Liberty Media's Takeover Of MotoGP Receives Huge Setback From European Union Investigation

The European Commission, the European Union's executive body, is set to thoroughly review Liberty Media's acquisition of an 86% stake in Dorna, the rights holder.

Apr 14, 2024; Austin, TX, USA; Pedro Acosta (31) of Spain and Red Bull Tech3 GASGAS and Marc Marquez (93) of Spain and Gresini Racing MotoGP and Jorge Martin (89) of Spain and Prima Pramac Racing rides during the MotoGP Grand Prix of The Americas at Circuit of The Americas. Mandatory Credit: Jerome Miron-Imagn Images / Jerome Miron-Imagn Images

The European Commission, the European Union's executive body, is set to thoroughly review Liberty Media's acquisition of an 86% stake in Dorna, the rights holder of the MotoGP World Championship. Announced in May, the deal was valued at up to 4.2 billion euros.

Originally expected to close by the end of 2024, the transaction has been delayed as the Commission evaluates its potential implications, pushing the completion timeline beyond initial projections. An investigation has been announced into the deal to assess whether Liberty Media's acquisition of MotoGP rights holder Dorna complies with EU antitrust regulations, created under the leadership of Teresa Ribera, who holds dual roles as Vice President of the Commission and the Spanish government.

A report quotes the following statement made by the commission, based on which it did not allow the deal to go through. It read:

"The transaction raises serious competition concerns in potential narrow national markets for the licensing of broadcasting rights for motorsports content in the European Economic Area, where Formula One is the clear market leader in all European countries and MotoGP is most often its only competitor.

"The transaction may remove important competitive constraints between the parties on some potential wider national markets for the licensing of broadcasting rights for all sports content or possible segments of such markets. In particular, this is because it appears that Formula One and MotoGP compete closely."

The concern centers on the potential for MotoGP's acquisition to give Liberty, already the owner of Formula 1, significant control over the market for racing broadcast rights in Europe, a scenario that could result in higher prices for consumers.

The commission will also delve into the role of John Malone, the principal shareholder of both Liberty Media and Liberty Global, to assess whether his influence could disadvantage competing broadcasters in countries where Liberty operates, including the Netherlands, Belgium, and Ireland.

Under the terms of the agreement between Liberty and Dorna, Liberty would be required to pay 126 million euros to the MotoGP promoter if it decides to withdraw its offer. Speaking of the timeline, the investigation has progressed to a second phase, allowing up to 90 working days from the contract's submission date, 14 November, to reach a decision. As a result, the new deadline has been set for 14 May.

The revised timeline poses a significant setback to the potential takeover, leaving the deal's ultimate approval by the EU Commission uncertain.