F1 owner Liberty Media buy Dorna Sports (MotoGP)

U.S.-based Liberty Media Corporation has closed a deal with Bridgepoint and CPP Investments to acquire Dorna Sports. MotoGP will join Liberty’s portfolio of Formula 1 rights.

From its first season in 1949 that staged six rounds across Europe, MotoGP has grown significantly and will host 21 races across 17 countries for the 2024 season. The business benefits from an attractive financial profile with diversified and contracted revenue streams, high EBITDA margins and low capital intensity resulting in significant free cash flow.

Carmelo Ezpeleta, CEO of Dorna since 1994, will continue to run the business headquartered in Spain. Founded in 1992 under the auspices of the ill-fated Banesto, the company was sold to CVC Capital Partners in 1998, gaining great international projection and renamed Dorna Sports. In 2006, the investment fund Bridgepoint Capital became the majority shareholder.

“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.”

“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. “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 Media will acquire 86% of MotoGP with MotoGP management retaining approximately 14% of their equity in the business. The transaction reflects an enterprise value for MotoGP of €4.2 billion and an equity value of €3.5 billion with the existing debt balance at MotoGP 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 and 14% of retained MotoGP management equity. The cash consideration will be funded with a mix of cash and debt, subject to market conditions. The FWONK share consideration will be priced on a 20-day volume weighted average price prior to transaction close. Liberty Media retains an option at its sole discretion to deliver additional cash in lieu of FWONK common stock.

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. It should be noted that on some occasions the European Commission had warned of the possibility of the two motor racing competitions, Formula One and MotoGP, falling into the same hands.