Liberty Media, the US media giant that owns Formula 1, has today received unconditional approval from the European Commission to complete its €3.5-billion ($3.8 billion) acquisition of Dorna Sports, the promoter of top-tier motorcycling series MotoGP.
After overcoming its final hurdle, the deal is now expected to close no later than July 3.
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Liberty’s purchase of an 86% stake in Dorna, reflecting an enterprise value for MotoGP of €4.2 billion and an equity value of €3.5 billion, was announced on April 1 last year and was widely expected to be completed by the end of 2024, with Dorna management keeping around 14% of its equity.
However, the European Commission, the executive branch of the EU, launched an investigation into the prospective purchase to examine the impact the deal will have on competitiveness for motorsports broadcast rights contracts.
The commission argued that in many European markets, F1 is the dominant motorsports competition and MotoGP its only competitor, meaning that the purchase of Dorna could “remove important competitive restraints and lead to broadcasters paying higher rights fees.”
Alongside the broadcast rights competition, the European Commission also examined whether John Malone, the largest shareholder in Liberty Media, will be able to exert “decisive influence” over both companies.
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By GlobalDataIt identified the possibility that Liberty Media, through MotoGP, could “foreclose” on rival broadcasters in territories where Liberty Global, through F1, is active.
After Liberty Media worked with the European Commission to try and appease its concerns, the deal has now been approved without the EU body demanding concessions.
Dorna will continue to operate in Spain as a separate entity from Liberty Media, with Carmelo Ezpeleta, chief executive of Dorna since 1998, continue to run MotoGP along with his management team.
Derek Chang, Liberty Media president and CEO, said: “Today’s approval from the European Commission marks the final condition to closing Liberty’s acquisition of MotoGP. We are thrilled to officially commence Liberty’s partnership with Carmelo and his excellent management team.
“MotoGP is a highly attractive premium sports asset with incredible racing, a passionate fanbase, and a strong cash flow profile. We believe the sport and brand have significant growth potential, which we will look to realize through deepening the connection with the core fan base and expanding to a wider global audience.”
In terms of the series' appeal in the US, for example, there is currently only one race held annually in that market (in Austin, Texas).
Ezpeleta added: “We are very happy that the European Commission has approved the transaction. This is an important milestone confirming the even brighter future that lies ahead for MotoGP.
“We look forward to accelerating the sport’s growth and expanding its reach to even more fans around the world. Liberty is the best possible partner for our sport and the entire MotoGP community, and we are excited to create even greater value for our fans, commercial partners, and everyone competing.”
