F1: Liberty Media's commitment to MotoGP: the 'Cable Cowboy' reinforces its dominant position

Last November, during his last interview on CNBC, John Carl Malone reiterate what you have been thinking for a long time. I repeat it once again. Sport is what you have to see. Some large technology companies are going to try to create their own sports rights (…). In a normal world, these big tech They would have already bought into traditional media, swallowed it and completed a smooth transition. But due to antitrust concerns…. That’s not going to happen, round the interviewer, David Faber. These antitrust laws, precisely, are what the owner of the company must now face. Liberty Mediathe company that owns the Formula 1which yesterday officially announced the purchase of MotoGP. An operation that consolidates Liberty as the reference in motor sports and as the largest sports conglomerate globally.

The American holding company will pay 4.2 billion euros to take over Dorna Sports, the Spanish company that has organized the World Motorcycle Championship since 1992. MotoGP is a global competition with a loyal and enthusiastic fan base, captivating races and a financial profile that generates great cash flow. (…) The business has important advantages and we intend to make it grow at all levels, both for fans, teams, sponsors and shareholders, he assured. Greg Maffei, CEO of Liberty, through a statement. Along the way, Dorna Sports would have rejected other offers, such as that of the TKO group, led by Ari Emanuel, famous Hollywood agent, and Qatar Sports Investments, parent company of Paris Saint-Germain. From now on, Liberty will also control the Superbike, Moto E and Women’s World Championships.

However, satisfaction with the agreement still depends on a premise. Which, precisely, worried Malone in the aforementioned talk with CNBC. The acquisition is expected to be completed by the end of 2024 and is subject to authorizations and approvals by the legal competition authorities, the aforementioned letter stated. And there is a precedent that should worry those involved. In 2006, the European Commission required CVC Capital Partners to get rid of Dorna Sports when the Luxembourg fund intends to buy the commercial rights to Formula 1 from the controversial Bernie Ecclestone.

2.2 million acres

So the designs of Brussels represent the last obstacle for Malone, an 83-year-old tycoon known as the Cowboy del Cable. The second largest landowner in the United States, with ranches in Colorado, New Mexico and Wyoming. No less than 2.2 million acres. Something like the surface of the province of Almera and 22 times more, for example, than Juan Abel, the largest Spanish owner. His net worth, after an exponential increase since 2020, is today around €9 billion.

Liberty Media’s coup crystallized in 2017 when it acquired Formula 1 in exchange for 4.2 billion euros. Since then, its value has skyrocketed to 18.6 billion, according to the ranking of Forbes. In addition to the Great Circus, its other star asset is the Atlanta Braves, champions of the Major League Baseball in 2021. Not to mention the traditional interests in cable TV, the adventure in British telecommunications through Virgin Media or Tripadvisor, one of the giants in the tourism industry.

Liberty’s hegemony in global sport is best understood in light of its competitors. According to the Forbes list, the holding Malone still leads by some margin Kroenke Sports & Entertainmentowner of the Denver Nuggets, current NBA champions, the Arsenal of the Premier League or the Los Angeles Rams, champions of the Superbowl in 2021. And it has increased its dominance over Fenway Sports Groupowner of Liverpool or the Boston Red Sox, one of the oldest franchises in the MLB.

The fee and sponsorships

During these six years, Liberty’s successes in Formula 1 have been based on three pillars. The most important lies in the high fees received by countries interested in a Grand Prix. An amount that is around 50 million euros in cases of Arabia Saud, to Azerbaijan, Bahrain o Abu Dhabi. Likewise, the peak of the business has caused an increase in television contracts: Sky Sports paid more than 1.2 billion euros for its latest five-year exclusive for the United Kingdom and ESPN It already pays 80 million annually for its rights in the US. Finally, sponsorships have regained the vigor of yesteryear. In addition to the Saudi oil company Aramcowith an annual contract of 50 million, other firms such as Rolex, Crypto.com, DHL o Heineken They have already disbursed 600 million in 2022.

Now it remains to be seen if Malone maintains with MotoGP the approach with which some equated him with Warren Buffett. A business vision that he himself equated to that of the Roman Empire, based on the elimination of any trace of previous leadership. The most notable retirement, in this case, should affect Carmelo Ezpeleta, at the helm of Dorna since 1994 and confirmed yesterday in his position as general director. Liberty has managed to turn a niche sport into a global spectacle, capable of cajoling millions of young people through Drive to Survive, the Netflix series. Now it remains to be seen if he can apply this model, increasingly popular in his country, to a World Cup that in 2024 will have 21 stops, including, for the first time, India.

By Editor

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