Why we lost the Cup -- extracts from the Team NZ report

Below is an edited transcript of the report in which Team New Zealand bared their soul and explained:

Ultimately, the loss of the America's Cup 0-5 can be attributed to a host of specific things not going in the team's favour.

These, however, need to be viewed as the end effects, not the cause.

Our management structure, which consisted of three individuals with specific, self-contained areas of responsibility reporting to a four-person board, did not deliver a winning combination of boat and crew to the start line for race one of America's Cup 2003.

It will always remain speculation as to whether a different management structure would have seen Team New Zealand successfully defend the cup. It may have, but what is clear now, but was not clear at the time, was that the management structure did not pull together sufficiently well the areas of sailing (including sail development), boat design and administration.

A second, significant factor was the structural failure NZL81 experienced in mid-December 2002. The impact this had on the team cannot be understated.

The failure of NZL81 led to decisions being made which severely handicapped the crew and the preparation of NZL82.

MANAGEMENT STRUCTURE

It is only in retrospect, and in the last months of the campaign when it was too late to make changes, that the fundamental weaknesses of the structure emerged.

The most critical weakness was that no one had a total overview of where the team was at, and final responsibility for and authority over decision-making.

Note: The departure of the team's leadership in 2000 is not put forward as the reason Team New Zealand failed to defend the cup.

NZL81's PROBLEMS

NZL81 suffered crippling hull and deck structural damage in early December 2002.

At the time, the boat had not completed its testing programme. The cause of the failure has not been finally determined at the time of writing this report.

However, it was not the result of a manufacturing fault.

The hull and deck on NZL81 failed again just before the start of the first race in the America's Cup.

These failures did not occur in NZL82 but it was a concern that never left the minds of the team.

NZL81's failure undermined the team's confidence in the structural soundness of NZL82. This led to compromises being made when testing the limits of NZL82's capabilities and, eventually, to pushing the boat during racing.

Collectively, the sailors expressed confidence in NZL82. However, privately they haboured the belief that NZL82 might be fragile, and they treated it too protectively. There was a concern that if they pushed NZL82 too hard, it too might fail and they would not have a boat with which to defend the cup.

Consequently, NZL82 was never pushed in more than 25 knots and the issues this created showed up dramatically in the defence series, when the boat was pushed to its limits for the first time.

The water issue experienced in race one had never been encountered previously, and the loads applied to boom and rigging in testing and practice were not at the extreme end of the range experienced during the eventual regatta.

Greater faith in NZL82 and more time to test, fine-tune and understand the boat would have led to the defects being detected, and fixed, in advance.

The difficulties the team faced with NZL81 and NZL82 could not be made public at the time as such knowledge would have assisted the syndicate challenging for the America's Cup.



STATE OF READINESS

When Team New Zealand lined up for race one of the defence we had in NZL82 a boat with the potential to defend the cup. We also had in the crew, under skipper Dean Barker, the sailors with the skills capable of defending the cup.

However, these two elements were still some weeks away from gelling together into an optimal combination.

Team New Zealand were not as prepared as they should have been and had planned to be.

As invariably happens in such situations, unseasonable weather and sea conditions further exposed and compounded the poor state of readiness.

Team New Zealand found themselves on the wrong side of the fine line that determines success or failure, and all our shortcomings were exposed in the white heat of the final.

The question must be asked whether it was ever possible for Team New Zealand to get to the point where it had a reasonable chance of successfully defending the cup.

The obvious comparison is that the Alinghi syndicate were able to build a cup-winning team from scratch in the same time as Team New Zealand had.

A key difference is that Alinghi had the former decision-makers, other than Tom [Schnackenberg], and formal and informal leaders, from Team New Zealand.

Alinghi's funding base was secure and this freed them from the pressure of raising finance.

While Team New Zealand can be rightly criticised for their performance, in more seasonal sailing conditions there existed the very real chance that we may have succeeded.

DESIGN

Team New Zealand became a design-led campaign.

The process of becoming design led was gradual and design was able to dominate through the lack of an overall leader responsible for balancing the demands of boat development and sailing needs.

Tom and his design team determined that to be competitive in 2003 they had to take a major step forward in boat design. They worked on a number of revolutionary concepts, of which the hula was only one.

Developing revolutionary concepts eats into time and financial resources.

The testing programme for NZL81 and NZL82 was based on that followed for the team's 2000 boats, NZL57 and NZL60.

NZL57 and NZL60 were conventional boats with few problems, and the testing time allowed proved adequate.

NZL81 and NZL82 were radical boats and problems were experienced during testing. Late delivery and structural problems reduced trialling time and NZL82 started racing without adequate preparation.



THE POSITIVES

This report focuses on the events that led to the 0-5 loss, and therefore does not balance the ledger by looking at the many positives to have come from the campaign.

The most significant of these is that in Team New Zealand we have a team capable of challenging for and winning the America's Cup.

While NZL82 was plagued by reliability issues, it was regarded by some experienced observers as an extremely fast America's Cup boat. In particular, the tacking duel and upwind performance in race 2 showed the real potential of NZL82. More testing time would have enabled the team to resolve all reliability issues and to realise the full speed potential of the boat. The crew demonstrated superb boat-handling skills in all phases of sailing.



CONCLUSION

The most important cause was the management structure adopted for the team following the sudden and unexpected departure of its former leadership in May 2000.

All subsequent downstream events and occurrences can be traced back to the management structure not delivering.

Therefore, those responsible for the management structure - Peter Menzies, Ralph Norris, John Risley and Kevin Roberts (as directors), Dean Barker (sailing) Ross Blackman (administration) and Tom Schnackenberg (boat design) - have collectively and individually accepted responsibility for the team's performance.

Collectively they developed the structure, and collectively they failed to challenge its ability to deliver.

The team have recognised the need to improve their structure and, with the appointment of Grant Dalton as managing director, have now covered one of the key elements missing in 2003. What we still lack is committed funding to mount a European challenge. Finding that funding is now our priority, and we expect to make a decision no later than the end of the year as to whether Team NZ will challenge in 2007.

Specific Race Issues

RACE 1: The second major structural failure NZL81 experienced in pre race manoeuvering was a body blow to the confidence of those on NZL82 in the ability of the boat to handle the conditions.

Choppy seas in conditions NZL82 had not been tested in, combined with the chop from spectator craft and extra weight from the positioning of some sails and the weight of the television equipment and umpire, saw NZL82 take on water during the start.

Lee cloths and extra bailers solved the problem after race one, but the Team was not prepared for the water issue as it had never been experienced before.

Testing in conditions above 25 knots would most likely have revealed the problems that emerged with the boom and the headsail tack fitting, and the issues resolved before race day.

RACE 2: Racing tactics, particularly on the last leg, and an incorrect selection of sails lost us this race. The Team believes they lost rather than Alinghi won race two.

RACE 3: We won this start and chose to go left. The after guard was advised of the shift to the right but elected to keep with its earlier preference for the left. As we were in a position to go either left or right at the time we made the decision to go left, it proved a race losing decision. Strategy lost us this race.

RACE 4: To save 18 kilos of weight, aluminium tip cups were used in the rigging. One of these broke while the boat was on the wind and the rig was lost.

The move to aluminium occurred six weeks earlier, and while there had been testing of the aluminium cups to destruction in the workshop, limited on water testing in strong conditions had been undertaken.

RACE 5: The Team attempted to banish concerns about the boat from their minds but confidence in the boat and gear was low. The Team was determined to finish the race and tuned and raced the boat conservatively. We failed to meet our own high standards.

Further reading: nzherald.co.nz/americascup