"No one wants to sell" - McLaren boss on healthy signs for F1

McLaren CEO Zak Brown believes owning an F1 team has never been more attractive than in 2022. It comes following a radical new Concorde agreement between teams and FOM in mid-2020.

Brown has revealed that no team across the grid is ready to sell, despite numerous investor interest from across the world.

Speaking in a post-season interview with Gulf Business, the American team boss said:

“The health of the teams has never been stronger. In Formula 1, there have always been two or three teams in trouble at any one time. Now, you have 10 very well-funded teams by very credible individuals or investment groups."

He added:

“You know, Sauber was saved by Finn Rausing a few years ago [when] it was headed in the direction of administration. And here it is a couple of years later turning around $400m for the racing team.”

One of the first objectives of the new management brought on by Liberty Media was to ensure that F1 was once again attractive to investors. They recognized that the sport’s fortunes had become concentrated in a few team’s hands.

Therefore, along with measures such as the budget cap and the new technical regulations, FOM also negotiated a new Concorde agreement with the teams.

The new agreement shares the revenue in a much more equitable manner compared to previous agreements that rewarded successful teams.

While there was some initial pushback against the new revenue sharing, it was generally welcomed across the grid. Furthermore, teams have reportedly included a confidential clause in the agreement. It mandates any new team wanting to enter the sport to pay $200 million to the revenue pool, to ensure the new entrant’s commitment.

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F1 had become an increasingly bad investment in recent years

Until the recent past, F1 was generally considered highly risky in terms of investment. Individual teams with smaller budgets had little to no chance of scoring points, led alone winning. It came following the vast inflow of investment from a few larger teams that started in the early 2000s.

Few exceptions, like Force India, Haas and Sauber, have had limited success. However, their on-track success never translated into a positive impact on their finances.

This meant that nearly half of the F1 grid has been on the verge of bankruptcy on at least one occasion.

Force India was famously put into administration after its owner Vijay Mallya ran out of money to fund the team with. Hundreds of potential job losses were avoided at the last possible moment after a consortium led by Canadian billionaire Lawrence Stroll took over the outfit.

Meanwhile, Williams—the third most successful team F1’s history, has struggled for competitiveness against top teams.

In 2019, the team failed to score a single point throughout the season for the first time in its history. To remain “independent” they chose to develop as much of the car as it can in-house, despite having a paltry budget of less than $100 million.

The following year, the economic pressure from Covid-19 pandemic was the final straw for the team. By the year’s end, the team was sold to American investors for a mere $150 million.