The Competition Authority is expected to rule within a fortnight on the sale of a stake in Setanta Sports to the giant US insurance company AIG.

A spokesman for the authority said it would assess whether the deal substantially lessened competition in the market. All media mergers have to be submitted to the authority and if it is not satisfied a more detailed phase two investigation may be carried out.

The value or size of the stake has not been revealed by Setanta. A spokesman refused to comment, saying until the authority considered the deal no details would be disclosed.

Setanta has been seeking to bring in fresh capital to the business for some time and the company's two founders, Mr Leonard Ryan and Mr Michael O'Rourke, could now see their stakes substantially diluted. Depending on the value of the transaction, both could be in line for a significant windfall.

AIG, while mainly an insurance and financial services company, also invests in media businesses via a sports and entertainment fund. It is not clear whether the deal will involve AIG directors taking seats on the Setanta board.

The various Setanta companies have been undergoing significant change in recent times and the production arm of the group was recently sold off as part of an MBO. The purchase price was believed to be between €1 and €2 million, with Mr Ryan and Mr O'Rourke the main beneficiaries.

Setanta's main emphasis in Ireland is its sports channel, headed up by former RTÉ head of sport, Mr Niall Cogley.

Earlier last year, the company won the rights to the Scottish Premier League.

These games are now available in Ireland and Scotland. Setanta is reputed to have paid €50 million for the rights.