It's panic stations for SPL over Setanta
Scottish football was officially in a state of panic last night as Setanta Sports, the game’s main cash provider, lurched towards collapse, leaving the Scottish Premier League (SPL) administrators and a range of Clydesdale Bank Premier League clubs floundering as they considered sudden black holes in their budgets.
The Irish broadcaster is expected to go off air at any moment and will probably announce today that it has ceased trading. That would leave in its wake a range of television sports contracts — involving football, golf, rugby, boxing and baseball — hanging in the balance.
Setanta’s two founders, Leonard Ryan and Michael O’Rourke, were last night racing against the clock to organise an extra time £100 million rescue package from new investors.
The company had struggled to fulfil recent contractual payments, including one of £10 million to the FA in England, and had proved unable to pay a £3 million instalment due to the SPL as part of its TV deal. Last night the probable collapse of the Irish broadcaster left top-flight Scottish football in tatters and casting around in desperation for a new TV partner.
English football is also facing a shortfall of more than £400 million if the feared collapse becomes a reality. A cash payment of £35 million is due to be paid to the Premier League next week as the final instalment for last season’s coverage. Setanta has one year of a three-year deal remaining to show 46 Premier League games a season, worth £392 million, with another three-year deal worth £159 million to follow.
If Setanta goes off air, other broadcasters, such as Sky, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, could bid for the packages. European regulations forbid Sky from showing all the matches exclusively.
Setanta is also one year into a four-year deal, shared with ITV, to show England internationals and FA Cup ties, worth £150 million. If the company falls, some of these games would also be put out to tender but the deals may not be so lucrative for the FA.
The worst effects of a Setanta collapse, though, would be felt in Scotland. Payments currently due to the individual SPL clubs range in size from £70,000 to nearly £750,000, with the Old Firm obviously taking the greatest hits. Yet Rangers and Celtic can probably withstand such setbacks — it is the smaller clubs who will feel the losses more deeply.
The SPL will hold a press conference today at Hampden Park outlining its plans for dealing with the crisis. The gist of it could be neatly summed up by SPL administrators holding up a placard with the words: “For Sale, Scottish Football. All Bids Welcome.”
The BBC, a previous SPL partner, has already let it be known that it will not be interested in picking up the SPL’s television coverage, and certainly not at the recently renewed Setanta rate — now certainly doomed — of £125 million spread over four years. There also appears to have been little movement in recent days from ESPN, the US broadcast giant that has previously held talks with Setanta about taking over some of its rights packages.
One SPL chairman, who didn’t wish to be named, told The Times last night: “We’ve reached a pretty awful stage now. Most of the SPL clubs have known for some time that the Setanta deal was in danger, but now we really are getting worried. People have talked about some SPL clubs going to the wall because of this [the expected Setanta collapse]. I don’t know about that, but I do know we have a major problem on our hands.”
Yesterday various Setanta employees, including some well-known Scottish broadcasting names such as Jim Delahunt and Rob McLean, as well as a range of pundits including John Hartson and Scott Booth, were digesting the news of the company’s probable collapse. Despite having an estimated 1.2 million subscribers, Setanta admits that the figure is too low to sustain its business model, hence its plunge into crisis.
Setanta had recently committed itself to deals to cover the FA Cup in England, certain Barclays Premier League matches, as well as USPGA golf. For many, the fatal move the company made was in its shared commitment with ITV to a four-year, £425 million deal with the FA to cover the FA Cup and certain England matches. Setanta is believed to be accountable for around £150 million of that arrangement, a sum which has recently proved to be beyond them.
In this context, its deal with the SPL, as damaging as it is to Scottish football, is paltry by comparison.
Setanta’s painful collapse would also have a knock-on effect on the SPL’s main sponsors, the Clydesdale Bank, who may now take a dim view of sponsoring of Scottish football when it is lacking television exposure. The SPL sponsor is waiting anxiously to see if anyone comes aboard to take over the Setanta TV deal in Scotland.
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