Dorna Sports problems: Is MotoGP facing a financial crisis?

Dorna Sports problems: Is MotoGP facing a financial crisis? 1

The summer holidays are over, and MotoGP is back to work… But sources in Spain report that at the end of 2022 Dorna Sports can fully feel the aftershock of the lockdown and logistics issues in the world: having survived the pandemic, Royal Motorcycle Racing has become more vulnerable than before.

The huge funds that Dorna managed to save on logistics due to the pandemic in 2020 did not help compensate for the failure in the fees of 2021. And the 2022 season doesn’t look any better yet.

Dorna Sports problems: Is MotoGP facing a financial crisis? 3
MotoGP – QatarGP 2020: Qatar Grand Prix – Moto2 and Moto3

In 2020, when the whole world closed for lockdown, Dorna managed to improvise – come up with a new scheme for rotating stages with doubleheaders (two stages in a row on the same track), thanks to which it was possible to hold a sufficient number of races to match the status of the FIM World Championship. The promoter fulfilled its obligations to the viewers, partners, and the Federation. This cost Dorna very expensive: all logistics costs in Europe fell on the shoulders of the promoter, plus, they had to “bury” 45 million euros, returning them partially or entirely to the organizers of the Grand Prix.

Traditionally, Dorna invests most of the money earned back into MotoGP, developing teams and helping them survive difficult times. The truly fat 2015-2019 years allowed teams to compensate up to 60% of the costs, and the MotoGP championship flourished. There is a new MotoE World Cup, an innovative series-a mono cup for electric motorcycles; many other new ideas have been introduced. Dorna earned record funds from the sale of television rights, was preparing to come to Russia, Finland, Vietnam, and Mexico, expand the calendar to the Middle East, adding races in Saudi Arabia and/or Bahrain. There were many people who wanted to hold a new national Grand Prix, and Dorna announced a plan to rotate the tracks in order to concoct a calendar for 22-23 races with 24-25 tracks in stock… In general, there are a lot of plans.

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MotoGP-2022 – QatarGP – Qatar Grand Prix

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But all of them were put on pause in 2020-21. Just on pause, Dorna wants to convince us! In numerous interviews, Carmelo Ezpeleta sees no problems with the implementation of his 2022-2026 strategic line.

However, there is an important factor that can disappoint: the lack of spectators in the stands has reduced the interest of the sponsors of the championship – many of them have left MotoGP, and others have significantly reduced their budgets. Sponsors have always accounted for a large share of Dorna’s revenue, along with the sale of television rights.

Dorna’s earnings were distributed approximately as follows: up to 85 million euros were brought by the sale of the rights to organize the Grand Prix; more than 100 million came from the rights to television broadcasts and up to 100 million from the direct sale of content through its own channels; up to 65 million euros were brought annually by sponsors and direct advertisers. Thus, the normal turnover of Dorna was up to 350 million euros per year. And by investing up to 2/3 of this amount back into the championship, the company demonstrated a net profit of 110-120 million euros. This was the case until 2019. But then something went wrong.

In 2019, Dorna, through the Bridgepoint investment group, to which it belongs, requested a multi-year loan in the amount of 221 million euros, which was approved by the company. The loan was needed to cover the shortfall of 8.3 million euros in 2019 and guarantee operational activities next season. That is, in one of the fattest seasons, Dorna had a shortage of funds! But the following year, a pandemic occurred, and Dorna’s reported loss amounted to 94.5 million euros.

And so, Dorna released statements for 2021, where it again declared a net loss of 44.8 million euros.

This is the third consecutive season with losses that Dorna is experiencing. It is more correct to say – with irretrievable losses that will not return to the championship in the form of investments. At the same time, the annual turnover was announced at a docklike level of 310.9 million euros, the Spanish agency reported

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In 2020, she gave Carmelo Ezpeleta the green light for any expenses related to the “rescue operation” to keep MotoGP afloat during the crisis season. This helped to avoid a catastrophe.

But it seems that aftershocks are beginning – aftershocks after the main wave of the earthquake, the consequences of the pandemic, which can cause more serious damage to Dorna Sports. The problem is obvious: an attempt to match the level of the budget with Formula 1, the expansion of the calendar, and the geography of MotoGP lead to an increase in expenses, but the sources of income are becoming less and less.

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MotoGP-2022: ArgentinaGP – Argentine Grand Prix

Among the main factors is the disruption of global logistics chains, due to which transport costs on intercontinental transfers have dramatically increased: these costs have increased not many times, but dozens of times.

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It is also obvious that the withdrawal of Suzuki’s factory project from MotoGP and the reduction of the starting grid in 2023 are unlikely to help Dorna attract more new sponsors.

The main hope for the most profitable second half of the 2022 season is the smoothness of the “Pacific Tour”, which has been absent for two years and is now in great demand, well, and the maximum intrigue in the fight for the title of champion.