Eurosport's full-year revenue takes hit but enjoys healthy profit increase
Full-year group revenue at Eurosport, the pan-European sports broadcaster, fell by 4.7 per cent to €452.9 million ($622.5 million) in 2013, but current operating profit rose by €18.2 million to reach €81.8 million.
TF1, the French commercial broadcaster that owns a majority stake in Eurosport but is in the process of selling it to Discovery Communications, the USA-based media group, said that the revenue decrease was attributable to a year-on-year drop in non-advertising revenue reflecting difficulties in the Spanish and Scandinavian markets.
This was partly offset, TF1 said, by Eurosport’s success in Eastern and Central Europe and by the expansion of Eurosport Asia-Pacific.
Revenue at Eurosport International fell from €406 million in 2012 to €385.8 million last year, while current operating profit jumped by €18.8 million to reach €76.6 million.
Along with Eurosport International, the Eurosport ‘group’ figures also include the activities of Eurosport France, the European sports broadcaster’s French arm.
Eurosport’s advertising revenue fell year-on-year ‘on tough comparatives due to a strong sporting calendar in 2012,’ a year that included London’s Olympic Games and soccer’s Euro 2012 European Championships.
Eurosport’s 2013 group advertising revenue dropped by 8.5 per cent to €90.2 million, following on from a 15.6-per-cent rise in 2012.
Fourth-quarter revenue at Eurosport fell by 3.4 per cent to €110.4 million, while current operating profit in the final three months of 2013 rose by €10 million to €27.1 million, thanks to very good cost control and delivering an operating margin of 24.5 per cent, TF1 said.
At the end of 2013, the main Eurosport channel was being received by 132.8 million households in Europe, TF1 said, a year-on-year increase of 1 million, with the number of paying households up by 0.3 per cent. Eurosport 2 is now received by 68.1 million households, an increase of 8.8 per cent, while Eurosport Asia-Pacific is in 9.3 million households, compared to 7.6 million at the end of 2012.
Last month, it was announced that Discovery was accelerating its investment in Eurosport and that it had reached an agreement with TF1 to increase its shareholding to 51 per cent almost a year earlier than initially anticipated.
Discovery had initially acquired a 20-per-cent stake in Eurosport from TF1 early last year in exchange for a cash consideration of around €170 million, with the option to increase the holding to 51 per cent on or after December 21, 2014, and with TF1 then retaining the option to sell the remaining 49 per cent.
Despite Discovery exercising its option early, TF1 has said that it will retain its 80-per-cent interest in Eurosport France until at least the end of 2014.
Meanwhile, the TF1 group reported revenues of €2.47 billion for 2013, a year-on-year drop of 5.7 per cent. Operating profit rose by 6 per cent to €223.1 million, while net profit attributable to the group was up by 0.7 per cent to €137 million.
TF1's group programming costs in 2013 were €946.7 million, representing a saving of €57.7 million on 2012. TF1 noted, however, that the previous year’s figures included the €24.2 million spent on broadcasting nine matches from Euro 2012. The group’s sports programming costs last year (excluding major sporting events) amounted to €60.4 million, significantly down on the €101 million spent in 2012, and thanks in part to TF1 no longer showing the Uefa Champions League, European soccer's elite clubs competition, after losing rights to to Canal Plus, the pay-television broadcaster.
Delivering its 2014 outlook, TF1 warned that the Fifa World Cup, to be held later this year in Brazil, would represent a ‘drag on profitability.’
In 2005, and before the onset of the global financial downturn, TF1 acquired the rights in France to the 2010 and 2014 World Cups for around €250 million, and it has been trying to sell on some of the rights to other broadcasters in France in order to recoup some of its outlay.