Hamish
Ross explains some of the changes (13/02/04) (source
: Alinghi)
AC Management recently published
two key documents which will govern how the next event
will be organised. Substantial changes have been made
to the Protocol signed by Société Nautique de Genève
and The Golden Gate Yacht Club when Alinghi won the
Cup in March 2003, and the terms on which additional
challenges will be accepted has been published.
Alinghi's General Counsel, Hamish Ross, the primary
author of the Protocol, explains some of these changes.
Bernard Schopfer : Why are these documents significant?
Hamish Ross: The Protocol records the terms and conditions
under which competition for the next America's Cup
Match will be held and establishes the Challenger
Selection Series. The recent amendments made to the
Protocol reflect the work being done by ACM, Oracle
BMW Racing and Alinghi over the past year since the
Cup was won. Alinghi has been working hard to reduce
the cost for competitors to compete. In some areas,
it has been successful and in others not.
The main amendments made to the Protocol are the elimination
of the entry fee and modifications to the technical
rules affecting the competing yachts. For example,
there are now restrictions on the number of support
vessels a competing team may operate, competitors
are now entitled to use old masts, regardless of their
design and manufacture, and re-use mast tooling built
for the last event. The ability to modify the hulls
of ACC yachts has been reduced as a cost saving measure.
There have been many other amendments of a clarification
or tidy-up nature. The Terms of Challenge is a new
document for the America's Cup.
The venue for the Cup has been successfully tendered
for the first time, providing very considerable financial
and logistical benefits for all competitors. This
in itself is revolutionary. In tendering out the venue,
there are commercial rules and regulations competitors
need to observe to ensure all competitors obtain the
full benefit of ACM's work. In short, the Terms of
Challenge specify the manner in which challengers
are to challenge for the America's Cup, the events
they are required to participate in, and their participation
in an America's Cup village facility at Valencia.
BS: What are the philosophical changes reflected
in these documents?
HR: For the first time in the America's Cup, there
has been a real attempt by the Defender to reduce
the costs of participation, not only for its own benefit
but also to encourage wider participation. It is no
secret many of us would like to see challenges from
countries with a strong sailing tradition who are
yet to participate in the America's Cup. There is
a feeling that the lack of activity between America's
Cups, sometimes with gaps of as long as 5 years between
events, is damaging.
For this reason, a series of well organised regattas
in each year prior to the Cup year of 2007 will help
sustain the interest of competitors, their sponsors
and the public. Perhaps most importantly, there is
at long last recognition for more independent and
impartial event and race management. The Protocol
specifically requires ACM as the event organiser and
the Race Committee to act neutrally and not favour
the interests of any competitor over other competitors.
This philosophy of openness and transparency is new
to the America's Cup and long overdue.
BS: There has been a lot of discussion about the
high costs of participating in the Cup, are there
financial advantages now for the teams?
HR: ACM has been successful tendering the venue for
the America's Cup and securing key sponsors at an
early stage. Teams will be offered logistical support
in attending pre-regattas and their costs in establishing
a base in Valencia will be more reasonable than the
charges experienced in Auckland. ACM will distribute
a dividend to competitors at the end of the America's
Cup Regatta on a formula which is set out in the Protocol.
Perhaps the greatest advantage offered to competitors
is the opportunity for increased exposure they are
able to offer their potential sponsors through participation
in the series of pre-regattas and proposed exhibition
regattas commencing this year and leading up to the
America's Cup.
BS: Challengers are required to deposit a bond
of €1 million, isn't that costly?
HR: It is obviously a large amount of money, however,
it can be posted by way of bank guarantee rather than
cash and it will be returned to the challenger at
the end of the competition if they have met their
obligations. In the last America's Cup, teams were
required to come up with US$400,000 in cash, which
was never seen again, as well as a US$500,000 performance
bond in cash or by bank guarantee. Given the substantial
benefits that will be provided to competitors, it
is reasonable they provide a tangible guarantee before
they receive those benefits. It is not uncommon for
an individual or a group of individuals to contribute
towards the costs of entering a challenge in the expectation
funds will be secured from sponsorship and other sources.
BS: Will these changes be permanent changes to
the America's Cup event?
HR: One of the benefits of the Deed of Gift is the
mutual consent clause that gives the competition flexibility
to be re-shaped appropriate to contemporary circumstances.
Things always change and evolve. It would be disastrous
to put in stone the arrangements being made for the
next America's Cup Regatta for all future regattas
as it would be for the arrangements for the Match
of 1870 to govern the next Regatta (those arrangements
involved 1 challenger against a defending fleet of
yachts!).
However, it is difficult to conceive how a future
holder and trustee of the America's Cup would not
continue many of the changes Alinghi has introduced.
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