Business, - Fri February 10, 2017

Bermuda’s regulatory friendly territory ready for the yacht racing’s great cup

When Commodore John Cox Stevens, a member of the newly minted New York Yacht Club, skippered the good ship America to a resounding victory in the first America’s Cup, he had little idea of the sporting legacy he was creating.

That one-off race took place in 1851, and involved the circumnavigation of the Isle of Wight, a smallish island off England’s southern coast. Stevens returned home to the United States with the spoils of victory, an ornate water pitcher made of sterling silver. It was to remain in New York until 1983, when Alan Bond’s Australia II finally broke America’s stranglehold.

In the race’s most recent iteration four years ago in San Francisco, Oracle Team USA, financed by the technology billionaire Larry Ellison, defeated Emirates Team New Zealand, backed by the Dubai airline.

Now the race switches to the waters off America’s east coast and, for the first time since the inaugural event, to another smallish island with a surfeit of maritime history: Bermuda, which beat San Francisco, Chicago and San Diego to secure the right to host this year’s cup.

Qualifying races begin on May 26; the winner of that round will start competing against the Oracle crew on June 17. The challenger will come from one of six nations including Britain, Japan and New Zealand, with the latter’s entrant again being backed by Emirates.

It’s hard to overestimate the impact it will have on Bermuda’s small but super-wealthy economy. Sponsors are festooning a sporting occasion tailor-made for the rarefied world of high-end branding. This year’s event will be “presented” by Louis Vuitton and backed by an army of supporting marques, ranging from BMW to Oracle. Other sponsors include Sperry, a US-based maker of deck shoes, professional services company PwC and two watchmakers, Italy’s Panerai and Britain’s Bremont, as well as Hamilton-based Appleby Global, which provides offshore legal services.

America’s Cup is not like the Super Bowl or the Fifa World Cup, affairs that become the focal point of the sporting world for hours and sometimes weeks at a time. The Bremont co-founder Nick English describes it as “one of those unusual sporting occasions which you either know about or you don’t”.

Every race attracts a new generation of admirers, drawn as much by the picture-perfect setting (this year’s event will take place in Bermuda’s Great Sound) as by the sight of two elite teams fighting for supremacy on unusual terrain. Those who fall in love with the spirit of the cup always remember their first time, be it the media titan Ted Turner’s victory with Courageous in 1977, or a team from landlocked Switzerland winning in Alinghi in 2003.

Then there is the battle-within-the-battle, the hidden and bitterly competitive pursuit of marginal gains, any of which could land you the title, or push you into second place. America’s Cup races have long been tussles where brain (as well as financing) regularly out-competes brawn. The earliest participants fought it out on wooden schooners, which later gave way to iron, aluminium and finally fibreglass hulls. Every winner gets to choose the shape and design of the boats that compete in the next race. Mr Ellison elected to abandon single-hulled boats and make the 34th running of the event in 2013 a shootout between two wing-sail catamarans, a decision that heartened some while dividing purists.

Whoever wins this year’s America’s Cup, the event is likely to prove a major boon to Bermuda’s economy. The Royal Naval Dockyard, which will host the Event Village, has been renovated to accommodate an influx of sponsors, spectators, journalists and VIPs. Many of the dockyard buildings, dating back to the 1850s, have been restored and will be used by the teams and the America’s Cup Event Authority.

This year’s America’s Cup is a chance for a small island in the North Atlantic to parade itself before the world. Ross Webber, the chief executive of the Bermuda Business Development Agency, sees it as a “milestone in Bermuda’s evolution”, a chance for the wealthy and well-travelled to see its pristine waters and friendly regulatory environment first-hand.

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