Bertelsmann Loses $159 Million In 1Q

FRANKFURT, Germany (AP) — Privately held media company Bertelsmann AG reported a first-quarter loss of 117 million euros ($158.5 million) Tuesday on provisions from lawsuits over its sponsorship of the music-sharing service Napster and settlements with a pair of major record labels.

Bertelsmann earned 60 million euros in the same period a year earlier.

The latest results were hurt by 114 million euros ($154.5 million) in costs and provisions for lawsuits related to its financing of Napster in 2000 and out-of-court settlements with EMI Group PLC and the Warner Music Group.

Sales also slipped, falling to 4.38 billion euros ($5.93 billion) in the quarter, from 4.46 billion euros a year earlier — an expected decline given that it no longer includes figures from its BMG Music Publishing business, which it sold last year to Vivendi SA, and because of the rising strength of the euro against the dollar.

Despite the downward trend, Chief Financial Officer Thomas Rabe said the company was on track to meet its goals for the year.

Bertelsmann's businesses include book publisher Random House; music business BMG — comprised of its 50 percent holding in the Sony BMG Music Entertainment joint venture; and radio and television — including broadcaster RTL, magazines and media services.

Bertelsmann is based in Guetersloh, Germany, but most of its 97,000 employees are scattered over its divisions. The company is controlled by the Mohn family, directly and through a foundation.

The company has announced that Hartmut Ostrowski, a long-serving executive who heads its printing and services division, Arvato, will take over as chief executive at the start of 2008.

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