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8 years ago
Setanta board holding emergency refinancing talks
June 10, 2009 / 11:12 AM / 8 years ago

Setanta board holding emergency refinancing talks

3 Min Read

LONDON, June 10 (Reuters) - Emergency talks to refinance Irish sports broadcaster Setanta were being held on Wednesday, according to a source familiar with the situation.

Speculation has swirled for days that the Irish group would be placed into administration but the source said the board was continuing to pursue options and that its closure was not imminent. Setanta declined to comment.

The Irish Times said Setanta's chances of survival had even appeared to improve as it looked at a "number of live options" to rescue the group.

The talks are being led by its founders Michael O'Rourke and Leonard Ryan, who started the business after charging fans to show an Irish World Cup match which was not available on British channels in a pub in London in 1990.

It grew quickly, acquiring the rights to show sports from soccer to boxing, cricket and golf around the world and is now struggling to meet the payments.

Sales to new subscribers via the website or phone appeared to be closed and BT said on Wednesday its pay-TV service was no longer offering Setanta channels.

The long-term viability of Setanta's business model was thrown into doubt in February this year when it failed to hold on to the rights to show its desired number of English Premier League soccer matches, a key draw for viewers.

Setanta currently holds the rights to show two English Premier League packages, or 46 live matches a season, but it lost out in the auction for the next three-year deal to BSkyB BSY.L and will in future show only 23 games per season against BSkyB's 115.

The failure to win the rights prompted Setanta to conduct a review of its business and attempt to renegotiate rights payments with a range of sporting bodies.

It missed a 3 million pound payment to the Scottish Premier League last week and faces a more than 30 million pound payment to the English Premier League, according to media reports.

Were the group to be placed in administration, the majority of its sporting rights would be returned to the sporting bodies for auction, but analysts believe they would reach a much lower price than before.

BSkyB could acquire some rights, although not all, due to competition rules, while Disney's (DIS.N) sports service ESPN could be interested again after failing at the previous auction.

As part of its review, Setanta approached BSkyB to offer its sports channels as wholesale in exchange for 50 million pounds ($81.95 million). BSkyB Chief Executive Jeremy Darroch told a Sport Industry Breakfast on Tuesday that the plan was rejected as BSkyB is a broadcaster and not a bank.

Setanta is a privately backed company whose shareholders include its management team and institutional investors. ($1=.6101 Pound) (Reporting by Kate Holton; editing by Simon Jessop)

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