SETANTA SCREWED BY TAX LIABILITIES
Andy Perry interview live on Radio Five Live at 6.40am on 19 June 2009. He was interviewed by Shelagh Fogarty on the Breakfast programme, about the problems at Setanta and the potential effects on the BSP clubs --->
Andy Perry interview live on Radio Four at 7.20am on 19 June 2009. (comment from Martin - I think it was the first Stags related interview ever on the "Today" program) --->
ESPN to set up new channel for ex-Setanta matches
guardian.co.uk, 24 June 2009
ESPN, the American sports network that has won the rights to show 46 Premier League matches next season, will set up a new stand-alone channel to screen the games as it seeks to build a powerful presence in UK sport.
Lynne Franks, the ESPN executive who brokered the Premier League deal, said: "Buying the Premier League rights is a huge step and we are excited to use that as a platform to move into [more] local live sport. Our intention is to launch an ESPN channel that will carry all the Premier League sport and also other sport." Franks, managing director of Europe, Middle East, and Africa at ESPN did not reveal whether it will seek to buy some of the rights previously owned by Irish TV-pay company Setanta.
The company's British arm has been placed into administration. Deloitte, the accountants appointed as administrators, are trying to find a buyer for Setanta's Irish and international businesses, however, which are thought to make a small profit. Franks said the new ESPN channel, which will run alongside its existing UK channels, ESPN Classic and ESPN America, will be available on every platform, including cable, satellite and Freeview. The company has already signed a wholesale deal with Sky, which is expected to offer the new channel to the six million or so customers who subscribe to its sports package, for a monthly fee of around £10.
Setanta pull the plug to let in Disney's ESPN sports channel ambition
By Sportsmail Reporter
24th June 2009
The Disney-owned ESPN network intend to build up a sports channel offering more than the two Premier League packages they bought this week and launch before the start of the new football season.
This ambition will be welcome news at the FA after Setanta finally moved into administration yesterday with the loss of 200 jobs and went off air just before 6pm.
Setanta's TV sports rights revert to the sports bodies who sold them, including their £150m chunk of the four-year deal for England and the FA Cup.
Off the airwaves: Setanta
ITV, partners with Setanta in the FA deal, are expected to pick up nine England friendlies at a discounted price of just over £2m per game.
The FA Cup content looks tailor-made for ESPN, whose European boss, Lynne Frank, said: 'We have to put some rights together pretty fast and we want it widely available on all the pay TV platforms.'
Setanta goes into administration
23 June 2009
The Irish broadcaster Setanta Sports has gone into administration after failing to make a number of payments to sporting organisations.
The administrator Deloitte said that it would shortly cease broadcasting to customers in Great Britain but would continue to operate elsewhere.
They said they would immediately stop collecting subscription payments.
About 200 employees involved with the British operations will be made redundant, the firm said.
Setanta had a total of 420 employees in the UK and Ireland.
"This is a sad day for all concerned," said Sir Robin Miller, chairman of Setanta.
"Unfortunately, in a difficult and highly competitive market, and despite strenuous efforts by the board and management, it has not been possible to find sufficient additional funds in the time available to ensure its survival."
Setanta will continue to broadcast in Ireland.
Setanta International and Setanta Ireland have not entered administration.
Setanta Sports missed payments to both the English Premier League and the Scottish Premier League (SPL) in recent weeks, resulting in both organisations taking their respective broadcasting rights back.
On Monday, the US sports network ESPN bought the rights to show the 46 English Premier League games Setanta was due to show next season, as well as the 23 matches it was to broadcast in each of the following three seasons.
The SPL has said it is also looking for a new buyer for its domestic broadcasting rights.
Setanta on brink after Premier League rips up contract over missed payment
By Paul Kelso, Chief Sports Reporter
Published: 8:12PM BST 19 Jun 2009
British sport is facing a financial crisis after the Premier League withdrew Setanta's contract to broadcast 46 live matches next season.
The move leaves the broadcaster fighting possible administration and a number of major governing bodies contemplating an uncertain future.
The Premier League took the drastic step to withdraw Setanta's licence after the broadcaster failed to meet a scheduled £10million payment by an agreed deadline of Friday evening.
The move will kick-start an auction of the games Setanta had been due to show, starting on Monday when broadcasters including Sky and ESPN are expected to deliver tender documents to the Premier League.
The Premier League's action also throws into question Setanta's contract to show 23 games-per-season from 2010-13, and raises the prospect of an exodus of subscribers in the coming weeks.
It will also throw into question Setanta's contracts with the Football Association, worth £150million, as well as a £125million deal with the SPL, a £54million deal with Premier Rugby and a £100million contract with the US PGA Tour.
FA chief executive Ian Watmore acknowledged that the development threw its deal into question.
“We have worked well with Setanta's management and potential new investors in the last week, and had reached a solution in principle that would have allowed them to meet their contractual requirements with the FA," he said.
“However, they made it clear this was dependent on reaching agreement with the PL. We now await developments.”
Setanta had been scrambling to complete a takeover package fronted by Russian billionaire Len Blavatnik, who was understood to have put up £20million to service payments to the Premier League while conducting due diligence on Setanta's books.
It is understood that the deal was thrown into doubt in the last 48 hours when due diligence revealed questions over alleged tax liabilities, both in the UK and in Luxembourg.
The discovery is thought to have prompted Blavatnik's investment vehicle Access Industries to ask for more time to complete the technicalities of the deal, a request the Premier League rejected.
Sources with knowledge of the negotiations have suggested that Blavatnik wanted 72 hours to complete the technicalities of the deal and appealed for more time.
League chief executive Richard Scudamore, unhappy at the ongoing uncertainty at Setanta's prospects and the ongoing reputational damage the saga was causing, rejected that request.
Sources close to Setanta described the failure of the deal as a “disappointment”, and indicated that only “technicalities” remained to be solved.
Scudamore's decision to enforce the deadline may attract criticism from other governing bodies in the coming days but the Premier League believes it had no choice but to meet its commitment and end uncertainty for its clubs and supporters.
Setanta's troubles have raised significant doubts over its ability to remain a long-term player in the broadcast market, reducing the incentive for the Premier League and other governing bodies to help it.
Should the Disney-backed ESPN pick up some of Setanta's rights it could significantly increase competition in the UK sports broadcast market.
In a statement the Premier League said: “The Premier League, in agreement with Setanta, stipulated that certain contractual requirements had to be met on or before Friday 19 June 2009 to allow the preparations for the 2009/10 season to continue unaffected.
“It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such the existing licence agreement between us has been terminated with immediate effect.”
The league will hope to recoup most of the £131million Setanta paid for the final year of its existing deal. With a portion of the money though to have been paid on deposit already, they are hopeful that the change of rights-holderwill be cash-neutral.
Other competitions seeking to re-sell their rights in a market shorn of the competition Setanta brought may struggle to do likewise.
English football could pay for failure of Setanta Sports
The Times online
June 20, 2009
Clubs and governing bodies could lose millions of pounds in television revenue after Setanta Sports failed to meet a deadline to pay £10 million to the Premier League, causing the League to terminate its contract with Setanta and pushing the broadcaster to the brink of collapse.
Setanta's live rights to 46 Barclays Premier League matches next season will be sold off to new bidders. That loss would almost certainly prove fatal to Setanta, which had pinned its hopes on a rescue by Access Industries, a conglomerate owned by Len Blavatnik, a Russian-born American oligarch.
However, Access has pulled out of a deal to save Setanta, which is likely to enter administration. While the Premier League is confident of recouping all the money it would have received from Setanta when it resells the rights, the FA faces a headache because the broadcaster also holds the rights to England home friendlies, the FA Cup and the Community Shield as part of a £425 million, four-year deal with ITV that runs until 2012.
The FA said that it had reached a solution with Setanta over their contract, but it had been contingent on the Premier League also finding an agreement with the broadcaster. “We are very disappointed with the news,” Ian Watmore, the FA chief executive, said. “We await developments, but remain confident of the attractiveness of our broadcast rights going forward.”
Under the terms of ITV's deal with the FA, it would pick up eight England friendlies between now and 2012 if Setanta collapses. The FA would try to resell its other rights — including England Under-21 matches and non-League competitions — to different broadcasters but would struggle to attract the same price in the present economic climate.
Advertising revenues are down and potential bidders are short of cash. ITV is cutting its budgets and the BBC has little left to spend on live sport having splashed out for coverage of Formula One and the RBS Six Nations Championship.
Despite the Premier League's bullishness, it too may find itself taking a hit in the pocket when it examines offers from new bidders next week. Under European Commission competition rules, the League cannot sell all its matches to one broadcaster. Sky, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, holds four of the six available packages for next season so would only be able to add 23 games to its portfolio. That leaves ESPN, the American company, as the most likely other bidder. If they are the only interested parties, and given the limit on how much Sky can buy, the League's position is weakened, though it would then examine the possibility of reclaiming any shortfall from Setanta.
Another problem for the Premier League is that Setanta paid £159 million to screen 23 live games for three years from 2010-11. One compensation for the top flight is that overseas rights deals are expected to reach record levels in the coming years.
A Premier League statement read: “It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such the existing licence agreement between us has been terminated with immediate effect.”
Setanta paid £392 million to show 46 live games a season from 2007 to 2010. It has an estimated 1.2 million subscribers. Bidding for the rights closes on Monday and the League is likely to make a quick decision because the process of selecting live matches will need to begin soon now that the fixtures list is out.
Setanta missed a £3 million payment due to the Scottish Premier League this month. Blue Square Premier clubs will also be worried, because they earn about £70,000 a year from their contract with Setanta, which also has deals for Guinness Premiership rugby union, golf's PGA Tour in the United States, boxing and Indian Premier League cricket.
Setanta loses Premier TV rights
Troubled pay-TV sports broadcaster Setanta has failed to pay the latest chunk of the £30m it owes the English Premier League - losing the rights.
A potential rescue deal, led by a US investor who had proposed buying 51% of Setanta, had fallen through.
The league will now put the rights to the 46 live matches for the 2009/2010 season out to auction, after Setanta missed Friday's payment deadline.
Offers to buy the rights need to be made by Monday.
The Board of Setanta said it would "consider its options over the weekend".
"In the meantime, Setanta's sports channels continue on air," it added.
The Premier League said it had been working with Setanta "for some time to help them continue as the broadcaster" .
The Premier League, in agreement with Setanta, stipulated that certain contractual requirements had to be met on or before Friday "to allow the preparations for the 2009/10 season to continue unaffected".
The league added: "It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such the existing licence agreement between us has been terminated with immediate effect."
The Premier League will now go ahead and auction the 46 UK live matches for the 2009/10 season.
Late last week, Access Industries, controlled by the US investor Len Blavatnik, tabled a £20m bid for a 51% share in Setanta.
It had been hoped Access could lead a consortium of investors to provide fresh funding for Setanta.
Mr Blavatnik had been studying Setanta's books
However Access has now said it was unable to proceed with a deal with Setanta.
There had been concerns over how much tax Access could be liable for if it acquired Setanta.
"Access believed that this proposal could potentially have secured the future of the broadcaster for its customers, employees and for football, provided certain conditions required to put the business on a long-term viable footing were met," it said.
"Regrettably, despite intensive efforts on all sides over the past few days, and despite significant progress in a number of areas, there remain a number of issues which we have been unable to resolve within the time available.
"We are disappointed not to have been able to make this deal happen. Access remains committed to sports programming and will continue to explore opportunities in this area."
One of those which may be interest in acquiring Setanta's 46 games is Disney-owned sports channel ESPN.
ESPN would not comment directly on the new situation but said it continued "to be interested in rights where they are available and where they make business sense".
Meanwhile James Pickles, editor of industry newsletter TV Sports Markets, said that until Thursday there were expectations that Setanta would pull though.
"It's bad news for everyone - no one is a winner," he said, adding: "It's a disaster for rights holders."
He said it was bad news for Sky because having a competitor such as Setanta was beneficial to it from an EU regulatory perspective, which prevents one broadcaster owning all Premier League rights.
However Sky would be legally free to bid for one of Setanta's two packages of 23 games.
Last week Setanta reopened its website to new subscribers - having closed it for several days.
Setanta is running at an estimated loss of £100m a year, after missing subscriber targets.
The broadcaster has 1.2 million subscribers, 700,000 short of the 1.9million that industry experts believe they need to break even.
Attention will now shift onto Setanta's other contracts - such as those with the FA for England and FA Cup matches, the Scottish Premier League (SPL), and the Blue Square Premier, the top division of English non-league football.
It recently missed a £3m payment due to the SPL - part of a four-year deal worth £54m over four years from 2006 to 2010.
Following Friday's news, Lex Gold, executive chairman of the SPL said: "We are still locked in discussions with Setanta."
"Understandably, these discussions are complex and must remain confidential at this stage. We expect these to conclude early next week."
Setanta also owns rights to the PGA golf tour, as well as cricket and rugby union deals.
Setanta signing up new subscribers as takeover moves step closer
Jun 14 2009
TROUBLED Setanta started signing up subscribers again last night amid growing hopes of a £40million rescue.
Russian-born tycoon Len Blavatnik's £20million deal for a 51 per cent stake was yesterday close to being completed.
Senior sources say another £20million will come from other investors - giving the firm a new lease of life.
Blavatnik's injection of cash will come through his company Access Industries.
Yesterday Blavatnik's spokesman said: "We can confirm we submitted a proposal to the Setanta board to acquire a majority interest, refinancing the company.
"The proposal is subject to a number of pre-conditions being met.
"Access believes this proposal would secure the future of the broadcaster for customers, football and employees."
Other investors will make up the rest of the cash, with the deal due to be sealed within a week.
The money could secure the future of some SPL clubs, as it emerged several could go under if the channel could not afford to pay for its exclusive deal to broadcast matches.
League bosses tried to reach a deal for the £3m owed earlier this week but left empty handed.
Setanta's board are so confident the proposal will go ahead they began taking on new subscribers for the first time since last Tuesday.
A Setanta source said: "This is fantastic news for the business."
A source added: "We have heard the vibes are positive but we are waiting to see how it all pans out.
"There is £3million outstanding, which needs to be sorted out."
Blavatnik, 52, fled Russia with his family in 1978. He founded Access Industries in 1986. It now has interests in Europe and the US.
Blavatnik, who is worth £4.25billion and describes himself as a proud American, has a share in Warner Music Group and is involved with Top Up TV.
His magic touch deserted him when he invested in chemical company LyondellBasell.
It collapsed in January, leaving huge debts for creditors including Royal Bank of Scotland..
Setanta pays part of instalment to Premier League
•Premier League may re-tender last year of Setanta's deal
•Endemol could take stake in pay TV company
The Guardian, Sunday 14 June 2009
Setanta has met part of its £35m instalment to the Premier League that is due tomorrow and is believed to have hammered out a repayment schedule. The league received £10m on Friday and Setanta will pay a further £10m this Friday. A final £15m sum has been deferred until later this summer, despite indications from the Premier League that it would not consider renegotiating or deferring payments.
However, the Premier League has reserved the right to put the final year of Setanta's three-year deal, which kicks in at the start of the 2009-10 season, out to tender if it believes the rescue is foundering.
Industry sources said it could begin the process of re-auctioning those rights before Friday by inviting offers from other bidders. It is believed to be concerned that Setanta's future remains in doubt with two months left before the start of the season. Setanta holds the rights to screen 46 games next season and 23 games for each of the following three seasons under a separate deal.
The company is continuing its emergency fund-raising drive as it battles to save its future. It emerged over the weekend that Endemol, the TV production company that makes Big Brother, could take a stake in Setanta as part of a refinancing package backed by the Russian-born billionaire Len Blavatnik. Endemol is run by Ynon Kreiz, a former partner at the venture capital firm Balderton Capital, one of Setanta's biggest investors, and sat on the Setanta board.
Kreiz was appointed CEO of Endemol last year after it was sold to a consortium headed by its co-founder John de Mol. Endemol is considering taking part in the rescue package, which will see Blavatnik's private company Access Industries pay around £20m for a 51% controlling stake in Setanta. A further £20m would come from other investors – enough to place the business on a firmer financial footing. The deal with Access, which owns a stake in Top-Up TV and is also a small shareholder in Setanta, has been agreed in principle but not yet finalised. Due diligence should be completed by the end of the week.
Setanta get extra time to pay Premier League as £20m rescue package nears completion
14 June 2009
Setanta executives are confident the broadcaster will survive after the Premier League gave them breathing space to complete a £20million partial buy-out by billionaire Len Blavatnik.
The ball is rolling ... on the Setanta rescue package
The Irish station are due to deliver the next £30m instalment in their current £392m contract with the Premier League tomorrow but the payment has been deferred to allow Blavatnik to complete due diligence.
That process is expected to be complete by Friday, giving the cash-strapped network the means to continue as a going concern and to restructure the business in the light of having lost one of their Premier League packages of 23 games from 2010-11
£20 million Setanta bail out to be concluded next week
Jun 13 2009 By Chris Roberts
BILLIONAIRE Len Blavatnik reckons his £20 million bid to rescue Setanta will be accepted next week.
SPL clubs fear for their lives as the Irish-based TV outfit hurtles towards administration.
But Blavatnik's biggest company, Access Industries, confirmed their chairman is riding to the rescue and his cash injection could save up to three SPL clubs from going bust.
Record Sport can reveal the US-based Russian tycoon already has a three per cent share in the company and is looking to increase that to a controlling 51 per cent stake.
A close associate of Blavatnik last night said: "It is a pretty full and fair offer at this stage.
"We are confident we can complete the deal. Discussions are progressing. It is a package to save Setanta and we want to conclude the deal in the next week or so."
Blavatnik is no stranger to the media. He owns assets in Top-up TV - the pay TV channels on Freeview -an Israeli sports channel, global giants Ice Net and many more thriving companies.
He has done business with former BSkyB boss David Chance and is hoping Setanta's owners and creditors will agree to examine his offer as an alternative to closing the business - and some SPL clubs.
Aspokesman for Acces said: "We can confirm we have submitted a proposal to the board of Setanta to acquire a majority interest which will refinance the company. The proposal is subject to a number of pre-conditions. We believe this proposal would secure the future of the broadcaster for customers, football and employees."
Setanta's potential white knight, who left Russia with his family in the 70s, founded Access in 1986 and has become one of America's most successful and wealthiest businessmen, with an estimated fortune of $7.2billion.
But he has also been hit by the recession. LyondellBasell, a huge petrochemicals maker he invested in, went bankrupt in January but are now rebuilding themselves with his help.
Setanta are still working hard on options to refinance the business, having earned a stay of execution from administration this week.
They have TV rights including the FA Cup, World Cup qualifiers, Premier League, SPL and the Blue Square Conference - but are struggling to pay for them as customer numbers have dwindled in the recession. Setanta have about 1.2million subscribers but that is short of the reported 1.9m they need to break even.
They have been bidding to raise fresh funds from investors, reduce their rights bills or even sell a stake in themselves to another company.
Another broadcaster, ESPN are monitoring the situation should Setanta go into administration,.
10 June 2009
Setanta bosses consider selling off US and Irish assets in last-ditch rescue planIrish pay-TV group Setanta could sell off overseas operations in bid to find part of £100m needed to secure its future
James Robinson, Mark Sweney and Elena Moya
guardian.co.uk, Wednesday 10 June 2009, 18.44
Executives at Setanta are believed to be working on an ambitious rescue plan that would see the Irish pay-TV group broken up but could keep it out of the hands of administrators.
The plan is thought to involve selling all or part of Setanta's US and Irish businesses, both of which are profitable.
Setanta founders Michael O'Rourke and Leonard Ryan are believed to be seeking buyers for the US and Irish operations and are hopeful that some of their wealthy business associates will agree to acquire them. Setanta Ireland is already 20% owned by Denis Desmond, the Irish music promoter.
Seperately, O'Rourke and Ryan are also believed to be working on a management buyout of the remainder of the business.
The company needs £100m to secure its future but its City backers, including private equity houses Doughty Hanson and Balderton, have refused to make more than £50m available.
Selling off the overseas operations could plug that gap, although it is unclear how much the move would raise. One industry source with knowledge of the talks claimed the US and Irish business could "be worth a few hundred million", although buyers are unlikely to pay anywhere near that sum given Setanta's distressed postition.
However, the US and Irish assets are likely to fetch enough for Setanta to meet a critical instalment of around £30m due to be paid to the English Premier League on Monday.
O'Rourke and Ryan's MBO could be funded, in part, with cash raised from the sale of Setanta's US and Irish businesses, depending on how much was raised, but extra funds from a new private equity backer would also be needed.
The MBO would be fronted by O'Rourke and Ryan but would also include other senior Setanta managers.
Under this plan, the founders would buy out their existing City backers, including Doughty Hanson and Balderton Capital. Both firms would be sitting on huge losses and they would be forced to write off a large part of the £500m or so they have invested in the company. However, the private equity firms stand to lose all of that money if Setanta is forced into administration, and may decide to cut their losses.
This proposed MBO deal is one of several options under consideration as Setanta battles for survival.
The latest rescue effort is being led by the company's advisers, investment bank Close Brothers and accountants Deloitte, which are exploring a range of options after an earlier plan, put forward by Doughty Hanson, failed.
Doughty Hanson's plan rested on renegotiating rights with sporting bodies, including the FA, the Scottish Premier League and its English equivalent.
Although some rights owners were willing to open discussions, the Premier League is understood to have proved particularly intransigent.
Industry sources claim Setanta has been contemplating the break-up plan for months as a fall-back position if talks with rights holders failed.
However, one City media analyst said any attempt to save the company using money raised from private investors would not prevent the company from folding.
"The debts of the company are immense, it owes over £500m. The real crunch is whether they can make it to Monday. That is when the English Premier League's £30m payment is due, and if it doesn't show up that is it. The rest is froth," the analyst added.
Time is running out, but if the rescue plan succeeds Setanta may be able to meet the Premier League payment on Monday. Doubts would still remain over the future of the company, however. Setanta has 1.2m subscribers but most industry observers believe it needs 1.9m to move into profitability.
The company was expected to go into administration this week, and Deloitte is standing by to take on that role.
Following days of crisis talks executives have so far managed to keep the business afloat, but Setanta confirmed today that it is no longer accepting new subscriptions.
A message posted on the Setanta website stated: "In the current circumstances, we have decided to suspend temporarily the acceptance of new subscriptions.
"As has been widely reported in various media channels, the management of Setanta Sports management is in the process of attempting to secure the future of the business. The company has not gone into administration.
"All our channels are still broadcasting across all platforms and our subscribers can continue to enjoy our programming."
Following an emergency board meeting on Tuesday night, about 430 Setanta staff were briefed during separate talks in London, Glasgow and Dublin on Wednesday, according to a company insider.
The message from management was that the company is not in administration, although it was again stressed to staff that the firm is in serious need of fresh investment. "We have been told we are fighting on for now," said one source.
BT issued a statement today that confirming BT Vision, the company's broadband TV arm, has stopped selling Setanta subscriptions.
"We are closely monitoring the situation with regard to the current position of Setanta Sports. As a precaution we have currently suspended any further sales of Setanta Sports from this morning," BT said.
"We are in constant dialogue with Setanta, and all other relevant parties to ensure we provide the best possible outcome for BT Vision customers."
Other suppliers, including ITN, which produces the broadcaster's rolling news service Setanta News, are also watching events unfold amid concerns that its collapse could cost them dear.
An ITN spokesman said: "We have regular meetings with all our customers to discuss our programming but we wouldn't disclose the details for obvious commercial reasons."
Virgin Media, which is a joint venture partner in Setanta Sports News, added: "We're monitoring the situation with Setanta Sports carefully and will try to ensure our customers continue to receive all available sports coverage."
Setanta Sports News was set up in late 2007 as an alternative to Sky Sports News after BSkyB withdrew its channels from the Virgin Media cable TV network following a row over distribution charges.
That dispute has now been resolved and there are questions over the future of the channel, which employs around 60 people
Stags could be counting the cost as Setanta crisis grows
CHAD.co.uk, 10 June 2009, By Stephen Thirkill
MANSFIELD Town could be thousands of pounds out of pocket next season if troubled sports broadcasters Setanta go to the wall.
The Irish company are currently two years into a five-year deal with the conference worth £2.5m but have run into serious financial problem, forcing them to recently default on a £3m end-of-season payment to the Scottish Premier League.
Setanta now desperately need to find backers to pay a £30m debt to the English Premier League and is reported to be losing £100m a year.
Last season Stags made £20,000 from three live appearances in front of the Setanta cameras, which included a home fixture against Oxford United
Stags chairman Andy Perry told Chad the club were watching the situation closely.
"We are keeping an eye on the situation but it doesn't look good at the moment,"he said.
"For Mansfield Town, being on the television meant £20,000 in cash as well as valuable publicity.
"We are marketing the club and pushing it as hard as we can and being on the television helps give us a big lift.
"It is also good news for the whole town to see the club on tv. I wouldn't be suprised if Sky came in to take over the contract, but we will just have to see how the situation develops."
Setanta currently hold the television rights to major golf tournaments, the high-profile Indian Premier League cricket, rugby union competitions and have broadcast numerous England fixtures.
10 June, lunchtime:
A statement on Setanta's website says: "Setanta Sports management and investors are in the process of attempting to secure the future of the business.
"Contrary to several reports, we have not gone into administration.
"All of our channels are still broadcasting across all platforms and our subscribers can continue to enjoy our programming.
"However, in the current circumstances, we have decided to temporarily suspend the acceptance of new subscriptions.
"Our customer services operations are still open and available to handle customers queries."
Struggling Setanta thrown a lifeline at 11th hour as SPL hopes to avoid meltdown
Jun 10 2009 Keith Jackson
SCOTTISH football may have been spared a catastrophic meltdown scenario at the 11th hour last night when crisis-hit broadcasters Setanta ditched plans to call in administrators.
Record Sport can reveal the top flight came within a couple of hours of financial disaster but they were spared from ruin after crisis talks were held in London at a meeting of the Irish Satellite firm's top brass. It had been fully anticipated Setanta would go into administration this morning and that the company's staff would be given the devastating news at a series of meetings with management.
That would have led to Setanta being taken off the air immediately and would have wiped out the £134m bounty which has been guaranteed to the SPL over the next five years.
But a dramatic U-turn was made late last night after a rescue package was proposed which may stop the broadcaster going to the wall for the time being at least.
It's now expected the ailing TV company will announce today their intention to battle on back from the brink - news which will be welcomed by Scotland's top 12 clubs who have been anxiously preparing for the worst.
By yesterday afternoon many club bosses were bracing themselves for the news Setanta's devise was inevitable and that the SPL would kick off next season without a TV deal for the first time since its inception in 1998.
However, it is as yet unclear if last night's dramatic developments can save the satellite firm in the long term - or if it's simply a stalling tactic.
A source told Record Sport:"It's been a quite incredible day. At lunchtime things looked extremely bleak and administration seemed certain.
"Arrangements were being made to notify the staff and the take Setanta off air. But everything changed later and now it seems there is fresh hope Setanta may survive. This has to be encouraging for all of Scottish football because without a TV deal there is a very real possibility that as many as three SPL clubs would not be able to stay in business and could go under before the turn of the year.
"We are not sure if Setanta can be rescued but for the time being at least there is some hope. The SPL can only sit, wait and keep its fingers crossed."
Company chief Richard Sweeney will address Glasgow staff at an 11am meeting today. It was originally expected he would be delivering bad news but it now looks likely his message will be more upbeat.
Us giants ESPN are believed to have resurrected their interest in a rescue package.
If Setanta had been taken off air it would have resulted in the SPL breaching the terms of their current contract with the Beeb which is worth an extra £2.5m a year on top of the Setanta jackpot.
The BBC would have continued to cover matches with commentary on radio and online but the loss of the highlights package - with footage supposed to be captured by Setanta's cameras and then handed over to the terrestrial channel - would have cost the SPL a further £800,000-a-year in lost TV cash.
There were genuine fears that if Setanta had failed to come up with the final £3m instalment of their deal for the season just ended that at least three SPL clubs could have gone to the wall.
The situation looked bleak yesterday when the firm- who are also due to stump up more than £30m to the English Premier League next week - stopped taking new subscriptions and shut down parts of their call centres. Anxious SPL bosses Lex Gold and Ian Blair refused to comment but both are aware of the consequences of heading into a new season without any kind of TV deal. And they will know also it may prove impossible for them to come up with an alternative package at the 11th hour.
They have already had to bail out clubs with a £3m emergency paymentfollowing Setanta's failure to cough up last Monday but most of that money will be long gone before the next campaign starts.
Should the worst happen, there is still the hope satellite giants Sky could come to the rescue with a reduced offer to put Scottish football back on the box. However, BSkyB chiefs last night confirmed they had refused a £50m lifeline to Setanta.
Sky chief executive Jeremy Darroch said they were "a broadcaster not a bank" but insisted they had no wish to see Setanta go into administration.
Setanta had asked Sky bosses for a £50m interest-free loan and in return offered access to the live rights to 46 Premier League games in England next season as an add-on option to Sky Sports.
Darroch told a Sports Industry Group event in London: "Our job is not to fund other companies. We have been talking to Setanta and trying to work with them and help them. At the end of the day we are not a bank, we are a broadcaster."
Setanta's subscription services for new customers suddenly became unavailable yesterday. Website applicants were flashed a message saying: "Oops! Something has gone wrong...".
England's Premier League should not be too badly affected should Setanta fold as they have won only one of the six live broadcast packages for 2010 to 2013.
Setanta looking at 'live options' for survival
Wednesday, 10 June 2009 08:05
Setanta last night said it was looking at what it termed 'live options', which could mean possible offers for the company. This should hopefully help the sports broadcasting firm stave off going into administration.
The statement follows a board meeting which was adjourned last night. A spokesman said a further announcement would be made in due course.
Yesterday, BSkyB said it had refused a £50m lifeline to the struggling sports broadcaster. Sky's chief executive Jeremy Darroch said the company were 'a broadcaster not a bank' but insisted it had no wish to see Setanta go into administration.
AdvertisementReports said Setanta had asked Sky for a £50m interest-free loan and in return offered access to the live rights to 46 English Premier League games next season as an add-on option to Sky Sports.
The Irish broadcaster is in crisis with a payment of more than £30m due to the Premier League this week and backers refusing to advance it any more money.
Mr Darroch told a Sports Industry Group event in London yesterday: 'Our job is not to fund other companies. We have been talking to Setanta, and trying to work with them and help them.'
Conference fears Setanta collapse
9 June 2009, 10pm
Audio interview with Woking secretary and Conference director Phil Ledger ---> http://news.bbc.co.uk/sport1/hi/football/eng_conf/8091991.stm
Football Conference director Phil Ledger is concerned clubs could be dealt a serious financial blow if Setanta goes into administration.
The Conference leagues are two years into a five-year deal worth £2.5m with the troubled broadcaster.
Blue Square Premier sides receive a minimum of £70,000 a year and clubs in the North and South take £15,000 each.
Ledger told BBC Sussex and BBC Surrey: "I think it will affect people a hell of a lot. £70,000 is a lot of money."
The Woking club secretary added: "It doesn't come through the gate for a lot of clubs, and the money can be a lifeline."
Rushden and Diamonds manager Justin Edinburgh says his budget at Nene Park is likely to be affected if the sports broadcaster goes out of business.
"It's going to affect the whole league and maybe the bigger clubs as much as the lesser ones." Edinburgh told BBC Radio Northampton.
"Until we get the full details we don't know just how much it will affect us."
Setanta is reported to be desperate for backers to step in and provide it with funds to bridge the £30m debt it owes to the English Premier League.
The broadcaster has already failed to pay £3m that it owes to the Scottish Premier League and is believed to be losing £100m a year according to analysts.
It also has the television rights to golf, cricket and rugby union competitions and while a rival broadcaster could buy up the rights to Setanta's Premier League portfolio, the future of broadcasting, and funding for, its non-league games is unclear.
It is a situation that Ledger finds uncomfortable.
"Clubs might have had advice not to budget for that money, but I'm sure some clubs think well there is £70,000 guaranteed.
"Also on top of this people do get £8,000 for a home game and £3,000 for an away game, and it's another couple of players for your squad".
Sky chief: Not our job to save Setanta
New broadcasters will move in if Setanta deals collapse, predicts BSkyB chief executive Jeremy Darroch
guardian.co.uk, Tuesday 9 June 2009 14.16
Jeremy Darroch, the BSkyB chief executive, today spelt out why the broadcaster had rebuffed stricken pay-TV rival Setanta's demand of £50m for its Premier League football rights, insisting: "Our job is not to fund other companies."
Darroch was speaking today about stalled talks with Setanta about a wholesale deal for the company's 46 live Premier League games next season.
The Irish pay-TV operator is seeking extra funding to avoid defaulting on sports rights payments and sliding into administration. Sky balked at the £50m upfront payment that Setanta wanted for the rights.
Setanta has been holding crisis talks this week with its backers, which include private equity firms Doughty Hanson and Balderton Capital and the investment bank Goldman Sachs.
But if it fails to broker an 11th-hour deal, accountancy firm Deloitte could be appointed as administrator within days, according to sources close to the discussions.
"We have been talking to Setanta, and trying to work with them and help them. At the end of the day we are not a bank, we are a broadcaster, not a supplier of working capital to a business and rights holder ... our job is not to fund other companies. This is a huge amount of money," Darroch said.
Darroch, addressing a sports industry breakfast meeting today at the National Theatre, London, added that Setanta had made key mistakes in running their business.
"They scaled up the business too quickly, and they have big backers who were looking to flip [sell on] the business too early. You have to look beyond three to four years – it took us more than five years to become profitable at Sky," he said.
Darroch added that Setanta had been very successful in attracting 1.2 million customers in just two years, but had got caught up in the credit crunch and recession.
"The core issue is less about their ability to add subscriptions, more about the level of their costs and their profit and loss account," he said.
Sources at the breakfast, attended by all the major UK sporting bodies and rights owners, from horse racing to Premier League football, claimed that one of Setanta's biggest mistakes was to strike a too generous distribution deal and alliance with BSkyB's rival Virgin Media for access to its cable TV subscribers.
They said under this deal Virgin Media took 85% of the £10m monthly subscription charge for Setanta channels, rather than the more traditional 50/50 revenue split, in the belief that advertising revenue would flood in once a large audience had been attracted.
Darroch denied that Sky would like to see Setanta disappear. "Quite the opposite. A rising tide lifts all boats. The more sports broadcasters there are, the better for sport. It is additional competition, and we welcome it," he said.
He added that despite Setanta's problems, the UK remained a very attractive market for sports channels. Another broadcaster, such as Disney-owned ESPN, would step in if Setanta folded, he predicted.
If Setanta collapses it will have serious consequences for Premier League clubs in England and Scotland, which are awaiting payments totalling millions of pounds. One £3m instalment due to the Scottish Premier League is already a week late, prompting fears that Setanta has finally run out of cash.
The US PGA golf tour, boxing figures, the Indian Premier League cricket tournament and Guinness Premiership Rugby are all owed money by the company. So, too, is the Football Association, which signed a £425m four-year deal with Setanta and ITV for England games and FA Cup matches. If Setanta goes into administration, it may not receive it.
The most powerful sports bodies, including the FA and Premier League, privately claim they have watertight contracts with Setanta and argue its City backers have effectively guaranteed Setanta's payments. If Setanta does go under, that claim could ultimately be tested in the courts.
Setanta 'is on brink of collapse'
BBC.co.uk, 9 June 2009, 7am
Setanta faces administration "within days" unless backers provide more funds to pay £30m it owes to the English Premier League, reports suggest.
The broadcaster has already failed to pay the Scottish Premier League £3m it owes in television rights money.
Setanta, which also shows cricket, golf and rugby union, has about 1.2 million subscribers, but is losing up to £100m a year, analysts say.
Deloitte is set to step in to run the firm if it goes into administration.
The rights to show the English Premier League - and the subscribers that this pulls in - lie at the heart of Setanta's business model.
But the firm had only about 60% of the subscribers it needed to break even, said Professor Chris Brady of the BPP Business School.
"They have predicated the whole thing on getting those subscribers. The problem is they are taking on Goliath in BSkyB," he told the BBC.
Not only did Setanta have only a small percentage of televised Premier League games, but they tended to be "weaker" matches, he added.
There had also been problems with customer service, Professor Brady told the BBC.
Setanta's viability was cast into doubt earlier this year when it lost the rights to show 46 live Premier League matches from 2010/2011.
In future it will show only 23 games per season, compared with BSkyB's 115, with industry observers saying that thousands of customers would give up their subscriptions.
It is expected that a rival broadcaster - perhaps ESPN - would buy up its Premier League football rights.
But the worsening economy has led observers to suggest that the rights to 46 games which Setanta holds for next season, the final year of its current contract, would not be worth as much as they had been.
There are also doubts about whether the Premier League could match the £159m Setanta paid for the right to screen 23 Premier League games each season from 2010-11.
A shared deal with ITV saw them secure rights for England and FA Cup matches for £425m - and it is likely another firm would buy up these rights
June 8, 2009, 7pm
Time running out for Setanta rescue
Setanta remains on the verge of collapse as shareholders battle over whether the loss-making business could be made viable
Dan Sabbagh and Alexi Mostrous
Setanta came close to falling into administration this morning, but the embattled sports broadcaster was able to negotiate last minute breathing space to ensure it would survive in the short term.
The reprieve, however, was not due to the emergence of a rescue plan, and Setanta remains on the verge of collapse as shareholders battle over whether the loss-making business could be made viable.
A source close to the negotiations between Setanta and its private equity owners, Balderton Capital and Doughty Hanson, said the company's survival “hung in the balance.” Setanta's future would be decided “in a matter of days rather than weeks,” the source said.
The Irish company, led by new chairman Sir Robin Miller, is understood to have raised nearly £50 million to fund its operations, well short of the £100 million it was seeking.
Setanta's board met, amid talk of a split between its principal shareholders Balderton Capital and Doughty Hanson over whether to stump up another £5O million to secure the future of the company.
Football clubs around the country, and particularly in Scotland, where Setanta is the only broadcaster of Scottish Premier League games, face financial shortfalls running into the millions if Setanta's lucrative deals with the SPL, the FA and the Premier League cannot be replaced.
Deloitte, the accountancy firm, remains poised to take over the private equity-owned business, which failed to make a £3 million payment to the Scottish Premier League (SPL) last week.
The viability of Setanta's business model was cast into doubt in February when it lost the rights to show 46 live English Premier League matches. In future it will show only 23 games per season against BSkyB's 115, leading to concerns that thousands of subscribers will defect. BSkyB is 39.1 per cent owned by News Corporation, parent company of The Times.
Unable to pay £3 million in Scotland, Setanta faces bigger financial hurdles later this month, when a reported £40 million payment to the Premier League falls due.
The broadcaster showed England's World Cup qualifier on Saturday, but that may be the last time Setanta is involved. A shared deal with ITV saw it secure rights for England and FA Cup matches for £425million.
Setanta, co-founded by Irishmen Leonard Ryan and Michael O'Rourke, which also shows cricket and PGA Golf, has about 1.2 million customers but needs nearer 1.9 million to break even and is losing £90 million a year, according to analysts.
Doughty Hanson and Balderton each own about 20 per cent of Setanta, while Goldman Sachs holds less than 5 per cent. Setanta declined to comment on funding discussions.
Exclusive: ESPN in frame to take over Setanta's SPL TV deal
Jun 6 2009 By Chris Roberts
GLOBAL media giants ESPN were waiting in the wings last night to save Setanta and take over the TV rights for the SPL.
The news came as SPL chiefs agreed to hand out £3million to their anxious clubs following the failure of the broadcasters to come up with a similar amount.
Record Sport can reveal ESPN – who are owned by the Walt Disney company – are in talks with the Irish-based outfit about either joining forces or buying their television rights.
Talks between the SPL and Setanta will go on through this weekend. But having failed to receive the final £3m of this season's TV deal from Setanta, SPL bosses have released funds early to prevent clubs from slipping into trouble.
We revealed earlier in the week that three clubs would go out of business if Setanta failed to honour their contract.
But after meeting yesterday the SPL board – Lex Gold, Martin Bain, Rod Petrie, Duncan Fraser and Campbell Christie – decided to release funds early to help clubs survive the summer at least before aresolution can be reached.
That money, which has been raised from broadcasting, sponsorship and other sources throughout the season, would have been distributed at a later date.
But drastic action was needed given the ongoing uncertainty surrounding the crisis-torn broadcasters.
One chairman said: “It's still an anxious time over the Setanta deal but at last we have a bit of positive news for the clubs.”
The SPL are running out of patience and Record Sport understands they are considering pulling the plug and seeking a new broadcasting partner if they don't come up with a solution to the problems over the weekend.
That's where ESPN, who have successful sporting networks all over the world, could come in to save the day for Scotland's leading clubs.
The TV giants, who will celebrate their 30th anniversary in September, have plenty of experience in Europe having held 33 per cent of the shares in Eurosport until 2002.
Having just missed out on the rights to screen Premiership football, they would jump at the chance to bag Setanta's contract with England's top flight as well as deals for the SPL, FA Cup and international football.
Damion Potter, ESPN's communications director for Europe, Middle East, Africa, Asia and Pacific Rim, said: “We have a good relationship with Setanta Sports around the world, including the UK where they are clients of ESPN America.
“As a partner, we speak frequently but we don't comment on speculation or on our investment strategy.
“It is a hypothetical situation and a question for Setanta and the rights holder but from our side, we remain interested in discussing rights if they make business sense.”
The company, which last year agreed to pay £125m over four seasons for exclusive live coverage from 2010, has been attempting to renegotiate a number of its contracts because of cash-flow problems.
But leading financial experts Deloitte and Touche reckon the SPL could go from strength to strength if they survive their latest crisis.
The company, who are advising Setanta through their troubles, believe Scottish football can rise again if they hang on over the summer.
Dan Jones, partner in Deloitte's Sports Business group, said: “There is more revenue in Scottish football than there has ever been.
“I do think football is much more resilient to the recession than most other businesses.
“The Setanta situation is a concern for everybody but the SPL could rise again if they survive the current situation.
“I don't worry for Scottish football at all.
“Scotland has been very successful in reducing its debt and getting the revenue-to-wages ratio down to a reasonable level.
“They are still enjoying some revenue growth and it's probably in better shape than it has been for some years.”
Setanta faces final whistle over bills
By Jonathan Russell, 10:40PM BST 06 Jun 2009
The sports pay-television operator Setanta may be forced to call in administrators this week after an emergency board meeting on Saturday failed to reach a decision about the company's future.
On Saturday it emerged that Setanta had failed to pay £3m to the Scottish Premier League, the last instalment for rights payments on last season's games.
The failure to pay such a relatively small sum in terms of football rights payments only served to heighten concerns over the viability of the company and its finances.
Setanta has been hit hard by rapidly rising cost of television rights for football games both domestically and internationally and a failure to grow its 3 million customer base rapidly enough. In recent months the company has taken on new management, Sir Robin Miller, the veteran media executive, was parachuted in as Setanta's chairman in a desperate effort to turn the company around.
However, the appointment has so far failed to find a solution for the company's woes despite appealing to shareholders including Doughty Hanson and Goldman Sachs for £100m in fresh equity and trying to negotiate a reduction in the cost of its TV rights agreements.
From The Sunday Times
June 7, 2009
Scottish Agenda: SPL would be foolish to put boot into SetantaIan Fraser
Scottish football managed to survive — just about — before the subscription broadcaster Setanta first crossed the Irish Sea and opened its rather large chequebook in 2003. Since then, the financing of the sport has been transformed.
Not only did Setanta give Scottish premier league (SPL) clubs a welcome shot in the arm, in the shape of a new revenue stream that enabled them pay off some of the debt accumulated while the Bank of Scotland remained a football-friendly bank, but in a renegotiation spearheaded by the SPL chief executive Lex Gold last July, the clubs also managed to more than double the amount Setanta pays for the rights to broadcast games.
The sum rose to £125m over the four-year period kicking off in 2010, compared with the current level of £55m.
However, that particular renegotiation is now looking less clever for the SPL. Having over-leveraged itself in the boom times, and suffering because of an iffy business model, Setanta may well be about to go into administration.
This is despite the fact that the group's private equity backers, Doughty Hanson and Goldman Sachs, recently installed new management led by the former Emap heavyweight Robin Miller.
Miller's team is clinging to the hope that it will be able to raise an additional €100m either from existing or new shareholders. But existing shareholders are unlikely to throw more money Setanta's way unless it manages to renegotiate — downwards — the contracts it has with rights holders such as the SPL.
This puts the SPL in a bind. If it plays too rough, it is likely to tip Setanta over the edge and end up even more impoverished than if the broadcaster renegotiates its contract.
There may be lessons from the collapse of ITV Digital. (Remember those ridiculous knitted monkeys?)
Back in March 2002, the English Football League refused to accept a £130m cut in its £315m deal with ITV Digital's sports channel. As a consequence, ITV Digital went to the wall. Even after protracted legal action, the clubs ended up with virtually nothing in compensation. Several were forced into administration.
Professor Tom Cannon, a football finance expert at Buckingham University, believes that SPL is going to have to be more pragmatic. He said it would be unwise of the league — which was last week obliged to dip into reserves to make a £3m payment that ought to have come from the broadcaster to the clubs — to be to tough with Setanta at this juncture. “I think it's in the SPL's interests to keep Setanta in business, as nobody else is going to come in and pick up that contract,” he said.
The problem for the SPL is that there is no queue of rival broadcasters waiting to rush in and compete. Were, for example, a rival broadcaster such as Sky — which is 39.1% owned by News Corporation, parent of The Sunday Times — to be waiting in the wings, then at least the SPL would be in a stronger negotiating position. But, according to Cannon, it isn't. There are also competition concerns.
Nor does Cannon believe it would be in the SPL's interests to allow Setanta to go bust and then look to secure a deal with Sky: “I suspect that they wouldn't get a better deal out of Sky than they would get out of a Setanta that they helped to survive.” Having been rescued by Setanta earlier this decade, perhaps it is time for Scottish football to return the favour?
Struggling Setanta is facing relegation from the big league of broadcasters
07 June 2009
By Nathalie Thomas
AT THE Railway Union sports ground to the south of Dublin, Mickey O'Rourke can often be spied kicking a ball around after a tough day at the office. The co-founder of Setanta Sports is known for prioritising a game with his five-a-side team over swanky parties, even after striking landmark deals for the digital broadcaster.
As Setanta's future hangs in the balance this weekend, it wouldn't be a surprise then if O'Rourke turned to the turf for comfort as he contemplates the challenging few days ahead.
After starting the football season with a bang, Setanta is now hovering dangerously close to the relegation zone. City tongues have been wagging about cash problems for several months, but the alarm bells rang out loud and clear last week when Setanta did not make a scheduled £3 million payment to the Scottish Premier League. The Irish broadcaster has until tomorrow before it officially defaults on the payment, but concerns about the company's financial state are so grave that the SPL took the rare decision on Friday to dip into its own reserves and cover the payment to clubs.
The City is on high alert this weekend as the digital broadcaster continues crisis talks with the SPL and potential rescuers, including the Walt Disney Company's sports subsidiary ESPN. Analysts warn it is now a serious possibility that Setanta will not be around when the new season kicks off on 15 August.
Rewind ten months and it had all looked so promising. Setanta, whose roots can be traced to an Irish dance hall in west London, was nipping at the heels of arch rival BSkyB. It held the exclusive rights for live SPL games, and broadcast a third of live Barclays Premier League matches in England. With BSkyB holding the remaining rights for the Barclays Premier League, it appeared as though Setanta might succeed where many others have failed in breaking the Murdoch empire's stranglehold on the market.
But now analysts are warning it is in serious danger of meeting the same fate as the Irish warrior after which it is named. The folk hero Setanta was told at an early age that his feats on the battlefield would bring him great fame but his life would be short.
Insiders say Setanta is facing a "crucial few days" as another deadline looms next Monday when it has to make a £35m payment to the Barclays Premier League. The City is increasingly concerned that unless a rescue deal can be struck, O'Rourke and fellow founder Leonard Ryan will have no choice but to call in the administrators.
So what has gone so wrong? And more importantly, can Setanta avoid being kicked out of the league?
Setanta's meteoric rise is a legendary tale in the City. O'Rourke and Ryan, both alumni of the prestigious Blackrock College in Dublin where Bob Geldof went to school, were living in London during the 1990 World Cup, hosted in Italy. When they discovered that nowhere in the city planned to show Ireland's crucial group match against Holland, the pair decided to take matters into their own hands. They telephoned Fifa, the governing body, and the BBC and asked how much it would cost to show the match live at the Top Hat dance hall in Ealing. When more than a thousand expat Ireland fans turned up and paid £10 each, O'Rourke and Ryan realised they were on to a winner.
In its early years Setanta stuck to broadcasting Irish sport, such as Gaelic football and hurling, to a network of pubs. But Ryan and O'Rourke soon developed grander ideas, and negotiated the rights to broadcast English and Scottish football games to expat fans living in Ireland and other countries, including the United States. Rod Stewart is named among the company's earliest customers, subscribing to the service from his home in Los Angeles.
In 2004 Setanta made it quite literally into the premier league when it outbid rivals including BSkyB for two of the six 23-game packages of Barclays League games. With BSkyB holding the other four packages, it appeared as though Rupert Murdoch's empire had finally met its match.
Like many other companies before the credit crunch, Setanta borrowed heavily to fund its rise. With subscriptions pouring in before the recession, O'Rourke and Ryan were confident the gamble would pay off. It is thought they were working towards a deadline of this summer to sign up the 1.5-2 million subscribers needed to break even.
What the entrepreneurial pair hadn't gambled on was the severity of the recession. As households radically rethink their outgoings, Setanta is among the non-vital extras that consumers are cutting back on, and the City estimates that subscribers are at about 1.2m.
An even more serious spanner was thrown into the works in February when Setanta was outbid by BSkyB for one of its 23-game Barclays League packages for the 2010-11 season. Toby Syfret of Enders Analysis says it exposed Setanta to the possibility of "mass subscriber defection" to BSkyB, which will broadcast five Barclays packages from 2010.
Syfret says the double blow of the rights losses and the recession has left Setanta fighting for its life. He estimates the firm is haemorrhaging £100m a year.
Setanta, which is backed by the private equity groups Balderton Capital, Doughty Hanson and Goldman Sachs, is notorious in the City for its limited reporting, but the cracks are evident for all to see.
In March, it was late with a £10m payment to the Football Association. Although the payment was eventually made, a new management team led by former Emap executive Sir Robin Millar was parachuted in to sort out the firm's mounting financial woes. Millar, who took the top job as chairman, was joined up front by former BSkyB executive Gary McIlraith.
The pair have since been in non-stop negotiations with shareholders to plug a £100m hole in Setanta's finances. But the talks have fallen short of expectations and its private equity backers only offered to stump up £50m.
Millar and McIlraith have been working against the clock to raise a further £50m as Deloitte, which already advises Setanta, waits on the sidelines in case an administrator needs to run on to the pitch. The situation is understood to be so desperate that Setanta even held out the begging bowl to BSkyB, asking for a £50m advance payment on a deal where Sky subscribers will be able to buy Setanta content. The request was turned down.
There is now speculation that ESPN may launch a bid for the troubled broadcaster. ESPN has been keeping a keen eye on Setanta for months and it was reported that it was among several firms, also including BT, which made enquiries about buying the Irish broadcaster early last year.
A spokesman for the channel in Europe confirmed it is interested in discussions about rights. However some analysts have questioned the wisdom of buying Setanta outright, and it is thought ESPN would be more likely to purchase just the TV rights or take a stake in the firm, providing much-needed equity.
In an attempt to stave off a takeover, Millar and McIlraith have also been renegotiating rights agreements with holders such as the SPL, the Barclays League and the PGA Golf tour. It is thought they are seeking to drive payments down by 25 per cent. Last summer the SPL signed a £125m four-year extension to its partnership with Setanta, which has already been negotiated down to £100m. SPL board members are understood to have serious doubts about whether even the revised contract can now be met.
If Setanta does survive the next few days, Syfret says it will have to radically rethink its strategy if it wants to avoid further cash crises. He says this year's events have exposed major flaws in its business model and the only escape route is for Setanta to become a uniquely wholesale business, supplying content to other digital broadcasters.
"Renegotiating rights is just one part of the jigsaw," he told Scotland on Sunday. "Simply getting a reduction in the fees would only get them so far."
Sam Hart, media analyst at Charles Stanley agrees. He says that even before the recession put pressure on Setanta's subscriber base, the package it offered most UK consumers was far less attractive than rival BSkyB's. Although it dominates the market in Scotland, south of the Border it owns the rights to "second tier" slots. It currently broadcasts Barclays League games on Monday nights and at Saturday teatime, which are considered far less attractive than Sky's prime 4pm Sunday slot.
Sources close to Setanta suggest management is also assessing the wholesale-only model. It is estimated that by allowing BSkyB to sell Setanta content on its behalf, the Irish broadcaster would cut operating losses by more than half.
Setanta is already well geared-up to concentrate on production in Scotland after it signed a deal with STV last summer to rent studio space, transmission and post-production services at STV's headquarters in Glasgow. The deal runs for two years.
However, Paul Richards, analyst at Numis Securities, suggests that a move to wholesale-only would not be easy. Relations with BSkyB are already believed to be fraught and Richards says Setanta cannot count on BSkyB chief executive Jeremy Darroch doing his rival any favours. "It matters a great deal more to Setanta than it does to BSkyB," Richards says.
Richards argues that Darroch would drive a hard bargain although ultimately it wouldn't be in BSkyB's interests to let Setanta fail. In 2005, after discussions with the European Union, it was ruled that no single provider could monopolise Barclays League games, and Richards questions how many other companies would want to take up the mantle after seeing Setanta fail. "Everyone is hoping that Setanta finds a way through this," he says.
Syfret agrees. The pay-TV market is already under investigation by Ofcom and Setanta's elimination could strengthen the regulator's perception that it is near impossible for alternative providers to challenge the dominance of BSkyB. The result could be a damaging crackdown by Ofcom and the EU.
"It's in no-one's interest for Setanta to sink," he says.
Sky set to fall in on Setanta's gamble
By Alan Ruddocl
Sunday June 07 2009
If Setanta collapses this month, it will be easy to mark it down as a casualty of the credit-crunch inspired recession. That's certainly what Brian Cowen would do if he were its CEO -- blame global forces beyond his control -- but Setanta's slide towards corporate oblivion has been a more complex affair.
Establishing a rival to Sky Sports was always going to be an expensive and risky business, particularly since so many potential subscribers can only be reached through Sky's own satellite platform.
To make the transformation from fringe player to major contender, Setanta's pockets needed to be deep and its negotiators razor sharp if it were to win the rights to broadcast sports that people were prepared to pay to watch.
In the British and Irish markets, that means just one sport, and one particular version of it: the English Premier League. It is the core product around which any sports TV channel has to be built and everything else is an add-on.
That doesn't mean that the add-ons -- like Scottish football, rugby, golf, FA Cup matches and internationals -- come cheap, or do not attract viewers: it means that building and holding a substantial subscriber base requires a regular diet of Premier League football.
Setanta came within touching distance of success. It won the rights to show 46 Premier League matches a season until 2010, and that solid base brought more than a million subscribers -- well short of what it needed to make money, but more than enough to suggest that it could survive and prosper if it could secure more Premiership football in the next rights sale. And that's where it all went horribly wrong earlier this year.
Instead of bidding aggressively for the football matches that people want to see, Setanta gambled on cheapness while Sky went for aggression. Setanta thought, perhaps, that the Premier League would let it keep 46 matches (sold in batches of 23) because it would not want Sky's dominance to grow, but its gamble backfired.
Setanta won just 23 matches, with Sky picking up everything else. At a stroke, the company was transformed from contender to feeble struggler and now faces collapse unless it can persuade Sky to come to its rescue, or can sell itself to the Disney-owned ESPN sports channel.
So why did it gamble its future by bidding so low for its lifeblood? In part, the gamble was a factor of Setanta's over-spending on the add-ons, like its joint €500m buy-up of the FA Cup and England internationals with ITV, and its solo purchase of Scottish football for almost €150m. They were staggering amounts of money to pay for second and third-grade football, and left Setanta without the firepower to mount a proper assault on the Premiership, which is what people want to watch. So it was forced to gamble, and it lost.
Its survival as an independent broadcaster now depends, bizarrely, on Sky. A possible deal would see Setanta become a wholesaler of sports programming to Sky, who would then sell it on to its subscribers. The only other likely outcome is a buy-out, with ESPN taking over Setanta's liabilities for a token amount.
Sky has a simple choice: let Setanta die, but let ESPN into its market, or let it live and keep ESPN out.
Either way, there will be repercussions. It seems inevitable that the Scottish deal will be renegotiated, with far less money flowing to the Scottish clubs. That could prompt Celtic and Rangers to go it alone, selling their matches separately and leaving the rest of the clubs to struggle on their own (which is what happens in Spain).
There could also be regulatory changes, with Sky's dominance of the market under investigation in the UK. That might involve legislating for more free-to-air sports programming (a suggestion that terrifies sports organisations who depend on TV money), or it might put restrictions on Sky's market share.
All too late, though, for Setanta. From its modest beginnings as a pub broadcaster to the heady days of the Premiership, Setanta made a brave stab at rivalling Sky and almost made it. Its failure has been hastened by recession, but self-inflicted wounds and Sky's unbridled aggression have played the key parts in its downfall.
- Alan Ruddocl
Most fans find Setanta very hard to watch
By Brian Mcnally 7/06/2009
The Football Association should have been squirming with embarrassment as the vast majority of England fans were denied the chance to watch the World Cup qualifier in Kazakhstan live on terrestrial television.
The Soho Square suits showed both their greed and disregard for English football fans by signing a grubby deal that gave subscription channel Setanta exclusive rights to the Three Lions game.
Millions of supporters could not watch their national team in action yesterday because - in their willingness to make a fast buck - the FA ensured that the match was hidden away in a satellite ghetto to which few have access.
To watch the game live meant forking out £12.99 for a monthly contract.
Once again the vast majority of England fans were victims of the FA's folly in giving crisis-hit Setanta a four-year deal.
There are now major fears within Soho Square that Setanta might face total collapse after their failure to make a £3million payment to the Scottish Premier League last week.
The fact that Setanta have hit possibly disastrous financial problems in the first year of that four-year deal indicates that the FA may not have been diligent enough in checking out the channel's financial structure.
Setanta, who also have the rights to FA Cup games, are now locked in crisis talks as they try to put a survival package together to stave off the threat of possible administration.
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Their future was plunged into serious doubt in March after they lost half their live Premier League rights for the 2010-11 season and beyond.
There was another body blow when an attempt to persuade investors to plough another £100million into the company failed - and Sky, from a position of strength, turned down a request for a £50million interest-free loan.
The crunch could come later this month when a £40million payment to the Premier League is due.
The pity is that Setanta again proved last night that, after a poor start, the quality of their football programming has improved beyond all recognition since the season began.
Their lead commentator, Jon Champion, repeated his impressive FA Cup Final performance with a lively analysis of a match that eventually turned out to be a stroll in the park for England.
But like the big-name, big-money studio guests Steve McManaman and Terry Venables (above), Champion must be weighing up his future.
Setanta are in such a precarious position that there is now widespread speculation that last night's game could be their final major broadcast.
If they do go to the wall, there won't be too many tears from the England fans who have been forced to miss vital games because of an agreement based on financial gain, rather than the long-term good of the English game.
UFC/Setanta update as reports suggest administration is imminent
Sunday June 7, 2009 BY Phil Lowe
The prospect of administration is looking increasingly likely for troubled broadcaster Setanta.
The Irish pay-TV broadcaster is struggling to agree as rescue plan with both investors and rights holders and administration could come as early as this week after a meeting on Saturday is said to have failed to resolve matters.
On Saturday, Setanta had failed to pay £3million to the Scottish Premier League in the last payment for rights on last season's games.
Setanta last year signed a four-year deal, extending its exclusive live SPL coverage from 2010 at a cost of £125m.
But the broadcaster has (thus far unsuccessfully) been attempting to renegotiate a number of its contracts because of cash-flow problems.
As previously noted, Setanta are understood to have around 1.2million subscribers - some 700,000 short of the number required to break even.
Saturday's developments could be a major headache for Scottish football, who are heavily reliant on television revenue.
In terms of football rights, the payment was relatively small and Setanta's failure to pay it has caused further concerns over the future of the company.
What happens next remains to be seen although we could have more of an idea in the next couple of days.
But as for what will happen to UFC programming in the UK? Who knows. My take is that a return to Bravo could be on the horizon, however that would almost certainly mean a return to tape-delayed PPVs and whether the UFC (or fans) would be happy with that, I'm not so sure.
Bravo are also one of several channels owned by Virgin Media currently subject to a £160m bid from BSkyB.
Sky themselves could be interested in the UFC, primarily to have another form of programming to sell on PPV and in HD. But whether Sky would be interested in the UFC given the level of coverage they gave Cage Rage is another question, plus as we've reported over the past few months, Sky's current five-year deal with WWE expires in January. Talks are underway on extending that deal and I don't believe WWE would like to be on the same network as UFC.
With terrestrial channels struggling financially, the only other contender I can see bidding for UFC television rights in the UK would be ESPN America.
UFC 99 is only a week away and as things stand, there is a possibility that UK fans may not be able to watch the event live on Setanta Sports.
Latest | June 2009