The Kiwis fight on the home front, Alinghi mobilises: Grant Dalton defends overseas plans for 37th America's Cup

The Extraordinary General Meeting of the Royal New Zealand Yacht Squadron (RNZYS) on 9 December was eagerly awaited. The RNZYS had invited its members to an information meeting in the ongoing national dispute about why the New Zealand defenders cannot or do not want to hold the 37th America's Cup in their home waters. Even though many members were only able to attend via Zoom due to the ongoing strict pandemic restrictions, everyone had the opportunity to listen to team boss Grant Dalton's defence and explanatory speech. The head of the successful Emirates Team New Zealand sailing racing team, to which the RNZYS provides the necessary association umbrella in accordance with the provisions of the Cup Foundation Charter, provided the members with the most detailed insights to date into the financial requirements of the upcoming Cup defence. The bottom line: there is still a shortfall of 50 million New Zealand dollars. Which is why a defence overseas and not in home waters remains the best way to plug this hole from the team's point of view.

In his detailed account, Dalton emphasised that nothing had changed in the budget for the defence of the silver jug since March of this year: "Of this total budget of 200 million New Zealand dollars(Red.: 1 NZD corresponds to about 0.60 Euro) the share requested from potential organisers was more or less consistently 120 million New Zealand dollars - depending on the relative costs abroad, such as accommodation. To get straight to the point: This is not about a search for the 'highest bidder', even if this has been mischievously publicised."

Dalton's battle plea was primarily against allegations and requests from long-time New Zealand Cup supporter Jim Farmer and wealthy New Zealand CEO of privately-owned operating company Greymouth Petroleum Mark Dunphy. Both are campaigning hard for the Cup to be staged in New Zealand, attacking the team under Dalton's leadership but failing to gain support from club members for their request for a national Cup course. In an interview with the New Zealand Herald newspaper in September, Dalton explained that Dunphy and his fellow campaigners had tried to convince the New York Yacht Club to attack the Royal New Zealand Yacht Squadron in the New York Supreme Court. In this way, they had tried to have the Royal New Zealand Yacht Squadron disqualified and the New York Yacht Club brought into play as the new Challenger of Record. Dunphy denied the allegations, but pointed out, among other things, that more than 85 per cent of New Zealanders wanted the Cup to be held in their own country.

80 million New Zealand dollars for the Kiwi sailing team

Dalton now told the AGM: "It is no wonder that RNZYS members and the public are confused because Mr Dunphy's figures and calculations were somewhat fluid in their construction. Initially, Mr Dunphy assumed that the Government would significantly increase its financial contribution to the event. But when he realised this was not going to happen, he disingenuously altered the costs to fit his narrative." Dalton continued: "This week, Mr Dunphy's latest position was that his $50 million shortfall could be covered by revenue from the event."

Dalton explained: "When you win the America's Cup, two things happen: you become the defender of the next America's Cup on the race course and you take on a number of responsibilities, including creating the new protocol and class rules. At the same time, you take over the organisation of the next event. There is no prize money for winning the America's Cup, but you become the rights holder of the event. However, this comes with an increased financial challenge and commitment as the cost of organising the event is added to the already significant cost of defending it on the water. As has been the practice in a number of different America's Cup campaigns, if the cost of the event is secured by a hosting fee, the defender as rights holder can use any additional funds to finance the costs associated with the team's defence." This model, says Dalton, has been used several times in Cup history: "Sir Peter Blake helped fund the team in 2000 with the proceeds from the event. And Team New Zealand did the same in 2003."

In addition, Dalton said that Hamish Ross, as Mr Dunphy's colleague from his time at Alinghi(Editor: Ross was a general consultant for Alingi at the time) in Valencia in 2007 that they, too, are(Ed.: the Swiss) generated a surplus from the event organisation at the time. Therefore, according to Dalton, there is no "additional income". Rather, he said, "Any funds raised will be used for either the event or the team, which are already included in the 200 million budget." Dalton attacked the critics, saying: "The point that Mr Dunphy is surprisingly or deliberately missing is this: There will need to be surpluses after the event is signed off to offset the $80 million that Emirates Team New Zealand (ETNZ) has committed to raising for the team as part of the overall $200 million budget. Therefore, the significant $50 million shortfall in its proposed budget remains."

The two factors that speak against a defence in New Zealand

Dalton continued his mocking jab at the critics trying to convince RNZYS members to hold the 37th America's Cup at home in New Zealand at all costs: "Sure you can host the event in Auckland with a $50 million deficit, but then you can bet your bottom dollar that ETNZ will inevitably lose. That will lead to the team's demise when competing against the budgets and strengths of teams like Alinghi, Ineos Britannia, Luna Rossa and American Magic. That's the part of the harsh reality that Dunphy and Farmer have turned into a 'threat' through their aggressive PR campaign." Dalton then took apart another key statement from Dunphy and Farmer. As part of their campaign for a defence in Kiwi waters, they had said: "We did it in the 36th America's Cup, so why can't we do it again?" Dalton counters that this argument overlooks two key factors: Firstly, the Covid-19 pandemic and the impact it has had on the global sponsorship market, and secondly, the contribution that the Challenger of Record (COR) made in the 36th America's Cup. This refers to the involvement of the Italian Challenger of Record, the Luna Rossa Prada Pirelli Team, in the 36th edition of the Cup in New Zealand.

Dalton pointed out that the $80 million currently budgeted for the organisation of the 37th America's Cup was already "significantly lower" (almost halved) compared to what had been spent in total on the 36th America's Cup up to March this year. In the official event balance sheet, COR is quoted as saying: "Prada and COR invested more than 150 million New Zealand dollars in the 36th America's Cup, a significant percentage of which went into operations on the water and ashore as well as the Race Village (...)." According to Dalton, this sum was obviously in addition to the 45 million dollars that ACE invested in the event as organiser, with the 40 million Kiwi dollars in event fees from the New Zealand government also being used exclusively for event costs. This, Dalton said, was an essential make-up of the figures that was "seemingly conveniently" neglected in Dunphy's calculations.

Dalton elaborated: "Our experience with AC36 has shown that the model of a separately managed challenger series is not fit for purpose. The AC37 protocol dictates that there is a single event authority for all AC37 events, as was the case in Valencia (2007), San Francisco (2013) and Bermuda (2017). Finally, there is the challenger series, the pre-regattas, the Women's America's Cup, the Youth America's Cup and the match itself."

Dalton's final blow to the troublemakers as he sees it: "Dunphy, Farmer and Ross have clearly invested a lot of time, money and energy into their PR campaign and explored every available avenue to disrupt the team, the RNZYS and the venue selection process. We have known for some time how far they have gone and the extremes they are pursuing here and offshore. For these reasons, ETNZ will never have a relationship with Mr Dunphy or his associates. Not even if he magically finds the missing 50 million to meet the full and current costs of hosting the event and a successful defence in the 37th America's Cup."

Alinghi's comeback takes shape

The state of play in the America's Cup: the protocol and class rules for the 37th America's Cup were published on 17 November. After two postponements, the venue is now to be announced by 31 March 2022. Cork in Ireland, Valencia in Spain and Jeddah in Saudi Arabia are being discussed as venues. Up to six participating teams are currently in sight, as confirmed to YACHT online by several sources: In addition to the New Zealand Defenders and the British COR Ineos Britannia, American Magic and apparently also Luna Rossa and Alinghi have set course for the Cup. According to experts, they have all already signed team members - a clear sign of their intentions. The Swiss Société Nautique de Genève, acclaimed European America's Cup winner in 2003 and 2007 alongside Ernesto Bertarelli's Alinghi team, plans to present its new plans for the 37th America's Cup at a press conference in mid-December. A second American team, Stars & Stripes, is also making an attempt.