The penalties were announced Tuesday by an international jury that has spent four weeks investigating illegal modifications of prototype boats used in warmup regattas last year and earlier this year.
Oracle Team USA, owned by software billionaire Larry Ellison of Oracle Corp., must win 11 races to retain the oldest trophy in international sports. Team New Zealand must still win nine races to claim the silver trophy.
The first two races are scheduled for Saturday on San Francisco Bay.
Dirk de Ridder, who trims the wing sail on the high-performance, 72-foot catamaran, is barred from sailing in the regatta, and two shore crew members also have been expelled. Grinder Matt Mitchell has been barred from the first four races. Sailor Kyle Langford was given a warning, and another sailor, identified only as Sailor X, had his case dismissed.
Top members of the syndicate, including CEO Russell Coutts, skipper Jimmy Spithill and tactician John Kostecki, were not implicated in the scandal, which involved 45-foot catamarans that were prototypes for the 72-footers being sailed in the America's Cup regatta.
"The rules infractions involved only a few of our 130 team members, and were done without the knowledge of either our team's management or the skippers who were driving the boats," Coutts said in a statement released to The Associated Press. "While we disagree with the unprecedented penalties imposed by the Jury, we have no choice but to make the necessary changes to personnel on our race boat and do our best to use the next four days for the new team to practice and get ready for the start of the 34th America's Cup."
Last month, Coutts called the illegal modifications a "ridiculous mistake." They involved adding about five pounds of ballast on two of the three boats sailed by the syndicate in the America's Cup World Series.
The jury had harsh words for de Ridder, saying it was "comfortably satisfied" that the Dutch sailor "gave the instruction to add the weight, knew the weight had been added, knew it was a breach of the aC45 class rule and "did not tell the truth in the hearing in this regard."
Although the infractions were from the America's Cup World Series, those races were considered to be held under the overall umbrella of the America's Cup.
Oracle Team USA also was fined $250,000.