Setanta difficulties could affect TV package - NZRU

By Greg Stutchbury

WELLINGTON (Reuters) - The financial difficulties faced by troubled Irish broadcaster Setanta could affect the size of the new television contract for the southern hemisphere's expanded rugby competition, the New Zealand Rugby Union has said.

Setanta has been locked in emergency refinancing talks in the last two weeks and had suspended signing up new subscribers. It hit trouble after failing to secure the number of subscribers needed to cover the cost of its sports rights.

While Setanta was never likely "to be a viable bidder" for the television rights from SANZAR, the southern hemisphere's governing body, if the broadcaster collapsed it would have an adverse effect, NZRU chief executive Steve Tew said.

"If they do fall over then what it does do is it releases a whole lot of sports rights back into the market and absorbs money that a company like BSkyB or the BBC might have used in the United Kingdom," Tew told reporters on Friday. "It doesn't help."

Tew also said that SANZAR had changed their approach on the rights package that is to begin in 2011.

Previously, the entire package had been sold to a single broadcaster but this time it had been segmented and costed individually in an effort to create competition amongst broadcasters, he said.

Companies would bid on the rights to live games and delayed broadcasts as well as to new technologies such as online and transmission on mobile telephones.

MORE COMPETITION

The documentation would be presented to the current broadcasters News Limited, which is owned by Rupert Murdoch's News Corp. by June 30.

They had 60 days to analyse the package and respond with a price for the rights, which SANZAR then could accept or reject.

"Then if that fails we can go to market. Our drive is to get as much competition into the market as we can, within broadcasters and products."

Despite the desire to introduce a competitive process and there being indications of competition within the product segmentation, Tew admitted that News Limited's Sky Television had an advantage within New Zealand.

"We would like to be in a position that professional sport is in the U.S. where there are channels tripping over themselves to bid for content.

"But in the end a broadcast partner has to have capability in terms of capturing it and broadcasting it.

"And in this country there is only one platform who can do as many games as we play at the weekend."