Exclusive: Meeting the New Shareholders of McLaren

Last week, McLaren announced it had sold 15% of its Racing division to a New York fund for the tidy sum of 202 million euros. MSP Sports Capital even has the opportunity to increase this stake to 33% by the end of 2022. Steve Wasserman, one of the partners, exclusively explained to us the reasons that led them to invest in McLaren.

« We are a fund that provides not only financial support but also operational support. We do not need to hire external consultants to tell us what to do. We have extensive experience in the sports business » he commented. Among the fund’s partners, there is a former CEO and co-owner of a baseball franchise, the vice president of an NBA club, as well as a former ESPN executive and director of strategy at UEFA.

This experience in the sports economy has thus led to focusing solely on McLaren’s Racing division and not the entire group, including the automotive manufacturing part: « Focus on what you know how to do! » The sports business industry has the particularity of not suffering from an ailment affecting other parts of the show business: binge-watching. « Unlike Netflix, you won’t be watching F1 on repeat. What interests you is watching live. You won’t record the race and watch it all over again. This adds a lot of value to any advertisement you display on the screen because the viewer will stay in front of the screen to make sure they don’t miss any action. »

This proximity with ESPN, the F1 broadcaster in the United States, has made it evident that audiences are clearly growing across the Atlantic, specifically by 21% between 2018 and 2019. However, it remains a niche market since each race gathered 671,000 viewers, out of a population of 300 million. For reference, Canal+ has just revealed that 962,000 people watched F1 during each Grand Prix of the season. It is precisely this growth potential that attracted Steve Wasserman and his associates: “With the arrival of Liberty Media and the introduction of budget caps, we are entering a new era: F1 will transition from vanity investments to a genuine financial investment. There’s everything to write, which is very exciting. We must educate the American public so that it becomes a mass market.” It is thus the alliance of technology with the human side that differentiates the discipline from other sports.

Once F1 was identified as a potential investment sector, the question was which team to invest in. The choice quickly fell on McLaren: « McLaren is a rough diamond, somewhat like Ferrari, but it’s not easy to invest in Ferrari. » So it was indeed MSP who first contacted the team in Woking: « We reached out to them and they were receptive, even before the pandemic began. We had a constructive dialogue, especially when we had no visibility on the future and didn’t know if the season would be able to start. »

Among the sources of additional profits, one sector stands out: eSports, highlighted during the forced break. « eSports is the future! It works across borders, allowing direct competition with professional drivers on the same tracks. Many gamers will discover F1 through video games before transitioning to the physical world. » Once fans are allowed back at the races, merchandise sales should rise again, notably in the United States where fans are fond of wearing clothes in their favorite team’s colors.

When Steve Wasserman explains that MSP Sports Capital aims to be operational, it will result in an active search for new sponsors, particularly in the North American market: « We certainly want to increase the company’s value by attracting new sponsors. We are five partners who will have a direct interest in bringing in new partners. We want McLaren to be the first team an American company thinks of if they want to invest in F1. »

The third place in the Constructors’ Championship, secured at the end of the season, is thus a good omen for this new investment. That a major player like INEOS has also decided to become a sponsor of a F1 team, in this case Mercedes, is an additional sign that investors believe in the potential of F1.

With the participation of RacingBusiness