'Terrific' FA helps Setanta stay in the game
Monday 04 May 2009
Setanta Sports last night tried to allay fears it is heading for collapse by praising the governing bodies to whom it owes money for "terrific" cooperation in ongoing talks about rescheduling payments. Setanta's current portfolio of rights includes a third of live Premier League matches, plus FA Cup and England games, the Scottish Premier League and PGA Tour golf.
The Ireland-based broadcaster also screens major fights, and in December signed a deal to become the primary UK rights holder for Guinness Premiership rugby from next year. The company's cash-flow difficulties have been common knowledge for months, since it secured just one package of Premier League rights from 2010 onwards, which throws into doubt the viability of its business model.
But it was suggested yesterday that the situation has become so acute that one deal in particular – the joint contract with ITV worth £425m for England games and the FA Cup – is in imminent danger as Setanta seeks urgent new funds from shareholders including Balderton Capital, Doughty Hanson and Goldman Sachs. Setanta's part of the FA Cup and England package is worth £150m, and while a large sum was paid up front, the firm was slightly late with a £10m payment due in March, leading to concerns at Soho Square about future payments. The worst-case scenario for governing bodies would be if Setanta went bust.
This would leave an income deficit of hundreds of millions across several sports and deprive the market of a serious competitor to Sky. But Setanta's director of sport, Trevor East, told The Independent: "We've been in productive talks with our rights partners including the FA and they have all been terrific, without exception. We're still talking about what can be achieved, but there is no question of us defaulting on any payments."
East declined to comment on any specific deals but it is known that Setanta wants to renegotiate the key terms of some deals, including scaling down the time and value of its next £125m SPL deal from 2010, and altering payment schedules on others.
Setanta's current Premier League rights cost £392m, and around £40m is due this month. The League is privately comfortable at altering dates for payment, as long as full payment is guaranteed. Greater nervousness at the FA is possibly a result of its historically shaky finances.
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