Cup of woe

The America's Cup is driven by money, passion and fervour, but principally money, and it is in the generation of this that the latest problems have arisen.

It was when the Royal New Zealand Yacht Squadron became the trustee holder of the Cup in 1995 that the troubles began. The Kiwis turned a profit, some of which was channelled into the defence of the Cup by Team New Zealand.

No one objected to that, at least until the lawyers decided that it was fair game for them to delve into the original 1887 Deed of Gift, where the Cup is described as being 'in trust'. Those words have opened a new can of worms.

In some eyes, this establishes the America's Cup as a trust, and as such its finances should be transparent. That Trust is seen as being under the jurisdiction of the New York State Court where the Deed of Gift is registered. The outstanding question is whether the event is, or is not, a charitable trust - under New York law, charitable trusts do not recognise sport as a beneficiary.

Now the NY State Attorney General, Eliot Spitzer, is conducting an enquiry into the manner in which the RNZYS has been using the money it has raised, using the America's Cup trademark as its fundraiser, following a complaint laid before the Attorney General's office.

Some parties, among them the Alinghi Challenge from Switzerland, believe the funds that are surplus to the running of the Cup should be distributed between the defender and the other challengers.

This has led to some xenophobic outpourings by the New Zealand media with one headline reading, 'Rivals seek Team NZ Cup money'.