Saturday, July 07, 2007 Libre: Nations vs. corporations By Mel Libre Seriously Now
THE America’s Cup in Valencia, Spain held its final regatta on Wednesday this week with Alinghi defeating Team New Zealand by 1 second in race 7, in what will be remembered as one of the most exciting races ever in the history of yachting.
Though the Swiss win is not surprising for those who are following the sport, one should note that Switzerland is landlocked and mountainous and known more for its skiing resorts. Its victory is, therefore, like having a Filipino win the most prestigious medal in ice skating.
How that happened is itself an interesting story to tell. It is not about a nation wanting to prove its worth in an alien sport. Rather, it is about a businessman obsessed with sailing and spending a fortune to get to the top.
Ernesto Bertarelli is a Swiss/Italian businessman and yachtsman. He sold the biotechnology company he inherited from his father for US $13.3 billion.
In 2000, he formed the yachting syndicate Team Alinghi with the vision "to win the America's Cup while earning respect and recognition as a world class sports team as well as sharing our passion."
In its initial fray in 2003, the syndicate humiliated two-time America’s Cup defending champion Team New Zealand 5-0 in Auckland, New Zealand.
Bertarelli had the formula for a winning team. Offering the sweetest monetary deals, he poached on the members of the winning Team New Zealand.
Thus, the backbone of his team that won in 2003 and in 2007 were New Zealanders. Currently, Alinghi has six Kiwis led by skipper and vice president Brad Butterworth.
Team New Zealand, for its part, had to start from scratch after its key personnel jumped onboard to Alinghi. The embarrassing defeat in 2003 pushed it to regain the Auld Maug (as the America’s Cup is also called). Government supported the team build up by pumping in NZ $34 million.
Even the national newspaper, New Zealand Herald, in its editorial said: “The Government is right to provide immediate finance (it has promised an initial investment of NZ $10 million for the next challenge) to keep the vital cogs together; a view we did not hold after the last debacle. We were wrong and (Sports Minister) Trevor Mallard’s judgment was right.”
The America’s Cup has become a competition between nations and corporations. The contest merely reveals the changing picture of how the world economy is being shaped by nations and by corporations as well.
While the World Bank and the International Monetary Fund have the backing of governments, there are now institutions and individuals whose resources dwarf those of some countries.
Just start with the Forbes’ List of Billionaires. Bill Gates (worth US $59.2 billion) continues to hold Microsoft’s grip in the software industry that he created. And there are also private equity firms like Blackstone that just bought Hilton Hotels (with 2,800 hotels) for US $26 billion.
The merger of giant companies for example in the music industry has alerted the United States and the European Union on the threat of mega-monopolies.
Admittedly, the changes in today’s world have been propelled by corporate and individual initiatives as governments grapple with the weight of its own problems in politics, governance and social ills. Like in the America’s Cup, corporations are sailing ahead in the rough seas of world economy to feed on profit.
Nations and their peoples must work closely together to prove their worth as the better alternative in making things work for the betterment of all.
