Euro 2004 may be over but the party is just beginning for sports advertising, according to the recent buyers of sports marketing group Sportfive.
The company, which earlier this year was taken over by venture capitalist Advent International in a deal which valued it at €560m, is planning to develop its business through acquisitions.
The timing is good – with Advent set to take advantage of an expected upturn in sportsrelated advertising and marketing.
Pascal Stefani, a partner at the VC, said the firm planned to leverage Sportfive’s leading position in European football and develop various other areas of the business. “We plan to expand into new countries, events and sports,” he said. Stefani added that the company will actively take part in the sports marketing sector’s consolidation.
Advent gained control of Sportfive through a transaction which saw it take charge of 75% of the company.
Stefani indicated that Advent, along with Goldman Sachs, decided to invest in media companies such as Sportfive at what they considered the best moment. “It was a favourable time to invest in the media sector, as soccer audiences in Europe are progressing at a fast pace,” he noted.
Stefani pointed out that large advertising groups remained highly involved in sports marketing.
Competitors include International Sports and Entertainment (ISE, created by Publicis and Dentsu in 2002), Global Sportnet (owned by WPP), Octagon (owned by Interpublic), International Management Group (IMG), Infront (owned by Robert LouisDreyfus) and Havas Sport (a subsidiary of Havas rumoured to be partnering with a competitor).
It is understood that IMG could be of potential interest to Sportfive, although the business is slightly different. Last month, the US press reported that IMG had hired leading investment bank Rothschild to explore options which could include a sale of the business.
“We could possibly be interested in IMG, but the US and the management of US sport stars are not priorities for us,” Stefani maintained.
In Europe, Sportfive already enjoys a strong presence in both France and Germany. To a lesser extent, it also operates in the UK and Italy. The company aims to gain further market shares in these four countries, as well as in Spain, where it currently manages only foreign football rights. Stefani however indicated that, at this stage, it was too premature to discuss new targeted markets. The firm will also try to diversify its offers in other sports such as rugby, boxing, handball and basketball.
As for the size of future acquisitions, he indicated that there was no limit to this, saying that potential targets could be as small as German competitor ISPR – acquired in October 2003 for a price believed to be between €5m and €10m. “It will depend on the opportunities,” Stefani said. “For a while, Sportfive won’t need the injection of new equity.”