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Tuesday 30 April 2024

Dorna Sports

Denver Based Formula 1 Owner Liberty Media Buys MotoGP

The MotoGP World Championship is now under American ownership, with Formula 1 owner Liberty Media acquiring Madrid based Dorna Sports, S.L., the exclusive commercial rights holder to the MotoGP and World SBK World Championship, from the joint ownership of 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, with Carmelo Ezpeleta remaining as CEO. He has led the organization since 1994 and the business will remain headquartered in Madrid. Liberty Media will acquire 86% of Dorna, with Dorna 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 Dorna debt balance 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. 

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."

“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.

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.

Liberty will be filing with the EU, UK, Brazil and Australia for anti-trust clearance and making FDI (Foreign Direct Investment) filings in Spain and Italy. 

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 now drops to 14% following the takeover.

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 the Moto2 and Moto3 junior categories.

MotoGP currently has one U.S. race on a 21-round calendar that includes Asia and the Middle East, with a European heartland dominated by Spain and Italy.

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 $8.95bn in 2023 (down from $11.5bn in 2019) and over 20,000 employees worldwide.