Yachting: Stormy economic seas sink one Cup hopeful

Mascalzone Latino in action against Team New Zealand during last year's Louis Vuitton Trophy. Photo / Getty Images

Never Mind the finishing line, America's Cup holders Oracle will have won an already rigorous battle just getting challengers to the starting line after the news that Mascalzone Latino won't be there.

Mascalzone, the Challenger of Record for the 34th America's Cup, has announced it won't compete in the regatta in 2013 - meaning that next-in-line team Artemis (Sweden) is likely to step into the vital role of challengers' spokesman in dealings with Oracle.

Mascalzone team boss Vincenzo Onorato said on the Italian team's website that it was not able to raise the money needed to be competitive.

There was no word from Mascalzone's sponsoring yacht club, Club Nautico di Roma, on whether it would continue as Challenger of Record without a competing team but most are picking Artemis to take over.

The problem is money and the parlous economic times. A US$200,000 ($252,000) payment was due by the end of last month and, although details are sketchy, it appears Mascalzone and few of the 12 challengers supposedly involved in the 34th America's Cup have yet found the bankroll to compete.

In fact, most in yachting circles consider that, right now, only four presently have the financial wherewithal to arrive at the starting line of the Cup regatta in 2013 - Oracle, Emirates Team New Zealand, Artemis and Team China.

Not that those who missed the $200,000 payment have seen their chances of competing scuttled.

Those who haven't made the payment date will have their futures discussed by the international jury overseeing the Cup - but it is likely that some deals will be worked out over time to ensure as many as possible are able to front up.

That is not without precedent. Alinghi, for example, famously helped fund Team NZ in a previous regatta. However, the big difference is that was a case of a major player being helped to keep the Cup alive.

This time, the global economic downturn is affecting both big and bit-part players - even though it is cheaper to compete in this America's Cup than the last one.

Of the remaining 12 challengers, four have so far been labelled as "undisclosed" - at least partly a euphemism for "yet to find the money".

Of the remaining eight, the French teams Aleph and Energy, Italy's Venezia, Team Australia and Team Korea are widely believed to still be in intense fundraising mode.

While the US$200,000 payment might not be a dealbreaker, another US$100,000 entry fee payment is due on June 1 and the biggest financial hurdle will be the US$800,000 (about $1m) bond due by the end of the year.

Even before then, the America's Cup World Series will have well and truly begun.

Kicking off in Portugal in August, the ACWS will take place in the AC45 catamarans built here and which have been zipping round the Hauraki Gulf in recent times. Each catamaran costs €695,000 ($1.25m) and it is understood that seven of the 10 AC45s built by Oracle have been sold.

However, Artemis, Team China, ETNZ and Mascalzone were the only challengers to have bought their boats for the ACWS regattas in Portugal, England and San Diego (with more venues to be announced as hosts are signed). Oracle have two of the AC45s and ACRM - the independent arm running the regattas - also has one. Those spare two could be lent to other challengers.

America's Cup regatta director Iain Murray was not available for comment but there are some points to be made here. The problems faced by other teams underlines how well Emirates Team NZ did to get their financial house in order.

It should also be said that none of the above is meant to be a criticism of Oracle; more a sign of the times.

Oracle are living up to their word in making the Cup more affordable; and making it more relevant by switching to multi-hulls; by promoting faster and more exciting racing, particularly to new audiences; and by taking that racing to those audiences by new TV and electronic means.

Oracle Racing CEO Sir Russell Coutts has always said that a team could compete in the 2013 Cup for a budget of around US$17m ($21.4m), although he was at pains to say that level of finance would not produce a winner; and that US$80m ($101m) would be needed to be competitive. In the last America's Cup, team budgets ranged from about US$40m-US$120m.

But, for all Oracle's efforts, it remains to be seen how many of the undisclosed remain undisclosed and how many of those disclosed are able to close their fundraising efforts and make it to the start line.