Once Riding High, Setanta Sees Its Fortunes Slide
By Kevin Hilton
The fortunes of many businesses have changed dramatically in the last year. In the sports-broadcasting market, it is Setanta that is facing the most ignominious fall. In April 2008, the Irish-owned business was on a high, with rights to English and Scottish Premier League and FA Cup coverage, and speculation was rife that BT, ITV, and ESPN were in the running to buy it. Twelve months on, and Setanta is in danger of going into administration.
Setanta has built up its business gradually since humble beginnings in 1990, when founders Michael O’Rourke and Leonard Ryan hired a venue in west London to show the World Cup clash between the Republic of Ireland and Holland after the BBC and ITV decided not to show the game in the UK. Setanta, named after a character in Irish mythology, then established itself showing Gaelic sports but later moved into the mainstream and, in the past five years, has aggressively bid for football, rugby, and boxing rights in an attempt to challenge the satellite and cable supremacy of Sky.
This policy appeared to be working, but, earlier this year, Setanta won only one package of English Premier League rights for the 2010-13 seasons, as opposed to the two it holds now. Setanta has 1.2 million subscribers, far fewer than the 1.9 million needed for it to break even. This, combined with the huge sums it still owes football rightsholders, has put increased pressure on Setanta’s cash flow.
Setanta owes £30 million to the English Premier League and £3 million to its Scottish counterpart. If the broadcaster were to fail, the rights would be taken back by the owners, which would then look for new buyers.
Representatives for Setanta said no comment was being made at this time. A similar response came from Deloitte, the accountancy and auditing consultancy that is apparently on standby to handle Setanta’s affairs if it does go into administration.
Today (June 9), Setanta announced that it is taking no more subscriptions. A quick trip to the Website to check this and clicking on the “Subscribe now” button came up with the message “Oops! Something has gone wrong…” Something has gone wrong indeed.