According to the Financial Times, Liberty Media is close to acquiring Dorna for 4 billion dollars, but European competition laws are in the way
Wednesday on Financial Times wrote about a possible acquisition of Dorna Sports, a Spanish company that holds the rights to MotoGP, by Liberty Media, the American company that has owned Formula 1 since 2017. The operation, which is solidly described by Financial Times, among the most authoritative business newspapers in the world, would bring together the world’s most important automotive championship and the main motorcycling championship under one ownership. According to the British newspaper, which cites anonymous sources close to the negotiation, Liberty Media will offer 4 billion dollars (around 3.7 billion euros) and the announcement of the agreement could arrive as early as next week.
The main obstacle to the operation, however, could be represented by the free competition laws of the European Union. The European Commission may indeed consider that, by acquiring Dorna Sports, Liberty Media would assume an excessively dominant position in its sector. In 2006 the European Union antitrust authority opposed a similar operation, and many believe that the market has not changed so radically as to justify a different assessment.
In 2006 the Luxembourg investment fund CVC Capital Partners, which already controlled the majority of Dorna and therefore of MotoGP, bought over 60 percent of the shares of the Formula 1 group from Bernie Ecclestone’s Bambino Holding and from Bayerische Landesbank, a German bank . The European Union’s antitrust authority opposed the deal, ruling that CVC had to sell MotoGP to proceed with the deal. The European Commission explained its decision by saying that the concentration of the rights of the two most popular motor sports in the Union in the hands of a single owner could cause “the risk of price increases for the television rights of the events and a reduction in the possibility of choice of the consumer”. CVC then sold its shares in Dorna, which were bought by the Bridgepoint Capital fund.
The Moto3 category in Qatar (Photo by Mirco Lazzari gp/Getty Images)
According to sources cited by Financial Times, the issue of free competition laws was analyzed by Liberty Media in the initial stages of the negotiation: it may have received reassuring opinions from its lawyers which could have convinced the company to continue the negotiation. However, the examination by the European authorities will not be immediate and it may take a few months to reach a final verdict.
Dorna is based in Madrid and organizes 251 motorsport races a year, in 20 different countries. In addition to MotoGP and the minor categories Moto2 and Moto3, it organizes the Superbike and MotoE electric motorcycle championships. In 2023 it recorded a turnover of 483 million euros, compared to 3.2 billion for Formula 1 alone. Dorna is owned 39 percent by the British investment fund Bridgepoint Capital, 31 percent by the Canadian one Canada Pension Plan Investment Board (CPPIB) and for the remaining 20 percent of current and former employees, of which the majority is held by Carmelo Ezpeleta, CEO of Dorna and head of MotoGP for the last 30 years.
Carmelo Ezpeleta, CEO of Dorna (Photo by Mirco Lazzari gp/Getty Images)
For some months, some statements by Ezpeleta and some financial transactions by Bridgepoint had provided clues to an imminent sale of Dorna. The Qatari state investment fund Qatar Sports Investments (which among other things owns the Paris Saint-Germain football team) had shown interest in the purchase and the other US group TKO, with interests in sports and entertainment , would have submitted an offer, which was rejected. Liberty’s proposal, in addition to the 4 billion dollars, would include a commitment to take over the company’s previous debts.
Liberty Media is chaired by John Malone, an 83-year-old entrepreneur with a billion-dollar fortune, who in the past worked in the field of telecommunications and media. Since the company took over Formula 1 for $8 billion (7.4 billion euros) in 2017, it has revitalized, popularized and increased profits from the racing championship, which in 2023 created around $400 million in profits.
Liberty has focused on the US market and a strong presence on social networks. It has also increased the sport’s audience thanks to the success of the Netflix series Drive to Survive, whose production had unprecedented access to circuits, drivers and team managers. Under Liberty management many of the teams participating in the championship have seen their value increase considerably, and none have been forced to abandon racing for economic reasons, as frequently happened in the past.
The Las Vegas Grand Prix last November (Photo by Mark Thompson/Getty Images)
Formula 1 and MotoGP revenues are generated from the sale of television rights, sponsorships, payments from the circuits hosting the races, merchandising and sales to customers corporate (company) spaces and access to dedicated areas of the circuits. As regards Formula 1, Liberty has also increased the number of races, preferring new city stages to some traditional circuits, such as those in Miami or Las Vegas, which are particularly profitable from an economic point of view.
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