Setanta Sports fell into administration yesterday with the loss of at least 200 jobs after failing to secure a rescue package that would allow it to keep broadcasting in the UK.
After weeks of emergency talks and narrowly staving off collapse 10 days ago, the Dublin-based broadcaster called in Deloitte yesterday afternoon. It collapsed with debts of about £300m.
The group stopped broadcasting to its 1.2 million direct subscribers in Britain last night, and its operations in this country will be wound up over the coming weeks. The Irish and international businesses, which have about 200,000 viewers, are still operational and Deloitte is in talks to sell them.
Neville Kahn, a partner at Deloitte, said: "After a huge effort by the Setanta board, management team and its backers, it has not been possible to save the UK business." Founders Mickey O'Rourke and Leonard Ryan are helping with the administration process.
Sir Robin Miller, who was brought in as chairman of Setanta earlier this year to help overhaul the business, conceded it was "a sad day for all concerned". He said: "Unfortunately, in a difficult and highly competitive market, and despite strenuous efforts by the board and management, it has not been possible to find sufficient additional funds in the time available to ensure its survival." The company has axed 200 of its 420 staff in the wake of the news, predominantly from the UK.
Setanta said yesterday that existing investors had been prepared to inject more money into the business as long as its operations improved. The group set about slashing costs, including attempts to renegotiate its agreements with commercial partners and rights holders, but it was not enough.
"Although progress was made, the improvements achieved were insufficient to ensure that the business could become profit-making," the group said. The administrators added that the investments made by Setanta's backers had been largely wiped out.
Toby Syfret, analyst at Enders Analysis said: "People just didn't see a future for it, and thought it would suck up too much money. The basic problem was they didn't get enough subscribers to make the business model work." This comes after the group nearly saved itself. Mr Kahn said: "Ten days ago it was close to having to file but it found people willing to invest." Len Blavatnik, a US-based billionaire offered £20m for a 51 per cent stake in the group. He walked away over the weekend.
The collapse comes just days after the English and Scottish Premier League bodies clawed back their broadcasting rights – Setanta's crown jewels – after it missed routine payments.
It still owns the rights to England internationals and the FA Cup. Yet the administrators said the Football Association is likely to follow suit and reclaim the rights packages as Setanta cannot afford to make any further payments to maintain them.
What happens next? The future for subscribers
Setanta stopped collecting subscriptions from customers in the UK after it went into administration yesterday. Direct subscribers paid on a monthly basis, which means that few will lose anything more than a few pounds, especially as the collapse came at the end of the month. Deloitte said subscribers could try for a refund on their last payment from their banks.
"The company will not be able to refund any money as it doesn't have any," it added. Broadcasters that offered Setanta as part of a package like Virgin Media are likely to reduce their prices, according to Toby Syfret at Enders Analysis.