Larry Ellison planned

Breaking: Sweden’s Artemis Racing team crashed its AC72 in San Francisco Bay during a practice run on Thursday, May 9. One crew member was reported killed in the accident, and the boat was severely damaged and may not be salvageable. How this will affect the team and the overall America’s Cup competition remains to be seen.

Ten minutes before the crash, Jimmy Spithill is in his element. On a brisk October afternoon on San Francisco Bay, Spithill is working with his team, practicing for the America’s Cup, the biggest prize in sailing. He won the event in 2010 for Larry Ellison’s Team Oracle, becoming, at 30, the youngest winning skipper in the event’s 162-year history. Among the spoils for the winning team is the prerogative to rewrite the rules of the competition, including determining the shape and construction of the boats that will be used in the next go-round. This is why today Spithill is sailing a $10 million AC72 — a radical new yacht for a radically reimagined yacht race.

The AC72 is a catamaran: a scrim of netting stretched between twin knifelike hulls, each 72 feet long but only a few feet wide. A series of interconnected cockpits carved into the narrow hulls allows the crew to hunker down and grind two-man winches. Connecting the two blades are girderlike crossbeams. Topping it all off is a rigid wing — 13 stories tall — that does double duty as both the boat’s engine and a billboard for the massive egos that animate the race. Each team builds a slightly different variation of the AC72, but the general size and shape were devised by Ellison’s people at Team Oracle.

Spithill’s job right now is the same as every other America’s Cup captain’s — to discover and push the limits of this new boat. The team keeps track of top speeds, and with each new day on the water they inch that number up. Today is day eight of testing, and the crew is approaching its 40th hour under sail. At 3 pm they’re just east of Alcatraz and considering their options. The wind is blowing at 20 knots and climbing. The AC72 is designed to sail in winds between 5 and 30 knots. Should they head to the South Bay, where winds are lighter? Spithill decides to go for one last lap in front of the Golden Gate. He wants to see what his beast of a boat can do.

He sets a course along the northern shore of San Francisco, aiming for a spot halfway between Alcatraz and the bridge. He’s in race mode, and the track he’s on is close to the one he’d sail if he were really competing. It’s nearly identical to the course he has already run four or five times today — with two subtle differences. The wind, already strong, is now a few knots stronger. And the day’s tide is nearing its maximum ebb. Twenty-eight-knot gusts push in through the Gate while water drains out of the bay at 5 to 6 knots. Taken together, the forces acting on the boat are the equivalent of 33-knot gusts: gale-force conditions. And 33 knots is well beyond the AC72’s comfort zone. But come race day, this is right where Spithill will want the boat to be.

By the time he gets past Alcatraz, Spithill and crew find themselves in massive chop, a product of the tide and wind working against each other. And they are driving into it at full throttle. The only way to avoid getting battered is to turn and go back, risking what’s known as the “death zone” in the middle of the turn. Spithill embraces his only option. “We went for it,” he says later.

Turning from an upwind heading to a downwind heading is a basic maneuver in a conventional sailboat. “If you ever got into trouble,” Spithill says, “you would just pull the sails down.” But on a wingsailed catamaran, that’s not possible. Because of the AC72’s very power and efficiency, the boat’s design is its own worst enemy when it has to turn and sail square to the wind. With no way to switch a wingsail off, there’s only one way to get through the death zone: as quickly as possible. It requires a coordinated team effort. The sails have to be depowered, the daggerboards (retractable keels that drop from the center of each of the catamaran’s twin hulls) have to be adjusted, and the helmsman has to carve the tiller — all in split-second coordination. But on this windy afternoon, there’s a fumble. At about 40 miles per hour, one of the hulls catches an edge, twisting the frame of the boat into a nosedive. “The rudders lifted out of the water,” Spithill recalls.

It’s the sailing equivalent of the steering wheel coming off in his hands. Without steerage, there’s no way to keep the wind from pounding down the wing. The boat pitchpoles into an ass-over-teakettle capsize: bows down, rudders up — putting Team Oracle on a heading straight for the bottom of the bay. They’re going over. What Spithill doesn’t realize, however, is that the entire vision for the new America’s Cup is about to turn upside down with him.

Ellison is not the first billionaire to get glamoured by the America’s Cup trophy. In fact, in many ways, the race is perhaps best understood as a pissing contest between the world’s richest men. The names are familiar from the history books and nightly news: Forbes, Vanderbilt, Morgan, Lipton, Sopwith, Turner, Koch. The stories are the stuff of yachting lore, told by the light of a campfire in the Bohemian Grove or swapped over Manhattans at the Knickerbocker Club on Fifth Avenue. The origin myth involves Queen Victoria watching a winner-take-all race around the Isle of Wight between a Yankee schooner named the America and 14 of the best boats in Britain — including the cream of the elite Royal Yacht Squadron. When a lookout spied the America coming toward the finish line in first place, the Queen asked who was in second. The answer: “Ah, Your Majesty, there is no second.”

The America won because its owners experimented with novel nautical technologies and spared no expense in building it (some things never change). In the 19th century, a ship in private hands that could beat the best that the British had to offer was something extraordinary — an example of private money rivaling the power of a great nation. The Cup has been a totem to tycoons ever since.

In the modern era of the Cup, post–World War II, the contest has become a little less of a free-for-all. Competitors, led by the holder of the Cup, usually agree in advance to sail variations of the same class of boat — the official specs are called the “box rule” or “formula rule.” In the past 55 years, there have been two such specs: a 12-meter-class rule, which held until the late ’80s, then the international-class rule, which doubled the length of the boats. Limits on boat sizes, however, didn’t mean limits on egos. America’s Cup boats in the ’50s and ’60s invariably had yachty names like Weatherly, Intrepid, Ranger, even Dame Pattie. Later boats conjured up their countries of origin in a running battle between the New World and the newer world: It was Freedom, Stars & Stripes, America³, and Young America versus Southern Cross, Australia, NZL-32, and NZL-60. The men who financed and sometimes even helmed these boats saw themselves as puffed-up proxies for their countries.

But the most naked clash of egos and billfolds plays out in the no-limit contests, the so-called deed-of-gift races — anything-goes throwbacks to the old 19th-century rules, triggered when one billionaire decides that he no longer wants to play nice and rejects the limits imposed by a rule. The contest in 2010 was a deed-of-gift race and proved a high-water mark for ostentation. It was Larry Ellison versus Ernesto Bertarelli. The Italian billionaire is currently 94th on Forbes ’ list of the world’s wealthiest. Ellison weighs in at number five. Bertarelli showed up in a carbon-fiber catamaran with a mast 203 feet tall. Ellison topped him (in every sense), building a carbon-fiber trimaran with a hard wing 223 feet high — so tall it couldn’t fit under the Golden Gate Bridge. The contest was like nothing the sailing world had ever seen — a real-life Godzilla versus Mechagodzilla. Some argued that they weren’t even sailboats anymore, strictly speaking: The sails were so enormous that both vessels had to have motorized winches to pull the lines.

Having won the Cup in the deed-of-gift match, Ellison decided that he wanted to have it both ways for the next contest, the party he would throw in 2013. He wanted a return to a gentlemanly rule, but he also wanted to see the kind of balls-to-the-wall machine that he won with. 1 The AC72-class rule is the result.

In a nod to at least some tradition, everyone agreed to ban the motorized winches that were used in 2010. So for the AC72, the designers started by estimating the maximum horsepower an athlete could exert over a 30-minute race and worked backward from there. If the AC72 were any larger, mere humans wouldn’t have the muscle to change the angle of the wing or to lift a secondary sail. The AC72 is not just an extreme sailing machine; it is the most extreme machine of its type possible.

The change of the spec from traditional soft-sailed monohulls to the new wingsailed twin hulls came with a media strategy explicitly designed to turn the America’s Cup into a real spectator sport. There wasn’t going to be just an America’s Cup, there was going to be a brand-new yacht-racing league — the America’s Cup World Series. The teams would barnstorm around the world, racing shrunken versions of the AC72 — called AC45s — to drum up interest in the main event. For Ellison the game now wasn’t about putting his name on a bigger boat. It was about putting his name on a bigger event.

For its part, the AC45 proved plenty exciting. The fast, jittery boats were prone to crashing: They crashed during the testing period in Auckland’s Hauraki Gulf. They crashed while racing in the World Series. Last year in the gusty, choppy conditions typical of a San Francisco summer, three AC45s went daggerboards up over a four-day practice period. After a crash, chase boats would simply come along and pull the AC45s upright.

But the real show, of course, isn’t the AC45s. It’s the Louis Vuitton Cup, the name of the America’s Cup elimination round — the playoffs, if you will — which starts July 4 and will feature the larger AC72s. This is the race series that will determine who competes in the America’s Cup itself, September’s two-boat duel between the winner of the Louis Vuitton Cup and Team Oracle, which gets to defend its title on home turf.

Planners originally anticipated at least a 14-team battle. In fact there are only three teams fighting for the right to challenge Oracle: Prada Luna Rossa, Artemis Racing, and Emirates Team New Zealand. The thin field is a direct result of the AC72. Its performance has proven even more awesome than advertised, but the boats have turned out to be simply too expensive for many racing teams.

Still, though there are only four teams, racing the big AC72s promises to be far more exciting than even watching the World Series boats. In higher winds, the AC72s can hydrofoil — quite literally fly — thanks to trick daggerboards that lift both hulls out of the water. And crowds are sure to throng to the shore, watching for AC72 crashes, like they did for the AC45 in the World Series. What could be more thrilling than seeing the big boat go over at 40 miles an hour? At least that was the idea — until Jimmy Spithill actually crashed one.

Splashing down face-first catapults the two hulls upright and momentarily triples the force of gravity. The boat’s speed goes from 40 mph to zero in an instant. No one is thrown overboard, but there is a tumble belowdecks as the 14 crewmates dive into the cockpits and fall on top of one another.

Spithill looks out to see the tip of his 13-story wing dipping into the water. He realizes that if the worst were to happen, if the wing were to snap from the body of the boat, then the hulls would turn turtle — pinning all of them underwater and giving them only the pocket of air inside the overturned cockpits to breathe. He gives the order to abandon ship.

The Oracle race crew starts climbing down to the bottom-most cockpit, where it’s possible to crawl out. From there, still a good 15 feet in the air, they jump into the cold bay, one by one, to be picked up by Ian Burns, the team’s design coordinator, who was following Spithill in one of four chase-boats.

It takes 10 minutes to get everyone off the boat and out of harm’s way, during which time the boat is slowly sinking. The plan is simple — just right the boat the way the crews righted the smaller AC45s: Attach a line between the high side of the craft and one of the chase boats, gun the throttle, pull the catamaran onto its side, then reorient and pull it upright. So, still wet from his swim, Spithill grabs a towrope from the deck of the chase boat, jumps back onto his AC72, and hauls himself up the netting to get to the highest point: the stern. There he ties the line and throws it back to the crew on one of the speedboats. Once the line is attached, he crouches down in a cockpit and braces for impact as the speedboat hits the throttle. The AC72 is jerked onto its side. There’s another climb and another towline secured, again to the high side of the boat. Once again the speed boat hits the throttle. But this time it’s not enough. The AC72 can’t be pulled upright. It’s too big and too submerged. The implications are enormous. The boat — with Spithill on board and dragging the speedboat like a loose anchor — gets swept out under the Golden Gate Bridge and into the truly rough water of the open Pacific.

The Crash

On October 16, Team Oracle USA capsized its new $10 million boat in San Francisco Bay. The mishap had a chilling effect on the whole America’s Cup organization. Here’s how the disaster unfolded over 10 hours.

1 | 3:08 PM: The boat capsizes in the bay, doing a face-plant that lifts some members of the crew 45 feet in the air.

2 | 3:27 PM: While the sailors scramble off the boat, 25 knots of pressure pushes the wing under the waves.

3 | 3:44 PM: A speedboat is able to jerk the AC72 onto its side but cannot bring it upright.

4 | 4:02 PM: Now dragging the speedboat, the AC72 gets swept under the Golden Gate.

5 | 4:41 PM: The wing shears at the foot of the mast, and the boat turns completely upside down.

6 | 6:30 PM: As the sun sets, the sailors accept that they will not be able to pull the boat home against the ebb tide.

7 | 10:00 PM: The tide has finally changed, and rescuers start hauling the upside-down and mostly submerged AC72 back to its home port. They’ll arrive at 1 in the morning.

Mark “Tugboat” Turner arrives in his own speedboat in time to see the Oracle boat slip under the Golden Gate. A barrel-chested tank of a man, Turner has been building boats professionally since leaving school to apprentice as a boatwright at 16, almost 40 years ago. Over the past 16 years, he’s built many for Larry Ellison. After he arrives, he hears the sharp snap of the wing shearing at the foot of the mast, causing the rest of the boat to fall on top of itself, upside down.

Turner watches, helpless, as the submerged wing starts sawing against the main body of the boat. Pieces of the wing break off, to be chased down by the motorboats, but the great mass of it — several jagged pieces — is still connected to the hulls by hydraulic lines and control ropes. Driven by an angry Pacific, the wing and hulls grind together like a mortar and pestle. The pounding continues for the next five hours, as the sailors wait for the tide to turn. By 1 am, with currents finally in their favor, they are able to drag the craft back to Oracle headquarters at Pier 80 on San Francisco’s industrial waterfront — upside down, broken, and almost completely submerged.

While Oracle is in the shed, fixing the smashed boat, the other teams are out practicing. It’s anyone’s race now

It is a disaster. Just repairing the wing will cost well over $1 million (and perhaps as much as $2 million). But the money is the least of it. The real cost is measured in time lost, and not even billionaires can buy more time. It will take nearly four months of 80-hour weeks by a team of 24 staff boatbuilders (plus every odd rigger, sailmaker, and machinist that Turner can manage to shanghai) to fix the damage. And that is just the hulls. The new wing — which needs to be built in a factory in New Zealand — is a job three times as big. The real loss: 40,000 person-hours, or the equivalent of 20 person-years of full-time labor.

That 20 years could have been spent practicing on the bay, engineering subtle mods, and otherwise moving toward the ultimate goal of winning the Cup. At a minimum, the setback has blown Oracle’s lead. Thanks to the win on the wingsailed trimaran in 2010, Oracle entered the contest as the only team with real wingsail experience. To entice the other teams to come out and play, Oracle agreed to limit practice time on the AC72 to a mere 30 days before January 31, 2013. They crashed on the eighth day, forfeiting the other 22. While Oracle is in the shed fixing its AC72, the other teams will be out sailing, perfecting their systems and closing the experience gap. It’s anyone’s race now.

In Sailing, it is traditional for the captain to go down with the ship. And in a postcrash interview, Spithill wastes no time taking the blame. “I am responsible,” he says, his blue eyes flashing. “It was definitely my call.” The problem, as Spithill sees it, was the decision to risk capsizing in high winds, strong current, and high seas. “It’s all good and well to push it and make a mistake, but making the mistake at the exact worst time ever to make it,” he says, noting that the ebb tide was one of the strongest of the year, “that was a bad decision.”

His boss, Russell Coutts, sees other bad calls. It wasn’t just the lousy decision his young protégé made in attempting a run in dangerous conditions. It was all the decisions made after the crash as well. “What we should have done when the boat capsized,” Coutts says, “is tow it into a sheltered area rather than letting it get upwind and under the bridge.” Then it could have been towed to Pier 80 in more forgiving conditions, sparing it most of its damage.

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As to where his own responsibilities lie — as Spithill’s mentor, as Team Oracle CEO, as a champion of the AC72 — Coutts is more circumspect. He argues that even though going out for a sail in such conditions was a rookie move, he could not have ordered Spithill to turn around, because overruling a skipper’s decision is tantamount to castration. “I don’t want some wimp driving my boat,” he says. Yet the possibility of someone pushing the boat too hard and capsizing was never addressed in the planning phases. “We never designed it to make sure it doesn’t break, or to make sure that if we had a failure, the damage is minimized,” he admits. “Why?” Coutts says. “The answer is, I don’t know! ”

Coutts’ stance is that this was a freak chain of events that could easily have been avoided and is therefore not a great threat to the America’s Cup writ large. Not everyone agrees. One of the AC72’s most outspoken critics is Scott MacLeod, managing director at WSM Communications, a sports-marketing business, who has represented corporate sponsors in every Cup going back to 1992. “I told them that they had the wrong boat three years ago!” MacLeod says. He founded the World Match Racing Tour, a yacht-racing tournament that was the de facto training ground for the America’s Cup before Ellison decided to abandon traditional monohulls. “I like the new boats, they are cool — but they are too fragile and too costly,” MacLeod says. “And ultimately the numbers don’t add up.”

He’s talking about finances. For the past 25 years, the ratio of truly big money — from billionaires and governments — to corporate dollars in the America’s Cup has hovered at around 50:50. This time around it’s more like 90:10. Most of the corporate money that used to be in the event has fled: The AC72 is just too expensive. “Fifteen million to sponsor a team?” MacLeod exclaims. “Companies can do Nascar for that.” And then there is the risk associated with the new AC72. “What happens if one of these other boats does an Oracle?” MacLeod asks.

It’s a question that the other teams — Luna Rossa, New Zealand, and Artemis — are asking themselves now. Paul Cayard, CEO and tactician of Artemis Racing, has plenty of experience with the tricky conditions in San Francisco Bay. His prediction: At least one of the teams is going to capsize again. “It will be a miracle if we get through the summer without it happening to somebody,” he says. “We’re going to start pushing harder, we are going to race, and those kinds of boats — catamarans — tip over.”

The real unknown, he says, is whether the damage caused by the Oracle crash was, as Coutts argues, an exception, a bad accident compounded by severe tides — or something closer to the norm when an AC72 capsizes in the rough waters of the bay. “The Oracle capsize is a bit of an anomaly,” Cayard says. “But it could happen again.” Oracle and Artemis have a full contingency plan — a second complete boat. New Zealand has just a single complete boat and some spare parts. Prada is the most vulnerable, because it has only one boat. “If Prada did what Oracle did closer to June,” Cayard says, “they’d probably be out of the competition.” A $50 million effort (perhaps more), completely sunk.

On a cloudless day in January, three months after the crash, I visited the Oracle hangar and watched as a brand-new replacement wing arrived. It had been shipped from New Zealand and then trucked from the port of Oakland to San Francisco’s Pier 80. When the big rig trailering the wing pulled in, the driver was greeted with photo flashes and applause by the assembled crew.

The sun shone, and the sailors who were not helping the workers unload the new wing were in the water honing post-capsize rescue and survival techniques. In the back of the hangar, walled off from inquiring eyes by a privacy wall, was the rest of Oracle’s salvaged AC72. Save for a paint job, the repairs were pretty much complete. Not only that, the boat was better than before, with thicker crossbeams and more buoyant bows to help prevent the twist-and-dig action that may have contributed to Spithill’s crash.

The reborn and revitalized Team Oracle is adamant about preventing another catastrophic crash. Brad Webb, the bowman, is on a committee that was preparing a document outlining what to do in the event of a capsize. It started as a one-page memo. “Now we have this massive manual!” he says. Others were working on engineering an airbag that would sit at the very top of the wing and deploy when the tip touched the water. The techniques and ideas will be made available to every team.

If Ellison loses, it’s possible the America’s Cup will have to abandon his skittish, ultrafast catamarans

But the most telling thing I heard while visiting the repair shop came from Coutts, the CEO. I asked him what would happen to the radical new wingsail design after the Cup was over. “No matter who wins,” Coutts said, “they are definitely going to make changes: make the boat smaller, bring the team budgets down, stuff like that.” In other words, the CEO of Team Oracle now acknowledges that the AC72 is an overreach.

It’s one thing to win the Cup, which Ellison did in 2010. (He declined to be interviewed for this article.) But even if he holds on to it by defeating his challengers, Ellison has lost the bigger game. The whole point was to make an indelible mark on the oldest trophy in all of sports. Ellison wanted his Cup to be the biggest, most spectacular sailing event ever. But the 2013 America’s Cup qualifying contest — with only three teams competing — will be the smallest in modern history. The marquee attraction, the giant wingsail catamaran, has proven to be too big even before the first race has been run. If Ellison loses, it’s possible that the next America’s Cup will return to traditional yacht design — monohulls with soft sails — which would be the ultimate refutation of all Team Oracle has tried to do.

For Ellison, the second-richest CEO in the world (after Warren Buffett), the view into the abyss must be hard to fathom. How ironic that he won the Cup as a sailor, crewing in the 2010 race, and then bungled the franchise as a businessman managing the rollout of a new technology. Ultimately, though, Ellison’s story is the story of the Cup: a prize that has always been driven by ego and one-upmanship.

Ellison’s reversal of fortune is a mixed blessing for the average sports fan. If there are a couple of Oracle-size crashes between now and when racing starts this summer, it won’t be much of a playoff series. If two teams manage to pull an Oracle during the races in, say, a messy collision, then there’s a very real chance the series will simply be canceled. On the other hand, now that the AC72’s fatal flaw is obvious to everyone, the possibility of another of these boats turning a somersault raises the stakes to astounding and unprecedented levels. Maybe the big boats will land on their daggerboards and this America’s Cup will glide to its own riveting sort of success. Or maybe Ellison will end up losing the race in every way possible. We’ll find out starting on the Fourth of July.

Adam Fisher (adamcfisher@gmail.com) is covering the run-up to the 2013 America’s Cup for wired. You can find his previous stories at www.wired.com/americascup.