SCUTTLEBUTT 1252 - January 31, 2003
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RUSSELL COUTTS SPEAKS ON TNZ DEPARTURE
(Following is the unedited text of a press release issued by the Alinghi
AUCKLAND - JANUARY 31, 2002 - At the time they left TNZ, in response to a
request from Tom Schnackenberg and incoming new trustees, Russell and Brad
had promised not to disclose problems preceding their departure. This week,
however, they have obtained an agreement from trustee John Risely to talk
openly. "By clearing the air we hope we can now return to a focus on the
sport and to the action on the water," Russell said.
"I am well aware of the strong reaction in New Zealand to our decision to
leave. At the time, Brad and I had been involved for over two years in very
difficult discussions with the people who controlled the trust that ran
Team New Zealand and controlled the rights to mount a defence. It had been
previously agreed that when Sir Peter Blake left the team we and Tom
Schnackenberg would take over the management. But it was only at a very
late stage in negotiations that we concluded we were very unlikely to be
able to reach a satisfactory agreement for this to happen.
"In our view this was because of the persistent obstruction, extraordinary
secretiveness about financial dealings and hostility towards our taking on
management responsibilities from the chairman, Richard Green and trustee
John Lusk. Both were partners at the law firm Russell McVeigh, they were
the most prominent trustees and they had effective control of Team New
Zealand at the time.
"We wanted to take over responsibility for running the companies involved
with the America's Cup, but the then trustees refused to show us detailed
accounts or existing contracts. My impression was that they did not really
want to do a deal with us.
"In particular, following more than two years of discussion, and some weeks
after we had won the cup, we were surprised to be presented with demands that:
-We accept liability for debts incurred by the trust, while being
permanently denied access to information on how large those debts were.
-We accept any potential tax liability of the trust, without the trust
quantifying the potential liability. At the time they were concerned that
the charitable status of the trust would be challenged, and if it was
successfully challenged we would then have been liable for the debt.
-We accept serious constraints on future commercial arrangements, including
a restriction on our ability to sign sponsors within a 12 month period.
"At that stage Brad had been involved in challenges for Team New Zealand
since 1986, and I had been involved for nine years. But we took the
decision we did because we believed a very big change was needed in the
attitude of the trustees if the superb organisation we had been part of
building up was to be protected. In the end, we concluded that we had done
all we could do within the team and had been unable to make that change
happen. On a personal level, we reached a point where we felt we had to
look to alternatives."
Russell said that at the time of defending the America's Cup in 2000,
neither Brad nor he had any thought of sailing for any other syndicate.
"In 1997, Sir Peter Blake told us he would leave Team New Zealand after the
2000 event and work for the Cousteau Society. He publicly announced this
plan later that year. Peter's departure meant we needed to plan for proper
succession in the management of Team New Zealand. The sailing, design and
boat-building teams wanted Tom Schnackenberg, Brad and myself to take on
the management role. In late 1999, we obtained a personal undertaking from
Richard Green and the CEOs of the 'family of five' sponsors that if 'we won
the America's Cup and won it well' they would facilitate a smooth
transition of the management structure to us.
"In November 1997, following initial difficulties in our progressing an
agreement on the detail of the basis on which we would assume succession,
we engaged Jim Farmer QC. Mr Farmer worked with us for over two years to
try to finalise an agreement with the existing trustees, while we focused
on defending the cup. He was given some initial co-operation but over the
period was unable to make significant progress with Richard Green and John
Lusk, the trustees with whom he was dealing, despite the fact that he had a
good personal relationship with them. He told us that they would not agree
to any arrangement which involved the existing trustees being replaced with
new trustees under the existing trust structure and that a new structure
would have to be established, existing assets sold to it and several
million dollars of discretionary debt paid to the existing sponsors. He
further told us that he did not receive replies to several written requests
that he made for an explanation as to why we could not continue with the
existing trust. He said that he could not understand why an agreement could
not be reached at that time that would give us the security of knowing the
basis on which we would be going forward.
"Team New Zealand won the cup on March 2nd 2000. On March 30th the
contracts of all team members expired. When this date passed we had no
agreement with the trustees. They had failed to secure the future of the
team, as it existed then, as an ongoing operation.
"Because of this failure, sailors and other team members who had financial
obligations and families to support faced uncertain futures. They were
given no firm commitments as to their future tenure. Several were accepting
contracts with other syndicates. The team needed to raise funds and to sign
its future personnel. We repeatedly requested meetings with the trustees to
finalise a management deal as promised. They delayed, saying they were not
ready. We were left with an impression that they were resisting our taking
on a management role and wanted to stall this transition process despite
the obvious urgency.
"It was symbolic of the prevailing attitude at the time that locks to the
base were changed abruptly so that sailors, who had been with Team New
Zealand for more than a decade, including Brad, found themselves
humiliatingly locked out.
"When we did secure a meeting with the trustees they presented conditions
that were totally unacceptable. In our view they were secretive about vital
information. They made significant and surprising new financial demands.
They did not appear to understand the urgency of the need to resolve the
situation if the team was to be held together.
"The terms of the proposal they offered included:
1. A demand that we shoulder a debt of more than $5 million to existing
2. A requirement that we accept any potential tax liability of the trust,
without the trust quantifying the potential liability. As already noted,
they were concerned that the charitable status of the trust would be
challenged, and if it was successfully challenged we would then have been
liable for the debt.
3. A requirement that payment of $2 million be made to provide funds for
the Team New Zealand Charitable Trust to distribute to charities to help to
justify its charitable tax status.
4. A requirement that we were not to pursue sponsorship for 12 months
5. A requirement that we could only negotiate with the 'family of five'
sponsors on similar terms to those that already existed."
"Our confidence in the trustees was eroded when, on March 4th 2000, 2 days
after we had defended the America's Cup, Richard Green and TNZ management
convened a media conference without informing us to announce the Protocol
for the 2003 America's Cup. We would have expected to have been notified of
a public announcement of such an important document. At this conference
Richard Green made it clear he did not want to confirm future management
"In mid-April we took stock of our situation. We had no contracts. The
management had not secured key personnel. Key sailors and designers had
already signed with other syndicates. Having won the cup we were extremely
disappointed with this situation. Later in April we began to consider
leaving TNZ as a serious alternative. At this point we advised Tom
Schnackenberg and John Risely of our thinking. On May 4th John Risely, Brad
and myself met in New York with Ernesto Bertarelli and Michel Bonnefous.
After that meeting Brad and I decided we would formally leave Team New
Zealand. We immediately advised Tom Schnackenberg, John Risely, Peter
Menzies and Ralph Norris of this decision."
Relevant Information on Team New Zealand structure - March 2000
1.1 Team New Zealand Trust (a charitable trust) controlled all Team New
Zealand entities. Its trustees were Sir Tom Clarke, Roger France, Richard
Green, Jim Hoare and John Lusk.
1.2 The Trust owned Team New Zealand Trustee Limited. Its directors were
Clarke, France, Green, Hoare and Lusk.
1.3 The Trust company owned Team New Zealand Limited whose directors were
Clarke, France, Green, Hoare and Lusk, the company responsible and
appointed by RNZYS to defend the America's Cup.
1.4 Team New Zealand Limited owned AC2000 Limited whose directors were
Clarke, France, Green, Hoare and Lusk, the company responsible for
organising the America's Cup Match.
1.5 Russell, Brad and Tom Schnackenberg assembled a new group of potential
incoming trustees consisting of Ralph Norris, Peter Menzies and John Risely.
It is understood that following the departure of Russell Coutts and Brad
Butterworth, Ralph Norris and Peter Menzies gave the old trustees an
ultimatum as to what conditions were acceptable. The old trustees were
given two hours to accept the new trustees' ultimatum, which was accepted.
- Bernard Schopfer, firstname.lastname@example.org
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JULES VERNE TROPHY
Kingfisher2 crossed the Jules Verne start line off Ushant (NW France) at
06:48:49 GMT Thursday. In the first hour she covered nearly 30 miles of the
26,000 mile course around the globe. Her maximum speed so far (data is sent
back every 2 hours) has been 37.1 knots. In a conversation with crewman
Andrew Preece at 1430GMT he reported that - "We have 50 knots of breeze, we
have no sails up whatsoever but are still surfing along at 20 knots - it is
pretty extreme out here."
Kingfisher2 is halfway across the Bay of Biscay and is dealing with these
conditions due to a cold front that swept the UK south coast earlier today,
although it is expected to pass through 5-6 hours from now. Behind the
front the conditions will still be very windy but will see a significant
decrease in the next 12 hours.
William Hill are offering odds of 7-1 for Kingfisher2 to break the non-stop
round the world Jules Verne record. Perhaps that 7 out of 11 Jules Verne
record attempts have failed since it began in 1993 have influenced the
odds! - http://www.kingfisherchallenges.com/
ROLEX MIAMI OCR
Though a two-hour delay in racing was frustrating to some, the light
breezes that caused it were the "means to consolidate" for others on day
two of the 2003 Rolex Miami OCR where 526 athletes are competing in 11
Olympic and Paralympic classes. In particular, Bermuda's Peter Bromby
widened his lead over the 68-boat Star fleet by winning that class's single
race today. He now has a 24-point margin over Paul Cayard of San Francisco,
Calif., who pulled himself into the top-three today with a 13th. Vince Brun
is in third place with 50 points.
Steve Hunt (Hampton, Va.) was happy with his 1-6 score that maintained his
lead in the 470 Men's class today, but only by one point over his closest
competitor Mark Ivey (Huntington Beach, Calif.). The USA's Paul Foerster
with crew Kevin Burnham is a point further back in third place.
In the 49-boat Laser class, defending champion Paul Goodison (GBR) scored a
win in the final race today to jump into the lead above fellow countryman
Daniel Holman. Matt Mendelblatt, the top US boat is in fourth place, 15
points behind the leader before throw-outs are applied.
Moving into the lead today in the Yngling class was Jody Swanson (Buffalo,
N.Y.) with crew Cory Sertl (Rochester, N.Y.) and Elizabeth Kratzig
(Houston, Texas). Betsy Alison is in second place, two points back with 22
points, followed by Carol Cronin with 29 points.
Holding their lead from yesterday are skippers Meg Gaillard (Jamestown,
R.I.) in the Europe class; Chris Cook (CAN) in Finn; Steve Hunt (Hampton,
Va.) in the 470 Men; Katie McDowell (Barrington, R.I.) in the 470 Women;
Greece's Nikos Kaklimanakis in Mistral Men; Switzerland's Anja Kaeser in
Mistral Women; Santiago Lange (ARG) in Tornado; John Ross-Duggan (Newport
Beach, Calif.) in Sonar, and Germany's Heiko Kroeger in the 2.4 Metre. -
Media Pro Int'l
For complete results: www.ussailing.org/Olympics/RolexMiamiOCR/
FOR THE RECORD
Paul Larsen, the 32 year-old Australian who sailed with Pete Goss aboard
Team Philips, plans to break the outright world speed sailing record this
year aboard the 30ft carbon fibre flier Sailrocket. Reaching a speed of 50
knots over the 500m course (in 19.5 seconds) is going to be a tough nut to
crack but Larsen believes his Sailrocket Team has the 'right tools for the
This wacky-looking speed machine, which weighs just 140kg (similar to a
Hobie 16) and costs a total of £200,000 to design and build, is according
to Larsen, more of a proa than a catamaran with two tiny planning surfaces
set on a fuselage. And the most unusual thing about this new design is the
fact that it flies the leeward hull. The 22sq m rig is positioned on a pod
to leeward, with the shrouds always set to windward but, as Larsen points
out, unlike most proas, such as Yellow Pages Endeavour, which are
effectively one-tack boats, Sailrocket will have a moveable ri . - Sue
Pelling, Yachting World website, full story and photo:
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LETTERS TO THE CURMUDGEON (email@example.com)
(Letters selected for publication must include the writer's name and may be
edited for clarity or space - 250 words max. This is not a chat room or a
bulletin board - you only get one letter per subject, so give it your best
shot and don't whine if others disagree.)
* From David Paine: Please, please ask your correspondents to get it
right. Alinghi is in a match race against Team New Zealand for the
America's Cup. Not the finals of the America's Cup. There are no heats or
semi-finals or finals for the America's Cup. There is the Louis Vuitton
Cup. Alinghi won that and now has the right to challenge for the America's Cup.
Second; rich boys make the America's Cup a great spectacle and good for
world yachitng. But there is nothing wrong with the way the deed is
currently interpreted. It gives everyone a chance. We won it; now you come
and get it.
Oh, and while I'm on a bandwagon, the Mayor of Marseilles might want to
reconsider counting his poule before they hatch. Forget the speculation.
February 15 will be another great day for sailing. And I can't wait.
* From Max Telhiard (edited to our 250-word limit): I'm 81 and have been
sailing for 60 years. 98% of my sailing has been in racing. I have a
problem weighting my interest between pure sailboat racing and corporate
yacht racing with the latter being credited with most if not all of the
advances in the sport. I raced on cat boats and schooners in the late 1930s
and early 40s before WWII pulled me away from Biloxi, MS. All of the boats
were wooden boats with wooden spars and canvas sails. That was the purest
of the pure racing I ever experienced.
My last racing on and off the coast of South Florida was with the highest
tech equipment used in what remains as pure racing. That means advanced
developed hulls, sails, winches, riggings and onboard instruments. On the
opposite end of the stick is today's current America's Cup racing which has
evolved into mighty corporate syndicates competing against like
organizations financed by entire nations for the purpose of being
recognized by each other. The actual racing aspect has developed into which
syndicate can present the highest tech equipment of tomorrow.
The next step will obviously be all electrically, hydraulically, or
otherwise power operated halyards, winches and steering systems all
operated by remote control by an operator either on or off of the boat. All
boat operations will be determined by computer function results, possibly
from a position remote from the racing venue. And perhaps the entire series
could be sailed with no humans aboard.
* From John Diggins: I can attest to the open hospitality of the RNZ
Yacht Squadron from personal experience. I had tried to see the the
America's Cup in New York after a 1975 Prince of Wales Finals at the
American Yacht Club, We had represented Area F in the Finals and were
returning to Texas when the doorman at NYYC refused to let us have a
glimpse of the trophy because we were not suitably dressed.
On a tour of New Zealand in 1998, my wife and I dropped by the RNZYS in
Auckland on a day when the Club was not open. Staff graciously took us to
the Trophy Room and took our picture beside the "Auld Mug". In 2000 I
jumped at an opportunity to return to New Zealand to judge an Olympic
Classes Regatta held during the last days of the Louis Vuitton Series. Both
events were under the auspices of the RNZYS and I was again impressed by
the graciousness of my hosts, to the point that I acquired, and still wear
a pair of TNZ red socks.
THE CURMUDGEON'S OBSERVATIONS
When a clock is hungry, it goes back four seconds.