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By Amy-Jo Crowley and Alexander Hübner
LONDON (Reuters) – The owners of the World Rally Championship’s advertising division are looking at options, including a possible sale of the business, seeking to raise money at a time when valuations for sports media rights are high, according to sources. familiar with the matter.
The owners, Austrian beverage organization Red Bull and German investment firm KW 25, are working with JPMorgan bankers to prepare a possible sale of WRC Promoter GmbH later this year, the sources said.
Owners expect the Munich-based company to achieve a valuation of up to €500 million ($550. 3 million), backed by earnings before interest, taxes, depreciation and amortization (EBITDA) that could reach more than €20 million. of euros this year. said one of the other people.
The sources, who requested anonymity because the matter is confidential, warned that talks are still taking place so that a sale does not occur.
JPMorgan representatives declined to comment. WRC Promoter, Red Bull and KW 25 did not respond to requests for comment.
WRC Promoter is jointly owned by Red Bull and KW 25, founded by entrepreneurs Karl Wieseneder and Thomas Krohne, according to its website. Krohne also owns the Munich Ravens American football team, which belongs to the European Football League (ELF), in which he has a stake, according to his LinkedIn profile.
A new WRC Promoter owner would expand its global success and expand into the United States, the user said, adding that deep-pocketed user equity firms, high-net-worth Americans and larger sports media teams could be among the investors.
WRC Promoter is responsible for the advertising aspects of the FIA World Rally Championship (WRC), adding television production as well as media and sponsorship rights.
The WRC has existed since 1973 and includes thirteen four-day races on other continents, the most notable being the Monte Carlo Rally. The current championship leader is the Belgian Thierry Neuville, followed by the Frenchman Sébastien Ogier. From 2022, WRC Promoter also organizes the European Championship and the Rallycross Championship.
Shareholders must also take advantage of the development price charged to advertising rights holders in the sport, the sources said.
Formula 1 owner Liberty Media earlier this year acquired MotoGP owner Dorna Sports from Bridgepoint and the Canada Pension Plan Investment Board (CPPIB) in a €4. 2 billion deal. The sale values the company at more than 20 times EBITDA, one of the resources said.
WRC Promoter achieved a turnover of €25. 7 million and an operating profit of €4. 62 million in 2021, affected by Covid-19 restrictions, according to the most recent documents published in the German federal newspaper Bundesanzeiger. the following year after resuming the European Championship and the Rallycross Championship.
($1 = 0. 9071 euros)
(Reporting via Amy-Jo Crowley; editing via Clare Fallon)