James Farmer

Legal Commentary

America's Cup Part 3

Monday, December 04, 2017
I have twice before written a commentary on the America’s Cup.   I feel qualified to do this, having served as a director of Team New Zealand from 2004 to 2013, been a member of the Challenger Commission for the Valencia Regatta (2007), a member of the International Committee that investigated safety rules following the death of an Artemis sailor, Andrew Simpson, in San Francisco and other related activities.

The achievement of finally winning the Cup back earlier this year was of course a superb team effort and the fact that Team New Zealand chose not to nominate Peter Burling for an individual award at the Halberg awards but restricted its participation in that event to the team section is a justified recognition by them of the fact that it is not possible to single out any one member - sailor, designer or manager – as “winning” the Cup.

It is sad therefore to see of late strong public reaction to the news that Team New Zealand is said to be asking the Government and/or the Auckland Council for a so-called “hosting fee” for the event to be held in Auckland, over and above the $130-190 million to build the bases in Auckland, against the further “news” that Abu Dhabi and Sochi in Russia have been offering large sums ($80 million or more) as a fee payable to Team New Zealand for the right to hold the event.

Typical of the public reaction are these letters to the NZ Herald:

“Team NZ, the hosting fee is a step too far.  By all means go to Abu Dhabi or Sochi with or without the Royal New Zealand Yacht Squadron, but as Team NZ I’m not so sure.  How about repaying the loyalty that’s been shown to you over the years.”

“If [Team NZ] want to accept money from foreign sources on condition that the competition is held elsewhere, so be it.  Goodbye and good luck.”

Then there was the large piece written by Lizzy Marvelly in the NZ Herald on 2 December which supports public funding for the necessary infrastructure but refers to the hosting fee as outrageous and “a slap in the face to New Zealanders who have supported Team NZ, both emotionally and financially, for decades”.   She draws unfavourable comparisons with the Peter Blake era and concludes it’s “time for Team New Zealand to live up to the name”.

Coming so soon after a General Election in which homelessness and child poverty featured so strongly, all of this is reviving the idea that the America’s Cup is a rich man’s sport and not one that “ordinary” New Zealanders should support.  (The fact is of course that they have and they do.)

It would seem likely that the Government and the Council will find the funds for the infrastructure.  That will be sufficient to ensure the Cup is held here and avoid what we have been told is the contractual obligation to move the Event to Italy if the infrastructure cannot be established.

For myself, apart from whether Abu Dhabi or Russia are even legal alternatives given Team NZ’s contractual arrangements with Prada, I cannot imagine that Team New Zealand would in fact seriously contemplate moving the Event offshore and it would be helpful and in their own interests in retaining public support if they came out in the open right now and said that this is not a possibility.  The failure to make a public statement to that effect will, even to people who believe that it is inconceivable that Team NZ would do so, look rather like corporate blackmail aimed at the Government: “Pay us a hosting fee or we will go elsewhere”.  

Board members such as Sir Stephen Tindall and Bob Field have done so much for New Zealand and, presumably (like me for 10 years as an unpaid director), have been involved with the company for one reason and one reason only – to bring the Cup back to New Zealand.  It is inconceivable that, having achieved that, they would be parties to seeing it leave these shores so quickly for a hosting fee.  I refuse to believe that they would.   Nor do I believe that men who have made their justified reputations on corporate integrity would negotiate with the Government and/or the Council for the allocation of public funds in such a crude fashion.

To finish. One concern that I do have about the next Event, wherever it is held, is the cost of the new proposed foiling monohull.  No one has ever built a 75 foot fully foiling monohull and the sketches that have been released of the proposed boat show what a breath-taking challenge it will be to design and build such a boat and to make it sail.  In my first piece on the America’s Cup, posted on 1 July 2013, I said:

“Grant Dalton has said that the next Event needs to meet budget constraints to attract a good number of challengers.  He must be right on that and choosing a monohull over the technologically complex multihulls will assist in that regard.”

The technological complexity (and associated costs) of the AC multihulls must surely look simple and modest compared with what is now proposed. 

Jim Farmer

4 December 2017

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