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America's Cup backers seek wider following

For 150 years America’s Cup has existed on the fringe of athletics. A sport for the rich. But, corporations have come to the game, dumping in hundreds of millions of sponsorship dollars, and they want their investment to pay off. By CNBC's Dylan Ratigan
/ Source: CNBC

For 150 years America’s Cup has existed on the fringe of athletics. A sport for the rich. But, corporations have come to the game, dumping in hundreds of millions of sponsorship dollars, and they want their investment to pay off.

Tell a cup athlete that his beloved sport is often perceived as an elitist activity for billionaires and you’ll likely get this:

“You know I take issue with that from a sporting standpoint. Everybody can get a used sailboat and out to the beach and enjoy themselves,” said Alinghi helmsman, Ed Baird.  

Thus, the marketing dilemma for this sport. How to take sailing from the fringe to the mainstream.

“That is an interesting question because there’s quite a lot of debate in the sailing world as to what is the right level,” said Seahorse magazine editor, Andrew Hurst.. And what I would say is this corporate arena, with all the money that comes in. To me, this is not really living on the back of mainstream marketingIn other words, billionaire sailors love to entertain at their Spanish regattas, but there isn’t an international broadcast deal and even the most rabid sports fans would have great difficulty distinguishing between a keep and a spinnaker, a grinder and a downwind trimmer.

There are loyal fans. When the BMW Oracle guys showed up at a Valencia autograph session, they were received like rock stars. There are two business icons leading the charge for more fans and a wider acceptance.

“In terms of billionaire personalities, you’d have to say Ernesto and Larry,” said Hurst. "They’re mega-stars on the Forbes scale and they’ve become mega-stars in the sailing scale."

Ernesto Bertarelli and Larry Ellison have dramatically increased exposure and corporate sponsorship dollars. Allinaz, BMW and Oracle back the Ellison boat. UBS and BT Infonet back Bertarelli's Alinghi.

The message sponsors try to exploit: The power of teamwork. Messages appearing in external and internal campaigns, a mantra for sales and marketing managers.

“In investments, you have short-term tactical moves so it’s not so much the association with a premium sport, but an association with a sport that’s about team work. That’s about long-term goals and it’s about making adjustments to get to that goal”, said Phil Neugebauer, director of marketing for Allianz.

One of the youngest billionaires on the planet, Victory Challenge owner, Hugo Steinbeck, is attempting to skew the fan base younger. He negotiated to bring the hip Red Bull brand into the sport.

Take a look around the harbor and you’ll see UBS, Oracle – huge corporate enterprises under the boats. But, Steinbeck is a young man and it’s a whole different culture around his team.

“We’re going for the pop culture," said Steinbeck. "To bring the people to sailing. Not everybody wants to expose their brands to the people and, if I can be brutally honest, nobody cares about it. Everybody thinks it’s a rich mans sport, but it is not.”

With a $60 million buy in, rich may be in the eye of the beholder.

“My father told me before he died when I got into sailing, he said ‘you must be crazy. A sailboat is a hole in the water where you throw money at it,'" said Bertarelli. "And you know, it’s my second America’s Cup and I’m spending a lot of money on it. There’s not money in it, it’s all about the fun.”

If you look at the names, whether it’s the names that are on the shirts or the names on the sails, for those that decide to put a sponsorship on it, their relationship is different.

“For them, I think it’s a very good investment," said Bertarelli. "Sailing is a very clean sport. Its outdoors and it’s an intelligent sport. From a sponsor’s point of view, I think it’s a sport which has a great future."

There are members of the old guard. Traditionalists, who resent any changes.

“They’re looking at it purely as commercialism over a once Corinthian sport, and I don’t think that’s the right way to look at it,” said Hurst.

The reality is that this is one of the most capital-intensive sports around. Despite vast riches, the Ellison’s and Bertarelli’s of the world need corporate backing.

“This is the Wimbledon, this is the Olympics, and this is the World Cup of our sport," said BMW Oracle navigator, Peter Isler. "Maybe even beyond because of its idiosyncrasies and being the America’s Cup. But, the sport of sailing is there for anybody. The water’s right out there, it’s a great, great way to go.”