MotoGP rights holder Dorna Sports acquired by Formula 1 owner Liberty Media
The MotoGP Championship is now under American ownership, with Formula 1 owner S.L. Liberty Media acquiring Madrid based Dorna Sports, S.L., the exclusive commercial rights holder to the MotoGP World Championship, from British private investment company Bridgepoint and Canada Pension Plan Investment Board (“CPP Investments”).
MotoGP will now become part of Liberty Media’s Formula One Group.
Carmelo Ezpeleta is to remain as CEO. He has led the organisation since 1994 and the business will remain headquartered in Madrid. Liberty Media will acquire 86% of MotoGP with MotoGP management retaining approximately 14% of its equity in the business.
The transaction reflects an enterprise value for MotoGP of € 4.2bn and an equity value of € 3.5bn, with the existing debt balance at MotoGP expected to remain in place after close. The equity consideration to sellers is expected to be comprised of approximately 65% cash, 21% in shares of Series C Liberty Formula One common stock (Nasdaq: FWONK) and 14% of retained MotoGP management equity.
The cash consideration will be funded with a mix of cash and debt, subject to market conditions. The FWONK share consideration will be priced on a 20-day volume weighted average price prior to transaction close. Liberty Media retains an option at its sole discretion to deliver additional cash in lieu of FWONK common stock.
Carmelo Ezpeleta is quoted as saying: “This is the perfect next step in the evolution of MotoGP, and we are excited for what this milestone brings to Dorna, the MotoGP paddock and racing fans.
“We are proud of the global sport we’ve grown, and this transaction is a testament to the value of the sport today and its growth potential. Liberty has an incredible track record in developing sports assets and we could not wish for a better partner to expand MotoGP’s fanbase around the world.”
The acquisition is expected to be completed by year-end 2024 and is subject to the receipt of clearances and approvals by competition and foreign investment law authorities in various jurisdictions. In a conference call with analysts, Liberty Media President and CEO Greg Maffei suggested that he expected no issues with clearance for the deal, but history would suggest otherwise.
CVC Capital Partners, who sold Formula One to Liberty in 2017, had to sell Dorna in 2006 as a condition imposed by the European Commission in its then purchase of F1.
For that reason alone, some observers think it likely that the deal may well face regulatory headwinds, especially in the EU, and especially now, given the less than wholly positive reactions that many of Liberty's Formula 1 policies and decision-making have received in the seven years of its F1 ownership so far. It is highly likely that it will also receive a mixed reaction from race fans who have already seen the costs associated with their enthusiasm 'steeple' in the past decade.
The Reuters news agency quotes Maffei and Liberty's chief legal officer Renee Wilm telling investors that the situation was different now and they were confident on the regulatory side.
"We believe there is a broad market for sports and entertainment properties, of which both F1 and MotoGP are only a small subset, and that the market has continued to change from the time when this was previously reviewed in a major way," said Maffei.
"These are both separate properties. The things that we are bringing to the table here are not in any way leveraging the two. We believe the regulatory process will move quickly and smoothly, but will take the time they need, and this deal will get done."
Wilm said Liberty would be filing with the EU, UK, Brazil and Australia for anti-trust clearance and making FDI (Foreign Direct Investment) filings in Spain and Italy. "We think those should be done pretty quickly and that the anti-trust clearance should be obtained by the end of the year so we can have a Q4 closing," she added.
Canada Pension Plan Investment Board (CPPIB) bought a 39% stake in Dorna from Bridgepoint in 2012. The remaining shares were owned by Dorna management, whose stake has dropped to 14% following the takeover.
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| “This is the perfect next step in the evolution of MotoGP, and we are excited for what this milestone brings to Dorna, the MotoGP paddock and racing fans,” said Carmelo Ezpeleta, CEO of Dorna. |
Bridgepoint said in a statement that the transaction represented the transfer of all its existing stake and that of CPPIB to Liberty. Dorna Sports, which was roughly 40% owned by British private investment company Bridgepoint Group, also promotes the World Superbike Championship and all-electric MotoE as well as Moto2 and Moto3 junior categories.
Maffei noted, in an interview with CNBC television, that Formula One had only one grand prix in the United States when Liberty took over and now has three. MotoGP currently has one U.S. race on a 21-round calendar that includes Asia and the Middle East, but with a European heartland dominated by Spain and Italy.
"I'm not suggesting we're going to get to three, but the opportunity to grow in the U.S. and in other markets and other geographies is very exciting," said Maffei.
The Liberty Media Group is a three-division conglomerate, a multinational telecommunications company with headquarters in London, Amsterdam and Denver, and had an annual revenue of US$8.95bn in 2023 (down from $11.5bn in 2019) and over 20,000 employees worldwide.
