KEY POINTS:
Luna Rossa's shock withdrawal from the 33rd America's Cup not only removes one of the leading contenders, it also accentuates the heavy reverses that are dogging holders Alinghi.
Ernesto Bertarelli, the billionaire leader of the Alinghi syndicate, has made it a proud declaration that his goal was to
lift the cup to a whole new level. After the 32nd America's Cup where the racing was at times wonderfully exciting, it looked a credible boast.
Since then, Louis Vuitton have pulled their sponsorship after some well-traversed difficutlies with America's Cup Management (ACM), the Bertarelli-owned company set up to run the cup and which was the target of much criticism from challengers alleging arrogance and officiousness. The challenger series now has no name and no sponsor, although Rolex are heavily rumoured to be moving in.
BMW Oracle objected so much to Alinghi's blueprint for the next cup it has lodged a legal challenge to force Alinghi to take it seriously.
Now Prada - the power behind Luna Rossa and the losing challenger in the 2000 America's Cup and losing finalist in this year's Louis Vuitton Cup (Emirates Team NZ won both times) - has called it quits.
There was no indication about what sparked their withdrawal.
"Participation in the next America's Cup was carefully analysed and, while significant human and financial resources are already available, it was decided that after three campaigns a cycle has come to an end," the luxury goods group said.
One reason may be money. Prada has been planning a global public offer which has consistently not happened.
In addition, the main sponsor at the last regatta, Telecom Italia, has been embroiled in a political row after it was fined more than $30m for a price-fixing rort.
The current uncertainty over going to court may have been the final straw.
"It is definitely a surprise," said a member of one America's Cup challenger, who asked not to be named. "When we finished in Valencia, they were talking like they would all be there for the next one and they weren't letting any of their people go."
The other side-effect is that Luna Rossa's talented young Australian skipper, James Spithill, is without a team. There was talk he might interest Alinghi but there are growing whispers Australia may put together a challenge.
Team New Zealand, Shosholoza and Desafio Espanol have thrown their hats back into the ring, together with new British syndicate Team Origin.
Other Valencia challengers yet to be heard from include Italy's +39, France's Areva, Sweden's Victory, United internet Team Germany and the China team.
Two New Zealanders are part of the Luna Rossa crew - trimmer Daniel Fong and navigator Tom Schnackenberg, a high-profile casualty of TNZ's 2003 campaign.