F1 buys the Motorcycle World Championship

Liberty Media will pay more than $4.5 billion for 86% of Dorna, which has the rights to MotoGP and the main motorcycle racing categories.

Varios pilotos de MotoGP. — Carrera de motociclismo en una foto de archivo. (Cordon Press)

Published by

Israel Duro

1 de abril, 2024

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Liberty Media, the company that owns Formula 1, announced in a press release that it has reached an agreement by which it will pay 4.2 billion euros (about 4.529 billion dollars) to acquire 86% of Dorna, the company that holds the rights to the World Motorcycling Championship. After the agreement, Dorna's CEO, Carmelo Ezpeleta, will remain in his position.

Pending approval from the authorities

The American company hopes that the operation can be completed before the end of 2024. Among other things, the agreement must still obtain the approval of the competition and foreign investment authorities in several jurisdictions. According to the statement, Liberty will pay 65% of the operation in cash, to which it will add 21% in Liberty Formula One series C shares. The remaining 14% will remain in the hands of the Spanish company.

Liberty justifies its move due to the growth of the motorcycling business in recent years. Although the statement refers only to MotoGP, the highest category of motorcycle racing, Dorna is also the owner of the Moto2, Moto3 and MotoE World Championships, as well as the Superbike World Championship and the new Women's World Speed Championship, which begins this year.

MotoGP is the pinnacle of motorcycle racing and features breathtaking races with top speeds above 360 kilometers per hour (223 miles per hour) and lean angles of over 60 degrees. 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.

Expanding the motorcycling audience, key to the agreement

Both companies highlighted that thanks to the agreement, motorcycling will be able to reach "a wider global audience," thereby increasing business. For the president and CEO of Liberty Media, "MotoGP is a global league with a loyal, enthusiastic fan base, captivating racing and a highly generative cash flow 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."

For his part, Ezpeleta considered that the purchase of the majority of his company by Liberty as "the perfect next step in the evolution of MotoGP. 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.”