All sailors aboard the 80-foot yacht were rescued. A salvage crew with a crane and air bags was headed to the scene, said Cathy Harvey, who works for Conner at his Long Beach compound.
The boats typically have crews of 16, but it was unclear how many were on the boat during Tuesday's training sail. It was unknown if Conner was on the yacht.
He was at the site helping with the recovery operation, Harvey said. Conner rarely sails on his America's Cup boats anymore and instead spends his time raising money for his $40 million America's Cup budget.
The yacht sank around 1:10 p.m. in 55 feet of water after the rudder broke and left a hole that was too big for pumps and air bags aboard the boat to stop, said Bill Trenkle, a member of Conner's crew since 1980.
"All the guys are fine," Harvey added.
Conner, 59, America's best known sailor, has won the America's Cup four times, but not since 1988. He's also lost it twice.
It was Conner's newest boat that sank, Stars & Stripes USA-77. Chistened May 26 in Long Beach, it would likely have been his primary racing yacht in the upcoming America's Cup competition.
Conner's crew has been training off Long Beach since February for America's Cup trials that begin Oct. 1 in Auckland, New Zealand. It will be Conner's unprecedented ninth appearance in the international competition.
The only other America's Cup yacht to sink was oneAustralia, which cracked in two and sank off San Diego during a challenger series race in March 1995. All 15 sailors were rescued after that mishap.
America's Cup contenders can race only one yacht at a time.
Conner still has a second boat, Stars & Stripes USA-66, launched in February, that could compete.
Harvey declined to comment on what impact the accident would have on Conner's participation in the America's Cup. The team will not know the extent of the damage until the boat is recovered and examined, she said.
When the hull cracks or is puntured, the entire boat can be dragged down by the 20-ton lead keel bulb that hangs about 14 feet beneath the water line. America's Cup boats can weigh as much as 50 tons, with much of that weight in the keel bulb needed for stability while sailing upwind.