Lagardere SA · EURONEXT:MMB
Lagardere SA — Lagardère Sports — Investor Day (June 2008)
48 slides from Lagardere SA's investor day presentation, June 2008
Slide 1: Lagardère Sports: Building a Global Leader in the Sports Ecosystem
June 2008 Analyst Presentation Lagardère Sports: Building a Global Leader in the Sports Ecosystem
Slide 2: Warning
Warning Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management’s beliefs. These statements reflect such views and assumptions as of the date of the statements and
Slide 3: Table of Contents
Table of Contents I. Opening Remarks II. Sports Ecosystem Dynamics III. The Business Model IV. Our Strategy V. Conclusion and Q&A June 2008 Analyst Presentation • 3
Slide 4: The unique attributes of sports brands and events
Opening Remarks The unique attributes of sports brands and events Universal and global – appeal to broad audiences and advertisers Live and instantaneous – each game is unique, no piracy Recurring – team story developing over time Predictable – long-term relationships and contracts June 2008 Analyst
Slide 5: Sports: a strategic choice for the Lagardère Group
Opening Remarks Sports: a strategic choice for the Lagardère Group Market Entry Rationale Lagardère Sports Vision Double-digit margin business, solid growth across markets and disciplines Global leader with scale benefits Diversified business model – multiple revenue streams, both measured media and
Slide 6: Table of Contents
Table of Contents I. Opening Remarks II. Sports Ecosystem Dynamics III. The Business Model IV. Our Strategy V. Conclusion and Q&A June 2008 Analyst Presentation • 6
Slide 7: A global, €63bn market in 2007…
Sports Ecosystem Dynamics A global, €63bn market in 2007… EMEA North America Premier League UEFA & CAF NFL Grand Slams NBA MLB College Sports MLS Latin America Asia Pacific CONMEBOL & CONCACAF Formula One ICC, BCCI (cricket) Formula One AFC events €31bn €25bn €5.5bn €1.5bn North America Latin Americ
Slide 8: …Structured around three key dimensions
Sports Ecosystem Dynamics …Structured around three key dimensions Market Segmentation 2007 Market Size (€bn) US Sports (1) €63bn €63bn €63bn 1. Sports Football Formula 1 Latin Am. 2% Other Olympics 23% Asia Pac. 9% Licensing Regional Sports 18% Other Sports Formula 1 5% EMEA Ticketing / 40% Hospital
Slide 9: Monetizing sports brands and events - value chain
Sports Ecosystem Dynamics Monetizing sports brands and events - value chain Governing Bodies Content Content and rights-holders Media Rights Production Distribution Athletes Marketing / Sponsorship Marketers / Clubs Sponsorship, Endorsement, Brand Management Advertisers Confederations Audiences / Fe
Slide 10: Comprehensive offering for rights-holders
Sports Ecosystem Dynamics Comprehensive offering for rights-holders Sports Development Lifecycle - Service Needs Rights value Discipline Stage Seed Emergence Expansion Maturity Achieve Develop Develop Maximize rights relevant audience rights value / value media coverage Rights- coverage Seek sponsor
Slide 11: Differentiated, increasingly sophisticated service platforms
Sports Ecosystem Dynamics Differentiated, increasingly sophisticated service platforms Sports Development Lifecycle - Service Platforms Rights value Discipline Stage Seed Emergence Expansion Maturity Cost-efficient Quality production Media rights Revenue media access management diversification (digi
Slide 12: Market growth solidly grounded on typical media drivers
Sports Ecosystem Dynamics Market growth solidly grounded on typical media drivers Global Market Business Underlying Growth Driver CAGR ('07-'12) TV / new media Pay TV and advertising funding content Media Rights advertising +6-7% Competition between traditional players Pay TV and new entrants for pr
Slide 13: Predictable long-term market dynamics
Sports Ecosystem Dynamics Predictable long-term market dynamics Media Sports Rights Sponsorship (€bn) (€bn) 6 USA 7 Europe Top 5 5 USA 6 Asia Pacific 5 4 4 3 3 2 Asia Pacific 2 Europe Top 5 1 Latin America 1 0.5 Latin America 0.25 0 0 0 50 100 150 200 5 2,5 30 15 55 80 105 130 Advertising / Pay TV (
Slide 14: Multi-year contracts - recession-resilient
Sports Ecosystem Dynamics Multi-year contracts - recession-resilient Premier League Total International Rights vs. World GDP (%) Multi-year contracts +24% +24% +22% +22% +22% +25% – vs. typical 1 to 2 year economic down-cycles Premium events growing +4.2% +2.6% +4.0% +3.4% faster than overall +1.5%
Slide 15: Combination of annual and multi-year growth trends
Sports Ecosystem Dynamics Combination of annual and multi-year growth trends 2004 2005 2006 2007 2008 2009 2010 2011 2012 … UEFA Champions League, CAF Champions League, Continental Competitions AFC Champions League, UEFA Cup, Copa Libertadores National Competitions US Major Leagues, European domesti
Slide 16: Overall market experiencing steady growth
Sports Ecosystem Dynamics Overall market experiencing steady growth Total Sports Market (€bn) Football TV Rights 2000-2008 (€bn) 7.1 7.3 69 63 6.4 6.5 61 6.1 5.9 54 5.5 49 52 €33bn 47 €34bn ~€2bn 2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008 Major multi- FIFA + Winter Olympic
Slide 17: €17-20bn addressable market
Sports Ecosystem Dynamics €17-20bn addressable market Addressable Market (2007) €63bn €25bn €17-20bn €17-20bn €17-20bn Latin Am. 2% Licensing Asia Pacific 11% Other 28% 13% Ticketing / North Hospitality Cricket 1% America 17% 19% Tennis 7% €10bn Formula 1 Media Rights 16% 24% €4bn €4-7bn EMEA €17-20
Slide 18: Faster growth in addressable markets…
Sports Ecosystem Dynamics Faster growth in addressable markets… 2007–2012 Addressable Rationale for Faster Growth in Total Market Annual Growth Market Addressable Markets Mature US market – early growth Media Rights +6-7% +7-8% driven by favorable economic and cultural factors Marketing / Sponsorshi
Slide 19: …Fueled by professionalization and investment
Sports Ecosystem Dynamics …Fueled by professionalization and investment Sports Market in GDP % Global Sports Infrastructure 0.37% (2006) Investment Examples Dubai: Sports City, $3bn Sports 0.25% complex Singapore: Sports Hub, $1bn sportainment facility 0.14% 0.10% Qatar: Aspire Sports, $2.8bn 0.07%
Slide 20: Sports ecosystem dynamics - key takeaways
Sports Ecosystem Dynamics Sports ecosystem dynamics - key takeaways “Sports = king of premium” - resistant to audience fragmentation and piracy €63bn global ecosystem with strong underlying growth Grounded on typical media drivers, multi-year contracts - predictable in the long term, recession-resil
Slide 21: Table of Contents
Table of Contents I. Opening Remarks II. Sports Ecosystem Dynamics III. The Business Model IV. Our Strategy V. Conclusion and Q&A June 2008 Analyst Presentation • 21
Slide 22: Monetizing sports events and brands: four main activities
The Business Model Monetizing sports events and brands: four main activities Media Original Media Rights rights- holders Marketers Federations Marketing / Sponsorship Audiences / Leagues Consumers Clubs Consumer Goods Event Licensing Organizers Venues Ticketing June 2008 Analyst Presentation • 22
Slide 23: Media Rights: maximizing value of content across media windows
The Business Model Media Rights: helping rights-holders maximize the value of their content across media windows Rights-holders Sports Event Media Confederations National cups Provide access to TV global media network Federations National Radio Support with sales / championship distribution know-how
Slide 24: Media Rights: buy-out and commission mix
The Business Model Media Rights: helping rights-holders maximize the value of their content across media windows Rights-holders Sports Event Media Buy-out model: ~82% of Lagardère Sports media rights revenues Acquire rights from Sell rights to rights-holder Buy rights from Lagardère Sports Sell righ
Slide 25: Buy-out and Commission models
The Business Model Buy-out and Commission models Buy-Out Model (Principal) Commission Model (Service Provider) 2. Rights 1. 2. Rights 1. Media Media Holder Holder 4. 3. 1. Strategic partner acquires rights from rights- 1. Rights-holder selects strategic partner holder 2. Rights-holder sells rights t
Slide 26: Buy-out and Commission models
The Business Model Buy-out and Commission models Commission Model (Service Provider) Buy-Out Model Role (Principal) Without Minimum With Minimum Guarantee Guarantee – Media Rights for Clubs – Club Marketing Contract Mainly for Media Rights – Media Rights for With Federations – Media Rights for Type
Slide 27: Media Rights case study: African Cup of Nations 2008
The Business Model Media Rights case study: African Cup of Nations 2008 Lagardère Sports Value Proposition Access to new geographies Event 100 Access to new media 124 Rights Before Lagardère channels Result of Lagardère Value Sports Added Sports Added Value Value (2006) (2008) Improved signal qualit
Slide 28: Marketing / Sponsorship: connecting marketers and rights-holders
The Business Model Marketing / Sponsorship: connecting marketers and rights-holders to build relevant brand partnerships Rights-Holders Marketing Rights Marketers Clubs Billboards Strong relationship Global / with rights-holders national advertisers Leagues Jersey Marketing know- sponsorship how Loc
Slide 29: Marketing / Sponsorship: commission and buy-out split
The Business Model Marketing / Sponsorship: connecting marketers and rights-holders to build relevant brand partnerships Rights-Holders Marketing Rights Marketers Commission model: 94% of Lagardère Sports sponsoring revenues Facilitate sale against Sell rights to 10-20% commission Buy rights from ma
Slide 30: Marketing / Sponsorship case study: Hamburg S.V.
The Business Model Marketing / Sponsorship case study: Hamburg S.V. Lagardère Sports Value Proposition Sell and maximize Hamburg SV’s 600 Total rights from 1998 Marketing 100 Following Sportfive Revenues (1998) Achieve the first Added Value naming rights ever (2006) sold in Germany Note: base 100 fi
Slide 31: Enduring need for independent service providers
The Business Model Enduring need for independent service providers Barriers to disintermediation Examples Economic model: most rights-holders lack scale to absorb fixed costs and develop know-how FIFA - outsourcing Complexity: multiplicity of revenue streams and business hospitality management model
Slide 32: Business model - key takeaways
The Business Model Business model - key takeaways Diversified base of activities - media rights, marketing / sponsorship, licensing, ticketing / venue management Two complementary value creation mechanisms - buy-out and commission, with distinct impacts on the balance sheet and P&L Strong barriers t
Slide 33: Table of Contents
Table of Contents I. Opening Remarks II. Sports Ecosystem Dynamics III. The Business Model IV. Our Strategy V. Conclusion and Q&A June 2008 Analyst Presentation • 33
Slide 34: Our ambition: become the first choice of rights-holders
Our Strategy Our ambition: become “the first choice of rights-holders”… Mutually Beneficial Relationship Benefits for Benefits for rights-holders Lagardère Sports 1. Rely on a long-term 1.Secure defensible business partner for competitive position a critical funding closest to the source source of v
Slide 35: Building leading positions and expanding our service offering
Our Strategy … Building leading positions across key markets and expanding our service offering From Agent… …To Strategic Partner 1 Build up Football Strong focus Position Market leader on selected across premium disciplines sports and 2 events Move into Expertise attractive Full service focused on
Slide 36: Delivered acquisitions, new talent and organic growth
Our Strategy Over the last 18 months: we have delivered 3 Successful acquisitions – building a footprint of networked market leaders 3 New talent – experienced team with proven market traction 3 Solid organic growth – winning new business with compelling value proposition June 2008 Analyst Presentat
Slide 37: Acquisitions: clear focus on market leaders
Our Strategy Acquisitions: clear focus on market leaders Acquisition Criteria Acquisition History Leader in football 2006 Leader in Europe Market leaders in our target segments (sports, Complementary skill set geographies, businesses) New disciplines (tennis, athletics, …) 2007 Talented teams Expans
Slide 38: Experienced team managing a global network of professionals
Our Strategy Experienced team managing and developing a global network of professionals Integration Philosophy: Market-centric Organization Lagardère Sports Role Local Talent Network Preserve structure of new 650 professionals in 35 offices across 25 acquisitions to favor countries entrepreneurship
Slide 39: A broad, compelling service offering
Our Strategy A broad, compelling service offering Governing Bodies Content and rights-holders Media Rights Content Production Distribution Athletes Marketing / Sponsorship Marketers Clubs Sponsorship, Endorsement, Brand Management Confederations Audiences / Federations Consumers Leagues Consumer Pro
Slide 40: Key decisions and group coordination resulting in major wins
Our Strategy Key decisions and group coordination resulting in major wins - acceleration over the last 18 months Africa Cup of Nations – contract renewal until 2016 Olympique Lyonnais – marketing contract until 2020 Juventus – contract until 2023 Transorientale – new rally event organization in 2008
Slide 41: The result: a secure, sustainable business portfolio
Our Strategy The result: a secure, sustainable business portfolio Lagardère Sports Revenue Base By market / business segment (2007) By contract length (from 2007) 100% 14% Media 29% Europe Rights Football 82% 73% 84% 32% Marketing Others Sponsorship 25% Others 27% 18% 16% Sports Geographies Business
Slide 42: Going forward: maintain course towards global leadership
Our Strategy Going forward: maintain course towards global leadership Pursue attractive acquisitions complementing the portfolio Position for future organic growth - e.g. develop event ownership Consolidate distinctive position in a fragmented competitive space June 2008 Analyst Presentation • 42
Slide 43: Relevant acquisitions: World Sport Group…
Our Strategy Relevant acquisitions: World Sport Group… 1. Build up Football Position: Leader in Asian football Strategic partner for Asian Federation Cup 2. Move into attractive adjacencies: Event organization (Barclays Golf Open) Arena management (Singapore Sports 3. Globalize footprint: Hub consor
Slide 44: …Further reinforcing our business portfolio
Our Strategy …Further reinforcing our business portfolio Lagardère Sports Revenue Base Excluding World Sport Group Including World Sport Group (2007 actual, total: €440m) (2007 pro-forma, total: €546m) Media Media Rights Europe Rights 73% Football 66% 70% Europe 81% Football 82% 84% Marketing / Othe
Slide 45: Strengthening our differentiated competitive position…
Our Strategy Strengthening our differentiated competitive position… Competitors Limitations Few players with the scale Rights UEFA (T.E.A.M.) required to amortize fixed Holders FIFA internal operations and international network Moved decisively to Infront Independent Kentaro secure key positions Ult
Slide 46: …Towards global leadership: 2012 Vision
Our Strategy …Towards global leadership 2012 Vision Competitive Position Business Portfolio Multiple sports 2012 Number of Sports Disciplines IMG Media Octagon Rights EBU Europe Football 2008 Infront Marketing / Sponsorship Kentaro Others Media- Others pro T.E.A.M. 2006 Other Single sport Local Glob
Slide 47: Table of Contents
Table of Contents I. Opening Remarks II. Sports Ecosystem Dynamics III. The Business Model IV. Our Strategy V. Conclusion and Q&A June 2008 Analyst Presentation • 47
Slide 48: Conclusion
Conclusion Global leader with scale benefits Strategic partner for rights-holders globally Profitable, predictable business Reinforcing Lagardère’s position in media Strong contributor to the Group’s bottom line June 2008 Analyst Presentation • 48