Feb. 8 (Bloomberg) -- Team New Zealand can’t match billionaire Larry Ellison’s budget in the America’s Cup this year so it’s relying on sailing nous for what managing director Grant Dalton sees as a last chance to reclaim the trophy.
As the defending champion, Oracle Corp. Chief Executive Officer Ellison’s sailing syndicate set the rules for the Sept. 7-21 series in San Francisco Bay, opting for the AC72 multihull design, a 72-foot (22 meters) catamaran with a carbon-fiber sail that’s bigger than the wing on a Boeing Co. 747 jet and took four times as long to build as previous boats.
“Billionaires’ egos get to set the criteria,” Dalton said in a Bloomberg Television interview at the Auckland harbor warehouse where his team was preparing the second version of its boat. “It is just ridiculously out of control, expensive.”
Team New Zealand, the only commercial crew to have survived in the competition since 2007, is relying on sponsors including Emirates Airline, Omega SA, Toyota Motor Corp. and the New Zealand government to fund a challenge that can cost more than $100 million. Ellison, the eighth-richest person in the world according to the Bloomberg Billionaires Index, has a net worth of $40.6 billion, more than New Zealand’s Gross Domestic Product of NZ$36.3 billion ($30.3 billion) in the quarter to Sept. 30.
Other challengers, including Gunvor Group Ltd. CEO Torbjorn Tornqvist’s Artemis Racing, will have budgets at least twice as big as Team New Zealand, Dalton said. They’ll contest the Louis Vuitton Cup from July 7 in San Francisco, with the winner of that regatta facing Oracle Team USA for the America’s Cup.
“In its way, it’s the last shot for this team,” Dalton added. “Maybe it’ll manifest itself in another way because the brand is so strong, but as a put-together sponsorship package with the dollars adding up to create the sum, it won’t happen like that again.”
Team New Zealand’s eight-year reign as holders of the so-called Auld Mug from 1995 to 2003 brought more than NZ$1 billion into the nation’s economy, inspired the redevelopment of a rundown waterfront in Auckland and grew a boat building and service industry, according to a statement from the team.
The America’s Cup began in 1851 when the schooner America defeated a fleet of British yachts off England’s South Coast. The New York Yacht Club held on to the trophy for 132 years until Australia II, financed by Australian investor Alan Bond, beat Dennis Connor’s Liberty in 1983.
The U.S. reclaimed the trophy in 1987 and held it until 1995 when New Zealand’s Black Magic won in San Diego. Following a repeat victory in 2000, New Zealand’s team fell apart. Skipper Russell Coutts moved to Swiss-based Alinghi, which he led to a 5-0 sweep of New Zealand in 2003. Dalton, who competed in seven round-the-world yacht races over two decades accumulating more than 375,000 nautical miles of ocean racing, then took over.
He put together a crew including skipper Dean Barker, who has been with Team New Zealand since 1995, wing trimmer Glen Ashby, the winner of 14 world championships across three multihull classes, and grinder Rob Waddell, a former Olympic rowing gold medalist in the single sculls.
“We’re unified as a team, we’re culturally strong,” Dalton added. “We can’t fight them on a money platform so we have to fight them on a culture platform.”
Three years ago, Ellison’s BMW-Oracle team beat Alinghi in a so-called Deed of Gift match off Valencia, Spain, after winning a court fight to become the official challenger. Oracle sailed a 90-foot trimaran with a 223-foot carbon-fiber wing sail against Alinghi’s catamaran in the contest.
Ellison opted to defend the Cup in the multihull AC72, meaning teams will race similar catamarans, powered by carbon-fiber wing sails and capable of speeds exceeding 30 knots.
The AC72’s wing sail has an area of 260 square meters (2,798 square feet) and is 40 meters (131.5 feet) high, compared with 85 square meters and a height of 21.5 meters, for its AC45 predecessor. Its gennaker, or downwind sail, is 320 square meters compared with 115 square meters for the AC45.
Team New Zealand said the first AC72 it tested last year reached speeds close to 40 knots and the second version unveiled Feb. 4 may go as fast as 48 knots. The team has a boat equipped with four 300 horsepower engines to keep up with the catamaran.
The Oracle Team USA boat capsized during training in San Francisco Bay in October after nosediving and flipping in 25 knot winds, showing the fine line that exists between reaching racing potential and disaster.
“This is the Formula One of sailing,” Barker said. “We are certainly pushing the limits.”
To contact the reporter on this story: Joe Schneider in Sydney at firstname.lastname@example.org