Lagardère Posts 65% Drop In Net Profit Amid Struggles In Its Sports Division

Lagardère SCA Chair & CEO Arnaud Lagardère "looked to reassure investors on Wednesday about the media conglomerate's strategy, as the group posted a 65% drop in first-half net profit amid poor results at the company's sports and publishing divisions," according to Max Colchester of the WALL STREET JOURNAL. Paris-based Lagardère said that net profit fell to $40M in the six months ended June 30. Revenue held flat at $5.3B. In a statement, the company "attributed the slump in profit to a difficult global economic environment, higher taxes and the poor performance of its sports-marketing unit." In the past five years, Lagardère's share price "has tumbled about 60%, as minority stakes in several businesses remained unsold and the 50-year-old's plans to build its global sports-marketing group struggle." Arnaud Lagardère has invested nearly $1.4B "into the company's sports-marketing business." However, analysts "fret about the company's poor return on sports-industry investments, which have included the purchase of sports-rights company Sportfive and a majority stake in the Asia-based sports agency World Sport Group." First-half operating profit at the company's sports subsidiary fell 56% to $5.7M. Lagardère said, "We are disappointed by the numbers." He added that "management changes had been made at the sports division" (WALL STREET JOURNAL, 9/1).