MotoGP change of ownership under cloud
Liberty Media’s purchase of MotoGP hit a snag overnight, with the European Commission opening a more in-depth (Phase II) investigation into its proposed acquisition of MotoGP.
The €3.5 billion Euro agreement to acquire MotoGP was announced in April, and the buyout bid by the owner of F1 has since received all other necessary regulatory approvals.
As a result of the opening of a Phase II investigation, all parties have agreed to extend the review process and believe the European Commission will reach a positive conclusion.
The Commission’s concerns stem from the potential risks that the transaction could lead to higher prices for the licensing of broadcasting rights for motorsports events hosted by both parties.
Liberty Media and Dorna Sports are both international media companies. Liberty owns the Formula One Group and holds the exclusive commercial rights for the FIA Formula One World Championship. Dorna Sports holds exclusive commercial rights for the FIM World Championship Grand Prix (‘MotoGP’), and other motorcycle racing championships.
The Commission’s preliminary investigation indicates that the transaction may reduce competition between Liberty Media and Dorna Sports in the licensing of broadcasting rights for motorsports content. In particular, the transaction may remove important competitive constraints on Liberty Media and Dorna Sports, which may strengthen their position vis-Ã -vis broadcasters of motorsports content and could ultimately lead to higher prices.
More specifically, the Commission found that:
- The transaction raises serious competition concerns in potential narrow national markets for the licensing of broadcasting rights for motorsports content in the European Economic Area (‘EEA’), where Formula One is the clear market leader in all European countries and MotoGP is most often its only competitor.
- The transaction may remove important competitive constraints between the parties on some potential wider national markets for the licensing of broadcasting rights for all sports content or possible segments of such markets. In particular, this is because it appears that Formula One and MotoGP compete closely.
During its in-depth investigation, the Commission will also further investigate whether Liberty Media’s and Liberty Global’s largest shareholder, Mr. John Malone, is able to exert decisive influence over both companies. If confirmed, the transaction could also give rise to concerns that Liberty Media may foreclose rival broadcasters in countries in which Liberty Global is active, namely in Belgium, Ireland and the Netherlands.
The proposed transaction was notified to the Commission on 14 November 2024. The Commission now has 90 working days, until 14 May 2025, to take a decision.
The opening of an in-depth inquiry does not prejudge the outcome of the investigation.
Teresa Ribera – EU Executive Vice-President for Clean, Just and Competitive Transition
“By acquiring Dorna Sports, Liberty Media would hold the commercial rights to two of the most popular motorsports in Europe: Formula One and MotoGP. We need to more carefully assess whether this acquisition could negatively affect European broadcasters, for example in terms of increased license fees, and ultimately European consumers and motorsports fans through higher prices. We will at the same time openly consider any substantiated claims by the parties about possible benefits this acquisition might bring, for fans, the industry and for consumers.”
Carmelo Ezpeleta – CEO of MotoGP rights holder Dorna Sports
“We expect this acquisition to gain the requisite EU approval and are excited by the potential opportunity to work with Liberty Media. In the meantime, we remain committed to our strategy to take the sport to new heights and continue our impressive rate of growth, further expanding our global fanbase of over 500 million. 2024 saw season attendance of more than 3 million fans for the first time ever, and six tracks set new all-time records for their events. Our French GP broke the all-time attendance record. Looking ahead, we don’t just want more of the same, we want even more – and we are proud that our strategy is already beginning to deliver it. We hope fans are just excited as we are about the future and the incredible new season that is just around the corner.”
William Jackson – President of the Board of MotoGP (Dorna Sports) and Founder of Bridgepoint
“MotoGP is the most exciting sport in the world and has a great future ahead. Bridgepoint and CPPIB have been hugely supportive of the Company and sport and remain fully committed to helping Carmelo and the team continue to drive the fantastic success the sport has enjoyed during 18 years as shareholders together.”
Liberty Media put out the following statement.
Liberty Media
Liberty Media today received notice from the European Commission opening a Phase II investigation into its previously announced acquisition of MotoGP. We are confident this transaction will benefit MotoGP’s business, fans, viewers and the broader motorcycle industry. Market participants have widely recognized the benefits of the transaction. There is a very large and growing market for audiovisual entertainment well beyond sports, and this transaction will enhance MotoGP’s ability to compete in this highly competitive market. We will continue to work with the European Commission as they progress their review and have agreed with the sellers to an extension of the longstop date to June 30, 2025 in order to accommodate the more in-depth investigation. We believe that the European Commission will conclude that the transaction should be approved.
About Liberty Media Corporation
Liberty Media Corporation operates and owns interests in media, sports and entertainment businesses. Those businesses are attributed to two tracking stock groups: the Formula One Group and the Liberty Live Group. The businesses and assets attributed to the Formula One Group (NASDAQ: FWONA, FWONK) include Liberty Media’s subsidiaries Formula 1 and Quint, and other minority investments. The businesses and assets attributed to the Liberty Live Group (NASDAQ: LLYVA, LLYVK) include Liberty Media’s interest in Live Nation and other minority investments.
