Sports Business: MotoGP commercial partner Dorna Sports to take 30% revenue hit

These are difficult times for every sporting property worldwide. The Covid19 pandemic has hit everyone hard financially. According to a report in Financial Times, the exclusive promoter of Moto GP and the World Superbike Championships, Dorna Sports will lose roughly 30% of its total revenues of $450Mn this financial year. Though the Moto GP season starts from 19th July but the race cancellations and absence of crowds from the future events will hit the promoters hard.

Moto GP Commercial partners will lose 30% of total revenues

According to the CEO of Dorna Sports, for the circuits worldwide race-day earnings are their main source of income, with that completely wiped out – they can’t pay the race licensing fee to the MotoGP.

“Obviously the biggest impact is in the fee we obtain from the circuits. The circuits without the spectators cannot pay the fee, then we will have practically no revenues from circuits unless the spectators are allowed,” Carmelo Ezpeleta, chief executive of Dorna, told the FT.

MOTO GP Commercial Model – How MOTO GP generate revenues ?

– Attendance at 16 of its races in 2018 exceeded the 100,000 threshold.
– All 19 races together delivered 2.9m spectators attended the MotoGP events
– Dorna generated a pre-tax profit of $70m on revenues of $400m in 2018
– In 2019 profits went up marginally to $77m on revenues of $450m
– 45% of its total revenues comes from media and broadcasting rights
– 20% is generated through sponsorships and advertising

MotoGP aims to resume its season on July 19 in Spain after being forced to postpone races in March. It is unclear whether any of this year’s events — there will be a maximum of 17 — will take place outside of Europe. The final number will also determine revenues including from broadcast and sponsorship revenue.

As per the revised calendar, the 2020 MotoGP season will now kick off with a double-header at the Jerez Circuit on July 19 and 26. In recent weeks, the Dutch, German, Finnish, Australian, Japanese, British and Italian GPs had all been cancelled. The FIM has now listed the USA, Argentina, Thailand and Malaysia as potential destinations for overseas races, once the European leg is completed.

To compensate for the lack of eligible venues, multiple circuits like the Red Bull Ring in Austria and the Misano World Circuit in Italy will be hosting more than one race and you can take a look at the full calendar in the image below: