The New York YC’s American Magic was 0-2 with its America’s Cup challenges, and given its early eliminations from AC36 and AC37, the money burn rate was high and the return on investment low. It’s all par for the course with the America’s Cup. After decamping from Barcelona to the team’s base in Pensacola, Florida, there was plenty of lip service about another go at the Cup in Naples, Italy in 2028, but in October, what was a hard maybe became a hard pass.
They didn’t agree with the final Protocol or the defender’s proposed scheme to take management of the regatta out of the hands of Emirates Team New Zealand and into the hands of a quasi-independent governing body called the “America’s Cup Partnership.” With American Magic’s exit, for the first time in Cup history, there may be no American syndicate.
“After extensive engagement with the Defender, Challenger of Record and fellow teams, we’ve concluded that the present structure does not provide the framework for American Magic to operate a highly competitive and financially sustainable campaign for the 38th America’s Cup,” said Doug DeVos, American Magic owner, in a team statement. “We care deeply about the America’s Cup and what it represents. However, for a team committed to long-term excellence, alignment around financial viability and competitive performance is essential. At this time, we don’t believe those conditions are in place for American Magic to challenge.”
Terry Hutchinson, the team’s sailing director, says American Magic’s exit is more of a “hiatus” that will allow them to instead prioritize building “a sustainable platform for high-performance sailing in the United States.” While winning the America’s Cup was always the goal, Hutchinson says they can now focus on their parallel effort to build what they envision as a pipeline of top-level American sailors, designers, engineers and boatbuilders. The shift in priorities, Hutchinson adds, will also allow them to bolster the underperforming U.S. Olympic sailing program by diverting funds and resources to private organizations supporting athletes, including AmericaOne Racing and the Sailing Foundation of New York.
According to Hutchinson, American Magic’s issues with the Protocol and the America’s Cup Partnership primarily revolved around concerns with the event’s commercial structure and future governance, and specifically, what the team felt was the lack of a clear and sustainable financial model. American Magic sought a structure where investors could reasonably expect to recoup their investments within a couple of cycles, but found the proposed model too risky and not conducive to such a goal. The model, Hutchinson says, would require ongoing support from private individuals and yacht club members rather than evolving into a self-sustaining, profitable sporting entity.
SailGP, he says, has the right model, borrowing many of its elements straight from Formula 1’s playbook. And SailGP may well be in the team’s future.
The focus for American Magic and its skeleton crew of engineers, boat builders and sailors in Pensacola is to now take a measured and strategic approach to winding down its America’s Cup operations and assets. Hutchinson says that process includes evaluating the potential to support another American team, should one step up to fill the void, which is not likely at this point. “We would always be open to supporting another American team if somebody wanted to step forward and take it on,” he says. “But it’s not a small undertaking.”
Still, they’re not rushing to fire sale all of their AC assets either, which include a pair each of AC75 and AC40s, containers full of parts and spares, assorted gear and foil sets, not to mention priceless design and performance data and intellectual property. While now officially out of AC38, Hutchinson says they remain cautious and “prefer not to make hasty decisions that could close doors to future America’s Cup involvement.”
Instead, Hutchinson says, they intend to keep their foot wedged in the America’s Cup door and would conceivably field teams into the planned Women’s and Youth America’s Cup AC40 regattas—should American Magic be invited to race. “We want to be good stewards for the America’s Cup,” he says, so the plan is to wait, observe how the event evolves and keep the possibility open for a future return.
For now however, the Olympics, and custom boatbuilding, take precedence, and for this, there are ample resources at American Magic’s Pensacola base. Hutchinson stresses that the goal is to build on existing Olympic systems already in place with US Sailing and elsewhere, rather than disrupting them.
“I think the first way to make the connection is to not impede progress that is already happening,” he says. “There’s a great system already in place, so our role over the next two and a half years is to learn the system that they have and support it where we can. We should make sure that every US sailor that goes to the Olympics in a boat that is immaculately prepared and perfect.”
