Dorna

MotoGP's Claiming Rule is set to be consigned to the history books. At the next meeting of the Grand Prix Commission at Barcelona, a proposal will be put forward to abandon the claiming rule altogether. With the advent of the new distinction, between MSMA entries and non-MSMA entries, the need to claim an engine ceased to exist. The demise of the claiming rule opens the way towards the leasing of Yamaha engines to private teams without fear of those engines being claimed by other factories.

The claiming rule had been instigated at the start of 2012, to allow the grid to expand. At the end of 2011, with the departure of Suzuki, and both Honda and Ducati cutting back the number of satellite bikes they were prepared to provide, numbers on the MotoGP grid looked like falling to as low as 13 or 14 bikes. The switch back to 1000cc engines meant a rich spectrum of engines was available to custom chassis builders, to produce affordable race bikes. To allow such teams to compete with the full factory efforts, such teams were allowed extra fuel (24 liters instead of 21), and double the factory engine allowance, 12 instead of 6. To prevent new factories from taking advantage of the loophole, the MSMA members - the factories involved in MotoGP - retained the right to claim the engine of such teams. Hence the name, Claiming Rule Team or CRT.

Carmelo Ezpeleta was served with with a subpoena this morning by legal representatives of Kevin Schwantz, calling the Dorna CEO to appear before the courts in Austin to give a report of the contract dealings between Schwantz and the Spanish company charged with organizing MotoGP over the race at the Circuit of the Americas in Austin. A statement released by Schwantz reads "I just received word from my attorney, Austin Tighe:  I want to let you know that earlier this morning, over what I am told was a delicious Four Seasons’ breakfast, Carmelo Ezpeleta was served with a subpoena to appear for deposition in Austin on May 8 at 9:00 a.m."

The move is the latest step in the long-running dispute between Schwantz and COTA, the owners of the Circuit of The Americas, over the rights to organize the Austin round of MotoGP. With Ezpeleta called to make a public statement about the course of events leading up to the ousting of Schwantz, the Dorna boss will be forced to fly back to the US the week after the Jerez round of MotoGP, to speak to the courts. Ezpeleta will likely be quizzed on his role in the contract dispute between Schwantz and COTA, and exactly what agreements were made between the parties.

With the MotoGP paddock once again assembled for the start of the season at Qatar, the four organizations who make up the Grand Prix Commission, MotoGP's rulemaking body, took the opportunity to meet and discuss and adopt a number of rule changes. The rules cover a number of areas, including testing for all three classes, the 2014 technical rules for MotoGP, and further steps to control the real cost of engines in Moto3.

The most significant part of the press release is perhaps also the least obvious. The GPC confirmed the 2014 technical regulations previously agreed upon, after Dorna received assurances - and detailed proposals - that the manufacturers were prepared to supply private teams with affordable machinery. The news that Yamaha has agreed to lease engines to teams was the final piece in the puzzle which ensured that the rule package for 2014 would be adopted. Honda had previously agreed to build a customer version of their RC213V machine, five of which they will supply to private teams, and with Yamaha supplying four engines for lease - or more likely, a package including a Yamaha engine in a Yamaha-inspired chassis built by FTR - the grid will have at least twelve prototypes, nine MSMA-supplied privateer machines, and three other bikes, two of which could be factory Suzukis. Ducati has not been asked to supply privateer teams, unsurprising given the fact that the Italian factory is the smallest manufacturer by a very, very long way, and designing and building a separate engine or bike for customer teams is simply beyond their resources. 

The Philip Morris-sponsored Wrooom event is not just the event at which Ducati launches its MotoGP season, it has become the de facto kick off to the MotoGP season as a whole. With an important section of the international media present, Dorna CEO Carmelo Ezpeleta inevitably seizes the opportunity to talk to the press about his view of the season ahead, and where necessary, of the future beyond that.

This year was little different. Ezpeleta spoke to the media ahead of the presentation by Ducati Corse boss Bernhard Gobmeier, and answered questions from a number of media outlets separately, answering questions on the future of both MotoGP and World Superbikes. From his statements, a picture of Dorna's vision for the two series starts to emerge: the future of world championship motorcycle racing is to be price-limited, with more support for the current teams, and factories holding a stake in both series, in exchange for keeping a lid on costs. The calendars of both series would come under scrutiny, with MotoGP heading to South America in 2014, and both series only racing at circuits willing to pay a sanctioning fee which would cover the cost of the logistics to get there.

Now that it has the World Superbike series under its control, Dorna is turning its attention to the question of costs. It was an issue which, WSBK insiders claim, the Flammini brothers and Infront spent too little time on, preferring to focus on trying to compete with MotoGP instead. The series' critics charge that this obsession caused WSBK to allow bikes into the series which were more like MotoGP prototypes than production road bikes. The Aprilia RSV4 is one of the bikes most often named in this regard, though perhaps the most extreme example was the Foggy Petronas FP3 machine, of which the entire homologation run is rumored to be stored in a warehouse owned by the Malaysian oil company in Kuala Lumpur. As a result, grids have shrunk from around thirty starters in 2009 to just twenty in 2013.

Since the global financial crisis struck back in 2008, MotoGP's primary focus has been on cutting costs. These efforts have met with varying success - sometimes reducing costs over the long term, after a short term increase, sometimes having no discernible impact whatsoever - and as a result, the grids in all three classes are filling up again. Further changes are afoot - chiefly, the promise by Honda and Yamaha to supply cheaper machinery to private teams, either in the form of production racers, such as Honda's RC213V clone, or Yamaha's offer to lease engines to chassis builders - but there is a limit to how much can be achieved by cutting costs. What is really needed is for the series to raise its revenues, something which the series has signally failed to do.

In truth, the series has never really recovered from the loss of tobacco sponsorship, something for which it should have been prepared, given that it had had many years' warning of the ruling finally being applied. The underlying problem was that the raising of sponsorship had been outsourced and the marketing of the series had been outsourced to a large degree to the tobacco companies, and once they left - with the honorable, if confusing, exception of Philip Morris - those skills disappeared with them. There was nobody left to try to increase the amount of money coming into the sport.

After an almost interminable period of discussions and debate, agreement has at last been reached over the technical regulations to be applied in MotoGP for the 2014 onwards. The agreement has been a compromise, with both sides of the argument being given something to satisfy them.

The new rules see the introduction of a compulsory spec ECU and datalogger, and the ECU now acts as a divide between the two classes of teams in the paddock. MSMA members will be allowed to use their own software for the spec ECU, but the punishment for doing so will be a reduction in the fuel limit from 21 to 20 liters for a race. Teams electing to use the spec software supplied by Dorna will be allowed 24 liters. The MSMA members will also be limited to 5 engines a season, while the rest will be allowed 12 engines. The reduction in fuel and engines was made at the request of the factories, to give themselves an engineering challenge to conquer.

An engine development freeze was also announced, preventing engine development during each season, and in addition, the bore and stroke of the MotoGP machines will be fixed for three seasons, from 2013 to 2015. 

The key role that money plays in motorcycle racing was once again underlined when Bridgepoint Capital, the private equity firm which owns a large part of Dorna, announced it was selling a 39% stake in the organizer of MotoGP and World Superbikes. That stake was sold to CPPIB, a Canadian pension fund, the combining of WSBK and MotoGP under the umbrella of Dorna having been a prime mover for the sale.

One of the first things the new owners have done is opened up bidding for refinancing of the debts Dorna is encumbered with. According to reports in Bloomberg Businessweek, Bridgepoint and CPPIB have hired the French bank Societe Generale to help arrange financing covering some 485 million euros of debt. The debt being renegotiated includes existing debt placed on the company, as well as debt being used to refund shareholder loans, according to the reports. A meeting is scheduled for this week, where potential lenders will be offered the chance to bid on the loans.

Below is the press release issued by the CPPIB on their acquisition of a 39% stake in Dorna, reproduced with kind permission:

Canada Pension Plan Investment Board to Acquire Interest in Dorna Sports S.L.

Toronto, Canada (October 26, 2012): Canada Pension Plan Investment Board (CPPIB) announced today that it has signed an agreement to invest in Dorna Sports S.L. (Dorna) following the sports management company’s recent acquisition of the FIM World Superbikes Championship. CPPIB will acquire a 39% stake in the enlarged group alongside current shareholders, Bridgepoint and Dorna management.

Dorna holds the global rights until 2036 to organize the FIM Road Racing World Championship Grand Prix, known as MotoGP, the world’s most prestigious motorcycle racing series. Dorna recently expanded its group following the acquisition of the FIM World Superbikes (SBK) Championship which, together, represent the two pre-eminent motorcycle racing series in the world.

“This is a unique opportunity to invest in a leading international sports management business,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “Dorna’s experienced management team has demonstrated a remarkable ability to deliver consistent and strong performance.”

The battle which has been raging rather politely between Honda and Dorna over the introduction of spec electronics continues to simmer on. The issue was once again discussed at Motegi, with still no resolution in sight. HRC boss Shuhei Nakamoto reiterated Honda's opposition to the introduction of a spec ECU in an interview with the Japanese journalist Yoko Togashi, which was published on GPOne.com.

The reasons for introducing a spec ECU - or more accurately, a spec electronics package, including ECU, sensors, wiring harness and data logger - are twofold: the first issue is to cut the costs of electronics in the sport, an area where spending is rampant and where gains can always be found by throwing more money and more engineers at a problem. The second issue is to improve the spectacle; racing in the modern era has become dull, with the electronics and the Bridgestone tires contributing to produce races where it is unusual for there to be more than one pass for the win.

While Nakamoto did not comment on improving the show via electronics - it could be argued that radically changing the tires would have a greater impact on the spectacle than merely introducing a restricted spec electronics system - he did repeat the claim he has made in the past that merely adopting a spec ECU would not help to cut costs, claiming that if anything, it would actually increase costs.

The analogy he used to describe the change was as follows: "Using different ECU is like switching to Macintosh while you are using Microsoft adapted computers for many years. You have to change everything." At first glance, that seems to be a reasonable argument: switching ECUs would indeed mean that all of the software Honda has developed for their own ECU would have to be transformed into a form which they could use on the new ECU, the unit to be supplied by Magneti Marelli. Nakamoto bases his claim on his experience in Formula One, where Honda spent a lot of money adapting their electronics package when that series implemented a spec ECU.

The repercussions of Bridgepoint's decision to hand control of the World Superbike series to Dorna are just starting to become clear, as each of the protagonists get to explain their side of the story. After Paolo Flammini spoke to the media at the final World Superbike round of the year at Magny-Cours, at Motegi, it was the turn of Dorna CEO Carmelo Ezpeleta to face the press.

He did so an hour before the traditional pre-event press conference, giving a statement and answering questions from assembled journalists on the implications of the move (a full transcript of the press conference is available on the official MotoGP.com website). Ezpeleta did his best to first of all quell any fears among the legions of World Superbike fans that Dorna intended implementing any major changes for the coming season, ensuring the assembled media that all would go ahead for 2013 as planned. "For next year things will continue as they are, and both MotoGP and WSBK will continue the same way, with exactly the same system of organization and with the same technical rules," Ezpeleta told the press. "For 2013 the regulations will be the ones that have been approved between the FIM and Infront Motor Sports," he said in response to questions, "In 2013 it will be exactly as proposed by the different parties involved, there will not be any changes for 2013."

Beyond 2013 is a different matter, however. Ezpeleta made it clear that his goal was to harmonize the regulations between the MotoGP and World Superbike series, each maintaining their separate identities, but cutting costs and increasing the spectacle in both. "From now, together with the FIM, the manufacturers, the circuits and with the teams, we will try to accommodate these difficult economic times to set up two championships that are able to continue and to grow together," Ezpeleta said. "This is the main aim of both championships - reducing costs and increasing the show."

The 2013 MotoGP calendar came one step closer to completion today. According to the ever-reliable Spanish website Motoworld, the Jerez circuit has finalized their contract with Dorna to host the Spanish round at the track on May 5th. The date had originally been listed as "Subject to contract" but is now confirmed for 2013.

The deal has been hammered out between the circuit, Dorna, and the government of the Autonomous Region of Andalucia, the federal part of Spain where the Jerez circuit is located. Under the agreement, according to Motoworld, the Andalucian government will pay the sanctioning fee to Dorna, in order to ensure the continuing presence of race on the MotoGP calendar. The race is the traditional opening of the European part of the season, and always attracts large crowds and draws money into the Jerez region.

This may very well turn out to be the biggest week in MotoGP since the decision to replace the two stroke 500s with large capacity four stroke machines. This week, Dorna CEO Carmelo Ezpeleta is set to have meetings with each of the MSMA members at Motegi, to hammer out once and for all the technical basis for the 2014 season. If they succeed, the ground will be laid for a set of technical regulations which can remain stable for the long term, the goal being at least five years. If they fail, then one or more manufacturers could leave the series, reducing the number of factory bikes on the grid and potentially removing two of MotoGP's top riders from the grid. There is much at stake.

So much, in fact, that neither side looks prepared to back down. On the one side is Dorna, who see the costs of the championship spiraling out of control thanks to the increasing sophistication of the electronics, and the racing growing ever more clinical as fewer and fewer riders are capable of mastering the machines these electronics control. On the other side are the factories, for whom MotoGP, with its fuel-limited format, provides an ideal laboratory for developing electronic control systems which filter through into their consumer products and serves as a training ground for their best engineers. Dorna demands a spec ECU to control costs; the factories, amalgamated in the MSMA, demand the ability to develop software strategies through the use of unrestricted electronics. The two perspectives are irreconcilable, at the most fundamental level.

Sunday is going to be a big day for World Superbikes at Magny-Cours. Not just because the 2012 title is to be settled in what could be a fascinating showdown, helped in no small part by the weather, but perhaps most of all because on Sunday morning at 9am local time, Infront Motor Sports CEO will speak to the media for the first time since the announcement that Bridgepoint, the private equity firm which owns both Infront and MotoGP rights owners Dorna, has decided to bring both series under a single umbrella, and that umbrella is to be Dorna.

That news has sent a shockwave through the motorcycle racing world. The World Superbike paddock is hardest hit of all: the mood there is somber, with everyone from Infront staff to team mechanics fearing the outcome of what amounts to a coup by Dorna CEO Carmelo Ezpeleta. Optimists are few, especially as Ezpeleta is one of the most reviled characters among denizens of the WSBK paddock, because of what he represents: the perceived arrogance of the Grand Prix paddock, and a culture which is anathema to everything which World Superbikes stand for. MotoGP is truly the Beatles to WSBK's Rolling Stones.

There is some justification to their fears. WSBK, in the person of Paolo Flammini, has been holding out on requests from MotoGP's organizers to impose further restrictions on development of the WSBK machines, bringing them much more in line with the Superstock-style regulations proposed by FIM to harmonize regulations at the national level. He does so with good reason: the manufacturers currently racing in World Superbikes have made it very clear that they have no desire to see any further restrictions on tuning and bike modification put into place. Given WSBK's increasing reliance on manufacturer teams - though blessed with six different manufacturers, teams without some form of manufacturer backing are finding it increasingly hard to survive, leading to shrinking grids and gaps opening between the factory-backed and privateer squads - keeping the factories happy is becoming ever more important. WSBK does at least have the freedom to change the rules without factory interference, something which was until recently unthinkable in MotoGP.

Much was expected of Friday's Grand Prix Commission meeting at Assen, which was set to discuss the major changes coming in MotoGP. The results of that meeting turned out to be a damp squib rather than the expected revolution, as decisions on the big changes were pushed further down the road. On Saturday morning, the day of the race, MotoMatters.com spoke to Carmelo Ezpeleta about those expected rule changes, and about the reasoning behind them.

In the discussion, Ezpeleta told MotoMatters.com that his main aim was to both reduce costs and increase the entertainment value of the series. Part of that would be by helping the CRT bikes where they are weak: the electronics are a major issue for the CRT bikes, and Dorna have enlisted the help of Magneti Marelli to provide the CRT machines with a standard ECU, developed using their extensive experience gained from racing in MotoGP. A rev limit is still on the cards, but whether this will be introduced in 2014 or 2015 is as yet unclear.

While unpopular with a lot of people, Ezpeleta laid out exactly why the rule changes are needed: Dorna is in the entertainment business, and is subsidizing both the teams and factories to race in MotoGP. That contribution is substantial, and the only way to keep the series viable is by keeping costs low. Expanding the popularity of the series was also important, and to that end, MotoGP will be going to Southeast Asia in either 2014 or 2015, though Ezpeleta was coy on exactly where that would be. Here's what Carmelo Ezpeleta had to tell MotoMatters.com at Assen:

MotoMatters: I would like to ask you about the new rules for MotoGP, the rules which are coming in 2014 or 2015.