With the recent spurt in popularity, many new avenues and markets have opened up for Formula 1. As a result, it inclines various sponsors and entities towards being part of the premier racing league. A new partnership has arisen between McLaren and the American shoe brand, Athletic Propulsion Labs.
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It has emerged in a time of crisis in the British racing stable as the team finds itself on the back foot with its finances in a year domineered with a cost-cap on the budget. Alongside F1, the team takes part in Indy Car, Extreme E, and Esports to raise the bar in the motorsport world.
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As per the reports, “McLaren recently had to raise $150 million in emergency financing from its investor group that includes Saudi Arabia’s Sovereign Wealth Fund because the available cash on its balance sheet had dropped 56% this year.”
McLaren recently had to raise $150 million in emergency financing from its investor group that includes Saudi Arabia’s Sovereign Wealth Fund because the available cash on its balance sheet had dropped 56% this year.
But here’s their new plan: $450 sneakers pic.twitter.com/lzwtS4dfRm
— Joe Pompliano (@JoePompliano) August 2, 2022
In the wake of their new partnership with the downtown Los Angeles shoe company, the British manufacturer launched its luxury shoe apparel for $450 for a pair. The limited edition APL McLaren HySpeed is an all-purpose running shoe in quest of pursuing high performance.
The two entities have been developing the HySpeed line for two years collaboratively. They designed the shoes with elements that mirror McLaren’s cars, including carbon fiber plates. With this move, the Woking outfit has associated itself with the $3 trillion fashion market to expand its reach and attract more consumers behind the growing popularity of its F1 racing team.
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A $25 million facility for its Indy Car projects is also in the plans of the papaya team.
How McLaren fought against bankruptcy?
This is not the first time in its time in Formula 1 that the British team has found itself on the brink of bankruptcy. In 2020, the team was in financial turmoil and on the brink of an exit from the pinnacle of motorsport.
Formula One F1 – Hungarian Grand Prix – Hungaroring, Budapest, Hungary – July 29, 2022 McLaren’s Daniel Ricciardo in action during practice REUTERS/Lisa Leutner
The factors that influenced this were the pandemic, which forced them to stop all their operations and, as a result, many employees lost their jobs. Additionally, the demand for the McLaren road cars fell significantly, which led to a depreciation in their value and the company had to sell them at a discount.
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The number of problems piled up and McLaren CEO Zak Brown commented, “Ultimately, we were fighting for survival.” A $150 million investment from the Bank of Bahrain saved the day for the team and helped it to keep its operations running.
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On top of that, it agreed to a £185 million investment from MSP Sports Capital, a consortium of US sports investors, that gave MSP an initial 15% stake in the racing division rising to a maximum of 33% by the end of 2022. McLaren has since sold its iconic Woking headquarters and leased it back on a long-term deal to raise more funds.
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These funds were used to launch its Indy car and Extreme E division, which has been a great success for them.
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