Alan Bond and the America’s Cup
The Wall Street Journal recently published a piece about the next America’s Cup challenge. The Kiwi’s wrested the cup away from Larry Ellison in 2017 and brought it back to New Zealand. The next challenge is scheduled for 2021 and Ellison’s defeat opened a run by the New York Yacht Club to represent the United States in that challenge. So far, no other American challengers have appeared and “New York Yacht Club’s American Magic,” is backed by a $100 million fund. Granted, they have a long way to go but, if successful, they would return the Cup to 37 West 44 Street where it resided from 1851 to 1983.
Geoff Jones drew my attention to this fact and when Geoff asked me if I had interest in reading this article, my first reaction was to tell him my experience in 1984 while waiting for my overnight flight to London at JFK. I had made my way to the Ambassadors Club, TWA’s pay-to-play private club that catered to frequent flyers by providing a quiet oasis.
Enjoying a pre-boarding Jameson on the rocks, I found myself in a conversation with an Aussie enjoying his Beefeater Martini. The Royal Perth Yacht Club had wrested the cup from the New York Yacht Club that past September. A momentous achievement as the New York Yacht Club had successfully defended it for 132 years, ending the longest winning streak in sporting history.
He asked what my thoughts were on losing the cup and I cavalierly replied: “You have to understand that ocean racing is an elitist sport and most Americans don’t pay much attention to it.”
I should have realized that he must have been involved with the cup victory and measured my responce accordingly. He confirmed this by explaining that he was a member of Alan Bond’s syndicate. I congratulated him but didn’t apologize for my remark.
Alan Bond was a bigger than life rouge, a phenomenon who went from rags to riches to disgrace in a mercurial manner. Bond recalls other rogues that populated the planet in the late Twentieth and the early Twenty First Centuries. Bernie Cornfeld, who created International Overseas Services, (IOS) with his evangelical command: “Do you sincerely want to be rich?” When IOS crashed and burned, Robert Vesco, another rouge, resurrected it until the SEC chased him into exile in Cuba. Bernie Madoff, who engineered the largest Ponzi scheme of all times, Crazy Eddie Antar whose pitchman guaranteed that “His Prices Were Insane” as was his business plan and Sean Quinn who rose to become the richest man in Ireland worth $6 Billion in 2008 only to declare bankruptcy by 2011.
Bond paved his way to success by using the tired true M.O. of most great rogues, “OPM,” Other Peoples’ Money. “Bond was a skilled salesman with a knack for coming up with cash. He never worried about whether he’d get credit. His early business partner, Cam McNab, (said) that Bond would often buy something that they could refinance on the occasions that they couldn’t pay their wages bill.”
At the time Bond first began his quest to take control of the America’s Cup in 1974, the Bond Corporation was already seriously in debt. Between 1971 and 1974 it had grown 12-fold, but its borrowings had grown 20-fold. accumulating $100 Million in debt.
He chose to win the cup to showcase his mega real estate investment, Yanchep Sun City, a luxury lifestyle for 200,000 people. Potential owners and investors were not exactly flocking to Sun City and it badly needed a boost.
When asked by a reporter if he entered the quest for the sake of sport, Bond erupted: “Anyone who considers racing for the America’s Cup isn’t a business proposition is a bloody fool. There can be no other justification for spending $6 Million on the Australian challenge unless the return is going to involve more than just an ornate silver pitcher.”
It took Bond four attempts to do it. The first three failed, Southern Cross lost 4-0 to Courageous in 1974 as did Australia in 1977. In 1980, Australia lost to Liberty, 4-1.
God only knows how much money Bond spent in 1983. The new boat, Australia II, was shrouded in secrecy and literally kept under wraps to hide its winged keel, designed by Ben Lexcen. Bond attacked the cup with military precision complimenting Lexcen’s genius with the superb sailing ability of skipper, John Bertrand. Still, Dennis Conner made it close losing the Cup, 3 to 4.
Bond was a national hero, and his empire seemed to prosper. It wasn’t until 1987 that it began to implode hitting bottom in 1992 when he declared bankruptcy with a debt of $1.8 billion. His marriage collapsed, he was convicted of fraud for syphoning off $1.2 billion from Bell Resources and sentenced to four years in prison.
Paul Barry, a reporter, was incensed by the shortness of his sentence. Barry noted that a 22-year-old Aboriginal man was given a mandatory penalty of a year for stealing $23 worth of biscuits. “Had the same formula applied to Bond, he would have been imprisoned for 50 million years,”
Bond died in 2012 at 77.
Prior to 1983, the America’s Cup was proudly displayed mounted on a large table in the foyer of the New York Yacht Club on West Forty-Fourth Street in Manhattan. I was invited to lunch shortly after Bond won the cup and it was as if it was never there. Even though the United States has regained the cup twice since 1983, the winning boats did not fly the pennant of the NYYC, so the cup has never returned to the club.
New York Yacht Club’s American Magic may be their great WASP hope.