From a helicopter hovering at 1,200 feet, the city of Venice looks like a dusty labyrinth. Red tile rooftops crowd together in heaps. The canals that slice the city into micro-islands glow a milky green. Contrasting sharply with this ancient landscape is a futuristic fleet of nine enormous wing-sailed catamarans flitting across the waterfront just off St. Mark’s Square. Their sharp, carbon-fiber minimalism crackles against Venice’s faded elegance, like an iPhone clutched by the Queen of England.

The racing cats skate and jockey for position just upwind of the mega-yacht Musashi, a mother ship of sorts. Owned by Oracle CEO Larry Ellison, the Musashi isn’t quite as big as the World War II-era Japanese naval vessel of the same name, but at 288 feet she’s as long as a city block. And, at five stories high, Musashi is actually taller than the seaside hotel she’s docked in front of. Ellison’s toy is half battleship, half wedding cake: layer upon layer of aluminum and glass baked in a gleaming white hull. From above we can see the retractable roof of a below-deck helipad, which doubles as a basketball court. Somewhere on board is the ultimate prize in sailboat racing: the 4-foot-tall, 33-pound, sterling-silver America’s Cup trophy.

The America’s Cup World Series is the circus Ellison has brought to town, and he himself is the ringmaster. It is a warm-up to the America’s Cup match, the one-on-one winner-take-all main event. Ellison won the Cup in 2010, and as long as he holds the trophy, he controls the event and its future. The World Series is Ellison’s particular stamp, designed to build excitement and anticipation for the finale. Here in Venice, the racecourse winds along the city’s waterfront before crossing a checkered flag near the mouth of the Grand Canal. The Musashi has a front-row seat.

My seat is in the cameraman’s helicopter: Ellison has chartered the chopper as part of his effort to make the World Series—and by extension, everything America’s Cup—into exciting television. It takes an active imagination to see sailing as a spectator sport, but for a moment, at least, let’s envision it. Think of the final races for the America’s Cup as sailing’s Super Bowl. The Louis Vuitton Cup, to be held in the San Francisco Bay in the summer of 2013, is the playoffs. By extension, then, what’s happening here in Venice—and all around the globe as the World Series jumps from city to city—is analogous to a regular season. If Ellison’s plan works as it should, the America’s Cup will morph from billionaire status symbol into real money-making sport league. That is his vision.

The reality at this point is that his America’s Cup has turned into something of an albatross. Every sailor knows the old saw about the true definition of a boat: a hole in the water into which one throws money. The only difference here is that Ellison has dug himself a billionaire-size hole. The World Series—indeed Ellison’s whole reimagining of the America’s Cup—is a Sea of Dreams: If you build it, they will come. The budget is confidential, but I’m told by Stephen Barclay, CEO of the America’s Cup Event Authority, that it’s “well in excess of $100 million.” Yet so far, few from outside yachting are coming. And inside the yachting world, all anyone can talk about is the financial straits that Ellison’s project is so obviously in. The evidence is everywhere: mass layoffs, radically foreshortened race schedules, and a slew of canceled plans.

Ellison’s best hope for saving his listing ship now lies in the magic of television. If the World Series can draw a large audience, then the sponsorship money and advertising revenue should be enough to salvage the operation. Sailing doesn’t have to be the next Nascar to make the World Series a success. It merely has to generate the level of domestic interest that, say, the Tour de France has now. Bicycle racing didn’t resonate with American sports fans until relatively recently, but today it is a profitable sports niche. Why couldn’t sailing follow a similar trajectory? Why couldn’t it grow into a league sport with all the trappings: team franchises, professional athletes, die-hard fans, and the advertising, merchandise, and commercial tie-ins that keep everything solvent? The biggest obstacle, in Ellison’s estimation, is that while most everyone knows how to ride a bike and drive a car, the rules of yacht racing remain obscure even to most boat owners.

That’s where the helicopter comes in. Mounted next to a half-million-dollar remote-controlled HD camera is a GPS and an inertial navigation system so advanced that the US government regulates it like a weapon. Together these are technical keystones in an augmented-reality system for inserting course boundaries, start and finish lines, room-to-tack zones, and wind direction readouts directly into the live television feed transmitted from the helicopter. It’s a system similar to the one that paints the first-down line onto the field during a broadcast of a football game, except generations more advanced. Called LiveLine, it has the power to “turn sailing into a comprehensible sport for the great unwashed,” says 77-year-old yachtsman and writer Bob Fisher, the Cup’s most venerable chronicler (and no relation to me). There are things Fisher hates about Ellison’s new World Series. The adoption of auto racing’s checkered flag at the finish line, for example: “Christ,” he says, “that’s nothing but kitsch.” But he loves how the special effects have transformed the television experience. “If Joe Blow can’t understand LiveLine,” Fisher says in a clubby upper-crust British accent, “he’ll never understand anything.”

Whether this system succeeds or fails—really, whether Ellison’s $100 million-plus gamble pays off—falls on the shoulders of one man: an inventor and engineer named Stan Honey.

There have always been geeks in sailing. In fact, a position is reserved on every sailing team—whether it’s a race around the world or a sprint across a lake—for the team nerd: the navigator. As sailing has gotten more technical and more complicated, these geeks have become more and more important. They are not just there to plot a course anymore, they’re being called on to plan every part of the strategy. And as it happens, Honey, the man Ellison tapped to make the America’s Cup palatable to the masses, is one of the best navigators in sailing.

Honey has been somewhat famous in offshore sail racing since 1983, when Nolan Bushnell recruited him to kit out his new sailboat, Charley. Bushnell, who had sold Atari to Warner Communications, was young and flush with cash and had decided that he wanted to win the Transpac, a legendary biennial open-ocean race from Southern California to Honolulu. Honey’s day job was at the Stanford Research Institute, where he had been designing over-the-horizon radar systems for the military. At Bushnell’s request, Honey developed one of the first onboard computers in sailboat racing. The computer calculated the maximum speed in every possible condition and sounded an alarm if Charley wasn’t sailing perfectly. SatNav, a precursor to modern GPS, was used to fix the boat’s location twice a day, when government satellites passed overhead. The software had to be custom-written, much of the hardware was hand-built, and everything had to be fortified for marine use. “Stan is so smart that he can break walnuts with his brain, but he’s also one of the nicest guys ever,” Bushnell says, reminiscing. “You really get to know somebody after living with them for a week on a boat.”

Thanks to Honey’s gadgetry, Bushnell was first to Hawaii that year. But even more significant, he emerged with his next big business idea: Etak. “We literally sketched out the company on the chart table,” Bushnell remembers, “an in-vehicle navigation system.” Etak was the forerunner to today’s ubiquitous nav systems such as Garmin and TomTom—except it was pre-GPS. It used a compass to determine direction, and sensors on the wheels to track where and how far the car had traveled. Bushnell was the wallet, Honey was a founder, and within six years Bushnell’s initial $500,000 bet paid off at a 70-fold return when News Corp. acquired Etak for $35 million. At News Corp., Honey became CEO Rupert Murdoch’s technical consigliere, just as the Internet was coming online and the computer and media worlds collided. “I ended up spending half my time explaining to Rupert what guys like Gates and Ellison were talking about,” Honey says. “What is encryption? What is digital? What is compression? What are CDs? What do they want?”

In 1994, Fox Sports struck a deal with the NHL to televise hockey, and Fox wanted to find a way to increase viewership. Part of the problem with hockey on TV is that flying pucks move so quickly they are almost invisible to the at-home viewer. Honey proposed digitally inserting a blue glow around the puck that would lengthen into a contrail whenever it was moving faster than the eye could see. Murdoch signed off on the idea. A few years later, Honey left News Corp. with Murdoch’s blessing and took the technology even further with his own startup called Sportvision. Honey invented the virtual first-down line for the NFL and strike-zone tracking for Major League Baseball (winning Emmys for both), as well as race car tracking for Nascar, shot tracking for the PGA tour, and many other sports special effects.

By 2010, Honey was wealthy enough that he could pursue sailing nearly full-time. In January of that year he was enlisted as the navigator on the Groupama 3, a lightweight trimaran going for the Jules Verne trophy—a nonstop, no-limits sailing race around the world. Somewhere off the coast of Brazil, Honey checked his email to find his wife had forwarded him an interview with a very confident Larry Ellison, who had just won the 2010 America’s Cup. Ellison was laying out his strategy for attracting a bigger audience to sailing’s most prestigious event. “When the NFL put in that yellow first-down line on the field, it gave the fan a little more insight,” Ellison told his interviewer. “The guy who did the yellow line is named Stan Honey. I’ve sailed with him.”

Honey won his trophy, but when he pulled into port he found himself back in the same position he was in 27 years before. A tech mogul with a fancy new yacht and massive ambitions needed him, the alpha navigator, to make a dream come true.

For Honey, it was an A-Team moment. He decided to pull together the very best people from his past for one last mission. Among others, he tapped Ken Milnes, who had helped him build the Transpac-winning race gadgetry for Bushnell, and Tim Heidemann, who had worked with him on the glowing blue puck for Murdoch. Both are sailors as well as accomplished engineers, and Honey wooed them with an offer they couldn’t resist: “It’s the sport we love. It’s going to be really cool. And together we are going to change the world, again.”

How to Televise Sailing

Yellow first-down lines in football broadcasts are simple compared to the technical demands of inserting infographics atop a sailing race, where everything—boats, water, helicopter-mounted cameras—is moving. Here’s how the America’s Cup footage for NBC comes together. —Katie M. Palmer

1. Helicopter

Each chopper—there will be up to three filming races—has a $500,000 camera to capture video, along with a superprecise GPS and an inertial nav system that determines the bird’s location, altitude, roll, pitch, and yaw. The video and positional data gets transmitted to the command center, where it is used in the live broadcast and to maintain a detailed schematic of every element on the course.

2. Race boat

Each vessel has what looks like a rounded horn protruding from its stern. Inside, there’s a microphone, a camera, and a GPS unit that, with the help of inertial measurements, tracks the craft’s location to within 2 centimeters. There are two additional mics and three more cameras placed around the boat. A microwave antenna on the top of the mast beams the feeds to shore.

3. virtual overlays

In the heat of a sailing race, it’s often difficult to know who is in the lead. But with additions like a course grid, speed indicators, and between-boat distances down to the meter, sailors and landlubbers alike can easily follow the competition. Called LiveLine, the system can also show boundaries, start and finish lines, and some of the more obscure elements like room-to-tack zones.

4. Command center

The beating heart of the operation is a portable command center constructed out of steel cargo containers. Inside, about 60 people scramble to pull all the streams of information into one perfectly clear presentation for TV. The umpires and commentators rely on the feeds too, doing their jobs not on the water but by watching screens in a windowless shipping container.

When Ellison won the Cup in 2010, he also won the right to run the next event his way. He wanted it, as BMW Oracle Racing CEO Russell Coutts famously put it, “to meet the expectations of the Facebook generation, not the Flintstones generation.” That meant radical changes in a race celebrated for its links to yachting’s grand traditions. The most obvious change was in the boats. Henceforth, instead of a wide range of vessels, all racers would use fast carbon-fiber catamarans of the same basic design called AC72s, employing powerful wing sails instead of traditional soft sails. This, Ellison reasoned, would make the races exciting. But he also wanted them to be accessible. By drafting Honey to create a top-notch augmented-reality system, the pieces seemed to be sliding into place.

Putting it all together would take time, though. For starters there was some concern that there were not enough sailors in the world experienced with wing sails to float a full fleet. And audiences needed to be attracted to the show. To fix both problems, Ellison created the America’s Cup World Series as a run-up to the main event. These races would use the AC45, a scaled-down version of the AC72 (the numbers refer to the rough length of the boats in feet). The plan was to take the sailors barnstorming around the world with the AC45s, drumming up interest in the America’s Cup while simultaneously giving potential crew members a chance to hone their wing-sail skills. This would also allow some time to fix up the waterfront back home in San Francisco.

Traditionally, the America’s Cup has been managed by the winner’s yacht club. But Ellison’s grand scheme needed a more substantial operation. There were new rules to work out, a new fleet of boats to build, a new youthful image to promote, not to mention a whole new event—the World Series—with the scope and ambition of a watery Formula One. Ellison staffed up not one but two whole new organizations: There is America’s Cup Race Management, charged with running the competitions, as well as America’s Cup Event Authority, to market them.

Then the problems started. The first obstacle was political. A certain faction of San Franciscans was against holding the Cup in the bay from the moment it was announced on New Year’s Eve 2010. In a press release, Ellison’s Event Authority estimated that the event would bring $1.4 billion to the city. But soon Aaron Peskin, former president of the San Francisco Board of Supervisors and head of the local Democratic party machine, was suing to stop the event. Ostensibly, the reason was environmental: Peskin claimed that Ellison’s proposed redevelopment of four decrepit waterfront piers into a race village and “pit row” posed an environmental hazard. Another explanation is that, in an era where appeals to the 99 percent draw crowds and votes, Ellison makes a fat target for a left-wing politico. A much-discussed article in the political newsletter CounterPunch at the time, titled “LET THEM EAT YACHTS,” stated: “The America’s Cup Event Authority is the vehicle through which the one percenters pocket financial rights to a large chunk of San Francisco’s extremely lucrative waterfront.” The argument about who exactly was exploiting whom was rendered moot two weeks after the piece was published, when Ellison’s organization began scaling back its redevelopment plans. Eventually, what was going to be a $111 million joint waterfront improvement operation became $10 million to $20 million worth of fixes—to be paid for exclusively by the city.

Local columnists grumbled that Ellison had pulled his money out because he was frustrated by San Francisco politics. But in retrospect it is clear that he also needed the cash to satisfy an even tougher band of negotiators: American TV broadcasters. Even in an era when it seems like anything can get on TV, the America’s Cup was having serious trouble. Multiple networks passed. Finally in March—well into the World Series’ first season—NBC bit, agreeing to broadcast the top-billed events. Again, the statement from the America’s Cup was triumphant. But then people noticed the terms of the deal: NBC didn’t buy the rights to broadcast from Ellison, just the opposite. In essence, Ellison had purchased a giant block of airtime from NBC, making the Cup the sporting equivalent of an infomercial. Soon after, there were layoffs that reached all the way to the top of the America’s Cup organization: the CEO of America’s Cup Event Authority was pushed aside, and half of the staff was sacked. “We just weren’t bringing in the money,” the former chief communications officer, Stephanie Martin, confided to me.

By the spring, Ellison’s grand plan to remake the America’s Cup was looking a lot like hubris. It wasn’t just the mass firings and downsizing of the San Francisco waterfront plans. Indeed, everything about the Cup had been scaled back. The World Series was originally billed as a near-monthly event; in reality it was operating at barely one event every two months. And what was originally envisioned as 15 teams fighting for the prize never materialized—the league is now hoping to have seven.

The news hasn’t been all bad. Just before the World Series event in Venice, the National Academy of Television Arts & Sciences unexpectedly gave Honey and his team an Emmy for canned highlights that aired on NBC. “It’s a real honor,” Honey told me after he won, while ruing that he hadn’t been able to attend the awards ceremony in New York. “There is too much to do setting up for Venice.”

Even more important than the Emmy was the fact that full races were finally receiving airtime: Several European networks had agreed to televise the Venice race. It would be a critical tryout before Honey’s system made its live debut on American TV. The next World Series races—in Rhode Island and San Francisco—would be shown on NBC.

The helicopter touches down on the northern tip of Lido di Venezia, the island that shelters the Venetian Lagoon from the Adriatic Sea. At the far end of the grass landing pad is what can be thought of as LiveLine central: a mobile command center spiky with antennas and snapped together Lego-like from 22 shipping containers. On the gravel out in front is Alan Trimble, one of Honey’s engineer buddies from the early days of Sportvision. “Welcome to the starship Enterprise,” Trimble says. Inside the containers are workshops, offices, studios, and control rooms of every description. Fifteen miles of cable weave the various rooms together to create a giant networked computer running a slab of code so strikingly sprung from Stan Honey’s brain that the engineers have taken to calling it StanWare.

LiveLine is not just one thing but rather a greatest hits compilation of all of Sportvision’s best special effects. On TV the boats have little contrails like the glowing hockey pucks. The software for the NFL’s virtual yellow first-down line has been rewritten so that it can paint course boundaries on the surface of the water. From Nascar comes the method of showing which boat is which by flying virtual flags over each mast. It’s not just a matter of porting these systems over. Getting the overlays to look right while everything is moving—floating, flying, sloshing around—requires a huge amount of reworking. Every marker, every boat, and every camera-copter must track itself with incredible precision and then beam that positional information back to this facility.

LiveLine, as it turns out, is not just a fancy computer graphics system. The new gear is quite literally game-changing. The same superprecise tracking technology that allows it to augment TV reality by painting course boundaries on the water also allows race officials to move those lines with the flick of a mouse. They’ve been experimenting with this all week, and in Trimble’s estimation, as he scrutinizes the latest amendment to the official racecourse, they’ve finally gone too far.

Classically, sailing races begin with the boats heading into the wind. But neither an upwind start nor the occasionally used downwind start makes for particularly exciting TV. Boats travel fastest when moving across the wind—known as a reach in sailing. As part of its campaign to turn sailing into a spectator sport, the America’s Cup race committee has been breaking with tradition and designing courses with a reaching start and a very short first leg. In some of the course designs for the World Series, the first turn is a mere 18 seconds from the start line, whereas in a typical old-school yacht race the first leg might take 10 minutes to sail.

The new racecourses make for Nascar-type action, with high-speed turns and fast overtaking, but create all sorts of problems for the sailors. The main one is that a reaching start is so fast, it is very difficult to time it correctly. Boats are supposed to get a run-up, then cross the line just as the official start is sounded. Left unpenalized, a gun-jumper is almost certainly going to win the race. Yet the traditional remedy—forcing offenders to circle back and restart—guarantees a loss on a fast course.

Again, it’s LiveLine to the rescue, with a new kind of penalty. It’s a virtual line that appears a set distance behind the boats that didn’t jump the gun. The offending crew must retreat to this line—and quickly. The slower the craft responds, the farther back that line falls. Such a perfectly calibrated penalty wasn’t possible before every boat was wirelessly tied to a tracking system.

What’s giving Trimble fits, however, is that the race managers are having a little too much fun with the power that Honey has given them and seem to be unaware of its limits. It’s the last race on the last day of racing in Venice, and the announcers in the broadcast booth are calling it Super Sunday because the competition is for triple points. Trying to squeeze as much excitement out of the event as possible, the race committee has come up with a radically heterodox course that hugs the edge of the city and forces all the boats into a hairpin turn near the mouth of the Grand Canal. It’s clearly designed to give the crowds that are massing on the Venetian shore a close view of the action. But it’s like no racecourse in the history of sailboat racing. LiveLine was designed to handle a specific type of course, not every possible combination of gates and rounding marks. “It’s not necessarily the case that the software is ready,” Trimble says. “It might work, but we’ve never tested it.”

Tim Heidemann wants to run Fleet-o-Matic, a simulator that could test the novel course in software, but there is no time. He’s in a gallows mood: “It’s only live TV,” he says.

“The software challenges that this course creates are really stupid,” Trimble explains, pointing out a mark placed by the race committee to force the boats to sail close to shore. “For example, when do you round this mark?” he asks. In sailing, rounding a mark is an event, and it’s defined precisely by the rules. But a mark that’s just placed to herd boats closer to the shoreline? “When does a boat ’round a mark’ that it’s just sailing past?” he asks. “The answer is not in the racing rules of sailing.” A human would be able to deal with the ambiguity, but it’s anyone’s guess whether LiveLine can. They are about to find out.

Before LiveLine came along, umpires would be on the water during a race, watching the action. Now, thanks to a LiveLine data viewer called UmpApp, the officials spend their days inside a windowless container, watching icons on a screen. Today those officials are Mike Martin, the head umpire, and his salty sidekick from Down Under, Roger Wood. As they talk, they both keep their gaze fixed on UmpApp. The software automatically polices the course boundaries and notifies them when a boat goes out of bounds or crosses the starting line before the gun. Still, it’s a promotion. The umpires have gone from glorified line judges to playing a role in crafting an all-new game as they help the race committee figure out the new courses. “We’ve probably changed half the rules in the rule book,” Martin says, seemingly unaware of the chaos that creates for Honey’s team.

Fifteen minutes into the race, almost the entire fleet is sailing as a single pack toward the mark that was worrying Trimble—the one designed to force the sailors close to the crowds.

Mitch Booth, one of the TV announcers, calls the action from yet another container in the StanWare complex. “They’re fully jammed up here,” he says as seven of the nine competitors attempt to squeeze between the mark and the seawall: “It’s a pileup!” The videofeed shows mobs of spectators running to get a better view. The audio is of the sailors on the boats screaming at each other to make way—every skipper is mic’d, and they can’t turn them off.

Back in the LiveLine container, Trimble is freaking out. Although the system is proving smart enough to handle the odd course design, Trimble has discovered another limitation. “I can’t show four marks at the same time,” he says to anyone who is listening. “I can’t do it, the system won’t allow it.”

The problem is that the course is packed with gate markers, but LiveLine can digitally insert only three at a time into the broadcast. In a normal racecourse, there’s only ever one or two on the screen anyway—but this is no normal course.

“Just take one of the other gates away,” LiveLine codesigner Milnes responds evenly.

“I am so screwed!” Trimble shouts.

It’s not clear that anyone even notices the glitch. And it’s the umpires who are truly screwed. They’re a few containers over, and pandemonium erupts when they realize what their innovative new racecourse has wrought: a fleet-wide collision.

“Oh boy!” Wood says, his screen filling up with windows, one for each possible rule violation.

“They hit,” Martin says, stating the obvious.

“Artemis was protected inside of the zone,” Wood announces, calling out his observations for Martin to hear.

“Is somebody penalizing Korea?” Martin asks, seeing a penalty request sent from one of the skippers flash on his screen.

They hardly notice, because they’re looking at UmpApp instead of the television feed, but a member of Team Korea has just fallen overboard while attempting to disentangle his boat from the rest.

“Team New Zealand starboard—China as well,” Wood says, rattling off the boats with right of way. But there are so many overlapping right-of-way rules that it may not even be possible to make a fair call.

“Now everyone is protesting everyone,” Martin says, increasingly exasperated.

First, second, and third places go to the French, American, and Swedish teams, respectively. But half the fleet wasn’t able to finish the race at all due to the pileup at the mark. Emirates Team New Zealand, which had the inside lane during the crash (and thus is probably not to blame), limped across the line in last place. While sailing past the checkered flag, Dean Barker, the Kiwi skipper, looks into the onboard camera to talk directly to the TV audience. “Well, there’s only one word for that,” he declares. “That’s just a joke—an absolute joke.”

Ellison’s grand plan, which has always been to democratize his sport, has so far handed him some big defeats. The first was at the hands of San Francisco’s city government, the second at the hands of NBC. But with LiveLine, Ellison may have gotten even more than he hoped for. He ordered up a software package of crowd-pleasing bells and whistles. Honey gave him an operating system for an entire sport. For all the chaos that ensued in Venice, LiveLine was a success: The boats may have crashed, but the system didn’t.

Huge pileups are a Nascar tradition, but they’ve never been part of sail racing before. Neither has a checkered flag. Traditionalists may complain, but these may be good for the America’s Cup. Team Oracle’s star skipper, Jimmy Spithill, recognizes the potential. “A lot of my mates are professional rugby players and race car drivers; they know what I do, but before LiveLine none of them could get through a race,” he says. “They would just yawn and turn off the TV. Now they love it, because they can understand it.” There’s evidence that the general public will agree: The following race, in Newport, Rhode Island, earned a 0.9 Nielsen rating—beating out the same weekend’s Tour de France coverage.

But for sailing to make it as a true spectator sport, Ellison must appeal to both a broad audience and the old hands at the yacht club. Multiboat pileups make for lousy racing but pretty good TV—and that is the bind that Ellison finds himself in today. He can dial up the carnage with crazy course designs worthy of pachinko. Or he can go classy and trust that yacht racing, newly comprehensible, will find a mass audience on its own.

No one, not even Stan Honey, knows where Ellison is going to take the America’s Cup World Series when it gets to San Francisco. But Honey does know one thing for sure. “Our shit is on schedule and on budget,” he says, to the sound of walnuts cracking between his frontal lobes, “and it works.” If the new America’s Cup does not find its way, it won’t be the fault of the navigator.

Adam Fisher (adamcfisher@gmail.com) is covering the America’s Cup for Wired until the finale in 2013.