EVENTS AT Irish pay television broadcaster Setanta Sports over the next 12 months are likely to be as absorbing as any of the football or rugby matches it screens.
Setanta last week lost one of its two live English Premier League rights packages for the three-year period from August 2010. From that date, it can show just 23 games a season, or fewer than one a week – hardly a compelling package for fans being asked to pay a subscription of £12.99 (€14.40) a month (at today’s rates). By comparison, Sky will have 115 matches a season.
It has emerged that there were serious divisions within Setanta about how it should structure its offer. Board members decided to bid at a deep discount to the £392 million it paid in 2006 while Setanta’s executives, a couple of whom have worked in senior roles with Sky, wanted to lodge a big offer.
Setanta is now pursuing talks with the English Premier League about sub-licensing matches from Sky, an unlikely scenario. It is also talking of taking its case to the UK sports minister and Europe if necessary. This all has a ring of desperation about it.
Separately, Setanta has hired Close Brothers to help it raise £159 million for the new rights.
Industry sources suggest its private equity backers – Balderton Capital and Doughty Hanson – have little appetite to pony up more cash. Securing new investment in the current climate will be hugely challenging.
So where does Setanta go from here? Analysts suggest it needs 1.9 million premium subscribers to break even – it currently has 1.5 million. Losing Premier League games will surely see it shed customers. Every 100,000 subscribers is worth about £10 million in revenue.
It racked up losses of £230 million in the past two years. A slimmed-down Setanta with lower rights aspirations is one option. The alternative doesn’t bear thinking about.
