This email was sent to Royal New Zealand Yacht Squadron members today:
Dear [Member Name],
Thanks for all of your support as we navigate these challenging waters in our role as Trustee of the America’s Cup. I want to assure you that we take this responsibility seriously and are working closely with Grant Dalton and Emirates Team New Zealand (ETNZ) as we plan to defend the 37th America’s Cup (AC37).
As many of you will be aware, we have a longstanding agreement with ETNZ that means responsibility for conducting the 37th America’s Cup defence, including all aspects of the AC37 organisation, management of racing and fundraising, rests exclusively with them. In return the Club is not required to make any financial contribution to America’s Cup activities, and RNZYS – its officers and members – are fully indemnified from any liability, financial or otherwise. These have been the fundamental principles of our contractual arrangements since the 1995 challenge. It is through these arrangements that we are now in the privileged position of being the Trustee of the Cup for a fourth America’s Cup cycle.
We have complete confidence in ETNZ to run the affairs of the Team and do what it takes to ensure a credible and successful defence and deliver another highly successful event. And all of this in a difficult environment, where they are up against some significant financial challenges and other teams who are considerably more resourced than they are.
It is both ETNZ’s and our preference for this defence to be staged in New Zealand, however the reality is that currently there is not a valid option to do so. That is why at our members briefing in June this year, we outlined the need to explore other options to ensure we keep the Auld Mug in the cabinet here at the Club. It is also very important to us that ETNZ remains viable, that we keep the Team together, and we honour our commitments and undertakings with our Challenger of Record, Royal Yacht Squadron Limited (RYS) and INEOS Britannia (formerly INEOS Team UK).
At this time we do not have a viable New Zealand defence proposition, and as a result ETNZ are in discussions with other potential locations. ETNZ and the club share the view that the absolute priority for AC37 is a credible defence with the goal of winning the Match. It would be an unprecedented achievement to win the America’s Cup three times in a row and taking the defence overseas – while not our preferred choice – may well offer the best chance for us to do so. It is important that you, our valued members and supporters, understand that this might yet need to happen.
Over the last couple of weeks we have been receiving high levels of enquiry from you, our members and in response I wanted to send you this update, and include for your attention some of the most frequently asked questions of us, and our answers to these HERE. I trust that these will go some way to better inform you of our role in the scheme of things, and the current status of issues and discussions.
Finally, I wanted to reassure you that we, as Trustees of the Cup, will keep you fully informed as things progress.
In the meantime if you have any questions, please don’t hesitate to reach out and contact either myself or any one of our America’s Cup Committee. We are genuinely here to help, and to support the Club and the General Committee in making decisions that are in the best interests of both the Club and our Emirates Team New Zealand.
I look forward to being able to talk with you again soon in person at the Club and to update you further at our AGM and other forums over coming weeks.
Kind regards
Commodore RNZYS
Attached to that was a Question and Answer section, which you can read below or here, as mentioned above.
Roles and responsibilities of the RNZYS and Emirates Team New Zealand (ETNZ)
Q: Who runs the affairs of RNZYS as it relates to the America’s Cup Defence?
A: The General Committee and Flag Officers of RNZYS are responsible for governing the affairs of RNZYS as set out in the RNZYS’s Rules & Regulations.
An America’s Cup Sub-committee has operated for some time for the sole purpose of dealing with all aspects of the RNZYS’s role as the Trustee of the America’s Cup and for liaison with ETNZ. The AC Sub-committee is made up of the Flag Officers, legal advisors (also RNZYS members), a General Committee member and the CEO. The AC Sub-committee, which meets on a regular basis with ETNZ, reports back to the General Committee.
It should be noted that the Commodore, Flag Officers and General Committee of RNZYS are all volunteers and elected to these roles by members. The CEO is the only paid officer of the Club.
Q: It has been suggested that RNZYS is not fulfilling its fiduciary duties as Trustee. Is this true?
A: RNZYS is confident that is has fulfilled (and continues to fulfil) its fiduciary duties and obligations as the Trustee of the America’s Cup. Such suggestion needs to be put in context given it originates from those who are deliberately attempting to undermine the partnership between the club and ETNZ in relation to the America’s Cup.
All decisions regarding the 37th America’s Cup (AC37) are discussed and debated first with the RNZYS America’s Cup Sub-committee and then ratified by the Club’s General Committee. The AC Sub-committee includes a senior legal adviser who has particular knowledge of the America’s Cup. This group considers all of the information and detail presented by ETNZ.
ETNZ talks to RNZYS on a daily basis on matters that may be relevant to RNZYS in our role as Trustee.
Q: If ETNZ were not able to find a solution for funding of the Team or event, what effect does this have on the RNZYS?
A: : ETNZ have only ever existed to represent RNZYS in the America’s Cup and remain strongly committed to defending the America’s Cup in AC37. In the highly unlikely event they cannot find a solution to fund the Team to the required level, RNZYS would remain the defending Club and Trustee, but without a representative Team to conduct a defence.
Q: What is the process for sign-off on the venue for the 37th Americas Cup?
A: The process for the Defender to announce the dates and venue for the Match will be specified in the Protocol governing the 37thAmerica’s Cup, which is due for publication on 17 November 2021 (if not announced prior).
It is the responsibility of ETNZ and INEOS Britannia to negotiate the terms of the Protocol, which will then be ratified and signed by the two yacht clubs, RNZYS and RYS.
Q: Is RNZYS just a front for ETNZ?
A: While the Deed of Gift established the event as a competition between yacht clubs, in the modern-day competition every yacht club has a representative team responsible for its challenge or defence. ETNZ acts on behalf of RNZYS and is responsible for all aspects of the defence and event organization in exactly the same manner as previous Defenders – Oracle Racing on behalf of Golden Gate Yacht Club and Alinghi on behalf of Societe Nautique Geneve.
RNZYS’s role is to fulfill its fiduciary duties as the Trustee of the America’s Cup pursuant to the Deed of Gift. There are independent advisors and processes in place to ensure that we can demonstrate that we deliver what is required of us as the Club that holds the America’s Cup.
Q: Does ETNZ and RNZYS have an agreement?
A: Yes, there is an agreement in place between ETNZ and RNZYS which appoints ETNZ as the representative sailing team of the RNZYS (to sail as the Defender in the AC37 Match), and as the exclusive event organiser for all aspects of AC37.
This longstanding agreement means responsibility for conducting the 37th America’s Cup defence, including all aspects of the AC37 organisation, management and fundraising, rests with ETNZ. In return the Club is not required to make any financial contribution to America’s Cup activities, and RNZYS – its officers and members – are fully indemnified from any liability, financial or otherwise.
These have been the fundamental principles of the contractual arrangements since the 1995 challenge. It is through these arrangements that RNZYS are now in the privileged position of being the Trustee of the Cup for a fourth America’s Cup cycle.
37th Americas Cup Protocol, key milestones and dates
Q: Will the Protocol be able to be announced on 17 November 2021 as planned?
A: This is the date that all parties are working towards. ETNZ has advised us that a draft was completed some time ago, and that discussion on the final wording is at an advanced stage with the Challenger of Record.
Q: What happens if RYS / Team INEOS UK walk away?
A: RNZYS and ETNZ have a very strong and committed relationship with RYS and INEOS Britannia.
The Protocol specifies the procedure to be followed if the initial Challenger of Record withdraws. In the unlikely event of a withdrawal prior to the publication of the Protocol, RNZYS would then be able to accept a new challenge under the Deed of Gift.
Q: The NYYC submitted a challenge for the 37th America’s Cup on 6 May 2021. What impact could this have?
A: None, as the terms of the Deed of Gift do not allow for this Challenge to be considered. NYYC will need to lodge a new Challenge when the entry period for the acceptance of further challenges opens under the terms of the Protocol. NYYC have now indicated they will not be entering AC37.
37th Americas Cup Defence – New Zealand
Q: Will central Government and Auckland Council reinstate their offer? Will they increase their offer?
A: As publicly confirmed by the Deputy Prime Minister Hon Grant Robertson, we understand that if the event is to be held in Auckland, the Government offer can be resurrected, but will not be increased. We also understand from public comments to date that Auckland Council are likely to be supportive, but unable to contribute further. Their offer is solely ’in kind’. As an aside a Host Venue Agreement (HVA) would still need to be negotiated with ETNZ on acceptable terms but this process took in excess of 12 months for AC36.
37th Americas Cup defence – overseas options
Q: Is the RNZYS in support of an offshore event, and why?
A: RNZYS’s strong preference is for AC37 to be staged in Auckland, provided it can be run as a credible defence that gives ETNZ/RNZYS the greatest chance of winning and retaining the America’s Cup.
RNZYS does not support the concept of running an underfunded event in Auckland and the inevitable loss that will result from this approach. Members may recall that this is what unfolded in 2003/AC31, and we need to learn from this. We believe this is the right approach for all sporting events, including sailing.
Member concerns and general questions
Q: There has been talk of RNZYS receiving a ‘pay-off’ from ETNZ if the Cup is defended offshore. Is this correct? (This issue has been mentioned in the media)
A: At our members meeting in June the Commodore referred to a legacy project for the club as has occurred in past America’s Cup defences with RNZYS being donated such infrastructure as support boats. An Auckland defence brings benefit to RNZYS members through positive member experience and the commercial opportunities that will be available particularly in a post COVID environment. While difficult to value, a busy and successful Club delivers value to current and future members.
In 1993, the Team NZ Trust was established to foster and advance education, training and development of those involved in yachting in NZ. We are all aware of the benefits our RNZYS Youth Training and Performance Programmes bring as a pathway for young New Zealanders to build a career in sailing and the wider marine industry. To support this, the Team NZ Trust is planning to contribute towards the completion of a RNZYS Training Centre as an AC37 legacy investment. This important initiative will help improve the sport in general and provide a facility for all to enjoy in the future.
Q: At least one Club member has been reported to be working against the interests of ETNZ by trying to ensure the agreement between the Challenger of Record Agreement with ETNZ fails. If correct, what is RNZYS doing about this?
A: Over the years several members have represented, led, and been employed by opposing teams (representing other yacht clubs) that have challenged and defended the Americas Cup. That is the nature of professional sailing (and particularly the America’s Cup) and many other professional sports. It is however, disappointing to learn what has transpired and reported in the media.
The Club has Rules and Regulations that contain a disciplinary process. This process is the responsibility and at the discretion of the General Committee, should it be deemed appropriate.
Q: Why doesn’t the RNZYS do or say more?
A: RNZYS is a yacht club. In relation to the America’s Cup, the role of RNZYS is to be the holder and Trustee of the America’s Cup as a result of ETNZ winning as a Challenger in Bermuda and Defender in Auckland.
RNZYS has never had the means nor the appetite to fund a challenge or defence of the Cup or organise and stage a large scale major event associated with a defence. ETNZ has always been exclusively contracted to undertake those roles on behalf of the Club.
It is a direct result of ETNZ’s success that we have the privilege of being the current holder of the Cup (with ETNZ representing the Club as the Defender). As such it is for ETNZ to take the lead on the organising and staging of AC37 and we have full confidence in them to do so.
Q: Why can’t we just change boats and scale down the event to cut costs?
A: This would need to be agreed with the Challenger of Record and covered in the Protocol. There is no appetite for such an agreement to be made and ETNZ is working on an AC37 defence in the AC75 given the success and worldwide acclaim given to the AC75 racing in the 36th America’s Cup in Auckland.
Q: I have supported ETNZ forever, but if they take the Cup defence overseas I will stop supporting them…and the RNZYS. (What is the Club’s response?)
A: Everyone is free to make their own choices.
For the record, if the AC37 Match and preceding challenger series is held at an offshore venue, ETNZ will still operate from New Zealand for a substantial period of time, making a significant contribution to the New Zealand marine industry. RNZYS members will continue to have the opportunity to attend and ETNZ are planning to deliver a free to air television broadcast of the same or better quality than AC36.
The ETNZ team of over 100 people are incredibly proud to represent the Club and New Zealand wherever they operate, and their work, designs, technological innovations and sailing talent will continue to promote New Zealand on the world stage.
RNZYS aspires to be the leading local and international Yacht Club, and our involvement in the America’s Cup through the efforts of ETNZ is a significant factor in support of this goal. By being a member of RNZYS, as well as having the opportunity to be part of the RNZYS community and to participate in our various on and off the water events, you are also supporting the development of young New Zealand sailors, many who have gone on to represent New Zealand throughout the sailing world.
The Club is 150 years old and is not only defined by its current role as Trustee of the America’s Cup.