Liberty Media To Acquire 86% of MotoGP Parent Dorma
It would seem that John Malone’s Liberty Media is doing much of the leavy lifting in the previously announced Warner Brothers Discovery (WBD, Liberty Media is affiliated with WBD), Fox (FOXA), ESPN (DIS) joint venture.
Liberty Media owns sports content outright (unlike Fox and ESPN) and added to its owned-sports portfolio having agreed to acquire 86% of MotoGP parent Dorma for approximately 3.5 billion EUR.
From my perspective ESPN and Fox Sports offer little more than marketing capability. Neither owns content. The UFC, NFL and MLB represent content licensed by ESPN and Fox rather than owned-content.
The risk to ESPN/Disney and Fox is that large Technology firms such as Google, Apple and Amazon can afford to outbid Disney, Fox, Comcast and other legacy media companies for live sports rights. We have already seen this begin to play out with Google’s YouTube winning the exclusive rights to NFL Sunday Ticket and Amazon winning the exclusive rights to Thursday night NFL games on Amazon Prime.
Disney is spending too much time fighting Nelson Peltz and ought to have lobbed a bid in to acquire Endeavor (EDR), and therefore 51% of TKO Group (TKO), one of the few live sporting assets Disney can afford to acquire. Liberty previously made a run to acquire WWE before EDR won the bid and subsequently merged its UFC asset with WWE to form TKO. Perhaps Liberty Media will make a run at EDR down the road once it has right-sized WBD.
Speaking of WBD, the way in which the studio has heavily marketed its big budget movies (Dune 2, Godzilla x Kong) in Q1 suggests that Warner Brothers Discovery is up for sale. I would guess that Comcast (CMCSA) has the inside track there as Brian Roberts - given his relationship with John Malone - is more likely to work with Malone on a deal structure that would be favorable to Malone (an all equity transaction if past is prologue).
Separately, I suspect that the UFC’s forthcoming June 22nd Saudi Arabia card to be broadcast on ABC free tv will help drive exposure in the Middle East and be a positive for TKO shares this summer.