Motorsports

Catching Up With: Zak Brown, Executive Director, McLaren Technology Group

Motorsports marketing ace sees great potential in McLaren and the business of Grand Prix racing

At the end of 2016, Zak Brown, 45, was named executive director of the McLaren Technology Group, which sits above the McLaren Formula 1 team. His arrival occurred just after longtime MTG CEO Ron Dennis was ousted from his position after losing an internal power struggle and marks the culmination of a 21-year business journey. A Los Angeles native, Brown — the son of a travel agent and music arranger — in 1995 founded Just Marketing Inc., which he grew into the world’s largest motorsports marketing firm. After years of brokering deals, from sports-car racing to NASCAR to IndyCar to F1, he sold JMI in 2013 but stayed onboard as CEO through late last year. We spoke with him about his move to one of the most storied teams in Grand Prix racing, and what the future holds F1 in general.

strong>Automobile Magazine: What are you tasked with in this new role?

ZB: I, along with COO Jonathan Neale, am ultimately accountable to the executive committee for the on- and off-track performance of the Formula 1 team. We aren’t doing it by ourselves. We’ve got [racing director] Eric Boullier and [other top management] … It’s our job to make sure they have everything they need to be successful, to make sure the right people are in the right places with the right resources and are empowered to be successful.

AM: Is it awkward to come onboard following Ron Dennis’ departure?

ZB: Ron was ultimately responsible for recruiting me and putting me forward to the board for approval, so to speak. Ron is very much responsible for me being at McLaren. It’s only uncomfortable in the sense of, you’d like there to not be any disruption at the board level.

AM: You’re a strong example of a self-made businessman. You didn’t go to college …

ZB: A lot of people would tell you I didn’t even go to high school and it would probably, fairly, technically, be accurate. (Laughs.) I went to three high schools. Some would say I wasn’t a student, because that means you have to go to class. My business experience comes from being in love with racing, wanting to race, not having the personal family resources to race, so — because I was so keen to have a driving career — that’s really how my sponsorship education came, was just out of my desire to race. … Then I realized I could make a better living by managing sponsorships, because I felt at the time there were not many people out there representing the sponsors’ interests.

McLaren Technology Group Executive Director Zak Brown Standing

AM: Speaking of which, McLaren F1 has not had a title sponsor for some time. Does that speak to the financial climate and how tough it is to get sponsorship these days?

ZB: Yes. There’s more competition than ever. Our competition isn’t just sport, it’s traditional advertising and it’s other forms of sponsorship. There’s a much greater demand for sponsorship in the world than there is the supply. When you secure a partner, it’s because you fit them best. Our job is to make sure that we stay current and lead the way, and are very flexible and adaptable to how our partners operate because their businesses are being challenged and scrutinized like never before. Everything has to have return on investments or return on objective. Everything needs to be measurable.

AM: What is the relationship between the race team and the production-car side? Are you going to have a hand in that pot?

ZB: McLaren Automotive is run by Mike Flewitt, and he’s very successful and getting more successful by the day. We share a common brand; they sell road cars, but also go racing. We go racing and help them sell road cars because of our brand. It’s a very collaborative approach in which we already have partners that are involved both in Formula 1 and automotive. For sure, we’ll be working closely together.

AM: Is McLaren interested in other forms of motorsports?

ZB: Yes. The first priority is to get back to winning Formula 1 races and world championships. However, McLaren does already go racing with GT3 and GT4 cars, and we do battery work with Formula E. We work with IndyCar and NASCAR through our electronics packages. McLaren has won Le Mans, McLaren has won the Indy 500. We are certainly going to explore all forms of motorsports over time and where it makes strategic sense.

AM: How important is the U.S. market to Formula 1 as a whole and to a brand like McLaren?

ZB: It matters a lot because we’re not anywhere near the size we can be. The U.S. is the wealthiest, most mature sports market. North America has to remain a high priority for us. It’s a great strategic fit and a huge audience of corporate partners, television, geography, etc. I think to build on the back of Austin’s momentum, we need at least one more race in North America in ’18 or ’19. We need to see some movement on North America in the next 12 months for something that’s coming down the line in another 12 to 24 months. If we’re sitting with only one North American race by the end of this decade, we won’t be moving the needle like we all hope we will. I think it’s 50/50 we get something announced here in the next 12-24 months.

McLaren Technology Group Executive Director Zak Brown With Jensen Button

AM: What do you see as the real upshot of Liberty Media’s purchase of F1?

ZB: There’s a lot of growth in the sport and like any business, it can always be improved upon. Also, it’s a lot easier for you and I to Monday morning quarterback it. It’s easier said than done. That being said, I think there are a few fundamental things. We as a sport could do a better job of serving our fans and feeding our fans, and giving our fans access and insight into the sport, the teams, and the drivers that they love. And then the other is, the ecosystem in Formula 1 isn’t healthy for everyone and if you look at the other big sports … You look at the NFL, everyone is making money, the players, the teams, the stadiums, the vendors, the owners. In Formula 1, there are a lot of people making a lot of money. There are some people making some money, and then there are too many people not making money.

I think ultimately everyone that is involved in the sport needs to be able to do good, healthy business. That will make the sport stronger. So I think we’ve got to focus on the fans and give them what they want, whether that’s access to the track, whether that’s new digital offerings, whether that’s races in new places. Feed the fans, they’ve got a craving. Also, we can’t have this boom or bust that there’s too much of in Formula 1 so we’ve got to figure it out. There’s a lot of money that’s spent in the sport. It should be a very sustainable industry for everyone that participates and delivers, and I don’t think that’s the case. The structure of the sport, I think, needs to be addressed.

AM: The structure as far as the financials and maybe the distribution of revenue to the teams as covered by the Concord Agreement?

ZB: Yeah, I think we do need to look at how funds are distributed. However, the other thing we need to spend more time on, because I think we spend our time, as an industry, almost exclusively on who gets what out of the existing pie — we need to make the pie bigger. You make the pie bigger by taking care of your fans because when you have more fans, younger fans, more engaged fans, you then get more sponsors and bigger TV fees, etc. While we’re always going to debate and argue over how the pie is split, and I do not think it should be split evenly, but I think it could be split differently. It’s going to be a lot easier if we’re dealing with a bigger pie.

AM: Car manufacturers tend to come and go from the sport based on their business and marketing plans. Do the manufacturers at this point maybe have too much influence over F1 and the direction it goes in? Is that something that’s a concern or is it just the way it’s always going to be?

ZB: Well, that’s how it’s always been. I’m not sure that’s always how it needs to be. You don’t hear in most sports about major teams going out of business like you have in Formula 1. I can’t think of the last time an NFL team went out of business. They get in trouble and they get sold, but I mean, I think it’s lazy to take a view of, “Well it’s always been like that, and therefore it’s OK.” Well, there are a lot of things that have always been a certain way but eventually put you out of business. I think it can be addressed and I think it does need to be addressed.

The other thing is cost containment. We also don’t have to spend as much as we are. We’re guilty of not cutting our expenses, too. Until we grow the pie, guess what, you don’t go out of business if you don’t spend money you don’t have. Unfortunately the rules allow the big teams, and we’re one of the beneficiaries of this, to outspend a lot of the competition. But we’re being outspent by our competition. Everyone keeps raising the bar. At some point, like most other sports, you get into some sort of budget cap. We’ve not really accomplished anything in recent times other than increasing our budgets.

AM: A budget cap was kicked around a few years ago but not everyone would agree to it. Then there was sort of a gentlemen’s agreement, if you want to call it that, about not exceeding a certain amount of money on this part or on that program. But traditionally there has been an attitude from some key people in the paddock of, “Why should we be penalized because other people aren’t as good as we are or don’t have as many resources? We’re here to win, we’re going to spend what we have. If you don’t have as much money to spend, that’s you’re problem.” How can the sport possibly get past that if there isn’t a collective mind shift?

ZB: That’s ultimately going to be up to Formula One Management and the FIA. I think we need help and in the current government structure, I believe the teams probably have too much rights to governance. I’m not sure it’s healthy for the sport. If you look at the NFL, Roger Goodell is put in by the teams, but he then runs the show. The teams can change the government, but he’s empowered and he takes the teams on. I think we as an industry have to come together and support our leadership. Certainly have a say and a role and a vote, but I think we might have too much right now and because we can’t agree amongst us, at the end of the day not much is getting done to address the problems other than a lot of talk.

McLaren Technology Group Executive Director Zak Brown With Colleagues

AM: If you could snap your fingers right now and change something about motorsports, whether it’s on or off the track, what would it be?

ZB: Get the fans closer to the drivers and the equipment, and that’s probably led as a Formula 1 statement, and I’m not suggesting I know what the solution is. It goes for all racing. When you look at the way fans worship Fernando Alonso and Jenson Button and Lewis Hamilton, it’s a shame. There are a lot of reasons why they can’t get closer to them. There are a lot of fans. The drivers have jobs to do. That’s not a criticism of the drivers. They’re such rock stars now, but I wish the fans could engage with them more. Maybe we can, and that’s maybe not going to be one-on-one live in person, but that might be where your whole digital and social media comes in, but it’d be great to get … I know how excited I was as a kid when I could meet a driver, get a picture, and communicate with them. I remember it to this day. I remember getting Richard Petty’s autograph in Riverside after the race, him sitting in his pick-up truck, and he said, “Kid, come on in.” I still have the autographed card. That was a pretty small moment in Richard Petty’s life. I guarantee he doesn’t remember it but I sure do.

AM: You’re a big-time car guy. What’s at the top of your collection?

ZB: My favorite topic! I’ve got around 20 race cars, half of those are Grand Prix cars. If I had to pick two, which is really damn tough, first would be my 1986 Lotus 98T that won two races and second would have to be, but is my most enjoyable to drive, the 2001 Mika Hakkinen McLaren MP4-16 that won the British Grand Prix. Then on the road-car side it would probably be my 1965 289 Cobra. As for more modern super cars, it’s a toss up between my Porsche 959 and my McLaren 675 LT Spider.

AM: Back to racing, what’s something over the years you’ve learned that stands out about motorsports, about the way the business works, that you never would’ve imagined before you got into it professionally?

ZB: That’s a good question. I think one of the coolest things is being able to work with all the people I grew up watching. Dealing with Roger Penske, Bernie Ecclestone, Ron Dennis, it makes me pinch myself. These were guys I watched on TV and who I once asked for autographs. What I have learned about them and others, these are some of the smartest people, best entrepreneurial racers in the world. They are world class. The other thing I guess that I didn’t fully appreciate is how competitive it is on and off the track and how political it is. You don’t get to where these world champions are without being very impressive and very astute. They don’t suffer fools.

AM: Similarly, you’ve always been a McLaren fan. Are you amazed to find yourself in this position?

ZB: Yeah, I feel like I won the lottery. I feel like I got picked out of the audience to be the next contestant on “The Price is Right.” Not in a million years did I think I would accomplish half of what I’ve accomplished in the sport, and I don’t think I’m done. And to put on the McLaren shirt was an unbelievable, proud moment. Even more special than I thought it was going to be. I guess it shows you: if Trump can be president, and Brown can be McLaren, anything can happen.

McLaren Technology Group Executive Director Zak Brown With Formula 1 Car

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