The European Commission announced on Thursday that it will investigate Formula One owner Liberty Media’s €3.5 billion euro deal for the motorcycle racing league MotoGP World Championship, as the deal risks raising prices for the licensing of broadcasting rights for motorsport events of both brands.
ADVERTISEMENTThe merger of owners of Formula One with motorcycle Grand Prix (MotoGP), the biggest series of motorcycle road racing events, could harm competition in the broadcasting sector, the European Commission has found in a first phase of investigation launched after the deal was notified to the EU enforcer mid-November.
“By acquiring Dorna Sports, Liberty Media would hold the commercial rights to two of the most popular motorsports in Europe: Formula One and MotoGP. We need to more carefully assess whether this acquisition could negatively affect European broadcasters, for example in terms of increased license fees,” Competition Commissioner Teresa Ribera said in a statement.
US-based company Liberty Media announced in April a takeover of MotoGP’s parent company Dorna valuing the world’s leading motorcycle racing championship at €4.2 billion, with an equity value of the deal of €3.5 billion.
However, the Commission deemed that there is a risk of Liberty abusing its dominance by owning both Formula One and MotoGP.
Liberty holds the exclusive commercial rights for the FIA Formula One World Championship, while Dorna Sports holds exclusive commercial rights for the FIM World Championship Grand Prix (“MotoGP”) as well as other motorcycle racing championships.
Formula One and MotoGP being close competitors, the EU enforcer is concerned that the transaction might affect competition on national markets for the licensing of broadcasting rights for motorsports content and in wider national markets for the licensing of broadcasting rights for all sports content.
The Commission has now 90 days to decide whether the merger complies with EU merger rules.
The announcement comes as Liberty Media nurtures the ambition to extend MotoGP events to a wider audience.
“The business has significant upside, and we intend to grow the sport for MotoGP fans, teams, commercial partners and our shareholders,” Liberty Media CEO Greg Maffei said in a statement in April.
