It is no secret to say that the Coronavirus pandemic led the world into a huge global recession, mainly economic. Now, in the sports world, we could say that it is a secret how much of a battle and struggle it’s being and how much certain Formula 1 teams lost in their power to develop in the usual way, within such an elitist and expensive sport.
Now, it is in the attempts of teams and organizations to settle scores and balance economic senses and here is where we begin to see a glimpse of the reality of what teams are going through. So much so that today it comes to light that McLaren has sold its factory in Woking, in a leaseback movement with the American company Global Net Lease (GNL), in a deal that moved £170million for the 840,000 square foot area of the F1 team.
“We are excited to announce that this world-class facility will become part of the GNL portfolio.”
"The McLaren Group Headquarters' state of the art buildings have won numerous awards, were designed by renowned architect Norman Foster, and are the type of mission-critical, net-leased properties that make up the GNL portfolio," Said GNL group CEO’, James Nelson, announcing the deal, today.
As McLaren CEO Zak Brown said during 2020, according to motorsport.com, this will be not bringing up the alarms at the F1 team, as it is nothing more than a balancing movement that has been planned up since little before Coronavirus lockdown started in March 2020.
"Why have all this money tied up in real estate? We're not a real estate company. We're a racing team and an automotive company. And that's the start of the journey to start cleaning up the balance sheet.”
"I think the majority of companies in this world don't actually own the real estate that they are tenants of. We've got a lot of cash tied up in that building, as you can imagine, and that's not a very productive use of funds when you're looking to invest in your business.”
"So we'll ultimately sell it to someone. We will then do an extremely long term lease and then we'll use that money to invest in our business to help us grow our business. So it's a pretty typical financial restructuring exercise."
"We're fine financially from a cash flow standpoint, obviously when COVID hit and that turned off our Formula 1 business, our automotive business and to a certain extent, our technology business, that consumed an immediate amount of cash that we needed, and was well documented.”
"We've now done that. And we've got plenty of runway to be able to make sound business decisions. I think the [factory] sale leaseback is a very good decision because while we'll rent it, it will be a lease that we will pay for every year,” he said.
"But the growth that we're going to be able to generate from our business by taking those resources and putting them into the business, we should be able to multiply that money that we're getting - because it will drive our business to the next level."
Having finished third in the Constructor’s championship and with F1’s new budget cap just around the corner, McLaren fans have really nothing to worry about regarding the team’s future performances or administration, as Brown assured, "We have a good five-year business plan for this next era of F1. I'm comfortable we have the resource, the people and support in place to give us what we need to get back to the front."