Reporting its delayed third quarter finance figures, the advertising giant said declining revenue and higher costs at Octagon Motorsports produced a pre-tax loss of $37.4m, of $.06 per share, in the last quarter.
Through nine months, the pre-tax loss at Octagon Motorsports totalled $58.4m, or $.10 per share (after-tax).
The slump is the more dramatic when you consider the unit was profitable last year.
Interpublic, the second biggest advertising agency in the world, said it estimates Octagon Motorsports will lose between $.15-.20 per share in 2002.
The finance figures also highlighted troubles at Octagon Motorsports showpiece event, the British Grand Prix.
Said the finance statement: "Marketing services revenue dropped four percent, principally reflecting continued difficulties at Octagon Motorsports where lower attendance reversed the profitability of this year's British Grand Prix in July."
Octagon had sharply increased the weekend ticket prices for the event this year.
The situation leaves the future of Octagon Motorsports still shrouded in uncertainty.
The unit consists of racing facilities in the UK and Hong Kong, acquired in 1999 and 2000.
Interpublic placed Octagon under the management of its newly formed Sports and Entertainment Group this summer. Since that time, the management team of Octagon Motor Sports has been replaced.
Said the statement:"As a result, the company continues to assess its strategic alternatives regarding its motor sports holdings."
Yesterday, an Octagon Motorsports spokeswoman refused to make further comment on the situation when contacted by sportbusiness.com
