Tuesday, 9 June 2009


Setanta 'is on brink of collapse'

Setanta faces administration "within days" unless backers provide more funds to pay £30m it owes to the English Premier League, reports have suggested.

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.

'Weaker' matches

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.

Falling values?

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 that 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.

One SPL club has told BBC Scotland that income from Setanta alone accounts for 33% of their income, while another said it was 20% for his club.

"With cuts already being made for next season, the loss of revenue of 20% would undoubtedly have a knock-on effect on and off the pitch," said one a source.

It is feared that the loss of cash from Setanta could force as many as three SPL clubs into administration.


Full story from the BBC.

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