(Bloomberg) -- Formula 1 owner Liberty Media Corp.’s $3.8 billion plan to buy motorcycle racing league MotoGP World Championship has been hit by a full-scale European Union probe.
The European Commission said on Thursday that the planned deal raises “serious competition concerns” for the licensing of broadcasting rights in Europe, and that it would lessen competition in the broadcasting market between Formula 1 and MotoGP. The Brussels-based regulator set a deadline of May 14 to either block the tie-up or approve it with concessions.
“We need to more carefully assess whether this acquisition could negatively affect European broadcasters, for example in terms of increased license fees, and ultimately European consumers and motorsports fans through higher prices,” the EU’s competition chief Teresa Ribera said, in her first major escalation of a competition case since entering office.
MotoGP is just the latest asset to be taken over by billionaire John Malone’s sprawling Liberty Media empire that already includes a wide range of businesses such as concert promoter Live Nation Entertainment Inc. As part of their investigation, EU regulators will also examine whether Malone’s power over Liberty Media and communications firm Liberty Global “could foreclose rival broadcasters in countries in which Liberty Global is active,” namely in Belgium, Ireland and the Netherlands.
A Liberty Media spokesperson said that it will continue to work with EU regulators as they progress their review, and that the deal will benefit MotoGP’s business, fans, viewers and the broader motorcycle industry.
Liberty Media is taking over Madrid-based MotoGP by buying its exclusive rights holder Dorna Sports with a combination of cash and shares of Series C Liberty Formula One common stock. The deal will bring one of the world’s biggest motor-racing brands and MotoGP — often described as the two-wheeled equivalent of Formula 1 — under a single roof. Heightened scrutiny can lead to firms walking away from planned acquisitions. Under the terms of the deal, Liberty would have to pay Dorna €126 million ($131 million) if it ends up withdrawing from the takeover.
Regulators have previously raised concerns over drawing both sporting brands together. CVC Capital Partners Ltd. was forced to put MotoGP up for sale nearly two decades ago to gain antitrust approval from European regulators for its takeover of Formula 1.
(Updates with Liberty Media response in fifth paragraph)
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