Action from MotoGP's Portuguese Grand Prix in Portimao, Portugal, on March 24, 2024.Rodrigo Antunes/Reuters
Canada Pension Plan Investment Board is selling its stake in the world’s foremost organizer of motorcycle racing for $1.9-billion to the company that made Formula One auto racing a global success.
CPPIB will sell its 39-per-cent stake in Dorna Sports S.L., the Spanish company that owns the rights to the MotoGP racing series, to Liberty Media Corp. The pension fund manager will receive 75 per cent of the proceeds in cash, with the rest in Series C Liberty Formula One tracking stock.
Liberty Media will also acquire the stake in Dorna owned by British private equity group Bridgepoint Group PLC, for a total ownership stake of 86 per cent. The deal puts Dorna’s stock-market valuation at €3.5-billion ($5.1-billion), not including debt. Liberty Media owns Formula One, as well as satellite radio provider Sirius XM and event company Live Nation.
The deal allows CPPIB to cash out the investment its private-equity arm made in motorcycle racing. Dorna is a sports management, media and marketing company that organizes the world’s top-tier motorcycle races, where riders reach speeds of more than 360 kilometres an hour.
“Since our first investment in Dorna in 2013, the company has expanded the scale, scope and fanbase of motorcycle racing globally,” said Hafiz Lalani, CPPIB’s global head of direct private equity, in a news release.
Mr. Lalani said the investment “delivered excellent returns” for the fund, even after struggling during the pandemic, but CPPIB did not provide details of its financial gains on the investment.
CPPIB manages $591-billion in assets for more than 22 million contributors and beneficiaries of the Canada Pension Plan. Its private equity division has $146-billion in assets, accounting for 26 per cent of the fund.
Liberty Media has presided over a renaissance in interest in Formula One, which has seen a boom in popularity thanks in part to a behind-the-scenes television series documenting its teams and drivers on Netflix. It will seek to expand the appeal of MotoGP in a similar fashion.
In a statement, Liberty Media chief executive Greg Maffei said Dorna CEO Carmelo Ezpeleta, who will continue to run the business from Madrid, has “built a great sporting spectacle that we can expand to a wider global audience.”
The company is counting on the scarcity of sports league assets such as MotoGP, which hosts 21 races in 17 countries, as well as the rising prices being paid to acquire sports media and sponsorship rights. In 2023, MotoGP generated revenue of €486-million ($709-million).
The deal is expected to be completed by the end of the year, subject to regulatory approvals and conditions.
James Bradshaw