Sports broadcaster Setanta is fighting for its life as a new management team holds urgent talks to raise cash and slash the amount it pays for sports rights. The company, which has 1.2m customers and broadcasts Premiership and England international football, faces an uncertain future unless it can raise up to £100m this month from shareholders including private equity firms Doughty Hanson and Balderton Capital. Accountants at Deloitte could be appointed as administrators if negotiations fail.
Sports broadcaster Setanta is fighting for its life as a new management team holds urgent talks to raise cash and slash the amount it pays for sports rights. The company, which has 1.2m customers and broadcasts Premiership and England international football, faces an uncertain future unless it can raise up to £100m this month from shareholders including private equity firms Doughty Hanson and Balderton Capital. Accountants at Deloitte could be appointed as administrators if negotiations fail. The Irish company has to find funding for a payment of £35m to the Premiership due on May 15th. Some rights partners such as IPL cricket are said to be considering reducing the value of contracts, but they want evidence that Setanta has a future. Shareholders want to see that the company can cut costs so that it can remain a viable business before putting in more cash. Only the Football Association, which splits FA Cup games and England’s home internationals, between Setanta and ITV. is understood to be digging in its heels.
Setanta is also trying to re-negotiate contracts that have yet to start. At a meeting with Scottish Premier League clubs this week, the company will try to cut the length and value of a four year deal worth £125m due to begin in 2010. The company was dealt a heavy blow when it won the rights to screen only 23 Premiership fixtures per season from 2010. While a recession makes home entertainment more viable in some ways, subscribers may decide to drop or not take up the complementary and less attractive package from Setanta whilst retaining their BSkyB contract. One possibility is that Disney, which bid unsuccessfully for Premiership matches earlier this year, may acquire Setanta in a fire sale.
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