£185m cash boost means F1 team 'can now have its cake and eat it' - McLaren
£185m cash boost means F1 team 'can now have its cake and eat it' - McLaren
McLaren is now in a position where it can 'have its cake and eat it' in the wake of the financial shot-in-the-arm that has re-energised the Formula 1 team.
That was the message from McLaren Group executive chairman Paul Walsh following US-based sports investment group MSP Sports Capital's £185million investment that has acquired an initial 15% stake in McLaren Racing, rising to 33% by the end of 2022.
MSP, that already operates in Major League Baseball, the National Basketball Association, ESPN, and sports management, will be co-investing with strategic partners UBS O’Connor and The Najafi Companies.
Walsh claimed it was "hypothetical" to suggest the Racing arm of the organisation would have gone under but for MSP's interest, however, it is clear without the cash injection the F1 team would undoubtedly have struggled to initially compete and then survive.
"If we look back to the impact of the pandemic, we stopped making cars because our factory was locked down," said Walsh in a press conference attended by GPFans Global.
"If you don't make cars, you don't sell them. If you don't sell them you don't get the cash flow in. Yet equally we have our racing team that was continuing to spend money, as they should.
"That tension made everyone acutely aware that the fundamental model needed adjustment. Now we could have just trimmed our sales, we could have just dialled [CEO] Zak [Brown] back on the money that he could spend.
"But then we would also have had to be true to ourselves that we would be dialling back on our ambitions, and we didn't like that.
"So basically, what we tried to put in place here is how can we have a fiscally appropriate model for the Group, but also equip Zak and the team to go and win, and that's what I think we've accomplished.
"You can speculate that in four years' time had we not done this what would have happened. I don't know.
"But here we have our cake and we can eat it, and we can play to win."
Walsh added that "in essence" the deal had "fundamentally ring-fenced racing, so cash requirements for the next two to three years the McLaren Group does not have to worry about".
McLaren has made significant progress on track this season to the point where it goes into Sunday's season finale in Abu Dhabi just 10 points shy of Racing Point in the lucrative fight for third in the constructors' championship.
Without investment, Brown has conceded it would have been "extremely difficult" for McLaren to make any further progress.
"When Paul talks about the urgency of timing, we effectively hit the pause button because if you are not investing and moving forward in Formula 1, you are effectively going backwards," said Brown.
"To be fighting for third place going into the last race in Abu Dhabi is a testament to how awesome the team has performed.
"We need to continue to make investments and be as prepared as possible going into the cost cap, and now we are able to do that.
"But as Paul said, had we not been in a position to invest, I think we would have had to lower our ambition, which is not the ambition of any of us here, and certainly not for our shareholders.
"But now we have the investment to invest in our people and the technologies we need to keep driving forward."
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