Setanta to dump retail pay-TV?
Setanta, the Irish pay-TV sports broadcaster, is reportedly looking to dump its retail operation and turn itself into a wholesale supplier of sports coverage.
The report, carried in the Financial Times, but using an Enders Analysis note on Setanta’s cash crisis, says that the upcoming (English) Premiership season is going to be extremely difficult for Setanta. The broadcaster has lost 50% of its current TV Premiership rights, and Enders suggests that the lack of Premiership coverage will only add to Setanta’s losses, stated as £100m ($164m) a year. Setanta has some 1.1m subs, but Enders says it needs 1.9m to break even.
Setanta has spent the past few months attempting to raise fresh cash – stated at £100m - or to sell a portion of itself to the likes of ESPN.
Enders says: “On balance, we believe that the switch to a wholesale-only model leaves Setanta with a fighting chance, and it is vital it happens quickly.” The proposal would see Setanta withdraw from its retail model, and in its place expand its wholesale operation. Enders suggests that Setanta could ‘save’ some 50% of its current operating expenses. “The sum total of £125m in annual cost savings by 2011 comfortably exceeds the current estimated annual operating loss of £90m in Setanta’s UK operation.”
What is crucial here is the response it gets from BSkyB. Only BSkyB has the muscle to promote and sell a retail sports offering to its 9m-plus subscriber base.
Yesterday, June 2, it was reported that Setanta had “defaulted” on a £3m routine payment to the Scottish Premier League