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 most prominent organizer of motorcycle racing for $1.9-billion, to the company that has made Formula One car 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 top-tier MotoGP racing series, to Liberty Media Corp. The pension fund manager will receive 75 per cent of the proceeds in cash, and the rest in Series C Liberty Formula One tracking stock.
Liberty Media will also acquire a stake in Dorna owned by British private equity group Bridgepoint Group PLC, for a total ownership stake of 86 per cent. The deal values Dorna’s stock 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 through Dorna in 2013. Dorna is a sports management, media and marketing company that organizes the world’s most prominent motorcycle races, where riders reach top speeds of more than 360 kilometres per 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 Dorna investment “delivered excellent returns” for the fund, even after struggling during the COVID-19 pandemic, but CPPIB did not provide specific 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, which invested in Dorna, 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, and will seek to expand the appeal of MotoGP in similar fashion.
Liberty Media chief executive officer 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,” in a statement.
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 ($711-million).
The deal is expected to be completed by the end of the year, subject to regulatory approvals and conditions.
