The commercial arm of the World Rally Championship (WRC) might soon have a new owner. The current owners, Red Bull and German investment company KW 25, are exploring the possibility of selling WRC Promoter GmbH, according to sources familiar with the matter. They are working with bankers at JPMorgan to prepare for a potential sale, which could happen later this year.
The Munich-based company is expected to attract a valuation of up to 500 million euros ($550 million). This high valuation is driven by strong earnings, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) projected to exceed 20 million euros this year. However, sources caution that discussions are ongoing, and a sale may not be guaranteed.
WRC Promoter, which handles the commercial aspects of the FIA World Rally Championship, is co-owned by Red Bull and KW 25. The latter was founded by businessmen Karl Wieseneder and Thomas Krohne. Krohne is also known for owning the Munich Ravens, an American football team in the European League of Football (ELF).
A sale could significantly expand WRC’s global reach, especially into the U.S. market. Potential buyers could include private equity firms, wealthy individuals, and large sports media groups. The company is in charge of TV production, media, and sponsorship rights for the WRC, which has been a prestigious motorsport event since 1973.
The WRC features 13 four-day races across various continents, with the Monte Carlo Rally being the most famous. Currently, Belgian racer Thierry Neuville leads the championship, closely followed by Frenchman Sébastien Ogier.
The rising value of commercial rights in sports is a major factor driving the potential sale. For example, Liberty Media, the owner of Formula One, recently acquired Dorna Sports, the owner of MotoGP, in a deal valued at over 4.2 billion euros. This transaction highlighted the increasing worth of sports media rights, with the business being valued at more than 20 times its EBITDA.
In 2021, WRC Promoter reported sales of 25.7 million euros and an operating profit of 4.62 million euros. These numbers were impacted by Covid-19 restrictions, but the company expects growth following its takeover of the European Championship and the Rallycross Championship.
Representatives for JPMorgan, WRC Promoter, Red Bull, and KW 25 have declined to comment on the ongoing discussions.
FAQ:
What is the World Rally Championship (WRC)?
The World Rally Championship (WRC) is a global motorsport event that has been held since 1973. It consists of 13 four-day races across various continents, with the Monte Carlo Rally being the most famous.
What is WRC Promoter GmbH?
WRC Promoter GmbH is the commercial arm of the World Rally Championship. It manages the TV production, media, and sponsorship rights for the WRC and other related events like the European Championship and the Rallycross Championship.
Who is managing the potential sale of WRC Promoter GmbH?
JPMorgan, a global banking giant, is working with the owners to prepare for the potential sale, which could happen later this year.
