F1 | Zak Brown: “I look at where we are 12 months on, it’s night and day."
Zak Brown has reflected on his biggest McLaren Racing deal to date and how that brought a new lease of life to the financially hit legendary F1 team
McLaren Formula One Team was recently voted as the favourite F1 team following responses from more than 167,000 fans in 187 different countries commissioned by Motorsport Network in partnership with F1 and Nielsen Sports. McLaren is a now a very settled team with a strong driver pairing in Daniel Ricciardo and Lando Norris. Meanwhile, the leadership of Zak Brown and Andreas Seidl bodes well for a strong future. All of this is a far cry from the situation of just over a year ago as explained in comments shared by McLaren Racing CEO Zak Brown in a detailed breakdown first published on therace.com.
2020 started with great panic and unrest in the wake of the Covid-19 pandemic. The impact was felt in every industry and the McLaren Group found itself in financial turmoil. With a Formula One season yet to start in 2020, there was talk of potential insolvency for the parent company. As a way to keep the wolves from the door, there was a pressing need to conclude the eventual sale of a significant minority stake in the McLaren Racing division.
McLaren Racing CEO Zak Brown has spoken openly in comments published on the-race.com about a most trying time for the Woking-based team: “Ultimately, we were fighting for survival.” A terrifying prospect for such a legendary Formula One constructor.
McLaren has true F1 pedigree after being founded by New Zealander Bruce McLaren in 1963. The team made its first F1 appearance at the Monaco Grand Prix in 1966. Then in 1974 would go on to claim its first F1 Drivers’ Championship and F1 Constructors’ title. To date McLaren has won 12 F1 Drivers’ Championships and 8 F1 Constructors’ titles but in early 2020 its very existence was on the line.
In December 2020, after a season of uncertainty, McLaren Racing agreed a £185m buy-in from MSP Sports Capital. This gave the consortium of US sports investors an initial 15% stake rising to a maximum of 33% by the end of 2022.
At the time of the deal Zak Brown said:
“This investment represents a key moment in the progress of McLaren Racing. MSP Sports Capital is first and foremost a sports investor. They know the market and their team has considerable experience and proven success in global sports properties. They are a partner as much as a shareholder, with the ability to leverage their network and knowledge for the long-term benefit of McLaren Racing.”
Now, in his comments to the-race.com it has been announced as to how Zak Brown considers this end of 2020 deal to be the biggest of his time at McLaren. Big words indeed from the man who joined the company as executive director in December 2016 a week after the departure of legendary team boss Ron Dennis.
“Without MSP’s investment we might not be sitting here,” says Brown. “Now we’re sitting here extremely healthy, having just bought an IndyCar team, and we started an Extreme X team. We’re fighting Ferrari, we’ve got great drivers, we’ve got a great team, we’ve got a wind tunnel coming.
Even though McLaren eventually lost out on third place in the 2021 Constructors’ championship to Scuderia Ferrari, they did have some fun on the Prancing Horse’s home turf. McLaren returned to winning ways at The Italian Grand Prix with Daniel Ricciardo on the top step and his teammate Lando Norris in P2. McLaren was the only constructor to achieve a 1’2 in 2021 (the 48th of its history) and this no doubt fills the team with confidence moving on in 2022.
“I look at where we are 12 months on, it’s night and day.” Brown remarked.
A well measured summary seeing how in the peak of the COVID-19 crisis McLaren had to survive by making redundancies in its Racing division as well as the wider company.
However, help was also on hand from majority owner Bahrain’s Mumtalakat group as they secured a $150m loan with Bahrain’s national bank to keep things afloat for McLaren. Nevertheless, to challenge at the front and not just battle in the midfield, more investment was required – hence the vital part MSP played and why Zak Brown regards the deal so highly.
Changes continued afterwards with a somewhat strange scenario seeing the legendary futuristic MTC being sold and leased back to McLaren on a long-term deal to raise more funds. The keen observer would have previously spotted the base in Hobbs & Shaw as the villain’s lair in the spinoff from the Hollywood franchise of Fast and Furious movies. Further movie appearances may be approved to keep cash coming through this avenue.
With many problems being faced by the Woking-based team at the time, now that the dust has settled, the-race.com posed the question to Zak Brown as to whether McLaren Racing was as insulated from the McLaren Group’s issues as appeared to be made out? Or was it more serious?
“It was pretty serious,” said Brown. “It was pretty serious. I’m sure we would have found a way through it… but it was pretty serious.”
Zak Brown was figuratively steering the McLaren ship and as every captain knows, sometimes information is best on a need-to-know basis. So proved to be the case at McLaren when Brown chose to shoulder a lot of the worry himself. This meant that he was not his usual self-confessed “transparent” self when sharing situations with his team. As it turns out though, the press was dangerously close to the truth and Brown has revealed that the stories in the media of McLaren Group being in such a severe financial crisis were “90% accurate”.
“That was very difficult,” Brown said. “We were in a situation where the race team was performing but I was well aware of the financial challenges we had at a Group level, which rolled down to Racing. And I didn’t want the racing team to lose its focus and momentum and be concerned by something that was out of their control. So that was a lot of weight on my shoulders and my leadership team’s shoulders because they were aware of ‘how do we keep the momentum, enthusiasm, excitement that we got going on, while we know there’s a huge storm coming but they can’t do anything about it’.
Zak Brown’s next remarks should be well noted by leaders of any industry and in any walk of life.
“That’s our job as a leadership team at times to insulate. And we worry about things they can’t worry about. Sometimes they worry about things I can’t have any influence over, what’s going on in the garage – I have total trust that whatever they’re worried about, they’re on it. And I think they have total trust that whatever myself and my leadership team are worried about, we’re on it.
“I’m really pleased with the outcome because now we are just very healthy and don’t have any worries. [But] we were not in good shape until we brought the investment on from MSP, which is something that I’d worked on for six months.”
No wonder Zak Brown is so proud of getting the MSP deal across the line at the end of 2020, the impact is evident.
“I sit back, 12 months on, knowing how fragile we were,” Brown reflected. “So even though on track we were doing strong, I knew and my leadership team knew, the shareholders knew what a fragile state we were in. Trying to find the balance between full throttle and fighting for survival at the same time without letting the world know, even though the media was reporting about it and it was getting closer and closer and closer, that was a highly stressful time.”
As with any storm though, once you make it through, the calm environment returns and so it proves to be the case now at McLaren – hence Zak Brown no doubt feeling he can now share the inside story of the past year or so in such an open manner.
“Now that we’ve gone through it is highly rewarding and highly motivating and has made the team stronger because I think everyone actually kind of knows now, and it’s given everyone a boost of energy that we could survive that.
“What doesn’t kill you makes you stronger.”
The outlook for McLaren as a whole is very bright indeed and this is unsurprisingly not lost on its CEO:
“We’re back to having the level of resources that you came to know McLaren to have,” Brown concluded. “We are now fiscally one of the big four [along with Mercedes, Ferrari and Red Bull]. When I started it drove me crazy, we were talking about the big three, the big three, the big three. And it was like, the McLaren I knew growing up was like the big one! Or it was us and Ferrari. I can comfortably say, while we have some catching up to do with all of our technologies, there’s no resources that the other three don’t have.”
The timing of F1’s effective reset in 2022 could not be better for McLaren.
Lando Norris has more than shown his ability and was cruelly denied a maiden F1 win at the unforgettable rain-hit Russian Grand Prix in 2021. Meanwhile, Daniel Ricciardo after a sporadic season of form achieved his previously mentioned F1 Grand Prix victory in Italy, nonetheless.
The 2022 season has all the prospect of being another unforgettable season and with a legendary F1 team returning to battle at the front of the grid creating ‘the big four’ - the news will no doubt whet the appetite of many a race fan.
McLaren has the drivers; McLaren has the funds; McLaren has the leadership. McLaren has to be one of the favourites for Grand Prix victories in 2022. Not many people would have said that a year ago so one can only imagine what people will be saying a year down the line.
