Groupe Jean-Claude Darmon - Company Profile, Information, Business Description, History, Background Information on Groupe Jean-Claude Darmon

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History of Groupe Jean-Claude Darmon

Groupe Jean-Claude Darmon is France's leading sports marketing group, and founder and chairman Jean-Claude Darmon is widely credited as the force behind the financial coming-of-age of the French professional sports industry. Professional soccer--also known as football--remains Darmon's bread-and-butter: the company handles the advertising, promotions, and public relations for 18 of France's 20 Premiere League teams. The company also has long-standing relationships with the French Football Federation and the National Football League. Darmon has also extended its expertise into other professional sports--including rugby, ice skating and hockey, and tennis--through its ownership of the Tournoi de Toulouse and contracts with the Monte Carlo tennis tournament. Beyond France, Darmon has developed a position in Africa, notably through its contract with the Confédération Africaine de Football and the Fédération Royale Marocaine de Football. Darmon has also launched a satellite channel devoted to football on the African continent. Darmon went public in 1996, taking a listing on the Paris secondary market. In 2001, the company announced its intention to form a new company with Sports Plus, of Vivendi Universal, and Bertelsmann's Ufa Sports, to form the world's leading sports rights group. That merger, expected to clear European Community monopolies scrutiny, will almost certainly result in a name change for the group. Jean-Claude Darmon is expected to remain as chairman of the new company, which will start out with estimated revenues of EUR 570 million.

A New Age in French Sports Marketing

French professional sports, as in most parts of the world, remained a relatively minor business and was often described as amateurish when it captured the imagination of Jean-Claude Darmon. Born in Oran, Algeria, but raised in France since the age of six, Darmon worked as a dockworker in Marseilles while pursuing night school courses. A dedicated soccer fan, Darmon recognized that French soccer had barely developed any kind of self-promotion activities beyond the stadiums, and what little promotion was done was decidedly amateurish.

Darmon came up with the idea of developing a series of "Livre d'Or" commemorative books celebrating the history of France's great soccer teams. Launched in 1968, the series was a success and led Darmon to create his own company, the Société d'Editions et Promotions (SEP). As part of his research for the book on FC Nantes, then at the height of its glory, Darmon paid a visit to the team's aging stadium. At the time, players' jerseys were still free from advertisements--as was the stadium itself for the most part. In 1969 the Nantes team agreed to allow Darmon to commercialize its billboard space, to great success. The following year, Darmon launched the era of advertising-clad uniforms, convincing Michel Axel to pay FFr 15,000 for the right to place its logo on the Nantes team's jerseys.

By the mid-1970s, the same contract was worth more than FFr 400,000--and by the end of the century, companies seeking to place their logos on France's leading teams were expected to plunk down tens of millions of francs for the privilege. Darmon's work for FC Nantes quickly caught the attention of many other French teams. By 1972, Darmon was handling the promotion activities for teams from Nîmes, Reims, and Sochaux. In order to coordinate his growing business, Darmon incorporated as FC Nantes Promotion, with a capital of just FFr 20,000 and three employees.

Darmon's business soon incorporated contracts with many of France's leading teams, including Paris-Saint-Germain, Monaco, and Lyon. The company also was quick to pick up on the potential for television rights. At the end of the 1960s, sports broadcasting occupied a decidedly marginal spot on the French television dial--which sported just three channels. Yet the launch of a new soccer-dedicated program, "Telefoot", on TF1, gave still greater television exposure to France's soccer clubs and opened the way for still more lucrative promotional contracts. In the mid-1970s, also, both the French football federation (FFF) and the French National Football League (LNF) (soccer is called football in France) turned to Darmon to help their organizations build their own promotional activities--a service Darmon provided for free. Yet this recognition of Darmon's expertise served as a strong promotion for his own business, which was flourishing rapidly by the end of the decade. In 1976, Darmon picked up the contract for the public relations and promotions activities surrounding the entry of the Bastia soccer team into the finals of the European Cup--the first time a French team had reached the finals in nearly 20 years.

A New Era in French Sports

When France reached the World Cup in Spain in 1982, Darmon's company was picked to handle the promotional rights for the event. The company now not only held contracts with many of France's major teams, both the FFF and LNF became Darmon customers. Darmon was once again picked to handle the French national teams promotional rights during the 1984 European Cup finals. By the early 1980s, the company's revenues had topped FFr 45 million.

A revolution in sports marketing had been brewing in the meantime. Television rights were set to propel France's professional soccer industry into a new era as a financial heavyweight. Up until the early 1980s, France's three government-owned television stations had shown little regard to sports programming, paying only minor fees for broadcast rights for professional soccer matches. The privatization of TF1, and then the launch of France's first new subscription-based commercial station Canal Plus changed the sports broadcasting landscape.

Darmon once again offered his services free of charge as the FFF and the LNF turned their backs on the French national stations and instead negotiated contracts with the new upstart station. The original deal was for just 20 first division matches per year. Yet these matches helped propel Canal Plus's own growth. The channel quickly surpassed its original expectations of just two million subscribers and doubled that number by the end of the decade, reaching six million subscribers by the late 1990s. Professional soccer's part in that growth helped propel the sport into the ranks of big business. The influx of new money enabled teams to improve their own professionalism and attract more talented players from around the world, which in turn brought still more viewers. If soccer teams initially feared that broadcasting matches might drain their stadiums, the opposite proved true, as the greater television exposure brought still larger numbers of fans to fill the country's stadiums.

Television broadcasting as a new force in the rise of professional soccer--and sports rights--in France was confirmed in 1987 by the World Cup in Mexico, for which Darmon held the promotional rights. At the same time, Darmon helped negotiate a new POOL system, in which both teams and television stations benefited from the growing popularity of European Cup matches. Darmon's company benefited as well, seeing its revenues top FFr 128 million in 1987, then nearly doubling a year later to FFr 235 million. That same year, Darmon looked beyond soccer for the first time, organizing the rugby tournament "Les Villages du Tournoi des V Nations." Yet soccer remained Darmon's dominant activity. The company also ventured outside of France, picking up the management contract for broadcasting rights from the African Confederation of Football.

A Global Sports Rights Heavyweight in the 1990s

With its revenues nearing FFr 340 million in 1990, Darmon stepped up the diversification of his company's activities, such as winning a ten-year contract to handle the marketing rights for the acclaimed Cadre Noir equestrian school of Saumur in 1993. By then, Darmon restructured his businesses, which were regrouped under the new name of Groupe Jean-Claude Darmon. In 1994, Darmon gained the promotional rights contract for the Fédération Française des Sports de Glace, handling broadcasting and advertising rights not only for ice hockey teams but for ice skating competitions as well.

The mid-1990s saw a veritable explosion in the sports broadcasting industry. The arrival of new competition, in the form of satellite broadcasters, greatly increased the price of broadcasting rights. Darmon's revenues reflected this new change, with sales jumping from FFr 352 million in 1995 to FFr 652 million in 1996. In that year, Darmon took his company public, selling 15 percent of his shares on the Paris exchange. Soon after the IPO, Darmon sold another 15 percent of his holding to investor group Henderson Investors. By then, the company had gained the sports rights contracts for 18 of the 20 French first division teams.

In 1997, Darmon reinforced its presence in Africa with the award of the rights contract for the newly created League of Champions of the Confédération Africaine de Football (CAF). The company also moved into the lucrative professional tennis scene, acquiring the Tournoi de Toulouse, and the rights contract for the Monte Carlo tennis tournament. By 1998, sales had topped FFr 835 million.

By the end of the 1990s, Darmon began casting its sights on even bigger contracts. Yet the company, despite sales that grew to FFr 1.14 billion in 2000, remained too small to offer the financial guarantees required for such events as the Olympic Games and the World Cup--the latter's contract was worth more than FFr 12 billion to sports rights leader Leo Kirch. Meanwhile, the sports rights business was growing rapidly and attracting increasingly tough competition from groups with deeper pockets than Darmon.

Darmon had in the meantime begun to interest a number of large-scale media companies. One of these groups was Audiofina, holder of 50 percent of European broadcasting giant CLF-UFA, which acquired a 25 percent stake in Groupe Jean-Claude Darmon in 1998. This investment helped the company win the rights contract for France to host the World Cup in 1999. France's win that year not only boosted French soccer, but also stepped up the growing sports rights industry itself. Darmon formed Club Europe along with Canal Plus and leading soccer clubs Bordeaux, Marseille, Lyon, Monaco, and Paris-Saint-Germain that same year.

In 1999, Darmon turned to soccer-mad Italy in an effort to recreate its French success. In November of that year, the company acquired a 51 percent stake in Bastimo Multimedia. That acquisition provided a foothold for the company in the Italian soccer scene, and by the end of 2000 the company had signed on five professional Italian teams, including one of the country's top teams, Juventus of Turin.

By 2001, Darmon, eager to take part in securing the contracts for the world's biggest sports events, reached an agreement to merge with Sports Plus, the sports rights subsidiary of Canal Plus and ultimate parent Vivendi Universal and Ufa Sports, owned by Bertelsmann through its RTL Group holding. The merger, which absorbed the two larger groups into Darmon in order to gain Darmon's public listing, created the world's largest sports rights group, worth an estimated EUR 570 million in combined revenues. Announced in May 2001, the merger was expected to clear European Commission monopolies inquiries. Jean-Claude Darmon, whose stake in the new group was to be reduced to five percent, was to remain as chairman. Yet his name was not expected to remain--the new global powerhouse was expected to choose a new name by the end of the year.

Principal Subsidiaries: Girosport SA; Société du Palais des Sports de Toulouse SA; Rugby France Promotion SA; Football France Promotion SA.

Principal Competitors: Leo Kirch; News Corp.; International Management Group; WPP Group plc; The Interpublic Group of Companies, Inc.; Clear Channel Entertainment; TBA Entertainment Corporation; Sportsworld Media Group Plc; Havas Advertising.


Additional Details

Further Reference

Belleville, Renaud, "La saga Darmon: Le financier du foot entre en Bourse," Les Echoes, November 26, 1996, p. 54.Garrahan, Matthew, "Sports rights giant unveiled," Financial Times, May 21, 2001.Le Bailly, David, "Les pionniers du sport business passent la main," La Tribune, May 23, 2001.------, "Le marketing sportif surf la vague médiathique," La Tribune, October 16, 2000."L'Historique de la Société," Groupe Jean-Claude Darmon corporate web site, September 2001.Meistermann, Nathalie, "Darmon Sees New Heights for Sports Rights Firm," Reuters May 22, 2001.

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