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America's Cup: Emirates Team NZ gybes clear of would-be funder

by Richard Gladwell/Sail-World NZ 22 Sep 08:42 PDT 22 September 2021
Royal New Zealand Yacht Squadron © RNZYS

America's Cup holders Emirates Team New Zealand has dumped a maverick kiwi group claiming to be able provide funding assistance with an Auckland Defence of the 170yr old trophy.

In a statement issued on the close of business on Wednesday, the America's Cup champions called out the parties claiming to be sincere in their support of an Auckland based defence of the most prestigious trophy in sailing.

The two month long affair ended with the firing of a media salvo by frustrated Emirates Team New Zealand, followed by a second release in support by the Royal New Zealand two and a half hours later.

The two month campaign would appear to have orchestrated by a Wellington based PR company, in a headline grabbing style reminiscent of the media campaign conducted against the team over the business activities of its event arm America's Cup Event Ltd. ACE was completely exonerated by an audit by a forensic investigation firm, aside from a tag about not keeping timesheets by AC75 class rule developers.

In late July, former Fay Richwhite staffer, and Rich Lister, Mark Dunphy made an offer through the media to finance an Auckland based America's Cup defence.

Despite numerous requests from Emirates Team New Zealand, who have always held the position of their intention to defend in New Zealand, provided it was financially viable, Dunphy and his group operating under the moniker of Kiwi Home Defence, made a string of offers and underwrites, but would not reveal the sources of the funding.

Early in the "assistance" campaign by Kiwi Home Defence backers, it was claimed that involvement of funders was contingent on long-standing Emirates Team New Zealand CEO, Grant Dalton not being involved in the team going forward. After the issuance a few days later of a media statement supporting Dalton, by a senior group of Emirates Team New Zealand members that ultimatum was eased to the extent that Dalton was not to "touch the purse strings".

The orchestrated campaign is reminiscent of many that have taken place at this stage of the America's Cup cycle, as the four times winner of the trophy re-establishes itself at the end of one cycle and is in the opening phases of the next. Often these blow-ups have been orchestrated from within New Zealand as mainstream media attempt, with varying degrees of success, to put the heat on the team over funding, particularly where government investment is concerned.

Sail-World NZ has not given any credence to the Kiwi Home Defence group its role as seen by recent events is as a disrupter.

From the moment Emirates crossed the finish line on March 17 to successfully defend the America's Cup, the chances of the next defence being conducted in New Zealand water was very unlikely. There is no guarantee that given the New Zealand Government's very aspirational and aggressive policies to eliminating COVID, that the 37th America's Cup would not be conducted against the backdrop of lockdowns or closed borders affecting TV broadcast schedules, and team and event sponsor activities.

Three months after the finish of Race 10 of the 36th America's Cup, and just before the end of the exclusive negotiation period with the New Zealand Government to find a way to conduct the next Defence in New Zealand, a members meeting was held at Royal New Zealand Yacht Squadron for ETNZ CEO Grant Dalton to update the membership. There was a lot of pre-meeting hype, including a TV news stakeout. It was plain that the Government backed deal was not going to come off, but there was expected to be a move by those associated with the Kiwi Home Defence group to force the issue with RNZYS to call the team to heel, and arbitrarily declare that AC37 would take place in New Zealand.

Under its agreement with Team New Zealand the RNZYS does not have that ability.

At that meeting Dalton was questioned on a New Zealand funded defence could be undertaken, which he did not believe was possible. Given that the team had just conducted a local defence for which it had secured the funding, one would have thought that Dalton, who had been arranging the funding for major sailing campaigns for almost 35 years would be in a good position to make that call, but some thought otherwise.

The next day Auckland Mayor, Phil Goff, a day short of the conclusion of exclusive negotiating period with the New Zealand Government broke an agreed "no comment" agreement revealing that the good faith negotiations had broken down with the Government offering $31million as a hosting fee and the Council and Government putting up $69million "value in kind". It was further claimed publicly that Team New Zealand's asking price was $200million.

That response by Dalton, at the RNZYS meeting, is believed to have sparked an approach by some RNZYS members to Mark Dunphy, which resulted in the formation of the Kiwi Home Defence group between common interest parties, with a patriotic fervour fired by Mayor Goff's comments, and a public expectation that like in 2000, 2003 and 2021 that the same could happen again in 2024.

Emirates Team New Zealand though the UK based Origin Sports Group, developed a Venue Selection Process Hosting Guide used to attract cities/ports interested in hosting AC37. The process was launched in late 2020/early 2021 and attracted 35 responses, reduced to a short-list of 3 or 4, with Auckland still an option. The intention was that the short-listed venues came to Auckland for the 2021 America's Cup and gain an appreciation of the event and what was involved. That did not happen due to the COVID lockdowns and closed border, along with a two week quarantine requirement for what was likely to be a visit of less than a week.

The NZ Government upped the ante on the victorious America's Cup team as Te Rehutai crossed the finish line on March 17, with an offer of a funding line of $5million conditional on there being a defence in New Zealand. The team did not immediately respond but declined the offer with thanks a few days later .

In the first week of July, three weeks after the NZ Government's period of exclusive period expired, RNZYS Commodore Aaron Young sent an email to all members emphasizing that there was international interest in staging the event, but commented on the NZ funded defence: "I can honestly say we have tried and continue to do so, but as of now we aren't there."

A couple of weeks later the Kiwi Home Defence group emerged, and the media sparring between Emirates Team New Zealand and the group began.

Surprisingly this was picked up and treated seriously by the sailing media, who should have been aware that in Team New Zealand's position it was not prudent to discontinue an international venue selection process, in favour of parties which had previously called for Grant Dalton's exclusion from the team.

The group's next iteration was that Dalton could stay but without financial authority.

Then the offer was made of $5million backing providing, the NZ Government came through with their earlier offer of $5million. Emirates Team New Zealand claimed the offer from parties associated with the Kiwi Defence Group was in fact only a loan, which they did not require.

Next an amount of $20million was discussed in the media as coming from Mark Dunphy personally. As with previous financial offers, and specific requests from Emirates Team NZ the sources of the funds offered, were not named.

Again it was more than surprising that international sailing media took these offers at face value, and regurgitated them.

Earlier this week Emirates Team New Zealand sent, and publicly released a letter, addressed to the Kiwi Defence Group which queried several points around its activities with overseas parties, including potential AC37 challenger teams. Parties associated with the Group responded that the claims about offshore dealing were false.

That prompted a very blunt response, Wednesday afternoon, from Emirates Team New Zealand, naming several RNZYS members as having contacted the New York Yacht Club as to the validity of the Challenger of Record under the 19th century Deed of Gift that governs the conduct of the America's Cup. The long note ended with the statement to the Group and their fans that "Emirates Team New Zealand and RNZYS have decided to cease all correspondence and any dealings".

Two hours later Aaron Young, RNZYS Commodore released a statement expressing their concern and disappointment "with recent findings on a potential funding arrangement that might have enabled the 37th America’s Cup Defence to be held in Auckland.

"RNZYS first met with Mark Dunphy on 1 July. Since this meeting RNZYS have continued to encourage both Mark Dunphy and Grant Dalton to meet. RNZYS expressed this in writing as recently as Monday of this week. This would now seem extremely unlikely given what has been found.

"RNZYS as Trustee of the America’s Cup is very aware of the responsibilities that brings. The RNZYS General Committee is responsible for all decisions the Club makes including anything to do with the America’s Cup and will in due course consider any further action.

"ETNZ and RNZYS have an agreement with ETNZ who is responsible for conducting the defence of the 37th America’s Cup. As our representative team, ETNZ have the full support of the RNZYS. RNZYS has a preference that the defence be held in Auckland with the caveat that there is funding to run a credible defence together with support from Local & Central Government."

The possibility of a New Zealand Defence remains, but will be arranged, by ETNZ - however for that dream to be realised to happen there has to be some shifts in position and additional external funding sourced. And, of course, an open borders policy instituted by the New Zealand Government, and similar to that announced by the EU and USA.

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