Cannes sale confirms: Hatchuel raked in the dough

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Anyone who has ever paid $1,000 to enter a commercial and a $3,800 delegate fee to attend the Cannes Lions International Advertising Festival on the outrageously overpriced Cote d'Azur figured that festival owner and Chairman Roger Hatchuel made a good profit.

But few knew how good until he sold the festival last week to Emap Communications for $96 million, and an Emap executive told a British trade publication that he expected the 2004 festival to turn a $12.8 million profit on revenue of $22 million.

"That's about 63% profit!" said Frank Palmer, chairman-CEO of DDB Canada. "I was absolutely shocked. We all know it's very expensive to enter, but I had no idea the profits were so obscene. We won [Lions], but at what cost?" (About $9,500 per Lion, actually. Mr. Palmer estimates DDB Canada spent around $38,000 on Cannes entry fees this year and the company brought home one Gold, two Silver and one Bronze Lions.)

Some Cannes habitues were less shocked. "It was the worst-kept secret," said David Droga, worldwide chief creative officer of Publicis Groupe's Publicis Worldwide. "Everyone knew [Mr. Hatchuel] made a fortune, if you do the numbers in your head." Cannes' sliding scale ranges from $1,000 for a TV spot down to $428 for an online ad. Print entries, the biggest category, cost $528 each.

For agencies pressed to make 15% profit margins, and marketers who ultimately pay the bill for advertising, the Cannes figures are breathtaking. Some have criticized the festival under its previous ownership for not doing more for the industry.

"I don't think having commercial needs and giving something back are mutually exclusive," said Andrew McGuinness, chief executive of Omnicom Group's TBWA London, winner of the Film Grand Prix this year for a Sony PlayStation 2 spot.

"Yes, it is very profitable," said Mike Jones, an Emap director. "And there are lots of ways the festival can give back to the industry. "

As for Mr. Hatchuel, 71, who acquired the festival 17 years ago from the cinema advertising companies that started it in 1953, he's "going to enjoy his retirement," Mr. Jones said.

contributing: lisa sanders

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