The longer-term prospects of KTM's MotoGP racing programme are now in serious doubt. Fresh financial disclosures have shed light on the extent of Austrian parent company Pierer Mobility's financial troubles. KTM has applied for 'self-administration', a concept in German and Austrian insolvency law where the debtor continues to manage assets under supervision. Austrian credit union AKV revealed that KTM is estimated to be nearly €3 billion in debt. This situation has already led to cuts, with more expected in the coming weeks.

Stabilising the Business

Under self-administration, the company is working on a debt repayment plan in the coming weeks. It seems that Pierer Mobility has become a victim of its own success, expanding aggressively during and after the COVID crisis. A third of the nearly €3 billion debt comes from brands other than KTM within the Pierer Mobility group, despite KTM still being responsible for 95% of the company's profit. The financial problems have been reflected in tumbling stock prices, with the share price falling from €102 in January 2022 to under €10 this week. However, there was a small upward tick upon the announcement of the voluntary administration plan.The financial woes have already affected the group's grand prix racing programme. GasGas and Husqvarna brands will disappear from factory MotoGP satellite team Tech3 and Moto2 and Moto3 squad IntactGP respectively. But for now, it seems the main MotoGP racing programme won't be affected. Head of racing Pit Beirer told Austrian newspaper Kronen Zeitung that next season is budgeted for, but there might be issues ahead as the series prepares for a radical redesign in 2027.KTM has four bikes entered in MotoGP and made two high-profile rider signings for next year. Maverick Vinales and Enea Bastianini will ride for Tech3 and are contracted directly to KTM. KTM has reassured the riders that the MotoGP programme will proceed as planned.

Expansive Talent Development

One area where there might be more immediate cuts is in the talent development pathway. KTM has been investing in Moto2 and Moto3 to train young riders, but many have ended up in rival MotoGP programmes. Reigning MotoGP world champion Jorge Martin is a recent example. Beirer added that these classes must become a cost-covering customer business. There will also be discussions about who will be involved in training young talent with Red Bull.

Financial Considerations

The question of whether KTM can afford to race from a purely financial point of view is different from whether it can afford to be seen racing. Given the parent company's financial struggles, any racing display can be seen as ostentatious. But Beirer is adamant that racing will remain a part of KTM's identity. He explained that motorsport is the clear identifier for KTM around the world and the best platform. Every KTM sold carries the spirit of motorsport involvement.Binder also shared his thoughts. When asked about KTM's crisis in October, he said the only thing he can do is win races. "What wins on Sunday sells on Monday - so that's my new motivation here."

Investment Candidates

There are others in the industry who could step up if needed. Indian conglomerate Bajaj Auto already owns 49% of KTM and has been expanding its stake. Chinese brand CFMoto, which builds components for the Pierer group and has enjoyed racing success with the KTM family, could also be a candidate. Group boss Stefan Pierer has a close business relationship with Mark Mateschitz, heir to the European half of the Red Bull group. There have been suggestions that Red Bull could step in as a potential new owner if KTM's racing programme faces significant cuts. But for now, KTM has publicly denied any plans for Mateschitz to join the ownership structure.