Our German Desk
The newly released protocol (Protocol) for the 38th America’s Cup (AC38) marks another chapter in the evolution of the world’s oldest international sporting trophy. While the Protocol introduces several innovations, the most striking change is the intention to create a centralised governing body – to be known as the America’s Cup Partnership (ACP).
The ACP is envisaged, not as a one-cycle arrangement, but as a perpetual structure to oversee organisation, delivery, and commercial leveraging of the Cup. If implemented as planned, the ACP would become the permanent steward of the competition – essentially superseding the defender/challenger duopoly that has existed since 1857. While understandable from an organisational and commercial perspective, this ambition raises a question of whether it is compatible within the Cup’s foundational document, the Deed of Gift.
Deed of Gift
The Deed of Gift (first settled in 1857 when the Cup was gifted to the New York Yacht Club by the owners of America) has been amended four times – each largely in response to practical challenges:
- in 1882 and 1887 (by the last surviving donor / settlor, George L Schuyler) after issues arose with the first few challenges;
- in 1956 to resurrect interest after World War II by permitting smaller yachts and abolishing the requirement for vessels to get to the match “on their own bottoms”; and
- in 1985 to permit the Cup to be held in the southern hemisphere summer after Australia had become the first successful challenger in 1983.
By modern standards, even with those amendments, the Deed of Gift is sparse. It establishes the Cup as a “perpetual Challenge Cup for friendly competition between foreign countries”. The first valid challenger, known as the “Challenger of Record” (Challenger), has the right to negotiate “mutual consent” terms (eg dates, courses, class, etc) with the Defender for that edition, which are documented in a “protocol”.
If the Defender and Challenger cannot reach agreement, the Defender must race or forfeit the Cup. Such matches are sailed under 19th Century default terms specified in the Deed of Gift, which have come to be known as “DoG matches”. These default terms therefore hang over protocol negotiations like the Sword of Damocles.
Once a Cup match is concluded – whether under mutual consent terms or the Deed’s default provisions – a new challenge may be lodged. To avoid “ambush” challenges, this is now a carefully choreographed exercise with the Defender’s preferred challenger, occurring as the winning vessel crosses the line. This begins a cycle of mutual consent negotiations for the next Cup. The Defender and Challenger may (and often do) consult other teams, but the arrangements for each match are ultimately to be determined by those two parties.
The lesson then is that the Deed of Gift remains both the legal anchor and the ultimate safeguard of the America’s Cup. It establishes an event that is intended to be governed by the Defender and Challenger for each cycle, who will of course change over time.
America’s Cup Partnership
The ACP proposes something new. Rather than being tied to one edition, it is designed to operate across all future America’s Cups, regardless of who the Defender and Challenger are. Further, its intended remit will extend beyond sporting organisation into long-term commercial rights: broadcasting, sponsorship, merchandising, and event infrastructure.
The ACP aims to professionalise and stabilise what has historically been a sporadic, winner-driven competition. It promises continuity and commercial certainty – qualities more typical of Formula One or latterly SailGP than the America’s Cup.
The Protocol itself is conditional on the partnership agreements (Partnership Agreements) required to establish the ACP being executed by 9 September 2025 (unless extended) (paragraph 3.1(a)). An undisclosed term sheet was signed contemporaneously with the Protocol, which presumably sets out the framework for the Partnership Agreements. It is unclear if the Partnership Agreements themselves will be made public once signed. Notably, the Protocol expressly states that it will become void if these cannot be agreed, in which case presumably the current British challenge would default to a DoG match.
Does the ACP fit within the Deed of Gift?
While the organisational and commercial rationale for the ACP may be plain, there is an inherent tension with the Deed of Gift.
Under the current structure, the Defender is the trustee of the Cup, with fiduciary duties to uphold the Deed of Gift. Each Challenger is empowered to negotiate with the Defender anew for each cycle. The Deed of Gift does not authorise a permanent external authority, nor does it arguably imply one. The ACP, by design, would require both parties to cede powers – potentially undermining the Deed’s core governance model.
How can this tension be resolved without exposing future matches to legal challenge?
The ACP will initially be established by contract – via the Protocol, the Partnership Agreements, and any undertakings given by the Defender and challengers for AC38. In that sense, it may be viewed as an extension of the mutual consent framework. But there is a limit to what contract can achieve in this context. Contractual promises only bind the parties who give them. A future Defender or Challenger may hold a different view on the appropriateness or legality of the arrangement, even if they were compelled to “accept” them to contest previous events. Perpetual undertakings (requiring current teams, if they win AC38, to procure an equivalent undertaking from future challengers) may strengthen the contractual arrangements, but even these are only as strong as the willingness of the next party to honour them. There is also an open question as to whether there are limits on what may be mutually consented (Ross, H., The Deed of Gift) and, if so, whether the ACP exceeds those limits.
A determined future Defender might disregard contractual commitments, or a new Challenger could refuse to recognise the ACP. In that case, any aggrieved party could seek clarification or enforcement in the New York courts, and, if the ACP was found to be incompatible with the Deed of Gift, racing could default back to becoming a DoG match. Given the Deed’s primacy as a trust instrument, there is a reasonable likelihood that the courts would prioritise its terms over any inconsistent contractual structure.
To amend or not to amend?
Accordingly, without (yet) seeing the Partnership Agreements, it seems the only way to put the ACP beyond challenge would be to amend the Deed of Gift itself so that it is expressly recognised as part of the Cup’s governance. This would embed the ACP within the legal foundation of the event, ensuring its authority continues irrespective of who holds the Cup or who the Challenger of Record may be. The current Defender and Challenger seem to recognise this, with an amendment evidently in contemplation based on media reports.
However, amending the Deed is not straightforward. It requires proceedings in the New York courts, which remain the supervising jurisdiction. Interested parties (eg other teams, former trustee clubs, sailing bodies, etc) would presumably need to be given an opportunity to be heard, in addition to the current Defender and Challenger. Prior amendments have been limited and functional and therefore provide, at best, limited supporting precedent value. Indeed, an amendment to enshrine a permanent governance and commercial body would be far more intrusive, and likely contentious as arguably going beyond the original intent of the Deed of Gift. All these arguments would likely need to be ventilated before the court.
Politically, too, it may provoke debate, albeit dampened by the fact that the current teams appear to support the change. They will undoubtedly (and perhaps rightly) argue that it represents sensible modernisation. Others, however, will see it as a step too far – diluting the essence and uniqueness of the Cup as a perpetual challenge trophy. It is that very structure which has made the America’s Cup so difficult to win, and yet so alluring, for over 171 years.
Conclusion
The ACP reflects a desire to modernise and stabilise the competition – but legally, it pushes against the boundaries of what the Deed of Gift appears to permit. For this reason, the New York Courts may need to be called upon once again if the ACP is to endure beyond AC38.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
