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The arrival of Liberty Media in MotoGP is certainly one of the big themes of this 2024. After several weeks (actually months) of rumors, the US and Spanish companies have come out into the open by making the agreement official.

An agreement which provides for the acquisition by Liberty Media of a majority stake in Dorna (86%), current organizer of the MotoGP, MotoE, Superbike, Women's Circuit Racing Championships as well as a series of trophies dedicated to emerging talents around the world.

This is in some way an epochal circumstance since this structure has been managing the MotoGP for over 30 years and the SBK for more than 10. An even more singular fact is that this acquisition comes from a company currently owning Formula 1: in this so the most important 2 and 4 wheel World Championships would be held by the same organization.

The signs of this rapprochement had been quite clear and by connecting the dots the evolving picture appeared clear.

  • First of all, the hiring of Dan Rossomondo at the top of Dorna during 2023 and his subsequent moves: having brought in an initial US sponsor (Ebay) and having started negotiations with the American broadcaster TNT.
  • The rapid landing of the new Team Trackhouse in place of the problematic Team RNF Cryptodata. An operation which, due to its timing, suggests that it was prepared for some time and was implemented at the most appropriate time
  • Stefano Domenicali's frequent visits to the MotoGP paddock during the past season, with more or less adventurous declarations on ideas, proposals, scenarios.
  • The increasingly massive presence of Liberty Media men on the MotoGP and Superbike race fields and their conversations with the teams.

In the era of investment funds, financial operations usually have a fixed timeframe: for some time Carmelo Ezpeleta, founder and head of Dorna, had hinted that he wanted to look for new ownership while maintaining control of the sporting activities. We also combine this with the opportunity to deliver dividends to major investors (Bridgepoint and the Canadian Pension Fund), reduce exposure to lenders and enjoy a business partner capable of expanding the business.

Formula 1 and MotoGP

Liberty's arrival is certainly functional for both parties. Dorna relies on a company that has been able to generate impressive numbers since it held the rights to Formula 1. For its part, Liberty obtains the diamond tip of motorcycling at an acceptable cost with a view to being able to build a profitable business around it.

Although the distances between the 2 areas are notable, it cannot be denied that some successful dynamics can be partially replicated. To be clear, the turnover around MotoGP is approximately 1/16 of that driven by Formula 1, which reached the astronomical figure of 3,2 billion dollars in 2023. A constant growth compared to the 2,5 of the year previous year and the 1,1 billion of the year marred by Covid. A Forbes study states that the average value of teams has grown by 2019% from 276 to today. Just in recent weeks there has been news that Mercedes has become the first team to exceed 500 million euros in annual turnover (640 to be precise), thanks to sponsors and proceeds from the federations and broadcasting rights. The profit is close to 100 million (98) and these numbers give an idea of ​​the incredible value that Liberty Media and the various actors involved have managed to transfer to the world. The total revenue from MotoGP sponsors (currently 26) is $87,95 million. The total revenue of the series has grown steadily in recent years, reaching 475 million euros in 2022 and 486 in 2023.

To make it clear how much this gap has widened, in 2010 the value of the respective turnovers was 200 million euros for MotoGP and 780 million for Formula 1.

Even in the more "genuine" context of motorcycling, which tends to be more refractory to glamor and exclusivity, there is therefore curiosity for the future, although often hidden under a blanket of mistrust.

If enthusiasts are scared by the prospect of a more dynamic and "creative" management of the package, professionals are well aware that the current format can express much higher potential.

Best practices

A quick analysis of the route taken by Formula 1 in the last 8 years inevitably leads to the observation of exponential growth in terms of numbers as well as a general repositioning on multiple levels.

  • Demographically, the average age of spectators has dropped while the catchment area has expanded at a global level, encompassing nations historically less involved in this type of discipline.
  • The quantitative increase was accompanied by a qualitative one. World-class media content has contributed to Formula 1's reputation for both entertainment value and as a business catalyst/platform.
  • The race is once again an event and as such no one wants to be left out of the atmosphere of the weekend. Records of attendance on the circuit have been recorded in practically all stages of the seasons which, moreover, have also extended up to 24 events.
  • The system of redistribution of profits deriving from television and media rights in general, combined with the introduction of the budget cap, allows many teams to have healthy budgets compared to the past
  • Companies are interested in even a small presence in Formula 1, in the face of very expensive costs, precisely because of the value that comes from association with that area.
  • It's impossible not to mention the success of Drive to Survive on Netflix, the documentary (certainly fictionalized but very effective in attracting crowds of curious people).
  • Having ridden the competitive escalation of the Hamilton-Verstappen duel in an extremely functional way, maximizing its echo and often encouraging it sportingly and mediatically.

Obviously, not all that shines is gold and there are a series of critical issues created or not resolved by this management.

  • For example, the fact that to obtain such numbers we had to move to less traveled territories - and therefore more curious and willing to invest - leaving aside some historical realities of motoring
  • The "volatility" of the public generated by TV series and less technical content: millions of viewers who are generally not passionate and could abandon this world in favor of new external stimuli
  • A contraction in the number of television viewers due to the offer often limited to pay per view only
  • A competitive spectacle that is often lacking in the face of notable regulatory revolutions and sometimes questionable interventions in sports management.
  • A general increase in ticket prices which did not prevent excellent results in many events but which dissuaded several long-time fans from participating.

1992 – 2024: over thirty years of evolution

The current MotoGP cannot boast the same catchment area although over the course of these decades the value of the sport has grown considerably. Credit certainly goes to Dorna: in 1992 competitive motorcycling was certainly an exciting discipline but followed by a niche of "hard and pure" audiences. The investments and the technical-commercial scenario were closer to the truest tradition than to the hyper-professional context of 4 wheels. 30 years that have seen epochal changes such as the transition to 4-stroke engines - necessary to ensure technical relevance and industrial sustainability towards the market - up to the opening up to many new markets.

A path that saw Valentino Rossi's epic as its most shining testimonial and thanks to which MotoGP has become a global phenomenon, both in sport and in customs. A journey that also had to overcome the difficulty of two difficult passages, which also coincided in time. Valentino Rossi's retirement and the drastic reduction in activities caused by the pandemic period.

Dorna has revised many of its dynamics to adapt to new scenarios, on a technical and organizational level. The introduction of the Sprint Races, the general refresh in the tone of voice, the search for new partnerships. A dynamism that was certainly useful in attracting the attention of possible buyers: Liberty Media itself proved to be the most interested and competent interlocutor on the subject.

In the press conference held before the Texas Grand Prix which featured Carmelo and Carlos Ezpeleta together with Dan Rossomondo, the message was very clear. A message that had already been underlined in other interviews and meetings with the press and stakeholders. Liberty Media has not identified any problems of a sporting nature and consequently this area will remain - at least in the short term - substantially unchanged. The current command structure will maintain its structure into the future to ensure series continuity.

What Liberty will focus on will be making the main world motorcycle championships more commercially, mediatically and economically more attractive. Both parties appear to be 100% in agreement on this trajectory.

Is Liberty Media the right company for this mission?

However, the question that almost everyone asks is precisely this: let's try to answer it.

Everything we have seen in the previous lines outlines a rather clear profile. Liberty Media is involved in major sporting and entertainment events and focuses the strength of its action precisely on these aspects. Formula 1, event organisation, ticket distribution management, radio stations and content streaming are part of this company's rich basket. The agreement provides that all sports management will remain - at least in the short term - substantially unchanged and in the hands of Dorna. The US group will focus on storytelling and creating a "package" that is easier to sell and communicate.

  • It is therefore certain that he will work first and foremost on defining a clear hierarchy of priorities so as to have a "gem" to enhance and make understandable to the public. This will obviously be MotoGP while we can think that Moto2, Moto3 - already defined as support categories from the first press release - are proposed in a different key, perhaps with dedicated timing and transmission methods.
  • This also involves the clearer identification of a series of points of attention: the story of the undertaking, the difficulty, the athleticism, the skill that permeate driving at the highest levels. The most "colourful" definition of the main actors: drivers, team managers, chief mechanics. Before Liberty Media it was impossible to think of a popular leader as an actor or a singer: then it is enough to see what happened with Gunther Steiner.
  • At a sporting level, the next introduction of the new participation regulations will be further aimed at a restriction of the technological part (which has made the races of recent years more difficult to follow) in favor of a formula more inclined towards competition on the track.
  • It is not difficult to foresee a more marked shift towards the US market with the addition of other tenders so as to involve the gigantic catchment area and local market.
  • There is an urgent need to allow for more fluid manipulation of the multimedia part (photos, videos, extracts) so as to create a sounding board that is complementary to the direct emanation through official channels. This is certainly one of the factors on which Dorna's current management has lagged a little further behind than Formula 1, although recent years have seen a progressive easing of restrictions.
  • A redefinition of broadcasting agreements, which have been "blocked" for years in many countries, is desirable, so as to bring audience figures back to acceptable levels.
  • The search for the involvement of new manufacturers (BMW, MV Agusta, Chinese manufacturers?) as well as the relaunch of those currently most in difficulty (read Yamaha and Honda)
  • There will certainly be a discussion on the system for sharing commercial revenues with the teams: Dorna currently pays an amount for each bike so as to ensure that private teams can also participate in the championship. The principles underlying the approach to US business are usually different and we can imagine a less "welfarist" but more virtuous platform. A more popular format in fact makes it easier to acquire new sponsors and reduces the need for "corrective interventions", which are also those that have allowed the categories to overcome the most stormy periods.

The panorama for commercial operators

It is precisely on this last point that the greatest interest lies for us at Fastback and in general for all operators in the field of sponsorships. It is no mystery that it has become progressively more difficult to attract high-spending investors precisely because of the difficulty of conveying the value of the presence within the series. The Covid years, the aggression by new social, web and broadcast platforms, the growing attention to social and ecological issues have weakened the link between companies and the ability of motorcycle racing to contribute to the achievement of objectives.

It is therefore necessary for the format to regain greater strategic relevance in the promotional and commercial sphere to attract new brands and investors. The progressive integration of MotoE, the use of tires obtained from recycled materials and ecological fuels, the creation of a women's championship and the greater attention to inclusiveness are certainly all steps in the right direction: being more compliant with ESG needs ( Environmental, social, and governance) of companies.

The expansion of opportunities certainly also involves the exploration of new territories in which to propose one's product. A system that Liberty Media has successfully implemented, namely moving the circus where the public and funds are already present: in this case the city circuits, especially in exotic metropolises. Well, this is certainly one of the most difficult points to propose again since the safety constraints of 2-wheel races do not allow us to think of races between walls and pavements (road racing like, Isle of Man and Macao aside).

The new world tracks are certainly designed mainly for 4-wheel use and it is difficult to think that they can be modified for such specific needs.

On the feared possibility of creating "all inclusive" weekends, i.e. in which MotoGP and Formula 1 are contested on the same circuit, it would be necessary to go deeper. The organizational difficulties relating to the coexistence of two such "bulky" realities that require well-defined spaces and times appear far from simple to overcome. However, we should not be surprised if in the next few years in at least one case - where the route, the structures and the period allow it - an experiment in this sense will be tried. Maybe even just as an exhibition or as a final celebration of the conquests of the respective world titles.

The fact that the same organizer manages the first car championship in the world as well as the first and second motorcycle championship means that a network of interests and influences can exist which is useful for clustering brands and subjects interested in investing and doing business in motorsport .

Having all the market exposure and penetration data, Liberty itself would be able to assist a company in defining the most suitable context in which to present itself and in the most effective times and ways. Some brands could think about extending their presence across the board while the teams could more decisively follow a strategy aimed at looking for sponsors dedicated to particular geographical areas with a greater turnover of names on the fairings.

We hope that a renewed and increased popularity of these disciplines will support our incessant research and support activities for companies. And we will certainly be ready for all the new opportunities that will open up, we are sure, in this new course.

Continue to follow ours blog to always be updated on the world of business in motorsport!

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