Chinese money is the key to a successful Australian America's Cup campaign

The announcement on Saturday that Team Australia has pulled out of the 35th America’s Cup was disappointing but not unexpected. As the Oatley’s said, it is difficult to mount a commercial challenge when you can’t tell potential sponsors where the event will be held.

And to be honest, I don’t think Team Australia would have made the Louis Vuitton final in 2017 – they may not even have made the semi-final.

That’s not to denigrate the fine sailors in the squad, but is a realistic assessment of the task ahead. So far in the Extreme Series the lack of multihull experience in the squad has been exposed and they would have been trying to knock out one of the four better-funded and more experienced teams in Artemis, Emirates Team New Zealand, Luna Rossa and Ben Ainslie Racing.

So what does the future hold?

Counting the Cost

One of the reasons given for Team Australia pulling out was that the holders, Oracle Team USA, had not succeeded in lowering the cost of competing. ETNZ admit to spending more than $100 million during the 34th campaign and that still wasn’t enough to win. The costs won’t be much lower this time around.

There are two ways you can fund an America’s Cup campaign. You can be one of the 10 richest men in the world, like Larry Ellison and Torben Tornqvist, or you can have a commercially-funded challenge like ETNZ, where a handful of very rich men put up the seed capital and then sell commercial sponsorship and get government funding for the rest.

The Oatleys aren’t struggling for a dollar but they’re not in Larry or Torben’s league, so they intended to adopt the second model. But to raise $100 million in the current Australian business climate was never going to be easy.

Government funding isn’t going to happen – even though ETNZ can show that the Kiwi government got back more than $3 for each of the $38 million they invested. Nor is it likely that Australian-owned companies will come to the party. A few years ago I approached a friend in WA, who is chairman of the advertising agency that created the anti-mining tax campaign. I asked him, with China’s booming interest in sailing, whether it would make sense for a big miner like BHP Billiton to sponsor an Australian challenge. He said it wouldn’t even be worth talking to them about it.

“If you want $45,000 to send some aboriginal kids to the MCG for a kick-around with their AFL heroes, they’ll write you the cheque on the spot. But they don’t want to be associated with anything that’s elitist,” he told me.

Because of the current economic climate, I just can’t see Australian shareholders supporting a multi-million dollar investment in what is seen as a play thing for rich men. It would probably be a great investment. I just don’t think Australian shareholders see it that way right now.

Other People’s Money

Where ETNZ were very clever is that they attracted money from overseas countries – Emirates, Toyota, Sky Vodka, Nespresso, every name on the Kiwi boat was an overseas-owned company.

That’s what Australia will have to do if it’s to fully fund a campaign. And in my opinion there is a very simple solution – Chinese money.

The Chinese are very serious about becoming a world power in sailing. They won an Olympic gold medal in the Laser Radial at London 2012 and after a disastrous first entry into the Volvo Ocean Race they now have a very well-funded campaign in place with the clear goal of an all-Chinese crew in the 2023/24 race.

They dipped their toes in the water of America’s Cup racing in the AC World Series but didn’t progress with a full challenge in the 34th Match when it was obvious they couldn’t be competitive.

Australia and China have a lot of synergy – they want our minerals and our agricultural products and we want their money. Our biggest boatbuilder, McConaghys, builds most of its boats in China and Australian coaches have been asked on many occasions to coach there. They tried extremely hard to lure our Olympic medal-maker, Victor Kovalenko, to Qingdao to coach their national team but fortunately ‘Aussie Victor’ wouldn’t budge.

I believe an approach to the Chinese government and some of that country’s biggest companies would pay dividends.  Huawei is already a major sponsor of the Canberra Raiders in the NRL – it’s not a new concept.

If we offered to fast-track their America’s Cup campaign by basing their team with ours and two-boat training with them as ETNZ and Luna Rossa did leading up to the 34th Cup, I believe they would be very interested. If not, perhaps Oman or one of the other Middle East nations would be.

What we need is an ETNZ-style operation. We need the Oatleys to relinquish a little control by inviting three or four other Australian business people to get involved. They’d need to collectively put in about $20 million to get the thing started. The balance would need to come from commercial sponsors – like China Airlines, for example.

Management Structure

To win the Cup a team needs very strong management. Russell Coutts and Grant Simmer are both highly-successful sailors but equally successful campaigners. And say what you like about Grant Dalton, he is a very strong-minded man. And a leader.

I have an enormous amount of respect for Iain Murray and his knowledge of the America’s Cup protocols and politics is legendary, as of course are his design skills and sailing ability. He needs to be involved at the top level. But I think we need to look outside the sailing world for Team Australia’s next CEO.

We need someone who has managed a Formula One team, or someone like Brian Cook from the AFL who turned a dysfunctional West Coast Eagles operation into the first non-Victorian club to win the flag and then created the Geelong team culture that has made them so successful in the past 15 years.

Or even Brian Waldron, the bloke who built the Melbourne Storm culture and was then disgraced when the salary cap rort was exposed. There’s no salary cap in sailing and he probably wouldn’t cost much as he’s keen to get back doing what he’s very good at – managing a sports organisation.

I’ve been involved with a number of elite sports and the key element to success in all of them is organisation. When the players, or in our case the sailors, have nothing to think about or worry about except the next race, they can apply all their skill and all their focus to winning. That’s what a great sports manager brings to the table – organisation.

The People’s Team

The other area that needs a lot of attention is the media side. Frankly, Team Australia’s media output has left an enormous amount to be desired. There are only a handful of news items on their website, their Facebook page is not much better and their handling of the “pull out” was very poor.

They also failed to engage with the sailing public, let alone the general public. What is needed is a Kiwi-style strategy to involve the people – to get them buying merchandise, following progress, vitally interested in all the activities of “their” team. If you get a million of them all contributing $10 each, you’ve also found a tenth of your budget.

I lived in New Zealand when the late Sir Peter Blake took his Whitbread boat Lion New Zealand around the country raising funds. Remember the red sock campaign? That’s what’s needed here in Australia and that requires a very senior media figure who knows what he or she is doing.

The Sailors

Finally let’s come to the sailors. We are spoiled for choice but again I felt that Team Australia missed the boat a little. They never had the money to attract the big names like Spithill, Outteridge and Slingsby. I know what they offered a couple of top people and it was described as “insulting”. But obviously there wasn’t enough money in the kitty to go head-to-head with what Larry and Torben were paying.

But that’s why a war-chest of $100 million needs to be assembled, and the first person I’d approach would be Glenn Ashby. Glenn has remained loyal to the Kiwis but the problems at ETNZ are well-documented and unless something changes fast, I don’t think they’ll make the Louis Vuitton finals, let alone compete against Oracle for the Cup. Now would be a good time to approach Glenn and ask what it would cost to get him back to Australia for the 36th Cup.

Glenn is not just one of the very best multihull sailors in the world. He has a brilliant technical mind and would be invaluable in the design stages, especially of the wing. But he’s also a damn good bloke and a rock as far as team spirit is concerned. A senior figure at ETNZ told me they couldn’t believe Oracle had let him go after the 33rdMatch, when he coached Oracle to victory.

Mat Belcher, the proposed skipper if Team Australia had competed in the 35th Cup, is an incredible sailor. But frankly I’m pleased he won’t be distracted by the America’s Cup in the lead-up to the Rio Olympics. There is plenty of time for Mat to become an America’s Cup sailor – what we need right now are multihull specialists.

I spoke with Extreme Series veteran Nick Maloney recently about the poor performance of GAC Pindar in the series so far. The sailors on that boat are members of Team Australia and they were bottom of the table in the first two Acts. The addition of Olympic gold medallist Nathan Wilmot for the Russian leg made a difference – he scored a second place in one race – but overall they were still near the bottom.

Nick said we shouldn’t be too hard on them. “The stadium format requires a different strategy and approach… which takes some time to develop,” he said. But he also queried the frequent changes in personnel and finished with an interesting observation which tends to confirm my point about management above:

“I personally believe that the overall project and sailing team is possibly missing a key inclusion, not necessarily an on-water sailor but an experienced manager and mentor. The AC is a long road, there is so much more to campaigning towards this particular quest than the sporting attribute.”

So there you have it. Remembering that this column appears in our “Opinion” section and is just my own personal view let me summarise thus:

It is sad that Team Australia will not compete for the 35th America’s Cup, but I don’t think the Oatley challenge is necessarily dead – just on hold.

A much bigger war chest is needed, and that will mean the Oatleys relinquishing a bit of control and bringing in other successful Australian business people. They will also need significant commercial input and China is the obvious place to look for the bulk of that. A two-boat campaign is always more successful than going solo too – as Grant Dalton said during the Louis Vuitton in San Francisco, you can only play with yourself for so long before it gets boring.

I’d bring in a CEO from outside the sport to build the culture of a winning organisation and I’d definitely beef up the media department. Getting Australia behind the team, like New Zealanders got behind theirs, is a key element.

Finally, I’d be quietly securing the services of Australia’s best multihull talent – people like Ashby, Bundock, Maloney, Landenberger and Booth – and giving Wilmot, Jarvin, Newton and the other hugely talented sailors in the squad foiling cats to play with in their spare time.

It’s not over. Australia can still win back the Cup. But it won’t be in 2017 and it won’t ever be easy.

– Roger McMillan, editor


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