2021 Cup defence smothered in red tape

stay here in New Zealand,” Dalton told the Squadron gathering in June.

What Dalton did not predict and nobody could anticipate was that the process would push beyond the September 17 deadline. But, with last-minute wobbles from two of the potential international hosts and an eleventh-hour development in a hometown bid to keep the Cup in Auckland, the deadline was extended.

“For the benefit of both the 37th America’s Cup and the eventual host venue, we would rather allow some more time now, so we make the right decision as opposed to a rushed decision,” said RNZYS Commodore Aaron Young.

Just 48 hours before the September 17 deadline, the Cup regatta was heading to Ireland. The other two potential offshore venues, Valencia and Jeddah, had slipped out of contention.

Valencia, still carrying debts from its 2007 hosting of the Cup, withdrew its bid to host another regatta despite much of the infrastructure remaining in place. However, the Spanish government was reportedly still showing interest in supporting a hosting bid. Barcelona was mooted as one possibility and, with central government backing, Valencia’s hopes could still be revived.

Although Saudi Arabia has been investing large sums in attracting major sporting events, there were indications its America’s Cup proposal was less attractive than those of its rivals.

That left Ireland in the strongest position and in the weeks leading up to the September 17 deadline, a stream of bullish news reports proclaimed Cork’s position as front-runner in the bidding war.

“It’s ours to lose now,” Cork Chamber of Commerce president Paula Cogan told the Irish Examiner on September 14. “If, in a few years’ time, we looked back on this and thought we’d lost this opportunity, it would reflect badly on the decision-makers of the time. This is perhaps a oncein-a-lifetime opportunity for Cork, for Ireland, to host such a huge global sporting event.”

Ireland’s Foreign Minister, Simon Coveney, had attended a number of high-level presentations and appeared to be strongly promoting the Cork bid. But at the last minute, an unrelated political stoush, difficulties with the ruling party’s coalition partners and nervousness about the costbenefit ratio of a Cup regatta appeared to stall Ireland’s charge. The Irish requested more time for due diligence.

Meanwhile, back in New Zealand, a private-sector initiative to raise enough money to keep the Cup regatta in Auckland also made an 11th-hour move to revive its position. The campaign is fronted by Mark Dunphy, chairman and CEO of Greymouth Petroleum. He occupied a senior position at Fay Richwhite, when the merchant banking firm backed New Zealand’s America’s Cup debut at the 1987 America’s Cup in Fremantle, Australia.

The Dunphy-led America’s Cup bid has charted an erratic course. From the outset, the tone was aggressive, very much in the form of a corporate raider intent on a divide and conquer strategy.

In various statements and interviews, Dunphy demanded funds should be managed by the Royal New Zealand Yacht Squadron, not ETNZ; that Grant Dalton must quit the team leadership; that funds should be channelled through entities that would give the backers significant tax advantages. There were rumours of court action and injunctions, which never fail to send shivers of dread through the Cup community.

Despite repeated efforts to open detailed discussions, Dunphy refused to engage directly with ETNZ, beyond a single hour-long telephone conversation with Dalton.

In the face of what was characterised as a hostile takeover bid, the RNZYS and ETNZ closed ranks, declaring they were “in complete alignment”. Senior members of the team also issued a lengthy statement in support of Dalton, describing efforts to unseat him as “mind boggling” and accusing Dunphy of undermining the structure of the team.

In the face of these and other strong expressions of support for Dalton from Sir Stephen Tindall, former chairman of the ETNZ board of directors, and others, Dunphy began to backtrack. Dalton could stay, he said. Although that would mean some backers would no longer support the bid, others would step up to the plate. The tax aspects of the plan would also be dropped.

But, as the clock ticked down, there was still no direct engagement with ETNZ and no detailed proposal. On September 1, Bob Field, a longstanding ETNZ board member, wrote a second letter from the team to Dunphy requesting details of the proposed funders and a credible indication of their willingness to commit funding, and on what terms.

Emphasising “utmost urgency”, Field wrote: “If you and your proposed funders are sincere in their goals, then we welcome a direct and candid dialogue.” For two weeks, there was no response. Then, two days before the deadline, there was another shift when Dunphy sent a more conciliatory letter to Field and the RNZYS.

In the light of these last-minute moves in Ireland, Spain and New Zealand, the RNZYS and ETNZ decided to delay the host venue announcement.

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Although they recognised the need for challengers to know the venue as soon as practicable, the postponement statement did not commit to a new deadline. The next scheduled milestone is the release of the Protocol on November 17. The Protocol would be meaningless without would-be competitors knowing where the regatta is to be sailed.

“ETNZ and RNZYS believe it is both prudent and responsible to extend the deadline in which the offshore venues can continue to progress negotiations,” the statement said. That would enable ETNZ team members to visit the offshore venues to carry out essential on-theground deliberations, which had been impossible under current Covid restrictions.

“This extension of the process will also allow Mr Dunphy further time to answer the questions we have already put to him over the past month.” Dalton added: “Now that we finally have an 11th hour letter from Mr Dunphy, it would be remiss of us not to explore the viability of an Auckland event and if it in fact can be fully and completely funded locally. To date, there has been no evidence of this being the case.”

The New Zealand government indicated the original $99 million offer to support an Auckland defence was still on the table. Grant Robertson, who is both Minister of Finance and of Sport, said the government was happy to have further conversations about whether the government’s contribution would be sufficient, but he added the government could not go beyond its original offer.

However, in the week following the postponement, relations between Dalton and Dunphy soured and then severed in acrimony. Dalton sought direct answers about Dunphy’s relationships with Swiss billionaire Ernesto Bertarelli, Oracle founder Larry Ellison and Prada chief Patrizio Bertarelli, all of whom have been Cup rivals of ETNZ. Dunphy denied he was working with or on behalf of any offshore interests.

But on September 22, ETNZ broke off all dealings with the Dunphy bid. It cited an email to the New York Yacht Club proposing a move to have the Royal Yacht Squadron disqualified as Challenger of Record, which would clear the way for New York to become Challenger of Record. According to ETNZ, the email was sent by lawyer, Dr Hamish Ross, with Dunphy copied on the message.

“The email clearly outlines their intentional lobbying of the NYYC to take legal action in the New York Supreme Court against the Challenger of Record with a purpose of intentionally disrupting the venue selection process,” said the ETNZ statement, which also cited a subsequent Zoom call initiated by Dunphy.

In a follow-up radio interview, Dalton said Dunphy’s 75-minute Zoom call was to a NYYC member and discussed the Ross initiative. Dunphy denied any connection with the Ross plan.

NYYC, which held the America’s Cup for 132 years, rejected the proposal. “We applaud Commodore Culver and the NYYC for wanting no part and rejecting Mr Ross and Mr Dunphy’s overtures,” said ETNZ.

RNZYS Commodore Aaron Young expressed concern and disappointment over the turn of events. Reaffirming full support for ETNZ, he added: “RNZYS has a preference that the defence be held in Auckland with the caveat that there is funding to run a credible defence together with support from local and central government.”

While the location remains undecided, some concrete details of the 37th America’s Cup have emerged with the announcement of a new AC40 class. This will be a foiling monohull, similar to the training boat ETNZ used to good effect in the lead-up to its successful 2021 defence.

The new class will be built at the ETNZ facility in Auckland and will be used by the challenger teams for scale testing and development, match race training and for scheduled regattas leading up to the 37th America’s Cup.

They will also be used for women’s and youth regattas to be held at the 37th America’s Cup venue. It will be compulsory for the yacht clubs of teams competing in the America’s Cup to field crews for the women’s and youth regattas, but entries will be open to yacht clubs not competing in the America’s Cup as well.

ETNZ’s 12m foiling monohull, Te Kahu, was a powerful tool in the team’s preparation for its successful 2021 defence of the America’s Cup.

2021 Cup Defence smothered in Red Tape

AUCKLAND, NEW ZEALAND’S HOSTING OF THE 36TH AMERICA’S CUP

36th America’s Cup Impact Evaluation

Final Report – 30 June 2021

America’s Cup Event Limited Final Event Report

1

By Ivor Wilkins Shortly before New Zealand slid into another prologned Covid lockdown in August, an official central and local government report on Auckland’s 2021 America’s Cup Defence revealed to nobody’s surprise that the regatta’s economic returns fell short of expectation.

Dozens of pages of economic analysis, surveys, graphs, tables, graphics, appendices and detailed exposition conclude that in a world radically altered by a devastating global pandemic fewer than expected international visitors attended, fewer big-spending superyachts arrived, fewer international media were able to provide first-hand coverage and fewer teams competed. Consequently, income did not match expenditure.

In what was described as a “perfect storm” of adverse circumstances, no other outcome could have been seriously expected. What is surprising, however, is how the joint report issued by the Ministry of Business Innovation and Employment (MBIE) and Auckland City Council chose to paint the event in the most negative light possible.

“The positive aspects get brushed aside and

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