SETANTA IN CRISIS TALKS
Setanta in crisis talks with Premier League as cash dries up
By Paul Kelso
02 May 2009
Satellite broadcaster Setanta is seeking to defer a £60million payment due to the Premier League this month and may consider requesting a reduction in its rights fees.
The broadcaster is understood to be facing a potential cash-flow crisis and is hoping to renegotiate its payment schedule. Talks between League chief executive Richard Scudamore and the broadcaster are understood to have taken place this week.
Setanta currently has a £392 million three-year contract to show two packages of live Premier League games, with the money payable in six equal instalments over the course of the contract. Setanta met its January payment in full but there are now concerns over whether it can meet the May instalment.
The uncertainty arises as a result of Setanta's failure to retain both packages of Premier League games in the auction for 2010-13 rights. The defeat has prompted a review of the business.
Setanta is thought to be attempting to defer as many payments as possible to refinance and seek new lines of credit.
In March Setanta was late with a scheduled £10 million payment to the Football Association, prompting fears that it might not be able to fulfil its numerous contracts across UK and international sport.
It eventually made the payment to the FA, but its negotiations with the Premier League could cause fresh concerns. The Premier League is Setanta's most important partner and its biggest creditor, and should it fail to meet its obligations to them then other sports and governing bodies will fear the worst.
Setanta has already held talks with other rights holders including the Scottish Premier League, with whom it has a four-year deal worth £125 million. The broadcaster has been said to be seeking a reduction of as much as 20 per cent in that fee but the SPL will resist any such move unless it receives guarantees that there will be no further calls for cuts.
The Sunday Times
May 3, 2009
Crisis talks to rescue Setanta TV
James Ashton and Kate Walsh
THE sports broadcaster Setanta is fighting for its life this weekend as a new management team holds urgent talks to raise cash and slash the amount it pays for sports rights.
Sir Robin Miller, the Emap publishing veteran, has been parachuted in as Setanta's chairman to lead it through an emergency refinancing.
The company, which has 1.2m customers and broadcasts Premier League and England international football, faces an uncertain future unless it can raise up to £100m this month from shareholders including private-equity firms Doughty Hanson and Balderton Capital.
Accountants from Deloitte have also been called in to work alongside long-time advisers at Close Brothers and could be appointed as administrators if negotiations fail.
Setanta is understood to have agreements in principle from sports bodies including the PGA golf tour that could let it cut up to £20m from the estimated £120m a year it will spends on rights from 2010.
The company was dealt a severe blow when it won the rights to screen only 23 Premier League fixtures per season from 2010. The rest will air on BSkyB, which is 39.1% owned by News Corporation, ultimate parent company of The Sunday Times.
The Irish company is racing to find funding for a payment of £35m to the Premier League due on May 15. Some rights partners, including IPL cricket and the Ultimate Fighting Championship, are said to be broadly supportive. However, they want evidence that Setanta has a future before agreeing to reducing the value of contracts, while shareholders want to see that the company is able to cut costs so it can remain a viable business before putting in more cash.
Only the Football Association, which splits FA Cup games and England's home internationals between Setanta and ITV, is understood to be digging in its heels.
Setanta is also trying to renegotiate contracts that have yet to start. At a meeting with Scottish Premier League clubs in Glasgow this Thursday the company will try to chop both the length and value of a four-year £125m deal due to begin in 2010.
Miller's last job was as chairman of the debt-laden Entertainment Rights – home to Basil Brush and Postman Pat – which was bought from administration by an American media firm. He is working with Gary McIlraith, a former Sky executive who became Setanta's acting chief executive last month.
Founded in 1990 by Leonard Ryan and Michael O'Rourke, Setanta began life beaming Irish football to expats in London. It grew steadily and burst onto the national scene when it broke Sky's stranglehold on Premier League games in 2006.
Disney, which bid unsuccessfully for some Premier League rights earlier this year, has long been linked to a bid for Setanta. The company tried to sell itself last year but called off the process because of limited interest.
Stagsnet comment: Setanta's coverage of the Blue Square Premier this season has been nothing short of outstanding. Over 50 live matches, including the Stags shown live 4 times, over 95% of Stags goals shown on the fantastic Blue Square Review shown each Friday, and in Steve Bower, Paul Parker and Rebecca Lowe they have possibly the best commentator, summariser and pitchside reporter in the business. Fantastic job and we should pray that they can continue next season or else we might find the Conference will be back to about 3 live games per season and no goals round-ups, as Sky used to provide.
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