Canadian Pension Plan Secures Investment Deals with Formula One and Dorna Sports Groups

October 29, 2012

The Canada Pension Plan Investment Board recently secured a deal to acquire 39 per cent of motorcycle racing marketer Dorna Sports and a US$400-million financing for Formula One Group, the company behind F1 auto racing.

Andre Bourbonnais, senior vice-president of private investments at CPPIB, said of F1 and Dorna: “These sports generate a premium and command a premium and that’s what really attracted us to that.

“When we started looking into it, what we also saw was very predictable and stable revenues because they are long contracted revenues with the promoters of the races.”

Formula One Group holds the race promotion, broadcasting, advertising and sponsorship rights for the FIA Formula One World Championship.

“In Formula One, your counterparty for the circuit is the Principality of Monaco, you’re pretty sure that they are going to pay you and the broadcasters are all Tier 1 broadcasters,” said Bourbonnais.

Formula One signed a four-year deal earlier this month with NBC Sports Group for the exclusive U.S. media rights.

NBC will carry four races, including the Canadian Grand Prix and the final three races of the season, while the NBC Sports Network will show the other sixteen races.

The financial terms of the equity agreement with Dorna are yet to be disclosed, but the agreement is part of a plan to expand Dorna through its acquisition of another motorcycle series, the FIM World Superbikes Championship.