Carmelo Ezpeleta will have been scanning the business pages of newspapers with more than usual interest, and pleasure, and reading of the growth of live sport on television and the value it is to television broadcasters, suddenly made real by the eye-watering amount an American media company has paid for Formula 1,
Ezpeleta is the boss of MotoGP and part owner of Dorna, rights owner and promoter of the series. Formula 1 is owned by a British investment company CVC Capital Partners and Mr Bernie Ecclestone, and has been bought by US media giant John Malone of Liberty Media, owners of Eurosport, the Discovery Channel and Virgin Media for £6.5 billion pounds.
Dorna is much smaller but still highly valuable. MotoGP, like F1, makes most of its money from fees charged to the circuits and viewing rights to TV. But whereas Bernie will trouser up to £25 million a meeting from the circuit owners, Carmelo will take a more modest £5-6 million. And F1 easily outstrips MotoGP for TV rights despite a huge, but hardly surprising, fall in viewing figures. It is also much more costly to run.
But when Dorna is sold, which it surely will be in the not too distant future if rumours from the City are true, then Mr Ezpeleta and his fellow shareholders, investment company Bridgepoint and the Canadian Pension Plan Investment Board, should be looking at a value in the region of £1 billion. This is based on the price CIPP paid for 39% two years ago - $500m or £375m in today’s money. Or something like five times the annual takings.
It is somewhat ironic that both Ecclestone and CVC are previous owners of MotoGP. The former motorbike dealer and occasional racer from Sidcup acquired the rights from the FIM in the early nineties - he had already won control of F1 - and pretty smartly sold it to Spanish marketing company Dorna for £50m. CVC was brought in by Ezpeleta much later but sold to Bridgepoint in 2006 when they bought into F1. A likely future scenario for Dorna is that Bridgepoint will sell their controlling stake, circa 40%, the Canadians will stay in and Ezpeleta will remain in charge but sell some shares.
If anyone thought that motorsport was a young man’s game then the ownership clearly is not. Ecclestone is 85 and the new F1 owner, John Malone, is 75. Having made his money on cable he is known as the Cable Cowboy or Darth Vader depending which side of the deal you’re on. It is unlikely he will be spending much time at race meetings.
Ezpeleta, like Ecclestone (but considerably younger), is very much hands on and he will deserve every penny of the 20 odd per cent he and the management own. It hasn’t been a perfect journey but, despite having to deal with the dead hand of the Japanese manufacturers, they have produced the most exciting period in the history of world championship road racing. And if TV companies really are interested in live sport then they should be heading the queue to buy. But don’t rule out digital giants like Facebook or Google. They too like live content.
Two other people should be mentioned in this success story. Mike Trimby, founder of the International Racing Teams Association (IRTA), was one of the original architects of the breakaway from the FIM. And a chap called Valentino Rossi, the greatest name in motor sport, two wheels or four, who has probably made the greatest contribution of all.