Lagardère Sports sale set for September as agency wants 'higher price'
By Jonathan Rest
The sale of Lagardère Sports, the sports marketing arm of Lagardère, should now be completed by September, some three months later than first anticipated, Arnaud Lagardère (pictured), general and managing partner of the France-based media giant, revealed today.
Lagardère, which has been working with Goldman Sachs and the corporate and investment banking arm of Crédit Agricole on the sale, said in November that it was hopeful of disposing of the sports business by the end of the second quarter of 2019.
However, speaking to analysts on a conference call today, Lagardère said: "We will have secured disposal of the sports unit by September. We might be ahead of schedule. I cannot give you any more indication of the price so far but it is around our expectations."
Analysts have previously suggested a ‘sum of its parts’ value of between €200 million ($227.2 million) and €300 million for the sports division, but Lagardère would not be drawn on exact figures today.
Asked why the planned sale of the business had been put back a quarter, he replied: "There is nothing behind this. It takes a little time because it is more complex [than the sales of the TV and TV production businesses that Lagardère is on track to complete by June]. The offers are coming from literally everywhere in the world as you can imagine, because we have activities, unlike in the TV and TV production businesses, that are in Europe, USA and Asia.
"So this is a big thing to deal with. And since we don't have any precise acquisition that we are negotiating right now, it gives us a little more time to gain - and this is our job - tens of millions [of euros], or maybe just millions, more. We have a little more time on this and less pressure, which enables us to get a higher price."
It was this time last year that Lagardère said it was considering a sale of its sports unit, a division that has been dramatically restructured in recent years amid a diversification to move away from hefty media rights minimum guarantees. Towards the end of 2016, it emerged that Lagardère was in negotiations about the sale of a minority stake in its sports business, with prospective investors from China and North America in talks.
Lagardère was speaking at the release of the group's 2018 financial figures, which showed a 4.1-per-cent drop in revenue at the sports and entertainment unit year-on-year to €438 million, albeit there was a minimal 0.9-per-cent increase for the fourth quarter to €135 million.
Strong performances from the Olympics division and soccer activities in Europe was partially offset by the disposal of tennis business in Sweden.
In addition, the company was quick to point out the "unfavourable calendar effect" in 2018, citing the non-occurrence of the Africa Cup of Nations and Asian qualifiers for the 2018 Fifa World Cup.
Andrew Georgiou, chief executive at the sports and entertainment unit, said the business will enjoy a "strong" 2019 first quarter thanks to the AFC Asian Cup, which finished in the United Arab Emirates on 1 February.
He told analysts: "The AFC Asian Cup was a very strong-performing asset from our Asian football portfolio. The rest of the division has traded as normal from previous years."
However, the company will be shorn of its profitable Asian Football Confederation business from 2021 onwards after losing out in the rights auction.
The winning bid from DDMC Fortis for the rights from 2021 to 2028 was worth well over twice the $1 billion that Lagardère is paying (for the rights from 2013 to 2020).
In September Lagardère did pick up a significant piece of business, taking on a worldwide broadcast rights agreement with the International Handball Federation (from 2019 to 2025) after the termination of a €150-million agreement with the now-defunct MP & Silva agency.