Behind the world of motorcycle racing lies a hidden world of high finance, and moves there have a potentially huge effect on the racing itself. A report in the Financial Times from earlier this week - spotted and reported by Bikesportnews - carries news of a financial transaction that could, potentially, have major implications for the two major two-wheeled racing series, MotoGP and World Superbikes.
According to the report in the Financial Times, Infront Sports and Media, the parent company of Infront Motor Sports, which owns the commercial rights to the World Superbike series, is being put up for sale by its current owners, Andreas Jacobs (heir of the eponymous coffee company) and the United in Sports private equity fund. But the interest comes from the parties bidding to take over the company: the Financial Times reports that three parties are involved, two sovereign wealth funds - the Qatar Investment Authority and an unnamed fund from Abu Dhabi - and a British private equity group, Bridgepoint Capital.
The intriguing detail behind these bids is that Bridgepoint Capital is the current owner of Dorna, the rights holder for the MotoGP series. The sale of Infront to Bridgepoint would see the two major motorcycle roadracing world championships owned by the same company. And that raises a potential conflict which could cause the deal to be modified under European competition law. If the deal does fall foul of the EU rules on mergers and acquisitions, then Bridgepoint could be forced to dispose of either the World Superbike series or of MotoGP.
The situation is complex, and the rules for mergers and acquisitions are by necessity highly complicated. The European Commission only comes into action if the companies involved are large enough to have a European impact, the basic principle being that only when all companies involved have a combined turnover of 5 billion euros a year is approval by the Competition Commissioner required. The companies themselves have to apply for clearance, the Commission itself does not get involved beforehand, an EU spokesperson told MotoMatters.com. As such, the Commission does not take a position on deals that have not yet taken place.
Given that the sale of Infront Sports and Media involves private equity funds who do not publish a full set of financial results, it is hard to gauge whether the deal would technically fall foul of the regulations, though the combined assets of the funds suggest that may well be the case. However, the Commission is also known to take advice from parties with an interest in a particular merger, and if Bridgepoint were to acquire Infront Sports and Media, it seems inevitable that some parties would object to World Superbikes and MotoGP being held by the same owner. When CVC acquired a large stake in Formula One owner SLEC, it was pressure from the TV companies - including Spanish broadcasters TVE (who show MotoGP) and Telecinco (Formula One) - who lobbied the Directorate General of Competition to force CVC to sell off Dorna, the commercial rights holder for MotoGP. Given the status of both MotoGP and World Superbike racing in Italy and Spain, it seems almost certain that the TV companies will once again push for the deal to be examined, potentially causing one or the other series to be sold off as a separate concern.
MotoMatters.com approached both Infront Motor Sports and Dorna CEO Carmelo Ezpeleta for a reaction. A spokesperson for Infront Motor Sports said that the company had no comment to make at this time, and referred us to a contact in Infront Sports and Media. MotoMatters.com asked Carmelo Ezpeleta for a reaction at a press conference to announce the Moto3 tire deal with Dunlop, but the Dorna chief merely dismissed the reports as "A typical internet discussion. We don't know anything about that." When referred to the Financial Times as a source for the story, Ezpeleta reiterated his point: "I have good connections with Bridgepoint, and if they were to do something like that, they would tell me. So we don't have any news about that."
In the hypothetical case that Bridgepoint were to take over Infront, and be allowed to keep both series, a potential dispute brewing between the two series over the CRT regulations could be neatly solved. Paolo and Maurizio Flammini, the founders of FGSports, the company that was sold to Infront and became Infront Motor Sports, have continually threatened the FIM with legal action over the so-called Claiming Rule Team regulations, which would allow engines derived from production bikes to be used in a prototype chassis in the MotoGP class from 2012. So far, no action would be forthcoming, but if both companies were owned by the same parent, such litigation would most likely be quickly smothered. It would also allow for much closer coordination of the two series' calendars, though both series already attempt to avoid too many scheduling clashes.
Of course, while this story has been picked up in several places by the motorcycle racing press, the emphasis in the Financial Times is the involvement of the Qatar Investment Authority. That is a much more interesting story: Infront Sports and Media is run by Philippe Blatter, nephew of FIFA president Sepp Blatter. FIFA is currently mired in allegations of corruption, stemming in part from the awarding to Qatar of the 2022 World Cup. The fates of two championships of a minority interest sport is a much lesser deal on the grand scale of things.