“We needed to reboot”: McLaren’s Zak Brown talks to RaceFans

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It’s day two of this year’s first pre-season test. I’m in McLaren’s hospitality suite, awaiting McLaren Racing CEO Zak Brown. He hadn’t planned on granting one-on-one interviews, but made an exception to discuss the team’s rebuilding programme with RaceFans.

McLaren had clearly learned from last year: having ditched Honda in favour of Renault, the team was bullish about 2018. But, as the record shows, in terms of hard results 2018 was little better than the year before.

So I wonder how Zak will play it. How does he plan to push the team forward to the stated objective of race and championship-winning form without raising expectations uncomfortably high?

“Our expectations are the same as everyone’s expectations of McLaren expectations,” Zak says without hesitation. On first hearing it sounds like gobbledygook from the American sponsor guru turned team boss. But his statement adds up: there are expectations, and not only inside McLaren. F1’s second-oldest continuously-running team – after Ferrari – carries the weight of expectation season-in, season-out, regardless of reality.

“Our expectations are to get back to winning world championships. But what we want to do is manage our own expectations on the journey that’s going to take us there. The desire’s there, the expectations are there, but it’s going to be a journey and we needed to reboot, which we’ve now done.”

Given that he has now been with McLaren for a touch over two years, how far into this journey towards redemption is the team?

“We don’t yet still have all the people that are to come, to lead the journey. Specifically Andreas Seidl [managing director of the F1 operation] and James Key [F1 technical director].” Note those titles, as Brown is responsible for McLaren’s full spectrum of racing activities, not only F1. For example, ex-Force India deputy team principal Robert Fernley is responsible for the new IndyCar project, reporting to Brown.

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James Key, 2018
James Key arrives at McLaren later this month
Clearly Brown rates Seidl and Key highly enough to be prepared to hang about for eight months for their respective ‘gardening’ vacations to end. But these are just two of a raft of appointments he has made since sliding his feet under the table. Engineering director Pat Fry has returned to the team, while former IndyCar team boss and Indianapolis 500 winner Gil de Ferran moved seamlessly from consultant to sporting director for all racing genre.

Seidl starts on May 1st; following this interview the team confirms Key’s start date as March 25th. McLaren’s building blocks are gradually falling into place.

“So I think we’ve [now] got the talent. Andreas, who’s an engineer by trade and a very determined individual, I think he’ll do an excellent job with James, Pat, Andrea Stella [performance director], Simon [Roberts, the team’s long-standing operations manager], and Gil.

“We’ve made all the other changes, so I think we’ve got our team now. But it’s going to now take time for that all to come together, and then the headwinds that we face by being outspent five to three by the other three teams, that needs to correct itself with the [2021] Liberty rules.”

Is he’s downplaying the team’s budget? There is a touch of reality to that comment, as our team budget comparisons prove. Against that background, what timeframe does Zak foresee before McLaren is once again a genuine title contender?

“I think it would be unrealistic (that word again) to think a championship is on the cards in the next few years. I think what we’re trying to set on ourselves is that we just continuously move forward, but we haven’t said, ‘here is the championship’ or ‘there is the championship’.

“It’s constant forward progress. We also have two new drivers, one is brand new to the sport, so that’s a journey. It’s all about planting the seeds, then watering the plant.”

Fernando Alonso, McLaren, Albert Park, 2018
McLaren flattered to deceive with fifth in Melbourne last year
Given where McLaren ended 2018 – sixth in the constructor classification – and the team’s stated target, would it be realistic to assume they’re looking at progressing at the rate of one placing per annum?

“I don’t think we’re going to be drawn on specific numbers. I think moving forward every year is our goal. We actually haven’t even really thought about that, in a numeric sense.”

We’re joined at the table by majority owner of McLaren, Sheik Mohammed of Bahrain. I wonder whether Brown will change tack in the presence of his ‘ultimate’ boss, but he continues without even a pause for breath.

I throw a curveball, curious to see how Mohammed reacts: Every season spent in the nether regions of the championship classification costs the team in lost revenues, both sponsors and F1 income. Mohammed watches intently as Zak responds: “Yes, of course obviously the better you do [the more money is earned].

“A couple of things on that one: One, we’ve got a very committed set of shareholders who have given us the remit to get back to winning races and championships.

“I’ve put together a five-year plan. We’re hitting sponsorship targets; we’re bringing on more partners than anyone else currently. We’ve had another very good off-season in that sense. Obviously [FOM] money this year is better than it was last year, finishing sixth. So I think we’ve internally set a realistic budget, realistic timeline, realistic on-track and off-track goals to get us back to fighting for the championship.”

As it turns out, last year McLaren received around $75m in FOM revenues after a lacklustre 2018, but this year should pull $100m if Liberty delivers as projected. Add in healthy boosts from various sponsors, including British American Tobacco and its ‘A Better Tomorrow’ message (believed to be worth upwards of $30m), and McLaren’s war chest looks stronger than for many seasons, including the lucrative but ultimately disappointing Honda period.

But the team faces three different challenges: a commercial restructure, internal reorganisation, and on-track performance. The team seems in good commercial health and personnel appointments are coming together. But on-track performance – which ultimately drives the ability to raise revenues – they are still a long way off race-winning pace.

There was a time when world champions lined up at McLaren’s door, begging drives. But who among them, with one on his way out, would drive for McLaren right now?

“I think, given where we’ve been – we’ve had a world champion up until last year – I think with this reboot and rebuild we know we’re not in a position today to compete for the world championship. So you’d rather take two drivers and bring them along that journey, because I think both drivers (Carlos Sainz Jnr and Lando Norris, for 2019) have tremendous potential.

“Also, you want to spend your money on what makes the car go fastest, and right now I think these are the investments that we’re making in the car and the team and the factory that will make a bigger difference . So I’m not concerned that we don’t have a current world champion, or even a race winner.

Lando Norris, Zak Brown, McLaren, Circuit de Catalunya, 2019
Norris has a stellar record from the junior categories
“We’ve got a rookie [Norris] in the car, so obviously he’s had no results other than being a champion in almost every series he’s been in. And then Carlos is very, very strong.”

I point out Fernando Alonso has departed F1 because he knows he has no realistic chance of winning another F1 title any time soon and had no other options available, and McLaren’s 2019 driver line-up is unique in that the pair do not have a podium place between them.

Zak responds that the former is a matter best responded by Fernando, but qualifies his comment: “Yeah, obviously if you’re a world champion you want to win the world championship next year…”

Complicating matters for McLaren is the question of F1’s much-vaunted budget cap. How can it plan a restructuring of this complexity in the knowledge that a budget cap is coming. In other words, how to ensure that quality rather than quantity of people prevails?

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Fernando Alonso, McLaren, Circuit de Catalunya, 2019
Alonso will race at Indy – and test McLaren’s F1 car
“I think we’re in a pretty good spot, depending on where the budget cap comes in,” Brown says in an obvious nod to the fact that F1 has less than two years to go until the cap is supposed to arrive, yet no levels have been decided. “We’re kind of playing around there [in terms of numbers] now, so you’ve got some teams that still won’t be able to get to it, and then you’ve got the other teams that are going to have to lay off hundreds of people.

“Depending on where Chase [Carey, F1 CEO] lands, I think we’re going to be doing fine-tuning. The other nice thing is it will be disruptive for employers – we’ve got a great automotive business that continues to grow, we’re doing the Indy 500 and maybe we’re going to do other forms of motorsport in the future.

“I think we’re also going to be in a [better] to address employee movements, headcounts, probably better than other race teams, which is great because I think if I’m working in a race team and I know three, four, five hundred people are going, that’s not going to be a great.”

In terms of the FIA’s International Sporting Code and in the absence of overriding agreements F1 is obliged to provide 18 months’ notice for major regulation changes, so 30 June for 1 January 2021 introduction. Is the sport in danger of rushing them through, possibly resulting in some unpleasant consequences?

“I think any time you have a rule change, for sure there’s going to be some unforeseen, unintended consequence. I think that’s inevitable. I think it’s about jumping on that as quickly as possible when that pops up,” he says.

“They’ve been doing a lot of work with teams and internally – I think we’re all hopeful that when they roll out the rules on June 30th they’re pretty buttoned up, but for sure there’ll be areas that need to be addressed.

Pierre Gasly, Valtteri Bottas, Sebastian Vettel, Circuit de Catalunya, 2019
F1 ‘spends way too much’, Brown reckons
“But they’ve been putting in a lot of work in for a long period of time. They haven’t shown much, so I think we’re all sitting here a little bit in the dark, but I’m hoping they’ve done a lot of work. They’ve wanted to intentionally keep everyone in the dark so we won’t then get too much of a head start.”

Consistent with that view, various potential budget cap figures have been mooted at different stages. What figure is Brown hoping those in charge of the sport settle on?

“I think this sport is spending way too much money. I think a 150 million budget cap, with what they are talking about being included and excluded, is achievable. It’ll be difficult, and difficult for everyone, but I think long-term it’s what’s best for the sport.”

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Then he expands on the topic, but adds a slight American twist: “At 150 million you should be able to get enough prize money and enough sponsorship to run at the budget cap and make money, no matter who you are. If you want to race at 130 and make 20 and not spend 150, you should be able to have that option, too.”

Is he suggesting that F1 teams should have the option of making profits, a status few if any consistently achieved over the past ten years?

“Yes, a race team should make a profit,” Zak says emphatically.

Why, then, do most folk in the paddock think making profits, in other words putting profits before performance, is a sin?

“I don’t! I mean, that’s why I think the budget cap should be down to 150 million. If you look at every other major sport franchise, they’re worth billions. And [F1] teams now are trading for administration. [Look at] Force India; Sauber was close to administration; Renault when it bought it from Lotus was in towering debt.

“Help me understand how the LA Clippers [basketball team], who are not a top team in the NBA, which is the third or fourth biggest sport in one country, is worth two billion dollars versus – I don’t think there’s probably a team in here worth two billion dollars in a sport that on the whole is much larger.”

Zak is clearly on a roll…

“If you want to run a Formula 1 team right now you have the privilege of burning through – pick a number: 50 million, 100 million, 200 million. And basketball teams, they don’t make a ton of money, but they’re great assets that appreciate, and they make money

“The [Liberty-owned] Atlanta Braves are worth 2.5 billion, they kick off at 20 million and free cashflow. If you own it, you know the franchise value is going to go up, and it’s going to pay for itself. Because I think fundamentally these race teams, given the size of the sport, you get a race team making 10, 20, 30 million or so, these teams should be worth a billion dollars, two billion dollars. But we’re a mile away from it.”

(When Liberty acquired the Braves from Time Warner in 2007, the franchise was valued at $450m.)

Lando Norris, McLaren, Circuit de Catalunya, 2019
McLaren has found some new sponsors
Is it not dreamland to believe F1 sponsors will happily shell out tens of millions in sponsors fees in the knowledge that costs will sink and teams turn a profit? In other words, won’t the rate card sink in sympathy with spend?

I sense a change of hats, from team boss trilby to salesman cap. “No,” says Zak, “I think the view is sponsors pay what it’s worth. When you buy that or I buy this or I buy this, I don’t decide what that watch is worth because of what its margin is. It’s worth it to me.

“I think sponsors pay based on value, not if I’m making 75 million and therefore ‘I’m going to pay less’. I think people buy based on value, not on ‘What’s that impact to your bottom line?’ Whether it’s a house you’re buying, or mobile phone.”

“It’s not like-for-like, so even though my sidepod is the same sidepod as nine others, [my pitch would be] ‘North America is big for you? I’ve got a North American proposition’ It’s our job to create a commercial proposition. If you’re shopping on ‘what’s the cheapest deal in pit lane?’ we’ll lose that deal every time. If you’re shopping for ‘what’s the best value?’ that’s the proposition McLaren’s coming from.”

It’s been a fascinating 30 minutes – Zak’s commercial brain ticks over like none other in the pit lane, and it’s been a lesson in selling to observe him overcome whatever “objections” or comebacks I’ve thrown at him.

He’s done it logically, persuasively, charismatically, and above all, in the process he’s thrown the gauntlet at the rest: The only way to survive in this business is to deliver performance and profit simultaneously while keeping expectations firmly in check.

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Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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30 comments on ““We needed to reboot”: McLaren’s Zak Brown talks to RaceFans”

  1. Nice article, Dieter. It definitely makes me view McLaren more sympathetically than I do seeing just a short one-liner/quote from Zak.

    1. Well said @phylyp

      It is also clear to me that McLaren and Renault are good partners, not just in PU terms, but also in how they see the sport.

      Haas might be a natural partner in this view, and they probably have things in common with Racing Point too (when the 2018 based payments are settled): potential, (re)new(ed) plan for progress, and a bang for buck mindset.

      Would be good if they/Liberty can use that to reign in the big three for 1021.

      1. Some really good points in there @bosyber!

    2. This is how I see it.
      They have to deliver within a short period of time. I’m sorry but they have to do it.
      McLaren’s team at the moment: Andreas Seidl , James Key, Pat Fry, Andrea Stella, Gill de Ferran, Simon Roberts, Jonathan Neale and Bob Fernley (albeit for the Indycar program).
      That is a dream team! Do they have the resources? How they work internally? Is talent being wasted? That is for Zack to manage, but in no way I look at them and feel more sympathetically (maybe because I don’t feel that way about any of them? Am I a good person @phylyp? Am I?). It is very normal that there are expectations associated with McLaren. How could there not be looking? And I’m not even taking history into consideration, it feels however that the only one that might be out of his comfort zone is Zack, I surely hope not. Grey, red, yellow and orange at the front would be great. Well they need proper drivers of course, hopefully Norris will become one

      1. @johnmilk – you make some good points. I agree that McLaren appear to have taken far longer than required to bring the required team together, and to allow Zak to step back from the F1 team’s direct operations. And now when they have a lot of the key team players in place (or coming into play shortly) they end up with a midfield driver and a newbie. So it would appear that they aim to fix their processes and their car first, and then look to entice a good driver (or hope for Norris to grow into a good one).

        To your other point about formatting your computer – haven’t they been doing that every few years with the change in team principals? :)

        1. I commented a few times last year that they needed to do is to focus on the car rather than multi million pound egos. What I failed to see was how good they were becoming internally. Surely something was wrong, lack of resources perhaps? I hear Kimoa was that good of a sponsor.

          But no more excuses now. And honestly they could have tried to get a better driver to put alongside Norris. Perez, Hulk even Wherlein I rate higher. I just can shake this feeling that Sainz is there because he knew someone.

          Maybe you are right, the hard drive must be broken

          1. Have you seen an edit button somewhere?

  2. Quite ironic that McLaren’s 2 new sponsors are associated with tobacco and chocolate – 1 is synonymous with a slow death, the other melts and loses it’s form when the environment gets too hot…

    Also, just reminded me of those chocolate cigarettes you used to be able to buy when I was a kid. Maybe they can replace the Freddo’s??

    1. Pretty sure those chocolate cigarettes were banned for being too close to the “real thing” promoted to kids @joeypropane ;-)

  3. McLaren is a name that belongs to a true legend of Motor Racing. It’s hard to see them struggle. I hope they get their act together, or maybe it’s time to pack up the tent.

  4. Just emphasis that Zak needs to be doing the finances not directly involved in the team.

  5. There are moment in my computers life’s that I encounter problems and then I have to reboot them, and I reboot them over and over in hope that it solves the issues. But it doesn’t and eventually I have to format it, how long for McLaren?

    With that said, I will properly read the article now.

    1. Duncan Snowden
      6th March 2019, 16:59

      Then you’re using the wrong system. I installed this OS in 2011. (Which even surprised me when I checked up.) Three CPUs, two motherboards, and countless system upgrades later, and it’s still going strong.

      I know that sounds like the usual internet geek one-upmanship, but there’s a serious point here: if the foundations are shaky, no amount of rebooting, rejigging, or rearranging will fix your problems. However if a system is basically sound, with some basic maintenance you can continuously upgrade, tweak, and repair to your heart’s content.

      I don’t know if McLaren is fundamentally sound or not. I have my suspicions, yet ultimately they’re still the team whose record is second only to Ferrari (and in percentage terms is still better). There must be something there to build on.

      1. What Mr Snowden said

  6. This is really a great interview. Thank you.

    One. We now knew that Zak is not a gobbledygook from the American sponsor guru turned team boss. It’s like having watch documentary movie with many new revelation. He knew exactly what a team in a sport mean and should be. Having financial benefit. That’s what a every F1 principal should have in mind when discussing a regulation with Liberty.

    Two. We now knew that McLaren’s personnel are ready for technical change when Liberty announce it this year. And they are ready for budget cap because they already knew how to operate within that amount. They ready for the long run. This two years is just a prequel. 2021 is the reboot.

    Three. I really want to know which engine they gonna partner with when 2021 regulation came. I think Zak should know by now that Renault especially after leadership change didn’t show a proper commitment to pour extra effort to be the best in F1. If 2021 regulation are catchy enough for new manufacture to commit, McLaren should grab it. When we have that announcement, I hope racefans made a sequel article of it.

  7. It’s nice to see this sort of long form interview is still alive as magazines decline.

    1. indeed, great to see that here at racefans.net!

  8. Am I correct in thinking that this is the first season since 1995 that McLaren haven’t started the season with a race winner as one of their race drivers (Blundell and Hakkinen started the season, with Mansell taking Blundell’s seat for a couple of races thereafter)?

    1. @geemac I remember when the duo was announced we did that exercise around here. No championship, no wins and no podiums in their driver line up.

      if they had Hulk for example, they would be better off and still without any of those things.

  9. “We need the Boot” would be more accurate….

  10. They needed a reboot, but still has Alonso around and talk of him testing the current car.

    That’s some reboot

  11. Mika Hakkinen
    6th March 2019, 17:26

    Ever since they fired Ron Dennis McLaren has been in shambles, which breaks my heart to watch as I’ve been following them for two decades.

    1. Ron didn’t have the answers. You’re forgetting that he was still there for the first true shambles year of 2015 and then for Shambles Part 2: The Bigger Balls Up in 2016. Ron had weaseled his way back in to control of the F1 team and then chose to give up the best engine on the grid and take on instead what would turn out to be the worst. He also promised the board he’d find a title sponsor, that was the only reason he was still being tolerated as the F1 boss, but he failed there too just as he failed in his repeated attempts to buy out control of the F1 side of the McLaren business. He was well past his sack-by-date.

  12. Currently the teams have an average value of $800,000,000 but they don’t have control or benefit of that value because of the way Max and Bernie stitched them up decades ago.

  13. Great article as usual.

    Could it be that Zak has signalled a way for teams to manage the budget cap by moving people to another racing division?

    Imagine RBR moving a couple hundred to a new entity called Red Bull Indycar technologies, Ferrari and Mercedes doing the same. Would the cap proposals be able to monitor the work they actually do?

    Other than that, it seems that Mclaren is consistently working on its management structure. I’ve often found in business that changing around management generally doesn’t achieve a great deal other than a lot of disruption as new managers try to stamp their authority over their division rather than addressing issues.

    1. I am sure that is part of the “conversation” at Mercedes’ adding an FE team to their activities too @dbradock.

  14. McLaren’s building blocks are gradually falling into place.

    I breathed a sigh of relief when i read this line.
    It is easy for the fans to deride an under-performing team. But for a team that has been part of F1 for so long that it has its own loyal fan base, its extremely hard to wash their hands off something that has built their reputation through the ages. It makes financial sense for an enterprise to exit a venture in which they haven’t done well for the last few years. The fact that they haven’t, only shows how much this sport means to them. I really appreciate Mclaren’s undying efforts to get back to where they were. I desperately hope that their persistence and perseverance pays off for the benefit of all including the sport itself.

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