How is Dorna Sports, the company that owns the MotoGP and SBK rights, doing? Reading its financial statements, it appears to be in perfect shape. In 2022 turnover reached 425 million euros (33% more than the previous year) and Ebitda reached 161 million euros (a record). This is what is being reported in an article written by Alcide Bonni and published in Affari & Finanza, a supplement to Italian daily La Repubblica.
Put like this, it would seem all hunky-dory, but there is another record figure in the 2022 budget and that is net financial debt, which reached its maximum in the last 4 years with the figure of 906 million euros. A result also due to the fact that it has distributed dividends of 422 million euro to its shareholders.
To understand the reason for these numbers, let's take a step back. Dorna's majority shareholder is the Luxembourg company Global Racing LX2 (30% owned by the Canada Pension Plan Investment Board and 70% owned by Bridgepoint). The remaining 21.3% is held by other companies, including top management (i.e. Carmelo Ezpeleta), but none of them have more than 10%. These are the shareholders who received record dividends.
A financially risky move because, as mentioned, it has led Dorna Sports' debt to exceed the threshold of 900 million euros, almost 6 times the Ebitda. Without forgetting that the Spanish company has received a loan from BNP Paribas of 975 million euros which will expire in 2029.
In short, despite its debts, the company is producing excellent results for Dorna Sports members and the same for those who manage it. Carmelo Ezpeleta (CEO), his son Carlos (Chief Sporting Officer), Enrique Almada (Chief Operating and Financial Officer) and the other managers have in fact bonuses of 22 million euros upon achieving certain objectives set in 2019. Of these, they have already received 14 million.
The goal that the managers have set is to get closer to Formula 1 in terms of image and spectators, but the road is still long because Liberty Media and Stefano Domenicali have revolutionized the top racing series, while MotoGP has only taken a few steps (such as the introduction of the sprint race), but without being able to change course (and above all to increase the audience on the circuits and in front of the TV).
We are therefore getting closer to the heart of the matter, to answering why the company has decided to go into so much debt to distribute dividends to shareholders. The most probable reason is that it is preparing for a sell-off. Distributing dividends among shareholders prior to a sale is standard practice. Not to mention that Bridgepoint had acquired control of Dorna Sports in 2006, while the last operations date back to 4 years ago. All indications that would suggest the sale of its shares and those of the Canadian pension fund in the near future.