McLaren Racing Limited has reported an overall £9 million loss for its fiscal year 2022 in its most recent reported accounts - pinned partly on the cost of paying off Daniel Ricciardo.
The team's finances state a revenue of £327.892 million in 2022, an increase of more than £115 million over the amount at the same point in the previous year. As well as F1, the turnover includes IndyCar, Formula E and Extreme E which all fall under the McLaren Racing Limited umbrella.
The team's annual report says the improvement is “primarily as a result of increased sponsors in the year, a return to pre-COVID hospitality, and inclusion of revenue from the IndyCar operations.”
Last year was the first year in which revenue from IndyCar was included in the overall company accounts. McLaren acquired a 75 per cent stake in Schmidt Peterson Motorsports and further increased its stake in August 2021.
IndyCar contributed £16.35 million to the company's revenue, but McLaren overall still posted an operating loss of £9.08 million for 2022 compared to a loss of £32.65 million the previous year.
The report blames “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" for the loss.
The one-off driver costs are a reference to the pay-off made to Daniel Ricciardo to terminate his contract a year early after a dismal time for the Aussie last season, allowing McLaren to hire his compatriot Oscar Piastri instead.
In sporting terms the decision has paid off, with Piastri contributing to the team's F1 renaissance with two podiums in his rookie season on top of a victory in the Qatar sprint race.
But the cost remains a drag on the overall accounts with the team paying the price for deciding to split with Ricciardo at the end of 2022. Sources at the time told Australian motorsports website Speedcafe that the pay-out amounted to somewhere between £14.7 and £17 million. On the plus side, Piastri's remuneration is much, much lower than Ricciardo's had been.
Without that, the F1 operations on their own are likely a profitable operation despite its investments in an all-new wind tunnel and simulator that have come online during 2023 as well as high profile new hires for the restructured technical team including David Sanchez, Rob Marshall and Peter Prodromou after the exit of James Key.
Last year McLaren ended the season fifth in the constructors’ championship with 159 points. This year it is fourth with 282 points, 21 points clear of Aston Martin with two races remaining.
©McLaren
That's despite a terrible start to the season in which Piastri and Lando Norris didn't score points in five of the first eight races. It was only with new upgrades arriving in Austria that things began to turn dramatically around.
The result is significant in terms of McLaren's future earnings. Fourth would net them an 11.3 per cent share in prize money which could see them receive more than a hundred million dollars on top of a $30 million heritage payment.
All things considered, it's likely that the top brass in McLaren will see the decision to drop Ricciardo as an overall plus in money terms every bit as much as on-track results.
It's also worked out well for Ricciardo himself who has now secured a permanent seat at AlphaTauri. Despite missing several races due to a hand injury, he stormed into the points in Mexico and is rumoured to be in the running to rejoin his old team Red Bull if Sergio Perez fails to re-find his form in 2024.
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