Oracle’s Ellison Says America’s Cup Rules Will Cut Costs, Improve Racing

The cost of racing in the 34th America’s Cup off San Francisco in 2013 may be less that what it was the last time more than two entrants contested the 159-year- old yachting trophy, even as the rules mandate faster, state-of- the-art boats that will produce better competition.

Russell Coutts, chief executive of defending-champion Oracle Racing and a four-time Cup winner, said in an interview in Cascais, Portugal, that a 60 million-euro ($86 million) campaign would be “very, very competitive” and 30 million euros would produce a “budget team.” Oracle spent more than $100 million in the 2007 Cup, while China Team had the lowest budget at 14 million euros.

At the same time, racing 72-foot catamarans, powered by 130-foot (40-meter) wing sails at speeds exceeding 30 knots, will produce more even competition where sailing skill will matter more than boat design, according to Larry Ellison, chief executive of Redwood City, California-based software maker Oracle Corp. (ORCL) and the yachting team’s founder.

“While there might be little differences in the boats, there aren’t going to be these major design differences,” Ellison said to reporters Aug. 14. “So I think the boats are going to be pretty close from an engineering standpoint and it’s going to be up to the sailors and crew to get them around the racecourse and win the races.”

Ellison campaigned unsuccessfully for the Cup in 2003 and 2007. He and his team won the right to choose the next venue and set the rules after capturing yachting’s “Auld Mug” off Valencia, Spain, in February 2010 in an unusual two-boat, best- of-three series against the Alinghi syndicate owned by Swiss billionaire Ernesto Bertarelli.

Legal Fight

The San Francisco regatta will mark a departure from that series, where Oracle sailed a 90-foot trimaran with a 223-foot carbon-fiber wing sail against Alinghi’s catamaran. The showdown came after a two-year court fight between Oracle and Alinghi over the rules that ostracized previous challengers from countries including South Africa, Italy and New Zealand; scared off sponsors like Banco Santander SA, UBS AG and Nestle SA (NESN); and shrank the organizing budget to $11.1 million (8 million euros at the time) from a record 230 million euros in 2007.

The sailors were in Cascais for the America’s Cup World Series, a circuit of regattas combining fleet and one-on-one match racing that helps teams prepare for the America’s Cup in 2013 and promotes that competition.

The boats raced in Cascais and other America’s Cup World Series events are nearly identical 800,000-euro, 45-foot catamarans, built by New Zealand-based Core Builders Composites Ltd. Competing in the AC45 series is an operation costing between 1.6 million euros and 2 million euros in the first year, according to Paul Cayard, CEO of the Swedish team Artemis Racing and a former America’s Cup skipper.

Design Differences

“In San Francisco, each team will have designed their own boat, so there’ll be some performance differences due to design,” Cayard said in an Aug. 13 interview. “But the type of racing we’re going to be doing, which is very short, means that the boat also has to be reliable and maneuverable. Whatever enhancement the boat has, has to be usable in that short period of time.”

Dean Barker, skipper for Emirates Team New Zealand, said that technology and engineering still will be critical to the winning team.

“It’s more likely that one boat will have some sort of performance advantage,” he said. “There is certainly the potential there that the racing could be decided by design.”

In San Francisco, challengers will race in the Louis Vuitton series for the right to face Oracle for the Cup.

U.S. Return

Ellison’s victory over Alinghi brought the Cup back to the U.S. for the first time since Dennis Conner’s Young America lost to New Zealand in 1995.

The Cup is named for the schooner “America,” which defeated a fleet of British yachts off the Isle of Wight in 1851 to capture the 100 Guinea Cup, deeding it as a perpetual trophy to promote “friendly competition between foreign countries.”

The New York Yacht Club defended the Cup off New York from 1870 until 1920, before moving the regatta in 1930 to Newport, Rhode Island, where it remained until 1983. That year, Australia II beat Conner’s Liberty in seven races to end the New York club’s 132-year hold on the trophy. Conner recaptured it off Fremantle, Australia, in 1987 with Stars and Stripes.

The event has since been held in San Diego, Auckland and Valencia, though it has never featured a fleet of multihull boats capable of these speeds.

“In the old days, if you won the start, you usually led the race from start to finish,” Ellison said in Cascais. “That’s not the case with these boats. There’s a lot of passing and a lot of opportunity to make a comeback, and I think that’s what people want to see.”

To contact the reporters on this story: Joao Lima in Lisbon at jlima1@bloomberg.net; Aaron Kuriloff in New York at 5697 or akuriloff@bloomberg.net

To contact the editors responsible for this story: Tim Quinson at tquinson@bloomberg.net; Michael Sillup at msillup@bloomberg.net.

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