Billionaires make waves at the America's Cup

By Chirs Redman - Fortune Magazine

Now, as the 32nd Cup kicks off (the preliminary Louis Vuitton Cup is due to finish on June 12; the main race begins June 23), another hero can be forgiven for wondering if there really is a curse: Swiss biotech billionaire Ernesto Bertarelli.

Back in 2003, Bertarelli's Alinghi - an out-of-the-blue challenger from a landlocked country - became the only first-time entrant to win since the race's inception in 1851. The Cup's eccentric rules allow the winner of the trophy to stage the next challenge and all that goes with it. It's as if the winner of the Super Bowl got to control the NFL for the year and could change everything from the shape of the field to the player requirements. So Bertarelli, a Harvard Business School grad who sold his company, Serono, to Germany's Merck in 2006 for $13.3 billion, decided to shake things up.

With approval from the lead challenger (Oracle CEO Larry Ellison), he created America's Cup Management (ACM), ostensibly to run the Cup in a more businesslike manner for the benefit of defender and challengers alike. But ACM--headed up by Bertarelli's boyhood pal Michel Bonnefous--has faced a chorus of complaints from the challenger teams.

Says one longtime Cup participant: "Challengers used to have their own organization to represent them. We gave that up in the interests of a more streamlined Cup, but we have received very little in return." Italian shipping magnate Vincenzo Onorato, backer of Mascalzone Latino, even went public with his anger at ACM, accusing them of being the "12th challenger" in the Cup. .... more