RNZYS MEMBERS UPDATE FROM EMIRATES TEAM NEW ZEALAND

It’s been a challenging time for all of us in Auckland but it’s worth remembering that despite it feeling like a lifetime ago, it was only 8 months ago in March this year that we managed to both stage and retain the Americas Cup while dodging COVID19 uncertainties and restrictions as a free and inclusive event for all of New Zealand.

Originally posted by the RNZYS

It has been a very busy 8 months since then for the wider Emirates Team New Zealand team, on a number of design and build projects as well as the Protocol that set the foundation of the 37th America’s Cup Campaign.

THE PROTOCOL

The Protocol and AC75 Class Rule V2 were published on the 17th November and was developed over a busy few months working with the Challenger of Record, INEOS Britannia and RYS Ltd. We are grateful for the constructive way in which Sir Ben and his team approached the “negotiation” of this defining document. A huge thanks to our Commodore Aaron Young for his leadership and efforts in supporting the delivery of a Protocol which will mark a new era in the history of the Auld Mug. Bertie Bicket, Chairman of Royal Squadron Ltd also deserves our thanks and the relationship between our two respective squadrons has been deepened through the process and will only be of mutual benefit to both fine yacht clubs and their members for the future.

The key features of the Protocol have been well traversed in the media. It is very progressive in many respects with a focus on reduced costs, sustainability and a true pathway for women’s participation along with the Women’s America’s Cup and a return of the Youth Americas Cup. And certainly it has been developed with the global growth of our sport of sailing and the America’s Cup in mind which should always be the responsibility of any Defender and Trustee.

THE VENUE

We had hoped to announce the Venue by 17th September, which was only 6 months after the final race of AC36, in hindsight we were too optimistic. But the up side of it has been we have kept the foot on the pedal processing all venue options as fast as possible. In the past, venues haven’t been confirmed for some considerable time post the final race and we had wanted, as always to deliver earlier. For context, after Valencia in 2010 it took 10 months to finalise San Francisco as the venue for AC34. After the final race of AC34, it took 15 months to announce Bermuda for the 35th America’s Cup, and then once we managed win the America’s Cup back in 2017 it still took 14 months to finalise the detail and formally announce Auckland as the venue for AC36.

These timeframes illustrate that whilst much is made of the critical issue of funding, the terms and conditions attached to that funding are of equal importance and it is this piece of the host venue deal that can be very complex and takes time to work through. Each venue or city has their own needs and wants and of course we are very clear on what is needed to deliver a spectacular global event.

It’s worth stating categorically that this is not, and never has been a process of selecting the highest bidder for the venue as some have been disingenuously stating and leading many to believe. This is utterly incorrect.

THE NUMBERS

The budget for the 37th America’s Cup varies little be it in Auckland or internationally. It comprises what we know are the costs needed in New Zealand for both the team $120m (ETNZ) and the event $80m (AC37) and this total budget of $200m has never changed.

Importantly of this overall $200m budget in New Zealand, ETNZ have committed to raising $80m of the total. Specifically the ‘ask’ for all the venues is essentially $120m but varying slightly for overseas costs such as accommodation.

These budgets and the endless detailed line items are developed bottom up by people with up to 30 years’ experience in the America’s Cup. People like Grant Dalton, Kevin Shoebridge, Richard Meacham, Chris Salthouse, Sean Regan, Geoff Senior, Dan Bernasconi, Steve Collie, Martin McElwee, Russell Green, Glenn Ashby and Burns Fallow. The powerful combined knowledge of what is needed to run all aspects of a successful yachting campaign and an event of the required standards of a commercially enticing global sporting event through award winning broadcast and for sponsors of which are some of the biggest brands in the world. Not some cherry picked numbers that those out of touch with reality think will be OK and ‘available’.

It should be noted that the event budget of $80m is already considerably less (almost half) that what was spent in total for AC36 when you also consider the contribution that COR36 made to the event. The AC36 Event Report clearly quotes COR36: “Prada and COR invested over $150 million NZD in the 36th America’s Cup, a significant percentage of which went into the on-water and on-land operations and the Race Village…” This obviously was in addition to the $45m that ACE also put towards the event. A vital make up of numbers that the cherry pickers continue to neglect.

As mentioned, it is primarily the same budget we put to Auckland and New Zealand negotiators as we have put to other venues. The cost is the cost- it’s the terms and conditions that vary amongst the venue cities we are working with. In respect of New Zealand we didn’t get to a point to negotiate the terms and conditions (known here as the HVA Host Venue Agreement) as the required funding costs could not be met by the Government and Council, which we have said all along was fair and reasonable given the financial constraints on the country after COVID19.

Perhaps the most tragic aspect of this tawdry saga is the detrimental effect and action that is being pressured on the RNZYS and its members by Dunphy, Farmer and Ross which jeopardises the very foundations of the 150 year old club with the aim of disenfranchising ETNZ and the 30 year relationship that has seen 4 America’s Cup victories together.

It is for these reasons that ETNZ can never have any relationship with Mr Dunphy or his associates even if he were to magically find the funds to meet the full and actual costs of hosting the event and defending AC37.

DUNPHY & CO.

Much has been played out in the media in an orchestrated PR campaign by Mark Dunphy. Despite hopeful beginnings, on discovering Mr Dunphy’s sinister activities and clues to his true agenda ETNZ cut off all engagement with him. As a result we have had no intention of being drawn into a meaningless and ugly media argument with him. But we feel that you as members of the RNZYS deserve to hear directly from us so you have clarity around some of the deliberate misstatements of facts and the activities that pose a significant risk to ETNZ and to the reputation and standing of the Squadron.

You will all know about the former merchant banker’s so called “patriotic gesture” to assist with funding a defence here in NZ.  As stated many times that it has always been our desire to host the next America’s Cup here in Auckland if the funding and the terms of that funding can be secured. It has not been possible and increasingly unlikely to be. Despite him, and other parties continuing to repeat that “the funds for a local defence are now available.”- They are not- they are $50m short. And that is assuming government would recommit their offer which is based on an unlikely joint approach.

Not a small sum that can hopefully appear at some stage.

Despite this large difference in budget which seems to be ignored, Mr Dunphy has been privy to the required budget information for AC37 on multiple occasions in correspondence:

  • In early June  Mr Dunphy made two calls to an ACE director as well as RNZYS representatives offering to provide some considerable funding for the next America’s Cup event and asking for cost information which was duly given. 
  • A meeting then took place between the two where those costs were reiterated and clearly explained. 
  • Grant Dalton sent Mr Dunphy a letter on the 15th July describing the full background and requirements to funding the team and event (again) openly and positively in the hope of keeping the event in New Zealand. (This and a subsequent letter to Mr Dunphy went unanswered)
  • A phone call between Mr Dunphy and Grant Dalton where the general offer of funds was mooted and required costs discussed again in some detail. (The suggestion of a meeting in Queenstown was proposed to Grant which he agreed would be sensible and who waited for the details of time and place which again never came.) 
  • Another letter to Mr Dunphy on 12th August, again breaking down numbers and outlining requirements.
  • Subsequent to other letters inviting an offer, a 15th September letter to Mr Dunphy seeking clarification and explanation of his confused numbers in a long awaited letter (sent by him on 14th Sept) in which Grant Dalton again clarified the required budget. 

The fact that he continues to say the funds are available is all the more perplexing given he has had the ‘real’ number required for AC37 on many occasions- yet the $50m deficit remains. Mr Dunphy’s latest misrepresentation of the costs is either a PR tactic that have the effect of discrediting the team or he thinks AC37 doesn’t require international TV broadcast or the team won’t need some key design work, staff, sailors, boats or components to defend the America’s Cup.

In all of this correspondence, as well as meetings with RNZYS representatives Mr Dunphy was repeatedly urged to urgently meet with Grant Dalton as the only next step to progress this generous and exciting offer, as indeed it seemed at the time. No such acceptance of the offer to meet was received despite the issue requiring urgency as stated by Mr Dunphy.

What followed next was two months of waiting to hear from Mr Dunphy before his PR campaign played out in the media where he called for the removal of Grant Dalton as the condition of funding. This provoking an outcry from ETNZ team members and many others. Mr Dunphy then retracted his call for the removal of Grant Dalton as CEO as a condition of his funding.

Meanwhile an email emerged from Dr Hamish Ross, with Mr Dunphy in copy to try to provoke legal action by encouraging the NYYC to take legal action against the Challenger of Record in the New York Supreme Court.

The full realisation of such an underhand approach emerged when we were informed of a conversation with the NYYC, initiated by one of Dunphy’s cohort. On this call a proposal was again put to challenge the validity of the RYS as Challenger of Record (COR) and to replace  NYYC as the new COR. Among other defamatory claims about ETNZ and Grant Dalton by Mr Dunphy, he made it clear that he wanted to see ETNZ and Grant Dalton gone and this litigation was part of his strategy to achieve a vision of a new privately and Govt funded event in NZ with the NYYC as Challenger of Record.

Mr Dunphy initially denied the call then remembered he had one, but claimed the reason for the call was to check on NYYC’s interest in Auckland as next venue.

All of the above has not stopped Mr Dunphy threatening legal action against ETNZ, the RNZYS and Grant Dalton in the past few weeks. Clearly this is an unnecessary cost and distraction for ETNZ but we certainly welcome the opportunity to detail this conversation and the parties to it can be known by all. 

Perhaps the most tragic aspect of this tawdry saga is the detrimental effect and action that is being pressured on the RNZYS and its members by Dunphy, Farmer and Ross which jeopardises the very foundations of the 150 year old club with the aim of disenfranchising ETNZ and the 30 year relationship that has seen 4 America’s Cup victories together.

It is for these reasons that ETNZ can never have any relationship with Mr Dunphy or his associates even if he were to magically find the funds to meet the full and actual costs of hosting the event and defending AC37.

THE TEAM

As the detail in the Protocol for the 37th America’s Cup illustrates the team and its 60+ staff already have not been sitting back doing nothing. It has been hammer down already on a number of projects.

It is no easy task putting the Protocol itself together, and Russell and Harry our in house legal team deserve a special mention to the long nights and many weekends of work to get that across the line with their counter parts are the Challenger of Record. Also the Class Rule led by Dan Bernasconi is like developing a legal document by having the ability to look into the future of innovation. These documents have been a priority to set the course for the other Challengers that have been standing by to see the roadmap ahead for AC37 before entering which a number of teams have already done.

Meanwhile the build team at the North Shore ETNZ build facility have been full on making great progress on the build of the prototype Hydrogen foiling Chase boat due for trial early next year. The design team have been progressing the exciting AC40 Class to be used in the Women’s and Youth America’s Cup events as well as setting the all-important foundations of the design tools to be used for the one AC75 permitted to build for the 37th America’s Cup.

We are continuing to strengthen our team with a number of new hires and address a number of issues raised in a thorough team wide review after the end of AC36.

In addition to our amazing design, build and production teams, we have an incredibly strong sailing team with the Glenn, Andy, Josh, Ray all returning, as well as the new signing of Nathan Outteridge which has been very popular and provides a considerable addition of experience.

Furthermore the other part of our team- the RNZYS, our relationship remains as strong as it has ever been. It is this relationship and the strength and mutual respect of it that has made us the most formidable team in modern America’ Cup history, winning the America’s Cup four times since 1995. The link between club and team is the envy of all Challengers, but regrettably one that is being tested from the inside rather than externally.

In conclusion, the team is looking forward to clarifying any further misinformation that still exists for members on Thursday.