Lasers - Applying a Blow Torch

[dogwatch]

And when a builder produces 300 new boats (at a cost of roughly $3k/boat) and lends them to the World Champs That $900,000 is generously lent to the builder by the local banks for absolutely no cost whatsoever.

At least as far as last Laser Worlds in the UK is concerned, with which I had some involvement, I know for certain the boats weren't provided at "no cost whatsoever". On the contrary, sailors paid approximately US$360K equivalent in charter fees. The boats were later resold at close to a new boat price and it's quite possible Laser turned a profit on the exercise. Not that there's anything wrong in that but let's not misunderstand the facts. I imagine the arrangements at most other major regattas are similar.
Regarding your assertion that regattas don't make money, my club runs National and World Championships quite regularly and we certainly make a profit out of them without, in most cases, any major sponsorships being involved.

 

[dogwatch]

You make a number of other comments that are simply wrong. The success of the class is not because of the class association. To start with, far more Lasers are sold to people/organisations that have zero to do with the association or class related events. Remember, Rastegar has stated that this is the market he is after, because the racing/class association related market is too small and insignificant.

Yes he's been quoted as saying that (indirectly, as far as I can tell). I find it quite hard to believe. Are the number of sailing centres, holiday centres and recreational sailors buying new Lasers really that high? Even if it was true, would those sales be as high without the visibility being generated by the racing market? I don't think many people would claim this 40 year old design is really the best recreational boat available.

 

[BalticBandit]

And when a builder produces 300 new boats (at a cost of roughly $3k/boat) and lends them to the World Champs That $900,000 is generously lent to the builder by the local banks for absolutely no cost whatsoever.

At least as far as last Laser Worlds in the UK is concerned, with which I had some involvement, I know for certain the boats weren't provided at "no cost whatsoever". On the contrary, sailors paid approximately US$360K equivalent in charter fees.

Sure but work it out, It takes at least a month to build that many Lasers using full time production and probably more time than that as you are unlikely to have 10 molds for normal production. Lets say you have 3 for your normal production rate. And since it is Poly, you can produce 2 hulls per day out of them: Start cleaning and prepping the mold at 9:00 am, Ready for spray by 10. Spray gell coat, wait for tacky, spray chop layer, layup woven layer, spray chop layer, its now noon. Let sit. 1:00 start bonding 2 hulls and decks, finish by 3. Pop the hull you sprayed in the morning, clean and prep the mold again, spray in another hulll to let kick overnight. rinse and repeat.

That's six hulls per day. That's 50 working days. that's 10 weeks, round up to twelve for hiccups. That's 3 months of a $1,000,000 line of credit the builder is carrying. And during this time the molds are in full swing so they aren't getting any cashflow from hulls they sell elsewhere.

figure the current rate on that is around 10%... normally around 15% annualized, so lets just make the number easy and say 1%/mo. that's $10k PER MONTH the builder shells out for 3 mos. $30k into it with zero profits.

Now when the folks show up, the builder gets $$75k-100k for the "lease" but they are also providing on site service and spares, and a part of that also goes to the sailmaker. So its more like $80k. So now the builder is $50k ahead. But the boats sell at a discount afterwards, so the margins the builder makes on the hulls are lower than they would otherwise get.

IOW the builder gave the class $30,000 up front, in hopes of making slightly less than normal return on revenue. Its not a BAD deal for the builder, but its hardly accurate to say that the builder did not front the sailors and the class a lot of money.

As to clubs making money on regattaes - the usually do so at the bar. The actual cost of running the event itself is not fully covered - though in some cases, the clubs "charter" themselves to the class at a break even cost and take the profit on the bar. But in that case, the regattae entry fee does not cover the costs of running the regattae, the class with its sponsors kick in the delta. Sure there will be exceptions, but the CYC Seattle recently did a study of this so as to figure out how to balance its books, and entry fees almost never cover the costs except at your local beer can "lets borrow an RC and race" kinda level.

 

[BalticBandit]

...

And when a builder produces 300 new boats (at a cost of roughly $3k/boat) and lends them to the World Champs That $900,000 is generously lent to the builder by the local banks for absolutely no cost whatsoever. Hmm do you even know what the borrowing rate for a small business on $1,000,000 is?

BalticBandit, why should we care about the builder's money? It's their business decision that they took. Nobody forced the "poor builder" to supply boats.

It's simple - want to be Olympic? Here's the deal, these are the conditions. Don't like it? Next, please..

As I understand it, the builder is required by their ILCA contracts to supply these boats up front. And as Simon pointed out, most builders are in this for the love of the sport and far less so for the "restructuring profit" that folks like Rastegar specialize in.

So if you don't care about the health fo the builder, you end up with a situation like what you saw with Bladerider in the Moth class. They basically could not afford the production system they set up (including the rework) and hence went bust. Now there is no-one building entry level priced Moths.

If you don't care about the eco-system, the eco-system will not care about you

 

[dogwatch]

Now when the folks show up, the builder gets $$75k-100k for the "lease"

Not sure where your $75-100K comes from. I said the figure for the Worlds in the UK was approx $360K. Actually....I forgot about the Masters, so that would have been more like $540K. Work it out. 300 boats, £400 charter fee, three events a few weeks apart (Radials, Standards, Masters) and a £/$ figure around 1.5.
If CYC Seattle can't turn a profit on events, maybe they need to look at their costs and/or fees. We make a profit. We wouldn't do it otherwise. Big events disrupt club sailing and the only reason members accept that is because it reduces our club dues.

 

[Wess]

To say Kirby had done nothing for the class simplay displays you are unaware of what he has done.

Yep. There appears to be a view here that the designer draws something on a piece of paper, send sit off and does nothing for the next umpteen years but sit on his ass and collect royalties. Such a view is spectacularly naive and suggests the writer knows very little about how things happen in real life.

I never said he did nothing and I don't think that. What I said did that the class association has done more. And he sued the class association that made him his money.

 

[Wess]

Geez Wess, Is it that hard to understand that this is about contracts?

I agree with SimonN that a lot of what Wess said is subjective. For example "...UNTIL HE [Kirby] GOT IN BED WITH PSA AND TRIED TO RUN LPE OUT OF TOWN". ...a conspiracy theory! So you are saying that Kirby and PSA somehow forced LP not to pay the royalties? I don't believe that that either Kirby or the Spenser family (PSA/LP) are engaged in a conspiracy. In fact, I think it's laughable - particularly in light of the events that have occurred. Were it true, then surely Kirby would be appointing PSA as the world wide builder for the Torch? He didn't and of course it simply isn't true. Thankfully your view Wess is a minority view.

Wess asks: "What right does he [Kirby] own?" The answer is spelled out in the 1983 and 1989 builder agreements that Kirby was party to, which are spelled out in the legal action. The agreements are referenced in the legal submission and are offered as exhibits. The agreements have been talked about for years. They exist. Kirby's rights as the designer named in the contract are real and transferable. There is case law that appears to support Kirby's position. Legal opinions have been offered that say that it appears that Kirby's position appears to be quite strong. It would appear to me the vast majority of sailors I have spoken with support Kirby's position (and a minority don't). There seems to be a smaller number that can't be drawn to support Kirby just yet.

Gov said "Wes I'm all for your freedom to not pay Bruce Kirby. And the way you do that is don't use Bruce Kirby's design" - I 100% agree. When I show up with my Laser an some other guy is there in their Laser or Torch - I'm just stoked to be in a sport where it is a level playing field. If someone turns up in a different boat design - lets call it the NewRastegarLaser, I don't so much care - it's not a level playing field any more.

There are those who say: "well, it's up to the courts now - let's wait and see". If you are doing that, then you are effectively supporting ILCA acting in support of Laser Performance / Farzad Rastegar.

I still have a problem with the way ILCA has acted with effectively supporting Laser Performance / Farzad Rastegar. Those who made the decision are answerable to their members.

So what's next? Perhaps we at the grass roots need start talking with our representatives?

Does anyone have any idea when the World Council next meets?

Gantt,

You are latest in a long line of trolls that keeps repearting the same BS over and over. Saying it is so does not make it so.

It is indeed a fact that there was a contract. It is obviously in dispute if it is a necessary or valid contract. To the point when his name was on the sticker it may have been both necessay and valid. But his name is not the boat, its not the design of the boat and its simply not necessary.

So I ask again the most saimple and basic question that even BK has never answered in all his puff heart strings pieces (and the shame of it is folks including me might agree with him if there was a straight answer):

* What right (patent, copyright, trademark) does he still own to the boat that makes the basis for the contract?

So simple really. Just provide a simple answer (Hint - the fact that there was a contract is not the basis for the contract. There needs to be something he OWNS that he can sell for the contract to be valid and enforceable. Hint #2 - You can't say design rights. There is no such thing. There are patents and trademarks and copyrights and construction manuals, etc...those things are owned and are rights).

KiwiJoker who I know disagrees with me at least answers honestly and does not use the smoke and mirror BS that you do. The only thing that you guys that support BK can answer is that he holds the trademark to his name and I am sorrry my friend but that is not currently necessary or required AFAIK. Nevermind that it is an unprecedented reach AFASIK.

If you like the guy and want to send him your money; go ahead! Maybe in a few years he can return the favor and sue you too. But in the meantime stop requiring others to pay what they don't have to (if a judge agrees they don't have to).

 

[BalticBandit]

Sorry Dogwatch I misread what you wrote. I though you wrote $360US in chater fees per boat. With 300 boats, even at 400L you don't get to that number. 400L == $620US x 300 = $186k US. And from that you have to subtract the cost of the sails, which are $600 retail, Which means probably about $300 Wholesaie from North, leaves you with $320/boat in charter fees so that's $96k in charter fees to the vendor. So they get their $30k back plus $60k profit. But again, that's after shelling out $30k in interest rate costs and making zero profit for 3 mos. Lets say they normally run $10k revenue per month on Lasers, That puts up the investment cost to $60k. Of which they get back $90k before selling the boats as "World's Charters". And by the time they get paid for the boats that get bought, that interest rate charge on that line of credit is easily up to $40k. So essentlially they front the class $70k and get back $90k after 4 months.

Its not bad, but its not anywhere near what investing in say a software business will give you.

I never said he did nothing and I don't think that. What I said did that the class association has done more.

Not quite. You basically claimed he gets no credit for what the Class association HE SET UP. And you claimed that he's "made enough money" and been screwing over sailors when the person screwing over sailors with poor quality and poocketing the license fees is Rastegar.

Now you are backtracking

 

[dogwatch]

Sorry Dogwatch I misread what you wrote. I though you wrote $360US in chater fees per boat. With 300 boats, even at 400L you don't get to that number. 400L == $620US x 300 = $186k US.

Like I said, times 3 events. Radials, Standards, Masters. So for the same set of boats, around $500K in charter fees.

 

[qusnewt]

Wess, you seem to be asking what "consideration" the contract has that makes it valid. It was the design and the right to build it and bring it to market. The success of the Laser is obvious justification of the value of the design and the right to be the builder. Contracts don't end just because the design has been disclosed and fully exploited and made successful. The entire purpose of the contract was to merge talents and capabilities to create a successful market for the design and to reward both parties for that success. If the boat had been a bust then then there would be no royalties to pay and the contract would expire. Success keeps it in force.

Had the design been patented, the contract would have been void when the patent expired. But the design was not patented. The royalty is by contract based on the initial disclosure and opportunity. 2% of the success of the builder that is exploiting your design is fair and reasonable and valid. The Supreme Court had already ruled on that type of scenario.

Redstar, Bruce is not trying to run the class. He just doesn't want the class to do something that is illegal and ultimately quite costly to the members. As a member I do not support the actions of the ILCA. What they have done is illegal! They aren't communicating with me or representing me. Volunteers or not, the end does not justify the means.

 

[Wess]

Wess, you seem to be asking what "consideration" the contract has that makes it valid. It was the design and the right to build it and bring it to market. The success of the Laser is obvious justification of the value of the design and the right to be the builder. Contracts don't end just because the design has been disclosed and fully exploited and made successful. The entire purpose of the contract was to merge talents and capabilities to create a successful market for the design and to reward both parties for that success. If the boat had been a bust then then there would be no royalties to pay and the contract would expire. Success keeps it in force.

Had the design been patented, the contract would have been void when the patent expired. But the design was not patented. The royalty is by contract based on the initial disclosure and opportunity. 2% of the success of the builder that is exploiting your design is fair and reasonable and valid. The Supreme Court had already ruled on that type of scenario.

Redstar, Bruce is not trying to run the class. He just doesn't want the class to do something that is illegal and ultimately quite costly to the members. As a member I do not support the actions of the ILCA. What they have done is illegal! They aren't communicating with me or representing me. Volunteers or not, the end does not justify the means.

With respect that is not how it works. He either owns the design or he does not. If it (the design) is public domain he can't write a valid contract that pays him for a design that is in the public domain. He could protect the boat/his work and sell it with patents or trademarks. He might write a construction manual filled with trade secrets and have a valid contract around that. Some claimed trademark. But each in turn were knocked down by Kirby's own supporters. Sorry, but If he does not own it he has no legal right to collect money for it contract (expired or not) or not. You don't have a valid contract if you don't own what you are selling. IMHO.

Come on Baltic, be fair. You know darn well my point is that the class did most of the work to make the class a success and that is who he is suing (without anyone on his side being able to state what he owns... seee above yet again... I don't mean you). Its obvious Kiry did some things with respect the class. But come on equally, you leave out the obvious part that he did that from vested self-interest (sell more - make more $). That is not the point. The class did much of thr work and is largely responible for the money he made. And so he sues them. Bite the hand that feeds him I say.

 

[Eric_R.]

Wess - who do you think pays for the ILCA organization We know that Dues don't cover it all. And we know that race entry fees almost NEVER cover the costs of running a regatta (at a small local club where you are kicking in for Beer, Trophies and mark set gas it does but not above that level).

So I guess you think the ILCA and ISAF are counterfeiters just printing money out of thin air. uhuh.

And when a builder produces 300 new boats (at a cost of roughly $3k/boat) and lends them to the World Champs That $900,000 is generously lent to the builder by the local banks for absolutely no cost whatsoever. Hmm do you even know what the borrowing rate for a small business on $1,000,000 is?

You are an ignorant troll

Sounds like you haven't run a regatta before and that is a pretty big generalization. People don't set out to lose money on an event whether it be local or international. That's why they budget things to either break even or make money, no one sets to lose money on something.

Big events can get sponsors but you can break even or make money with a regatta easily. It's not that hard to lose money when running a Laser event, in fact because it's a laser you can make it even cheaper if you do food correctly.

 

[BalticBandit]

Sorry Dogwatch I misread what you wrote. I though you wrote $360US in chater fees per boat. With 300 boats, even at 400L you don't get to that number. 400L == $620US x 300 = $186k US.

Like I said, times 3 events. Radials, Standards, Masters. So for the same set of boats, around $500K in charter fees.

Dog - the quote was for 300 hulls, and I looked it up, in 2012 Germany only held the event for the Laser and Women's Laser Radial, and Australia held the the Youth Worlds, the Masters and the Mens Radial. But here's the real gotcha for Australia. The first batch of boats had to be ready in March, but they couldn't get sold until the end of July. So figuring 3 mos to build - that means PSA was carrying that $1mil US line of credit at $10k/mo for 7 mos. That's $70k just in interest costs alone. plus another estimated $30k in lost revenue costs - and probably more since their market would know there were "almost new" boats to be had in August - so that lost revenue cost is probably closer to $50k and you see that the builder shelled out $120k or so.

And they got rentals for 200 x 3 x $320 (cuz they are supplying new sails each time). So they got $192k in return on a $120k up front cost Thats a 50% ROi on the cost but you still have to subtract out that they didn't immeiiately sell off all the inventory etc. So their net profit was decent but not stunning.

With respect that is not how it works. He either owns the design or he does not. If it (the design) is public domain he can't write a valid contract that pays him for a design that is in the public domain.

I see very little respect there since this is fundamentally wrong and ignorant of how this actually works As has been discussed earlier (with appropriate legal citations) NO HULL CAN BE PATENTED PERIOD.

certain novel features of hulls can be but that's it. after that what gets protected are the actual building documents. This is just like a house. Your architect copyrights the Blueprints and licenses you to build one house from those prints and nothing more - that is your CONTRACT.

In Kirby's case what he is contracting is the use of his blue prints: His Construction Manual. The CM.

As to your claim that "the class did most of the work"

1) is new - it was not your claim at the outset

2) is only possible because of how Kirby set up the class

3) his motives don't matter - the members of the class's motives were better sailing so they were in it for themselves as well

The guy biting the hand that feeds it is Rastegar - who does not want to contribute to building and maintaining the class and wants to pocket the extra $$ that he owes Kirby by contract. He wants to keep using Kirby's CM - which is Kirby's property, not pay Kirby, not pay the class and just pocket the $$

 

[ojfd]

Out of curiosity I just have to ask this:

How many of the readers of this thread would be happy to have it 'Kirby's way', but at the same time Laser being thrown out of Olympics and ISAF Sailing World Cup?

 

[nbb]

Out of curiosity I just have to ask this:

How many of the readers of this thread would be happy to have it 'Kirby's way', but at the same time Laser being thrown out of Olympics and ISAF Sailing World Cup?

I don't know about the world cup but I definitely couldn't care less about the laser being in the olympics. In fact I'd prefer it if it wasn't. All the olympic classes are basically dead in the US. It's a class killer.

 

[Otterbox]

An interesting question.

Are you asking because someone in ISAF is proposing that?

Who has confidence in ISAF´s decision making processes, anyway?

This is the team that threw the multihull out of London 2012, replacing it with Womens Match Racing and tried to throw Windsurfing out of Brazil 2016

 

[torrid]

Out of curiosity I just have to ask this:

How many of the readers of this thread would be happy to have it 'Kirby's way', but at the same time Laser being thrown out of Olympics and ISAF Sailing World Cup?

 

[Bruce Hudson]

Wow, some really 'interesting' perspectives. Wess, you are really off the charts with your perspective. I'm really glad that very few share your views.

Think of at more like a joint venture, where a 'system' between different parties has been set up. Holding together the system are agreements, and ultimately, the integrity of the respective parties to uphold those agreements. As one of the key architects of the system, Kirby got royalties for his design. When one party decided act out of integrity with the system by not paying royalties, the system fell over.

Wess, talking about ownership of rights in the way you are is tangential to the legal action. Ownership does not make for the basis of contract law. Agreement does.

You are latest in a long line of trolls that keeps repearting the same BS over and over. Saying it is so does not make it so.

I agree that just saying something doesn't make it so. Note that the "it" that I am saying is that ILCA and ISAF do not support my views by acting in the way they have. I believe that they do not represent the majority views of those who they represent. I believe the membership needs to voice their concerns to their delegates as soon as possible, with a view to reversing ILCA's and ISAF's position.

What is so is that this is my position. What is so is that my position appears to be shared by the majority of people I have communicated with. Also, I'm pretty sure that I'm not a troll, whatever that is. I'm fairly certain that raising the subject of bovine faecal matter does very little to serve anyone's cause, though of course, you have every right to talk about it as you seem intent to do - my guess is that you have some morbid fascination in the stuff. I'm glad you (Wess) seem to have dropped your silly conspiracy theory (at least I hope you have). I guess the repetitive nature of the subject from my perspective is that it's all pretty simple and straight-forward when you look at the facts. When you speculate why ILCA and ISAF acted the way they have then it's far more complex.

I'm still hoping that the ILCA will reverse their position and represent the views of the majority of their membership.

The Olympics kill classes? (nbb) - I'm glad to say that the Laser has been a great exception. I think that the main reason is that the gear used in the Olympics, is pretty much the same gear that's used at club level. The same can't be said for Finns or 470s or for that matter the Tornado when it was used. The newer classes haven't had a chance to reach critical mass yet - and maybe they won't. Tell the guys sailing at the Lake Travis Regatta that their sport is dying. Or The North Harbour champs sailed on Lake Pupuke. Or the various Masters regattas - now there's a success story. Bottom line is that at grass roots level, there's a ton of life in the Laser / Torch class.

 

[SimonN]

To say Kirby had done nothing for the class simplay displays you are unaware of what he has done.

Yep. There appears to be a view here that the designer draws something on a piece of paper, send sit off and does nothing for the next umpteen years but sit on his ass and collect royalties. Such a view is spectacularly naive and suggests the writer knows very little about how things happen in real life.

I never said he did nothing and I don't think that. What I said did that the class association has done more. And he sued the class association that made him his money.

This is where I believe you and I see things so differently. As stated before, my view on the role of class associations in the success of a boat is based on years of serving on class committees at national and international level in a variety of classes ranging from Olympic to national classes. The classes range from strict one designs to development classes. I have actually been involved in setting up an Olympic class structure from scratch and I have organised championships at National, European and World championship level. I therefore feel I have more than earned the right to comment on the roles of a class association.

The role of the class association can be very different, depending on the type of class. On some situations, the success of the class is totally in the hands of the association, in others, the association contributes far less to the success. IMO, the former situation is best typified in development classes, where there isn't a single manufacturer, or an alliance of manufacturers who drive sales of the boats. We also see this in a number of traditional classes, such as 505's, Fireballs etc. where no single manufacturer is driving the class.

However, in strict one designs and SMOD's, the role of the class association is very different. They do not do the main marketing of the class, which is looked after by the manufacturer. In these situations, it is my belief and experience that a class association doesn't contribute to the success but in fact, can be responsible for exactly the opposite. A bad association slows the growth of a class. A good association is, IMO, doesn't increase sales. It is simply a small part of a much bigger picture. In my experience, when a class association is important to the commercial success of a class, you see the manufacturer supporting that association in many ways. However, LP has cut its financial support of the class. If you really want to understand how important the association is to sales, simply look at the actions and comments of Rastegar and LP. He is a clever operator and if he felt that the association led to more sales, he would treat the association in a very different way to how he is currently acting, withdrawing funds through advertising and sponsorship. In case you missed it, that has put the association in a bad position, with it showing a financial loss last year. Then you read his comments about how sales to people who race are only a small amount of his business and he doesn't focus on that. Sales vs membership seems to support that view.

To further illustrate the point, look at the numbers. Even allowing for the number of boats that have died over the years, the ILCA membership represents a pretty small numbers of boats out there (probably around10% of boats in existence). Considering that membership is meant to be compulsory, this gives a real indication of the influence of the association on those buying boats.

Please don't misunderstand what I say. Everybody who is involved with running class associations deserves respect, because it is a thankless job. You don't get praise when it goes well, but you get caned if it doesn't go well. However, IMO, it is important to understand the true role of a class association in the success of a class. An association needs to model itself on the nature of its role and whether it is the prime source of marketing or not. Understanding that allows a class to use its resources effectively. I personally believe that very few sailors really understand these issues, because they don't find themselves in a position to need to consider the problems and challenges.

Finally, the class association would not exist if it weren't for the efforts of the original commercial interests in the Laser. As has been acknowledged on this very thread, BK was one of those whose efforts and support allowed the ILCA to get to the position it has today. At best, one might argue that it was a true symbiotic relationship, but to claim that the Laser is a success because of the class association and that it made BK money simply doesn't stack up to scrutiny.

 

[Reht]

Taking the Kirby hull out of those contests because of supplier battles is as absurd as playing the world soccer cup with volleyballs because Rawlings, Wilson, and Spaulding got into a fight about who builds soccer balls.

The fact anyone considers this a possible outcome demonstrates the absurdity of the ISAF and ILCA reaction to LPs refusal to build class legal equipment

I think we all get that this is all about contracts, and contracts have also been signed to do with 2016 (maybe even 2020), but I could easily see ISAF revoking something from the laser class if they can't get a reasonable supply of equipment and boats sorted by then. IIRC when the selection of the latest additions to the games were announced, a big part of it was that there was a world-wide distribution system, if the laser builders can't sort out their arguments soon the supply of boats could dwindle and then you're failing to meet a criteria.

The laser provides world class racing, whether you love it or hate it you can't deny that. But at the same time, I'm sure ISAF doesn't like this whole fiasco looming over its head and could (in it's usual random way) act like a kid throwing a temper tantrum.