The news this month of Formula One owner Liberty Media's planned acquisition of Dorna Sports of Madrid should have everyone in the international motorcycle industry worried.
The deal will see Liberty acquire some 86% of the equity in Dorna Sports for a reported 'enterprise value' of € 4.2bn, with the remaining 14% staying in the ownership of Dorna management and existing CEO (since 1994) Carmelo Ezpeleta, continuing in that role as the company gets absorbed into Liberty's Formula One Group (Nasdaq:FWONK).
The Liberty Group has three different corporate entities listed on the Nasdaq composite index, one of which is the Formula One Group, in which the motorcycle industry's premier race classes will now find themselves.
Private equity or investor ownership of one kind or another is not new to FIM endorsed MotoGP and WorldSBK racing, but outside of North America, U.S. ownership or U.S. stock market ownership of sport is rare.
The worry about any kind of ownership structure for any kind of enterprise or undertaking always revolves around the extent to which the financial needs and interests of that ownership will guide and dictate the management policy and operational conduct of the undertaking concerned. Sometimes that is good and needed, necessary. Sometimes, as in the case of sporting enterprises, it can go either way.
sporting jeopardy is the 'secret sauce'
When ownership is predicated on removing the capital generated by the undertaking in question from its ongoing operations, then the potential for the wrong kind of sporting tension is introduced.
Where the zone of difficulty comes, is in the perceived (and often very real) need for regulators rather than enthusiasts to become the guardians of sporting policy.
We have been there before. Not only in the dozens of other diverse national and international sporting endeavours in which regulators have interceded, but, specifically, where Liberty themselves and Formula One and Dorna/MotoGP are concerned.
This will not be the first time that MotoGP and Formula One have been judged to be inappropriate dance partners in corporate ownership terms. In 2006, the European Union forced prior owner CVC Partners to divest itself of Dorna as a condition of its plan to acquire Formula One.
Greg Maffei insists that we now live in different times. That the expansion of corporatism in sport in general, globally, since then, makes history a poor background against which to judge the likelihood of joining the two premier motorsports franchises at the hip being approved nearly two decades later.
The principal changes in that time have been the impacts of the extraordinary evolution that has been seen in media technology since then and the growth in coverage, viewership (in person, broadcast and online) and the resulting income generated by that evolution.
Change is good. The opposite of change is decay, and no sports fan worth the name would ever want to see their choices of their sporting passion diminishing. But neither do sports fans want to see their objects of enthusiasm reduced to boardroom playthings.
Playthings whose primary raison d'être ceases to be driving sporting excitement, but driving balance sheet growth and stake holder returns instead - relegating the 'secret sauce' of genuine sporting jeopardy to a second place.
Formula One has been in the departure lounge of being a genuine sporting jeopardy showcase for at least two decades now. Is it a sport or is it an entertainment?
As Formula One and other classes of motorsport (looking at you NASCAR and Indy Cars) have flown Icarus-like too close to the heat of the kind of financial returns that are part of what defines entertainment from sport, the sporting jeopardy that drives the passion of fans in the first place diminishes. The 'secret sauce' becomes the casualty.
Sporting jeopardy requires uncertainty. Investors and entertainments require certainty.
We've seen this in football, here in Europe in particular. Without the convincing threats of regulatory involvement, football's governing body was way too shortsighted about the dangers that the game they are delegated to protect would have been exposed to if a breakaway European Super League had happened.
Football clubs across Europe are now awash with sovereign wealth fund capital, making the traditional qualification and pyramid structures that fuel the hope of fans ever less viable. Tennis is now faced with having to fight similar battles, even Rugby Union has been clasping the asp of capital poisoning way too close to its bosom for the long-term good of the game at grass roots level.
Look at what has happened in golf. The intrusion of sovereign wealth has tainted the well. Public viewership, interest and participation are all sliding, dramatically. My passion, cricket, went through a similar near-death experience in the late 1970s. From swimming to athletics, boxing to cycling, sadly sporting jeopardy is no longer the prime metric. Even the Olympics are feeling the heat.
If MotoGP is allowed to head down the same entertainment, team franchise and direct race operation and promotion route that Liberty is nudging Formula One towards (check out how the 'breakthrough' 2023 Las Vegas GP was promoted), the umbilical cord between the grassroots local club level of the sport and the pinnacle of motorcycle racing that fuels our industry will come under pressure like never before.
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