Team NZ: how the ship went down

By JAMES GARDINER

"Money doesn't talk, it swears," wrote Bob Dylan, and the only printable swear word for Team New Zealand's sponsors and supporters last night was "bugger."

The defections of two of the three Team NZ leaders - Russell Coutts and Brad Butterworth - to a Swiss syndicate makes a mockery of the supposed orderly handover from the old guard to the new.

The fact that more key people may also decamp is one worry. Couple that with Coutts and Butterworth's parting statement that they did not want to work within the proposed structure of the new America's Cup syndicate and a chill should run down the spines of those who endorsed Coutts' confident post-victory prediction of a generation of successful defences.

Skipper Coutts and his lieutenants, tactician Butterworth and navigator Tom Schnackenberg, have spent the past month or more shoring up financial support domestically from sponsors and visiting the United States and Europe hawking the television rights to the 2003 Cup defence.

But clearly, that is not all they were doing.

As recently as May 2, Coutts, speaking from a taxi in New York, said he was resigned to losing at least a couple of New Zealand sailors to the open foreign chequebooks.

What he did not say, of course, as he gallantly promised to fight to keep the team together, was that he and Butterworth might be those sailors.

He could even see a positive side of the $1 million-plus offer rumours: "The nice thing about people being approached is the high value it has placed on those people. At least we have that problem."

Everyone, it seems, was looking in the wrong direction. New Zealanders comforted themselves that likely targets would hardly be the heart of the supposedly tight-knit Team NZ.

The greenback rather than the Swiss franc was said to be doing the talking, with American billionaires from Bill Gates to John and Craig McCaw reported as possible backers of syndicates.

Devonport lawyer and sailor Sam Reeves, who had acted as Team NZ's rules adviser, acknowledged just last week that he might be acting for clients representing another syndicate.

Difficulties within Team NZ emerged publicly in late February, just before the finals series.

The Herald quoted Butterworth as saying there were policy disputes between the crew that he and Coutts led and the hierarchy led by Sir Peter Blake.

But it emerged later that those tensions - described by Sir Peter as akin to a family squabble - had been simmering for years.

Much of the problem was put down to the personalities involved, but the complexity and secrecy surrounding the companies that owned the syndicate and ran the Cup series were also key factors.

Behind Team NZ stood the unregistered charitable trust that essentially controlled the syndicate's assets. As negotiations dragged on through March to wind it up and transfer assets to the new trust, Butterworth made disparaging comments about "bloody lawyers" on the old guard.

At yesterday's hastily arranged press conference at the Royal NZ Yacht Squadron in Auckland, he cited the new setup as not being to his and Coutts' liking either.

With Coutts out of the country, Butterworth fronted to explain the frustrations the two men felt.

"Over the past three years Russell and I have worked to the utmost of our ability to ensure an orderly and realistic, sustainable transition of control from the trust governing Team NZ to the new management.

"We have reached the conclusion that we do not want to manage a defence within the proposed structure," he said.

"We have therefore decided we will step aside now and allow someone else the opportunity to take Team NZ forward for the defence in 2003. It is better to do this cleanly now than partway through the defence."

But Butterworth would not answer questions on troubles with the trust. Nor would he say if it was that - or the money - that clinched the defection.

The complexity of the trust was also cited yesterday by one of its members, Ralph Norris, the Business Roundtable chairman and ASB Bank chief.

Auckland businessman Peter Menzies and Canadian millionaire John Risley, a close friend of Coutts, are the other trustees.

"We thought the assigning of the rights [to defend the Cup on the yacht squadron's behalf] would be quite a simple process," said Mr Norris. "When we got into the nitty-gritty there are a myriad of different agreements and sponsorship arrangements in place.

"We had to get to the bottom of those. We also had to understand what future liabilities we may be responsible for."

He said there was "no significant surplus" of funds after the windup of the old trust "and there's certainly been no situations where any money has been redirected anywhere."

The assets to be handed over are the Team NZ base on the Auckland waterfront, the boats NZL57 and NZL60 and equipment.

Mr Norris said all assets had been handed over unencumbered, although the new trust had taken responsibility for the $5.25 million in loans extended to the previous syndicate last year by sponsors Lotto, Steinlager, Telecom and Toyota.

They, along with TVNZ, make up the "family of five" key sponsors who yesterday reconfirmed their support for the new syndicate and its leadership.

It also emerged that Brand New Zealand, a joint venture between the Tourism Board and the Trade Development Board, has agreed in principle to become a major sponsor.

Although Butterworth would not say at the press conference where he and Coutts saw their futures, there seemed to be little doubt that their decision to "move on" will mean returning to sail under another syndicate's colours.

He said the change would create opportunities for others and New Zealand had a huge depth of talent.

Young Dean Barker, who sailed the Cup-clinching final race, has been confirmed as Team NZ's skipper and Schnackenberg will hold a steady course. Still, losing an experienced skipper and tactician is akin to leaving the black boat with a gaping hole in the hull.