Setanta Sports not for sale, founders tell staff

Staff at Dublin-based pay television broadcaster Setanta Sports were told yesterday by management that the company is not for sale.

This followed reports at the weekend that Setanta had received an unsolicited offer from a European media group before Christmas that valued the business at about £1 billion.

In an e-mail to staff yesterday, the company's founders Michael O'Rourke and Leonard Ryan said: "There is frequently speculation of this sort regarding Setanta - our continued progress has made us an attractive proposition and a valuable asset.

"But we have not put the company up for sale, and remain focused on continuing to build the business through further subscriber and content growth.

"If we receive offers we will look at them - our adviser and shareholder Goldman Sachs will act for us in this regard - and we will let you know of any significant developments if and when they occur."

The note to staff added that Setanta looked forward to "another big year" in 2008 "having achieved so much" last year. "We have to take the company on to the next stage in 2008 and we are all committed to doing so," it added.

Setanta declined to comment on reports of a bid but it is understood that its owners are open to an offer at the right price. Setanta's founders and management own about 25 per cent of the business between them. Private equity groups Balderton Capital and Doughty Hanson, which owns TV3, own about 20 per cent each of the broadcaster.

Other shareholders include Goldman Sachs, Davy private clients, Enterprise Ireland and EchoStar Holdings in Colorado.

The identity of the bidder for Setanta has not yet emerged, although UK-based Virgin Media - which formerly traded as NTL - and sports broadcaster ESPN, which is owned by Disney are seen as the likely frontrunners. ITV in the UK has also been linked with a possible offer.

Setanta has about 1.1 million premium subscribers in Ireland and Britain and about three million customers when deals with cable operators UPC here and Virgin in the UK are included.

Revenues this year are projected at about €500 million. The company is loss-making and is not expected to reach break-even until the last quarter of this year. This would be ahead of expectations.

The Irish company is thought to have debts of about €150 million and has received about €430 million in the past few years.

Setanta was founded in 1990 by Mr O'Rourke and Mr Ryan. It began by broadcasting Irish soccer internationals and GAA games into pubs and clubs in Britain and the US.

It has significantly expanded its operations in recent years snapping up the rights to the English Premier League, the SPL in Scotland and PGA golf in the US.

It paid £392 million for live rights to English Premier League soccer. It teamed up with ITV last year to secure rights to live FA Cup and England matches.