Liberty announces $825mn F1 stake sale to fund MotoGP takeover

Liberty Media has announced it is selling a $825million stake in Formula 1 to fund the purchase of MotoGP.

It was announced in April that Liberty would acquire 86% of the shares of Dorna Sports, the Spanish company which has owned MotoGP since 1992.

The deal was valued at $4.2billion, with the remaining stake staying with MotoGP management.

Now a sale of over 10 million shares, priced at $77.50 per share, will give Liberty the proceeds required to complete the Dorna deal - although a part of the proceeds will go towards corporate purposes including debt repayment.

Confirming the sale of shares on Thursday, a Liberty Media statement read: “Liberty Media Corporation announced today that it has priced the previously-announced public offering of 10,650,000 shares of its Series C Liberty Formula One Common Stock (“FWONK”) at a public offering price of $77.50 per share. Liberty Media also granted the underwriter of the offering an option to purchase up to an additional 1,597,500 FWONK shares.

“The offering is expected to close on August 22, 2024, subject to the satisfaction of customary closing conditions, and is expected to result in approximately $825,375,000 in gross proceeds to Liberty Media, before deducting the underwriter’s discounts and estimated offering expenses payable by Liberty Media.

“Liberty Media intends to exercise its option to deliver additional cash in lieu of shares of FWONK as part of its previously disclosed proposed acquisition (the “Acquisition”) of Dorna Sports, S.L., such that all the consideration paid will be comprised of cash and no shares of FWONK will be issued to the sellers.”

The confirmation of the Dorna deal dragged on for longer than both parties would have liked, given that they had been in agreement on the terms for a while and had initially wanted to announce the news before the 2024 MotoGP season got under way in March.

Marc Marquez, Gresini Racing, Carmelo Ezpeleta, CEO Dorna Sports

Photo by: Gold and Goose / Motorsport Images

Liberty saw off interest from the likes of Qatar Sports Investments, the country's sovereign wealth fund, and Ultimate Fighting Championship and World Wrestling Entertainment owner TKO to add MotoGP to its pen.

“We are thrilled to expand our portfolio of leading live sports and entertainment assets with the acquisition of MotoGP,” Greg Maffei, Liberty Media President and CEO, said at the time of the deal being announced.

“MotoGP is a global league with a loyal, enthusiastic fan base, captivating racing and a highly cash flow generative financial profile. Carmelo [Ezpeleta, Dorna CEO] and his management team have built a great sporting spectacle that we can expand to a wider global audience.

“The business has significant upside, and we intend to grow the sport for MotoGP fans, teams, commercial partners and our shareholders.”

Since acquiring Formula 1 in 2016, Liberty has overseen a boom period for the series as interest has hit an all-time high, increasing value and revenue streams.

Liberty will be hoping to enjoy similar successes with MotoGP, where Ezpeleta and his son Carlos [sporting director] will remain involved at the outset.