Felsing heading back to rebranded Lagardère Sports once H.I.G deal is completed
Stefan Felsing is to return to Lagardère Sports after a two-year hiatus, following the sale of a majority stake of the agency to H.I.G.Europe, a division of the USA-based private equity and alternative assets investment firm.
French media giant Lagardère announced in December that it was close to selling off 75 per cent of Lagardère Sports to H.I.G, and a definitive agreement was signed by all parties yesterday that will involve the agency being rebranded.
The deal values Lagardère Sports at €110 million ($119 million), with the loss of key contracts over the years having diminished its worth.
The Lagardère group will retain a 24.9 per-cent stake in the sports business, which will be led by chief executive Felsing, who was its executive vice-president, media, global sales and acquisitions when he left in January 2018 to form his own consultancy. His first client was Lagardère Sports.
Christian Kraul-von Renner, managing director at H.I.G, said in a statement: “The global sports marketing segment is a multi-billion-euro industry with attractive long-term growth prospects fuelled by the continuously increasing popularity of sports and the digitisation of sports marketing services. H.I.G. is looking forward to drive the business to the next level together with a truly global management team.”
Felsing added: “I am looking forward to returning to a former place of work in the context of my new responsibilities. Lagardère Sports has enormous potential, particularly given the company’s unique culture and the long-standing trusted partnership with its customers. Together with H.I.G., a strong and experienced investor, we are ideally positioned to continue building on these great assets. We are ready to leverage the full potential of the firm.”
Felsing was previously a member of UFA Sports’ senior management and stayed on board following Lagardère’s takeover of the Hamburg-based agency. He was also part of the senior management team at (the Lagardère-owned) Sportfive, with one of his main tasks being the sale of broadcast rights to the 2008 Uefa European Championships, leaving to set up UFA Sports that same year.
Lagardère had been looking to offload the sports agency for two years, and the group said early in 2019 that it was hopeful of a completed sale by the second quarter, but complications with the business, notably the Confederation of African Football’s decision to cancel a 12-year global media and sponsorship rights contract, meant the process ran to the end of the year.
Sportcal reported last July that the group was in exclusive talks with Wasserman over the sale of Lagardère Sports, but the US sports marketing and talent management agency later cooled its interest. Other parties linked with the sports division have included Mediapro, the Spanish media rights and production agency, and Endeavor, the owner of the IMG agency.
When originally announcing the proposed sale to H.I.G in December, Lagardère said the valuation "does not include the future value creation potential of the group's residual 25 per cent interest in Lagardère Sports, or any potential gains from the Confederation of African Football (CAF) agreement."
The group anticipates recognising a write-down estimated at between €210 million and €240 million, notably deriving from what it described as the "unilateral decision" of CAF to cancel the deal.
The value of Lagardère Sports had already been affected by the loss of its other major soccer rights contract, namely that with the Asian Football Confederation.
DDMC Fortis won the right to market AFC national team and club competitions from 2021 to 2028 after submitting a bid worth well over twice the $1 billion that Lagardère Sports is paying from 2013 to 2020.
In its most recent published financial results, for the first nine months of 2019, Lagardère Sports and Entertainment posted turnover of €402 million, up from €304 million, in the prior year, driven by events such as the AFC Asian Cup in the United Arab Emirates, the Africa Cup of Nations in Egypt and the IHF World Men’s Handball Championship in Denmark and Germany.