close global

Welcome to GPFans

CHOOSE YOUR COUNTRY

  • NL
  • GB
  • ES-MX
  • US
  • GB
McLaren investors MSP "bet" on franchise value created by F1 budget cap

McLaren investors MSP "bet" on franchise value created by F1 budget cap

McLaren investors MSP "bet" on franchise value created by F1 budget cap

McLaren investors MSP "bet" on franchise value created by F1 budget cap

MSP Sports Capital principal Jeff Moorad has described the company's investment in McLaren Racing as a "bet" with the incoming budget cap expected to increase the "franchise values" of teams.

McLaren announced the £185 million sale of an initial 15 per cent stake in its Racing division to MSP in early December.

After the signing of the new Concorde Agreement in August, a deal signed by all 10 existing teams, outgoing Formula 1 CEO Chase Carey described the team as "franchises that have franchise value".

The model of a team being a franchise is more commonly seen in American sports than in Europe, with NFL teams, in particular, known for changing city or state - most recently the Oakland Raiders moving from Oakland, California to Las Vegas, Nevada where they will become the Las Vegas Raiders.

With the introduction of the $145 million [£119 million] budget cap for 2021, a part of the Concorde Agreement, Moorad believes the value of teams will soar.

“The truth is that we believe that Liberty’s business plan of creating more franchise-like values on the teams are going to flow in part from the cost cap that is now in place [and] the driver salary cap to the extent that this becomes a reality," he said.

“All of these are pieces of, I think, a thoughtful business plan that will ultimately create franchise values for each of the teams in the sport. That’s our bet.”

By the end of 2022, MSP's stake in McLaren Racing will stand at 33 per cent but Moorad was non-commital on whether any further investment would be forthcoming after this date.

He added: “We’ve not discussed any plans to invest beyond the commitment we’ve made and anything’s possible.

"But at this point, we are quite content with the terms of the arrangement we’ve put in place and are excited to support the business.”

Related

F1 team boss reveals KEY Piastri turning point
Latest F1 News

F1 team boss reveals KEY Piastri turning point

  • March 23, 2024 14:57
McLaren announce MEGA deal for key F1 star
Latest F1 News

McLaren announce MEGA deal for key F1 star

  • March 22, 2024 09:40
Do Not Sell My Personal Information
Ontdek het op Google Play