America's Cup fillibuster starts following new statements from three teams
by Richard Gladwell/Sail-World NZ 29 May 11:07 PDT
A walk in the Park? Italian Prime Minister Andrea Abodi, Minister for Sport & Youth, Giorgia Meloni, Italian Prime Minister and Grant Dalton, CEO Emirates Team New Zealand - May 26, 2025 © Ian Roman / America's Cup
The first official event of the 38th America's Cup got under way on Monday, set against the symbolic backdrop of St. Peter's Basilica in the Vatican.
Except for the Defender, Royal New Zealand Yacht Squadron, none of the competitors, including the Challenger of Record, the Royal Yacht Squadron, were present.
One would have expected that they would have been invited to the next event of the Italian welcoming tour in Naples on Wednesday, May 28, at Castel dell'Ovo, where an official presentation of the event was be held. But the Brits were a "No-Show". Only the Italian and French teams were represented along with the Defender, Emirates Team NZ.
One would have expected that the aggrieved challenger teams could have used the two Italian events to meet face to face with the Defender, and resolve the outstanding issues, and signing the Final Draft of the circulated Protocol, with amendments made to relect the outcomes of their Neoplolitan discussions. But that didn't happen.
Instead the America's Cup timelines, and event milestones go on hold to some extent until the matter are resolved.
The Cup preparations don't come to a halt, at least two of the teams will proceed at pace with design programs and strategies, waiting for the first allowed on the water testing day on October 20, 2025.
It is unlikely that the Defender will agree to a shift in any key dates, now that it is well advanced with its defence program and intends to start building its AC75 Defender for the before Christmas.
With the welcome celebrations barely concluded, the new host, Naples got a bewildering welcome to the America's Cup as three Challenger attacked the Defender with another round of media statements.
Maybe the Italians should not have been surprised. Their team Luna Rossa is now on its seventh America's Cup challenge and has been at the heart of many controversies - including their fiery Patron Patrizio Bertelli's own dramatic withdrawal from the 2017 America's Cup, 14 months after entering, when the America's Cup Class was changed from the AC62 wingsailed foiling catamaran to the AC50 of the same genre.
Not the Ten Commandments
The two Venue announcement events were proof positive that the 38th America's Cup is under way, temporarily breaking free from the salvos of media releases calling for more transparency launched by two concerned teams late last week,and repeated today Thursday May 29, 2025. As part of their response, to the earlier statments, the America's Cup Defender included a document with the fileid of "Final Draft" of the Protocol, or rules that will govern the upcoming Cup.
Unlike the Ten Commandments, the AC38 Protocol is not cast in stone. It is a living document, subject to change, and in the last America's Cup the Protocol had 16 versions released throughout the Cup cycle.
The "Final Draft" does have several points indicated as being "Under Review" however they are not show-stoppers, and the Protocol can be amended when they are resolved. Two of these points on crew numbers and composition, are part of the more techically complex, and yet to be published Class Rule.
The Challengers were also offered a viewing of the Venue Hosting Agreement, provided they first signed a Non-Disclosure Agreement (NDA).
Curiously, now three weeks later, one of the malcontents, Athena Racing, representing the Challenger of Record, still had not returned the prerequisite NDA, and had not been sent the confidential Host Venue Agreement, which would reveal the amount of the Hosting Fee and other matters. It is a strange inaction from a key party who was calling for more transparency from RNZYS/Team New Zealand.
Instead on May 29, Athena Racing issued a second statment which just echoed the first, and continued to complain of not being consulted on the venue and arrangemnts for Naples, and saying:
"Athena Racing is committed to finding a resolution and mutual consent on behalf of all Challengers for the 38th America's Cup. We will respond imminently with a protocol and partnership framework to the Defender which we hope will allow for a successful event for all stakeholders in 2027 and beyond."
Royal NZ Yacht Squadron, the America's Cup Defender through their team responded:
"The Defender, as per the Deed of Gift has the right and responsibility to choose the venue and the Memorandum of Understanding signed with the Challenger of Record at the conclusion of the 37th America’s Cup also gives that full right and obligation to the Defender.
"The Defender remains committed to work with the teams to create a partnership for the future America’s Cups."
The statement by American Magic echoed what had been said before.
Defenders right to pick Venue
Under the Deed of Gift for the America's Cup, it is the Right of the Defender to nominate the venue - usually its home waters, however since 2007, four America's Cups have been contested at venues that were not the home venue of the Defender.
The Defender in giving away that right of a home Defence is entitled to any fees and other concessions it can obtain from the selected Host venue. That is no business of the Challengers.
Unless they have conceeded otherwise, the Challengers do own the rights to their own series, and can claim approriate hosting fees from a venue if that is appropriate. That is no business of the Defender. In fact until 2000, the Challengers did run their own Selection Series and all other arrangements including host TV broadcast. (In San Diego in 1995, ESPN ran the Host Broadcast for the Defender and a TVNZ consortium did the Host Broadcast for the Challengers. In Auckland in 2000 there was a lot more sharing of assets between the two broadcasters, and in the 2003 Cup they agreed for it to be ran with a joint organisation.)
The race management for the Challenger Series and Defender selection series were also quite separate bodies.
The point being that there is no requirement in the Deed of Gift, or by way of historical precedent, for there to be consultation over venue selection.
In fact for the 2017 Cup in Bermuda, Golden Gate Yacht Club conducted a lengthy venue selection process amongst potential hosts in USA and Bermuda, holding regular meetings and issuing statements advising whch had been dropped from contention. The Challengers as a group were not involved at all in that process. Under the rights conferred by the Deed of Gift, it was none of their business.
(After Hamilton Island YC dropped out in 2015, having negotiated a Protocol for a 2017 Cup which was meyond the financial means of their team, the Royal Swedish Yacht Club took over as Challenger of Record (Kungliga Svenska Segelsällskapet, or KSSS), with their team Artemis Racing.)
A relatively recent innovation (starting with the 1992 Cup) is for the Challenger of Record is to negotiate a Protocol with the Defender beyond covering the conduct of the Match, and if the two bodies agree to merge their rights for the Challenger Selection Series. However up to 1992 they were separate, with the Challengers even using a separate Jury, Umpires and race management officials, as well as the Host broadcast.
In fact they operated out of different yacht clubs in San Diego.
What has not been made clear/issued publicly is the contents of the Letter of Challenge given to the Royal NZ Yacht Squadron by the Royal Yacht Squadron. That will show if there was any understanding over RNZYS agreeing to consult over the Venue choice.
Equally the Challengers don't have to fall in with the Defender's choice of venue for their Selection Series. The limits pf co-operation are set out in a joint note issued a joint note issued by both bodies on November 8, 2024 - three weeks after the conclusion of the 37th Match, with some specific points mentioned, and nothing on Venue Selection. But they did agree that the RYS would allow and the RNZYS would accept as Challenger for the 38th Match the winner of the Multi-Challenger selection series.
All smiles at the Naples presentation
On Wednday, in Naples, at the 12th century Castel dell'Ovo, the atmosphere repeated the smiles and bonhomie of Monday's session in Rome's Casino del Bel Respiro, along with a very enthusiastic media presence.
Entries open on Sunday?
Late last week, there were agitated calls for more transparency from the two Challenger teams: American Magic, the team of the New York Yacht Club, and Athena Racing the team of the Royal Yacht Squadron, the Challenger of Record.
The RYS has to jointly sign-off on the Protocol along with the Defender, Royal NZ Yacht Squadron. The Challenger of Record has now had the Final Draft of the Protocol for three weeks. It is difficult to escape the conclusion that the three teams are colluding and that some form of legal action is pending.
The Swiss are said, and have now admitted to have added fuel to the embers of discontent within the challenger ranks, with a letter claimed to be en route from a former America's Cup Trustee, La Société Nautique de Genève, to the current Trustee, the Royal New Zealand Yacht Squadron. The AC Rialto* has it that the note is less than complimentary about the current state of the America's Cup and the Draft Protocol in particular.
The contents of the letter have not been publicly released.
One can assume from the missives of Thursday and Friday, last week, that the "Final Draft" of the Protocol governing the conduct of the 38th America's Cup has not been countersigned by the Challenger of Record.
The statements issued by the Challenger of Record confirms this point. Sail-World.com/news/286556/Athena-Racing-statement
If they continue to hold that stalling position, then the dates (not yet published publicly) stated in their Letter of Challenge become operative. That document names a date, for the Match, as the Challenger's is required do do. Usually a more convenient date is negotiated under the Mutual Consent provisions of the Deed of Gift. Despite their claims to the contrary by the Brits
It is reasonable to assume from the Challenger of Record's actions, or lack thereof, and their team Athena Racing's statement of late last week, that Mutual Consent has broken down, and the provisions of the Deed of Gift come into play to decide the Match, before it can be decided and moving onto AC39.
That being the case, it will be interesting to see what happens this Sunday, when, according to the Final Draft of the unsigned Protocol, entries open for the Cup and remain so for three months before closing on August 31, 2025.
Technically, the RNZYS has to receive all Notice of Challenges and then put them through a vetting process to ensure the challenging clubs comply with the Deed of Gift, the 19th-century document that governs the overall framework for the America's Cup. The provisions for a bona fide club, which are laid out, in the as yet unsigned Protocol.
Surprisingly, unlike the Protocol for the 2024 America's Cup, the Final Draft Protocol doesn't specify a date for payment of the €5 million (NZ$9million) entry fee, which has been previously due within seven days of the Entry being accepted by the Royal New Zealand Yacht Squadron.
Last January, the Royal Yacht Squadron's team, INEOS Britannia, was disbanded when its financial backer, INEOS Sport, withdrew its support. No interim financial backer has been announced for the British entry since then. The now €5 million entry fee is a significant increase from the € 2 million entry fee for the 2024 America's Cup and will be a challenge for any team that doesn't have financial backing in place.
Seed Capital
In a change from the 2024 situation, the Entry Fee doesn't go to the Defender, who is responsible for organising the America's Cup events.
In this Final Draft Protocol, a new organisation was created to run the America's Cup events, and the entry fees, doubling as "Seed Capital", are used to fund the new Cup organisation, the America's Cup Partnership (ACP).
That organisation takes over on June 30, 2025, and is stated by the Protocol to be funded by "Seed Capital" - without which it can't operate.
All Challengers Entry fees contribute to the "Seed Money". However, the Defender is exempt from that requirement; in other words, RNZYS and their team ETNZ pay nothing, and ETNZ won't be providing the financial props for the fledgling ACP in the interim.
The Defender doesn't quite get away scot-free, as since winning the Cup, ETNZ has carried the costs of getting the Host Venue, Naples and the principal sponsor of the America's Cup Events, Louis Vuitton, on board. To date, it has also coordinated much of the heavy lifting on the new Protocol and the AC75 Class Rule.
There is no mention in the Final Draft Protocol regarding whether the Event Hosting Fee or any Sponsorship monies are to be deposited into the ACP bucket. One assumes there will be some payment, as neither the venue nor the presenting sponsor would sign a deal that did not have deliverables, which are still the primary responsibility of the Defender.
Dalts hands over to ACP.
In forming ACP, Emirates Team New Zealand CEO Grant Dalton appears to have dodged a bullet.
In the last two Cups, Dalton was often accused of wearing two hats - that of the CEO of the racing team ETNZ and that of the CEO of America's Cup Events Ltd, the event organisation arm of Emirates Team NZ.
Now that the responsibility for the Event organisation has been handed over to an independent group managed by the ACP Board and formed from the Founder Cup teams, the Defender has escaped involvement in the organisational minutiae of what is primarily a Challenger Selection Series.
The lunatics aren't quite taking over the asylum; the Challenger of Record and Defender (COR/D) do have the right of approval over the direction of travel, without doing the heavy lifting in the Cup organisation.
After the conclusion of the 2021 America's Cup, Emirates Team New Zealand sat down and conducted a review of their performance in the regatta, not on the basis of winning, but on the basis of losing. It was the only way they could objectively assess their performance, identify areas where they could have improved, and pinpoint the root causes of the errors in the 7-3 Cup win.
It's a fair bet that a similar process was undertaken this time around.
That probably explains the hard line taken by the team with skipper Peter Burling and absences to compete in 14-18 SailGP regattas each year in the run-up to the Cup, given the sailing time limits imposed by the new Protocol. Team boss Grant dalton said he thought Burling's sole focus should be on the America's Cup.
It is also a fair bet that, given his objective of winning the America's Cup, Dalton and others in the management team didn't feel that running around and organising a Challenger Selection Series was conducive to winning the America's Cup. Like the expectation he put on his former skipper, Dalton is putting his total focus on winning the America's Cup.
A stellar Challenger Selection Series doesn't make the ETNZ's boat go any faster, and passing the responsibility to an independent, largely Challenger funded independent organisation is a smart, maybe Cup winning, move.
Show me the Money
If Athena Racing cannot demonstrate to the Royal Yacht Squadron that it has the financial backing to support a competitive team, then it is likely that RYS will withdraw as Challenger of Record. Part of meeting that COR commitment, as the first club entered, is paying the €5million Entry Fee/Seed Capital.
In that eventuality, it will be interesting to see what happens and whether the provisions of the Deed of Gift take precedence over the provisions of a yet-to-be countersigned Protocol. In the past, the Challenger of Record has continued without a team in the event; however, in the current circumstance, it is hard to see how the COR can continue without paying the not insubstantial €5 million Entry Fee.
Whichever way that scenario plays out, it is a fair bet that other teams will be emailing RNZYS at the stroke of midnight on Saturday night to submit their entry and secure first place in the queue to replace the Challenger, should the British team withdraw.
After months of quiet, the America's Cup juggernaut is finally firing up.
* Rialto is an Italian word adapted by Shakespeare in the "Merchant of Venice" in relation to a market or trading place. It implies a public setting known for commerce and gossip, and in the current context seem to be appropriate for an America's Cup held in Italy.