Why Coutts jumped ship

By EUGENE BINGHAM and JAMES GARDINER

At the height of the Team New Zealand meltdown, Russell Coutts talked to Ernesto Bertarelli about putting his billions behind the 2003 defence of the America's Cup.

But when the plan fizzled, Coutts accepted an offer from the 37-year-old biotechnology whiz to join his new Swiss Alinghi syndicate and became Team New Zealand's arch-enemy.

Bertarelli's investment in the defence would have been at the expense of the "family of five" sponsors that supported New Zealand's 1995 and 2000 campaigns.

But Coutts was convinced that the only way to keep the cup was to double the team's budget and to do that meant looking overseas.

He remained open to the idea of finding a benefactor even after giving his word to the sponsors that he and they had a deal.

After skippering Bertarelli's Alinghi team to victory in the Louis Vuitton Cup last Sunday, Coutts said there was an "untold story" behind why he and Brad Butterworth left Team New Zealand in May 2000.

What that story is he is not saying, declining interviews.

But a Weekend Herald investigation has uncovered more details of the bitter power-play that unfolded during the switch from a Sir Peter Blake-led administration to one that was supposed to be headed by Coutts, Butterworth and Tom Schnackenberg.

Butterworth this week told a small group of foreign journalists that the pair were "locked out" of Team New Zealand - a claim vehemently rejected by two men who dealt directly with Coutts and Butterworth to establish Team New Zealand's 2003 campaign.

They said it was the millionaire yachtsmen who made a deal and then reneged.

Team New Zealand trust chairman Ralph Norris, who joined at Coutts' request in 1999, was insulted by the pair's comments.

"It tends to cast aspersions on me as a director that somehow or other I have acted inappropriately," he said. "I find that totally unacceptable. If Russell and Brad genuinely felt that the task was too big for them, then they probably did everybody a favour."

Lion Breweries director Mike Smith, who represented the family of five in post-cup negotiations, said he felt very let down by the pair, particularly Butterworth, whom he had known for many years. "With Russell, perhaps, I shouldn't have been surprised. A few people would say that Russell is a very self-centred guy."

Coutts wanted to double the $50 million 2000 campaign budget, but Sir Peter and the outgoing trustees opposed any proposal which would have sacrificed the family of five sponsors - Steinlager, Telecom, Lotto, Toyota and TVNZ.

Coutts was already unpopular with the sponsors after a two-year battle with Sir Peter and the old trustees over what he saw as misallocation of money in the defence. He believed that Sir Peter and three of his managers were being paid too much compared with what was spent on the sailors and the boats.

But even with Sir Peter out of the America's Cup picture and Bertarelli eager to enter it, Coutts found that Team New Zealand's contractual obligations made a new arrangement difficult.

Mr Norris said he became aware that even after Coutts and Butterworth committed themselves to Team New Zealand on the terms agreed with the family of five, they continued to discuss other funding options.

"I understand a suggestion was put forward to Ernesto Bertarelli that he sponsor Team New Zealand."

But Bertarelli was more intent on setting up his own syndicate. With an $8 billion personal fortune, it was no problem to come up with $120 million to establish Alinghi and buy the best sailors he could.

Coutts accepted more than $10 million for the three-year campaign, including a sign-on fee of about 30 per cent.

Sean Reeves, who left Team New Zealand to set up OneWorld and was embroiled in the cup spy scandal, saw first hand the bitter bust-up between Sir Peter and Coutts.

"If some people saw what Coutts had to go through, they might have understood better what he did," Reeves said.

The break-up of the team was "driven by greed - everything in the cup always is", said Reeves.

Butterworth this week attacked the trustees from the Blake-led administration and said they and the sponsors owned the team.

But Richard Green, former trust chairman, rejected Butterworth's claims.

"To suggest that we personally owned it rather than as trustees for charity is completely wrong. Brad has had it explained to him on so many occasions over so long a period that one either draws the conclusion that he's not very smart or he's being deliberately misleading."

nzherald.co.nz/americascup

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