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America's Cup sinks as sponsors flee billionaire feud  Comments
February 9, 2010

By Alex Duff and Aaron Kuriloff


Billionaires Larry Ellison and Ernesto Bertarelli have turned an America's Cup boom into bust.

A 30-month wrangle over rules cancelled a 19-team qualifying event, scared off sponsors including Nestlé and shrunk the organising budget to e8 million (R84.8m) from a record e230m in 2007, organisers said yesterday.

The start of the best-of-three sailing regatta in Valencia, Spain, was postponed for two days because of a lack of regular wind speed yesterday, race officials said.

International interest had declined to such an extent that organisers gave away the television rights, officials of Bertarelli's Alinghi team said.

"This is not going to be a windfall for anyone," said Gary Jobson, the president of US Sailing and the cup-winning navigator in 1977. "It's going to cost them both a lot of money."

The economic impact of the 159-year-old event, sailing's oldest competition, is less than 10 percent of the $7 billion (R54bn) realised last time, according to Tom Cannon, a sports business professor at the UK's Liverpool University. There were no infrastructure benefits and most of the about $500m spent would be on the two competing boats.

According to Switzerland's Bertarelli, his team had struggled to get sponsors to replace UBS and Nestlé.

"It's a difficult sell," Alinghi captain Brad Butterworth said in an interview. This America's Cup was "95 percent legal, 5 percent sport".

Bertarelli received $10bn in the 2006 sale of family drug company Serono, while Ellison, the chief executive of Oracle, is worth about $22.5bn, making him the fourth-richest person in the world according to Forbes magazine.


Bertarelli has accused Ellison of turning the event into a spending race to suit his challenge, comparing the US billionaire's tactics to "corporate raiding".

"Larry has more money than anyone else, so why would he like a Cup that costs less," Bertarelli said last month. "He likes a Cup that costs more."

Oracle team chief executive Russell Coutts said Alinghi consistently attempted to bend the rules in its favour. Ellison did not respond to a request for comment yesterday.

"Bertarelli's new protocol did not make commercial sense," Coutts said. "Most corporate sponsors want the competition regulations to be stable and provide a fair format and rules for the teams."

The billionaires' spat has even touched on whom has the better business and sailing credentials. Bertarelli would be Alinghi's helmsman yesterday, while Ellison would not be among 10 sailors on the Oracle boat, the team said.

Ellison said early yesterday his participation depended on the weather conditions.

It is the first time there has not been a qualifying contest since 1988, ostracising challengers from countries including South Africa, Italy and New Zealand that competed last time. - Bloomberg
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Showing page 1 of 1 comment pages, 2 total comments
27 Weeks ago Mal wrote :
And from the other side of the isle....most mainstream media has indeed portrayed it as something of a joke but, though America's Cup 33 may well have appeared to be two billionaires playing with their toys, there was a lot more to it than that. Ernesto Barterelli and his Swiss team Alinghi were the first European team to both win and successfully defend the Cup since it's inception in 1851. Quite an accomplishment. In what I think was a misguided attempt to gain total control over the Cup competition at the end of 32; Bertarelli formed a paper tiger of a yacht club in order to challenge himself. Several teams protested but none had the moxie to mount a material protest. Larry Ellison took it to court as the challange was not only unfair, it was in violation of the Deed of Gift that established the rules for Cup competition in the late 1800's. The resulting legal maneuvering gave the whole thing a black eye but, as is often the case where agreements cannot be reached, seemed the only recourse. If fault can be assigned by a score; Larry Ellison was 11 for 11 in his legal challenges. The Deed of Gift is a charitable trust and very difficult to break so, in the end, it became the rules for the race. The Deed specifies agreement as the controlling factor in a Cup challenge. Ernesto and Larry couldn't agree on much of anything. Since the Deed was written in the late 1800's, it is not very limiting. A single masted boat must be between 40 and 90 feet and that's about it. This is the reason the boats were so ridiculous or magnificent depending on your point of view. Anyway, the Cup is back in the US after a 15 year absence, Ernesto is claiming sour grapes and Larry is promising an interesting multi challenger, multi defender, possibly multi hull competetion for AC 34. If you followed the whole story from the beginning and know the history of the Cup; it was all quite interesting. If you are a multihull sailor; the racing itself was nothing short of amazing...
29 Weeks ago vitis wrote :
This has totally ended up a great big joke--it is not a true sporting event but rich boys with their toys playing absolutely ridiculous games--how this has all been allowed to happen I just don't know --but Americas cup racing ?????????????? I think not, and apart from watching these beasts of machines to see if one hopefully splits apart the whole event lacks interest---WHO BLOODY CARES WHO WINS apart from the rich boys themselves, what a sham and what a shame.
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