America’s Cup venue: Did financial needs trump sailing objectives?

We all know that money talks. Apparently, it sails, too. While the America’s Cup organizers sought to make an official venue announcement for the 35th Match on December 2, it’s now been less officially revealed that Bermuda will be hosting the 2017 competition.

San Diego Tourism Authority CEO Joe Terzi confirmed to U-T San Diego that the 2017 America’s Cup has been awarded to Bermuda, not San Diego, and dinero seems to be the principal reason why.

If it was just about sailing, the exciting conditions in San Francisco during the 2013 contest would have assured a return after Oracle Team USA’s successful defense. But the commercial goals were not met during the 34th America’s Cup, and San Francisco determined that improving the terms to host again was not in their best interest.

So a list of acceptable suitors was narrowed to San Diego and Bermuda. And now it has been narrowed further.

“The America’s Cup rep said you guys worked hard,” shared Terzi, “(but) would have liked to have seen a more aggressive bid financially.”

Bermuda always had an advantage due to its location, which would offer a broadcast time zone better aligned with both North America and Europe. But it was believed that Bermuda’s limited sponsor appeal, less consistent weather, undeveloped base infrastructure, and lack of hotel rooms would swing the favor toward San Diego.

And then there is the issue of a defense team hosting the America’s Cup in their own country – USA.

It is now believed that the tax status of the British territory proved to be the trump card.

“If you stack up Bermuda’s assets with San Diego, they don’t win on any direct comparison,” said acclaimed sailor Malin Burnham, a San Diegan who was involved with Dennis Conner’s America’s Cup campaigns in 1987 and 1988. “The question is: Why would you go to Bermuda? It has to be for financial purposes.

“Bermuda is known as a tax haven for rich people. Is that the connotation you want for the America’s Cup? If it goes to Bermuda, it’s going to a place for non-sailing objectives.”

According to an AP report, defense team owner and Oracle founder Larry Ellison – who’s worth an estimated $51.3 billion – was the one who ultimately spurned San Diego in favor of Bermuda. After meeting with Russell Coutts, the CEO of his sailing team, Ellison decided that his would be the first American crew to defend the title outside of the United States.