America's Cup Teams May Reduce Budgets by 80% 29/10/2008 |
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America's Cup teams will cut their budgets by up to 80 percent under plans for sailing's richest event in 2010 as financial turmoil makes it harder to find sponsors, Alinghi team owner Ernesto Bertarelli said.
``We need to adapt to the times,'' the Swiss billionaire said in a phone interview from Geneva yesterday.
Alinghi beat Team New Zealand off Valencia, Spain, last year to earn the right to organize the next edition of the competition. Under plans to be discussed by about a dozen prospective teams tomorrow, syndicates will be able to be competitive on a budget of 10 million to 20 million euros ($12.5 million to $25 million), Bertarelli said. Teams spent as much as 100 million euros to build and race boats in the past.
Teams will build only one boat, which will be reduced by about 10 feet (3 meters) in size, and could use less equipment and staff than at the last event, Bertarelli said. He said he was confident sponsors can still be secured in the current financial climate.
``Companies still need to run businesses, they need to have a public image,'' Bertarelli said, adding Alinghi sponsor UBS AG hasn't said it will withdraw. UBS was forced into a $59.2 billion bailout by the Swiss government this month.
Alinghi is pursuing plans for the next edition of the 157- year-old event even before a legal dispute with Larry Ellison's BMW-Oracle team is resolved. The U.S. billionaire claims Alinghi selected an invalid Spanish yacht club to set the rules for the Cup, initially planned for 2009.
Legal Challenges
If Ellison wins the suit, it could force Alinghi to shelve its project and compete in a regatta against BMW-Oracle to decide who organizes the next America's Cup.
Bertarelli will host prospective America's Cup teams in Geneva tomorrow. At last year's competition there were 11 challengers.
``Almost every team that competed last year is back,'' Bertarelli said.
Under draft plans to be discussed, the new class of boats will be more practical than last year's 90-footers and easier to re-use after the Cup is over.
``I own two of the fastest America's Cup boats and I haven't been able to sail them for 12 months,'' he said, citing their size and fuel costs as an impediment.
Bertarelli got 10.7 billion Swiss francs ($9.2 million) from selling Serono SA, the drug company controlled by his family, in 2006. He said he is continuing to invest in health care amid the financial and economic gloom.
``I'm always going to look at health care,'' he said, adding you have to stick to what you know. ``After food and shelter, the next thing you want is health.''
He spent $90 million of his own money to win the Cup from Team New Zealand in 2003 before successfully defending the trophy last year in the first edition held in Europe since 1851.
(Source: Bloomberg)
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