KTM Might Leave MotoGP Sooner Than Expected: Report

Alex Harrington | Dec 29, 2024

Apr 13, 2024; Austin, TX, USA; Brad Binder (33) of South Africa and Red Bull KTM Factory Racing rides during practice for the MotoGP Grand Prix of the Americas at Circuit of The Americas. Mandatory Credit: Jerome Miron-Imagn Images / Jerome Miron-Imagn Images

Recent reports suggest that KTM might end its MotoGP involvement earlier than anticipated, possibly exiting by 2026. This potential move is part of the company's broader restructuring efforts, driven by financial struggles that have resulted in substantial debt. KTM, facing an estimated debt of over €3 billion, has entered self-administration, a step aimed at navigating its financial crisis.

This financial strain, exacerbated by ambitious expansions throughout and after the COVID-19 pandemic, including acquisitions in the cycling sector and other brands like GasGas, Husqvarna, and MV Agusta, has necessitated this drastic course of action.

Financial analyses, including one by the Boston Consulting Group via Crash.net, forecast a brighter future for KTM. However, they also highlight that cutting its grand prix program could save the company around €46 million per year. The financial challenges have prompted actions such as a recent Austrian creditors association hearing, revealing KTM's "planned" exit from MotoGP, though the company affirmed its commitment to the sport through 2025, leaving intentions beyond that year unspoken. This declaration contrasts with KTM's contractual agreement with Dorna Sports, which runs until the end of 2026.

KTM has several high-profile riders for the coming seasons, including Brad Binder, likely remaining until 2026. Other riders, like Pedro Acosta, Enea Bastianini, and Maverick Vinales, have multi-year contracts, which adds another layer of complexity to the potential MotoGP exit.

Investment opportunities appear to be on the horizon, with initial creditor reports suggesting that potential investors might inject up to €700 million into KTM. Discussions have been noted with figures like Lewis Hamilton's management, signaling possible new investment avenues for the F1 driver. The timeline for these financial solutions is pressing, though, with investors required to submit offers by the third week of January, followed by a creditors' vote by the end of February. Success in securing these investments is critical, as it forms a part of the restructuring plan to repay 30% of the existing debt.

Key figures within KTM, like motorsport chief Pit Beirer, have argued that the company's identity is tied to motorsport. Beirer has been explicit about KTM's dedication to racing, admitting that the bike for the next season is ready and preparations for 2025 are underway, despite acknowledging challenges, especially with regulations in MotoGP changing for 2027. However, the potential for KTM's MotoGP exit prompts concerns about significant PR damage.

Past reports included speculation about Red Bull, KTM's long-time partner, becoming more heavily involved as a possible owner, akin to its role in Formula 1. Despite these rumors, KTM denied intentions for any shifts in ownership, focusing instead on internal restructuring and external investment strategies.

Looking ahead, the next few months are crucial for KTM's future in MotoGP. The results of upcoming investors’ bids and the creditors' vote will influence whether the brand continues its storied presence in the premier motorcycle racing category beyond 2025.