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Rough sailing: Australian yacht club drops out as Challenger of Record in America's Cup

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SAN DIEGO — Australia's Hamilton Island Yacht Club has withdrawn as the Challenger of Record for the America's Cup, the first public sign of dissatisfaction with the direction sailing's marquee regatta is going under defending champion Oracle Team USA.

The move came six days after competitors met in Los Angeles to air their concerns. Among them are costs, not knowing the venue before the first installment of the $2 million entry fee is due and unhappiness that San Francisco was eliminated as host city.

Organizers had promised to contain costs in this America's Cup cycle. Hamilton Island officials said they are bailing because of the cash outlay needed to compete for the oldest trophy in international sports.

"The Challenge was initiated with a view to negotiating a format for the 35th America's Cup that was affordable and put the emphasis back on sailing skills," Bob Oatley said in a statement. "Ultimately our estimate of the costs of competing were well beyond our initial expectation and our ability to make the formula of our investment and other commercial support add up. We are bitterly disappointed that this emerging team of fine young Australian sailors will not be able to compete at the next America's Cup under our banner."

Hamilton Island was the first foreign yacht club to challenge Oracle Team USA after the U.S. team successfully defended the America's Cup in September with a stunning comeback against Emirates Team New Zealand on San Francisco Bay.

Team Australia head Iain Murray, who served as regatta director of the last America's Cup, didn't return a call and email seeking further comment.

Australia last challenged for the America's Cup in 2000, when its low-budget effort was led by Jimmy Spithill, who has since skippered Oracle Team USA to consecutive victories.

Australia's big moment in the America's Cup came in 1983, when John Bertrand beat Dennis Conner to end the New York Yacht Club's 132-year winning streak. Four years later, Conner went down under and beat Murray to reclaim the Auld Mug.

Oracle Team USA is owned by software billionaire Larry Ellison, who has spent an estimated $500 million since the early 2000s in pursuing, winning and defending the silver trophy. Ellison and his sailing CEO, five-time America's Cup winner Russell Coutts, want the event to become self-sustaining commercially.

But that's created steady grumbling among challengers. Ellison has allowed Coutts to lead the way in writing the rules for the next America's Cup and picking the venue. Many in the sport feel the New Zealander is putting commercial interests ahead of sailing.

Most foreign syndicates are unhappy that San Francisco, which provided a spectacular backdrop and steady wind last year, was eliminated from contention to host the 2017 regatta due to financial reasons.

They also are unhappy that Bermuda is under consideration to host the challenger semifinals and finals, and the America's Cup match in 2017. They feel it will be a logistical nightmare to take the competition to the British territory in the Atlantic Ocean. Bermuda is competing with San Diego to host the racing.

While San Diego Bay would provide arena-style sailing, there are concerns that the wind won't be strong enough.

Another touchy subject is that Ellison and Coutts want to stage elimination rounds in another part of the world, which would add another layer of expense in moving the 62-foot, wing sail catamarans. Teams feel it will be hard to attract sponsorships because there are no assurances they'll reach the final venue.

It wasn't immediately clear which syndicate will replace Hamilton Island as Challenger of Record, which represents all foreign syndicates in dealing with Oracle Team USA.

In a statement, Coutts said he was disappointed that the Aussies dropped out.

This is the second straight America's Cup in which the original Challenger of Record has dropped out.

Ellison and Coutts had hoped to attract more teams, not have them drop out. The last America's Cup was star-crossed from the start, in part because only three challengers entered, a big drop from the 10 or 12 originally expected. The competition was further marred when British Olympic star Bart Simpson was killed when the catamaran being sailed by Artemis Racing of Sweden capsized on San Francisco Bay in May 2013. That forced Artemis to sit out the round-robins in the challenger trials, leading to the bizarre situation of having its scheduled opponent sail alone around the course to collect a point.

The entry period for this America's Cup closes Aug. 8. The first installment of $1 million of the $2 million entry fee is due shortly after challenge papers are accepted.

Coutts said recently he hopes to pick the venue by the end of September, but that the process could last longer.

Teams must also put up a $1 million performance bond.

Entries are expected from New Zealand, Italy, Britain, Sweden and maybe France and China.


Follow Bernie Wilson on Twitter at http://twitter.com/berniewilson

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