Dennis goes to Denmark

These are busy times for McLaren’s Ron Dennis. If rumours are to be believed, Dennis is busy raising money to buy 26 percent of McLaren Group Ltd. This is currently 50 percent owned by Bahrain Mumtalakat Holding, the investment arm of the Kingdom of Bahrain, with 25 percent belonging to the Ojjeh Family’s TAG Group and the remaining shares being owned by Dennis. He took over management control in January on the basis that he would then raise the money to buy control of the whole group. There have been reports that Dennis will buy 25 percent of the Mumtalakat shares and 12.5 percent of the TAG shares. if true, this would give him 62.5 percent of the company. The problem is that the McLaren Group is worth a great deal of money and the word is that Dennis is working to a deadline.

Again the numbers are not certain but the company is worth at least $800 million, which would mean that Dennis needs to find at least $300 million to complete such a deal. The long-term goal remains to IPO the company in the longer term, Dennis saying in 2011 that this would be in the pipeline for around 2016 and that may help to attract investors.

The team still has to decide who will join Fernando Alonso (although the Spaniard has still not yet been officially confirmed) but the choice seems to be between Jenson Button, Kevin Magnussen and Stoffel Vandoorne. There has been talk of Telefónica coming in to sponsor the team with its Movistar brand and in recent days Ron Dennis was spotted in Denmark. He is believed to have been in talks with Anders Holch Povlsen, the owner of the fashion retail business Bestseller, who is reckoned to be worth around $4.8 billion from apparel and accessories sold under 11 different brand names. Holch Povlsen has been a supporter of Kevin Magnussen for several years with his Jack & Jones brand and is already a McLaren sponsor with the asos.com brand. He is also big on environmental causes and owns more than 130,000 acres in Scotland, on which he is planting trees.

Denmark is a country with a number of huge companies, notably the transportation conglomerate A.P. Moller–Maersk Group, the pharmaceutical firm Novo Nordisk, which uses motor racing to highlight its diabetes treatments in the US, Danske Bank and the Carlsberg brewing company. There are also high worth individuals such as Kjeld Kirk Kristiansen, who is reckoned to be worth $10.6 billion as a result of his Lego empire. Kristiansen was spotted in the F1 paddock in Monza this year and Lego currently has a promotion ongoing with Ferrari and Shell. Dennis has already said that he would like to see Danish companies support the efforts of Magnussen. The remarks were echoed by Lars Seier Christensen, the CEO of investment bank Saxo.

It is worth noting also that there are stories in the Danish newspaper Herning Folkeblad suggesting that a working group is due to meet with F1 supremo Bernie Ecclestone to discuss a potential Danish Grand Prix for 2018. The group is being represented by politician Helge Sander, who served as the Minister for Science until February 2010. It is reported that a meeting is scheduled for January. Sander has confirmed the bid.

108 thoughts on “Dennis goes to Denmark

  1. Joe, I’m sure you’ll set me straight with a one word answer, but any chance Alonso would be interested in McLaren shares?

      1. Joe how much is Alonso going to be paid per year or potentially in total?
        I have read some reports indicating a crazy salary, could it be in the form of shares?
        Besides getting one of the top drivers (some consider the current best) I still wonder how Dennis must feel not only getting Alonso to drive but also paying him such large sums of cash after Alonso arguably lost McLaren $100m as well as any earnings from the constructors in 2007.

        1. There would’ve been no $100m for Alonso to have allegedly “lost” McLaren if the team hadn’t engaged in industrial espionage and sporting fraud in the first place!

          Ergo, Ron Dennis cost McLaren $100m – not the employee who blew the whistle on details of his employer’s unethical, (potentially criminal?) behavior.

      1. Lego were targeted by environmental campaigners due to their deal with Shell and hence they aren’t renewing it.
        Whether F1 seems like a good idea after that who knows.

  2. So this can be seen as the end of Jenson’s F1 ride then? If Kevin can attract the Danish money, that is that.

    1. If money (read salary) is the only concern then if I was JB I’d accept a deal to be paid KMag’s salary but with certain performance clauses that if I’m a match and/or beat Alonso I get certain bonuses.
      However, one doesn’t want to open the can of worms about a team ‘sabotaging’ its own driver and then again…
      I’m not JB 😉

  3. Seems we are watching a new dawn for participation by Nordic drivers and companies. I’ve really liked what Bottas has done this year and am keen to see him further develop. The younger meat coming in from the northern lands also hold a lot of potential; will they be able to show their best? Only time will tell. But I see it as an exciting development and suspect it can be a big positive for the sport.

    If any of the new Nordic drivers can develop in the manner of Tom Kristensen, they will be personally successful and a strong asset for F1. On top of that, a Danish GP would be great.

    As we stumble around here in the States with just more speculation about an American driver getting a seat. How long has this been going on?

    1. I want to know too…I am also keeping tabs on Lewis Hamilton’s contract talks with Mercedes AMG for 2016. Though there is no reason to think there will be any kind of dramatics here, could Hamilton’s talks and Alonso’s future have something in connection?

  4. I read a quote from Ron over the Abu Dhabi weekend to the effect that “I hope Danish business sees value in F1 as a commercial opportunity” and thought something was in the pipeline. I have to say, all things being equal they’d have to be nuts to drop Button for Magnussen, so perhaps things indeed aren’t equal…

  5. Hey Joe,

    do you know how serious these Telefonica/Movistar rumours are?

    It would fit the puzzle if they keep KMag because of some Bestseller sponsoring and maybe these could also explain the delay in the driver announcement.
    Otherwise I can’t imagine McLaren advertises brands like Jack&Jones…

    1. I’m no good at this sort of thing, but at sounds to me as if Ron might want Danish zillionaires to pay for whatever nod Kevin might already have… after all, he needs somebody to rent the side of his cars… and maybe he thinks Kevin is one way to do that, especially as the McLaren name hasn’t been enough so far…

  6. I would have thought that many of the F1 vanguard would have tired of Ron and his management style by now. My imaginary billions wouldn’t go anywhere near Mclaren with him in charge. How much Ronspeak can a sponsor endure? And that is before you even consider the laughably expensive McLaren rate card.

    Surely, other teams offer much better value for sponsors than Ron can? Isn’t this part of the problem?

    Mercedes have Paddy and Toto and Niki. Mclaren has Ron and Eric. Its not the same, is it? I can’t help but wonder if a revitalised McLaren without Ron (rebooted with a new team in much the same way Mercedes have been) would be refreshing for sponsors.

    It looks like things are going the other way and Ron is planning to take over the show in its entirety.

    1. I wonder if the sponsor rates, attitudes etc changed much under Whitmarsh? The team culture did seem to change, Mclaren didn’t appear so cold what with Lewis and JB doing tooned and a bunch of other promos.

    2. Lost or pushed away (then oh, wait, think I’d like them back) FA, LH, Newey. (And one of them gave him a $ kick on the way out.)
      Minus the privilege of being part of the alleged f1 cartel, how many would say this is the resume of a sharp CEO?

        1. Still doesn’t mean he’s a great human performance manager on the sporting side…

          & as an aside, don’t you (the media in general) ever get tired of being repeatedly lied to and dissembled to by cynics like Boullier who don’t respect your professional integrity and so repeatedly feed you BS in servings both large and small?

        1. What *current* McLaren is. There were Championships and plenty of race wins before the Project 4 era.

          But yeah – Dennis has massive achievements on his CV. Albeit if you’ve only come to the sport in the last few years you might not think it.

        2. I’d disagree there RShack, McLaren to me, will always be Bruce. RD has used the name over decades and created a hugely successful F1 team and series of Ltd Companies. However these are his creation, not Bruce’s, and nothing I’ve seen of Ron since around 1980 when he and Marlboro took it over, has in anyway convinced me that his McLaren is the same one as the McLaren that Bruce founded, which is a team that I still have many fond memories of.

          1. You’re proving my point for me… not sure what you’re disagreeing with. The McLaren of modern times has zilch to do with the 20-guys-in-a-garage outfit that Bruce and pals founded.

            You’re just saying you liked Bruce’s version better, that’s all. I agree that the old, little version was more romantic. But there was nothing about it that required a CEO. Ron Dennis took that 1-horse (or maybe 2-horse) operation and turned it into a big deal. The *only* similarity is the name… and even the name is not identical…

    3. Bizarre comment! Why would any investor or sponsor be fed up with such a successful man and organisation? You may not like Ron, or McLaren, and you would be right to recognise they haven’t been so successful of late, but you’d have to be very naïve to regard him as a charlatan or the McLaren group as a failure.

      1. “Why would any investor or sponsor be fed up with such a successful man and organisation? ” < < < < Hence why McLaren ran all of 2014 w/o a title sponsor…because they were such an attractive value proposition?

  7. There is a Lego MP4-29 coming, so there must be some sort of relationship there. I doubt Lego needs to build any brand awareness with more Marvel and Star Wars movies incoming and the associated piled of Lego sets though…

    1. There’s already a Lego movie about Ron, in it he’s called Evil Lord Business and he hates anybody touching his stuff and changing anything…

  8. Interesting…this would seem to point towards a Dane partnering Alonso in 2016. 

    The Danish GP race interest announcement is also curious, coming on the heels of Tom Kristensen’s retirement. One would expect him to make a rather good spokesman for Danish motorsport.

    Sent from my Verizon Wireless 4G LTE smartphone

      1. But why? Audi are already selling 15% more cars than in 2013, which itself was 15% up on 2012. Audi are going very, very well. So too are Porsche. VW don’t need F1 and they certainly don’t need to spend a fortune and maybe win a race in 5 years time.

        BMW on the other hand are losing market share, building crapper cars (I should know, I’ve had plenty) and not competing in competitive motorsport. How can the ultimate driving machine not be in F1?!

        All BMWs now have turbo chargers, Mercedes are around to publicly fight against. Just a shame they want to ruin their image by making mundane cars like the 2 series crossover.

  9. It’s sad when even McLaren are choosing their drivers on the basis of who brings the best sponsorship. 😦

    1. I agree. A shame, not least for Jenson. A far cry from the ‘golden era’ of Senna/Prost and, lets be honest, Hakkinen also etc. Pure talent was the sole decider then. I accept however, that the (F1) world has moved on.

      1. No Nick, the world hasn’t moved on, it’s just the same, but F1 is still stuck in the same groove of spend, spend, spend,spend…..maybe Ed Miliband should be Bernie’s replacement…..

        1. I was rather hoping for Malcolm Tucker*. F1 seems a bit of an omnishambles at
          the moment.

          (*I know he’s fictional but it is a fun thought)

    2. “It’s sad when even McLaren are choosing their drivers on the basis of who brings the best sponsorship.”

      Put “McLaren Title Sponsor” into Google and you get some possible clues regarding these reactions. Used to be that McLaren had no difficulties in that particular area.

  10. Joe

    Please forgive me if I have missed something. Asleep at the back of the class again!

    What happens if Dennis does not get the funding he is seeking. Is this the predominant deadline in this?

    The whole concept of Alonso & Dennis working together again seems beyond normal belief?

  11. Joe, [to the best of your knowledge] if RD isn’t able to raise funds to meet a deadline, would the others be given a chance to take control of MGL or would things stay as is?

  12. Whilst I accept that the McLaren group as a whole provides for a more attractive proposition as an investment, isn’t one of the abiding lessons of F1 that Billionaires are so because they hang on to their Billions?

  13. I wonder if I might translate from the original Ronspeak. When he says McLaren wants the best drivers available he kinda means that but subject to how much loot they can indirectly bring to the table. Put another way, the once mighty McLaren is looking for pay drivers.

    1. Not at all. McLaren is looking to maximize the value it can give to its sponsors. That’s all. It’s called logic.

      1. Joe, Penn is correct. You’re making a semantic argument.

        Whether drivers buy a ride directly, or indirectly through a sponsor, the driver is still paying for the ride.

        If Magnussen only keeps his McLaren drive due to a raft of Danish sponsors showing up, he will be no more or less worthy of his position than the Maldonados of the world.

        McLaren will never admit the fact, but he will be exactly, precisely the same. A pay driver.

          1. It sure sounds as if Ron needs a few cheques to make up his mind, but you’re usually right about these things, so I suppose this means that KMag is being retained by McLaren – in some capacity – irrespective of sponsorship (well, almost anyway). It may still be that they keep Jens for a year and have Kevin as test driver with some promise for 2016, which might be enough for the Danish companies as I don’t see them sponsoring another nationality.

            The prospect of a Danish grand prix seems a little far fetched: not enough oil billions and crazy dictators… Cynical, I know. I wonder why…

          2. Joe, had Dennis signed Magnussen prior to his Danish visit, you’d have a point.

            Sadly, that is not the case. McLaren has signed neither driver. Dennis has been clear that the decision won’t even be his, but one made by the board sometime early next month.

            To believe that money won’t enter this equation is no different than believing a politician who claims his big money donors don’t impact his political decisions. In both cases, money talks. To believe otherwise is naivete.

            If McLaren sign Magnussen along with a raft of Danish sponsors, he will not be driving the McLaren based on the quality of his skills, but on the money his backers have provided.

            He will be no different than Maldonado. Both drivers have certain skills, but neither have nearly enough skill to independently justify a seat in Formula One. It will be a sad day if the mighty McLaren stoops to buy-a-ride drivers.

              1. So you’re saying Ron Dennis has lied, totally and unambiguously?

                To refresh, Dennis said that the board, not he, would decide the matter early in the month of December.

                What would be his upside for lying? It doesn’t make any sense.

              2. Because Eric Boullier has told us – through you, the world’s accredited F1 press – that no decision about driving signing(s) (ostensibly apart from F.A.) will be MADE until the Dec. 1 BOD meeting…not that no decisions will be *announced* until the Dec. 1 BOD meeting.

                Which would lead one who took these statements to be true, and not strategic lies told by cynical manipulators, to believe that McLaren has not yet decided whether or not to sign K-Mag, let alone done so?

          3. What’s different Joe? If RD says to a Danish sponsor that he’d like KMag to stay but can only have him if they pay for him, that is a Pay Driver.As RD would not employ him just because he thinks KMag may be a winner, but only because he can get sponsorship for KMag that he might not get for JB?

          1. No, he would not. However there is nothing wrong with signing a driver and then finding money off the back of that contract. It is a subtle difference.

            1. you say the guy he was speaking to is already a ‘supporter’ of km, so the question is then why would you sign the guy before trying to negotiate more money? thats just bad business. where is the leverage? maybe its a case of pay up or your man will be alonsos stooge all season, if you give us more money he will get more equal treatment?

      2. My irony clearly missed the mark with you. I do, let me assure you, have an understanding of maximising the return to be obtained from the value of a brand.

        Being inside the F1 bubble can bring both perspective and discombobulation. 😉

  14. My take, for what little it is worth; Ron Dennis favours Keven Magnussen for 2015 and beyond, but needs to point to sponsors who will join the team if he gets the drive.
    This does make me wonder why Jenson Button is even hanging around hoping for a contract in 2015. If the current leader of the F1 team does not really want you, why would you want to stay in any case?

  15. Very good reporting Joe. Where do you get this stuff!
    I can see why JB is upagainst with a piece of the business up for grabs. This is more than just a sponsor/ rent-a-drive situation. Kevin is a fortunate boy.

  16. Lego F1 game! Struggling with that one. Lego have been successfully using the same formula for years and there has to be diminishing returns. The movie franchise hook no longer works with my kids due to the same repetitive game play 😦

    The amount of money Bernie want’s must be ridiculous and some Lego big ‘dick’ need to see sense and step back from this one!!

    F1 is in crises! Lego has succeeded on the gaming bubble but is F1 the route ahead? A turning point for both?

  17. Hi Joe,
    Thank you for your article, it brings new light on the story for me. Just a minor detail. Bech Povlsen’s current sponsorship isn’t asks.com but asos.com.
    Great to follow you
    Jakob

  18. Not to nit pick but for clarity 25% of 50% = 12.5% and 25% of 12.5% = 3.125%. Although it is clear you meant to say half of each.

    Thanks for the article, sounds like Magnussen is the favorite.

      1. Which means Mr Dennis wouldn’t have control unless his and TAG shares are voted together.

        Where does the $800m ($US) valuation come from? McLaren’s own press release (3rd Sept 2014) says it earned 22.5m pounds in 2013 or about US$35m based on current exchange rate.

        We don’t know what the EBITDA is but based on the profit number the $800m is equivalent to almost 23 times earnings. For a unlisted business that would be an extraordinary valuation; it would be massively high for a listed business.

      2. Joe,
        How close is Ron to securing the MEGA $ € £ ¥ ₩ he needs to engineer a majority share holder position at McLaren ?
        Isn ‘ t this the REAL scenerio behind the scenes of driver anouncement delays ?

  19. Sadly the commercial dept of McLaren is NOT what it was a decade ago. They have relied too heavily on agencies recently who take commission and rarely deliver. McLaren Marketing have lost their best people who have moved to better paying jobs elsewhere too. They should be looking at the US and not at five or six people in Denmark, who have shown little real interest in global sponsorships and how to maximise a return. It is all very messy and the TAG Group have the funds available but with Mansour Ojjeh being ill their interest has wained.

    1. Can you speak in more detail about this matter? Who were the good people who left McLaren?

      What are the agencies that were contracted to find sponsors but failed to deliver?

      Is Macca bringing this effort back in house?

      OT: Claire Williams was the head of sponsorship searching for Williams before her current role, no?

  20. Being a Dane,I somehow doubt that any danish company would be willing to enter into a titlesponsor sized sponsorship. Especially the historic danish companies like Maersk, Novo Nordisk, Carlsberg(Football is their sport), Lego.

    Bech Povlsen is a very shrewd businessman, and very forward thinking. Investing in a lot of different danish retail businesses. Question is, can he use the commercial power of F1, to promote any of these brands? I don’t think so. Unless he decides to promote the parent brand “Bestseller” but i seriously doubt that, because they promote their sub brands separately.

    Another possibility is Saxo Bank, who have an agreement with Lotus and backs another danish driver Marco Sørensen. But the amounts they dish up is peanuts compared to what they would need to bring McLaren. Plus, they are very active in the their sponsorship of the Tinkoff Saxo cycling team.

    Maybe Pandora,

    Magnussen get’s a lot of press in Denmark, but as mentioned, nothing has been written about this. Look at Tom K, the KING of Le Mans, he didn’t bring sponsors with him into Le Mans. But he himself carries a lot of brand value in Denmark.

    To give an update on the Grand Prix to Denmark story, the mayor of Herning, has publicly stated that they pulled out of the bit, due to the publicity they have gotten. So I think that’s is a dead deal, unless another city bids in, which i seriously doubt.

  21. Come on boys, just because Button is English, it is not obvious to him running. If McLaren would keep Button, they had probably asked him procure sponsorship money. McLaren can see Kevin has great talent and only had a seson in formula 1, and want to keep him, it’s as simple as that.

  22. This made me laugh – genius

    “AuraF1
    There’s already a Lego movie about Ron, in it he’s called Evil Lord Business and he hates anybody touching his stuff and changing anything…”

    I’m with Joe though – some people don’t rate Ron, but Ron is on of the most talented blokes to ever work in F1. The man started as a mechanic and he turned McLaren into the 2nd most successful F1 team ever and also a supercar manufacturer of the highest order

    Absolute legend

  23. Joe,
    Do you see Fernando and Ronspeak having a close working relationship or will Ron leave the daily management to Eric?

    1. Alonso and Dennis have two important things in common. The desire to win championships and the drive to do whatever it takes.

  24. Joe,
    You mentionned Stoffel Vandoorne in your article.
    Is there are any realistic chance that he’ll be picked for the seat in 2015 ?

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