Force Majeure: It Means “You’re Not Getting Paid”

So, essentially, no races, no revenue.


Is MotoGP on life support? Mary Spies

Nearly every contract has a force majeure clause in it. It’s rarely looked at and or invoked simply because its translation is basically ‘an act of God preventing the parties who are named in the contract from performing their obligations’. It’s usually ignored because giant clouds of locusts, rivers on fire and torrential rain for 40 days and 40 nights isn’t as prevalent today as it was in the Old Testament.

However, we can safely assume that (with evidence of a major pandemic happening worldwide) there is currently a great deal of focus on force majeure clauses. In contracts between riders and teams, riders and manufacturers, the teams and Dorna, Dorna and the circuits, Dorna and their transportation contractors, etc are assuredly being examined and interpreted in terms of force majeure.

Depending on how strictly a force majeure clause is enforced it can mean that a top factory MotoGP rider might not be getting his monthly paycheck of (roughly) $583,333. Sponsors not getting their logo shown on a motorcycle and or television can invoke force majeure to a team, which means the team’s invoice is stamped “tough monkeys” and returned, unpaid. Dorna subsidizes a great many MotoGP teams. Dorna’s payments to teams such as Tech 3 and LCR are a major source of income, if not the lifeblood of the team.

Dorna itself is owned in large part by Bridgepoint Capital, which is basically a Canadian pension fund. Tellingly, Bridgepoint describes its investment in Dorna thusly: The company generates its revenues from circuit fees (from 18 Grands Prix in 13 countries), television broadcast contracts, sponsorship and advertising as well as corporate hospitality and related services. It continues to develop the strength of the MotoGP product and brand to a very broad audience base globally, thanks to the series’ heritage and popularity.

So, essentially, no races, no revenue.

 


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