Billionaire Bernard Arnault gains influence through media deals in France

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While billionaire Bernard Arnault grabbed global headlines last month for his attempt to pull his luxury LVMH empire out of a $ 16 billion deal to buy American jeweler Tiffany & Co., a smaller deal of Europe’s richest man in France has gone largely unnoticed.Arnault’s investment group has acquired a stake of over 5% in Lagardere SCA, once a sprawling conglomerate spanning everything from cars and planes to space which now focuses on media, publishing and points sales at airports and train stations.

The purchase is a precursor for the Arnault group to play a larger role in these activities, said people familiar with the talks at the two companies.

Why Arnault, known as France’s largest investment banker after skillfully acquiring an armada of luxury brands – from Dior and Fendi to Louis Vuitton, Hennessy Cognac and Dom Pérignon Champagne – would want a piece of a struggling group like Lagardère?

For Arnault observers, it’s all about political influence: Lagardère’s stable of media assets includes French brands like Paris Match, a glossy photo magazine that has often increased the chances of presidential candidates. , the Europe 1 news radio and the influential Le Journal. weekly Sunday.

While the media unit loses money and weighs little beyond France, in the country – where business and politics are intimately linked – it carries weight. Arnault’s formidable wealth – its Net worth is around $ 86 billion according to the Bloomberg Billionaires Index – already making him hugely influential in France. But having more attraction never hurts anyone, said Rémy Le Champion, co-head of the journalism program of the French Institute of the Press at the University of Paris-Assas. “Bernard Arnault has access to whomever he wants in government,” he declared.

“Yet extremely wealthy people often have a hobby horse. The benefits of owning media more than outweigh the relatively small cost to a man with a net worth of $ 80 billion. ”

Take the Tiffany case, for example. Arnault, who has increased his media resources over the years, was able to rely on the French government to help them withdraw from the deal.

LVMH obtained a letter from Foreign Minister Jean-Yves Le Drian, requesting a postponement of the agreement due to a trade dispute between the United States and France, which the company cited as the reason for withdrawing . LVMH has denied having played a role in obtaining the letter. , but Le Drian told parliament he answered a question from the company, and said in an interview that it was his “duty to protect French interests”, effectively merging the company’s priorities with those of the country.

LVMH, controlled by Arnault, owns Les Echos, the leading French financial daily, and Le Parisien, the must read in Paris. The classical music aficionado also controls Radio Classique, a station that covers current affairs in its morning programs. “Owning these papers gives him media clout, and that means you want him to take you out,” said Julia Cage, professor of economics. at Sciences Po in Paris, with reference to the Le Drian letter.

The buyout of Lagardère’s stake will allow the billionaire to deepen his media presence and forge closer ties between similar businesses of the two companies, Oddo BHF analysts wrote in a note. LVMH owns the DFS duty free store network, and owns a stake in the Madrigall group, owner of Gallimard, the publisher of authors such as Nobel Prize winner Patrick Modiano.

Arnault also plans to buy a 40% stake in the press group behind influential business magazine Challenges, its chief Claude Perdriel told Le Monde this month. “Having media assets belonging to industrialists, even if they are not interventionists, promotes mistrust and doubt,” said Cage, who chairs an association of readers of Le Monde, adding that this gives them an “inordinate” influence on the government.

Arnault is not the only French billionaire to invest in media assets. Telecommunications magnates Martin Bouygues and Patrick Drahi respectively control or own the broadcaster TF1 and the 24-hour news channel BFM TV, while Xavier Niel is co-owner of the daily Le Monde. The Dassault industrial family owns the newspaper Le Figaro while Vincent Bolloré with his eponymous group owns a majority stake in the CNews TV channel of Vivendi SA as well as a stake in Lagardère.

The internet age has disrupted the media industry, shrunk its customer base and advertising revenue, and pushed it into the arms of wealthy, life-sustaining clients. Over the past decade, circulation of Lagardère’s Paris Match – once the best-selling news magazine in France – has dropped from 100,000 to just over 500,000. For Arnault, who funded a series of activities in France – by promising 200 million euros for the reconstruction of the Notre-Dame de Paris cathedral devastated by a fire last year and the hosting of contemporary art exhibitions in its Louis Vuitton Foundation – the purchase of the stake of Lagardère is also a way of supporting a once legendary French industrial group.

The conglomerate was started by Jean-Luc Lagardère, who was Arnault’s tennis partner until his death in 2003. It is in troubled waters, with Jean-Luc’s son, Arnaud Lagardère, assaulted by the investor Amber Capital activist for over two years due to violence. the governance.

The investment “underlines our commitment to the integrity and development of Lagardère,” said Groupe Arnault in its press release dated September 24. He declined to comment on Arnault’s media ambitions or analyzes suggesting he aimed to buy political influence.

The billionaire’s push for media assets is less about making money and more about controlling the narrative at home, Le Champion de Paris-Assas said. In 2016, a controversy erupted when Les Echos and Le Parisien chose not to publish a review of the documentary “Merci Patron” (Merci patron). The documentary by François Ruffin, a left-wing activist turned MP, was a critique of LVMH and the power of the rich.

A year later, journalists at Les Echos criticized an editorial decision to remove Ruffin’s name from an article written by a columnist.

That said, many publications owned by Arnault say that there have been few examples of censorship. Pierre Louette, general manager of the Les Echos-Le Parisien group, described his ties with the owner as “natural, fluid and normal”.

Still, Les Echos stepped lightly on whether LVMH had relied on the government to withdraw from the Tiffany deal, claiming instead it was “collateral damage” in the trade war between France and the United States.

“I don’t think anyone picks up the phone and complains to journalists when Bernard Arnault doesn’t like a story at Les Echos,” said Le Champion. “We’re talking more about subtle influence, assumptions, self-imposed limits. “



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