The proposal to cut costs has threatened to see two of the biggest teams withdraw from the next America’s Cup – what’s going on?

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First came the news that the Cup organisers were to change the boat that the next America’s Cup would be contested in from a 62ft foiling cat to something around 45-50ft. Then came word that the Italian Luna Rossa team objected to the idea of downsizing and would withdraw from the Cup if it happened.

‘Team Luna Rossa Challenge is distinctly opposed to the proposal to change the Class Rule for the 35th America’s Cup and therefore the boat that was previously accepted by all challengers on June 5th 2014,’ read a statement issued by the team on 26 March. ‘If the principle of unanimity of all challengers required to change the Class Rule were not to be respected, Luna Rossa will be obliged to withdraw from the 35th America’s Cup.’

Initially their stance was seen as being a tough negotiating strategy, albeit one that carried high stakes. But then, just a few hours later, the Kiwis looked like they too could be out of the event if the plans for a smaller boat went ahead. Their stance was rather different.

While Team New Zealand agreed with the idea of reducing costs, they had been told by the Cup organisers that accepting a smaller boat would mean the country would not get to host a challenger event in Auckland, New Zealand in 2017.

As Team New Zealand boss Grant Dalton explained, the NZ government had made it very clear that no Auckland event would mean that they wouldn’t back the team in their Cup campaign.

Economic Development Minister Steven Joyce told the New Zealand Herald that without a presence in Auckland, there would be no money.

“We are interested in being involved as a sponsor as a much lower basis than last time, and on the basis there is a qualifying series in Auckland,” Joyce was quoted as saying. “If that was to change then we could not be involved.”

According to Dalton the decision for Team New Zealand was a no brainer, the team had to back the big boat and support the Italians in their objection to the new smaller boat.

The debacle has left the Cup organisers in a very difficult position, albeit one of their own making.

Do they go with a smaller boat and risk losing two of their biggest and longest players and hope that a number of smaller teams will make an entry, or stick with the original plans to go with the 62ft cat?

The issue is made all the more complicated given the string of AC World Series events that are already planned where Italy is due to host first of four in Sardinia during early June.

So why has the new boat caused such ructions and why is the issue even on the table?

One reason is cost, the other performance.

Any high performance boat is going to be expensive to develop and build and the AC62s are no different. Ironically the move from 72ft cats was an early step towards reducing costs but as it turns out, not enough. Shipping such huge fragile structures around the world, especially to New Zealand, would be eye wateringly expensive and be a significant factor in an exercise that would cost teams around $5m. Compare this to a campaign budget of around $350,000 for a smaller boat that could fit in a container and it’s easy to see why some teams have been baulking at the idea of going down under with their big cats.

On top of this, the shipping time would see more than two months lost as the boats were transported out and back.

Then there’s the issue of performance. The rapid development of the foiling test boats has seen huge leaps in performance already.

Several teams such as Artemis and BAR have been working on modified AC45s for their testing and development. Nicknamed ‘45 turbos’ these boats are wider, stiffer, lighter and with more refined foils and control systems, these machines are already getting to AC72 speeds – I’m told around 25 knots upwind and well in excess of 40 knots downhill.

Foiling tacks and gybes are now commonplace as the game has taken a significant leap forwards. With that kind of performance why go to the expense of developing a 60footer?

The idea of a new smaller boat for the Cup has been in discussion for some time. Part of those talks focused on a 50-54 footer with hulls that could come apart and slip into a container. While that seemed to offer some advantages, fitting a wingsail into a container meant that the wing would end up being very high aspect ratio, tall and skinny and therefore tricky to handle on the water.

It sounds now as if the size of the new boat could be somewhere between 45-50ft.

But given the significant change that is proposed and the loss of a competitive advantage, why would Artemis and BAR be in support of a move to smaller boats?

Despite their public support for the move, the reality is that they would rather not have to change direction mid cycle, but the lessons they have learned and the data they have accumulated at this stage of the development still puts them ahead of anyone about to start a campaign. They also believe that reducing costs in the future is an important if not essential goal for the Cup.

As Artemis Racing boss Torbjorn Tornqvist told me during the current RC44 event in Malta, “The cost of competing in the Cup needs to come down, the current budgets are just not justifiable. They need to be half what they currently are. That would mean a budget of around $50million which is still the most expensive sailing campaign by far.”

A move to 45 footers could see a much bigger cut to around $10-15million. I’m told that a 45 footer costs around 10 percent of that of a 62footer. It’s numbers like that, that are driving this debate.

Given the history of the Cup and the stress that high campaign costs have caused in the past it is ironic at best that the issue of reducing costs is threatening to destabilise the event this time around.

While there will be plenty that roll their eye back in disbelief at the prospect of more disputes and stand offs in the Cup, those that regularly follow the Cup circus will known that this is all part of the cycle. The difference this time is that while it seems odd to be moving the goal posts at this stage in the game, the reasons could benefit the event in the long term.