Team NZ's focus was a single Cup campaign

By ROGER FRANCE*

Don Cowie alleges (Business Herald, February 27) that New Zealand has been betrayed by Team New Zealand's bad management.

Team NZ, in common with most syndicates, is and always has been an organisation formed to mount discrete campaigns to contest America's Cup regattas.

Team NZ's responsibilities and authority are quite clear - to enter each regatta with the fastest possible boat and, if the defender, to stage the cup match (but not the challenger elimination series which the Challengers are responsible for). It has no other responsibility or authority.

After each campaign, it has the choice of winding up or, if further money can be obtained, contesting another regatta.

Team NZ had neither the resources nor the mandate for any wider "institutional arrangements" or "commercial management" - even if it understood what these additional activities are supposed to entail.

The task of raising sufficient money to mount a single campaign is daunting enough without some implied requirement to finance other unspecified objectives.

The only way in which the cup, with all its attendant economic benefits, can be retained is by winning a yachting regatta. No "commercial affairs committee", however well resourced or intentioned, would change that fact.

His suggestion that Team NZ was "grossly negligent" in failing to protect intellectual capital demonstrates a complete lack of understanding of the event.

If by "intellectual capital" he means staff, Team NZ - in common with the majority of cup syndicates - enters into each campaign with no certainty about the outcome and thus no certainty of its ability to provide continuity of employment.

Accordingly, all staff enter into fixed-term employment contracts (containing appropriate confidentiality clauses relating to intellectual property) which expire at the conclusion of each campaign.

It is not realistic to make fixed-term-contract employees whose contracts have expired "stand down from any competing syndicate for the duration of the next cup".

Even if employees could be coerced into signing contracts which prohibited them from future employment, they would be unenforceable in the absence of very substantial financial compensation. The task of funding an America's Cup campaign is difficult enough as it is; with that additional burden it would be impossible in New Zealand.

As a matter of fact, however, the former directors and the new directors did reach agreement with Russell Coutts and Brad Butterworth (with Tom Schnackenberg) for them to take over the management of Team NZ, as was publicly confirmed by Butterworth on March 31, 2000. Accepting that retention of key personnel is a critical success factor, it is difficult to see what more valuable action the directors could have taken to that end.

If by "intellectual capital" Cowie means intellectual property, the Protocol, which essentially constitutes the rules for the regatta, contains extensive specific provisions prohibiting the transfer of intellectual property. The arbitration panel has already held hearings relating to alleged breaches of the intellectual property rules. If Cowie has information as to any breaches of the protocol, he should refer these to the panel.

Last but not least, in seeking to blame management, he overlooks the fact that Team NZ's directors and its sponsors went to great lengths to reach agreement with Coutts and Butterworth (together with Schnackenberg) for them to take over the management of Team NZ.

That Coutts and Butterworth chose not to honour that agreement cannot be attributable to bad management on the part of the directors.

* Roger France is a former trustee of Team New Zealand.

Further reading: nzherald.co.nz/americascup