Bertelsmann 9-Month Net Profit Lower

Profits Down

BERTELSMANN AG said WEDNESDAY that its net profit declined sharply in the first nine months of this year, pushed down by settlements of copyright claims that arose from its backing of file-sharing service NAPSTER and other one-time expenses.

The privately held company said its net profit for the year's first nine months dropped to euro10 million (US$14.6 million) from euro265 million in 2006.

The decline "primarily reflects the previously reported special items resulting from settlements in connection with NAPSTER," the company said in a statement. BERTELSMANN already reported a euro51 million net loss for the first half of this year.

BERTELSMANN said in APRIL that it would pay US$110 million (euro75.4 million) to settle claims brought by WARNER MUSIC GROUP over the GERMAN company's financing of music-sharing download service NAPSTER. BERTELSMANN agreed to settle similar claims with EMI GROUP earlier this year and paid US$60 million (euro41 million) to UNIVERSAL MUSIC GROUP in 2006.

GUETERSLOH-based BERTELSMANN's businesses include book publisher RANDOM HOUSE, a 50% holding in the SONY BMG MUSIC ENTERTAINMENT joint venture and radio and television, including broadcaster RTL.

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