"You Can't Always Get What You Want"
The Rolling Stones must have been singing about the America's Cup. Opinions are flying about what the Royal New Zealand Yacht Squadron and the Circolo della Vela Sicilia should put into the protocol for the 36th defense. It's easy to say, "We should go back to monohulls," or "There should be strict nationality rules for the crew," or "Yacht clubs should be in charge, like the Deed of Gift says," or "We need to keep the great LiveLine graphics." But it's a lot harder to come up with a complete Protocol, since some apparent desiderata are mutually exclusive. And there is the small matter of how to fund the event.
What's the Objective?
Before diving into details, let's think about what we want to achieve.
- Do we want to build the America's Cup into a profitable sports entertainment business?
- Should we return to a "traditional" America's Cup? What does "traditional" mean? The traditions of the Herreshoff era, with tycoon-funded American yachts with a Scottish skipper and a crew of Scandinavian fishermen? Or the traditions of the 12m era, sailed in the smallest yachts ever, until the AC Class catamarans of 2017? Or the traditions of the 1930's with huge, elegant J Class yachts helmed by their owners?
From the Royal Yacht Squadron website
RYS Annual Regatta - 1851
- Monohulls or multihulls?
- The fastest boats (apparent wind always forward) or boats with downwind sails and sail changes?
- Stadium racing or racing in big waves and strong winds? (NYC ACWS or Freemantle Doctor?)
- Build a linear TV audience big enough to attract broadcast rights fees equivalent to, say, the Tour de France (about $50M)? Or use a "digital-first" strategy on a freemium model?
- Help owners build their teams into long lasting, financially valuable "sports franchise" assets? Or continue with varying mixes of patronage and sponsorship?
- Establish a permanent governing authority? Or give more authority back to yacht clubs? (What staff and funding does a yacht club need to run the America's Cup?)
- Provide visibility by defining the dates, venues and boats for multiple future editions? Or follow the Deed of Gift and have the defender and challenger issue a Protocol months after the conclusion of each Match?
- Encourage additional nations to enter? Or institute 80-100% nationality requirement for the crew?
- No racing among the teams before the Challenger Selection Series? No sailing with the Defender before the America's Cup Match?
- Frequency? Every two years? Every four years? Random, decided by the Challenger in the case of a DoG match; or by the Challenger and Defender under mutual consent?
- Branding. (OK, I have not seen any discussion of this - as a businessman it is a special interest of mine.) Stop diluting the brand by holding "America's Cup This or That." America's Cup World Series. Red Bull Youth America's Cup. America's Cup Qualifiers. America's Cup Challenger Playoffs. America's Cup Superyacht Regatta. Stop it! The America's Cup is the Match, between the Defender and the Challenger. Find other names for all those other events. Go back and look at the 1851 RYS. There was only one event called "The R.Y.S. £100 Cup." All those other events were great, but each had its own name.
What's the Revenue Model?
How much will it cost to run the event? Regatta management, security, an international media center, broadcast production, the LiveLine graphics which require helicopters and a team of engineers to operate the system - who pays for all this?
Sailing is unlikely to generate much revenue from big sources that some other sports have: TV broadcast rights and ticket sales. As with Formula 1 venues, Valencia and Bermuda paid significant venue fees. Sailing is highly dependent on sponsorship. Merchandise, licensing and commercial hospitality provide additional revenue sources. How much revenue can be generated? Will it cover the cost of producing the event? If not, who makes up the shortfall?
Will We See a New Framework Agreement?
The RNZYS did not sign the "Framework Agreement." At the time, Team New Zealand said "Emirates Team New Zealand believe the future America’s Cup format should be decided by the Defender and Challenger of Record as it has historically been."
But might RNZYS and CdVS agree to a protocol that requires additional challengers to commit themselves to conditions imposed by the defender and the challenger of record?
When ACEA persuaded Louis Vuitton to return as a sponsor they attached the luxury brand's name to all phases of the competition:
- Louis Vuitton America's Cup World Series
- Louis Vuitton America's Cup Qualifiers
- Louis Vuitton America's Cup Challenger Playoffs
- America's Cup Match Presented by Louis Vuitton
Louis Vuitton designed their own logo for the event, which ACEA was not allowed to use on clothing or merchandise, or in association with any other sponsor.
Most marketing experts insist on protecting how a logo can be used. Brand identity guidelines specify "clearspace" around a logo to protect its integrity and impact. Hybrid logos with other companies are strictly forbidden, in order to strengthen the value of a brand's identity.
It appears the "logo police" at ACEA had a pretty loose idea of brand integrity.
Why anyone thought Snapchat was a good way to build the audience is a separate topic.
Presenting Sponsor or Title Sponsor
Who gets top billing - the event or the sponsor?
Vuitton's LV symbol was used on the wingsails instead of the traditional America's Cup symbol. Compare the AC72 yachts in San Francisco in 2013 with the America's Cup Class yachts in 2017.
Before the Match began, I made some predictions. Some were better than others...
- Neither team will sweep the other - it will be a back and forth battle.
Not so good. Oracle managed to win one race out of nine - hardly a back and forth battle.
- The racing will be intense, with frequent lead changes after the first downwind leg. The first boat to Mark 1 - the end of the short blast reach after the start - will almost always be leading at Gate 2, since there are few passing opportunities on the short first downwind leg.
- It will come down to sailing - how well the teams execute their maneuvers.
- Neither team will have an overwhelming speed advantage.
Mostly right. New Zealand was faster in the first four races, but Oracle made their boat faster between the two weekends of racing. Oracle's errors - starting, tactics and boat handling - made things easier for the Kiwis.
- Oracle's Jimmy Spithill will be very aggressive, especially in the pre-starts.
Wrong. Spithill won only two starts in nine races. He was over early in the Race 1 and Race 5. He gave away the start in Race 7 by slowing unnecessarily. In Race 8 Burling hooked Spithill and forced him head to wind.
- Very light air will favor the Kiwis.
If the 2013 America's Cup seemed like "The Empire Strikes Back," 2017 gave us "Return of the Kiwis." Peter Burling's Luke Skywalker vanquished Larry Ellison's Darth Vader racking up eight race wins while Oracle could manage only one. Jimmy Spithill and the Oracle crew seemed to succumb to Jedi mind tricks, losing seven of the nine starts, going OCS in two races, sailing out of bounds once, misjudging laylines both upwind and down and falling off their foils in several tacks and gybes.
The Match started out badly for Oracle when they were over the start line early in the first race.
The following Saturday, Oracle was again OCS, in Race 5.
The Kiwis won the first five races. Oracle got their only win in the second race on Saturday 24 June.
On Sunday, in Race 7 Oracle had good speed to weather of the Kiwis, but after an inexplicable turn upwind by Spithill, they crossed the line over a boat length behind and slower than the Kiwis.
In the pre-start of Race 8 New Zealand's Peter Burling manage "to hook" Jimmy Spithill and force Oracle almost head to wind. Burling's protest was green-flagged by the umpires, but Burling was able to speed off to lead at Mark 1.
Speed and Boat Handling
The Kiwis closed out the Match in Race 9 with a demonstration of the boat speed and good handling that had brought them to match point. Oracle managed to win the start and led at Mark 1. The first gybe on leg 2 spelled the end for Oracle. New Zealand's gybe was crisper and they edged ahead, gassing Oracle with turbulence off their wing. They extended their lead and were never threatened, speeding to win the race and claim the America's Cup.