France: TF1 recovers costs of World Cup

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A report in Le Figaro, and reported by equity analysts at Deutsche Bank, says that media ad-agency Zenith expects French commercial broadcaster TF1 to “recover” most of the €50 million it spent on the TV rights package for the FIFA World Cup.

The bank says that if this translates to €40 million of ad-sales then this means a potential 5 per cent boost to growth over Q2/Q3.

The bank explains its thinking, saying: “Our forecast is for a 4 per cent boost over Q2/Q3 from the broadly flat trend of 1Q, which was echoed by TF1 as the market growth outlook. However, ad sales around the FIFA World Cup will not be purely incremental as the event displaces programming and advertising which would otherwise have occurred. So, the “most of” the €5o million is unlikely to be all incremental. Hence, this looks like a weak datapoint alongside evidence of underwhelming World Cup advertiser interest in the UK and Spain. It also underlines that, for TF1, despite management proclamations of a change in sports strategy with no more loss-making events, the World Cup will repeat the historical record of investing in loss-making headline sports events.”


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