A long time ago, in a kingdom far, far away, there was a legal reason why movie studios (think Disney, Paramount, and so on) weren't legally able to own movie theaters.
Why? Because a US Supreme Court ruling in 1948 established a clear rule to prevent the studios from forming monopolies within the industry. Because who loses with movie theater monopolies? Regular people who just want to see a movie.
Think about it: If a movie studio (which makes the movies) also owns the theaters that show the movies, in addition to the film distribution channels, it can control pricing at every single level. And there's no competition to even theoretically rein in prices. They can charge whatever they want because they're the only game in town, and if you want to see the movie, you have no choice but to pay it.
That rule went by the wayside in 2020, after over 70 years in effect, and I bring it up as a way of explaining why the European Union's executive arm, the European Commission, just announced a formal investigation into Formula One owner Liberty Media's proposed acquisition deal for Dorna Sports. For anyone unfamiliar, Dorna Sports is the international rights-holder and promoter of MotoGP, as well as World Superbike, Moto2, Moto3, and more similar motorcycle racing series.
Similar to the 1948 US Supreme Court ruling about movie studios, the EC is concerned about a potential motorsports broadcast licensing monopoly situation brewing if Liberty Media is allowed to complete this acquisition. Right now, the EC says, Liberty Media is effectively a competitor with Dorna Sports in terms of motorsports broadcast licensing. The EC's argument is that "Formula One is the clear market leader in all European countries and MotoGP is most often its only competitor."
Now, one could probably raise reasonable questions about why Dorna was able to collect the rights to just about every major international motorcycle racing series like so many Pokémon in the first place. But that's probably a question for another day.
Does it have to do with comparative size, perhaps? While Formula One has been mega popular outside the US for decades, it's only recently begun to make inroads in Liberty Media's home country. That's due in no small part to the popularity of the Netflix series Formula One: Drive to Survive, which showcased (and probably exaggerated) the behind-the-scenes drama brewing in the paddock at every turn. Multibillionaire racers who've been training since they were literal babies; they're just like us!
And while MotoGP has been popular with motorcyclists around the world for decades as well, it's still never achieved the same general level of recognition as Formula One. When Dorna attempted to replicate the success of Drive to Survive with its own Amazon behind-the-scenes series, it didn't end up working as well. Part of that's down to the editing, but part of that is also down to the fact that lots of people don't like to read subtitles, and a whole lot of the riders were subtitled in that series. But I digress.
If MotoGP is the standard-bearer for international motorcycle racing, and it still hasn't cracked the level of international popularity and success that Formula One has, then perhaps that's allowed Dorna's acquisition of the rights to nearly every other international motorcycle racing series to fly under the radar. That is, until now.
If this deal goes through, as I said when it was first announced, that would mean Liberty Media would hold the international rights to most international motorsports series, period. Not the one-off annual events like Dakar or the Isle of Man TT, but pretty much everything else.
According to the EC's announcement, a further investigation within an investigation is planned, aimed at determining whether John Malone, who is both Liberty Media and Liberty Global's biggest shareholder, is also able to strongly influence the decisionmaking at both companies.
Why It Matters
US readers might be familiar with Liberty Media's list of holdings, which includes Formula One, Live Nation Entertainment (the ticketing and live entertainment company). It's also affiliated with Liberty Broadband, which owns Charter Communications, the second-largest cable TV operator in the US, of which John Malone is also chairman of the board. But since this company doesn't operate in Europe, presumably the EC is less concerned with it.
The same can't be said of Liberty Global, which does operate in Europe. Similar to Liberty Broadband in the US, Liberty Global touts itself as "a world leader in converged broadband, video, and mobile communications and an active investor in cutting-edge infrastructure, content, and technology ventures."
In other words, through its various arms, this would be very much like the movie studios owning the movie theaters. If Liberty Media completes this deal, it will own the entertainment, as well as the distribution means for said entertainment in multiple countries. Arguably, it already does this with Formula One, but successfully acquiring Dorna would bring almost all international motorsport series into one vertically integrated ecosystem.
In what could be seen as an effort to appease critics, Liberty Media announced a plan to split its Liberty Live arm (under which LiveNation rests) in November 2024. But that's just one part of a creature with an awful lot of tentacles. What's one arm if you've got seven more?
In any case, we'll be watching developments here with interest. What are your thoughts on this potential merger, and what it could mean for motorcycle racing and its fans? Are you glad the EC is investigating, or do you think it will matter? Or is it a really dumb idea? Let us know your thoughts in the comments.
