$236m Lifeline Saved McLaren from Bankruptcy and Pushed Them Back to F1 Success

Alex Harrington | Dec 7, 2024

May 5, 2024; Miami Gardens, Florida, USA; McLaren driver Lando Norris (4) celebrates with his team after winning the F1 Miami Grand Prix at Miami International Autodrome. Mandatory Credit: Peter Casey-Imagn Images / Peter Casey-Imagn Images

In a remarkable turnaround that speaks to both astute financial management and team restructuring, McLaren Racing has successfully navigated its way from the brink of bankruptcy to re-establish itself as a frontrunner in Formula 1. At the heart of this resurgence lies a financial lifeline: a $236 million investment from MSP Sports Capital in December 2020, which allowed McLaren to scale back from the precarious edge of financial ruin and now lead the Constructor's Championship.

Back in 2020, the world of Formula 1 was not immune to the pervasive impacts of the COVID-19 pandemic. The disrupted season resulted in reduced revenues, a financial blow that nearly spelled disaster for the historic McLaren team. Known for its long-standing presence and legacy in the sport, the Papaya outfit found itself struggling with financial insecurity, seeking refuge in financial support to sidestep bankruptcy. To combat these challenges, McLaren secured a crucial financial injection from MSP Sports Capital, along with additional investments to improve its liquidity and stabilize operations.

This timely intervention valued McLaren Racing at £560 million and set MSP Sports Capital on course to eventually hold a substantial stake within the organization. Capitalizing on their deep expertise and experience across various sports industries, MSP's involvement was not merely a financial bridge but also an avenue for technical and operational improvements that have permeated McLaren's revived performance on the circuit.

McLaren's triumphant return to Formula 1 has manifested most notably during the final two seasons, where the team is vigorously competing against the likes of Ferrari. The team has impressively maintained their lead since the September race in Baku, far exceeding expectations set at the beginning of the year.

Zak Brown, McLaren's CEO since 2016, effectively steered the team through the turbulence of financial duress, ensuring that morale and competitive spirit remained intact while he swam through these challenges.

"I needed to protect the team from them being aware, so everyone could remain in the very positive energetic spirits they were in, because the team was progressing nicely. So it wasn't a comfortable place at all," Brown admitted about those testing times.

In conjunction with financial stability, McLaren implemented significant changes to elevate performance and competitiveness. Andrea Stella's promotion to principal in 2022 was a strong internal decision that harnessed leadership and tactical advancements from within. Meanwhile, the partnership of young talents Lando Norris and Oscar Piastri on the track has further accelerated McLaren's resurgence.

With a past decorated by legendary drivers and 8 Constructor championships, the expectations are immense. Brown summed up their journey: "We've come from the brink of insolvency to five race wins, second most podiums consecutively in the history of McLaren, gone down to the last race against Ferrari and beaten Red Bull and Mercedes."

"We're trying to do what got us here this weekend and not kind of race differently, not think about the championship."

While the possibility of not clinching the current championship remains a strong reality, McLaren isn't naive. Brown said: "We'll be massively disappointed to not win it but if that unfortunately happens we need to shift quickly to look at what we've done this year and where we've come from."

He ended: "If you'd told me at the beginning of 2023, I'd have bit your hand off."