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McLaren’s Zak Brown has never seen Formula 1 so hot, ever

Gianfranco Tripod

Zak Brown became CEO of McLaren Racing in 2016, just at the lowest of the legendary racing team [fig. 1]. He had already made a name for himself (and a fortune) with his motorsport marketing company, Just Marketing International. He knows the world of motorsport intimately.

Road & Track: It looks like a good time in Formula 1 – and really in all professional racing series – in terms of business. Is it as good as it looks?

Zack Brown: Yes. I also agree with your overall comment, on motorsport in general. I have never seen Formula 1 so hot, ever. I’ve been managing McLaren for six years, but I’ve been in the sport for 25 years. It is a fact, not an opinion. TV ratings are up. Record number of Grands Prix, more people want more Grands Prix than we can organize. The teams want to enter the sport, new manufacturers at the door: Porsche, Audi. The digital numbers are through the roof. Corporate partnerships with the biggest brands in the world are on fire, brands that historically haven’t been in the sport: Google, Goldman Sachs, Cisco, Dell, Coca-Cola. All races are sold out. Sport is on fire.

R&T: Is it a blip or can the success continue?

ZB: This is the part that excites me the most. I think it will only get stronger. The race will get closer because of the cost cap. The 10 teams have never been healthier, and they are now owned by people and groups who can afford to be in Formula 1.

R&T: And the average value of an F1 team has increased significantly since the budget cap came into force.

ZB: Massively. I think we are also going to see better racing, as this is only the first year of the new regulations. What happens is that as the rules stabilize, everyone catches up. Over the past 20 years, two teams have always fought for the championship. For the past 10 years, it was almost a team with two teammates fighting for the championship. I think when the race is more competitive it will increase the number of spectators, which means more media, which means more sponsors, which means more countries will want races. It’s just going to keep building this big momentum. So it’s the budget cap and all that Liberty [Media] did to fix the economic structure of sport. And we just signed a new TV deal in America [with ESPN] it is twenty times.

R&T: Speaking of television, the average viewership for Formula 1 racing in the United States has increased by 54% from 2020 to 2021. This must have a profound effect on sponsorship.

ZB: One hundred percent. You have three sources of income: you receive money from Formula 1, you receive money from your sponsors, then licensing and digital, etc. Just over half of our revenue comes from our business partners, and it has increased fivefold since 2016.

R&T: Is there a sponsorship synergy between F1 and IndyCar that gives McLaren a financial advantage?

ZB: Yeah absolutely. This is one of the main reasons we acquired a Formula E team from Mercedes. We were the first, and only at this stage, [F1 team] in Extreme E. We are the only F1 team to have an IndyCar team. Our logic is there, no matter how big Formula 1 is in North America, we want to have the biggest North American platform because of how important this market is to the majority of our corporate partners and fans. When I look at our racing portfolio, Formula 1 is our center of gravity, but then IndyCar allows us to connect to North America, and Formula E and Extreme E allow us to shine a light on the commitment of our partners towards sustainable development. They are all very complementary in trying to create the most exciting racing team in the world.

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