Setanta board in emergency talks to avert collapse
Wednesday 10 June 2009
Setanta could call in the administrators as early as today after the board was locked in an emergency board meeting late last night trying to stave off the group's collapse.
As fears for the group's future intensified yesterday, the website subscriber page stopped working. When potential customers attempted to log in, the page displayed an error message which read "Oops! Something's gone wrong".
Subscribers attempting to access its telephone service were also met with a message saying the service "on this number is no longer in use".
Setanta was unavailable for comment last night, but industry insiders confirmed that the executives, including founders Mickey O'Rourke and Leonard Ryan, were attempting to put together a last-minute rescue plan, the second time the board has come together in two days.
Deloitte, the accountancy and consultant group, is advising the business on a potential restructuring and could step in as administrators as early as today. Should Setanta collapse, the knock on effect for UK sport including football, boxing, golf and rugby would be huge, with the bodies potentially missing out on millions of pounds owed.
Some could be bailed out if BSkyB steps in and pick up some of the rights, while Disney's ESPN has also been linked to picking up UK rights.
The cracks began to show last week as the beleaguered broadcaster missed a £3m payment to the Scottish Premier League. The SPL had hoped for clarity after yesterday's board meeting but it still has not been paid. The broadcaster also owes £30m to the English Premier League.
Setanta has been in talks with its backers in recent weeks, including Balderton Capital, Goldman Sachs and Doughty Hanson, to encourage further investment into the group. One source at a rival group last week said the investors had to invest to save Setanta. "The group has overpaid for some rights and has made some bad decisions in recent years," the source added.
The company runs at an annual loss of about £100m. It has about 1.2 million direct subscribers, but the company underestimated how many it would need to break even. One expert's estimation was a break even point of about 1.9 million subscribers.
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