World Cup Boosts Ratings, but Causes Loss for France's TF1
The country's largest private television company reported an operating loss because of the cost of the games, though strong ratings staunched overall ad decline in a very weak French market.
PARIS – Germany’s World Cup win was a loss for French network TF1. Despite strong ratings for the games broadcast in June and July, the network reported an operating loss of $40.35 million (€30 million), mostly associated with the costs of airing the games, it said in results released on Friday.
Overall, the first half operating profit was down $24.7 million (€18.4 million), to $32.5 million (€24.2 million) from $57.3 million (€42.6 million) a year earlier, due mainly to the $74.9 million (€55.7 million) costs associated with the World Cup. Second-quarter results took the biggest hit – down $67.2 million (€50 million) from the same period in 2013.
The group purchased rights to the games for $174.8 million (€130 million), and resold a portion of those rights to the Quatar-based pay-channel BeIN Sports for $40.3 million (€30 million).
The games brought in some of the network's best ratings in years and about $94 million (€70 million) in ad revenue, which stemmed the decline in advertising revenue this quarter. Ad revenue was down only a slight 1.6 percent, to $16.9 million (€12.6 million).
However, the overall ad market in France continues a downward slide in what the group called a “tough and unstable” economic environment.
"In the absence of clear signs of economic recovery in France, advertisers remain cautious and visibility on future advertising spending remains very limited. Market fragmentation and increased volumes of advertising on the [free to air channels] contribute to intensify competitive pressures,” the group said in a statement.
TF1 is France’s first-place network, with an average 28.9 audience share over the quarter and airs several American series, including the perennial number one The Mentalist, as well as Grey’s Anatomy, Person of Interest and Hostages.
The group finalized the sale of a stake in pay-channel Eurosport to Discovery International in May, which boosted their cash in the second quarter. However revenue on pay-channel sector fell by 7.6 in the first half, to $84.8 million (€63.1 million), largely because of declines in profit at Eurosport France. Discovery International now owns 51 percent of Eurosport International and 20 percent of Eurosport France.