MotoGP Worth 210 Million Euros A Year

The standard joke in motorsports paddocks around the world is that the way to make a small fortune in motor racing is to start off with a large one. MotoGP - like all other forms of motorsports - costs a lot of money, and somebody has to pay for it. The question of how much MotoGP costs - and how much money it generates - is an interesting one, and not one to which many people have a ready answer.

Fortunately, the leading Italian MotoGP website GPOne.com have dived into the subject, and come up with some fascinating answers. GPOne's Alice Margaria spoke to Dorna SL's Chief Operating Officer and Managing Director Enrique Aldana, and enquired about the financial side of Dorna's business. Dorna's turnover, Aldana revealed, was 168 million euros in 2009, with the company expecting to earn around 210 million in 2010. From that income, Dorna expects to turn a profit of some 5-8 million euros. Most of Dorna's income is from the sale of TV rights - a potential risk for the future, as the internet continues to encroach on traditional broadcast channels, but Dorna has spread the risk across a wide range of broadcasting outlets. Spain and Italy remain the biggest market - their relative strengths reflecting the state of on track competition, with Spain now picking up the slack, as Jorge Lorenzo looks like taking a championship from his Fiat Yamaha teammate Valentino Rossi.

The GPOne article is a great piece of research, and it immediately highlights MotoGP's main problems. Dorna's official figures for MotoGP's global TV audience is around 300 million for each Grand Prix, an impressive figure, and about half that of Formula One's audience of around 600 million per race. But looking at the revenue MotoGP generates from those audiences is worrying. Where MotoGP generates 200 million euros, Formula One's turnover is over $1 billion, around 780 million euros. In other words, Formula One generates four times the income from double the TV figures.

More worrying than this is the fact that where Dorna generates 5 million euros in profits, FOA (the commercial rights holder for Formula One) booked an operating profit of $420 million last year, or 330 million euros, or 66 times the profits generated by MotoGP. Dorna Sports Management SL paid around 580 million euros for the shares owned in it by CVC (the equity company which owns FOA), and the 5 to 8 million a year that MotoGP currently generates will not qualify as a good return on investment for that kind of sum.

Valentino Rossi's switch to Ducati could not have come at a better time for Dorna, which was one of the reasons the company pushed so hard to achieve the switch - that and the fact that Rossi's move provides excellent cover to help disguise that there will still only be 18 bikes on the grid in 2011. But it's clear that there is a lot more work to be done if MotoGP is to capitalize on its potential.

The standard joke in motorsports paddocks around the world is that the way to make a small fortune in motor racing is to start off with a large one. MotoGP - like all other forms of motorsports - costs a lot of money, and somebody has to pay for it. The question of how much MotoGP costs - and how much money it generates - is an interesting one, and not one to which many people have a ready answer.

Comments

What company ?

"which was one of the reasons the company pushed so hard to achieve the switch "

You mean Dorna or Ducati ?

I wonder if bridgestone will focus his tires developement for the Ducati and Rossi.

Total votes: 72

Differing numbers

I believe we are all referencing the same Autosport article which revealed F1's turnover and profit margins. The same article also revealed that servicing CVC's debt (principal and interest) was in excess of $250m per season. You wouldn't expense principal, but in this case, CVC only owns the rights to F1 until 2014 so the principal and the depreciation should be roughly the same (way oversimplified). Long story short, F1's income is 1/3 the number they give to the press, imo.

Also, CVC were only 75% stakeholder's in Dorna Sports SL. Their stake was bought by Bridgepoint Capital for $626m. Dorna should still be entitled to 25% of the income. If Dorna make $5-8m then total income should be around $20-32m.

http://formula-1.updatesport.com/news/article/1153384661/formula_one/F1business/F1-owner-CVC-sells-MotoGP-for-$626m/view.html

Even so, MotoGP's situation is ugly, and that's precisely why I believe that Dorna actively moved Rossi to Ducati. No conspiracy. These people are just trying to make a product that sells. If Dorna didn't meddle in Rossi's affairs, they wouldn't be doing their job. Similarly, the NBA wouldn't be doing their job if they didn't meddle in the LeBron James trade. The MLS wouldn't have been doing their job if they didn't broker the deal to move Beckham to the MLS.

Total votes: 59

Thanks David

phoenix1, this is the sort of information that I was asking you for. As I mentioned, I have never seen any reporting on this (or more correctly, anything of value). In the absence of any evidence, a conspiracy theory remains exactly that.

I do still question Dorna's ability to manipulate rider contracts though I recognize their interest in doing so. I think the degree of involvement is important to pain t a picture of Dorna pulling the puppet strings I think has to be as inaccurate as that of them maintaining an objective indifference.

Total votes: 75

Still a minority sport?

I think the research brings home the fact that motorcycle racing isn't easy to sell to the non motorcycling public! The guy driving his Ford Focus imagines that he has the skills of Jenson Button or Fernando Alonso, there are a lot of drivers in this world and fewer bikers, India, Thailand etc have a large proportion but not a huge proportion of them are race followers.

Total votes: 63

Excellent point...

And is the main reason that European countries have a higher proportion of their population interested in motorcycle racing than here in America.

Many younsters in Europe start their life off riding scooters and become familiar with them. Relatively few American kids start on two wheels but that is slowly changing. I see a lot more kids on scooters here now that the cheap Chinese machines are available.

Asia and China are quickly becoming the most important markets for larger displacement bikes and will become more and more influential on the manufacturers.

Life happens.

I wonder how fast the Chinese and Indians will be in MotoGP?

Total votes: 60

MotoGP is not F1

nor will it ever will be. Any comparison to F1 and MotoGP will look small, pale, and failing.

But just because MotoGP isn't as big as F1 means it's in trouble? No.

I don't see the relevance of this comparison. A more telling tale of the health and profitability of Dorna or MotoGP would be to compare where they have come from and what they used to profit compared to now along with what their audience number used to be and what it is now and if it's growing.

Total votes: 59

MotoGP is too narrow

With only four riders in the world worth their salt, if you believe the "aliens" theory, no wonder it's hard to get the rest of the world interested in motogp or motorcycle road racing in general. NASCAR has to be one of the lowest forms of motorsports but it sells. I think MotoGP has been built up too much. More access is needed and build up the national series as well as WSB. Make them more important. If only MGP matters then only 4 riders matter. In that case no one really cares.

It kills me that there are a few hundred young, fit and fairly rich racers across all the series and only Rossi has a back story anyone knows about. These stories should sell themselves.

Total votes: 73

NASCAR/MotoGP

NASCAR is really funny to me. I'm pretty sure here in the states its still the #1 spectator sport next to football, but football might have passed. Anyway, I used to watch NASCAR but how many times can you watch cars go in a circle before you go insane? I love it when you get these guys on a road race course and Juan Pablo Montoya whipes the floor with em! But the thing about NASCAR is they have more winners. Its not the same 4 guys all the time. Sure a lot of racers are much better than others but there are more winners. At the same time its also one of the most regulated motorsports. So I think its a trade off. Do we want highly regulated specs for more winners or unregulated with the same 4 guys?

Total votes: 71

inaccurate

I don't care for NASCAR much but I do catch a bit of the races at Sonoma and Watkins Glen. I've always been a bit JPM fan, but he has only won 2 races in 4 years. That isn't wiping the floor at all. The NASCAR boys hold their own on roadcourses and have shown it.

Total votes: 71

To grow, we must change

You make some fair points. I've been following GP racing since 1984 or so and even now I sometimes surprise myself by remembering *all* of the riders participating in the 2010 series. I'm not sure how anyone unfamiliar with GP could establish any sort of fascination with it beyond the mass appeal of Rossi.

Dorna and the MSMA need to somehow link the glamour of racing to both the sale of daily commuting bikes/scooters and the sale of more specialised bikes to returning riders - at the very least. To take it to a wider audience would require tactics that are probably unfamiliar to conventional television marketers.

As an example - my wife has been riding since 17, but only watched a bike race for the first time when she met me, at 28.

8 years later and she still loves riding, but I can count on one hand how many races she's actively watched. I do however remember her paying attention to a 250GP race with the sound off and a classical CD playing - she said something about how lovely it was to watch them flowing without all the annoying noise that usually accompanied it.

Anathema to afficionados, sure, but if we want the sport to prosper we need to think beyond what *we* want, and then cope with the differences that will come. And it will have to become different in order to grow, make no mistake.

IMO Dorna is being particularly stupid in killing off YouTube replays of racing events. Maybe they could set a limit of 30 or 60 seconds and allow footage up to that limit so that people could post highlights or special incidents, but to remove everything that infringes their copywrite simply reduces the potential audience and turns the younger potential audience off them due to their perceived arrogance. Dorna needs to understand that the younger potential viewers see profiteering and market protection as things to attack and cirvumvent. And they couldn't care less about Dorna protecting the tv rights of big companys.

Dorna also needs to ensure that the major news outlets in each marketable country run some results on the Monday after each race - just to keep the sport in the public eye, which is necessary before you can attempt to build its profile up. Again, after 25+ years of following GP racing, it's still surprises me to see *anything* in a major newspaper after a race.

Total votes: 63

You're definitely right

You're definitely right about the youtube thing... I'm an MMA fan, and the UFC used to be maniacal about booting UFC footage off youtube. Then they came to their senses and made an official UFC-youtube-channel. They still get to control their content, it's a marketing juggernaut, and it's the best way to get kids into the sport. Because for a lot of kids (especially in the USA), if it's not on youtube it doesn't exist. Dorna should follow suit....

Total votes: 68

There is

There IS a MotoGP Youtube channel, and has been for months.

MotoGP.com also allows some FREE video downloads from iTunes.

Total votes: 63

I stand corrected... hadn't

I stand corrected... hadn't checked since the end of last year.

EDIT: Well, I checked it out. And it's certainly better then nothing, but I don't see why they can't post full races on there a week or so after the fact. How could the broadcasters have a problem with that? So it's still a fail in my opinion.

Total votes: 65

But...

Yes, they have a Youtube channel but it is all just interview and paddock girl clips. Very little actual race footage. If you have spent any time looking at the fan posted footage, it bears little resemblance to what Dorna is making available.

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MotoTheory.com - MotoGP Data & Statistics

Total votes: 62

eh

They have the prerace pump/hype jazz for EVERY race.

They have race highlights, over 60 second clips from EVERY race.

They have all the promo clips that you have to pay for at their site, on Youtube for free. Like the head to head battles between rivals.

They have the "After the Flag" show in its ENTIRETY (usually 15+ minutes)

They CONSTANTLY have specials like "onboard at XYZ track"

They have "Best overertaking moves at XYZ track" for almost every race.

My point is, Dorna is NOT wasting youtube as an asset. They ARE very much taking advantage.

Sometimes some people here play devils advocate just to stall the discussion instead of advancing it. Sheesh.

Total votes: 66

the product

People confuse the actual product b/c they are not impressed by the manufacturer. I've seen the improvements they made to their services over the last 2-3 years and during this time I've canceled my subscription b/c the 21L 800s are not worth my money and b/c they banned my youtube videos.

You are right about the quality of the service and all of the improvements Dorna have made, but their casual disregard for all things sacred (fan enthusiasm, fun, and fierce competition) cannot be repaired by a bulleted list of improvements. I don't think Devil's advocate is going to make anyone rethink the situation. You'd have to demonstrate the Dorna have done a good job managing the sport over the last 4-5 years. Tough sell when GP is in this kind of condition. Maybe we will be singing their praises 5 years from now, but not today.

Total votes: 64

eh #2

Highest TV viewership of all time, no? ;-) Last year saw many record crowds. As a "business" it is more successful than ever.

But I wont argue that the racing aint what it once was. I am with you there.

Robot bikes and fuels and engine limits. Yuck.

Gimmie a full tank, a fat torque curve and a talented wrist....tires be damned.

Total votes: 71

But...

That still doesn't address my last point (which was the important one) the clips the fans were putting up were of interest in a very different manner and that sort of viral publicity is exactly what Dorna doesn't get.

For example, there was a slo-mo clip of Hayden at Silverstone showing him fighting the Ducati in a manner similar to Stoner in 2008, then he started losing the front, this clip was worth countless words in a discussion on the forum in tht it described a lot about how the Ducati was behaving - and yet, it is exactly what will never see the light of day on the MotoGP Youtube channel.

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MotoTheory.com - MotoGP Data & Statistics

Total votes: 61

oh

But those are for the supergeeks like us who are ALREADY hooked. Newbies dont see the hundreds of subtle things going on in that clip like you and I do.

To attract the younger generation you have to slap together an MTV stlye "highlights" clip with music blaring in the background, bright colors and hot chicks. Todays youth needs ADD pacing to hold their attention. Look how cinema and music have changed over the decades.

Showing the stuff that you and I can rewatch 73 times and analize (and love it) over and over is boring old fart stuff to them. (we know better though!)

Its like the difference between slamming 2 Redbulls RIGHT NOW back-to-back, or letting a nice wine breath and nursing it for a couple hours.

Marketing = Highlights + Buzz + Drama + more Highlights.

Total votes: 64

Agree and disagree

You're right that Dorna have hugely upped their game in this respect, and that they have highlights clips up on the Youtube channel really quickly, including other cool stuff. As you rightly point out, this goes a long way to capturing the imagination of the casual viewer. However, by disabling embedding, they are also restricting the distribution of those videos. If they allowed those videos to be embedded, then I'd probably put them up (much as I do with the WSBK videos), and people could post them on forums, messageboards, blogs, Facebook, etc etc etc. That's better than pointing everyone to the official Youtube page.

Where they're really missing a trick, I think, is in their chasing of user videos. When a great move takes place during a race, masses of people upload videos of the moves, then immediately email all their friends with a link to the youtube video. This is clearly in breach of Dorna's rights, but it is precisely these videos that will help grow the sport. If the friends receiving the email click on the link and see a fantastic piece of racing, they might pay more attention to the racing next time. If they see a Dorna takedown message, they'll just be annoyed, and not be any more interested in MotoGP.

So far, though, Dorna is still focussing on maintaining control. Until they realize that they cannot control everything, and start focussing on distinguishing between what they can control and what they can't, and on promoting and monetizing the sport, then they are missing out on a huge opportunity.

Total votes: 65

You'd be shocked

I had to take a 21st century (really it was the digital age starting the in 1990s) advertising class when I was in college. We watched a compilation of some of the most successful ads of the last 10-15 years. Most of the ads were focused on younger consumers b/c the 14-20 demographic was the holy grail in those days.

Imo, the most interesting tidbit was about the "dumbed down marketing" of which you speak. Imo, it was very clear that the dumbed down hype vids with hot abs and boobs popping out of shirts were merely to mask the fact that a company had not hired a proper ad agency. They were often handled in house and the footage was simply grafted from an archive not purposely shot for marketing endeavors. The well shot ads were still palatable even at much slower speeds b/c they were created by skilled media professionals in a controlled environment.

Imo, these marketing theories (which are not my own) were proved by viral advertising. If teens really just preferred mindless 1/2 second cuts of boobs and flames and any other high intensity mindlessness, then how did viral video become so popular? Viral advertising is a creative derivation of the bare-bones dumbed-down MTV caliber ads. The gotcha themes are very real, but the dumbed-down hype format is not terribly compelling. That's why viral advertising is so big.

I think you're right that few would be swayed by 1-cut 30 second super slow mo glam shots of Hayden sliding the front, but it is equally likely that the bog standard hype videos are ineffective in markets with highly develop advertising infrastructures (i.e. the developed world). It would be wise for Dorna to cast a much wider net with the media they generate.

Also, people shouldn't have to work to be enthusiasts. If someone approached Dorna and said they wanted to get into GP, Dorna should have a red carpet and an awesome goodie bag. You shouldn't have to scour the internet for a few cheesy low budget Dorna hype vids.

Total votes: 66

Agreed

I agree completely.

Dorna needs to find new ways to reach its audience. The Youtube piece cannot be overstated - Dorna needs to be feeding those clips that we all love (Capirossi smoking the rear coming around the corner at Valencia?) to people who have never seen them. The fact that the only place to get them is on their site - and I have to pay to see them is evidence of backward thinking. I am a strong supporter of copyright laws but a 10 to 30 second clip doesn't have any value in itself. You cannot convince anyone to buy 10 seconds from you. However, if seeing that 10 seconds adds them to the audience rolls or even convinces them to subscibe (for full length races) then Dorna has extracted the actual value out of that 10 second clip.

The focus on TV is problematic (as Mr. Emmett mentions) right now, I do most of my viewing through the TV. However, I watch very, very little broadcast (or cable) TV. Much of what I view comes over the Internet. A significant component of that is Roku which provides streamed content and provides the infrastructure to get MotoGP.com content right into my living room. With a combination of free and subscription content, there would finally be a compelling reason for me to pay for their subscription.

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MotoTheory.com - MotoGP Data & Statistics

Total votes: 67

Youtube

I had a half dozen youtube fan videos posted at one point, but all of them have been banned for violating content restrictions. Dorna were definitely stupid to block Youtube content, but David told me that the major broadcasting networks demanded it. IIRC it was BBC in particular.

The only place on youtube where Dorna can show their content is on MotoGP's official channel. If they were smart they'd host fan vids on their own channel to increase exposure. They might even have a featured section for particularly good fan vids.

I think the most frustrating thing about Dorna is that all of the great ideas and the passion for the sport does not elevate the fans. The more we spoon feed the marketing-buffoons, the more they use our ideas to charge us more money. If they started hosting fan vids, they wouldn't pay me consulting fees for the idea. If Dorna marketers gleaned ideas from your wife, she'd never see a dime (probably wouldn't even get free tix to an event). But rest assured, we all get to pay higher prices for MotoGP.com. We all get to pay more for race tickets as the sport grows in popularity. It's an uphill battle.

Racing is painfully simple. If you can't make it generate profit without selling it to major manufacturers or third party private equity firms, you really need to get your head checked.

At this point, you've also got to ask yourself what the hell Bridgepoint are doing. CVC shutdown the F1 row at Silverstone in 2009 by bringing an army of lawyers to explain how FOTA would be tied up in international courts for decades if they had any ridiculous ideas about operating an international series outside of the FIA. Why do Bridgepoint sit in silence while the MSMA lead MotoGP down the 3.5L Group C road? Fuel restrictions, unlimited electronic complexity (ECU), and capacity limits = instant and immediate paralysis. We learned that lesson in the 1990s. 1000cc will not change anything unless the marketing concept of 1000cc is enough to convince the fans that the sport has been radically altered. Even if profitability goes up, the contest is still going to be sick from a competitive and engineering standpoint b/c of Swiss Watchmakers syndrome. Endless tangible technical refinement of an intangible CONCEPT that has almost no applicability to the production market. No offense to the Japanese, but the fans have got to wonder if any of their executives are still lucid. Nobody in their home country buys/rides motorcycles anymore, and yet they remain stubborn and stew in angry bewilderment when the MotoGP fans demand more fuel. Something has got to give? Is it going to be the MSMA? or is Dorna going to let the MSMA drive the industry off a cliff like they have done in Japan?

Total votes: 56

Marvelous.

One of the better comments I've read on here.

Total votes: 67

They should make a reality

They should make a reality show out of this, it sure will beat the heck out of "dancing with the stars" :p and they will collect gazilions of dollars from incoming text messages from the fans telling DORNA who should make the cut and survive versus those that go home...

Total votes: 58

Props

I may be completely wrong, but I don't suppose FOA have to prop up any of the teams with cash to keep them on the grid.

How much do Dorna spend every year keep the few bikes left on the grid?

Total votes: 71

Arrogance and alienation.

I sometimes feel that IRTA and Dorna are guilty of an arrogance which alienates the enthusiast which in turn quashes any enthusiasm they may have!

Take access to the paddock area for example, how can Laguna Seca and Indianapolis allow access when elsewhere fans are treated like dirt? I'm lucky enough to be able to get a pass but I feel pretty crappy when i see the poor buggers who can't peering through the fence just to get a glimpse of what goes on.
At the Valencia test a couple of years ago, the few people there with passes were slowly forced out of viewing areas! Why? What the hell were they likely to see that was so sensitive? Nobody was in the way or causing any problem at all! It seems that in the States the paying public are king, in the rest of the world they are there to pay and be taken advantage of!

Until the guys in their ivory tower, (Dorna, FIM, IRTA, the teams and manufacturers,) realise who they work for, the sport will never grow any bigger than it is now. There is a limit to what people will accept and motorcycle racing has had a history of being accessable.
I'm not saying that the solutions are simple but a change of attitude is!

Total votes: 60

You're right, but F1 treats

You're right, but F1 treats their fans even worse (at the track at least), yet they don't have the same problems as MotoGP. I was at the Montreal Grand Prix this year, and you get the feeling that the powers that be in F1 would be glad to have all the fans locked in a cage, with only enough access to grab their wallets. Not going to type out the specifics of the stories/incidents (I'm lazy & it's kind of boring) that made me feel that way, but I was not alone in that feeling. It's almost as if it's a privilege to be abused by F1, even for the casual fan.

Also, as F1 relates to MotoGP in terms of profitability, lets not forget "we" have no Ferrari or even Mercedes... Some of my friends wouldn't know a spark pug if you stuck it in their mouth, but they're ALL Ferrari fans ($50 hat, $100 T-Shirt at the track, no problem!). It's a symbol of the type of lifestyle almost everyone wants, and MotoGP doesn't have anything resembling that (no Ducati ain't it), nor is there such a place for motorcycles in society in general. So lets be realistic in our expectations, and hopefully Dorna realizes what works for F1 won't necessarily work for MotoGP (whether that be financial, marketing, technical rules or anything else) and there could be a very bright future for the sport and the enthusiast even with all the predictions of post-Rossi doom & gloom.

Total votes: 61

I agree there, I feel that

I agree there, I feel that getting back to that motorcycling camaraerie thing, which still exists all over the world (Car racing, car drivers and F! have never had it and never will) would serve the sport well! Bikers love the technology the riders and everything about the sport, let them have easy access and get the powerful men to take their heads out of their butts. They are only custodians of a sport which belongs to the paying customer!

Total votes: 56

those number seem very low to me.....

I have to question the numbers - both gross & net ( disclaimer - I have no basis to do so - past common sense). With the size of the audience and television rights in hundreds of countries - both the gross and the net seem (very) low to me.

In the U.S, at least, a private company would NEVER disclose how much it nets and grosses - So I wonder how accurate these number are or how much faith one would put in his quote? (go to gpone.com to read it) - or if the biz standards are the same in the spain & Europe?

Also, I somewhat disagree with the comments about non-motorcycle riding public watching or not watching. At my local pub, where we watch - I nearly always take my girl friend and often non-cycling friends - they love it - but were very unaware of the series until I took them . It only lasts 45 minutes or so, and most are game to go check it out over a pint or several;-).

I really agree with the comments about Dorna & Utube - I can't understand their "rational" for taking down small clips (but man they're good at getting the down quickly). If more people in the US and other countries saw the sport - it would have a much larger following.

Total votes: 59

They do seem low

Those numbers do seem low. And that's precisely the problem, they should be much, much higher. MotoGP has failed to capitalize on the popularity of the sport. Not just Dorna, but teams, riders, factories, everyone involved in the sport. There's large amounts of money out there, it just needs someone to tap into it, and find the angle to sell it to the right sponsors.

Total votes: 63

And what about WSBK?

Anyone with the numbers on what they make?

Just more reason to not have two competing prototype leagues.

Total votes: 59

follow up -

I meant for 300 Million viewers in hundreds of coutries - for me the revenue numbers (both gross & Net) don't add up. Is there a chance they're 'sandbagging' and these numbers are actually (much) higher? Since they're not public I would guess it would be hard ascertain the accuracy.

I would also be curious about the WSBK Gross and Net

Total votes: 62

The viewers, not the revenue

If there's a number I don't trust, it's for the viewing figures rather than the revenue. Counting TV viewers is difficult at the best of times, and totalling everyone who "saw" the race can be even worse. After all, Dorna give us no guidelines as to how they count what a viewer is. It could be that of those 300 million, 200 million saw a 30 second recap on a sports news show. But we don't know that.

Total votes: 72

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