America's Cup: The fish hooks in the Brave, New Protocol
by Richard Gladwell/Sail-World NZ 12 Aug 06:15 PDT
Royal New Zealand Yacht Squadron, Westhaven Drive, Auckland © RNZYS
As they say in Formula One (F1), you always read a new set of rules twice - once to see what the rules do say, and the second and much longer read as to what they don't say.
After reading the Protocol once and having been at the New Zealand media conference this afternoon, and standing in for Sail-World's UK based publisher, Mark Jardine, at a second media session Tuesday evening (NZT), my initial take is as follows.
Much was made by the Challenger and Defender about event continuity - beyond the current America's Cup AC38. It gives certainty on several fronts to teams and the event.
The continuity beyond AC38 is contained in a Terms Sheet which has to be executed by Sept 9.
The Terms Sheet is not included in the release of the Protocol. When asked about continuity and the need to change the Deed of Gift which governs the America's Cup, the response was that was the intention (to amend the Deed of Gift) and that approach had the support of New York Yacht Club. A rather obtuse piece of legalese in the Protocol says that if the documents that will create the AC Partnership are not excuted by the required date, then the Protocol "shall be void and of no further force and effect." However later it was said that the date was not fixed, and could be amended under the Mutual Consent provisions of the Deed of Gift, which governs the conduct of the America's Cup.
The details of the Terms Sheet and the ACP agreement - said to run to hundreds of pages and will not be publicly released. By comparison the latest Protocol is a mere 60 pages, and the Deed of Gift, just four pages.
NBA management model?
As to how the ACP (America's Cup Partnership) would operate, Grant Dalton compared it to more to an NBA style of management with every team having a representative on the Board, and the voting being structured so that some changes could pass with a simple majority, others with a "reinforced majority" and others will require unanimity. The objective is to avoid one team becoming dominant.
The key point with ACP is that it can be implemented by Mutual Consent for the 38th Match, without amending the Deed of Gift - and thereafter for any subsquent Protocol where event control can be similarly agreed under Mutual Consent.
In the past, the Defender and Challenger have ignored the Deed of Gift almost at will, as they did in 2017 where the Deed's "constructed in country" requirement was deemed to be satisfied if just 2.7metres of the bow of the AC50 was laid up in the country of the Club of the Challenger/Defender - and had to be done in one design tooling/molds supplied by the Defence team's builder.
However as with most things America's Cup, if you follow the money you will get to the Truth.
One of the key reasons cited by Ainslie and Dalton for creating ACP is to allow the Event, and Teams, to forward sell sponsorship for periods of longer than just the current Cup cycle, and possibly forward allocate the venue. But pre-determining the venue would require a Deed of Gift amendment, as currently it is the right of the Defender to hold a Defence in its home waters, or another venue it selects.
That point aside it would seem that the rest of it can be done by legal agreement, and establishment of one or two new entities, without a need to go to Court.
In the past 170 years, the NY Supreme Court has only made three amendments to the Deed of Gift. The first two were in 1956 - to enable the Cup to be sailed in smaller boats, such as the 12 Metre class, by reducing the Load Waterline Length from 65ft to 44ft. There was also a removal of the requirement of the Challenger to sail to the Match on their own bottom. The third Admendment was made in 1985 to allow the event to be sailed in the Southern Hemisphere summer, to accommdate the conduct of the 1987 America's Cup in Fremantle.
The three Amendments were quite different to what is proposed for AC38 and beyond. In 1956 the Cup had been uncontested since 1937 and required resuscitation, and was done after consultation with groups in USA, Great Britain and Australia. In 1985 the Cup had been won by a legitimate Challenger and it was logical, and consistent with the words and intent of the donor to allow them to defend in their home waters and in their summer sailing season.
Those three amendments are quite different to what is proposed, since without the changes in 1956 and 1985, the intention of the Donors (the owners of the yacht America which won the first race and £100 Cup, now known as the America's Cup) would be frustrated.
Opponents of the proposed changes could well argue before the Court that the Cup was not in dire straits, and the Deed of Gift did not require a change.
They would also argue that the America's Cup has survived the since 1871, aside for the three amendments above, and that its strength lies in the Deed's concise wording, flexibility and foresight, which should not be altered.
Venue determination aside, the creation of America's Cup Partnership will be a lot quicker to progress without a trip to the New York Supreme Court, to change the provisions of the Deed of Gift.
One option may be to form an America's Cup Class Association (ACCA), and get recognition of the new body by World Sailing, so that ACCA is the authority for the technical administration of the America's Cup Class.
If Royal NZ Yacht Squadron are genuine in vesting all of their rights as a Defender into ACP, then they would include America's Cup Properties Inc. formed in 1986 to protect the America's Cup name, and the Cup Marks (the silouette, or logo of the America's Cup), and then AC Partnership would have effective ownership of the Cup properties and a high degree of control over future events.
Like America's Cup Properities Inc., the Challenger Selection Series (Louis Vuitton Cup) and Cup Preliminary regattas are outside the purview of the Deed of Gift.
The AC class association and Events, including the Match, can be run and controlled by the AC Partnership, which like the NBA is owned and controlled by the current teams in the competition.
The setup above is similar to the structure of Formula One (F1) motor racing where Fédération Internationale de l'Automobile controls serves as the regulatory authority ensuring the integrity and safety of Formula One, and Formula One Group, owned by Liberty Media manages the sport's commercial operations including broadcasting, sponsorship, and race promotion.
The Burling Rule, contained in a previous draft Protocol released by the Defender (prohibiting sailing crew from competing for an team other than who they sailed for in the 2024 America's Cup) effectively no longer exists, and Peter Burling, or others of his ilk, are free to helm the Italian (or any other boat) boat. However Ainslie and Dalton were at pains to say that they didn't (hoped?) think this would happen in Burling's situation as the Italians already have two strong "young" helmsmen (one of whom is only a couple of years younger than Peter Burling).
The comment about Burling not coming off the bench, was a little strange in that in Ainslie's case he was promoted from the reserve bench to be tactician of Oracle Racing on Day 3 of the 2013 America's Cup, when the US were failing in their Defence in San Francisco. It is difficult to imagine that Luna Rossa would not do the same, in similar circumstances in Naples, come September/October 2027. The change to the nationality rule means that Burling, if he was a co-helm on Luna Rossa, could become the first sailor in America's Cup history to helm four successive winners.
Are all AC75s created equal?
The Protocol does not contain a comprehensive view of arrangements of the raceboats to be used for the 38th America's Cup. Those will be contained in the America's Cup Class Rule, Version 3, mentioned in the Protocol, and the Technical Regulations which accompany it. Both will be released on Friday (August 15). One of the points that needs to be clarified is how much hull surgery will be permitted, given that alterations to the canoe body of the AC75 can be treated separately from the usually more liberal changes allowed to the deck area.
With the swapping out of cyclors for battery banks, some internal changes will clearly need to be made, those in turn affect boat weight, as does the reduction of crew from eight to five of six (including the Guest spot). The off the cuff answer was that the change would be minimal, however that is yet to be confirmed by the teams.
Also to be covered is the issue of a boat that has known structural defects - are they permitted to only replace "like with like", or can they create improved structural design and allow a new component be implemented.
The concept of being only able to use pre-existing boats is a novel one for the America's Cup. It did happen optionally with Defenders back in the 1970s, in the NYYC's Defence trials. But the then 12 Metres were given a substantial work-over, and Intrepid and Courageous each sailed in two successful Defences for the New York Yacht Club. With minimal changes permitted, designers and builders won't be able to resist demon-tweaking their aging raceboats, as much for the psychological advantage as the physical gain on the water.
As mentioned, teams are only allowed to sail an AC75 that was sailed in the 2024 America's Cup, or one to a design that was sailed in that event.
Any team building to a new design has to comply with the "constructed in country" meaning the hull has to be built in the country of the club of the challenging country.
There are a lot of fish hooks in the boat recycling, and in my view American Magic definitely comes out the winner with its low profile deck - designed around recumbent cyclors. When questioned Ainslie and Dalton said there was minimal differences between the hulls of the raceboats. However before the last Cup we saw numerous complaints to the measurement committee about the deck layout of the US Challenger and particularly the material used to construct their hatch covers. If that was such an issue in 2024, it is hard to believe that there are minimal hull drag differences between the same group of boats in 2027.
It will be interesting to see how much the AC75 class rule permits boat surgery. Alinghi with it's hull near destroyed and being an extreme AC75 design is a problematic case.
However in the second media conference Ainslie and Dalton were emphatic that the speed differences between the 2024 AC75 hulls was minimal. Whether the other teams, and the designers, see it that way remains to be seen.
As it stands the re-use of existing AC75 hulls will deprive Cup fans of one of the highlights of the precusor events - as each team launches and reveals their latest design creation on launch date, and then the America's Cup world can see the approaches taken by the various design teams to produce a Cup winner. Somehow new wingfoils and rudders just doesn't have the same visual impact.
As expected there are restrictions on the number of days a team can sail in practice. But the teams have been allowed bonus time depending on where they finished in the 2024 Cup. As lowest placed finisher, the French get an extra 10 days - scaling down through the 2024 placings to the Brits getting two extra days and the Kiwis none.
On that topic, in the second media session, Ben Ainslie was adamant that the Brits would be sailing their 2024 Challenger and that it won't be named "Britannia".
The Brits don't get hit by the Deed of Gift prohibition on a defeated Challenger being barred from using that boat in a successive Challenge, by virtue of two years having elapsed since their 2024 defeat in Barcelona. That deadline runs out on October 19, 2026.
Capping the costs
Budget caps are also a key part of the new Protocol with a €75million spending limit. In the NZ session I asked how this would work, both Dalton and Ainslie were evasive.
Grant Dalton's response was that it wouldn't be a problem for the Kiwis as they had never got near that level of expenditure. Ben Ainslie ducked and weaved a bit.
However the Protocol says that after the Cup Match all teams have to submit full financial accounts (audited if required). And, if a team has exceeded the cap then they have to pay 100% of the difference to ACP - the new America's Cup Partnership (assuming of course that ACP is an on-going and surviving entity).
While Budget caps seem to work elsewhere, after some settling down, in F1 it must be remembered that certain costs, including driver salaries, are exempt from the cap. And then there are the side agreements, with individual sponsorships, which are also exempted.
There is a fast track provision for Arb Panel Hearings with Applications having to be submitted within three working days and a decision within five days of receipt. It would seem that this is just the first stage of an Arb Panel Hearing.
The format of the racing in the Challenger Selection Series is also due for a change with fleet racing being used for the first time, as well as the standard match racing. It will count for points in the Louis Vuitton Cup. The Defender will sail in the Qualifiers. The idea is to mix up the format to make it more interesting for non-sailors. Whether the traditionalists quite see it this way is yet to be seen.
Ben Ainslie said they expected five or six teams, including most if not all of the 2024 Cup entrants. A second Italian team is expected to sail alongside Luna Rossa.
Most of the other points had been signalled in previous versions of the draft Protocol:
- Crew of six comprising five sailing crew (including at least one woman) and a guest sailor.
- Move to an all electric boat - bidding farewell to grinders and cyclors
- The Entry Fee is an eye watering €7million, of which €2million is a loan to ACP. A Performance Bond is no longer mandatory
- There will be three Preliminary Regattas - venues and dates to be confirmed in AC40s, and with one regatta in AC75 raceboats.
- Youth and Womens America's Cups are retained - with much the same format and number of teams - 12 - in each - as in 2024.
- Reconnaissance is retained - in the same way it was in 2024, except it will run right to the end of the Cup.
The real winner out of all the past ten months of statement and counter statement is the America's Cup, which has the chance of getting itself established on a platform as good or better as other professional sports, and for the teams to have a life expectancy beyond just a two year cycle.
Remember too that, like the current America's Cup, F1 got down to just six teams before being given a shake-up, it is now up to 20 teams, and expanding.
There is a lot more golf in this hole - and more will be revealed in the coming days.
Entries open in a week, and close 28 days after the signature on the Partnership Agreement.
If that doesn't happen it is back to Square 1.
To read the Protocol for AC38 click here