Wednesday, 16 December 2009

Not RAK nor Rudders

Just like buses, I haven’t written on the America’s Cup for 18 months, then a couple of blogs come along at once... But it’s not the appeal court’s decision to rule out RAK, or even rudders, that brings me back to the topic. Nope, you can get everything on that and more from the ever reliable Cory Friedman. Rather, I’m returning to the Cup because of the World Yacht Racing Forum held last week in Monaco.

I’ve read some rather sinister interpretations of what this event was all about, i.e. that it’s intended to rival ISAF as an organisational body for sailboat racing. Not yet. Right now, this is simply a conference for those involved in professional sailing; a place to network, air some dirty laundry, vent some spleen and generally discuss the issues affecting the sport.

Number one amongst those issues is the America’s Cup, while close behind is bringing some order to the chaotic multiplicity of events besetting sailing - Nick Fry, CEO of the Brawn GP F1 team, and keen amateur sailor, described it succinctly as, ‘a bugger’s muddle’.

If ISAF doesn’t get its butt into gear on this issue, the Forum may well become the place where the first plots are laid to rival ISAF’s administration of the professional sport – but that’s both another topic and, I suspect, a year or two down the track.

So, while the Forum’s organisers had scheduled a discussion on governance, it was the America’s Cup that had the headline grabbing final session – the Russell and Brad show - both Coutts and Butterworth made a presentation, and then joined a panel for a debate.

Most readers will know that the pair are old friends, and they made it quite clear to the gathering that nothing in the last two and a half years had changed that - by turning up more than a little worse for wear after a big session the previous night. The sub-text being: it ain’t our fault, we’re still mates.

The event has been reported elsewhere and I don’t intend to go back over that ground. Rather, I want to return to the questions asked by my previous blog; how do we stop the America’s Cup getting derailed like this again? And if we can’t, can we build the professional sport without it?

The Forum shed some light on the first part of this problem, at least if BMW Oracle win, with Russell Coutts mounting a defence of the ability of the Deed of Gift to manage the Cup; ‘…Mutual Consent, the two most beautiful words in the Deed of Gift.’

And in his latest article, Cory Friedman argued that there’s no need for any change, the Deed of Gift will do the job; 'New York’s courts have demonstrated that the Deed is just fine as it is…’

I beg to differ; while we may have got the right answers, it’s taken nearly three years to get a match that should have been held less than a year after the 32nd Cup. And in that time, the impact on people and businesses has been huge. Even those involved with the competing teams have had to live with a level of uncertainty that most of us would find unacceptable – no idea which school the kids are going to be in next week, never mind next year.

Formula 1 teetered on the brink of a bust-up and an incredibly damaging split last summer, but had the mechanisms in place to bang heads together, and the whole thing was settled in a matter of weeks. In comparison, the Deed of Gift and the New York courts don’t seem like much of a management system to me.

I still think we need to put a mechanism in place to prevent this kind of complete breakdown, on occasions where there is no mutual consent between the defender and challenger.

Russell Coutts did go on to allude to this issue in his presentation, saying that their legal advice was that changing the Deed of Gift to try and get a solution would be costly, time-consuming and not necessarily successful – any solution would have to reflect the desires of the original donors. It’s far from guaranteed that the court would look favourably on a proposal for, let’s say (my example) an independent dispute resolution body.

There is another way, which Coutts explained afterwards, and that’s using a commercial contract (with a massive financial penalty) that forces certain conditions for the defence of the 35th Cup on the winner of the 34th, when they enter the initial contest. Those conditions might include preservation of the same independent management system, along with clauses that roll the whole thing onto the 36th and 37th matches, and so on.

I’m no lawyer, but I suspect that there are still no guarantees that this won’t end up back in front of the New York judges. Nevertheless, it would go a long way as a holding action, until the court might be convinced to put something more permanent in place.

So far, so good, but what if Alinghi win? Brad Butterworth didn’t mention the issue, I didn’t get the chance to ask him about it afterwards, and his protestations that they would seek consent with the challengers on the future seemed a little feeble to me, at least in comparison to Russell’s. But then, I could be inaccurately pre-judging Alinghi on past history, or it could have been that Brad was struggling more with his hangover…

What of the hope that I expressed in the previous blog; that a united challenger group could hold out for long-term, structural change if they stuck together? Paul Cayard left the Forum to try and get agreement on a new set of rules for the 34th Cup, before either Alinghi or BMW Oracle win the 33rd, and self-interest makes them a good deal more entrenched in their views.

I wish him luck; personally, I didn’t detect a great deal of real, heart-felt mutual consent – Butterworth professed Alinghi’s preference for multihulls in the next Cup, while Coutts and BMW Oracle seem to want a return to monohulls. The rest of the potential challengers didn’t seem much more in agreement, but you can judge for yourself in these clips on the different issues; where and when, the type of boat, and a protocol for the 34th Match.

I suspect that the way that this will play out is that both Alinghi and BMW Oracle will pick a compliant Challenger of Record, and set up the next Cup in their own image. If BMW Oracle win, it may well include a solid plan for a long-term fix to stop this happening again, with some sort of independent professional management put in place. If Alinghi win, it probably won’t…

But I’ll finish by returning to my second question; if we can’t stop the America’s Cup periodically blowing up in our face, then can, or should, sailing try to build the professional sport without it?

The answer from the World Yacht Racing Forum is that many people already are – Mark Turner’s OC Group and Knut Frostad and his team at the Volvo Ocean Race are prime examples of talented, energetic people trying to deliver sailing as a commercially viable sport, with or without the Cup.

But can those events prosper in a world where someone can come along and drop a couple of hundred million dollars on grabbing some of the biggest names, and much of the precious media oxygen that sailing is afforded in the mainstream?

Knut Frostad made the point at the Forum that one successful sailing event will drag the rest up with it – and I think he’s right. But that event needs to be a sailboat race, not a legal soap opera.

And many other sports survive with no shortage of rich guys spending to win; they own plenty of football, gridiron or baseball teams. But those sports have a strong governing body in place to protect the commercial viability of the game.

So whatever happens, or doesn’t happen, in Valencia in February, I suspect that governance will still be a very hot topic at next year’s World Yacht Racing Forum – both for the America’s Cup, and the sport as a whole.


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Monday, 7 December 2009

It’s a Challenge... and an Opportunity

It’s been a while since I last ventured onto the topic of the America’s Cup – and with good reason. Another thirty instalments of Cory Friedman’s inestimable blog on the various court manoeuvrings have come and gone, with precious little in the way of clarity or progress in the New York court on which the action centres. 


Unsurprisingly, I’m still just as weary of the whole thing as I was back in April last year. So, don’t panic, I’m not about to start a tack by tack analysis of court performance, still happy to leave that to Mr Friedman. 


Instead, I wanted to point out that we may be about to turn a corner, from where we can see in the distance (and perhaps only briefly, before the confused fog of unconstrained legal warfare rolls back in) a glimmer of sunlight uplands.


The possibility of an America’s Cup match actually happening in February 2010 in Valencia looks to have tipped solidly this side of 50-50 – enough for BMW Oracle to start packing up in San Diego, anyway. 


So at the risk of pointing out the obvious; if Blinghi race in February then one of them is going to win. And when they do – regardless of any further legal recourse - a representative of another yacht club will need to be standing beside the winning team’s principals with a new challenge in their hip pocket. 


This is the traditional method for the new defender to control the next America’s Cup match: line up a yacht club who will challenge on previously agreed terms. The new defender is bound to accept the first challenge after their winning yacht crosses the finish line – so it’s important to have this organised in advance of the final race. 


It was a system which failed horribly for Alinghi when the New York court decided that their ‘hip pocket’ challenger – Club Nautico EspaƱol de Vela (CNEV) - wasn’t actually a yacht club, giving rise to the current situation.


Now, we all know that the delivery of this next hip pocket challenge will almost certainly not be the end of the 33rd America’s Cup. There remains plenty of potential for further legal challenges, for more appeals, affidavits, memos, depositions, oral argument, and so on, and on, and on.... 


But regardless of all that, the making of the next hip pocket challenge will be an important moment – because the nature of the document will tell us a lot about the intentions of the new defender for the 34th match. And it will be the first time in about two and a half years that anyone outside Blinghi (and the good judges of the New York court system) has had any say in the future of the event. 


So – what will be in those new challenge documents? What might be under negotiation right now, in smoke-free backrooms, for the future of the America’s Cup?


If Alinghi win, it seems unlikely that their plans for the 34th America’s Cup will vary greatly from their much maligned, original blueprint for the 33rd. The word on the street I was walking down the other day was that they’ve got a newly bona fide, bomb-proof CNEV lined up as the challenger again, and so we could be right back where we started - just two and a half years older. And looking forward to the number of Cory Friedman’s court reports reaching three figures.


However, if BMW Oracle wins, things could be different. They’ve talked a good game for how they might run the next Cup, but that hip pocket challenge will be the real test – what will it say about the 34th Cup?


I’m not the first person to think that any new challenge document needs to fix the Cup once and for all. It needs to ensure Deed of Gift altering, court approved, full and binding change – the kind of thing that will put the Cup on a sound footing as a 21st century professional sport. 


Team Origin’s principal, Sir Keith Mills, has recently talked about just this sort of thing - but what he hasn’t said, is what he’ll do if he doesn’t get it. 


Personally, I’m starting to think that if the new challenger agreement provides for no lasting change, then maybe it’s time for Sir Keith and all the other potential teams to think about walking away from the Cup, just letting that ugly old silver ewer go...


If nothing else, that threat might provide them with a brief moment of influence on the Cup’s future – but only if the challenger group act together.  If they do, there’s a chance, just a chance, that Blinghi can be pressured into fundamentally changing the way the America’s Cup is played.


And boy, do we need it. It’s the second time in twenty years that the Cup has been hauled off to the court room to the detriment of almost everyone involved, and we can be sure it won’t be the last, unless the Deed itself is modified to stop it happening again. 


The 33rd Cup that we’re watching, this monstrous battle of technology, lawyers, wallets and wills is actually much closer to the origins of the Cup than anything that happened in Valencia in 2007. Sad to relate, but this is what the Deed of Gift bestows on us as a Cup match, and unless the court approves changes to the Deed, it will revert to type every time it gets an opportunity. 


But a professional sport needs to offer all the stakeholders – sponsors, competitors, spectators, officials - continuity, security and a viable long-term business model. And it can’t do that while it’s being blown around by the whims, obsessions and largesse of the super rich. 


So, unless the new defender is going to apply to the court to change the game so it cannot be railroaded by the next rich guy to come along (which I accept would be like a turkey voting for Christmas), then perhaps the sailing community just has to let it go, let the Cup be what it is, and set about building the professional sport without it.


It won’t be easy, the America’s Cup can, and almost certainly will, carry on doing what it does best - pitting the financial behemoths of the time against each other in what will remain a headline grabbing arena. 


What’s so bad about that? About having this vast endeavour going on every time there are people willing to pay to play? It will enrich some of our number, and who knows, maybe someone will make a discovery that will define a new golden age of sail, make oil-fired container ships obsolete and help rescue us all from melting ice caps. 


The problem is that somehow the sailing community will have to get the message across to the mediaverse that this wild and wacky race doesn’t define the professional sport of sailing any more than cheese rolling defines athletics. 


But as I said, that isn’t going to be easy - I just pitched a major media organisation to provide reports on the upcoming Louis Vuitton Trophy in Auckland, and was turned down for the simple reason that it wasn’t the America’s Cup. Same people, same boats, wrong trophy. Turning that attitude around is going to take time, and it’s only going to happen if everyone outside Blinghi can get on the same page and agree what the alternative is… 


But that’s really for the future, in the first instance, the select group of people funding and organising the group of putative challengers have the big decision to make. And the moment they have to start making it is when the winning boat crosses the line to end the 33rd America’s Cup on the water. 


It’ll be a challenge, but it’s also an opportunity.


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