Larry Ellison is America’s highest-paid CEO, with an annual salary at Oracle software of $96.2 million plus stock options in 2012 alone of another $90.7 million. But try as he might, Ellison can’t seem to buy success with all of that cash. Not only did he lose 22 percent of Oracle shareholders’ returns in the past fiscal year, according to The New York Times, but he also is the driving force behind what an increasing number of critics call the most disastrous America’s Cup in generations.
The 34th America’s Cup opened last week in San Francisco with only one team, Emirates New Zealand, competing in the first race. The number of challengers for the Cup dwindled precipitously after Ellison — who won the Cup in 2010 and has the right to set the rules this year — changed the type of boats to 72-foot lightweight carbon-fiber multihulls that whip across the water and seem made for TV coverage. Originally, some 15 teams were expected to challenge for the Cup. The real number turned out to be three, mostly because of the staggering expense of funding these high-tech builds, which can top out around $10 million for research, development, materials and construction.
The powerful AC72s have had plenty of bad press, including the death of Olympian Andrew Simpson during a training capsize. That, plus changes to the rules following the fatal accident, has left teams either not competing at all or sitting out at least some of the races in protest about the way the Cup is being run on Ellison’s watch.
Some San Francisco residents are now adding to the chorus of gloom, too, as they watch from onshore as their home becomes Ellison’s personal playground. By some estimates, infrastructure and security costs totaling about $22 million are being laid on the backs of taxpayers to make Ellison’s sailing vision a reality.
“I don’t think we should fund a sport that only a few people enjoy,” one local resident told NBC News during an anti-Cup protest outside City Hall. Another added: “I’d be p—ed that I’m financing a billionaire, Larry Ellison, to do his little boat show.”
America’s Cup event authority chief executive Stephen Barclay says the city’s general fund will not be affected, and he told a recent San Francisco finance committee meeting that expenses and revenue from the Cup “should be a wash” for the City by the Bay. That’s a far cry from what the Bay Area Council Economic Institute predicted a few years ago, when locals were led to believe the event would pump $900 million into the city’s economy.
There’s now an online petition with more than 4,000 signatures demanding that Ellison use his personal wealth to cover any expenses the city may incur. The message couldn’t be more blunt, telling Ellison to “put your money where your mouth is.”
For now, Ellison is putting his money into Team Oracle, which he’s hoping will successfully defend the Cup and keep the racing in San Francisco for at least several more years to come. You can follow our America’s Cup coverage live from San Francisco at www.yachtingmagazine.com.