According to several reports in the financial sector, the investors behind Dorna Sports S.L. are readying themselves for another sizable payout from the media rights holder for the MotoGP and WorldSBK Championships.
Using a bit of financial finesse, the move would see Bridgepoint Capital and the Canada Pension Plan Investment Board (CPPIB) – the two major investors in Dorna Sports – taking roughly €889 million off the books of the Spanish media company, according to Reuters.
As such, today’s news would make this the third time that Bridgepoint and the CPPIB have raided the piggy bank for motorcycling’s premier racing series, having done similar deals in 2011 (€420 million) and 2014 (€715 million).
Red Bull are poised to make two dramatic announcements over the next two weekends, we can exclusively reveal. At next weekend’s Bahrain F1 race, the Austrian energy drink firm will announce its withdrawal from the premier four-wheeled racing series at the end of 2014.
A week later, at the Austin MotoGP round for which it is the title sponsor, Red Bull is to announce that it is to purchase Bridgepoint Capital’s remaining stake in MotoGP, and take over the running of the series.
Sources in the private finance industry with knowledge of the situation say that Bridgepoint has been looking to rid itself of its motorcycle racing business for some time. The private equity firm had acquired 71% of Dorna in 2006, at the peak of MotoGP’s popularity, reputedly for £400 million.
Since then, they have seen the value of their investment drop, and have been looking to get their money back from the deal ever since. The sale of a 39% stake in Dorna to the Canadian Pension Plan Investment board was the first step in recouping their investment.
That deal was rumored to be worth €400 million, or just over 70% of their initial outlay. Sources with knowledge of the situation say that Red Bull is to acquire the remaining 32% of Dorna for around €300 million , but with full control over the series.
When Casey Stoner was asked on Thursday about the key to his speed through Turn 3 – now renamed Stoner Corner in his honor – he refused to answer, saying only that he might tell everyone after he had retired. To anyone watching Stoner scorch around that corner and the rest of the track, the secret was plain to see: the Australian is completely in his element, totally comfortable and confident in every move he makes at the circuit.
Stoner left thick black lines round most of the left handers at the circuit, including daubing them all over the inside of the kerbs at Turn 3. It was a display of mastery that left even the injured Ben Spies in awe, watching at home on the computer. “I gotta say without a doubt Casey Stoner does stuff even GP racers watch and scratch their head at!” Spies posted on his Twitter page. Stoner ended nine tenths of a second up on second-place man Dani Pedrosa, the only man to dip into the 1’29s (just, his fastest lap being 1’29.999), and the only man bar Pedrosa to hit the 1’30s.
Bridgepoint Capital, the private equity firm which owns Dorna and Infront Sports and Media, has sold a 39% stake in Dorna to a Canadian pension fund, Canadian media are reporting. According to a report from Reuters, Canada Pension Plan Investment Board reportedly paid €400 million for the 39% stake in Dorna, and will join Bridgepoint and Dorna’s management – in the figure of Carmelo Ezpeleta – in running the company.
The sum paid for the 39% stake gives Bridgepoint a healthy profit. The UK-based private equity firm purchased Dorna from CVC back in 2006, when CVC purchased the rights to Formula One and were forced by the European Competition Commission to sell the rights to the MotoGP series first. Bridgepoint is said to have paid some £400 million (about €550 million) for the 71% stake held by CVC when they took over the company.
The Canada Pension Plan Investment Board is buying into more than just MotoGP, however. With the consolidation of Infront Motor Sports under Dorna, CPPIB now has a stake in both MotoGP and World Superbikes. This sale also provides the rationale for Bridgepoint’s decision to bring both series under a single umbrella: not only does it add value to the package on offer to CPPIB, but it also eliminates competition between the two series, allowing both to grow without cannibalizing each others audience and potential sponsors.
This, rather than any power struggle between Dorna CEO Carmelo Ezpeleta and Infront bosses Paolo and Maurizio Flammini, is the more important reason for combining the two series. Ezpeleta may have come out on top in that internal power struggle, but it was as a by-product of the proposed sale, rather than as a direct intent.
The repercussions of Bridgepoint’s decision to hand control of the World Superbike series to Dorna are just starting to become clear, as each of the protagonists get to explain their side of the story. After Paolo Flammini spoke to the media at the final World Superbike round of the year at Magny-Cours, at Motegi, it was the turn of Dorna CEO Carmelo Ezpeleta to face the press.
He did so an hour before the traditional pre-event press conference, giving a statement and answering questions from assembled journalists on the implications of the move (a full transcript of the press conference is available on the official MotoGP.com website). Ezpeleta did his best to first of all quell any fears among the legions of World Superbike fans that Dorna intended implementing any major changes for the coming season, ensuring the assembled media that all would go ahead for 2013 as planned.
“For next year things will continue as they are, and both MotoGP and WSBK will continue the same way, with exactly the same system of organization and with the same technical rules,” Ezpeleta told the press. “For 2013 the regulations will be the ones that have been approved between the FIM and Infront Motor Sports,” he said in response to questions, “In 2013 it will be exactly as proposed by the different parties involved, there will not be any changes for 2013.”
Beyond 2013 is a different matter, however. Ezpeleta made it clear that his goal was to harmonize the regulations between the MotoGP and World Superbike series, each maintaining their separate identities, but cutting costs and increasing the spectacle in both. “From now, together with the FIM, the manufacturers, the circuits and with the teams, we will try to accommodate these difficult economic times to set up two championships that are able to continue and to grow together,” Ezpeleta said. “This is the main aim of both championships – reducing costs and increasing the show.”
Sunday was a big day for World Superbikes at Magny-Cours. Not just because the 2012 title was settled in what was a fascinating showdown, helped in no small part by the weather, but perhaps most of all because on Sunday morning at 9am local time, Infront Motor Sports CEO spoke to the media for the first time since the announcement that Bridgepoint, the private equity firm which owns both Infront and MotoGP rights owners Dorna, has decided to bring both series under a single umbrella, and that umbrella is to be Dorna.
That news has sent a shockwave through the motorcycle racing world. The World Superbike paddock is hardest hit of all: the mood there is somber, with everyone from Infront staff to team mechanics fearing the outcome of what amounts to a coup by Dorna CEO Carmelo Ezpeleta. Optimists are few, especially as Ezpeleta is one of the most reviled characters among denizens of the WSBK paddock, because of what he represents: the perceived arrogance of the Grand Prix paddock, and a culture which is anathema to everything which World Superbikes stand for. MotoGP is truly the Beatles to WSBK’s Rolling Stones.
Bridgepoint has announced today that it has brought MotoGP and World Superbike, the two motorcycle racing series it owns, under a single umbrella organization. The reorganization will see Dorna Sports become the parent organization for both series, though Infront will operate as an independent entity and continue to organize World Superbike under its own banner. Infront has also been named as “marketing advisor and global advisor” for both MotoGP and WSBK.
The implications of this announcement are huge, but not immediately clear. The logic behind the move is impeccable: the two series are spending too much of their time competing against each other instead of working together to promote the sport of motorcycle racing. By combining their marketing efforts, the hope is that both series will be made stronger.
Bear with us on this one, as it’s a bit convoluted. Bridgepoint Capital, a private equity firm based out of London, owns Spanish company Dorna Sports SL. Dorna, which as you might recall is the media rights holder and promoter for MotoGP, the motorcycle Grand Prix World Championship that we all know and love. Meanwhile World Superbike is owned in majority by Swiss company Infront Sports & Media, and in minority by the Italian-born Flammini brothers, with the latter group still handling WSBK’s media promotion.
Now according to reports, Infront Sports & Media is up for sale, and one of the three alleged bidders is Bridgepoint Capital (circle back to the second sentence in the first paragraph if you got lost on the way here). This means that potentially the twice-removed owner of MotoGP could potentially own a controlling stake in the Championship’s rival series: World Superbike. There are still a number of “if’s” in whether Bridgepoint will come through as a buyer on Infront Sports & Media, but ownership of both series by the same party, even at a removed distance is worth some general discussion.