Thursday, February 12, 2009

Fiduciary duty

Among the eighteen teams that have entered the 33rd America’s Cup (legal warning: this is the event that occurs if Alinghi wins in court), it is expected that at least half won’t find the funding to ultimately participate. However, everything begins with a first step, and with the Louis Vuitton Pacific Series, several teams took a second step by participating. They all remarked how much they learned, how enlightened they have become, and after getting eliminated, how eager they are to continue.

The LVPS was billed as the ‘Friendly Games’, as its intent was to get teams on the water and away from the bickering. Good vibes, Corinthian spirit, bring the event back to spectators… right? Or, is this a naive premise in this era of sponsorship and professional sailing? Can sailing have an All Star Game, where the event is to be fan friendly first, and competitive second? Based on how the Alinghi team is handling their business, the answer appears to be no.

All the entrants seemed to get it except for the most prominent team, the America’s Cup defender, the Swiss Alinghi team. Rewind the tape. The match between Alinghi and the Kiwis was to be a highlight of Round Robin 2, a rematch of the 32nd America’s Cup, but the Swiss sat out - a move they justified based on the oddities of the event rules. Not a popular move. Then when the Swiss made it to the Finals, they protested a section of the event rules they believed to be unfair. Not nice again, but no worries mate, they got their way both times.

As the Alinghi counsel Barry Ostrager stated during the February 10, 2009 hearing at the New York, Court of Appeals, the safeguard of a fair competition in the America’s Cup is the defender’s fiduciary duty. The Challenger of Record, whose job is to negotiate fair event rules with the defender, a heightened responsibility in a multi-challenger event, is in essence, Ostrager inferred, redundant. With how the Alinghi team is handling their business in Auckland, it does raise questions about their ability to fulfill the “defender’s fiduciary duty”. God help the future of the America’s Cup.

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At 6:54 PM, Anonymous Anonymous said...

Excellent summary.

Alinghi have never showed any interest in what is best for the event, or for that matter the sport.

If they weren't so good at winning on the water we would have said good riddance to them years ago. Surely karma must catch up with them eventually?

At 9:46 PM, Anonymous Anonymous said...

Are both of these you, Tom ?

At 10:11 PM, Anonymous Anonymous said...

This basic anti Alinghi is pathetic. Alinghi has delivered an exceptionnal event in 2007 n Valenciam turned to the public and exciting for the competitors.
Why don't you jsut recognise this.

Maybe you think the obstructive attitude of BOR ans especially of two of his main men in 2007 (Tom Ehman and Laurent Esquier) is a better example for sport?

Let's come back to reality.

At 12:47 AM, Anonymous Andrew Troup said...

The "explanation" was that the team's duty to their fans was to win, by any means the rules allow.

If it means behaving like the spoilt guest at a child's birthday party, so be it.

So what concern is it of the general sailing public?

Here's my take:
Sailing is a sport where sportsmanship, and honourable behaviour, has always been at a premium. Partly, I think, this is because it would be very easy to cheat, especially offshore.

Hence the tradition of erring heavily on the side of old fashioned codes of honour and civilised behaviour.

There would be little point in sailing against people whose general behaviour would raise doubt about their commitment to honour the rules, in spirit as well as in letter.
Dwelling unduly on the latter at the expense of the former gets "pretty old", for those who don't aspire to take up residence in the protest room.

Furthermore, setting out on the briny deep has always brought out in susceptible humans a sense of style, if not swagger, perhaps as a bulwark against the immensity of the canvas, where our wake dwindles within our view to a tiny brushstroke.

In the end, if the sole purpose is to win, might we not just as well blob out in front of the TV ?

It would be similarly rewarding and meaningful, much more affordable, and in the living room, there is nothing to lose.

At 2:25 AM, Anonymous Anonymous said...

Ok, its not popular not to compete, but that's the rules. Complain to those who sponsored them, not to the ones that mastered them. Alingui is playing the best it can, both on water and the race commission, isn't that sport?
If you don't agree, pick-up some friends, some beer and go sunset sail, that's anything wrong with it.
The true is Ernesto is not American and that makes a lot of difference, just remember what Dennis Connor did 12 years ago...

At 6:22 AM, Blogger Scuttleblog said...

The event in 2007 was great for television spectators, as the racing was very close. Why was it close? Because the class evolution had slowed to allow teams to catch up, and the Valencia winds were varied enough to ensure that no lead was safe. Great racing made the 32nd America's Cup great.

I am all for being competitive, but losing at the LVPS is no disgrace. At this level, particularly for this event, especially when public oppinion is easiliy moved, Alinghi should have thought about how these decisions would look to the public.

Maybe this is a return to the days of Ted Turner, Dennis Conner, and Tom Blackhaller, where we all couldn't wait until the next time they said or did something outlandish.

Maybe I need to forget how Ernesto asked the PRO of the 32nd America's Cup to step down after running that one light air race that Alinghi lost. That example keeps ringing in my head as a question in whether a team with too much control can fulfill the defender's fiduciary duty to run a fair event.

At 4:53 PM, Anonymous Andrew Troup said...

I think it's inconsistent to support Alinghi for exploiting the rules if you don't take exception to the way they respond to rules they signed up to that they later decide they don't like, such as the rule that the boats used in the finals would be decided by a draw.
Once again, when the time comes, they behave badly.

It does look, once again, like the classic behaviour pattern of the spoilt little rich kid at the birthday party, who throws a tantrum when rules do not favour them.

Everyone is too embarrassed to make a firm stand and spoil the party, and the rules are temporarily amended in favour of the 'enfant terrible'

I thought it was actually fairly classy the way, in response to Alinghi's assertion that 92 was significantly faster than 84, ETNZ effectively shrugged and said "that's OK, you can have 92 if you like"

At 5:45 PM, Anonymous Andrew Troup said...

I think it's also a misrepresentation to shrug and say "that's the rules".

Would you say that to someone who exploited the discovery that the rules of a particular boxing match did not specifically prohibit hiding a horseshoe in your glove?

I think it's safe to say that not competing against the host is definitely against the spirit of what was specifically put together to be a friendly competition.

In almost every other respect, the concept has won through, both as a welcome break from the joyless, snarky, mercenary culture the AmCup risks adopting, and as a timely holiday for the legal teams.

I don't see any merit in attacking, or defending, the team's leader on grounds of nationality, and in any case the skipper of the boat (whose nationality I happen to share) is just as much at fault, IMHO.

Rightly or wrongly, I'm not sure the helmsman on Alinghi is entirely at home in the team's political culture.
This, also, has nothing to do with nationality and everything to do with character.

At 1:53 PM, Anonymous Anonymous said...

The best thing of the LV Pacific series ...following Alinghi's non gentlemanly behaviour off the water- ref non turning up to race TNZ and then protesting because they believed there was a boat bias, In the end...TNZ gave it to them and closed the deal in the "slow" boat.

Some Karma rolling through on the water there.

Congrats Team New Zealand for running a successful, fun regatta for everyone- excluding Alinghi.

Good luck Oracle/BMW in closing the rest of the deal on Alinghi...I realise all the court proceedings are possibly delaying things, but I can't stand the way Alinghi have behaved over recent year.

I look forward to seeing some more racing when the cup comes round again.

At 1:58 PM, Anonymous Anonymous said...

Isn't one of the complaints about Alinghi's protocol that they were allowed to race in the chalenger series?

Alinghi says that they wouldn't have any great effect on the C-series then they pull this stunt in the LVPC...

At 3:16 PM, Anonymous Anonymous said...

Amazing... why doesn't anyone pick up on what Alinghi was doing by sitting out that race? Oracle insisted to Alinghi that races against Alinghi in the round robins of the 33rd AC should not count for points. Alinghi was simply showing why that is not a viable situation for the defender who needs a chance for real practice in order to have a fair chance in the AC finals. If Oracle wins it's appeal and pretends to propose "fair terms", look for this issue to re-surface then perhaps.

At 12:37 PM, Blogger Verbatim said...

Excellent summary and pin pointing of the root problem with the Americas Cup currently.

Alinghis desire for complete control of the event led to the manufacture of an artificial "lap dog" Challenger of Record.

A main function of a C.o.R. is to negotiate fair terms to give them as close to an even chance of winning as possible.

Alinghis creation and control of the C.o.R. makes a mockery of the process.

In the case of current multi-challenger events, this position bears even more importance as the C.o.R. is representing the interests of all other teams.

It can be argued that historically all cup holders have tried to tilt the playing field a little in their favor, but Alinghi has overleapt itself this time.

I hope the courts rule according to the spirit of the deed of gift, rather than the letter of the law and right the obvious wrong.

I also hope that some sort of agreed and fair format and rules can be built up around the deed of gift as suggested previously by the NY Yacht Club, that would prevent this absurd hijacking of the cup from reoccurring.

It would be wonderful to see the A.C. return to being the worlds premier sailing event.


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