Revenue drop but improved profitability for Constantin Medien ahead of delisting

German media group Constantin Medien, which will next year rebrand as Sport1 Medien, has reported a €10.5m ($11.7m) fall in first-half group revenues, partly due to the loss of broadcast rights in Germany to the Uefa Europa League.

Nevertheless, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to a €900,000 deficit in the first six months of the year, a year-on-year improvement of €2.1m.

Constantin Medien houses German sports broadcaster Sport1, production company Plazamedia and ad sales division Sport1 Media, and is poised to delist from the Frankfurt Stock Exchange after approving a proposal earlier this month from parent company Highlight Communications.

Constantin Medien attributed the decreased first-half revenues to lower television advertising income after Sport1 failed to retain the Europa League rights from 2018-19 onwards and a “general restraint in advertising spending.”

Expanding on the results, Constantin Medien said: “Group revenues in the first half of 2019 reached €50.0m (H1 2018: €60.5m). Positive sales impulses from the Ice Hockey World Championship, the DEL and Champions Hockey League as well as the stable Bundesliga Sundays could not compensate for the discontinuation of the Uefa Europa League in the first half of 2019.

“In addition, there was a general restraint in advertising spending and months of legal uncertainty regarding the Schleswig-Holstein licenses for online casinos.”

Constantin Medien’s first-half results last year were also buoyed by major events such as the 2018 Olympics and World Cup (for which Sport1 held digital highlights clips in Germany).

Selected live and highlights rights to the DFB Pokal, the German knockout clubs competition, have been secured from the 2019-20 season onwards, but the advertising boost will not be felt until the next quarter.

Olaf Schröder, Constantin Medien’s chief executive, said: “The results for the first half of 2019 clearly show that our strategy is paying off. Profitability is more important to us than revenues growth, and we have made great progress in this respect. Despite declining revenues, Group earnings improved strongly. We are particularly pleased with the earnings improvement at Plazamedia, where our considerable investments are beginning to pay off.

“Of course, we also want to grow revenues again. In return, I expect impulses from the live and highlight rights to the DFB Pokal as of the 2019-20 season.”

Since the start of the year, the group has launched eSports1, the first linear eSports channel in German-speaking countries. It has also ramped up operations at Match IQ, the agency that organises friendlies and training camps for German clubs and in which Constantin Medien purchased a majority stake last year.