Outlook looks bleak for Setanta

SETANTA Sports, the Irish-founded sports broad-caster, could go into administration within the next couple of days.

The company’s board held a crisis meeting yesterday to decide on its immediate steps after attempts to raise funds to meet payments to both the English and Scottish premier leagues failed.

While weekend reports suggesting the company could cease broadcasting within days seem wide of the mark, such an outcome is a real possibility down the line. In the meantime, however, accountancy giant Deloitte is expected to be named as administrator to the firm this week.

Such an outcome could result in the sale of the broadcast rights Setanta has, at heavily discounted prices.

Earlier this year, Sky Sports won five of the six British television transmission rights packages for the English Premiership for the autumn 2010 to summer 2013 tranche, effectively slashing Setanta’s share of the British sports broadcasting market in the process.

Setanta has only around 1.2 million subscribers across Britain and Ireland, while a figure of closer to 1.9 million is seen as necessary for the company to just break even financially.

Setanta has been looking for fresh capital since the beginning of this year to allow it meet payments for broadcasting rights. The company is estimated to be losing around £100 million (€115m) a year.

Just last week, Setanta refused to comment on reports that it had missed a £3m payment owed to the Scottish Premier League (SPL) relating to its rights to transmit live games.

The SPL has had to pay its member clubs their share of that money out of its own funds.

A previous £10m missed payment to the Football Association in England – relating to coverage of the FA Cup – which was eventually paid, was not, Setanta claimed, a sign of it being in financial trouble.

The broadcaster still owes the Premier League in England a £35m rights payment by next Monday.

The London-headquartered Balderton Capital (which is headed by former Esat Digifone chief, Barry Maloney), private equity house Doughty Hanson (which also owns TV3 here) and Goldman Sachs all have stakes in Setanta and the latter two recently wrote down the value of their investments to zero over concern for the business model.