America's Cup: Ides of March significant for Late Challengers
by Richard Gladwell Sail-World NZ 8 Mar 2019 10:27 GMT
8 March 2019
The America's Cup at picturesque Lake Whakatipu, Queenstown, New Zealand © Emirates Team New Zealand
The America's Cup is never dull - even though we are still four months away from seeing the first AC75's launched.
On Tuesday, there was a rare if not unique moment in America's Cup history when the competitors were able to resolve a dispute relatively amicably - short-circuiting an Arbitration Panel hearing set down for next week.
Ostensibly the Hearing was to resolve issues over the payment of Entry Fees, Late Entry Fees and a Performance Bond totalling a cool USD$4million, by the three late Challenging teams for the 36th America's Cup. The three Super teams, who entered by the regular entry date of June 30, 2018, will have already paid all their Fees, totalling $3million by November 30, 2018.
For the earlier story click here
Mid-March and April will now be crunch time for the three Late Challengers. On April 1 - they have to pay the first instalment of their Late Entry Fee - USD$250,000. Then at the end of April, they have to lodge their USD$1million Performance Bond.
It is not spelt out in the latest Protocol amendment when the Late Challengers have to pay the first instalment of their $1million entry fee. The pre-existing Protocol says it was within ten days of their Challenge being accepted. Given that the three Late Challengers had the legality of their Challenge taken to the Arbitration Panel, one assumed that all non-refundable entry payments and performance bonds would be suspended until that situation was resolved.
But now the with the Arbitration Panel circumvented, it has transpired that all outstanding Entry Fees must be paid by March 15, 2019 - the Ides of March - or a week from today.
Ironically the Ides of March was known in Roman times as the deadline on which all debts must be settled.
The date, perhaps better known as that of Julius Caesar's assassination, seems to have acquired a new poignance in the context of 36th America's Cup.
There are four major components to the Fees which begin to fall due on the Ides of March - First and Second Installment of the regular Entry Fee (USD$1million per Installment); the Performance Bond of USD$1million, and a Late Entry Fee (for those entering after June 30, 2018) of USD$1million.
Yes, it is complicated.
The Ides of March payment includes the first installment of the regular entry free of $USD$1million. Additionally the first two installments of $275,000 each, of the Second Installment of the Entry Fee are also due on March 15, 2019, if paying under the deferred payment system, otherwise the full USD$1million is also due next Friday.
The second regular entry fee payment, of $1million should have been paid in full on November 30, 2018. For a 10% (USD$100,000) loading, the payment can be deferred and paid in four installments of USD$275,000 on November 30, 2018, February 28, 2019, May 31, 2019 and August 31, 2019.
First payment, USD$250,000 of the Late Entry Fee is required by April 30, 2019 and the Final Payment of the late Entry Fee is $750,000 payable on October 1, 2019.
The point being that while the Late Challengers may have won a reprieve from an Arbitration Panel Hearing, the Ides of March are now a very poignant date for that group. At a minimum USD$1.550,000 must be paid to Royal NZ Yacht Squadron, by next Friday which is March 15, 2019.
Missing that deadline or any other payment deadline, will now mean an audience with the Arbitration Panel, who following previous Cup precedent will usually give a further seven days grace - and if that is not met - the team will exit the 36th America's Cup.
Launch dates
While the financial pressure may be on the late Challengers, those intending to launch two AC75's are also under a time-squeeze.
News out of Italy is that Luna Rossa will launch their AC75 in July 2019. The first round of the America's Cup World Series has been pushed out into the European Spring of 2020. Whatever the ACWS dates, there is the imperative to get the first boat right- as well as early to maximise learning to be fed back into the second AC75 or race boat.
The extension of the AC75 V1 launch dates to July - a month or two from what was expected to be May-June, will impact on the launch date for the second AC75 for the Super teams. Clearly, there is a need to get as much of the design learnings transferred from the AC75V1 to the race-boat - which is allowed to be launched after February 15, 2020.
History shows that the first launched AC race-boats are usually the most successful. Build times are now reasonably refined at around 18 weeks, and few construction shortcuts can be taken, as the designers have always wanted as much time as possible to resolve their tradeoffs before doing a final design sign-off.
There is also the restraint that ASC75 hulls can only be altered by 12.5% of the surface area (previously it was 25% of one hull). It is going to be essential to get the first launched's hull shape optimised so that can be carried over into the race-boat. Remember that with their test boats no-one has resolved the trade-off between a hull shape that allows a boat to foil earlier against one that presents the least aero drag.
Team New Zealand may be getting some good answers from their simulator, but they are also the most time rich of the teams, and will be able to have a good look at the other teams first AC75 designs, before committing to their race boat.
And then for the Challengers most of whom are coming from the Northern hemisphere/Europe, there is the shipping time to be factored in - unless they opt to fly their race boat to NZ and save 8-10 weeks in transit.
Of course, as they are sailing in their home waters, and don't have to peak until two months after the Challengers, Emirates Team New Zealand has more elasticity in their timelines.
But for the Challengers, the end of the runway for the 2021 America's Cup is coming up fast.