F1 owner Liberty Media’s MotoGP deal creates motorsporting behemoth
By the close of play today Formula 1 owners Liberty Media will finalise a £3.6bn deal to buy MotoGP.
The agreement will see Liberty Media purchase 84 per cent of Dorna – in cash – in a deal which last week got approval from the European Commission.
“We believe the sport and brand have significant growth potential, which we will look to realise through deepening the connection with the core fan base and expanding to a wider global audience,” Derek Chang, Liberty Media president and CEO, said.
Formula One Group’s current market cap is just north of $25bn, with MotoGP set to boost that when it is incorporated into the same arm of Liberty Media.
It is a deal that will turn a motorsporting juggernaut into a global behemoth. But is that a good thing?
One private equity investment adviser based in the City said: “MotoGP’s teams, riders and fans need to be careful what they wish for as the new owners seek to attract new audiences.
“The majority of the sport’s new paymasters, as we have seen in F1, care more about their reputation than their integrity.”
Liberty Media making moves
Professor Rob Wilson adds that there is a danger that “MotoGP becomes a junior partner, even an afterthought to F1’s dominant position”.
“If Liberty prioritises F1 commercially or logistically, MotoGP could lose its identity and competitiveness,” he says.
Uniting Formula 1 and MotoGP under one umbrella is an almighty move by Liberty Media, and one that – surprisingly to some – “received the necessary regulatory approvals in all other jurisdictions to close the acquisition”, as well as the European Commission.
“Following the acquisition,” Liberty Media said, “Formula One Group’s tracking stock will be comprised of its subsidiaries Formula 1, MotoGP and Quint, as well as certain minority investments.”
Professor Wilson says: “The acquisition of Dorna Sports by Liberty Media marks a significant shift in global motorsport. With F1 and MotoGP now under one commercial umbrella, Liberty effectively controls the two premier international racing series. A move that has implications for governance, competition and commercial strategy.
“While the EU has approved the deal, questions will remain over whether this creates a ‘de-facto’ monopoly. Liberty now have the power to shape the global motorsport calendar, its broadcast rights and sponsorship landscape in ways that few single entities ever have. The concentration of influence is obvious.”
MotoGP under the umbrella
MotoGP operates in nations, such as Thailand, where Formula 1 is exploring expansion while also staging in events once famed for F1 weekends – such as Malaysia and Germany.
The Grand Prix of the United Kingdom is held at Silverstone, like this weekend’s Formula 1 British Grand Prix, while tracks in the likes of Qatar host both disciplines too.
The potential collaboration between the two sports, now part of an organisation which could see its market cap rise after this acquisition, could change the landscape of motorsport in its entirety.
Concludes Wilson: “Ultimately, for me, this deal succeeds if Liberty recognises the distinct DNA of both properties in its stable. There are synergies to be found, especially in operations and promotion, that can enhance brand differentiation and reach.”