IRISH PAY TV broadcaster Setanta Sports is like a football club fighting the drop at present. The matches are coming thick and fast and it needs a couple of big wins if it is to stay in the top flight.
This week there have been reports of ITV taking a stake, of a £3 million missed payment to the Scottish Premier League (SPL) and of a rebuff from rival Sky to a proposal that it make an upfront payment of £50 million as part of a deal to wholesale the Irish company’s sports packages.
According to the BBC’s online sport service, SPL chairmen will meet today in Scotland to discuss its new £125 million four-year rights deal with Setanta, which the Irish group wants to review.
One unnamed SPL chairman gave this frank assessment: “There is a certain period by which Setanta will have to pay up [on its missed payment] and we are talking weeks, not months.”
Since losing one of its two packages of rights to the FA Premier League in England in February, Setanta has been trying to bridge a £100 million gap in its finances. Some of its rights have been renegotiated, while reports suggest that its backers, which include private equity groups Doughty Hanson and Balderton Capital, will chip in another £50 million.
What about the balance?
Sources tell me that talks have taken place in the past few weeks in London with Disney-owned sports broadcaster ESPN, which has made no secret of its desire to land live rights to English soccer.
Investing in Setanta would be one way of doing this. Then again, ESPN might just let events develop on the basis that it might get the rights anyway if Setanta comes a cropper.
Setanta insiders say the company is not far off break-even. Its Irish arm is already profitable.
A slimmed-down group based on showing fewer Premier League games from 2010 could probably be sustained by 1.4 million subscribers, rather than the 1.9 million estimated by some analysts. It has about 1.2 million already, although some migration of customers is likely with fewer games to show.
A £35 million payment is due to the English Premier League in the middle of June.
Time is running out for Setanta to find a solution. Relegation is not an option.
