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America's Cup: Mediation resolves issues over Host Broadcast

by Richard Gladwell Sail-World NZ 8 Jul 17:54 NZST 8 July 2020
New TV Broadcast Platform vessel - based on AC45 hulls - Waitemata Harbour, January 15, 2020 © Richard Gladwell / Sail-World.com

A Mediation, by the America's Cup Arbitration Panel Chairman, has been successfully concluded between the teams representing Luna Rossa, the team of the Italian Challenger of Record and the Defender, Emirates Team New Zealand.

The spat involves the Luna Rossa's event management arm, COR36, and its obligations to organise and meet its share of costs for the Host Broadcast of the Prada Cup (Challenger Selection Series) and America's Cup Match.

Article 28 of the Protocol for the 36th America's Cup says that COR has an obligation to organise and meet the costs for the Preliminary Regattas and Challenger Selection Series including the production of the TV feed.

Team New Zealand, through its event management arm America's Cup Event Ltd, is responsible for doing the same for the America's Cup match.

Rather than each group doing their own production as occurred in the 1992 and 1995 America's Cups, the Protocol provides for the two bodies "to organise and to meet the costs" for the two events, "including the production of the TV feed".

In October 2018, COR36 and ACE signed a joint venture agreement with two German companies for the media production and race management systems for the 36th America's Cup regattas.

The two companies, Riedel Communications GmbH & Co and West4Media Filmproduktions GmbH, operate under a joint venture name of Circle-O.

In its Application to the Arbitration Panel, ETNZ/ACE sought to have COR36 declared to have failed to meet its obligations under the Circle-O agreement.

If the Arbitration Panel agreed that COR36 had breached its obligations, then ETNZ/ACE "would be entitled to subrogate or otherwise avail themselves of COR's rights under Articles 7.9 and 29.3 of the Protocol in relation to those amounts."

If invoked the effect would be for the Challengers to be all charged for any funding shortfall on the Challenger Selection Series (Prada Cup). The amount of the shortfall would be offset from "money raised from commercial activities" - which includes TV rights sales and event sponsorship, and if there remained a shortfall, then that would be financed by the challengers.

It would appear that the lodgement of the Application seeking the intervention of the Arbitration Panel was triggered by a serious issue involving the provision of the Host Broadcast, sufficient to call into question that it would happen at all, or in a much-reduced state.

[The Host Broadcast is a central TV content pool drawn from on the water, onboard, helicopter cameras plus audio, to which the various broadcast rights holders have access in return for the payment of a rights fee and can compile their own feed, including commentary, to their licenced territory.]

Two of the Challengers - INEOS Team UK and American Magic made representations, as they were affected parties by any diminution or changes in the host broadcast of their series.

"NYYC-American Magic respectfully submits it needs to be consulted and to agree to any proposed changes that might materially affect it. This includes, for example, any changes to the broadcast arrangements or anything that may adversely affect the financial rights and obligations of the challengers under the Protocol especially given the provisions of art 29.2 and art 29.3 as to surpluses and shortfalls"..

INEOS Team UK submitted similar sentiments.

All parties agreed that they wished to have the matter resolved by confidential Mediation, rather than a Hearing. The Mediation was undertaken by the Chairman of the Arbitration Panel, David Tillett, who mediated alone, between COR36 and ACE and reported:

"The mediation process has been successful. This case is thus settled. The other competitors, NYYC American Magic and Ineos Team UK, have been informed of the result of the Mediation."

Costs of NZD$14,750 (USD$9,650) were shared equally by COR36 and ACE.

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