Pay-television company Setanta has held a fresh round of talks with private equity firms in a bid to raise up to £100m following its failure to retain both of its Premiership rights packages beyond 2010. Analysts think that the attempted fundraising may be greeted with some scepticism as it comes amid question over how the TV company will reach even break-even on its subscriber model. In February Setanta won the auction for only one of the six available live broadcast packages for Premiership football the season after next.
Pay-television company Setanta has held a fresh round of talks with private equity firms in a bid to raise up to £100m following its failure to retain both of its Premiership rights packages beyond 2010. Analysts think that the attempted fundraising may be greeted with some scepticism as it comes amid question over how the TV company will reach even break-even on its subscriber model. In February Setanta won the auction for only one of the six available live broadcast packages for Premiership football the season after next. That outcome forced the Irish-based group to review its whole business model which was based on financing bids for TV rights with fresh capital, before recouping it through subscriptions. The global financial crisis clearly makes it more diffucult to obtain the capital, particularly when the return is uncertain. Setanta has considered handing back some of its portfolio of sports rights and is looking closely at the value of all of its assets. Setanta owns rights to the Scottish Premier League and the non-league Conference and shows some England internationals and FA Cup ties.
Setanta, which employs about 1,000 people in the UK, is backed by Goldman Sachs, Balderton Capital and Doughty Hanson. Doughty Hanson, which owns about 20 per cent, and Goldman Sachs, which owns about 5 per cent, are believed to have written down the value of their stakes. The founders and management of the company own about 20 per cent of the business which is not yet profitable. In the bidding auction, Sky is understood to have outbid Setanta by about ten per cent. Although perfectly permissible under competition law agreements, the fact that BSkyB won five out of the six packages, one more than it currently owns, does make it close to being a de facto monopoly. However, BSkyB produces a very high quality product and the funds it has provided have been key to the success of the whole Premiership model.