Advent buying Sportfive

Co. to acquire 75% while RTL keeps 25%

BERLIN — Pan-European broadcaster RTL Group and France’s Canal Plus are close to finalizing the sale of their joint sports rights venture Sportfive to Boston-based equity investor Advent Intl. for E550 million ($669 million).

The Bertelsmann-owned RTL and Vivendi Universal’s Canal Plus each own 46.1% of Sportfive, while CEO Jean-Claude Darmon owns 4.9%. The remaining shares are publicly traded.

The sale marks Canal Plus’ exit from the sports rights business as it continues to restructure and divest itself of noncore businesses.

RTL, on the other hand, will retain 25%, while Advent is acquiring 75% of the company. Darmon is expected to depart the group.

Luxembourg-based RTL Group, which controls Germany’s leading web RTL Television, M6 in France and the TV production company Fremantle, is the biggest breadwinner of German media group Bertelsmann.

Keeping RTL on board gives Advent a strong marketing partner. For RTL, the partial sale means an estimated win of more than $243 million at a time when its core business has been dented by the advertising downturn. In addition, cutting its stake in Sportfive means its overall tax burden will be noticeably lessened.

Sportfive was set up in 2002 as an ambitious joint venture by former Bertelsmann topper Thomas Middelhoff and Viv U’s ex-CEO Jean-Marie Messier.

A merger of RTL’s Ufa Sports, Canal Plus’ SEDS and the Jean-Claude Darmon Group, Sportfive quickly became one of the leading players in international sports rights trading. In 2002, it posted an operating profit of $52 million on sales of $777 million.

Sportfive has been on the block since last summer. The sale has been complicated by its intricate contractual ties to more than 300 international soccer clubs and scores of rugby, basketball and handball teams.

Deal marks the latest European media acquisition by an international venture capitalist group, a trend that has been on the upswing since the collapse of Germany’s Neuer Markt in 2000 and the string of major insolvencies in the industry that followed.

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