Liberty Media acquires MotoGP in a $4.5 billion deal

Liberty Media acquires MotoGP in a $4.5 billion deal

Formula 1 owner Liberty Media has acquired MotoGP in a deal valued at €4.2 billion (US$4.5 billion).

A deal has been struck by Liberty Media to acquire the MotoGP series’ commercial rights, expanding its racing portfolio that includes Formula 1.

The American entertainment company—which has had the rights to Formula 1 since 2016—will acquire Dorna, which has owned MotoGP since 1992 and also has control over WorldSBK and the MotoE World Cup in a deal estimated to be worth €4.2 billion.

Liberty Media intends to buy out almost 86% of Dorna, the company that owns the commercial rights to the internationally acclaimed premier bike series which will be transferred from owners Bridgepoint and Canada Pension Plan Investment Board.

The equity value of the entire deal is €3.5 billion (US$3.8 billion) including the existing debt that will remain in force after the deal closes. Currently, Dorna currently has a gross loan of €975 million (US$1.05 billion) from BNP Paribas, with an expiration date of 2029.

Longtime CEO Carmelo Ezpeleta will continue to lead Dorna, which will continue to be operated independently and get linked to Liberty Media’s Formula One Group tracking stock.

It is anticipated that the equity consideration to sellers will consist of roughly 65% cash, 21% Liberty Formula One common stock shares in Series C, and 14% retained MotoGP management equity.

“We are thrilled to expand our portfolio of leading live sports and entertainment assets with the acquisition of MotoGP,” said Greg Maffei, president and chief executive of Liberty Media.

“MotoGP is a global league with a loyal, enthusiastic fanbase, 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.”

Ezpeleta said in a statement that he and his group aim to expand MotoGP with Liberty Media’s support. Ever since Liberty Media acquired the F1 rights, the sport has seen a tremendous rise in popularity particularly in the United States where it had been struggling for many years.

“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,” Ezpeleta said.

“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.”

Liberty states that it intends to complete the buyout by the end of 2024 although it notes that the acquisition is subject to the receipt of clearances and approvals by competition and foreign investment law authorities in various jurisdictions.

Former F1 owner CVC Capital Partners was forced to give up its shareholding in Dorna in order to finalize its F1 transaction in 2006 following European Commission anti-competition concerns.

Formula One is experiencing tremendous interest, and Liberty Media stands to gain significantly from the initial US$8 billion deal. Though it’s still far too early to tell, this might be the strongest hint yet that the group is ready to have discussions about selling the huge worldwide enterprise.

The FIM-sanctioned MotoGP held its first season in 1949, one year ahead of F1’s launch. The sport got started with six rounds spread across Europe in its inaugural season, and it has since expanded to include roughly 20 races annually across five continents.

The organizers claim that the current television broadcast reaches hundreds of millions of fans worldwide.

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