HAVING BEEN on something of a losing streak in recent months, Irish pay TV broadcaster Setanta Sports gained a positive result yesterday when Scottish Premier League bosses agreed to take a sizeable cut in the £125 million live rights contract.
It’s just one of a long list of sports rights packages that Setanta is seeking to renegotiate in light of its changed financial circumstances. Neither side was divulging details but it’s understood that the SPL clubs have agreed to take a £20 million drop in their fee from Setanta.
Last year Setanta agreed to pay £125 million for live SPL rights for four seasons from 2010. This was roughly double the size of its previous deal and was seen as a coup for the Scottish clubs.
The world has changed considerably since that deal was struck, and loss-making Setanta is looking at every means of preserving its cash flow.
On Wednesday, Dundee United chairman Stephen Thompson told the BBC that he hoped clubs would be realistic about the rights deal. “There is no point in looking to where we were last summer. We’ve got to move forward.”
Setanta will be hoping other rights holders share this pragmatic view.
The Irish company is seeking to reduce it total rights bill by 15-20 per cent and in some cases renegotiate some of the deadlines for its various staged payments.
Setanta’s rights include the Uefa Champions League, PGA golf from the US and Indian Premier League cricket.
Its main prizes are the English Premier League and the FA Cup. I understand that talks on renegotiating these deals are proving more problematic.
Premier League rights are a hot ticket and its clubs aren’t minded to take a haircut on their lucrative deals with Sky and Setanta. Its costs a lot to keep Ronaldo and Fernando Torres in frocks. That said, the various sports bodies and the European Commission won’t want Setanta to go to the wall given that it’s Sky’s only real competitor at present.
Setanta urgently needs to restructure its finances. Reports suggest it needs to find €100 million in the short term – a big downpayment is due to be paid to the English Premier League in about a fortnight.
Deloitte and Close Brothers are shaking the bushes for new money, but if that fails to materialise existing major shareholder Doughty Hanson is expected to step up to the plate.
This is akin to a late-season relegation dogfight for Setanta.
Let’s hope it avoids the drop.
