Bootsnboats


Ellison the good guy?
July 21, 2007, 12:48 pm
Filed under: America's Cup, Diary, Tosh

If it wasn’t serious it would be funny. The Golden Gate Yacht Club versus the Société Nautique de Géneve? That is what is on the documents presented to the New York Supreme Court, but this is a battle of two billionaires, both at times characterised as billionaire brats, with the unlikely side-effect of the San Francisco-based Larry Ellison, boss of the Oracle America’s Cup challenge, grabbing the white stetson of the good guy and planting the black hat of the villain firmly on the head of Switzerland’s Ernesto Bertarelli, boss of the Alinghi syndicate which has just successfully defended the cup in Valencia.

As the Spanish city prepares to announce that it will host America’s Cup 33 in July of 2009, its mayor, the recently -re-elected, irrepressible, baritone-voiced Rita Barbera, must be hoping that there is a penalty clause written into a contract worth over €100m if Alinghi and its unloved executive arm, America’s Cup Management, fails to deliver.

 There was near-universal condemnation of the terms of the protocol for the next event when it was announced a couple of days after Alinghi beat Team New Zealand 5-2 in early July of 2007. The Spanish press ripped into its national federation for being not just raped but dropping its own trousers and obligingly standing with its legs apart in agreeing to the terms which Alinghi and ACM had demanded.

Most of the rest of the challengers were wringing their hands – though it is clear that the South Africans are equally willing to do Alinghi’s bidding, the Chinese have other fish to fry, and the British Origin team is standing back in case a mediator is needed.

So a meeting  was held in Valencia which included some of the big hitters like Patrizio Bertelli of Prada/Luna Rossa, Grant Dalton and Jim Farmer of TNZ, Dawn Riley of Areva, Alessandra Pandarese representing Vincenzo Onorato’s Mascalzone Latino, Tom Ehman for Ellison and the Germans. But, instead of just saying ‘what can we do’, a stiff letter drafted by Bertelli’s Spanish lawyer Luis Sainz was tweaked, approved and sent to both the Club Nautico Espanol de Vela, Berterelli’s collaborators, and the SNG.

What Ehman did not tell the meeting was that GGYC was intending to lodge a second challenge, under the terms of the third Deed of Gift which govern the running of the event. This is the 1887 version and is in the jurisdiction of the New York Supreme Court, having been lodged there by the New York Yacht Club.

A delegation duly flew to Geneva, a local legal processor accompanied them to the SNG clubhouse and handed the document to the secretary general (photographing the procedure) and went back to Valencia. The challenge was under the strict trerms of the 1887 Deed, specifying a yacht with a 90-foot load waterline length, a 90-foot beam (almost certainly a catamaran and, yes, design work is well underway) and in 10 months.

 There was no word from Alinghi, ACM or the SNG until the SNG announced it had also accpted a challenge from the Royal Cape Yacht Club on behalf of Shosholoza and under the terms of its latest protocol.

That was enough for Ellison, who then immediately instructed the law firm of Latham & Watkins to make its move. Not the San Diego office, which had acted in 1987 and ’88 on behalf of the San Diego Yacht Club in its fight against Michael Fay ahead of the big boat versus catamaran fiasco. This was the New York office operating on its own ground.

The acceptance of the South Africa challenge was manna from heaven for GGYC as it was clear evidence of a deliberate freezing out of Ellison and a hint that, even if the pressure on the CNEV to stand down was succesful, ACM had a second poodle on a lead. Whether that pressure has had any effect may be seen after a meeting on Thursday 26 July of the board of CNEV’s directors. Apparently the King of Spain is less than impressed, other Spanish yacht clubs are taking every opportunity to stick it to a CNEV that has yet to do anything other than try to organise an Optimist regatta in Santander, and is generally perceived to have been less macho than is acceptable to a nation that worships bullfighters.

Estimates are that it could take three to four months to extract a decision from the finest legal minds that New York has to offer (say October or November) and if it went GGYC’s way that would imply a 2008 cup in August/September with the first Valencia Formula 1 grand prix slated for October next year. It would also call into question the ability of the Swiss to put together the best boat, which would have to be designed, built and equipped only with materials available in Switzerland. Perhaps Andy Steiner could build the mast, and Décision could build the hulls, but winches, sailcloth and electronics would be more difficult.

SNG has 30 days to respond, that is by 19 August, and needs to juggle its relationship with Valencia with its feeling about how strong is its own position and how stubbornly it wants to keep total control. Ellison clearly wants to create enough leverage to shoehorn Bertarelli, however reluctantly, into negotiations. He would then be the white knight who wants to see an event board made up of two directors appointed by the challengers, two by the defender and those four able to appoints a fifth as chairman. He wants the appointment of people like jury members, event director and race officers to remain independent. And he will want to see the whole of the challenger programme returned to the challengers without Alinghi always crashing their party.

Meanwhile, the transfer season is still underway, even though the latest developments have had people keeping the caps on their pens until they see how things are going to run. Not least in the Oracle camp, where Russell Coutts is nearly in place, and in the Spanish camp, where Paul Cayard is an unhappy observer of what is happening and his long-time buddy Francesco de Angelis, who has parted company with Prada, does not like the way the CNEV has acted. 

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8 Comments so far
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Stuart, what a perfect description of the current state of affairs. At least the boys in the white hats have a leader who has a good track record in the courtroom. In addition to the ability to spot a puff of wind, Larry Ellison knows how to pick lawyers with the ability to put Ernesto’s puff of wind back where it belongs. A pity it has to come to that. cheers, Ray

Comment by Ray Cunningham

[…] Ellison the good guy? If it wasn’t serious it would be funny. The Golden Gate Yacht Club versus the Société Nautique de Géneve? […] […]

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quite right too.

Comment by Fish

So what does the promised land look like? Duplicate of Valencia 2007 in 2010 with new 90 footers? Can Louis Vuitton be lured back? That was probably the biggest. The America’s Cup has become 90% the well run LV series.

Comment by Brion Lutz

Bullfighters? Bullshitters more like.

Alinghi have already proven that when they structurally illiquidate the market (setting the bar sohigh it’s notworth turning up) they are then more than willing to pay for others to saddle up for the slaughter (ETNZ loan springs to mind!).

not sure what case BMWOracle have got given that they raced under ACM terms last time? Sure there was the challenger comission etc. but was that really up to much in the scheme of things?

Whilst the time lag in sorting out the details won’t cause a problem for teams with non commercial backing, it will be the death of smaller teams who are trying to roll up their commericial brands interest for the next event.

Maybe that’s what Alinghi wants: more racing for itself and less teams.

It could end up with all of this and more: but with effectively no event at all.

Comment by Alex

America’s Cup 2007 -great racing, great technical coverage but the onboard microphones picking up KKiwi accents from both boats shows that the AC has moved so far away from it’s charter. Was it won by the Swiss or the Kiwis? Fewer people are caring. Time to return to true national challenges

Comment by David

As a kiwi fan I never thought I’d actually say this, but I find it quite exciting how all that legal wrangling is unfolding – a little spice to shake things up a bit. It will also be very interesting to see how Russell and Oracle does in the Cup. Hopefully all syndicates will be involved, but I don’t think I’d actually mind if the Cup goes to the US in 2009!

Comment by sandra




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