Police have named the two victims of a yachting accident off the NSW south coast.

Experienced sailors Sally Gordon, 47, of Darling Point, and Andrew Short, 48, of The Spit, were pulled unconscious from the water early on Saturday morning, but couldn't be revived, police said.

Mr Short - who was the owner and managing director of Sydney-based boating business Andrew Short Marine - was a man who dedicated his life to the sea, colleagues say.

ninemsn understands Mr Short was a married father-of-three whose wife Kelly was also involved in the business.

A colleague of Mr Short's said the skipper had been involved in yaching all his life.

"We are still in shock here, all we are hearing is just what is on the news," he told ninemsn.

Mr Short and Ms Gordon's yacht, Shock Wave, sponsored by PriceWaterhouseCoopers, crashed into rocks off Flinders Islet and ran aground at about 3am (AEDT).

The 16 surviving crew members were rescued and taken to Wollongong hospital suffering minor injuries and hypothermia.

The yacht carrying 18 people hit rocks at Flinders Islet off Port Kembla early on Saturday during a race from Sydney to the island and back, police said.

A police and emergency services rescue began shortly after 3am (AEDT) on Saturday after authorities received a number of distress calls about the 24.4 metre yacht PriceWaterhouseCoopers.

Mr Short and Ms Gordon died after they were pulled from the water by crews from Sydney yachts Ragamuffin and Quest, now moored at Wollongong Harbour.

Fifteen survivors managed to make it onto the island and were later winched to safety by helicopter during the three-hour rescue operation, police said.

They were taken to Wollongong Hospital suffering a range of minor injuries and hypothermia, while a 14-year-old boy sustained burns to his hands, Ambulance Service of NSW said.

Another man was pulled from the water by water police and his condition is unknown.

The 92 nautical-mile Flinders Islet Race started off Point Piper on Sydney Harbour at 8pm (AEDT) on Friday.

The yacht ran aground about seven hours into the journey, and activated a series of red flares about 2.55am (AEDT) on Saturday, which were noticed by competing vessels.

Race organisers, Cruising Yacht Club of Australia (CYCA), said the Australian Maritime Safety Authority (AMSA) - which sent a rescue helicopter - and Wollongong water police were alerted and began searching the area.

Ragamuffin and Quest went to help the PriceWaterhouseCoopers' crew, CYCA said in a statement.

Sydney yacht Yendys also detoured to help their competitors.

Navigator Will Oxley said the crew of Yendys saw three flares as they were approaching the island.

"We saw torchlight in the water too and people on (Flinders) Islet. We knew something was wrong, so we tacked towards them to see if we could give assistance," he said in a statement.

"Ragamuffin and Quest were there too. (The yacht) Loki (Stephen Ainsworth, of CYCA) had rounded the Islet and was six miles away, but radioed to see if they could help."

Detective Superintendent Mark Hutchings said the rescue mission was extremely difficult.

"Waves were about 2.3 metres, the sea was sloppy, but the wind was quite calm," he said.

"I want to thank everyone involved in what was an extremely difficult rescue mission that was handled very professionally."

Investigations are continuing and Maritime Area Command police are preparing a report for the coroner.

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From News.com.au

Tragic last words of champion skipper in yacht race death

THE last words of veteran ocean racer Andrew Short were something his crew had never heard him utter before: "Help! Help!''

Mr Short yelled them after huge waves smashed his 80-foot yacht in the pitch-black night.

He had been standing at the wheel, desperately trying to get off a rocky reef near Wollongong, but the power of the ocean was too strong, The Sunday Telegraph reports.

Mr Short, 48, of The Spit, and his friend and fellow experienced sailor Sally Gordon, 47, of Darling Point, were washed overboard.

Their bodies were recovered by two of the 21 other yachts taking part in the overnight race from Sydney to Flinders Islet.

Mr Short's 19-year-old son Nicholas was also washed into the sea but was saved.

Another son, 14-year-old Mitch, was among 15 crew members who survived after somehow scrambling onto the rocky shore of the tiny outcrop. He suffered rope burns to his hands.

Ambulance paramedics in a rescue helicopter later winched the 15 to safety in a three-hour operation.

It is the worst ocean-racing disaster since six men lost their lives in the Sydney-Hobart race 11 years ago.

Mr Short and Ms Gordon both survived the 1998 race.

Matt Pearce, one of the rescued crew, told how Mr Short, a veteran of 15 Sydney-Hobart races, was last seen trying to stay afloat.

"I heard him say, 'Help! Help!' - this from a man who never asked for anything,'' Mr Pearce said. "He was so tough. To hear him saying `help' was devastating.''

Mr Short's yacht PricewaterhouseCoopers, formerly known as Shockwave, was rounding a mark off Flinders Islet when a series of waves hit it.

"All of a sudden, these couple of sets broke in front of us and out of nowhere I saw the reef,'' Mr Pearce said.

"The bow came down, and we hit the ground hard. We tried to get off, but the keel was on the bottom.''

The crew pulled down the yacht's sails and started its motor in a bid to stay clear of the rocks.

"The boat gybed and the rig (mast) snapped and went over the side,'' Mr Pearce said.

"The boat came back over the other side, and a couple more waves broke on the boat ... there was two metres of green water slapping the boat, dragging people out.''

Mr Pearce said he saw Ms Gordon washed overboard and Mr Short holding the steering wheel before the enormous force of a wave washed it off its pedestal, and the skipper overboard with it.

"I didn't see him again. Then the boat just got lifted up (by a wave) and landed on the island on its side. We had a 30-second window of opportunity, and we all jumped.''

Mr Pearce said the next few minutes were a blur of chaos.

"This big set came in and just grabbed it (the yacht). It just destroyed it.

"It took five minutes, and the boat was gone.''

Sailors who had gone to the aid of the yacht when they saw flares indicating it was in strife said they were staggered at the amount of debris in the water.

Mr Pearce said he firmly believed he and his fellow survivors were lucky to be alive.

"Thirty seconds from death, yes,'' he said simply.

The sailing community was yesterday struggling to come to terms with the loss of two of its most popular members.

Mr Short last year took Shockwave to fourth place in the Sydney-Hobart race.

He and Ms Gordon were again planning to sail in this year's event.

Ms Gordon, also a veteran of 15 Sydney-Hobart races, had been due to sail in the World Masters Games tomorrow.

In 2000, she won the Ocean Racing Crew Person of the Year award.

Cruising Yacht Club of Australia Commodore Matt Allen said the race conditions had been benign and did not explain why the yacht had found itself in trouble.

"There were only moderate winds and a moderate swell. The experience of the crew was enormous,'' he said.

Police have launched an investigation into the crash.

Inspector Jennifer Thommeny, of the Marine Area Command, said investigations would focus on all circumstances leading up to the incident, including the construction of the yacht and the weather conditions.