By Amy-Jo Crowley and Alexander Hübner

LONDON (Reuters) – The owners of the commercial arm of the World Rally Championship are exploring options including a possible sale of the business, according to people familiar with the matter, as they seek to raise cash at a time of high valuations for sports media rights.

The owners, Austrian drinks group Red Bull and German investment company KW 25, are currently working with JPMorgan bankers to prepare for a possible sale of WRC Promoter GmbH later this year, the people said.

The owners hope to value the Munich-based company at up to 500 million euros ($550.3 million), backed by earnings before interest, taxes, depreciation and amortization (EBITDA) that could reach more than 20 million euros this year, one of the people close to the deal said.

The sources, who requested anonymity due to the confidentiality of the matter, said talks are ongoing but a sale may not happen.

Representatives of JPMorgan declined to comment. WRC Promoter, Red Bull and KW 25 did not immediately respond to requests for comment.

WRC Promoter is jointly owned by Red Bull and KW 25, founded by businessmen Karl Wieseneder and Thomas Krohne, according to its website. Krohne also owns the American football team Munich Ravens, which is part of the European League of Football (ELF), in which he is involved, according to his LinkedIn profile.

A new owner would help WRC Promoter expand its global reach and expand into the United States, the second person said, adding that investors could include deep-pocketed private equity firms, high-net-worth individuals and major sports media groups.

WRC Promoter is responsible for the commercial aspects of the FIA ​​World Rally Championship (WRC), including TV production, media and sponsorship rights.

The WRC has existed since 1973 and includes 13 four-day races on different continents, the most famous of which is the Monte Carlo Rally. The current leader is Belgian Thierry Neuville, followed by Frenchman Sebastien Ogier. Since 2022, WRC Promoter has also been organizing the European Championship and the Rallycross Championship.

According to the people, the shareholders also wanted to benefit from the increasing value attributed to holders of commercial rights in sports.

Formula 1 owner Liberty Media acquired MotoGP owner Dorna Sports from Bridgepoint and the Canada Pension Plan Investment Board (CPPIB) earlier this year in a 4.2 billion euro deal. The sale valued the company at more than 20 times EBITDA, one of the people said.

WRC Promoter had a turnover of €25.7 million and an operating profit of €4.62 million in 2021, when it was affected by Covid-19 restrictions, according to the latest filings published in the Federal Gazette. The company said it would see an increase in turnover the following year after taking over the European Championship and the Rallycross Championship.

(1 US dollar = 0.9071 euros)

(Reporting by Amy-Jo Crowley; Editing by Clare Fallon)