Formula 1 secured on Tuesday a $2.55 billion loan package to help finance Liberty Media’s acquisition of MotoGP.

September 11, 2024

Formula 1 secures $2.55 billion loan ahead of MotoGP takeover

Formula 1 secured on Tuesday a $2.55 billion loan package to help finance Liberty Media’s acquisition of MotoGP.

Liberty initially sought an $850 million leveraged loan for the purchase. It later added a US$1.7 billion term loan refinancing. Both loans mature in September 2031, according to Bloomberg.

Liberty’s take-over of MotoGP – valued at $4.2 billion – was announced last April. The acquisition, funded by a combination of shares and cash, represents an 86% stake in Dorna Sports, while the remaining 14% will remain with MotoGP’s management.

Speaking at a Goldman Sachs Communacopia & Technology Conference on Wednesday, Liberty CEO Greg Maffei offered an optimistic outlook on the financial health of both Formula 1 and MotoGP.

“We have lowered the leverage of Formula 1, the parent, dramatically over the last several years, partly through success and partly through generating cash flow to finance the $4.2 billion purchase of MotoGP,” Maffei explained.

“We raised just under a billion dollars of equity money and the rest is going to be financed on our balance sheet, and their balance sheet leverage will still be relatively modest compared to the historical numbers which have been managed to both companies.

Read also: Liberty sells $825m stake in Formula One to acquire MotoGP
“I think for a little bit of time, we’ll focus on cash flow management. We’ve run return of capital through equity repurchase and that’s certainly on the table, but we’ll also look at other synergistic opportunities.

“We have returned capital, and we do expect we will be repurchased in the future. That’s been a Liberty hallmark, and I don’t want our shareholders to think that’s something we’re walking away from.”

Maffei revealed that the announcement of Liberty’s acquisition of MotoGP, given its highly successful management of Formula 1, had generated a lot of interest from potential investors looking to get involved in the immensely popular series.

The Liberty boss confirmed that seven-time F1 world champion Lewis Hamilton had inquired about the possibility of acquiring a MotoGP team.

“When we announced – it’s a great example – we had immediately people call up and say, I want to buy a team, including people like Lewis Hamilton. Why? Because they saw what had happened in Formula 1, and they want to follow,” said Maffei.

“We had major distributors call them and say we want to be involved. And unfortunately, I had to tell them, ‘Well, we really can’t talk about it until we get EU approval, but we’d love to talk once we get it’.

“I think there’s an opportunity when you’re at the league level to take advantage of those changes that you can make,” Maffei added.

“At a team level, in general, teams don’t cash flow as well. It’s not absolutely true. NFL teams cash flow pretty well, but in general, we’re still too traditional in wanting that cash flow in addition to your ability to change the dynamics, to set the stage and do the things that you want are far better, far easier, more manageable.

“Still, it takes time, but you can get it done at the league level in a way that’s very difficult at the team level.”

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