Premier League ends TV rights deal with Setanta

Sports broadcaster fails to meet deadline to pay for football screening rights

The Premier League terminated its contract with the troubled Irish sports broadcaster Setanta last night after the group was unable to negotiate a deal with investors that would have allowed it to pay a £10m instalment it owed for screening rights next season.

Setanta had spent most of the last week trying to secure a deal, but after setting a deadline of the end of yesterday, the league issued a statement saying it had run out of patience. It said: "It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such, the existing licence agreement between us has been terminated with immediate effect." A spokesman for Setanta declined to comment.

Worried that Setanta would default on the payment, the Premier League opened an informal tender process for new bidders last week, which it had promised to close had Setanta reached an agreement.

There is likely to be a scramble to meet Monday's tender deadline for the 46 games Setanta had the rights to broadcast. Damion Potter, the director of communications at ESPN, the US sports broadcaster, said before last night's announcement: "We are aware that the Premier League has issued an invitation to tender for which the rights may or may not go to auction next Monday. As we have always said, we continue to be interested in rights where they are available and where they make business sense." Sources suggest that ESPN is eager and able to launch a bid, having lost out to Setanta's original offer in February.

Sky Sports, which already has the rights to 92 games next season, could also bid, but it would be restricted to 23 of Setanta's 46 matches under European competition rules. Separately, Setanta owes £3m to the Scottish Premier League under a different agreement for games broadcast last season. The Scottish association has not yet imposed a payment deadline.

Setanta had stopped taking new customers earlier this month, but restarted sales last weekend, with the Premier League saying as late as yesterday that there were "positive noises" coming from the broadcaster. The group, which now faces an uncertain future, has 1.2 million subscribers, short of the 1.9 million it is understood to need to break even.

Reports that the group was close to a deal circulated on Friday before the Premier League eventually pulled the plug. The talks centred on Access Industries' £20m offer for a controlling 51 per cent stake that would have passed ownership to the group run by the US tycoon Len Blavatnik. The deal had been agreed in principle, with discussions centred on bringing in new minority backers. The prospects of an agreement were also helped last weekend when Setanta agreed a new payment schedule with the Premier League. The original deal had included the payment of a £30m lump sum, but that was broken up into three £10m payments, the first of which was paid last weekend. It was the second tranche that Setanta was unable to find, with a third £10m fee payable in July.

The Premier League had said on Monday that it would "provide Setanta with as much time as possible to rearrange its finances, [but] the start of 2009-10 season is only two months away. Accordingly, the Premier League has notified Setanta that if necessary the existing licence agreement between us will be terminated, coming into effect if Setanta does not meet certain contractual requirements of the Premier League on or before Friday".

Setanta also has the rights to broadcast the semi-professional Blue Square Premiership, Indian Premier League Cricket and Guinness Premiership rugby.