Rallying-World rally championship promoter explores $550 mln sale, sources say

Liberty Media

15/08/2024 11:06

By Amy-Jo Crowley and Alexander Hübner
       LONDON, Aug 15 (Reuters) - The owners of the World Rally
Championship's commercial arm are exploring options including a
possible sale of the business, seeking to bring in cash at a
time of high valuations for sports media rights, according to
people familiar with the matter.
    The owners, Austrian drink group Red Bull and German
investment company KW 25, are working with bankers at JPMorgan
to prepare for a potential sale of WRC Promoter GmbH as soon as
later this year, the people said. 
    The owners are hoping that the Munich-based business can
fetch a valuation of up to 500 million euros ($550.3 million),
underpinned by earnings before interest, tax, depreciation and
amortisation (EBITDA) that could reach more than 20 million
euros this year, one of the people said. 
    The sources, who requested anonymity because the matter is
confidential, cautioned that discussions were ongoing but a sale
might not proceed. 
    Representatives for JPMorgan declined to comment. WRC
Promoter, Red Bull and KW 25 did not immediately respond to
requests for comment.
    WRC Promoter is jointly owned by Red Bull and KW 25, founded
by businessmen Karl Wieseneder and Thomas Krohne, according to
its website. Krohne also owns the American football team Munich
Ravens, which is part of the European League of Football (ELF),
in which he holds a stake, according to his LinkedIn profile.
    A new owner for WRC Promoter would help to widen its global
reach and expand into the U.S., the second person said, adding
that private equity firms with deep pockets, high-net-worth
individuals and larger sports media groups could be among the
investors.
    WRC Promoter is responsible for the commercial aspects of
the FIA World Rally Championship (WRC) including TV production
as well as media and sponsorship rights.
    The WRC has been in existence since 1973 and comprises 13
four-day races on different continents, with the most famous
being the Monte Carlo Rally. The current championship leader is
Belgian racer Thierry Neuville, followed by Frenchman Sebastien
Ogier. Since 2022, WRC Promoter has also organised the European
Championship and the Rallycross Championship.
    The shareholders are also looking to take advantage of the
increasing value placed on commercial rights holders in sports,
the people said. 
     Formula One's owner Liberty Media  FWONA.O  earlier this
year acquired Dorna Sports, the MotoGP owner, from Bridgepoint
 BRDG.UL  and Canada Pension Plan Investment Board (CPPIB) in a
4.2-billion-euro deal. The sale valued the business at more than
20 times EBITDA, one of the people said. 
    WRC Promoter had sales of 25.7 million euros and operating
profit of 4.62 million euros in 2021, as it was hit by Covid-19
restrictions, according to the latest filings published by
Germany's federal gazette Bundesanzeiger. The company said it
would see sales grow the following year after taking over the
European Championship and the Rallycross Championship. 
    
($1 = 0.9071 euros)

 (Reporting by Amy-Jo Crowley; editing by Clare Fallon)
 ((Amy-Jo.Crowley@thomsonreuters.com;))