Post by derbiean on Jun 20, 2009 15:08:52 GMT -1
Clubs and governing bodies could lose millions of pounds in television revenue after Setanta Sports failed to meet a deadline to pay £10 million to the Premier League. As a result, the League terminated its contract with the broadcaster, pushing it to the brink of collapse.
Setanta’s live rights to 46 Barclays Premier League matches next season will be sold to new bidders. That loss would almost certainly prove fatal to Setanta, which had pinned its hopes on a rescue by Access Industries, a conglomerate owned by Len Blavatnik, a Russian-born American oligarch.
However, Access has pulled out of a deal to save Setanta, which is likely to enter administration. While the Premier League is confident of recouping all the money it would have received from Setanta when it resells the rights, the FA faces a headache because the broadcaster also holds the rights to England home friendlies, the FA Cup and the Community Shield as part of a £425 million, four-year deal with ITV that runs until 2012.
The FA said that it had reached a solution with Setanta over their contract, but it had been contingent on the Premier League also finding an agreement with the broadcaster. “We are very disappointed with the news,” Ian Watmore, the FA chief executive, said. “We await developments, but remain confident of the attractiveness of our broadcast rights going forward.”
Setanta released a statement late last night, which said it would “consider its options” over the weekend. “In the meantime, Setanta’s sports channels continue on air,” it said.
Under the terms of ITV’s deal with the FA, it would pick up eight England friendlies between now and 2012 if Setanta collapses. The FA would try to resell its other rights — including England Under-21 matches — to different broadcasters but would struggle to attract the same price in the present economic climate.
Advertising revenues are down and potential bidders are short of cash. ITV is cutting its budgets and the BBC has little left to spend on live sport, having splashed out on Formula One and the RBS Six Nations.
Despite the Premier League’s bullishness, it too may find itself taking a hit in the pocket when it examines offers from new bidders next week. Under European Commission competition rules, the League cannot sell all its matches to one broadcaster. Sky, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, holds four of the six available packages for next season, so would only be able to add 23 games to its portfolio. That leaves ESPN, the American company, as the most likely other bidder.
Another problem for the Premier League is that Setanta paid £159 million to screen 23 live games for three years from 2010-11. One compensation for the top flight is that overseas rights deals are expected to reach record levels in the coming years.
A Premier League statement read: “It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such, the existing licence agreement between us has been terminated with immediate effect.”
Setanta paid £392 million to show 46 live games a season from 2007 to 2010. It has an estimated 1.2 million subscribers. Bidding for the rights closes on Monday and the League is likely to make a quick decision.
Setanta missed a £3 million payment due to the Scottish Premier League this month. Blue Square Premier clubs will be worried, because they earn about £70,000 a year from Setanta, which also has deals for Magners League rugby union, golf’s PGA Tour in the United States and Indian Premier League cricket.
Setanta’s live rights to 46 Barclays Premier League matches next season will be sold to new bidders. That loss would almost certainly prove fatal to Setanta, which had pinned its hopes on a rescue by Access Industries, a conglomerate owned by Len Blavatnik, a Russian-born American oligarch.
However, Access has pulled out of a deal to save Setanta, which is likely to enter administration. While the Premier League is confident of recouping all the money it would have received from Setanta when it resells the rights, the FA faces a headache because the broadcaster also holds the rights to England home friendlies, the FA Cup and the Community Shield as part of a £425 million, four-year deal with ITV that runs until 2012.
The FA said that it had reached a solution with Setanta over their contract, but it had been contingent on the Premier League also finding an agreement with the broadcaster. “We are very disappointed with the news,” Ian Watmore, the FA chief executive, said. “We await developments, but remain confident of the attractiveness of our broadcast rights going forward.”
Setanta released a statement late last night, which said it would “consider its options” over the weekend. “In the meantime, Setanta’s sports channels continue on air,” it said.
Under the terms of ITV’s deal with the FA, it would pick up eight England friendlies between now and 2012 if Setanta collapses. The FA would try to resell its other rights — including England Under-21 matches — to different broadcasters but would struggle to attract the same price in the present economic climate.
Advertising revenues are down and potential bidders are short of cash. ITV is cutting its budgets and the BBC has little left to spend on live sport, having splashed out on Formula One and the RBS Six Nations.
Despite the Premier League’s bullishness, it too may find itself taking a hit in the pocket when it examines offers from new bidders next week. Under European Commission competition rules, the League cannot sell all its matches to one broadcaster. Sky, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, holds four of the six available packages for next season, so would only be able to add 23 games to its portfolio. That leaves ESPN, the American company, as the most likely other bidder.
Another problem for the Premier League is that Setanta paid £159 million to screen 23 live games for three years from 2010-11. One compensation for the top flight is that overseas rights deals are expected to reach record levels in the coming years.
A Premier League statement read: “It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such, the existing licence agreement between us has been terminated with immediate effect.”
Setanta paid £392 million to show 46 live games a season from 2007 to 2010. It has an estimated 1.2 million subscribers. Bidding for the rights closes on Monday and the League is likely to make a quick decision.
Setanta missed a £3 million payment due to the Scottish Premier League this month. Blue Square Premier clubs will be worried, because they earn about £70,000 a year from Setanta, which also has deals for Magners League rugby union, golf’s PGA Tour in the United States and Indian Premier League cricket.
