When the Swiss team Alinghi snatched the America's Cup from Team New Zealand last year in a shutout, it looked like a Cup dynasty was in the making. With a committed, billionaire owner, a solid crew, the world's most talented skipper and the corporate resources in place to prepare the first European defense, obstacles looked formidable indeed for potential challengers.

Fifteen months later, Alinghi looks shaky.

The sleek gray boat with the swooping red design down its side struggled here last week against a rival it had easily dispatched for the right to race New Zealand in 2003. "They seemed to have a touch of speed on us upwind," said veteran Alinghi crewman Josh Belsky after BMW Oracle, U.S. billionaire Larry Ellison's Cup challenger, handed Alinghi four straight losses in the middle of a week of match-racing for the UBS Trophy.

Belsky had a good explanation. BMW Oracle had been training and updating sails and gear for most of a year while Alinghi rested. "We've only been sailing eight days," he said. "Our boat has been parked in the shed. They've been at it eight months."

But he was harder-pressed to explain what's been going on in the back rooms at Alinghi that led to the absence of the No. 1 America's Cup skipper, Russell Coutts, who steered the last three Cup winners.

"I can't really get into that," said Belsky. "I don't really know what's going on."

What's going on, say insiders, is an ugly separation that could be permanent. Coutts himself, who spent last week here doing commentary on a spectator boat carrying Alinghi supporters after declining to sail on the race boat, was not optimistic.

"Any chance you can patch this thing up?" I asked on the dock.

"Probably not," said the dark-haired New Zealander, with a trace of sadness.

Not only was Coutts absent from the afterguard as Alinghi and BMW Oracle did friendly battle in a showpiece regatta playfully dubbed "the pillow fight," but his longtime tactician, fellow Kiwi Brad Butterworth, also was missing. Butterworth smashed his ankle after he drove a brand new V-12 Mercedes into a brick wall at 3:30 a.m. on the elegant strip of Newport mansions called Bellevue Avenue the day before racing began.

The double whammy left Alinghi's owner, Swiss pharmaceutical magnate Ernesto Bertarelli, scrambling for someone to run the boat. He settled on an odd pair: backup helmsman Peter Holmberg, who's been enjoying the good life in his native St. Thomas for the last year, with hard-driving German Olympic gold medalist Jochen Schuemann calling tactics.

To say the pair lacks the easy relationship of Butterworth and Coutts, who have sailed together for more than a decade, is an understatement.

Coutts apparently is miffed by his modest role in Alinghi defense planning. Insiders say he had strong interest in shaping the new Cup structure and hoped to influence decisions on the venue for the next event, changes in the design of Cup boats and racing rules. Instead, Bertarelli put his longtime business assistant, Michel Bonnefous, in charge, leaving Coutts and Butterworth with the sailing team.

Relations soured. "It's been going downhill for a year," said one Alinghi crewman.

"We met with Brad [Butterworth] about it," said Alain Golaz, a high-ranking official with the Societe Nautique de Geneve, the Cup's official keeper. "He said, 'We'd like to be loved, to be part of the club. We're going to lose our sense of humor if it's all lawyers and accountants making the decisions.' "

Golaz said the loss of Coutts shouldn't damage Alinghi's chance for a successful defense too severely. "All the effort has been to show this as a team -- Jochen, Ernesto, the designers, the sailors, the trainers and the staff working together. If one among these for legitimate reasons decides to do something else, it would not, I think, be so damaging.

"But if he leaves," added Golaz, "it must be on friendly terms, which I think it will. If not it becomes a poaching game, and that's bad."

Left unanswered is what Butterworth might do if his countryman and longtime golfing partner Coutts departs. "Divorce in the family is never pretty," said Alinghi's lawyer, Hamish Ross.

As for last week's racing, it was good fun. The two giant Cup boats with their towering, 115-foot masts drew crowds of spectator boats to the channel leading from Fort Adams to the open ocean, and thousands of fans watched from shore. It's been 21 years since the America's Cup left Newport and Rhode Islanders seemed pleased to have it back, even in modified form.

The races were on short courses close to land, unlike America's Cup races which are held offshore, and the sight of the two powerful vessels charging each other and crossing tacks with inches to spare brought the glory of Cup-style racing back.

Alinghi looked rustier than BMW Oracle but both teams had their inglorious moments. In one race in 18- to 20-knot winds, Oracle's spinnaker burst as it filled after a mark-rounding, with shreds flailing in the breeze. Alinghi, just astern, charged in to seize the lead but Oracle skipper Gavin Brady steered up sharply to prevent the pass. Holmberg's effort to avoid collision was late and his spinnaker brushed Oracle, a foul.

But Brady's steering was so abrupt it tossed bowman Dean Webb into the drink, another rules violation, and on-water umpires flagged it off as a double-foul, the penalties offsetting each other.

Meantime, Alinghi's spinnaker flogged, caught a corner of the mainsail and it, too, shredded.

A collision, a man overboard, and $40,000 worth of sails blown to tatters in about three minutes: What fun!

That sort of mayhem may be enough to convince potential challengers to the next Cup regatta, three years away in Valencia, Spain, they might have a chance to win. A year ago, the specter of a pair of billionaires elbowing everyone out of the pool left many wondering whether anyone else would enter the fray for 2007.

Now Alinghi looks slightly vulnerable and Ellison, with all his insecurities, may peak early. Team New Zealand has mounted a serious challenge with two strong sponsors and $100 million Kiwi dollars in hand, while South Africa, France, Italy and England all have prospects.

And now Coutts, who hasn't lost a Cup race in a decade, is on the loose.

Or is he?

The spinnaker on BMW Oracle, left, bursts in a race against America's Cup champion Alinghi in the UBS Trophy race. Each boat had 115-foot-high masts.