SETANTA SPORTS founders Leonard Ryan and Michael O’Rourke are working to a weekend deadline in their last-ditch effort to rescue the ailing pay-TV company from the brink of administration with a £40 million (€46.68 million) refinancing deal.
Although telecoms operator BT and Disney-owned ESPN are also said to be mulling investment proposals, Setanta confirmed yesterday that it had stopped accepting new subscriptions as it seeks to avert collapse.
Frantic efforts to raise new investment represent but one strand of Setanta’s bid for survival.
Unable to meet its financial commitments, the company is trying to renegotiate the terms of sports rights contracts it holds.
The securing of discounts on those contracts, seen as a precondition for Setanta’s viability, are crucial to the firm’s prospects of raising new investment.
Having agreed revised terms with the Scottish Premier League and the US PGA golf tour, Setanta is seeking discounts from the Football Association in Britain on rights its jointly holds with ITV to to broadcast FA Cup matches and England international games.
New terms with the English Premier League are unlikely as they would set a precedent for a renegotiation with the league’s dominant contract-holder, Sky.
Following the adjournment of a Setanta board meeting on Tuesday, the deadline intensifies pressure on Mr Ryan and Mr O’Rourke as they seek to bridge a gap of up to £10 million in the funding available to them to refinance the business.
With more than £30 million falling due to the English Premier League this month after Setanta missed a £3 million payment last week to the Scottish Premier League, discussions on a rescue deal are said to be difficult.
At present, Setanta’s founders are working on proposals to rescue the entire business, whose biggest operations are in Britain. If they fail to raise enough money, they will try to buy out Setanta’s Irish unit and an international unit that broadcasts into the US, Canada, the Caribbean and Australia.
It is understood there has been no firm proposal from ESPN or BT. In a further sign of mounting pressure on Setanta, BT yesterday cut off access to the channel for its broadband subscribers in Britain. However, sources close to Setanta insisted this manoeuvre did not suggest any cooling of BT’s interest in the business.
In a statement on its website, Setanta said its management was “in the process of attempting to secure the future” of the business. “The company has not gone into administration,” it said.
“All 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 suspend temporarily the acceptance of new subscriptions.”
Customers who pay Setanta by direct debit, credit card and standing order were told not to cancel subscriptions.
“Your contract with Setanta Sports is still in operation and your Setanta television service is still available according to the terms of your agreement.”
