On Monday, 1 April, Liberty, the owner of Formula 1, made a significant announcement regarding its expansion into the realm of motorcycle racing. The company revealed its acquisition of MotoGP and its parent entity, Dorna Sports, from Bridgepoint Capital for a staggering sum of €4.2 billion.
Initially slated to be finalized prior to the commencement of the 2024 MotoGP season, the completion of the deal faced delays attributed to the necessity of obtaining approval from anti-trust boards, particularly within the European Union.
This acquisition comes as a significant move, considering that MotoGP was divested by its former owner, CVC Capital, in 2006 when it acquired Formula 1. This historical context has raised questions regarding how Liberty intends to navigate potential regulatory hurdles and prevent a similar scenario.
During an investors call, Liberty’s CEO, Greg Maffei, expressed confidence in the deal’s regulatory approval process. He emphasized the belief that both Formula 1 and MotoGP occupy only a fraction of the broader sports and entertainment market, which has evolved significantly since previous regulatory reviews. Maffei stressed that the company’s approach does not involve bundling or leveraging the two properties together in the market.
“We are going to not treat these as a bundle or try to bring them together in the market. These are both separate properties. The things that we are bringing to the table here are not in any way leveraging the two,” Maffei affirmed.
He further outlined Liberty’s strategy, highlighting the application of insights gained from their experience with Formula 1 to enhance the exposure and growth opportunities for MotoGP.
Addressing concerns over regulatory hurdles, Liberty’s chief legal officer, Renee Wilm, provided insights into the filing process. The company intends to file for anti-trust clearance with regulatory bodies in the European Union, the United Kingdom, Brazil, and Australia. Additionally, they plan to make Foreign Direct Investment filings in Spain and Italy, anticipating a swift resolution by the end of the year to facilitate a fourth-quarter closing.
Maffei drew a distinction between the current situation and CVC’s circumstances in 2006, noting that time constraints had hindered thorough regulatory scrutiny during CVC’s acquisition of Formula 1.
“We are in a very different position. We are absolutely aligned as a group in a changed market. We’re not under the same sort of time pressure. We believe the regulatory process will move quickly and smoothly,” Maffei remarked.
Liberty remains optimistic about the regulatory clearance of the MotoGP acquisition, confident in its approach and preparedness to navigate the changing market dynamics.
