End nearing for Setanta?
Numerous local report suggest that today (Monday) is likely to be crunch day for Irish pay-TV sports broadcaster Setanta. Now the talk is of formal administration, one step from full bankruptcy.
Setanta has appointed liquidation specialists Deloitte to examine all options. Top of the list is payment of £3m that should have been paid to the Scottish Premier League last week. Last day for the £3m cheque to land on the SPL’s doormat is today. The SPL has itself made a distribution payment to its own clubs, which means it is wholly out of pocket if Setanta defaults on its obligations.
Next up is a £35m instalment due to be paid to the English Premier League on June 15. There are also other significant contract obligations, not least to transmission operators Globecast and Arqiva.
Setanta, which launched itself as a rival to BSkyB in 2003, has struggled to make its numbers, and reportedly not helped now by a tougher approach to cash-flow from major funders Doughty Hanson. Setanta is said to need at least a £100m immediate injection to see it through this winter – but the problems are compounded given that its soccer offering is reduced. Existing shareholders are pressing for a major rights re-negotiations with the soccer leagues in particular. They, in fairness, are duty bound to get the best possible terms for their member clubs, and if Setanta ends up in formal administration then the rights may revert to Setanta’s rivals.
The ‘usual suspects’ are reportedly in discussions over rescue terms for Setanta, but players like Disney’s ESPN have already looked closely at Setanta’s books and walked away. Of course, today’s picture might be very different for ESPN and the asking price might be very much lower. BSkyB, meanwhile is quietly waiting on the touchline, looking to pick up fresh soccer rights to help consolidate its own position.