The America's Cup: Gone with the wind

The Cup has been sunk before today’s start by tragedy, a lack of competition and feuding over funding

San Francisco

Up close, the AC72 is breath-taking. A 72-foot catamaran powered not by a sail, but by a towering carbon-fibre wing, the boat is spectacular to watch even during a mere practice session: skimming across San Francisco Bay with Alcatraz as its backdrop, a flotilla of tiny motor launches in its wake like pilot fish pursuing a shark. As it reaches its top speed of almost 50 miles per hour, the vessel can deploy retractable feet that allow it to rise up out of the water until it is all but flying. Unfortunately, the cost of the craft – with which the 34th America’s Cup is about to be contested – is breath-taking, too: an estimated $100m each.

Larry Ellison, the multi-billionaire CEO of Oracle, won the Cup as a sailor in Valencia in 2010, and has organised the event from on-shore in San Francisco in 2013. He had hoped that the spectacle of these remarkable boats would attract the masses to this rich man’s sport. But instead the AC72 has proved to be both controversial and downright dangerous, while the vast sums of money involved in the competition have kept away prospective teams, sown scepticism among potential fans, and caused uproar in the corridors of City Hall.

Last Wednesday lunchtime was quiet at the America’s Cup Park on San Francisco’s Pier 27/29. If things had gone differently, the venue might have been packed with spectators, straining to glimpse the finish line on the final day of the Louis Vuitton Cup – the group competition to decide which team will take on the holders of the most prestigious prize in sailing. But due in part to a paucity of contenders, the contest concluded days early, so this was just another training day for its victors, Emirates Team New Zealand, and their rivals, Ellison’s Oracle Team USA, who will now face off for the America’s Cup itself in a 17-race series beginning on Saturday.

A handful of committed yacht-spotters and curious tourists clustered at the end of the pier, but the rest of the Park – an array of pricey pop-up bars, restaurants, bleachers, pavilions and merchandise concessions – was near-deserted. Instead of the cheers of a crowd, the silence was filled with the voice of Jeremy Irons, gravely narrating The Wind Gods, a documentary about Oracle’s 2010 triumph, which was being shown on a large outdoor screen, watched by almost no one.

The film lionises Ellison, the buccaneering tech mogul – hardly surprising, given that it was produced by his son, David. But not everyone in this city is quite as impressed by the world’s fifth-richest man as his own family. And with the America’s Cup’s reputation sitting low in the water, it’s little wonder that some in San Francisco have begun quietly rooting for the Kiwis.

Ever since Queen Victoria watched the New York Yacht Club snatch the first America’s Cup in 1851, its winners have been awarded the honour and responsibility of choosing both the venue and the rules of the subsequent race. As anyone who has tried to engage with televised Olympic sailing without prior nautical knowledge can attest, it is not a sport suited to the screen. Yet after claiming the prize in Spain in 2010, at his third attempt, Ellison was determined that his beloved pastime should become a popular spectator sport, and picked its next location accordingly.

In the past, the Cup was typically contested out in the open ocean, but as it made its return to the US for the first time in 18 years, Ellison decided it should take place where people could witness it at close quarters. And where better than his hometown, with its natural watery arena? He pitched a summer of sailing culminating in the America’s Cup to San Francisco, with a report that promised $1.4bn (£0.9bn) in increased economic activity, 8,800 new jobs and 2.7 million spectators. As he presented Ellison with a key to the city in 2010, the then-Mayor Gavin Newsom asked, “Who the heck needs the Olympics … when you’ve got the America’s Cup?”

Those lucrative predictions would be undone, however, by Ellison’s next innovation: the boats he planned to race with. The Cup’s biggest setback of all came in May, when British Olympic gold medallist Andrew “Bart” Simpson, a member of the Swedish Artemis team, drowned after the AC72 flipped during a training session. His death led to a package of new safety measures.

Meanwhile, with everyone but billionaires priced out of the event by the prohibitive cost of the craft, only three more teams besides Oracle could be persuaded to take part: Artemis, backed by Swedish oil magnate Torbjorn Tornqvist; Italy’s Luna Rossa, backed by Prada CEO Patrizio Bertelli; and New Zealand’s team, backed by the Emirates airline. Ellison personally funded a pair of AC72s for Oracle – to race against each other in training, while the other teams tussled for the right to challenge them. Among the Oracle crew is another British multiple-medal winner, Ben Ainslie.

Louis Vuitton was so disappointed by the lack of participants that it demanded a $3m refund on its $10m sponsorship investment. The optimistic projections on which the city had based its funding estimates were premised on some 15 teams taking part in the competition, not a meagre four, and in March they were revised downwards, to 2 million spectators, 6,500 jobs and $900m in economic activity. In the meantime, the America’s Cup Event Authority – set up by Ellison to oversee proceedings – had backed out of an agreement with the city to spend $100m on upgrading neglected sections of the waterfront. Last year, City Hall also ordered the Authority to cough up almost half a million dollars after it underpaid the workers who built its spectator stands.

The city’s own Organising Committee promised to raise $32m in private funding to offset the public costs of the Cup, but reduced that target by $10m in light of the contest’s diminished scale. It has nonetheless struggled to reach its goal, leaving taxpayers worried that they will have to foot the bill. The city expects to make up the shortfall with revenues from the event, though an online petition is calling on Ellison to pay the difference himself.

Tim Redmond, a resident and former editor of the San Francisco Bay Guardian, said, “You go to a moderately rich person in San Francisco and ask for $500,000 to offset the cost of the America’s Cup, and they’re going to say, ‘What’s Larry giving?’ And Larry’s giving zero. The fifth-richest man in the world is not giving a penny… I don’t have a problem with holding the America’s Cup in the Bay, but the citizens of San Francisco should not have to pay to subsidise Larry Ellison’s boat race.”

In 2010, when he chaired the city’s budget committee, Supervisor John Avalos approved the arrival of the America’s Cup. Now, he fears that he and his colleagues were duped, and that the event will be a net loss for San Francisco. “We were expecting a huge bump for tourism, a lot of participants in the stands, cheering and clapping. Instead of applause, you can hear the barking of sea lions,” he said.

“I don’t think it’s the responsibility of the city to put of hundreds of thousands of dollars towards helping a small number of businesses – such as restaurants that already do well from tourism – when we could use that money in neighbourhoods that are struggling economically. The America’s Cup is a symbol of misplaced priorities in San Francisco.”

Not everyone is quite so pessimistic about the event’s impact. Jane Sullivan, a spokesperson for the city’s America’s Cup project, is confident that San Francisco will see a return on the money spent. The Cup has spurred the completion of several long-delayed capital projects, such as a new cruise terminal – and, she insisted, it is a great advertisement.

 “These unbelievable vistas of the city are being played in 170 countries around the world, so as a marketing effort it’s incredible,” she said. “It cements our role as a world-class city.”

And yet, like the teams and the crowds, the competition has also failed to draw TV dollars, despite Ellison’s introduction of up-to-the-moment filming and broadcast techniques designed to render the sport televisually thrilling. In the US, the crucial races will be shown on NBC – but only because the Cup organisers paid the network for the airtime.

In one final, humiliating blow to the Oracle team, three of its members were this week banned from participating in the competition, after an international jury found that they had brought the event into disrepute by making illegal modifications to their boats during last year’s America’s Cup World Series practice regattas. Oracle was also fined $250,000 and docked two points from their score in the forthcoming contest.

If Ellison’s team can pull off a second consecutive triumph in spite of this handicap, there’s every chance the America’s Cup will return to San Francisco. But one thing is for sure – next time, the boats will be cheaper.

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