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"We're financially healthy," declares Zak Brown

NEWS STORY
04/08/2020

Hit particularly hard by the pandemic, in terms of the inability to go racing - and thereby earn - McLaren also experienced serious drop in demand for its road cars, which saw revenue in the first three months of the year crash from 165.3m ($217.7m) to 103.5m ($136.2m) while its pre-tax loss rocketed by 600% to 125.8m ($165.6m).

The company subsequently secured a 150m loan National Bank of Bahrain which, among other things brought to an end a legal case which had seen the company go to court to challenge a number of bond holders who had blocked plans to raise funds against the F1 team's historic car collection and the group's factories.

Weeks later, having announced a new deal with former partner Gulf Oil and running third in the team standings, Zak Brown has cause to smile.

"I think we're in quite a good position now," he said. "The bad news is behind us, as far as it relates to all the stuff that played out the last couple of months. We're financially healthy.

"I think we're benefitting from being aggressive and playing offence when COVID hit," he continued, "as far as recognising the severity of the issues it was going to cause for the sport and for us, and so we ran towards the problems to try and address them quickly, so we can kind of try and turn the page commercially.

"We've just announced Gulf Oil and Iconix, we have are a couple of announcements coming up, so we're now exactly where we want to be. Looking forward I think we're sitting on a better business model for F1 and for McLaren for the next journey of F1. We're in quite a good spot, and spirits are high.

"All the deals that we've announced are real, substantial, the right size relative to the size of the arrangement," he added. "Otherwise, I think if you do partnerships in place that aren't healthy, then it kind of messes up your business plan and bites you in the ass in 12, 24 months time.

"We've got our plan, and we're sticking to it," he insisted. "I think sponsorship is always hard, even in the best of times. I think next year will be soft.

"I am finding, unlike the financial crisis in 2008 where everyone just stopped, that people now are dealing with COVID and recognising that we might have to deal with it beyond December 31, and therefore what I'm seeing is people are getting back to business, they're doing business a little bit differently. Digital and social media, things of that nature, which I think we're extremely good at, have become that much more important.

"That's kind of replaced - in the short term - hospitality," he admitted. "But short of hospitality, we're still delivering hundreds of millions of eyeballs, still business to business relationships, still great content. We're able to deliver the majority of the sponsor benefits, and it feels OK.

"We've got a lot of conversations going, so I'm expecting maybe a little bit slower growth rate than we would have anticipated for '21, but we're OK."

Indeed, the American admits that plans for improvements to the facilities at Woking, which had previously been shelved, are now looking likely to get the green light.

"We're moving forward," he said. "Everything that we need for the future is on plan. We've turned projects back on. So we've got a timeline and very comfortable that we've got the investment in what we need in the right places in the right timeline.

"We're coming out of COVID... and now moving forward with our, our master plan, if you want to call it that."

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1. Posted by Greg, 04/08/2020 17:06

"Great news indeed. Hopefully they are there for the long run"

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