No rescue deal yet as Setanta turns away customers
Desperate search for new backers as time runs out to save broadcaster
Thursday 11 June 2009
Setanta Sports moved closer to administration yesterday, after the beleaguered broadcaster officially stopped signing up new subscribers, with still no rescue package on the table.
The company even took the extreme step of paying staff at two-week rather than monthly intervals, "to reassure" them as uncertainty grew.
One Setanta insider said the issue was "clearly not yet fixed" but stressed it had not fallen into administration. Rumours of a potential rescue bid from the group's founders have intensified, but there were no official updates last night. The source added that Setanta was waiting on developments from "parties external to the company".
On Tuesday night the subscription service on Setanta's website went down as fears for the company grew. It prompted the company to post an "important customer message" yesterday.
The message read: "In the current circumstances, we have decided to suspend temporarily the acceptance of new subscriptions."
Yet the group underlined it had not gone into administration and was broadcasting as usual. "Setanta Sports management is in the process of attempting to secure the future of the business," the message added.
Setanta's board was locked in emergency talks on Monday. Founders Mickey O'Rourke and Leonard Ryan are attempting a rescue bid, while insiders said there were other options on the table.
Yet time is running out, after the group missed a £3m payment to the Scottish Premier League last week, with a payment to the football body's English counterpart imminent.
It emerged this week that rival BSkyB was not prepared to accept Setanta's pre-condition of a £50m upfront payment for wholesale deal. Jeremy Darroch, Sky's chief executive, told a sports industry breakfast this week that while he did not want to see Setanta fold "our job is not to fund other companies. This is a huge amount of money".
Accountancy and consultancy group Deloitte are overseeing a restructuring programme at Setanta. The group is expected to step in should the company be put into administration.
Yesterday, BT Vision, the telecoms group's pay-TV service, said it was "closely monitoring" the parlous situation at Setanta and had halted offering the service to new customers.
BT said: "We are in constant dialogue with Setanta, and all other relevant parties to ensure we provide the best possible outcome for BT Vision customers." The group sells Setanta as a standalone deal to its customers, and also throws the channels into its premium television packages.
Virgin Media, which offers Setanta free to customers of its top package, said it was monitoring the situation. This comes just a day after Dan Marks, the chief executive of BT Vision which has about 430,000 customers, surprised the market as he quit the group. Mr Marks is understood to be frustrated that the regulator has not tackled Sky's domination of Premiership football.
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