Liberty Media buys MotoGP

After more than 30 years in charge of the motorcycle grand prix racing world championship known today as MotoGP, Dorna Sports SL has sold control of the global series to Liberty Media Corporation; the same company who purchased rights to the Formula 1 World Championship in 2017.

A press release issued by Dorna on 1 April was no April Fool’s Day gag, with the Spanish-based sports management and marketing specialists announcing that Liberty Media’s acquisition of MotoGP will add to the US company’s “portfolio of high-quality global sports assets”.

"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, who’s been CEO of Dorna since 1994.

"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."

Dorna and the Deal

Dorna Sports S.L. was founded in 1988 and took over the FIM Motorcycle Grand Prix World Championship in 1991, holding exclusive television and commercial rights from then to now. Dorna’s portfolio also includes the FIM Superbike World Championship, FIM MotoE World Championship and various junior development series, like the Red Bull Rookies Cup and Asia Talent Cup.

The deal put Dorna/MotoGP’s enterprise value at 4.2 billion Euros and the equity value at 3.5 billion Euro (AU$6.9 billion and AU$5.7 billion, approx.), which makes Liberty Media’s purchase of Formula 1 for US$301 million (AU$397 million approx.) seven years ago seem like an absolute bargain.

Unconfirmed reports suggest that Liberty Media beat out another US agency, William Morris Endeavour, and a Qatar sports investment firm in buying the rights to MotoGP.

The purchase is not total, with Dorna management retaining approximately 14 per cent of their equity in the business. The deal is still subject to approval by competition and foreign investment law authorities in various jurisdictions, too, but is expected to be cleared and finalised before the end of this year.

Following approval, Dorna Sports S.L. will remain an independently run company attributed to Liberty Media’s Formula One Group. Carmelo Ezpeleta will remain in his position and continue to run the championship with his management team. Dorna will also remain based in Madrid.

Liberty Response

"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."

The last company to own the Formula 1 and motorcycle grand prix championships was CVC Capital Partners, but the Luxembourg-based private equity and investment advisory firm held both only briefly, selling the two-wheel series in 2006 after objections from competition regulators in the European Union.

Questions Answered

Following the initial announcement, a special press conference was held at the Circuit of the Americas in Texas on 11 April, ahead of that weekend’s Grand Prix of the Americas. Carmelo Ezpeleta was joined by Chief Commercial Officer Dan Rossomondo and Chief Sporting Officer Carlos Ezpeleta to elaborate on the deal with Liberty Media and what it will mean for MotoGP going forward.
“We are very excited to be able to work with Liberty Media once [the deal] is complete;” Carmelo Ezpeleta said. “This will be the perfect step in the evolution of MotoGP, as Liberty Media has a great track record in developing sports success.”

When asked if more races will be held outside of Europe, as has been the case with F1 since Liberty Media’s acquisition, Ezpeleta said: "We will continue more or less as we are, with maybe some changes. We cannot do more than 22 races, and if we have to open more markets, then there will be more races outside of Europe, but not until 2027."

Rossomondo stepped up when asked what fans can expect under MotoGP’s new ownership.

“I see that people do not want much change to our sport, but those same fans also want to be able to share this sport with others, and I think that is what we are going to focus on - and we have been focussing on it,” Rossomondo said. “We have been doing a lot over the past year and previous ones before on how to make this spectacle transcend motorsport and become more culturally relevant, so it’s about preaching that and shouting it from the rooftops."
Carlos Ezpeleta added: “Liberty does not think that the sport needs fixing, and we agree with that. I think a lot of the things that we have already initiated in the past couple of seasons, like big changes to our format, are trying to increase the visibility and awareness of our sport globally while continuing to satisfy our traditional fans.”

When asked what made Liberty Media decide to purchase the MotoGP rights, Rossomondo echoed Maffei’s earlier statement about not changing the sport, but bringing it to a wider audience.

"They have seen the great potential that this sport has, and I think that is the very important thing. They are very happy with the business, and they think they can add to that once this deal is approved.

“They saw the same potential that I saw when I started one year ago, so that to me is a big part of this as they see [this deal] as a tremendous opportunity."