VOR AUCTION - OPPORTUNITIES LOST & STILL THERE?

stief

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Tip and Shaft interview with Johan Salén about the bidders, machine trans:

# 1 JOHAN SALÉN: "THE VOLVO OCEAN RACE HAS A VERY STRONG POTENTIAL" 

After long months of reflection, the shareholders of the Volvo Ocean Race have chosen to sell the event they owned since 1997. According to our information, two companies were in the final: the English Origin of Keith's Origin Sports Group Mills, close to Alex Thomson) and Swedes Richard Brisius (50) and Johan Salén (57) from Atlant Ocean Racing , currently co-CEO of the event . These last, connoisseurs of the test, were chosen this Thursday as buyers . Exclusively for Tip & Shaft , Johan Salén unveils - in perfect French (he is married to Christine Guillou , who was, among other things, skipper of EF Education during the VOR 1997-1998) - their ambitions for the race. 
 
With Richard Brisius, you have been one of the mainstays of the Volvo Ocean Race for almost 30 years, can you summarize your background? 
We met Richard during the Whitbread 1989-1990: I sailed on the Swedish boat The Card and he with the Italians Gatorade . I was finishing my studies at the Stockholm School of Economics, whenRoger Nilsson called me to help him set up a new Swedish project sponsored by Intrum Justitiaduring the 1993-1994 edition. Then, EF contacted us to manage the two-ship project of the 1997-1998 edition. This is where Richard and I started working together, he as shore manager, me as a project manager. After the EF campaign, we went to Atlant Ocean Racing and chained with Assa Abloy (2001-2002), the two Ericsson projects (2005-2006 and 2000-2009) and Team SCA during the last edition. We have been working together for just over twenty years and the only edition of the Volvo Ocean Race where we have not been involved since 1989 is the 2011-2012 season. 
 
You were not present on this edition, but Volvo caught you ... 
We were not actually involved: I had other activities and Richard handles the Stockholm bid for the 2026 Olympics . After the resignation of Mark Turner , Henri Sténson , chairman of the board of the Volvo Ocean Race, former director of communication of Ericsson that we knew when he was a sponsor, called us. The board needed a quick fix, someone who had the experience of running. We decided to go because it was a unique opportunity : the Volvo is our main activity for almost thirty years, we love this environment and this race! 
 
Redeeming the race seems almost like a logical outcome for you ... 
Yes, it's true ! We started by sailing, then we managed projects, then we ran the race, then we became owners. The loop is complete , in a way. For us, it's a bit of a dream, because we think there is a lot of potential. 

What do you think is the potential of the Volvo Ocean Race? 
The basic concept, a world tour with stops, has a lot of potential, both from an economic point of view and from a sporting point of view. Commercially first, because it's not easy for large companies to find events that are truly international and long-lasting, with media coverage and public relations on every continent. There are other options - like Formula 1, for example - but it's much more expensive or with a different image. Sportingly then, I think we really underestimate how difficult this race is for the crews at sea: it's probably the most difficult challenge for a team, and that's interesting sporting. , but also commercially. So we think there is the potential to have more boats and more good teams. 
 
You announced that Volvo remained sponsor of the next edition in 2021 ... 
Yes, it gives us a good base for the next edition. Volvo's commitment is only about the next, it is possible that they want to continue, especially Volvo Cars [ property of Chinese Geely, Ed ] but it is not safe. The discussions will take place in two years. Volvo is a great sponsor, but it may not have been the right way to own it. Two big international boxes, it weighs heavily on the operation, even if it worked. I believe it will be an advantage in the future, we will be more agile , more flexible than the association Volvo Cars and Volvo Group. The two entities do almost nothing together, the only thing they do together is the Volvo Ocean Race! Their brand policies and marketing strategies are increasingly different . 
 
Will the race still be called Volvo Ocean Race? 
Good question ! (laughs) It's not yet decided , we have to decide quickly. 
 
Does this mean that the budget of the next edition is already complete? 
Between the sponsorship of Volvo and the contributions of the cities of call, the budget to produce an edition identical to this one is buckled . After, we have the ambition to do better, especially for communication, so we will seek new sponsors. But we are not dependent on them for the next race, it's very good. I think it will be easier to market the race with Volvo as a mere sponsor and not as owner. Some brands, often small or medium size, like to associate their image with that of Volvo, which is very strong, but some major brands could hesitate to invest in a test that belonged to Volvo. 
 
Is the route of the next edition defined? 
No, not yet completely. The ambition for the next course is to reduce the number of stopovers a bit , something like two less . Counting Aarhus, we have 13 stops this time: it's a bit too much, the race is complicated to follow. Our ambition is to return to the roots of the race, more simplicity. This edition was a little too intense at times, for sailors and for logistics too. We have to continue to go to Asia, of course, but I think we can do it more simply: going around Australia and going back to the west, for example, it's a lot longer. After that, we also want more continuity in the ports of call, we have changed ports too much, we must return more often to the same places. 
 
Which boats will be departing in 2021? We know that you have been discussing for several months with Imoca ... 
It is no secret that we are in discussion with Imoca, it is going very well and it will be easier now with the sale. Our ambition is very clearly to find an agreement quickly : we are not there yet because we were until then very focused on closing the future of the race and it was longer than we thought.After, the Imoca is a class especially suited to navigation solo or double, it will be very important to find a good implementation to navigate crew Imoca. It's a job we have to do together and it's very important for it to work. It may take a few months, we are not in a hurry. 
 
That means that it will be necessary to modify the gauge Imoca? 
Yes, you have to adapt part of the Imoca gauge to crew navigation. And, at the same time, it is very important that boats that exist or are under construction, can make the Volvo Ocean Race. If they are completely different boats with the same tonnage certificate, it is useless , we lose all the synergies we are looking for. For this to work well, it is also necessary that the boats of the teams of the Volvo can make other races in double or solitary. The Volvo Ocean Race has always had a boat a little 'isolated', it's always been a weakness. 
 
What becomes of the Super Sixty project? 
The project of Super Sixty as originally planned is abandoned, it was dependent on the financing of Volvo. At the same time, a lot of work has been done, so it would be a shame not to use it. The drawing is available for someone who wants to build an Imoca on Verdier plans. Guillaume is convinced that if he were to make an Imoca today, it would be the same boat as the Super Sixty .For us, it would be a shame not to use it. Volvo Ocean Race owns the plans, but the riders have to discuss directly with Guillaume, with whom we have a royalties repayment agreement if he sells the plans. 
 
The current VO65 could align with the next edition, according to yesterday's press release ... 
We do not know yet, it's something we have to decide quickly . In the case where two classes cohabit, the main class would of course Imoca. We have to think a little more, we have a lot of scheduled meetings with the teams, we hope to decide by the end of the race. 
 
Will the race stay in Alicante? 
Yes, it works very well, there is no reason to change that. 
 
One last question: at what price did you buy the Volvo Ocean Race? 
With a company like Volvo, you can not say anything about signed contracts. For them, the most important thing was to find a lasting solution for the future: even if they sell today, their name will remain involved for ten years. A race like the Volvo Ocean Race does not make money , it generates losses, so it's hard to sell for a big sum . Our goal is at least not to lose money! If we can be profitable, it's a bonus, but we do not expect to make much money in the short term. We know it does not work that way. The most important thing is to build a solid structure and expand the existing platform.
http://translate.google.com/translate?hl=auto&langpair=auto|en&u=https%3A%2F%2Fus12.campaign-archive.com%2F%3Fu%3D1e692787e2c4cc3370813fca1%26id%3Daf95776c2f%26e%3D3854e9c80a

original https://us12.campaign-archive.com/?u=1e692787e2c4cc3370813fca1&id=af95776c2f&e=3854e9c80a

 
Geely won't care - it is the largest voting shareholder of Volvo Group anyway. 
Its not Miffys fault because this is widely misreported in the business press as well as on SA. Comments suggesting that Geely (a Chinese company) controls Volvo AB. I don't know if one report got it wrong and others just follow suit. But its is complete nonsense.

Geely is not even close to being the largest voting shareholder. 

The largest shareholder in order of votes held are:-

1. Industrivarden   (Investment company that span out of Handelsbanken in 1944)  23.1%  of votes

  2. Barclays Bank  8.9%

3.    Nomura  6.8%

4. Norges Bank 5.4%

In terms of economic ownership, its Industriavarden, Barclays, Swedbank and Alecta.

If we take the time to follow the votes through the various Swedish investment companies and nominees then , as usual, you end up at the door of two Swedish families; The Lundbergs and the Wallanders. 

Geely owns 99% of Volvo cars and an investment in Volvo AB but nowhere close to being the largest voting shareholder. .

 
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jack_sparrow

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  One discussion that the management group will be having is how to reward their anchor tenant Volvo Cars without giving a free ride to Volvo Group.  That will be interesting because I dont have an answer.
Putting aside the race, for two decades now the two have lived side by side promoting each other in some form and giving a perception of one apple not two halves. So that shouldn't be a problem.

However that has largely come about because both are Swedish HQ,  product perceptions similiar etc. Not too sure how it would all go if one start producing a shit product though. 

 
Miff was first time to my knowledge.
Li Shu Fu has modest ambitions.  Aside from a mere desire to control the Chinese and Malaysian automobile market, alongside stakes in Mercedes Daimler, Volvo AB,  Volvo Cars and Lotus,  he is just a humble manufacturer of refrigerators.  

I suspect Volvo AB realized that they could not keep up with his modest dreams. The Swedes are rather more careful with their spending. 

 
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jack_sparrow

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I don't know of one, but I'm sure there are examples, of one iconic professional sporting event, global or national that is encumbered with a commercial name.
The Q/A begins.

Wimbledon 
Seems to tick every box, noting Wimbleton is the name of the suburb and bit like the VG. Great example also of the home being a club where event tradition has been maintained such as it is the only Grand Slam still played on grass, players have to wear predominantly white and they still serve strawberries and cream by the bucket full.

Also starts in a few weeks to go head to head with the VOR. Wonder who will get the most viewers :)

Club RO and mainly amateur contestants.

I'm sure it would have occurred to you eventually but there is, of course, the iconic global event that was branded by Schweppes.

https://sopyc.com.au/viper-640-world-championship-2018/
 Very iconic but amateur contestants.

 
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Miffy

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Its not Miffys fault because this is widely misreported in the business press as well as on SA. Comments suggesting that Geely (a Chinese company) controls Volvo AB. I don't know if one report got it wrong and others just follow suit. But its is complete nonsense.

Geely is not even close to being the largest voting shareholder. 

The largest shareholder in order of votes held are:-

1. Industrivarden   (Investment company that span out of Handelsbanken in 1944)  23.1%  of votes

  2. Barclays Bank  8.9%

3.    Nomura  6.8%

4. Norges Bank 5.4%

In terms of economic ownership, its Industriavarden, Barclays, Swedbank and Alecta.

If we take the time to follow the votes through the various Swedish investment companies and nominees then , as usual, you end up at the door of two Swedish families; The Lundbergs and the Wallanders. 

Geely owns 99% of Volvo cars and an investment in Volvo AB but nowhere close to being the largest voting shareholder. .
Nomura and Barclays' shares are actually Geelys. Not sure where you're getting the voting numbers but they contradict every report available re Volvo AB voting shares. 

Near the end of last year Geely reported they had bought out another investment firm and Barclay and Nomura were the pass thru institutions. 

 
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jack_sparrow

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Nomura and Barclays' shares are actually Geelys. Not sure where you're getting the voting numbers but they contradict every report available re Volvo AB voting shares. 
Miff there is also proxies to consider that largely flow in favour of the Board's position.

 
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jack_sparrow

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Stief thanks for the translation of the Tip and Shaft interview with Johan Salén.

So much to chew over there and obviously still a lot in the pantry unseen. Here is just a couple of morsels where I have linked relevant paragraphs.

Volvo is a great sponsor, but it may not have been the right way to own it.

I think it will be easier to market the race with Volvo as a mere sponsor and not as owner. Some brands, often small or medium size, like to associate their image with that of Volvo, which is very strong, but some major brands could hesitate to invest in a test that belonged to Volvo. 
Hallelujah

For them, the most important thing was to find a lasting solution for the future: even if they sell today, their name will remain involved for ten years. A race like the Volvo Ocean Race does not make money ,

Will the race still be called Volvo Ocean Race? 
Good question ! (laughs) It's not yet decided , we have to decide quickly. 
I have just brought another prayer mat noting his comments above including some major brands hesitating to invest in a race that "belonged" to Volvo (as opposed to branded Volvo?). 

Is the route of the next edition defined? 
No, not yet completely. The ambition for the next course is to reduce the number of stopovers a bit , something like two less . Counting Aarhus, we have 13 stops this time: it's a bit too much, the race is complicated to follow. Our ambition is to return to the roots of the race, more simplicity. This edition was a little too intense at times, for sailors and for logistics too. We have to continue to go to Asia, of course, but I think we can do it more simply: going around Australia and going back to the west, for example, it's a lot longer. After that, we also want more continuity in the ports of call, we have changed ports too much, we must return more often to the same places. 
Shang breaths huge sigh of relief, though I read that maybe not necessarily be China and not stopping in Australia? The concept of more permanent stopovers a plus.

  Guillaume is convinced that if he were to make an Imoca today, it would be the same boat as the Super Sixty .For us, it would be a shame not to use it.  Volvo Ocean Race owns the plans, 

In the case where two classes cohabit, the main class would of course Imoca.
Interesting to read this in conjunction with Nico's FP interview praising OD/Boat Yard over Box Rule, but noting OD doesn't necessarily have to be the "rent a boat" model.

 
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Sailbydate

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What I meant was, it's not like they had to pull kids from the fields and teach them from scratch.  There was a already a rich theatrical heritage going back generations.

Disagree here.  Soccer very much taking hold in the inner cities especially with the Latin communities, South Americans, Central Americans, Brazilians and Mexicans of course.  My son had a Brazilian coach on a club team and we played all inner city teams.  East LA etc.  No shortage of talent there.

This is right.  Access.  It's so bloody expensive now, at every turn.  Gone are the days you can drag an old skiff down to the water and have a day of it.

I remember reading a dog - eared copy of Gypsy Moth Circles the World in the rain tucked in a berth on our boat at Parsley Bay.  It was like reading Jules Verne.  I was hooked.
Cost is certainly a barrier, SX. But people are time-poor these days - or at least that's an excuse they can readily adopt. It takes a hell of a lot of commitment and time to be a sailing parent. Not so much if there's a solid infrastructure of local clubs, which are happy to run the introduction to sailing programmes. But parents still have to get them there and keep their kid's interest up. 

In terms of parenting these days, it's easier to sit a toddler in front of a TV or shove a tablet in their hands to keep them amused, than actually get them physically involved in a sport like sailing. Mostly it's left up to school sports participation and then on to club sport for a few.

 

stief

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Good reactions Jack. Tip and Shaft continues to impress. Once again, they asked the right questions of the right person. Hoping Laurent will clarify any trans issues, like whether the point that Volvo, "even if they sell today, their name will remain involved for ten years"

Re the 'auction,' enjoyed speculating what-ifs about Sir Keith Mills getting the race back for England, OC sports not being mentioned, the whiff of backroom talks with  Henri Sténson of (ex) Ericsson, and how long the maneuvering has been going on. Have been watching for tweets from Mark Turner's, wondering if his silence could now be broken, but guess NDA would likely be in play.

Anyway, looks like Atlant would open up the VOR routes and stopovers for IMOCAs, who would serve a a kit-development fleet that could stop, repair in the boatyard, and try different solo or DH combos with ideas like the Super 60 before they tried the Vendee,. The crewed race, likely OD and focused on crew development, maybe with reduced crew (shore based routing might give the old guys like Cape and Vila another option) would provide the great team racing. Once the OD fleet was EOL, the best of the IMOCA design could be  made into a fleet for the next edition, and migration between the two fleets would be fascinating. 

A route via China-/ North America west coast, followed by a double latitude leg and then round the Horn would avoid point Nemo and cut out a stop in either NZ or Australia, since the Indian Ocean leg gives almost Southern Ocean conditions.

Just some speculation what Brisius means by "sustainable."

 
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jack_sparrow

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I suspect Volvo AB realized that they could not keep up with his modest dreams. The Swedes are rather more careful with their spending. 
Or Mambo I hope it is that Volvo AB have stepped away knowing the race will no longer be a "Volvo branded race" and that there is really only room for one Volvo product line as a major support sponsor.

We might see the Yanmar name associated with this race for the first time in a long time :)

 

jack_sparrow

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Have been watching for tweets from Mark Turner's, wondering if his silence could now be broken, but guess NDA would likely be in play.
Depends if he is now a free agent or still being retained by Volvo for the sale transition.

 

jack_sparrow

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A route via China-/ North America west coast, followed by a double latitude leg and then round the Horn would avoid point Nemo and cut out a stop in either NZ or Australia, since the Indian Ocean leg gives almost Southern Ocean conditions.
While it appears a long-term Asian stopover is firming, its introduction has a huge ripple effect, one of the largest being on having the race return to its roots. That has now been deemed important to all as evidenced by this edition.

As you point out here Australia and or NZ out of the picture for example to accommodate less stopovers and it is goodbye to the Sth Ocean being part of the race track in its entirety. In Aucklands case an iconic stopover and SO launchpad with the best stopover village footfalls and nation with significant sailor reps.

Big price to pay casting these things aside just to prosecute the Asian agenda?

Sleepless nights ahead for the new RO with calculator, rule and dividers as a pillow.

 
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stief

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Australia and or NZ out of the picture for example and it is goodbye to the Sth Ocean being part of the race track in its entirety.
Yes, that's the worst fear of cutting ports, and why I wondered about Tahiti (to attract the IMOCA eyeballs on the way to Itajaí), or West Coast North America. Chia to Itajaí is too long, so at least one stopover between needed. Turner wanted more Southern Ocean, sounds like Atlant wants established stopovers attractive to sponsors in Asia.

Dealing with Point Nemo (forever Fish) is the key, I suspect. 

In any case, Alicante looks fixed for the start, so probably Lorient or Les Sables  for the finish if IMOCA has their say. 

too much speculation.

 

jack_sparrow

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  Turner wanted more Southern Ocean, sounds like Atlant wants established stopovers attractive to sponsors in Asia.
stief main thing is established stopovers can then invest with surety in infrastructure to accommodate more boats, particularly when they are of the beamy, foiling, outrigger mast variety. 

...and pretty sure Turner has a bigger hard-on for Asia than Atlant.

 
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stief

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stief main thing is established stopovers can then invest with surety in infrastructure to accommodate more boats, particularly when they come in the foiling, outrigger mast variety. 
Yep. Can also see a last leg of Newport->Finish in Den Haag, if they risk a cut to Gotenburg and Galway/Cardiff/France stops.

 




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