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Are They Sailing Or Selling?
Sarah Ballard
October 20, 1986
The America's Cup syndicates, hit by high expenses, have turned to corporations to bail them out
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October 20, 1986

Are They Sailing Or Selling?

The America's Cup syndicates, hit by high expenses, have turned to corporations to bail them out

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Newport was full of bloody fools that year, most of them snorting in unison at the bumptious Aussie and his brash promotion of a godforsaken real estate development on the Indian Ocean called Yanchep Sun City. Bond did not win the America's Cup in 1974, or in '77, or in '80, but he did sell Yanchep Sun City to a Japanese group for $12.2 million in 1978, and that was just the beginning. Today Bond is a national hero for having paid the bills for the boat that brought the America's Cup to Australia; his current worth is estimated at $500 million. That makes him one of the 10 richest men in the country. His Bond Corporation, through its many and diverse holdings, is so thoroughly enmeshed in the business of the 1987 America's Cup that his 12-meter syndicate seems, at times, to be merely a conduit for transferring money from one section of the Bond empire to another. His Swan Brewery is the major backer of the syndicate; his TV network will help provide the principal television feed to the rest of the world; his Airship Industries will lease blimps to his television network to carry cameras over the race course; and his importing firm will supply French champagne for his syndicate's galas.

Bond's crosstown rival for the right to defend the America's Cup is Perth millionaire Kevin Parry. Parry, 52, who once worked as a furniture maker, now owns gold and diamond mines, television stations, film companies and the like. In the beginning Parry had difficulty lining up corporate support for his fledgling Kookaburra syndicate, but when it became apparent earlier this year that the syndicate had produced not one but two excellent 12-meters and that Parry was prepared to spring for a third, the funds began to flow in Kookaburra's direction.

Notable among the new Kookaburra backers is Carlton & United, the Melbourne-based brewer of Foster's, Australia's best-selling beer—notable because Perth and the rest of Western Australia is traditionally Swan territory. The invasion of the West by Foster's, which, in fact, was a response to the earlier invasion of the eastern market by Bond (recently Bond added an eastern brewery, Castlemaine Tooheys, to his empire), launched what the Australian papers are calling the Beer War. Foster's ad campaign will star Australia's favorite entertainer, Paul Hogan (Crocodile Dundee); Swan ads will feature the familiar rumpled face of Australia II's designer, Ben Lexcen, who, incidentally, is a contracted consultant to the Bond Corporation.

To appreciate the significance of the Beer War it helps to know that the Australian beer market is worth $5 billion a year. The U.S., with 15 times the population, spends only $12 billion on beer.

Until recently the Sydney group was one of the have-nots among the four Australian syndicates vying to become the defender of the Cup. Then the Sydney people hired Powerplay, a promotional firm, to handle its fund-raising. "They had picked a wimpy, insipid name for the boat—Sunshine—that just had to go," says Bob Pritchard, Powerplay's managing director. Powerplay renamed Sydney's 12-meter Steak 'n Kidney, which is Cockney rhyming slang for Sydney, and though the establishment shuddered, the average bloke loved it. "We started to nod off when Powerplay came to us and began to talk about the America's Cup," says Mike Rule, head of the Registered Clubs Association, which represents 4,300 licensed (to sell beer) clubs and two million blue-collar members. "Then they got to the name of the boat. That's something that will appeal to the battlers [Aussie for good ol' boys]."

Corporate sponsorship is not new to the Cup, but open corporate identification with individual boats is. When the British syndicate representing the Royal Thames Yacht Club belatedly acquired a major sponsorship from White Horse distilleries of Scotland, the name of its latest 12-meter was, in effect, changed from Crusader to White Crusader. The Kiwis formally named their syndicate BNZ Challenge when the Bank of New Zealand came aboard. However, of all the sponsors who have bought their way into the '87 America's Cup, the one most candid about its commercial motives is KIS France, a French multinational corporation that is the sole backer of the challenge from the Société des Régates de Rochelaises. The company's founder and President is Serge Crasnianski, a 43-year-old engineer and nuclear physicist who admits he knows nothing about sailing. He named the syndicate's 12-meter French Kiss and his tender Kiss Me lender. 'I am a businessman first and last, Crasnianski said. "I look for profits, success, expansion.... When French Kiss wins, KIS France wins, I win, and so do our products."

Crasnianski is spending money in Fremantle because his company does business in Australia. "The America's Cup is no longer merely a sporting event," he says. "It is an investment opportunity. How else can I justify spending $15 million to $25 million on a boat race?"

The last barrier to the complete commercialization of the America's Cup is Rule 26 of the code that governs international yacht racing. The rule says in essence, that while yachts are racing "no advertising shall be displayed on the hull spars, sails and equipment...." Not long ago the International Yacht Racing Union ruled that Crasnianski had gone too far and that the name French Kiss constituted advertising. Last week the YRU reversed its earlier ruling and allowed the name. Michael Fay, executive director of the New Zealand syndicate supports the move. "The money needed for the .987 challenge is huge," says Fay Sponsors must have their money back." If New Zealand were to win the Cup Fay, an investment banker, would get his money back and then some. He and his business partner own the right to the 1991 Cup if it should be sailed in New Zealand.

The government of Rhode Island estimated in 1983 that the America's Cup was worth $100 million to that state's economy. A study made earlier this year by the University of Western Australia's Centre for Applied Business Research Predicts that the 1987 Cup will boost the Western Australian economy by $384 million and 14,000 new jobs. Increased tourism the study says, will account for 1141 million and will generate $67 million worth of new industrial output Construction associated with the America's Cup will reach $38 million, which in turn will generate another $51 million worth of jobs in related industries. Best news of all-the effects of this economic growth will continue to be felt for several years even if Australia loses the Cup.

"I'm not sure we'll really come to understand the economic impact until we see the aftermath of 1987," says Michael Campbell, a spokesman for the Canadian challenge for the Cup. "If Australia is able to demonstrate that the numbers they've been talking about in terms of economic benefit are real...then I think we'll begin to see a lot of people viewing the America's Cup in a dramatically different way."

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