On July 14, 2009, Golden Gate Yacht Club brought a second Contempt of Court action against Société Nautique de Genève. Basically, GGYC is claiming that SNG is in contempt because it does not intend to hold the 33rd America's Cup match in accordance with the rules that SNG used in July 2007, when GGYC issued its challenge.
GGYC also states that SNG (or Alinghi) paid the ISAF €150,000, "persuant to a secret agreement making certain arrangements concerning ISAF's role in, and the 'rules and sailing regulations' for the next Cup match."
Is there any merit in this?
We will find out on Tuesday, July 21 (the date of the hearing) whether Judge Shirley Kornreich sees any merit, but in the meantime, it is worth taking a look at some basic facts relating to these matters, starting off with that supposedly secret deal.
The only evidence that GGYC offers on that is an affidavit from its Rules Advisor, Richard Slater, who states that ISAF Treasurer David Kellett told him in a phone call that SNG (or Alinghi) agreed, in June, to pay ISAF €150,000 "pursuant to a written agreement that also contains certain arrangements concerning the racing rules for the next match and ISAF's role in the next match." The UK Guardian newspaper - in a July 15 article - said of the payment and agreement. "This was seen as collusion." and quoted BMW Oracle Head of External Affairs, Tom Ehman, as saying "What they've told us is that they're going to make up the rules as they go along, which they can't do."
Can he be serious?
In his latest affidavit, Ehman states that he has been involved, in various capacities, in 10 America's Cup events - every one for the last 29 years - and that he has served in various capacities with the International Sailing Federation. He must, therefore, know that the America's Cup is an ISAF sanctioned event and organisers of such events have to pay for various things, such as the services of race officials for example. He must also be aware that the ISAF owns the media rights to yacht racing events and that, without its permission (or a listed exclusion) an organiser cannot organise its own media coverage. Without ISAF agreement, there could be no organiser arranged TV coverage, no internet coverage, no CD-Roms. It is perfectly normal for the ISAF to negotiate a fee, for relinquishing its rights in connection with "Special Events", such as the Volvo Ocean Race, or the America's Cup. In addition, without an agreement with the ISAF there could be no sponsors logos on boats and nobody can know that better than Tom Ehman, for he was the one who represented US Sailing on the 1987 committee that formulated the ISAF Ad Code. As to secrecy, there is a difference between "secrecy" and normal business confidentiality and, as a competitor, GGYC has no right to know what financial arrangements the organiser is making.
Why the change of tune?
In 1987, Tom Ehman was Vice President and COO of Sail America, the company appointed by San Diego Yacht Club to manage the America's Cup regatta between SDYC and Mercury Bay, which was represented by New Zealand businessman Michael Fay.
On December 2, 1987, Ehman wrote to Michael Fay spelling out the conditions under which SDYC intended to run the Cup. Amongst his points was:
"All design and construction elements, including such items as number of hulls and particulars of rigging, shall be of our choosing."
Ehman went further, in spelling out the Defender's right to design freedom, in a press release issued by Sail America, on March 28, 1988:
"The Deed also makes it clear that the only design restriction is that the defending yacht 'if of one mast shall be not less than forty-four feet and not more than ninety feet on the load waterline.' We intend to abide by that restriction."
Today, in his capacity of BMW Oracle External Affairs, Ehman has changed his tune and seeks to impose additional design restrictions on Alinghi, claiming that the defender cannot design a boat "with engines to trim sails and movable ballast." His contention is that Alinghi must run the event under the Racing Rules of Sailing which SNG used, in 2007, the year GGYC challenged and cannot change any rules without GGYC's agreement. That is again a very different view from the one he held in 1987 for, in that December 2 letter to Michael Fay, Ehman wrote:
"The races shall be sailed subject to such rules and sailing regulations as may now or hereafter be promulgated by the San Diego Yacht Club, as long as they do not conflict with the Deed of Gift."
A design contest
Dennis Connor once told the New York Times:
"He seems to have forgotten that, ever since 1851, the America's Cup has been a design contest and that the design competition is fundamental under the Deed of Gift itself."
Connor was speaking of Michael Fay, in 1988, but his words would be just as appropriate today, if addressed to GGYC/BMW Oracle.
