The Long Term Future Of MotoGP - Financial And Technical Stability At Last?

At Assen, Dorna, the FIM and IRTA held a joint press conference announcing their plans for the future of the championship. From 2017, they told the media, the MotoGP teams would receive 30% more money from Dorna, factories would have to make bikes available to satellite teams, all 24 riders will receive financial support from the organizers, and Dorna retain the right to buy the grid slots of the two riders who finish last in the championship.

For MotoMatters.com readers, this is nothing new. We reported on this back in May, after the Jerez round of MotoGP. Only a few details have changed in the intervening period, but those changes are worthy of comment. And it is important to note that the new regime starts from 2017, with 2016 being a transitional year. So what will the future of MotoGP look like? Here's an overview.

For next year, the existing system will continue as it is, with teams receiving free tires from the official tire supplier – Michelin, as of 2016 – and an allowance to cover travel costs. Dorna will support 22 riders for next season, meaning that three riders will not receive any support. Which three those are will be decided by IRTA, on the basis of the results of each rider during 2015. The three riders currently out of the top 22 are Karel Abraham, Alex De Angelis and, rather surprisingly, Marco Melandri. Abraham is struggling with a foot injury, but there have been rumors that the Czech-based team is looking at a switch to World Superbikes for 2016.

De Angelis losing his slot would also not come as a surprise. Though they entered the championship with high hopes, Giampiero Sacchi's IODA Racing team have struggled in MotoGP, unable to field a competitive motorcycle. Withdrawing from MotoGP would be a blow, but would allow them to focus more on their Moto2 effort.

Marco Melandri's position is much more troubling. Although the Gresini Aprilia team is a factory effort, the subsidy from Dorna is very welcome. At the moment, Melandri and Aprilia are at loggerheads over the future. Neither one wishes to continue for the rest of the season, but Melandri will not leave without being paid, and Aprilia are disinclined to pay for such a gross underperformance. If this continues, however, it may be worth their while to pay for Melandri to leave. The Italian is rumored to be on a salary well north of €1 million a season, and he is keen to see that money. The amount of money Gresini Aprilia would be missing out on for 2016 if Melandri (or his replacement) is around €1.5 million, so it may prove to be more costly to keep Melandri at 25th in the rider ranking than to replace him with someone capable of finishing nearer to his teammate, Alvaro Bautista, and ahead of a few other riders.

From 2017, the system changes. Dorna will end the subsidy to the manufacturers – currently more than some factory teams receive from their title sponsors – and will instead fund each team. Teams will receive around €2 million a year for each rider they field, about half of what is required to complete a season in MotoGP. Dorna will subsidize at least 22 and at most 24 riders, and will retain the right to buy the grid slots for the two worst-performing riders. They do not expect to have to exercise that right, but it will be a way of ensuring that the teams in MotoGP are strong enough to race in the premier class.

The most important step in helping to assure the quality of MotoGP teams is in guaranteeing they will get to keep their grid slots, unless bought out by Dorna. All of the teams currently racing in MotoGP have been assured that they will be able to keep their grid slots until 2021. The combination of increased financial support from Dorna and guarantees of their long-term participation should make it easier for the teams to secure sponsorship and build partnerships.

The other prong of that policy is the imposition of a price cap on the supply of motorcycles. In addition to their own two-rider factory teams, each manufacturer will have to supply between two and four bikes to private teams, upon request. The maximum price a factory can charge will be €2.2 million euros a season, per rider. For that price, they will get two complete race bikes, plus full maintenance for the bikes for a season. Crash damage will not be included, for obvious reasons, but having a predictable and fixed price level for the next five years again makes it easier for teams to budget for the medium term.

The factories were willing to accept this because the technical and sporting regulations have been fixed for the same period, from 2017 to 2021. After next year, once the new spec software is adopted for the single ECU, and Michelin take over the role as single tire supplier from Bridgestone, the only changes to the rules will be made for safety reasons. Rule stability should mean both that bikes will remain current for longer periods of time, and make it easier for factories to plan their development cycles. The two-tier system of successful and unsuccessful manufacturers will continue, with Aprilia and Suzuki free to develop engines during the season and test with factory riders outside of official tests until they secure six so-called concession points, based on podium places. Ducati will join Honda and Yamaha with just seven instead of twelve engines per season, development on the engine frozen, and testing with factory riders limited to the official tests.

Stabilizing the technical regulations is what makes it possible for factories to make bikes availabe for €2.2 million. However, this price will be a maximum, not an average, and most bikes will be cheaper. At the press conference, Dorna CEO Carmelo Ezpeleta said he expected the average price to be lower, nearer €1.5 million. Private teams will be free to negotiate with any factory they like, and try to bargain the price down. Less popular factories will be forced to make their bikes available for less money, more popular ones will be able to ask the full price. Manufacturers will be allowed to make a maximum of three different specs available, for example supplying very recent bikes to a favored team, and bikes a year or so old to a second team for a cheaper price.

It will also mean that factories will not be able to refuse to supply a satellite team. In previous years, Suzuki has done exactly that, only building bikes for their factory team. By having more manufacturers supplying bikes, the price should be driven down.

The fact that the private teams are all guaranteed to keep their grid slots in MotoGP means that any new factory entering MotoGP from 2017 onwards must go through an existing team. In other words, they must do what Aprilia did this year, and work together with an existing team (in Aprilia's case, Gresini), using their resources, manpower and facilities. They cannot do what Suzuki did and set up a new team from scratch and enter that in MotoGP. So if Kawasaki or BMW decided in 2018 to join MotoGP as manufacturers, they will have to agree terms with an existing private team.

The only exception will be KTM, who had already agreed to enter in 2017 before this agreement was made. Should they so decide, they will be allowed to join the series as a separate factory squad with their own resources. Whether they will do so or not is as yet undecided. Iwan van der Valk, Dutch TV commentator and the power behind the websites Nieuwsmotor and Oliepeil, spoke to KTM racing boss Pit Beirer at Assen, after he spotted Beirer in the AB Motor Racing hospitality holding discussions with Karel Abraham senior. Beirer told Van der Valk that they had indeed held preliminary discussions about cooperating with AB Motor Racing, but that they had also held similar talks with a number of teams in the paddock. Aspar are another team who have been linked to a KTM entry, but again, that is only at a preliminary stage. The option of entering as a private team is still very much open, Beirer said.

The aim of all these changes is simple: to put the MotoGP championship on a more solid financial footing for the medium term. With private teams guaranteed a place, and certain of both their income and what they will have to spend on a motorcycle each season until 2021, teams can start to work for the longer term. Establishing long-term partnerships will be key, and sponsors will be easier to persuade when futures are fixed. Guaranteed stable technical regulations, factories know what they can invest and what they can't, and can make old bikes available to private teams are a reasonable cost.

Will this succeed in keeping the championship affordable? Teams and factories will find ways to spend whatever money they can persuade sponsors to give them, so spending will merely shift to other areas. However, the long-term guarantees mean that everyone is working from a firmer basis, and knows what their starting point is. The weaker teams have time to try to improve, instead of fearing for their future every season, and though the gap to the front will still exist, it should at least be a little more respectable.

What it does do is bring some much-needed stability to MotoGP, after a period of nearly ten years of constant flux. Things are not about to become easy, but it will afford factories, private teams and sponsors alike a little breathing space.


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Total votes: 83
Total votes: 131

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Comments

You have already written on the appalling lack of marketing effort the teams put into gaining and maintaining sponsorship. The plan to insert stability and increase support to the teams is great a step forward, but will it reduce even further their incentive to retain marketing professionals to take the next step to prosperity?

Total votes: 107

"technical and sporting regulations have been fixed for the same period, from 2017 to 2021."
PUH-LEEEEEZE . DORNA should add the caveat or asterisk 'unless we want to change them on you."

And noting that contrary to popular belief in some countries around the world that there is no free money, DORNA may find ways to significantly increase their subsidies to teams, but who will foot this bill? What is DORNA expected to do to fees charged to venues for the privilege of hosting a race and what will those venues do to ticket prices, food/drink prices, website subscription costs, etc.? I have an idea and if it is like how 'free' stuff works in the US, then it is going to cost everyone a lot more.

Total votes: 124

The stability on technical regulations is part of the contract signed between the manufacturers and Dorna. They will not be changed. There is no real need, there are plenty of bikes on the grid, from a range of manufacturers, and racing is (relatively) affordable. The Global Financial Crisis has settled down, for the most part, and so sponsorship is easier to find than in 2009/2010. The CRT ploy (for it was exactly that) worked.

Who will foot the bill? To a large extent the factories, who will receive less money from Dorna than in the past. Dorna will continue to charge venues to stage races, and will continue to charge TV companies to show the races. But what do you expect? MotoGP is an entertainment product, and the consumers of that product - the fans - have to pay somehow. They either pay through their TV contracts, or by buying tickets to races, or by serving as a willing audience for sponsors/advertisers. Either way, they pay. There is no such thing as free entertainment.

Total votes: 127

I was not suggesting free entertainment, just a stable price for the consumer. DORNA is owned by a Private Equity firm, correct? They care about one thing and one thing only - returns on their investment. They are not going to watch their earnings march out the door through increased subsidies, so it will be funded by those whom consume the entertainment.
By DORNA discontinuing their Factory subsidies and funding teams, I have to think their costs will go up given the few factories involved for the past few years vs. $2M euro per rider on a team. Obviously without knowing what the previous arrangements were between DORNA and the factories we'll never know, but chances are this new format costs them more.

Total votes: 90

Is perhaps a better description for CRT than ploy. ;)

Total votes: 106

the recent backflip on Ducati and Suzuki is a prime example of when Honda is getting beaten-time to change the rules.

I still can't help but feel as though the tyres and a lack of competition in supply is causing most of the problems in relation to evening up the playing field, and the fuel limit, engine rule and lack of testing.

Its good that there appears to be stabilization to attempt to improve competition, however its no good stabilizing regulations which are, well, no good.

Total votes: 128

A background issue but I couldn't find anything on it. Does the grid limit mean the end of wildcard rides or is there a carveout in the agreement for them?

Total votes: 117

Thanks to strange regulations these past years and thanks also to the arrival of Marquez and the revival of Rossi, we have once again great show in MotoGP.

These new agreements seem to be smart and logical on the paper.

Anyway, I still don't understand the Dorna's policy about the TV/Internet coverage. With a race as last week end, writing "motogp" on youtube should have raise hundreds of videos and millions and millions of views. Fans around the world should have the right to put in their own editing without censure... bringing millions of fresh viewers, which means new sponsors interested in.

Since the last ten years, when I show MotoGP best races to "non motorcyclist" friends, the reaction is always the same: "this should be more famous around the world, it's great, fast, short and ruthless".

But you have to pay, or watch it on awful streaming ...

Come on (old ;) ) guys, this is the new way ... the world wants to see this.

Total votes: 136

Do World Superbike teams get support now? It seems like a good way to keep the sport viable. Rider's paying for their ride doesn't seem right for the longer term.

Total votes: 116

No other manufacturer has shown any interest in racing in MotoGP. The requirement to go through a private team will be only a relatively small part of their decision making process. 

Total votes: 117

The idea that you tell the factories they can charge €2.2 million but you think they will charge 1.5 made me laugh for at least 5 minutes.

Total votes: 129

It's great that manufacturers will be formally required to supply satellite bikes - I've been waiting for this to happen - but I can't see how it is going to add much to the entertainment, create closer racing or shake things up at the front of the field.

What should be required is for manufacurers to provide, for a maximum of €2.2m, a certain number of bikes of _equivalent specification_ to their factory entries for the current year.

Something like this:

- If supplying only 2 bikes to satellite teams, both must match this year's specification.

- If supplying any more than that, at least 2 must match this year's specification, while the balance may be cut-price versions eg last year's model, semi-seamless gearbox only etc.

- Or just make a rule that ALL supplied bikes must match this year's factory spec. AND bring in a claiming rule allowing satellite teams to grab a bike or engine from a factory team (of the same manufacturer), at a price, if they suspect it has a performance advantage. This would effectively limit the manufacturers' expenditure on factory team bikes (there would have to be certain constraints, eg you can't swap the bike you just crashed and filled the engine with gravel for a factory newie etc).

Otherwise I suspect the bikes supplied to satellite squads will just be down-spec backmarker material as usual.

Another alternative might be to say customer frames etc can be from older versions but engines supplied to satellite team must meet the same specification currently being raced by the factory squads. With the possibility of a claiming rule too. I don't like the engine freeze - I can't see the point of forcing a team to race around all year with an engine that might prove to have a major design flaw - but it would help with the idea of requiring factory teams to use an engine of no greater spec that satellite teams.

The thing that is somewhat lacking in most MotoGP races - let's face it, even the best races we see these days are hardly edge-of-your-seat thrileers from one corner to the next - is spectacle and any real challenge to the usual group of frontrunners. The rules have to be engineered to level things out and give the satellite teams a real chance of challenging for the win. Dorna should do whatever it takes to bring this about - maybe even salary caps for riders if that's what it takes.

Factories should be required to turn over their engine mapping etc to the satellite outfits they supply at each race too.

AND/OR lift the engine freeze, but only for satellite teams, giving the factories the chance to continue development, feed those engines into the customer bikes and evaluate whether to use them next season in their official entry. Under this model the satellite teams would potentially benefit from the latest technology and refinements - once again, hopefully increasing their ability to challenge at the front.

Interested in your thoughts, David, and others' too.

Total votes: 109

I don't know how your suggestions would work out in practice, but they are certainly food for thought. What is certainly absurd and pathetic is the large number of bikes in the field which have no hope of challenging for a win, or even a podium place. This situation devalues the premier class of bike racing.

Total votes: 104

This would certainly make for better racing at the front for sure, but factories would never hand an advantage to a satellite team who could potentially embarrass them by beating them with their own bike. There is a reason they have last years bikes in their garage. They are very fast....but missing that little something extra that riders like JL & VR can use and extract a tenth or two a lap.

Total votes: 118

"Dorna retain the right to buy the grid slots of the two riders who finish last in the championship."

Can someone explain the purpose of this and how/why it would be put into effect? Is it a severance package for poor performers?

Total votes: 107

Simply ability for Dorna to replace the two last place entries in the field with another viable (i.e. able to pay for it) entry.

Total votes: 119

But physically how is the transaction taking place? Who is paying money to whom and why are they doing it?

It is the part about Dorna buying them I don't understand. I thought they were Dorna's to sell, so I don't understand the reasons they would have to buy them back and what the rationale is to do so.

If 'viable' means able to pay for it, then why wouldnt the viable interested team buy the slot instead of the organizer? More to the point, if it was only about money, why is performance criteria used to initiate?

Total votes: 109

Dorna can buy back its grid positions for a set price. If the team is terrible, and someone else wants in to MotoGP, Dorna can buy out the bottom team/s to allow for a new entrant.

It's just a safety mechanism to prevent the private teams from forming a cartel to gouge incoming teams and manufacturers.

Total votes: 94

I've been incredulous at his performance this year. David do you know what the explanation is for this?

End of last season in WSBK he was arguably the fastest rider on the grid and performing better than Sykes and Guintoli, and Baz. I would feign to criticize MotoGP riders as a track day /amrchair merchant myself, but Melendri's form has been incredibly off-pace. I just cannot believe he is say a second slower that the likes of Alex De Angelis, and way off his teammate. Melandri is experienced, fast and as we all know, aggressive.

It's a pity and doesn't reflect well on him. I don't know what he plans next but how does his next employer know that there's going to be a magic return to form?

Total votes: 86

You don't really have to think too hard about what is going on with Marco. I won't speculate and fuel that particular fire because it has litigation written all over it. I will only say, I support Marco 100%, Aprilia effectively ended his career by putting him at the a** end of the field in MotoGP. I just hope he can get on with Dosoli at Yamaha, and beat the pants off of Aprilia in WSBK next year. Puts hands together, and prays. Marco is a great guy, but he got screwed over, he's doing what he needs to do, and Aprilia need to rethink their priorities, because they are going backwards faster than they probably think.

Total votes: 87

If the rules have contributed to getting more faster bikes back in the mix, like Ducati and Suzuki, then all in all, I like the rules!

Total votes: 112

In the mix is all very well, but they really need to get on the top podium step STAT.
Over the last four years, there have been five riders of three nationalities aboard two factory teams from one country who have won races. This is not an ideal situation for promoting the sport to a wider audience - it's far worse than Formula 1.

Total votes: 102