The conflict concerns control and ownership of the team’s design, intellectual property, and assets.
There is potential for two British challengers, but legal outcomes could delay the 38th America’s Cup.
On the face of it, the wrangle between the two British sailing knights, Sir Jim Ratcliffe and Sir Ben Ainslie, could strand preparations for the 38th America’s Cup on the sandbank of protracted legal proceedings – but there’s also a slim possibility not one but twoBritish teams could challenge Emirates Team New Zealand next time.
That will depend on the acidity of the water that flows under the bridge during the break-up between Ratcliffe, the billionaire owner of petrochemicals giant Ineos, and Ineos Britannia skipper Ainslie, the world’s most decorated Olympic sailor.
The battleground is about control and who owns the design, intellectual property and assets of the British team that fell 7-2 to New Zealand at the last Cup match in Barcelona. On one hand, Ratcliffe has the money, a design team and technology expertise from the highly worthwhile link with the Mercedes F1 team (which he partly owns). But he has no sailing team. It is not clear whether the $430m he has poured into Ineos Britannia’s two campaigns so far gives him rights to the team’s vital IP and assets, which is what any legal action will likely decide.
Ainslie, on the other hand, has a sailing team – but no financial backer. However, he has considerable pull in the UK and connections to potential backers such as Sir Keith Mills (the wealthy entrepreneur who established Team Origin for the 2007 America’s Cup) and yet another billionaire knight, mobile phone magnate Sir Charles Dunstone. That’s not to mention Land Rover, principal sponsor of Ainslie’s team in Bermuda in 2017 and who just might love to make a metaphorical rude gesture to Ratcliffe, whose Grenadier SUV competes with Land Rover.
It may depend on how badly corporate and personal noses were put out of joint when Ainslie, believing he needed more money to wrest the Cup away from Emirates Team NZ, met Ratcliffe’s demand to be sole sponsor of the team, dropping all others. Meanwhile, Emirates sponsor Ainslie’s SailGP team; there is undeniable interest in other areas of the Middle East for America’s Cup involvement of some sort, while Sir Richard Branson’s Virgin outfit showed America’s Cup interest some time back.
If Ainslie can muster enough support, there could be two British challengers for the 38th America’s Cup – which has no venue nor date confirmed. In the middle of all this are Team NZ, who want to establish the next protocol, which basically sets out the rules for the next Cup with the Challenger of Record, due again to be Ineos Britannia. Now, however, who does Team NZ negotiate with – Ainslie or Ratcliffe?
Sir Ben Ainslie skipper of the AC75 Ineos Britannia and Ineos CEO Sir Jim Ratcliffe celebrate after defeating The AC75 Luna Rossa Prada Pirelli Team during the race 11 of the Louis Vuitton Cup Final. Photo / Getty Images
Technically, it’s understood Ainslie’s team is still officially the challenger of record, although Cup rules mean a challenge can only be issued through a yacht club – in this case, the Royal Yacht Squadron. It is believed Ainslie’s Athena Racing company is linked to that challenge, racing as Ineos Britannia. Legal action may be needed to sort out any internal agreements pertaining to ownership.
It’s not yet known what the Royal Yacht Squadron’s position is and, depending on their agreement with Ainslie/Ineos, it may be like the relationship between Emirates Team NZ and the Royal NZ Yacht Squadron – where the team effectively has control.
So the likelihood of a delay, possibly a considerable one, is high. Among possible outcomes is that the two principals settle their differences (admittedly unlikely right now). Ratcliffe could decide against costly, time-consuming legal action, find a new yacht club and start a new challenge. So could Ainslie if legal action went against him, or if he decides suing a billionaire is like setting fire to his personal wealth, sending bad smoke signals to potential sponsors. Ratcliffe could also poach Ainslie’s sailors.
However, it may be that Ratcliffe will drop his America’s Cup interest if he cannot effectively complete his “takeover” of the British team. A new crew and a new boat do not generally win America’s Cups. It takes time, meaning more money and more campaigns to get to the goal.
That may not be as palatable as it has been. Ineos has invested nearly $5 billion in sport, headed by Ratcliffe’s purchase of Manchester United – enduring one of its worst seasons in the English Premier League, highlighted by the current manager calling the current side the worst in its history.
Ratcliffe has now poured $2.72b into United, although he has also presided over ruthless cost-cutting at the club, making 250 staff redundant and hiking ticket prices. Ineos’s sports portfolio also includes the Ineos Grenadiers cycling team, formerly Team Sky, ($460m); Switzerland’s Lausanne football club ($96m); France’s OGC Nice football club ($400m); Mercedes F1 team ($640m) and the All Blacks and Black Ferns, small beer at $17m. None is setting the world on fire right now.
That, with United and Ineos Britannia, totals about $4.76b. Ineos uses the exposure to build its brand in the face of critical views of the environmental effects of its gas, oil and plastics products. Ratcliffe has talked recently of bringing additional sponsorship into his cycling and America’s Cup teams.
If not, faced with at least another $430m for Cup campaigns, Ratcliffe may feel his time is over for now. So Britain could have one or two challengers… or none, depending on what happens next.
