McLaren boss Zak Brown tells where F1's real money is made
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Zak Brown gave up his dream of being a Formula 1 driver in 2000 and turned full time to marketing. But his current job is still pretty close to his boyhood fantasy.
As group executive director at McLaren Technology Group, Brown is the figurehead of one of the most venerable names in motorsport, but it is also a wider technology company.
It has worked on computer systems for Heathrow Airport, helped improve efficiency on the Aquafresh toothpaste production line and now partners accountancy firm KPMG in providing advice to blue-chip firms.
American-born Brown still has his eye on the Formula 1 World Championship – but also on the commercial future of the McLaren brand. He talks of the decision to quit full-time racing after a very promising early career on the track in his native America and in Europe.
‘I had a few success, some big success, but not nearly enough,’ he admits in his strong West Coast accent. ‘It was no longer fun and everyone was telling me to stop racing and focus on my business, which is not what you want to hear.’
It turned out that while Brown had been a pretty good racing driver, he was an excellent businessman. The motorsport sponsorship company he had set up to fund his own driving career boomed. By 2013 it was the biggest motorsport sponsorship group in the world and he sold a controlling stake to British marketing group Chime Communications.
The marketing business earned him more money than all but the very top F1 drivers. Brown’s wealth is estimated at about £100million (NZ$178.5million) – not so far behind Lewis Hamilton. He worked for a few years at Chime’s Sports marketing arm CSM and then, last year, made the move to McLaren Technology Group.
McLaren Technology, home to the motor-racing team as well as its much wider high-tech interests, is majority owned by Bahrain’s sovereign wealth fund. McLaren Automotive, maker of the sports road cars, is separate but controlled by the same shareholders.
The road car business is very profitable. The technology side breaks even, Brown says, because the money is reinvested.
‘It definitely does all fit together. We are most well-known for our F1 team and that is what McLaren started out as. Then there’s McLaren automotive, a very high-end sports car brand built on the back of the F1 brand.
‘Then there’s McLaren Applied Technology, also a company built on the back of our F1 team. It has evolved from the technologies, the materials and what we’ve learned in F1. McLaren Applied Technology worked with GlaxoSmithKline corporate to accelerate and enhance their production. F1 teams are known for their speed of development – so how do you bring that culture, that way of working and that two-second pit stop to a production line making toothpaste?’
McLaren also has a ten-year business partnership with KPMG. As part of its motor-racing work it has developed a computer system for predicting the behaviour of parts and systems under all kinds of conditions. KPMG-McLaren offers these tools to companies.
‘They go in to a big company and say we can help you be more efficient, McLaren comes in with KPMG and helps provide that solution. They are selling our brand.
‘We, of course, have McLaren merchandise where the consumers are buying something that is branded by us. We are now developing in certain areas. We’ve already done things like bicycles and we are working with other brands to develop what would be mostly technology driven end products. One of those being the Richard Mille McLaren watch.’
The watch – made by the luxury watchmaker Mille with technology and branding from McLaren – sells for close to £1million.
Brown, however, thinks McLaren has breadth. ‘We’ve got an unbelievable brand. In F1, sponsorship has been our traditional income in addition to prize money. I think we can generate a lot of commercial revenue from our brand beyond logos on race cars.’
Brown’s office is festooned with models and pictures of racing cars. It could pass for the bedroom of a car-mad schoolboy – albeit a very tidy one. It is situated at one end of the space-age McLaren Technology Centre – a lakeside palace of curving steel and glass in Woking, Surrey. They build and test F1 cars here, but the atmosphere is uncannily calm – more like a yoga retreat. The vast reception space is itself a showroom of McLaren cars.
‘I have not yet got tired of showing up for work,’ says Brown.
His love of motor-racing began as a teenager growing up in Los Angeles, where his father would take him to races. Brown met Mario Andretti at the 1987 Grand Prix at Long Beach and he advised him to get into go-karting. Karting costs money, but Brown had a source of cash up his sleeve. A few years earlier he had been on the TV show Wheel Of Fortune and won a set of his-and-hers watches.
‘I went to a pawn shop and sold those watches and went and did the kart racing school. I did well there. I went and did the advanced course and I did well there. With the watch money I bought a go-kart.’
Money, however, was the key hurdle. Brown’s mother worked at a travel agent and came across someone at TWA who agreed to provide airline tickets as part of a sponsorship deal.
Brown began handling his own sponsorship and then branched out into organising deals for other drivers. In 1995, he started his company Just Marketing International. Five years later he stopped racing.
Racing driver, marketeer and now boss of...well what? How does Brown regard McLaren? ‘It’s a technology brand,’ says Brown. ‘We just need to let people know what our capabilities are,’ he declares. ‘We have worked in the healthcare business developing technology around prosthetics – we are changing people’s lives.’
But racing is at the core. ‘F1 is our marketing platform and it is our research and development platform. So F1 is our marketing machine.’
Winning races is crucial to the McLaren brand, Brown says, not just to the racing team, but to all the spin-off businesses.