In the last 16 months, McLaren has shown an incredible recovery, both on track and behind the scenes, where it has achieved remarkable financial stability after being on the brink of financial collapse just four years ago. To save the team, a series of key interventions were necessary to get it back on track. These efforts have put it in the running for its first Constructors’ Title since 1998. Zak Brown faced the toughest challenge of his career.
“When I joined, I had no idea how severe the situation was because for me, McLaren had always been synonymous with power,” Zak Brown said during an interview with the New York Times. “It couldn’t be that disastrous.” But the reality he found was very different: the team had just experienced the worst year in its history, the car lacked significant sponsors, drivers weren’t interested in racing for the team, and the work environment was demoralized and lacking proper leadership. “There was a lot of criticism, conspiracy theories, and a widespread lack of trust,” Zak Brown continued jokingly, “other than that, everything was perfect!”
It soon became clear that the team had lost its way, resulting in a chaotic and negative environment. It took time to straighten things out, make the necessary changes, and create a new leadership group, step by step. With the right team, Zak Brown was convinced that McLaren was finally “heading in the right direction.” “And then Covid hit.” Even though F1 managed to resume races in 2020, it did so without spectators and under strict restrictions imposed by the FIA. With a drastic reduction in revenue, McLaren was forced to take drastic measures, including layoffs and selling some assets, to survive.
“When I started, we were losing more than 100 million pounds a year,” Zak Brown said. “I was protecting the team by saying ‘Everything’s fine,’ but it wasn’t. We were in a very dire financial situation.” Just as the team was beginning to see improvements, both on track and financially, the pandemic hit hard. Sponsorships stopped, and prize money was drastically reduced. This almost led McLaren to bankruptcy. “We were a month or two away from bankruptcy.” – he admitted.
The situation was resolved thanks to the sale of 15% of the team to the investment fund MSP Sports Capital, which injected 185 million pounds. Additionally, the McLaren Group sold its Technology Centre in Woking for 170 million pounds, signing a 20-year lease. “I always had faith that we would find the necessary money or that the shareholders would step in,” Brown explained. “I was under pressure, but I was confident that we would make it, and that’s what happened.” – the CEO of McLaren concluded.
Today, McLaren is making a profit and expects to achieve record revenues of over 500 million pounds this year.
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