Breaking the chains: How the America’s Cup finally agreed to modernise

After months of ructions and wrangling, Defender and Challenger have finally agreed to modernise the America’s Cup. Magnus Wheatley, America’s Cup author and historian, reports on the painful lead-up to a seismic decision that could finally liberate the event from its stifling Deed of Gift constrictions...

Within seconds of Emirates Team New Zealand (ETNZ) crossing the finish line in Barcelona in October, dispatching INEOS Britannia 7-2 in the 37th America’s Cup Match, Royal Yacht Squadron Commodore-elect Bertie Bicket was in an office shoreside with Gillian Williams, then Commodore of the Royal New Zealand Yacht Squadron. 

Away from the cameras and the glory, Bicket was doing something just as momentous as the crews who crossed the finish line, only rather more quietly: signing the official letter and Memorandum of Understanding to become the Challenger of Record for the 38th America’s Cup.

As well as chief competitors for the next event, this also made the New Zealand and British teams collaborators on its rules. It was largely their failure to reach mutual consent on those rules – the Protocol – for so long that led to woes within Cup circles, ranging from disappearing financial backers to public disputes, and even star sailors jumping ship. But the road was paved with good intentions.

Modernising minds

Since midway through the 37th regatta, teams for the 38th America’s Cup, slated for Naples in July 2027, had been angling to reform the competition. Throughout the Cup in Barcelona, Defender ETNZ recognised issues around sustainable funding and proposed a raft of changes during lengthy discussions with the Challenger of Record, the Royal Yacht Squadron, bringing in other syndicate heads to try and find a way forward. 

The goal was to make commercial negotiations more meaningful for sponsors, benefactors and suppliers, as well as informing venue selection, to bring the America’s Cup more in line with the modern sporting world.

“In essence, the ultimate goal was to create longer-term value in the teams that can become franchisable models,” says Grant Dalton, CEO of ETNZ, about the partnership. “If you look at all the major sports in the world, every single one operates on this basis. It’s only the America’s Cup that sits outside of that, and in order to create value, the AC Partnership is the key.”

This new AC Partnership arrangement would allow teams to form an all-powerful committee with equal voting rights to run future events.  That would generate stability and predictability (the rules wouldn’t change every time unless unanimously agreed) and therefore encourage revenue from event fees, TV rights and sponsorship arrangements.

The idea was a set-up that was equitable, profitable and attractive for all involved. It would need to be laid out within the Protocol agreed by Challenger and Defender and then confirmed potentially in due course via an amendment to the Deed of Gift, the overall guiding document of the Cup.

Grand plans fracture

But consensus on the details proved difficult to find – delaying publication of the Protocol that the AC Partnership would sit within. Relations began to break down behind the scenes, with three Challengers – Athena Racing, Alinghi and American Magic – dividing into a separate camp, and contesting the structure and make-up of the Partnership.

Things came to a head when Dalton, also CEO of the America’s Cup Event, chose Naples as the venue. The lead-up to the Naples announcement, during which Italian prime minister Giorgia Meloni hosted a lavish reception in Rome, followed by ministerial-level largesse at another reception in Naples, had been tense. Sir Jim Ratcliffe, the petro-chemicals tycoon, had just pulled his support from the Challenger of Record Athena Racing, leaving the British in a scramble to raise funds to honour their challenge.

With this as a backdrop, Athena aligned most publicly with the Swiss Alinghi syndicate and the New York Yacht Club’s American Magic team via a series of statements to decry an “ongoing lack of transparency” and its impact on negotiating a fair sporting Protocol.

“Athena Racing has been negotiating in good faith for the past seven months and still has serious concerns regarding several key clauses proposed within the Protocol, which is far from being ‘final’ as the Defender suggests,” the team statement read.

Athena contended that a host agreement, which commits all challengers to the logistics and costs of setting up a base and moving a huge team to a new venue, typically follows an agreement on the Protocol. With no such agreement in place, ETNZ was jumping the gun by announcing Naples as the next venue.

In the background, the Alinghi Red Bull Racing team was seemingly wound up, although still part of negotiations. The Defender, meanwhile, was unable to reach acceptable terms with their star sailor Peter Burling and the three-time winner of the America’s Cup left, only to resurface months later at Luna Rossa, the Italian challenger.

Public pronouncements rumbled on around the Protocol and the venue, until ETNZ issued a terse statement that highlighted a key paragraph in the Memorandum of Understanding that Bicket had signed in Barcelona. It states clearly that: “The Venue for the Match and for the preceding Challenger Selection Series (CSS) will be determined and announced by the AC38 Defender within eight months of the AC37 Final Race. The final dates for the Match and the preceding CSS will be announced within a further two months of the Venue announcement.” In other words, the Defender was perfectly entitled to pick Naples.

Things get messy

In effect, that shut down the argument over Naples for both the Match and the Challenger Selection Series, and public statements were removed from team websites. But “mutual consent” was falling apart, and with the clock ticking down on the timeframe to agree to a Protocol, an even greater peril began to loom.

If “mutual consent” could not be achieved on the Protocol, rules for the next competition would revert full square to the archaic conditions laid out in the Deed of Gift (see sidebar). Leaving aside wrangling on details of the AC Partnership agreement, a Deed of Gift Match would nix the whole idea of such a deal, for the 38th Cup at least. It would also have potentially meant a no-frills head-to-head Match between Challenger and Defender, excluding all other competitors until a three-race series had been concluded.

For many, the Deed of Gift is the problem with the America’s Cup. Its binding legacy, framed in iron-clad New York trust law, has been a stumbling block for those wishing to make the Cup more commercially viable. In fact, only two amendments have ever been made – once in 1956 to allow smaller boats to compete when the 12 metre rule came in, and again in 1985 to allow for racing in the Southern Hemisphere after Australia II’s victory in 1983. 

Housed in a secure room off the library of the 44th Street Manhattan clubhouse of the New York Yacht Club, the Deed is signed by George Schuyler, the last surviving member of the “America” syndicate that famously won on 22 August 1851 in a race around the Isle of Wight.

With this scenario impending, the New York Yacht Club, the ultimate founding trustee of the America’s Cup, decided to try and break the stalemate by aligning with the Defender with the will to go back to court in Manhattan to seek an additional amendment to the Deed of Gift that would allow for a central organisational structure to be put in place. 

It was a key move by Jay Cross, Commodore of the New York Yacht Club, who publicly stated in August 2025: “As the founding Trustee of the America’s Cup, we are completely supportive of the move to modernise the oldest sporting trophy in the world.”

Points of contention

Despite the positivity, the nine months of protracted negotiations around the Protocol were a damaging episode both externally to the viewing public, but also internally, with relationships fracturing. The Partnership structure and its ultimate make-up was at the heart of the disagreements while other progressive measures – such as stored power replacing cyclors, the mandatory inclusion of women on the AC75, the continuation of the Youth and Women’s America’s Cup events, the doubling-down of eco-friendly “eChase” support boats, and a relaxation of the nationality rules to allow two non-nationals on each competing AC75 – were seen as positive steps forward.

Negotiations and agreement also stalled in the attempt to stop the cliff edge drop that happens immediately after every America’s Cup, and to bring in two-year cycles, along with a partnership structure that can direct and lead the America’s Cup into the future. As Dennis Conner famously said: “Bet on self-interest, it is always in the running,” and the San Diegan may well be right in this instance, with teams vying for a controlling stake in the Partnership structure either via voting rights or personnel appointments.

The implications

Dalton, willing to step away from the running of the event if it would help end the stalemate, remained optimistic to the last, telling BOAT International, “It will very much be a partnership. It’s one vote per team and no dominant parties therein. But there are a lot of hurdles to overcome, hence the lawyers, but after the guns were put away, everyone is working together to get a resolution. It’s a chicken and egg scenario with regards the Protocol and the Partnership as we can’t publish one without the other being agreed. It could well last to the end of the year before it’s over the line.”

Dalton’s prophecy on the timeline was ultimately wrong, with Ainslie and Bicket flying to Auckland to meet with RNZYS Commodore David Blakey and senior members of the club’s representative sports team in Emirates Team New Zealand. The result was agreement across the board in terms of the Protocol for the Louis Vuitton 38th America’s Cup, while a deadline of 9 September 2025 has been set to, as Bicket said, “dot the I’s and cross the T’s on the AC partnership”.

For the Challenger of Record, there is one mighty hurdle still to overcome, spelled out in the Deed of Gift: “No vessel which has been defeated in a Match for this Cup can be again selected by any club for its representative until after a contest for it by some other vessel has intervened, or until after the expiration of two years from the time such contest has taken place.”

When questioned, Ainslie was certain it was not an issue and would be overcome within the Protocol’s “mutual consent” that stipulates for the 38th event that: “AC37 competitors shall use their Hull from AC37 except, where that Hull is no longer available due to causes beyond the control of the affected Competitor, they may acquire an AC36 or AC37-launched Hull, or build a new Hull to their AC37 design, with modifications as allowed in the AC38 Technical Regulations.”

In Ainslie’s view, no amendment to the Deed of Gift is required but whether the British will have the use of the yacht they competed with in Barcelona is a moot point as relations with Sir Jim Ratcliffe, who contests ownership of the yacht, are soured. The British may be forced to either buy an old hull, potentially the Swiss Ac75 if that team has truly been wound up, or build anew.

The America’s Cup has always been “a game” played by wealthy backers more than used to getting their own way. If the question is: what is wrong with the America’s Cup? Then the answer lies in the desperation to win it, using fair means or otherwise. Especially when powerful people with legions of lawyers are involved.

Grant Dalton recently told a 3News reporter: “This is the America’s Cup, right? So never believe anything you’re told,” and until the boats get racing, nothing is ever certain in the America’s Cup. The breaching of the impasse on 12 August 2025 was the first concrete step towards a conclusion, but interpretive litigation around the Deed of Gift, via the efficient New York trust courts, can never be discounted – and therein lies the ultimate problem with the America’s Cup.

Changing the Cup has shipwrecked many attempting to do what seems like the right thing. What binds eventual failure is enshrined in a tightly worded Deed of Gift, often referred to as “the most expensive document in sailing history”, but progress is seemingly being made to modernise and change the Cup for evermore.

Magnus Wheatley is an America’s Cup author and historian

First published in the October 2025 issue of BOAT International. Get this magazine sent straight to your door, or subscribe and never miss an issue.