French media conglomerate Lagardère confirmed a €550 million ($737 million) writedown in the value of its sports marketing division, Lagardère Unlimited, as the group announced a net loss of €707 million in its full-year results for 2011. Lagardère Unlimited owns the IEC in Sports, Sportfive and World Sport Group rights agencies.
The sports division writedown was blamed on loss-making contracts, the non-renewal of agreements, lower-than-expected sales, litigation costs and the non-collection of some debt.
Lagardère Unlimited’s sales increased by 6.2 per cent year-on-year to €454 million, but recurring earnings before interest and tax was minus €6 million, down €34 million from positive earnings of €28 million in 2010.
Lagardère Unlimited’s €550 million writedown was part of a total €895 million impairment charge for the parent company, with the total figure also including a €310 million writedown on Lagardère’s 20-per-cent stake in pay-television broadcaster Canal Plus France.
“If one puts to one side the ‘accident’ of sport, the group overall did well in 2011,” the conglomerate’s general managing partner, Arnaud Lagardère, was quoted as saying by the Financial Times.
He said the company’s performance would be “stable” in 2012 after a difficult 2011 and he remained determined to turn around the fortunes of Lagardère Unlimited.
The company said that “major changes in management” had taken place at the sports division in the first half of 2011 with the aim of turning the division around.