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America's Cup: Venue tender details leaked, as Brits emerge as possible Challenger of Record

by Richard Gladwell/Sail-World 9 Feb 22:44 PST 10 February 2021
Louis Vuitton Pacific Series - 2009 Emirates Team New Zealand v Team Origin (GBR) - Waitemata Harbour © Richard Gladwell / Sail-World.com

For the past week or two, rumours have been ricocheting around the America's Cup media centre and beyond, that the Royal Yacht Squadron will be the next Challenger of Record.

The move was virtually confirmed by INEOS Team UK skipper, Sir Ben Ainslie in answers over the past weeks to various questions at media conferences implying that he was in favour of retaining the AC75, and then saying there was an agreement (indicating that it was not a done deal) for the British - presumably Royal Yacht Squadron to become the next Challenger of Record.

Regardless of whether they are currently estranged from their long-standing friends at Emirates Team New Zealand, it is unlikely that the Italians would be Challenger of Record for a third time. They resigned the COR role to a Challenger Committee ahead of the 35th America's Cup, who nine months later changed the class of boat from the restricted AC62 to the one-design AC50, and the Italians walked in protest.

That leaves the New York Yacht Club, who have expressed their interest in having a 70ft monohull as the America's Cup Class for the 37th Match. By sheer co-incidence one of the principals of the American Magic team is President of the Maxi 72 class, and another principal is a multiple champion in the Super52 class. The other two teams in the current Cup along with the Defender favour staying with the AC75 - whose class rule will no doubt get a major tweak.

By definition that leaves the Royal Yacht Squadron as the last club standing, and the only choice from the existing teams.

The British have a long history as Challengers for the America's Cup, but to date, have never won it.

In the equally long history of the Cup, it has never been won by the Challenger of Record - and the role is regarded as a poison chalice. The Brits appears to be optimistic that they can break that duck. The upside of being the Challenger of Record is that along with the Defender they get to shape the AC75 Class Rule, and Protocol for the Match, and have those documents aligned with their views and aspirations. As well they get the right of approval on all changes to both documents.

Ironically in their now 36 years of existence in various forms, the Kiwis have only been Challenger of Record once, and that was by necessity for the Big Boat Challenge of 1988, through the Mercury bay Boating Club.

In support of the superstition that being Challenger of Record never wins the America's Cup, the Kiwis have won the America's Cup three times.

Three options for hosting

With the Final of the Prada Cup set to start this weekend, it would seem that for the next Cup there are three options for hosting and venue for the next Match.

If INEOS Team UK win and go on to win the America's Cup, then they get to organise the next Cup probably using Origin Sport, which grew out of Team Origin, the team formed around Sir Ben Ainslie and a group of leading British sailors to challenge for the 2013 America's Cup.

Team Origin competed in several Louis Vuitton Trophy events while the America's Cup was in the New York Supreme Court over Deed of Gift issues from 2007-2010. With 2012 Olympic organisation and competition commitments, Team Origin was put on ice, and then revived as Land Rover BAR for the 2017 America's Cup in Bermuda. Team Origin Sports is now a completely separate entity from Team INEOS UK, but the obviously the long-standing personal relationships remain between the two groups.

If Luna Rossa win the Final and go on to win the Cup, it is assumed that there will be no bid process and the event will be held in Italy with Prada as principal sponsor. That is the practice envisaged under the Deed of Gift, the 18th century document which governs the conduct of the America's Cup, which does not contemplate bidding the venue as was done, without being legally challenged in 2007 and 2017. It is believed that 2003 and 2007 America's Cup champion, Alinghi, may be their Challenger of Record. At least two other Challengers are believed to be pending as well as the four teams that sailed in Auckland.

In the past organisers have tried to avoid sailing the Cup in an Olympic year. Specifically they would be keen to avoid a clash with the Paris Olympics in August 2024. Tender documents for bidding the venue have been put into circulation by Emirates Team New Zealand call for a Match in September 2023 - if held at a northern hemisphere venue. However if the dates slipped by a year due to COVID having a resurgence in Europe, then there would be a direct clash with the 2024 Olympic Games.

Fractured relationship

A fast-tracked tender document for the next Cup, is in circulation but depends on Emirates Team New Zealand conducting a successful defence.

The process is being run by UK based Origin Sports Group with whom Emirates Team New Zealand interacted for the organisation of the second of the 2020 America's Cup World Series events in Portsmouth, UK. That regatta was was cancelled after the outbreak of COVID in Europe in March of 2020.

Despite the issuance of a tender document, Emirates Team New Zealand as the holder of the Defence rights, is obliged by agreement to negotiate in good faith with the New Zealand Government. That presumably means the Ministry of Business, Innovation and Employment with whom the two New Zealand America's Cup entities had a very public stoush, throughout latter part of 2020.

"Our first priority has always been to defend the cup in New Zealand", Emirates Team New Zealand's CEO, Grant Dalton told Sail-World. "We are a team that have always existed from Cup to Cup, Event to Event, so have always had to look ahead at all legitimate commercial possibilities to survive. The world of sports events and sponsorship is a different place now due to Covid-19," he added, explaining why the team has gone to tender for the Host Venue, if the team is successful in it's Defence of the America's Cup in early March.

A government ordered audit of issues surrounding the Host Venue Agreement for the 36th America's Cup resulted in the two NZ Cup entities being exonerated along with those directors and management involved. As well as considering the appropriate cost centre for the development of the AC75 Class Rule, a second part of the mediation considered the role of MBIE in the affair. The issue of MBIE involvement was short-circuited by the issuance of a joint press release by the two parties. Beneath that thin crust of bonhomie, there remains the issue that MBIE and the Auckland Council have little real understanding of the operation of an America's Cup, and just who calls the shots.

Presumably MBIE and Auckland Council will be required to answer the same points set out in the tender document, as ETNZ's potential suitors will be doing.

It is clear by the timeline in the tender document that a parallel bidding process will be run alongside that of the NZ authorities, who will be forced to compete with bids having a much better foreign exchange rate.

There is a time limit of three months set on the negotiations with the New Zealand Government and Auckland Council - which will avoid the brinksmanship that took place after the 2017 America's Cup win, and in which a Protocol clause was close to being exercised which called for the Cup venue to be moved to Italy.

"Auckland is definitely in contention for the next America's Cup," Dalton said emphatically.

Upping the ante

The tender document envisages the 37th America's Cup being held in 2023, with any America's Cup World Series events being held only in the venue of the 37th Match.

The documents also calls for teams to be increased to six to eight, and for the AC75 to be retained. The document calls for proposals to increase audience levels above the AC36 level of 452million viewers. The 37th Cup, if ETNZ defends, will cover an eight race program over three events.

It would seem that in the time frame available, outside of Auckland, new facilities would have to be built - which is a big ask in the context of a 2023 Match date. That is one key area in the process, that Auckland does have an edge.

The timeline outlined in the tender calls for the AC37 programme and race venue to be announced in August 2021, with the entry period for Challenges being opened from that date for the remainder of 2021.

The tender envisages the venue construction taking place in 2022, and with teams moving into full training in that year, with some relocating to the host venue.

From January to June 2023 all competing teams will be based at the host venue, and a world series event being staged in July/August 2023. The Challenger Selection Series will start in August/September 2023, with the Match taking place in September 2023 - comprising a best of nine races over a maximum 10 day period.

At an overseas venue, the Cup organisation will continue to be controlled by Emirates Team New Zealand and their event management arm America's Cup Events Ltd. The Royal New Zealand Yacht Squadron will be expected to partner with a club in the host venue capable of providing the volunteers and race management infrastructure necessary to run the event. That situation is no different from some past Cups where the Challengers ran their own Challenger Selection Series and did so by partnering with a yacht club that was not the same as the Defender's Club.

The financial contribution from the host venue comprises three parts - a rights or sanction fee reflecting the commercial value of the event to the host venue; a commitment to cover the operational costs of AC37; the required infrastructure, facilities and services must also be provided at the cost of selected venue.

ACE and the Host Venue will be jointly responsible for securing the revenue from various sources including TV broadcast rights, sponsorship, value in kind services etc.

Team base construction will be at the individual team cost, above the tarmac provided by the venue, except for the Defender who will have their base provided at the cost of the Host Venue - to the dimensions specified in the tender.

Six month process

The timeline set up in the tender calls for Heads of Term Agreements to be negotiated with all short listed bidders during the upcoming 36th Match in early March - three weeks away.

Representatives from those venues will also be invited to attend the Auckland Match starting on March 6, 2021. The final agreement negotiations will be conducted in March/April/May and will get under way as soon as the current Match is concluded, and on the assumption that ETNZ are still the holder of the America's Cup.

It would seem that these negotiations will take place alongside a three month negotiation required with the New Zealand Government, if indeed the Kiwis wish to bid. There could well be a similar situation to San Francisco after the 2013 Cup, where the America's Cup Events Ltd/Golden Gate YC and the San Francisco authorities decided they'd had enough of each other, and other US venues were considered along with Bermuda.

The successful venue for the 37th Match is expected to be announced in August 2021 - six months after the conclusion of the 36th America's Cup.

Of the previous America's Cup venues, only Valencia, Bermuda and Auckland have existing new facilities. All three need to have the sheltered water essential for foilers to reduce the risk of AC75 rudder ventilation in a seaway, which would rule out most race venues sailing on the ocean.

It goes without saying that the shift to a venue outside of Auckland not be well received by the Kiwi public and authorities - given the level of investment for the 36th Cup, which has been of little economic benefit to Auckland/New Zealand because of the advent of the COVID pandemic and international travel restrictions into New Zealand.

When the full extent of the pandemic emerged, the New Zealand authorities seemed to be unable to pivot to a Plan B which would have delivered a different, but still valuable benefit to the NZ economy. Instead they opted to scuffle with the America's Cup champions, with the claims being splashed through mainstream media, and one outlet in particular.

Bidding the event offshore assumes that COVID will be under control by 2022 in regions that have been badly affected by the pandemic. Again New Zealand currently has an edge in this regard.

Of course, if Emirates Team New Zealand do win, and the 37th Match is located to a venue outside New Zealand, then the Defenders will be without the backing of a home crowd - as happened in Valencia in 2007 with a Swiss club defending in a Spanish city.

In Valencia, the support for the Swiss team had to be largely manufactured. Support was strong for the European Challengers, along with a strong New Zealand contingent that mostly travelled from UK and Europe.

Given what has transpired over the last four years, and indeed since the unsuccessful Challenge in San Francisco in 2013, the Board and Directors running Emirates Team New Zealand have clearly decided that they must, as they are required under their duty of fiducial responsibility, act in the best interest of the team, put it on a sound financial footing, and give it a certain financial future.

"We want to reiterate again, that none of this matters unless we can defend the 36th America's Cup which obviously is our full focus right now," Dalton said.

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