Liberty Media plans US growth for MotoGP after €4.2bn deal

Apr 2, 2024 2:33 am | News

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Liberty Media is hoping to repeat its Formula One success by expanding the US audience for MotoGP after agreeing a €4.2bn takeover of the elite motorcycle series.

After announcing the takeover on Monday, Liberty chief executive Greg Maffei told the Financial Times that MotoGP had an “attractive” customer fan base that “can be grown”, particularly in the Americas. Liberty’s experience of broadening the audience for F1 well beyond its “heritage” markets in western Europe provided a good template for MotoGP, he added.

“This is not as well known in the US. It is not as well known in Latin America. If you look where the revenue streams are it is southern, continental Europe,” Maffei told the Financial Times. “It’s a great worldwide product. Our opportunity is to expand it beyond that historical base.”

MotoGP is due to hold 21 races globally this year, including four in its home country of Spain, but just one in the US and none in Latin America. While there is some overlap with the F1 race map, MotoGP’s calendar also includes races in Thailand, Indonesia and India, countries that are big markets for motorbike manufacturers.

According to an investor presentation on Monday, MotoGP had revenue of €486mn last year, and earnings before interest, taxes, depreciation and amortisation of €179mn.

The deal, which gives MotoGP an enterprise value of €4.2bn, will be financed with 65 per cent cash, 21 per cent equity in stock of a listed entity that tracks F1, while MotoGP management will retain 14 per cent of the business.

“We’re paying a pretty good price. I don’t think we’re getting it cheap”, said Maffei. But the opportunity was there to “bring some of the learnings . . . and that mentality” from F1 to boost audiences and revenues at MotoGP “attractively”.

Maffei told investors that Liberty had the option of increasing the cash component of the deal, and “could bring in third party equity to accomplish this”.

Carmelo Ezpeleta, chief executive of Dorna Sports, which owns MotoGP, said that Liberty’s ability to widen the appeal of F1 provided a “big example” for how to bring the motorcycle series to new audiences.

“People talk about how Formula One has grown in the States. But Formula One has grown all over the world,” he said.

Colorado-based Liberty saw off competition from TKO, which owns Ultimate Fighting Championship, and Qatar Sports Investment to buy Dorna Sports from private equity firm Bridgepoint and the Canadian Pension Plan Investment Board.

The deal to bring MotoGP and F1 under the same roof is likely to draw attention from regulators. The European Commission ruled in 2006 that the two could not have the same owner owing to concerns that broadcasters would be disadvantaged in negotiations over screening events.

Maffei said he was “very confident” that the deal would gain approval from competition authorities, however, both because of how the media market had evolved in recent years, and how Liberty planned to operate its new motorsport asset.

“We’re going to keep the company independent. We’re certainly not going to be trying to merge and sell the product in the TV market as one,” he said. “There’s been this explosion of sports, as well as an explosion in distribution technology. We’re confident that authorities are going to understand how competitive this market is and how dynamic it is.”

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