Why the WRC's search for new commercial rights holder is so important

It’s official. The World Rally Championship appears on course to welcome a new commercial rights holder in the near future. 

For more than a year the WRC Promoter, that has seven years remaining on its commercial rights contract, has been seeking a buyer in what has become very much an open secret in the service park. Now the FIA has finally made this official by announcing that a tender process is underway to seek “a new commercial rights holder which is committed to long-term investment in the championship and to securing the best possible future for WRC”, according to a press release from the motorsport governing body.

There is no hiding away from the fact that this is a pivotal moment for the future of the WRC. The championship’s promotion has been a hot topic for a long time. To their credit, the WRC Promoter has responded to those calls, action has been taken and changes have been implemented in recent months.

For example, moves to improve rally formats and itineraries is a constantly evolving situation, and after coming under fire initially with its revamped points system, this and the Super Sunday format is now reaping rewards. The promoter has also recently introduced a women’s driver development programme and invested in bringing young drivers to Rally1 by helping fund Martins Sesks’ graduation to the top tier with M-Sport-Ford.      

However, the prospect of a new commercial rights holder presents an opportunity for more changes, further investment and perhaps new ideas to come to the fore. 

The somewhat surprising move from the FIA to issue a press release outlining the current situation regarding the future promotion of the WRC appears to be a sign that a change of rights holder is on the horizon.

At last weekend’s Rally Paraguay further light was shed by FIA president Mohammed Ben Sulayem who revealed that moving forward all future contracts with all motorsport series commercial rights holders will be structured differently, hinting that whoever takes over the promotion of the WRC could be locked into a 25-year deal. Ben Sulayem also confirmed that any funds generated from the sale will be directly invested by the FIA back into the WRC.  

Ben Sulayem has confirmed funds generated by the sale will be redistributed into the WRC

Photo by: Sam Bloxham / Motorsport Images via Getty Images

“Money is not what the FIA wants, it wants sustainability of the business. To me when this thing [sale] is going to happen, I can promise you now there will be an injection from the money that we get back into the championship,” said Ben Sulayem in Paraguay.

The uncertainty regarding the future of the WRC commercial rights holder that has lingered this year, in addition to the FIA’s highly anticipated 2027 technical regulations, have been seen as two aspects that are key to finalise for the WRC to progress forward. 

Reuters first reported last year that the WRC shareholders were gearing up for sale. It claimed that the promoter, in its current structure, owned by Red Bull and KW25, were working with JPMorgan, one of the world's largest banking companies, to find a willing bidder with the asking price approximately €500million.

"The FIA’s priority is to ensure that the WRC is best placed to maximise on this potential and deliver value to all its stakeholders" FIA Statement

WRC Promoter GmbH acquired the commercial rights to the World Rally Championship in 2013. Previously, the promotion was handled by North One Sports, but the 10-year (in force since 2010) contract with the FIA was cancelled before the 2012 season when North One Sports declared bankruptcy.

“The FIA’s priority is to ensure that the WRC is best placed to maximise on this potential and deliver value to all its stakeholders, including drivers, teams, manufacturers, organisers and fans, while also preserving its strong heritage,” read a statement from the FIA when it announced the tender process.

“The FIA will work with Red Bull and KW25 to seek a new commercial rights holder which is committed to long-term investment in the Championship and to securing the best possible future for WRC. This is an exciting opportunity for a new enterprise to take the Championship to the next level and to build out engagement with a new generation of fans.

"J.P. Morgan, the global financial services company, will be acting as financial advisor to Red Bull and KW25, supporting them through the tender process.”

How the tender process will operate 

Red Bull will be one of the operators of the tender.

Photo by: M-Sport

While the FIA has moved to effectively announce publicly that the WRC‘s commercial rights are up for sale, it is important to clarify that the tender process to find a new WRC commercial rights holder isn’t solely an FIA process. The tender will be operated by Red Bull and KW25, although the FIA says it will work with the former through the process.

“The tender process for the commercial rights holder is a big opportunity for a new enterprise to take the Championship into its next chapter with renewed energy and investment. We will work with Red Bull and KW25 to find the best fit for this important role,” said the FIA’s new deputy president and M-Sport founder Malcolm Wilson, who has made securing a new commercial rights holder a key objective.

Conspicuous by the absence of any official comment in the FIA announcement, the WRC Promoter has provided Autosport the following statement: “We can confirm that Red Bull and KW25, together with the FIA, are launching the tender process to identify a new owner of the World Rally Championship.

“We see this step as a very positive signal for the future of the sport: the WRC has experienced strong growth in recent years and holds enormous potential to reach even more fans worldwide. Together with the FIA, we will ensure that the series builds on this foundation and enters a successful new phase.”

Previous tender announcements announced by the FIA relating to the WRC, for example tyre or fuel supplier contracts, have included a deadline for parties to submit their presentations. This announcement didn’t include a timeframe and the FIA has been unable to shed anylight when contacted by Autosport, so it is difficult to predict a timeline for the next steps. But it is likely that the aim for the handing over of the commercial rights to a new suitor will be completed before the start of next season.  

However, Autosport understands that several potential suitors from Europe, America and the Middle East have declared their interest in purchasing the WRC Promoter.

Autosport understands promotors from across the globe have declared an interest

Photo by: Toyota Racing

A number of interested parties have even attended events this year to complete any potential due diligence, which does bode well in terms of finding a buyer. But these processes are often not straightforward and do take time before an agreement is reached. 

Interestingly, this tender process is playing out while the WRC is gearing up for a seismic shift in its technical rules for 2027, designed to be more flexible and affordable with cars built to €345,000 cost cap in the hope of attracting more manufacturers and teams to rallying’s top class. 

A change of commercial rights holder won’t affect the FIA’s 10-year technical plan for the WRC, but knowing what ideas the new commercial rights holder is planning to promote the series could be instrumental for potential manufacturers/teams and current participants sitting on the fence, pondering possible WRC programmes for 2027 and beyond.

The change could be crucial for manufacturers and teams weighing up entry for 2027 and beyond

Photo by: Vincent Thuillier / Hyundai Motorsport