Monday, April 07, 2008

Press reports: Alinghi to hold 33rd AC match in Valencia in 2009 in exchange for 50 million euros

Valencia's main newspaper, Las Provincias published on Monday morning an interesting article concerning the ongoing negotiations between Ernesto Bertarelli and the city of Valencia, regarding the possibility of holding the 33rd America's Cup match here. According to the article Bertarelli had a very busy week in Valencia, not only training aboard Alinghi's catamaran but also negotiating with city officials.

The newspaper claims that according to reliable information it seems that talks are proceeding well and a final agreement shouldn't be too far. Las Provincias is of a mainly right-wing orientation and as such it enjoys close relations to the local and regional governments. As a result, we believe that the article's sources, presumably within these two authorities, are reliable.

Although the article doesn't explicitly mention it, we understand that the year 2009 actually refers to the period between May and August of that year. Alinghi stated in the hearing in front of Justice Cahn last week that they will not agree to holding the race earlier than May 2009.

33rd America's Cup
Always according to the article, Ernesto Bertarelli is willing to hold the 33rd America's Cup in Valencia only if it takes place in 2009. In that case, his offer to the city is to split the total amount Valencia would have paid for a regular 33rd America's Cup and pay Alinghi a approximately a third of it.

Las Provincias states that according to sources within the city and regional governments, Valencia had agreed to pay 105 million euros for the right to hold the event. In addition, Valencia guaranteed to secure a couple of corporate sponsors as well as pay additional costs, such as "television rights" (the article doesn't specify more on that issue). As a result, the total cash cost for the city would have been approximately 150 million euros, if of course a regular America's Cup had taken place from July 2007 until July-August 2009.

Given the fact Bertarelli asked for a third of that total cost, Valencia will have to pay approximately 50 million euros if they want the catamaran race to take place here in 2009.

34th America's Cup
The scenario that will follow an eventual Alinghi victory in the catamaran race against BMW Oracle in Valencia in 2009 is very straightforward and doesn't require much thought. As Defender, Alinghi chooses to remain in Valencia for the 34th edition and the city pays the Swiss team the remaining 100 million euros. A regular multi-challenger event will then take place from 2009 until the summer of 2011.

The situation for the city of Valencia will become more complicated if it is BMW Oracle that prevails over Alinghi in the catamaran race. According to the article, city officials have stated they are not willing to offer more than the amount left after deducting the initial 50 million, that is 100 million euros. The basis for any negotiation with the Americans will not be what they offered in 2007 but what remains from their previous obligations with Alinghi.

BMW Oracle from their part have stated various times that their intention and will was to hold the 34th America's Cup once again in Valencia, under the condition they were given the same or similar financial consideration as Alinghi in the previous two editions. As a result, the Americans will have to negotiate with local authorities the new financial conditions for holding another America's Cup here. If the newspaper's information is correct, Larry Ellison's team will have to aim lower and might not get the same windfalls as the Swiss in 2003 and 2007.

Obviously, this is pure speculation and a lot of things can happen until 2009. Justice Cahn might rule next week that the match will instead take place in 2008, as requested by BMW Oracle, or might reset the clock and order a race in January 2009. Even then, Alinghi can always appeal Cahn's order and we might be in for a long legal battle.

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3 Comments:

At 12:52 AM, Anonymous Anonymous said...

Hi Pierre, part of the story, near the end, says:

the Americans will have to negotiate with local authorities the new financial conditions for holding another America's Cup here. If the newspaper's information is correct, Larry Ellison's team will have to aim lower and might not get the same windfalls as the Swiss in 2003 and 2007.

Did you mean "the same windfalls as the Swiss in 2007 and 2009" (as opposed the dates mentioned?

Otherwise, I don't understand. Perhaps time for a nice storng coffee and reread ;0)

Bob

 
At 7:59 AM, Blogger Valencia Sailing said...

Hi Bob,

No, I did mean 2003 and 2007. Maybe the phrase was not correctly worded but I mention these dates because it was then that Alinghi negotiated the deals for the 32nd and 33rd editions.

The results of the contracts are seen later, as you correctly say in 2007 and 2009, but the deals were done in 2003 and 2007.

Thanks for the remark.

 
At 6:16 PM, Anonymous jean marc said...

The city of Valencia might not be interested in funding a project that is hazardous; who can say today than the winner will be Alinghi ?

 

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