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America's Cup: Several options on the table for defender and challengers

by Richard Gladwell Sail-World NZ 24 Mar 23:34 PDT 25 March 2021
Emirates Team NZ crosses the finish line to defend the America's Cup - Day 7 - March 17, 2021 and starts the clock running on AC37 © Richard Gladwell / Sail-World.com

As Emirates Team New Zealand crossed the finish line at 5.11pm on St Patrick's Day, March 17, the Labour Government issued a media release congratulating Emirates Team New Zealand on their win and offering the same $5million funding line as happened after the 2013 and 2017 America's Cup campaigns. Except this one had conditions attached, and is expected to be politely declined.

In contrast to Bermuda, there was no winners Media Conference held with the team principals present, and able to lay out the direction of the 37th America's Cup.

It transpired, rather than being formally announced that the Royal Yacht Squadron's subsidiary, Royal Yacht Squadron Racing Ltd, would be the Challenger of Record.

The same commercial entity was the Challenging Club for the Ben Ainslie led Land Rover BAR team in Bermuda, and INEOS Team UK in Auckland.

At the end of an America's Cup there are three key points that need to be announced as soon as possible to get traction for the next Match. They are - the class or type of yacht to be used; the venue; and the dates.

After Bermuda, the media and potential teams knew the date of the 36th Match was likely to be 2021 and the venue would likely be Auckland. The Class was to be advised, which happened six months later.

Almost four years on, the only certainty is that the AC75 will again be used, and that the class will not change as it has for each of four Cups sailed since 2007.

It would seem that Emirates Team New Zealand is at a commercial crossroads, and will be taking a new direction, choosing not to proceed up the path of taking early Government assistance for a Cup Defence, as it has done for several campaigns.

Now run as a company by a Board and Executive Officers, the team has to act like any other company to secure revenue streams; provide continuity for its employees, suppliers and contractors; protect and leverage its intellectual property, assets, brand and expertise.

The other teams in the 36th America's Cup were quite different from ETNZ, which had been in existence for 35 years. The Class of 2021 were effectively start up teams. Luna Rossa has been around the Cup scene since 2000, but only in 2021 did it work in the same way it had in the 2000, 2003 and 2007 America's Cups. In the 2013 Cup it purchased a design from ETNZ, and in 2017 Luna Rossa did not compete. INEOS Team UK rose out of the ashes of Ben Ainslie's Land Rover BAR, and Team Origin before that. American Magic was the first entry by New York Yacht Club since 2003.

That background contrasts with Emirates Team New Zealand which has been operating as a stand-alone team for ten America's Cups winning four, defending twice, only twice has missed winning the Challenger Final. It has has developed itself as a marketable brand either as a Challenger or Defender.

Clearly it is time that ETNZ moves to be like any other professional sports team of that maturity. It is similar to an F1 team in that it is heavily reliant on technology, making it attractive to partner/sponsors familiar with the opportunities associated with high speed vehicles.

It's immediate asset is that as Defender determines the shape of the next America's Cup. For some time it has been known that ETNZ was "shopping the venue" and issued a Venue Selection Process Hosting Guide issued prior to the 36th Match. The guide sought "to secure the interest of Host Venues/Cities to host the 37th edition of the Cup, scheduled to take place in 2023/24."

The team has been clear that responses to the Venue Selection Process, will be considered in parallel with its agreement to conduct negotiations in good faith with the New Zealand Government for three months or the end of June.

The NZ government's offer of a payment of $5million along with conditions including a requirement to defend at a New Zealand venue doesn't appear to be consistent with the Venue Selection Process Hosting Guide.

The Kiwi Government's $5million and its conditions sought to effectively short-circuit any discussions with other venues. Alternatively it was a half-hearted gesture designed to be rebuffed, or set up an alternative political agenda.

A better move for the NZ Govt's Major Events tentacle would have been to lockstep with ETNZ's Venue Selection Process.

As one of the few existing venues (Valencia and Bermuda being but two), Auckland gets more than a few quick ticks. However clearly the boot has to be on the other foot given the antics of the past three and a half years leading up to the 36th America's Cup.

The Venue Selection document calls for a decision to be made, and contract negotiated on the venue by August 2021 - with a Match being sailed in the Northern Hemisphere in September 2023. It has to be that year to avoid a clash with the 2024 Olympics in Paris. For a southern hemisphere regatta the 37th Match needs to be completed six month later.

If the time-lines in the bid document are being followed, then the short-listed venues and organizations will have already been determined, and were in Auckland for the 36th Match.

Union Jack Match

The suggestion of a single Challenger Defence against INEOS Team UK to be sailed in Southern England got some airplay in the latter stages of the 36th Match.

For it happen it would seem there would need to be an agreement between the two teams that the 38th Match would have to be sailed in Auckland, as there seems to be little point in running a short-cycled match when there would normally be a three to four year interval. Of course, there is the prospect that if the Brits pulled off a fairytale win, that the Kiwis would be a Challenger back in the return Match, in Auckland - which would certainly ignite local interest.

If it takes place, the Union Jack Match would be the first between just a single challenger, and a defender since the 1967 Match between Dame Pattie and Intrepid.

From the scuttlebutt in the mainstream media, it is not clear if a single race around the Isle of Wight is contemplated, or a series of best of three as specified in the Deed of Gift, or a best of seven, nine or 13 races sailed off the South Coast of England. A single Round the Island race would be over a 50nm course, for which the record is held by a MOD70 trimaran Phraedo3 (now Beau Geste) at 2hrs and 2mnins which seems hardly worth the Kiwis making a five month round the world sea voyage.

[The acceptance of just a single challenge, without multiple challengers sailing a Challenger Selection Series, is not a "Deed of Gift Match". It is just that an America's Cup Defender has decided not to accept as a Challenger a yacht that is the product of a Challenger Selection Series. All matches and challenges must comply with the requirements of the Deed of Gift, the 19th century deed administered by the Supreme Court of the state of New York, which is the apex document of the America's Cup. For 100 years, it was the practice until 1970 to accept just a single challenge and deal with that, before accepting a challenge from another club, as prescribed by the Deed of Gift. The bulk of Deed of Gift covers the conditions of a default Match in the event that the Challenger and Defender clubs cannot mutually agree on the Match Conditions. It is only when a Match is sailed under the default Match Conditions set out in the Deed of Gift is it known as a Deed of Gift Match - such as happened in 2010 in Valencia Spain between challenger Golden Gate Yacht Club, and defender Societe Nautique de Geneve when there was an absence of mutual consent.]

Quite how the Luna Rossa and American Magic teams feel about being excluded from the INEOS/ETNZ tryst is not clear, but they are probably not pleased. Suffice to say ETNZ would not be overjoyed if as a potential challenger they were excluded by a one on one between a new Defender and a friendly Challenger.

Similarly with any new teams looking to come into what they thought was going to be the 37th America's Cup on finding their targets should now be focused on the 38th instead. If it Union Jack Match [a moniker reflecting that both the challenger and defender having the Union Jack in their respective national ensigns] is going to take place, then it needs to happen in this coming summer (2021) so existing teams and new know where they stand for 2023/24.

Seemingly forgotten in the Kiwi Government media release, is the fact that for a Defence in Auckland, there is no infrastructure cost. The point was often made by the Auckland Mayor Phil Goff, in meetings around the development of Cup infrastructure, that the proposed $200million infrastructure spend by the City and Government was a one-off, and a second Defence was "free".

The test is whether Auckland Council and the New Zealand Government can meet the market, given that much of the hardware/infrastructure is already in place - however given the current media and political environment in New Zealand, the real challenge for the next America's Cup, will be whether ETNZ can prevail over the political panjandrums and their minions.

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