Liberty Media adds MotoGP to racing portfolio alongside Formula 1 - what does it mean?

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Liberty Media will acquire 86% of MotoGP business from Dorna Sports with the MotoGP management retaining approximately 14% of their equity.

Liberty Media, the American company that owns Formula 1 racing series, added MotoGP – a motorcycle racing series – to its global racing portfolio. The acquisition is set to come into effect by the end of this year. The move valued MotoGP at €4.2 billion ($4.53 billion).

Liberty Media will acquire approximately 86% stake of Spain-based Dorna Sports, who own the commercial and television rights for MotoGP, for about €4.2 billion ($4.5 billion). As per a statement, Dorna Sports would remain an independently run company with Carmelo Ezpeleta at the helm, the series’ chief executive since 1994.

What can one expect after the move?

Liberty Media has made Formula 1 a bigger brand since taking over in 2017. It has seen its growth in recent years, notably with the popular Netflix series “Drive to Survive,” and addition of races in Miami and Las Vegas in the United States. Before Liberty Media, Formula 1 had just one race in the US.

MotoGP, the premier racing series for motorcycles, can expect an equivalent expansion. MotoGP will hold 21 grand prix races on four continents this year. The next race is the Grand Prix of the Americas at the Circuit of the Americas in Austin, Texas, on 14 April. It is the same track that was built for Formula 1 races and has been used by MotoGP since 2013.

“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 Liberty Media President and CEO Greg Maffei in an interview with CNBC.

MotoGP currently has one US race in the calendar that includes Asia and the Middle East but with a European heartland dominated by Spain and Italy.

What is the acquisition cost for MotoGP?

Liberty Media Corp., the American company that owns Formula 1, is adding to its global racing portfolio with the purchase of the MotoGP motorcycle racing series by the end of 2024. AP

Liberty Media will acquire 86% of MotoGP business from Dorna with the MotoGP management retaining approximately 14% of their equity. The transaction reflects an enterprise value for MotoGP at €4.2 billion and an equity value at €3.5 billion with the existing debt balance at MotoGP expected to remain in place.

Curiously, CVC Capital Partners, who sold Formula 1 to Liberty Media in 2017, had to sell Dorna in 2006 as a condition imposed by the European Commission in the purchase of F1.

Maffei and Liberty Media’s chief legal officer Renee Wilm said 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 in a call with analysts.

“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.”

Canada Pension Plan Investment Board (CPPIB) had bought 39% stake in Dorna Sports from Bridgepoint in 2012. The remaining shares were owned by Dorna management, whose stake has dropped to 14% following the takeover.

Bridgepoint have said that the transaction represented the transfer of all its existing stake and that of CPPIB to Liberty.

What did Liberty Media say after the acquisition?

“We are thrilled to expand our portfolio of leading live sports and entertainment assets with the acquisition of MotoGP,” said Greg Maffei, Liberty Media President and CEO. “MotoGP is a global league with a loyal, enthusiastic fan base, captivating racing and a highly cash flow generative financial profile. Carmelo and his management team have built a great sporting spectacle that we can expand to a wider global audience. The business has significant upside, and we intend to grow the sport for MotoGP fans, teams, commercial partners and our shareholders.”

“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. “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.



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