SportsPro SportsPro

Russell Coutts on cutting costs, losing the lawyers and the future of the America’s Cup

3 October 2013 | Posted in Quick-Fire Questions | By David Cushnan | Contact the author

Russell Coutts on cutting costs, losing the lawyers and the future of the America’s Cup

Oracle Team USA’s remarkable come-from-behind victory, against Emirates Team New Zealand, in the America’s Cup last week marked the fifth time New Zealander Russell Coutts has been part of a Cup winning team. The 51-year old, a legendary name in Cup history even before his latest triumph, was chief executive of the US team in San Francisco this summer, but also one of the architects of the 34th Cup alongside Oracle billionaire Larry Ellison. Their full vision of a new generation Cup, with the giant, spectacularly rapid but controversial AC72 catamarans, came to life only during the dramatic finale to the competition.

“In many ways you couldn’t have scripted a better sports story,” Coutts told SportsPro. “Obviously, being inside the team at that moment was challenging but I guess, on reflection, all the difficulties made the outcome even more rewarding, from a team perspective. When we were 8-1 down, whilst we absolutely never gave up, there were many of us – and I can certainly speak from a personal perspective – who thought it was unlikely we’d turn it around. But there was always the hope that we would and always the determination that we would. It was fantastic to be part of a team like that. It was great and from an event standpoint to see the way the race turned out was also very satisfying.”

The highpoint of the finale contrasted sharply with the darkest moment of the summer of racing in San Francisco, the death of British sailor Andrew Simpson in May when his team boat capsized. Safety concerns about the new generation AC72s were matched by question marks over the cost of competing. With a nine-figure budget required to compete, only three challengers made it through a build-up which, for the first time, included the America’s Cup World Series, an offshoot of the main event designed to add value to commercial partners in the long period between Cup matches.

“We obviously had our challenges throughout the series,” Coutts reflects, during a conversation in which he assesses the 34th Cup and the changes required for the next edition, notably his proposal for a permanent America’s Cup commissioner to be appointed to oversee the Cup’s commercial and sporting interest and how costs can be reduced. “We’d have liked to have had more teams competing and we had difficulties earlier on with, obviously, the Artemis tragedy and other complications,” he notes, “but at the end the final turned out to be a great series and was a snapshot of what it could be like in the future. It was a nice outcome.”

You touched on some of the highs and lows; as you were running Oracle Team USA, how easy was it to separate yourself from what you were doing as a team and take an overview of how the event was going and how it was being perceived around the world?

Challenging - we obviously wanted the event to be successful. Deep down inside, I knew it would be successful once we got over the hurdles. I was saying before the final that I thought it was shaping up to become a great final between two very equal teams and, at the end of the day, that’s what people want to see. The platform was spectacular, the boats were spectacular and the course area was close to perfect, in many ways, with fans being able to watch the racing close up and the spectacular backdrop. All of that was great. We just needed good competition between the teams, so as we look to the future that’s obviously the first key thing to address: we’re already in discussions with some of those potential teams. We really want to increase the number of competitive teams. Past America’s Cups – I think the record was 13 teams, but I think only three or four were really competitive. We think the final this time showed that when you have competitive teams and compelling racing, that’s really what people want to see and what the athletes want as well – a competitive environment where you get lead changes and that suspense, which is such a great thing in sports where you’re never really certain of the outcome. That’s what we want to move towards: a group of competitive teams – whether that’s six or we can stretch it to, say, ten, in the next cycle, that’s the work that’s going on at the moment.

"Deep down inside, I knew it would be successful once we got over the hurdles"

How much do you personally enjoy the negotiation, the debate over legalities and technicalities, element of the America’s Cup, or is that something you just have to live with?

It’s got to change. Right now, and I’ve said it a few times throughout this campaign, the legal people in these teams get way more press coverage than what they deserve – all the arguments over the rules and so forth. It’s, in many ways, an archaic process that the America’s Cup has been putting itself through over many, many years. I think we’ve got to move towards a mechanism other sports use where they, for example, have a commissioner that has the commercial interests of the sport in line, as well as the competitive interests of the teams and can balance that. For example, a lot of the rules issues this time became highly public debates and that’s what most of the press focused on. In a way, those are the sort of issues that should be dealt with swiftly and much more efficiently behind closed doors so that you keep the focus on the racing, on the athletes. The great thing about this America’s Cup is we’ve finally got personalities, like your Ben Ainslies, your Jimmy Spithills, Dean Barkers, that people can focus on and get it away from these lawyers who love to see their names in lights – because frankly it doesn’t add to the sporting values of the competition. There is a counter-argument that some of those controversies add to it and I’m all for that, but in the America’s Cup in the past we’ve been way too much in the category of having too much of that controversy.

Is your view shared by the wider America’s Cup community? Is there a mood for change?

Well it’s not a point of view shared by the lawyers, no doubt. I want to take the focus away from that. We made a lot of moves this time, such as setting up America’s Cup Race Management as an independent body that managed the sport side but we still need to address those fundamental problems of how we resolve disputes in the correct way, quietly, in such a way that it doesn’t damage the event commercially. We didn’t really sufficiently address that and it’s time to address that now.

After every America’s Cup, the conversation turns to the type of boats to be used in the next edition and the AC72s have been controversial, spectacular and also deemed by some to be prohibitively costly. How fundamental is the type of boat to the economics of the next Cup?

"The racing was so spectacular that we've got to keep the same concept"

We can’t take a step backwards. The racing was so spectacular that we’ve got to keep the same concept. If you look at the America’s Cup brand, that is where the brand needs to be in the future, in my view. It was spectacular racing, it captured the non-sailors’ interest and we have many, many examples of media interest that is unprecedented in our sport. We’ve finally got a product that is user-friendly on television and compelling. We can’t take a step back but we’ve got, simultaneously, to address the cost issues because the cost of these teams is completely out of line with commercial sustainability. The main thing to address is the number of personnel on each of these teams. The personnel is somewhere between 50 and 60 per cent of the running costs of the teams, so we simply have to find ways to reduce the number of people on-site in these teams. We can do that in a variety of ways. We could consider making some of the components one-design, which would probably make the racing more compelling as well. I emphasise ‘some’ of the components because there should still be a technology element – that’s a part of the brand – but it should be technology that doesn’t absolutely destroy the racing, so that we can still keep the focus on the athletes and teams. We can, for example, also share resources. We’ve started to develop that concept with the America’s Cup World Series, where the teams, rather than have all this duplication with each team having their own cranes and lifting facilities and sail lofts and maintenance facilities, share a lot of equipment. That is a significant cost-saving, we’ve proved that. It’s an area where we’ve been learning last time but we can expand that into the final race format to make it much more cost-effective for the teams. The real big ticket expense item is personnel and the high cost personnel are the designers and the sailors; you need to somehow address the number of those that are on-site with the teams.

What’s the future, as you see it, of the America’s Cup World Series?

We’ve got some ideas about how that should change as well. Obviously the foiling boats this time have become part of the brand going forward, part of the image, so we have to address that and recreate that. But we have to keep it as a lower-cost format for the teams. It’s absolutely essential for all of the commercial partners – broadcasters need to have a regular sports platform in order to promote, leading to a crescendo at the end – to have a regular format of events. We absolutely need to re-activate that and we have some ideas about how it can be improved, how we can further reduce those costs – we can make some considerable savings by reorganising the structure of the television production for the America’s Cup World Series, where we had a lot of people on-site. We can avoid the size of footprint we require of host cities and we can do that considerably by combining the technical facilities, the workshop facilities, of the teams into one central area, which will make it easier for cities to accommodate these regattas. There’s a whole host of improvements – 60 per cent of the transportation costs last time were for non-containerised items, so we obviously need to address that and tidy a lot of those things up. Once we get things running more efficiently, with the numbers we’ve looked at, we believe we can make it very commercially sustainable or profitable going forward.

What sort of timelines are we looking at in terms of getting revisions to structures and the other improvements in place?

I think everyone would agree this was a big improvement on the past but we’re not content to just sit on that and have more of the same and repeat it. There’s obvious areas we need to address and improve and we’ll be working hard on that over the coming months in order to get that in order. We’re looking to re-activate the America’s Cup World Series from the middle of 2014 onwards and we’re also looking to make some changes to the format that will further improve what was seen this time. Larry Ellison, myself and some of the other people involved see this as a starting point now. We now have a platform we can build on and we’re excited about what we think is possible to achieve in the future.

And what about your own personal future – running the defender again or is some kind of overall commissioner role, as you mentioned, appealing?

I really haven’t thought about that. I don’t think it would be right for me to be a commissioner, per se. I’m still thinking about what role I would like to take on. There’s a number of exciting possibilities so I want to take some time over that. There’s a lot to think about and right now I’m having a lot of discussions with Larry about a lot of these prospects for the future. I think I’ll just take my time and make some decisions on that probably later this year.

Finally, as you look back on this remarkable summer, what’s the defining moment, the first thing you think about?

I think the fact that the racing put the viewer on the edge of their seats – there were lead changes, spectacular events on the race course, the television coverage was great with all the new graphics and a major step forward. I think the defining moment was seeing how the television coverage and the racing all came together. I think finally people saw what this new concept was about.
 

blog comments powered by Disqus