Setanta ‘murdered by rivals’

Chris Forrester

Troubled pay-TV sports broadcaster Setanta was murdered by its main rival BSkyB, according to a report in the influential Financial Times business newspaper. However, the report also squarely cites Setanta’s owners and management as having to shoulder much of the blame for its current difficulties, having flown too high and bid too strongly for some TV broadcast rights.

Comparing Setanta’s demise with a cop show murder, the FT says: “If Setanta does expire, it won’t look good for BSkyB. But there will be no reason for Ofcom to assume a crime has been committed, even if a body is found. A failure in a market is not necessarily a sign of market failure – it could be the reverse. In that case, obliging BSkyB to sell premium content to rivals at regulated prices would help keep everyone on the straight and narrow, but capital punishment – antitrust action or forced structural change – would be unnecessary.”

The FT reminds readers that nobody forced Setanta to bid its high prices for secondary sports action – and yet not having enough cash available to secure that which really mattered: the (English) Premiership soccer rights.

It is widely reported that Setanta had tried to offload an equity stake in its business, including offering shares to British Telecom and Disney-owned ESPN.

In the event of a total collapse at Setanta it is assumed that the administrator/receiver would hand back the TV rights, or – depending on the contractual terms in place – offer them for sale to third-party broadcasters. Players such as Virgin Media already carry Setanta output. Setanta has stopped selling subscriptions, an action taken as a precursor to some sort of receivership. However, Europe’s pay-TV rules prevent a single broadcaster controlling all the transmission rights of key events, such as the Premiership.