Formula 1 owner acquires major stake in MotoGP for $4.5B

Liberty Media, the owner of Formula One, has finalized an agreement to acquire a substantial stake in MotoGP, a motorcycle racing circuit. This significant acquisition is valued at approximately $4.5 billion.

Liberty Media is set to purchase around 86% of Dorna Sports, the Madrid-based commercial rights holder for MotoGP. This transaction places a significant enterprise value of $4.5 billion on Dorna Sports.

Known for its active role in the motorsports world, Dorna Sports is not just the promoter of MotoGP but also oversees the World Superbike Championship and the MotoE series, focusing on electric bike racing.

The deal's structure involves a combination of about 65% in cash and 21% in Liberty Formula One common stock, indicating a robust financial strategy behind this acquisition. It also implies an equity value of $3.8 billion for Dorna, with MotoGP's existing debt balance anticipated to remain in place following the closure of the deal.

This ambitious acquisition is scheduled for completion by the end of 2024, hinging on obtaining the necessary clearances and approvals from competition and foreign investment law authorities across various jurisdictions.

Liberty Media's track record with Formula One – expanding the racing schedule and spearheading innovative initiatives like the Netflix series "Drive to Survive" – signals its intention to transform MotoGP similarly. The company aims to enhance MotoGP's global presence and appeal, banking on its proven ability to elevate sports properties.

Liberty Media President and CEO Greg Maffei expressed his excitement about bringing MotoGP under Liberty's umbrella. "MotoGP is the pinnacle of two wheels," Maffei stated. "With its loyal and enthusiastic fanbase and a financial profile that generates strong cash flow, we see tremendous potential. Working alongside Carmelo Ezpeleta and his team, we aim to expand MotoGP to a wider global audience."

Despite the deal's promise, potential regulatory challenges loom. Similar past attempts by private equity firms to own both Formula One and MotoGP have faced scrutiny, particularly from EU competition regulators.

Dorna's preexisting ownership structure includes prominent players like the U.K.-based Bridgepoint Capital and Canada's CPP Investments. Carmelo Ezpeleta, the long-standing CEO of Dorna, will continue in his role, which he has held since 1994.

The business headquarters will also remain in Madrid. Ezpeleta expressed optimism about the partnership's future impact on MotoGP, seeing this as a pivotal step in its evolution. He remarked, "We are proud of the global sport we've grown. With Liberty Media, known for developing sports assets, we look forward to bringing even more to our fans and partners."

Source: Newsroom