Billionaires are battling over the future of the America’s Cup, and while there is nothing unique in this, it is a bitter struggle that could see the event delayed to await courtroom decisions. One billionaire’s club holds the trophy and another’s doesn’t like the way in which the event is threatened to be run.
Johnnies-come-lately are misfits in the arcane world of the America’s Cup. Their position is likely to be the result of failing to observe the ground rules of the competition, those established in the three documents that declare the intentions of the donors of the oldest continuously competed trophy in sport – the Deeds of Gift, the trust documents held in the New York State courts..
The five owners of the schooner yacht America that won the £100 silver ewer in a now fabled race around the Isle of Wight in 1851, debated what should be done with the cup, and decided to hand it to the New York Yacht Club as a perpetual trophy that was subject to challenge by foreign yachts clubs for friendly competition.
When the Societe Nautique de Geneve won the cup in Auckland and returned the trophy to Europe for the first time in its history, it inherited the rules and regulations established by the donors, and modified by them over a period of thirty years; the third and final amended deed was drawn up by the last surviving owner of America, George Schuyler in 1887.
Ernesto Bertarelli, the owner of the Alinghi team that challenged on behalf of the SNG, appeared to be as defensive of the cup as any of its previous holders and, after due consideration, chose Valencia as the venue for the 32nd edition of the event, and proved a worthy defender by defeating Team New Zealand 5-2 early this month.
It was with his plans for the 33rd event that he appears to have ignored the basic tenets of the cup, by choosing a Spanish yacht club that was formed only days before it lodged its challenge as his opponent. He and the Spanish club had failed to observe a basic clause in the deed that states that the challenging club shall be one: “…having for its annual regatta an open water course on the sea,” and this requirement was not met.
Bertarelli had seen fit also to impose other draconian regulations which biased the event heavily in his favour, and which were universally criticised, but it took fellow-billionaire, Larry Ellison, to fire the warning shot across Bertarelli’s bows. From the Golden Gate Yacht Club, under which Ellison challenged, came a riposte that the Spanish club was unconstitutional and therefore the SNG must accept the challenge of the GGYC.
Nothing official has been heard from SNG and Ellison has subsequently indicated that his is not a personal challenge, but simply one to restore the event to the way in which it has been run of late, but that would require an immediate climb-down by both the Spanish and the Swiss. The former could be despatched in court, and the latter by the “mutual agreement” clauses of the Deed of Gift.
Both billionaires want an event in two years time, and the local government of Valencia is clearing away any possible obstacles to make the venue available, but the battling off the water may be nowhere near as easy as that on it. Conciliation is not a simple matter, but the terms of the Deed of Gift are. It needs commonsense to make the parties understand how best to tackle the issues.
This first appeared in The Observer on Sunday July 22nd
