McLaren Racing Limited revealed a total operating loss of £9 million for its 2022 financial year in their most recent financial reports, which was partially attributed to the expense of Daniel Ricciardo’s repayment.
According to the team’s financial statements, revenue in 2022 was £327.892 million which represents a rise of more than £115 million over the same period the year before. In addition to Formula 1, the McLaren Racing Limited company also oversees IndyCar, Formula E and Extreme E.
According to the team’s annual report, the switch back to pre-COVID hospitality, an upsurge in sponsors for the year, and the integration of IndyCar operations revenue are among the primary drivers of the improvement.
The revenue from IndyCar was incorporated into the company’s overall financial statements for the first time last year. August 2021 saw McLaren increase its ownership of Schmidt Peterson Motorsports from its initial 75% stake.
Despite IndyCar’s £16.35 million revenue contribution, McLaren’s overall operating loss for 2022 was £9.08 million, down from the previous year’s loss of £32.65 million. But that number was much lower than in their 2021 report, and they might have evened out if Ricciardo’s costly dismissal had not happened.
Although Ricciardo was saddened by his departure, it was probably outweighed by the £14.7 million that McLaren was compelled to pay to terminate the Australian driver’s contract one year early.
All parties seem to have benefited from that decision, as Ricciardo is now doing well at AlphaTauri and McLaren is content with Oscar Piastri, who took his place. Piastri’s two podium finishes during his rookie season furthered the team’s F1 comeback in addition to winning the sprint race in Qatar.
However, such a move proved difficult to swallow financially and in 2022 the racing team lost money even though its revenue was at £327.892 million.
According to Speedcafe.com, McLaren pointed out: “Pressures across all costs as well as a one-off provision for driver costs and increased costs related to a return to pre-covid hospitality levels have all contributed to this.”
McLaren’s Formula One operations are presumably profitable despite their investments in a brand-new wind tunnel and simulator that went online in 2023 and their high-profile new hires for the reorganized technical team, which included David Sanchez, Rob Marshall, and Peter Prodromou following James Key’s departure.
McLaren finished the previous season in fifth with 159 points in the constructors’ championship. It is currently in fourth place this year with 282 points, 21 points ahead of Aston Martin with two races left.
This is after Piastri and Lando Norris endured a dismal start to the season, failing to register a point in five of the first eight races. However, things started to drastically change only after new upgrades arrived in Austria.
The final result will have a big impact on McLaren’s earnings going forward. Taking fourth place would earn them a share of the prize money of 11.3%, potentially bringing in over $100 million in addition to a $30 million heritage settlement.
Taking everything into account, the senior management at McLaren is probably going to view the choice of replacing Ricciardo as a financial benefit in conjunction with on-track performance.
