Emirates Team New Zealand lost the Laureus World Team of the Year award to the Mercedes Formula One Team.
Team New Zealand were nominated for their stunning victory over Oracle Team USA in the 35th America's Cup in Bermuda last year.
The Mercedes team clinched the World Constructors' Championship last year after 12 race wins and 26 podium finishes between Lewis Hamilton and Valtteri Bottas.
The annual Laureus Sports Awards ceremony, which was held in Monaco, honoured individuals and teams for sporting achievements from 2017.
Team New Zealand chief operating officer Kevin Shoebridge and skipper Glenn Ashby attended the ceremony on behalf of the team.
The other nominations for Team of the Year were the French Davis Cup tennis team, NBA team the Golden State Warriors, the New England Patriots in the NFL, and football giant Real Madrid.
Team New Zealand were the only Kiwis who made the 2017 shortlist over eight categories, and were just the second New Zealand sports team to ever be nominated for the Team of the Year award.
The All Blacks have been nominated for the award five times since it was established in 2000, winning in 2015 following their third Rugby World Cup triumph.
The Laureus Awards was established in 1999 by Laureus Sport for Good Foundation, which supports over 100 community projects in around 40 countries.