Brawn GP made £98.5m profit in 2009

Brawn GP made a profit of £98.5m in 2009, according to accounts filed by current owners Mercedes-Benz Grand Prix Ltd, having made just £1.3m under Honda in 2008.

The team had sales of £234.5m – an increase of 38% over the last year under Honda. The sales figure includes sponsorship income, ‘Bernie money’ (but in essence owed from 2008, not based on 2009 performances), and payments from Honda. Sources say that one-off sponsorship deals were far more lucrative than may have appeared to outsiders.

One intriguing number suggests that Honda paid the team a total of £92.5m during the year – a figure that almost matches up with the overall profit. It’s known that Honda bankrolled the team fully until March, and in effect paid for the development of the car, but presumably the rest was a ‘dowry’ to help keep the team going.

The directors were paid £8.4m during the year, with one director – assumed to be Ross Brawn – earning £4.7m of that amount. The other directors were Nick Fry and three senior members of the former Honda team who took it over when the Japanese manufacturer pulled out, namely Nigel Kerr (finance), John Marsden (HR), Caroline McGrory (legal), plus Gordon Blair. All but Ross resigned as directors in December.

The filing also says that the directors loaned £3.4m to the team in March 2009, at a critical point in its campaign to survive. That loan was repaid during the year.

It’s also confirmed that Daimler (via Mercedes UK) and Abu Dhabi investment concern Aabar acquired 75.1% of the team between them as of December 24. Brawn and his colleagues mentioned above still own the rest.

The current shareholders, ie Mercedes, Aabar and the former Brawn directors, split a dividend of £20m between them based on the above percentages. In other words having bought the team the new owners instantly got £15m back.

Although paper figures don’t always fully reflect the real world, the profit figure will no doubt be of interest to Jenson Button, who took a massive pay cut prior to winning the World Championship, and then could not agree terms with the team for 2010.

Having said that the accounts also reveal a ‘Contract Settlement Fee’ of £10m paid to Button to formally end his Honda deal before the Brawn adventure started…

23 Comments

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23 responses to “Brawn GP made £98.5m profit in 2009

  1. Ian P

    Fascinating insight into the finances of an F1 team, but it does make you wonder a) how much Honda must have been spending and getting nowhere, and b) why Honda didn’t have some kind of claw-back clause in the sale contract since they provided the majority of funds for ’09.

    As for JB, I think he is right to feel slightly aggrieved and if he’ll talk about it, it would be fascinating to hear his view. Whatever way you look at it, it seems Ross Brawn and Nick Fry have gone from being very wealthy, to extremely wealthy as a result of this.

  2. CARSON44

    Seems as though Mr. Button had good cause to be a little miffed. Everyone was made whole save JB. However I believe him when he says he went to a team that had a better championship chance.

  3. rubbergoat

    Sounds like Brawn and Fry are proper Wheeler Dealers.

    Certainly any notion of the team being a small one on limited resources is gone with this result.

    My only question is why more of the profit wasn’t put into developing this year’s car?

  4. Steve Clark

    Jenson may well be a little miffed but given the relative success of the two teams I don’t think he’ll loose much sleep.

    I expect he’s still got more money in the bank than he can ever spend and this season he’s getting into a car that gives him a chance of winning. Had he agreed to terms with Mercedes he’d be getting in a car and hoping for podiums.

    I think all the drivers would give their left nut for a winning car over money.

  5. Black Knight

    Adam,

    Do you know who the directors at Braun were at this time ? Didn’t JV and his manager still have shares ?

    • Pollock was gone long ago! The others were Nigel Kerr (financial director under Honda), Caroline McGrory (legal) and John Marsden (human resources). There’s also Gordon Blair, I’m not sure how he fitted in, but he was an outside consultant of some sort. All bar Brawn were no longer directors after Dec 23 2009. Along with Ross, the board of MGP is now packed with folk from Mercedes (3) and Abu Dhabi (2), including of course Norbert Haug.

      • Black Knight

        Thanks –

        I thought that Pollock somehow retained a small piece. Not so –

      • Leigh O'Gorman

        Last anyone heard of Pollock, he was co-running a team with Kevin Kalkovin in Champ Car up to 2007 – he’s no longer involved in that project either

  6. Mark

    Sales? Of what?

    Given that they had a relatively small amount of sponsorship, what else did they sell?

    • Sales would include ‘Bernie money,’ ie the team’s share of the prize fund – and it did a lot of winning. However that tends to be paid further down the line so I’m not sure how much of the earnings from the 2009 season would fall into those accounts. There is also one assumes some element of Honda funding… In fact I am no expert on reading these things but on further investiagtions it looks like Honda paid £92.5m during the year. We know they were paying all the bills in Jan/Feb, be interesting to know how much continued to flow in.

  7. **Paul**

    Let us not forget that Jenson also got one 6 Brawn GP cars used in the 2009 season, as it was a clause in his contract (what a great move that was!). So he’ll have done nicely out of that. The car will surely be worth a pretty penny in years to come given the hertige of Ross Brawn, and the fact the team won the WDC in it’s first year.

    I also think JBs decision to move to McLaren has proven to be completely justified given the poor performance of the Mercedes GP car. If he’d signed up for another year I fear people would question his talent because he’s not a ‘by the cruff of the neck’ style of driver, as it is he’s more than proved himself at McLaren whilst most people thought he’d get destroyed by Lewis. If anything Jensons stock has risen this year and Lewis’s has perhaps fallen a bit.

  8. Jerry R

    Facinating article.

    It never surprises me just how much money is ‘sloshing’ around in F1, numbers your average Joe can only dream about. I had the impression last year that Brawn might have been running on ‘fresh air’ money wise near the end of the season, how wrong can you be.

    All I can say is nice work if you can get it, but you do feel that Honda having done the decent thing at every turn have been well and truly turned over by RB and NF!

  9. Fulveo Ballabeo

    JB will be fine. Let’s ask the hundreds of people laid-off (and their families) during the Honda/Brawn transition what they make of these figures.

    With risk should come reward. Undoubtedly, these guys had the stress of saving the team. But not the risk. Honda handed them a salable asset for $1, and provided the first year’s running budget. After a year of paying themselves a healthy sum, they sold-out to Mercedes for an even healthier sum.

    Rarely in life is one handed such a no-lose opportunity to become a multi-millionaire. Good gig, if you can get it.

    • Just a note for everybody, I’ve updated and corrected the story several times since you may have read it first having had a look at the numbers myself and spotted some things that Bloomberg did not report. I’m no forensic accountant, but I did my best!

      • One more follow up, a very good source (!) has told me that the £20m dividend was in fact split between the new shareholders, ie 75.1% of it went to Mercedes and Aabar, and the rest to Ross and the ex-Brawn GP directors, rather than the whole lot. I’ve adjusted the story again to reflect that.

  10. Chris Partridge

    Great article. Very interesting read.

  11. Kitchen cynic

    Never mind Button, there’s a large number of laid-off staff who might be interested in those numbers…

  12. Peter G

    Adam

    Good article …

  13. Rodolfo

    Great insight. Strongly interested in F1 finance, so please keep them coming.

  14. Kirk

    Fascinating story. Ever since early 2009 I have been watching Ross Brawn and realise that maybe he’s more of a businessman than an engineer.

    After being heavily involved in re-writing the design rules as part of the Overtaking Working Group, he essentially inherits a team, designs a car that cheats in the spirit of the (his) rules – but is eventually found to be technically legal – and then decimates the opposition. Finally, he flogs off said team for millions upons millions.

    This year? His car is a dog. It’s lucky to be fourth placed and I wouldn’t be at all surprised if it ends up fifth or even sixth. Given his budget and the technical base (last years car), that’s dismal.

  15. tom baker

    Thank y0u!

    I’m happy to see I’m not the only one who realizes the car is a pile of junk. Both drivers are flattering the hell out of it.

    I think they have at least fifth locked up. Renault is within striking distance, but not FI.

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