Avast, Ye Scurvy Dogs! America's Cup Hijacked By Lawyers, Billionaires

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The 33rd America's Cup taking place this week in Valencia, Spain, already seems destined to be remembered as one of the most vicious and brutal sporting events in history. For 30 months, competitors Ernesto Bertarelli and Oracle (ORCL) CEO Larry Ellison have duked it out in court and the media, battling over every detail of the contest and dragging each other through the mud. In the process, they have driven away sponsors and fans: The 2007 race attracted more than $200 million in sponsorship money, but the 2010 has pulled in just $11 million.Sponsors and fans are running in part because Bertarelli and Ellison have scuttled the traditional structure of racing. Traditionally, competitors came from established yacht clubs, which held local and regional regattas to determine the best teams. But Ellison set up his BMW Oracle Racing team specifically to win the 2003 Cup, as Bertarelli did in 2007 with his team Alinghi.

Not a Democratic Sport

Bertarelli, who assembled his yacht crew by hiring much of Team New Zealand's 2000 crew, has publicly taunted Ellison, asking if the billionaire intends to sail with his crew. Bertarelli plans to helm his own boat, sharing the duty with Loick Peyron, the Frenchman that he hired as his skipper.

Using teams sponsored not by clubs but by billionaires -- Ellison is worth $24 billion, Bertarelli $10 billion -- has closed the competition off to all but the most insanely wealthy competitors. But then, the America's Cup was never a democratic contest, and yachting is not a poor man's sport. Top-notch crews and sailing technology don't come cheap.

Since the Cup was established in 1851, only two teams have competed in each match: the defender and one challenger determined by a qualifying race. From 1983 to 2007, the run-off was called the Louis Vuitton Cup, and the famed luxury brand provided a trophy to the winner. But Bertarelli has a strained relationship with Vuitton, which has shown signs of withdrawing its support.

Watertight Law, Squishy Intepretations

Even by the standards of a rich man's game, the 33rd America's Cup is outrageous. Three years of courtroom warfare between Ellison and Bertarelli's teams of lawyers have produced a highly legalistic set of racing rules, an incredibly precise protocol that borders on the ridiculous. For example, competing boats may be up to 90 feet long and must be measured with water in their ballast tanks -- but the distribution of the water is open to interpretation. Bertarelli's boat could be weighted so that only 90 feet is underwater while it's measured, but much more is underwater during a race, which would give it much more stability and a larger sailing platform. The Alinghi boat is as large as two tennis courts placed side-to-side.

But Bertarelli's creative ballast tanks are only the tip of the catamaran. Both sides have sunk millions into development: Ellison's entry has three hulls and a 223-foot carbon fiber rigid sail that is larger than the wing of a jumbo jet. Sailing website Scuttlebutt reports that the boat is so outsized, it cannot sail under the Golden Gate Bridge even at low tide. And that's not a minor consideration: If Ellison wins the race, his hometown of San Francisco would be a likely site for the next America's Cup.
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