Setanta stays afloat
June 12, 2009
Setanta co-founders Michael O’Rourke and Leonard Ryan have won additional breathing space to try to push through a last minute refinancing rescue package to save the company from going in to administration.
The Irish pay-TV broadcaster’s next pressing deadline is a £30 million (E35m) payment to the English Premier League due next week.
Setanta’s founders are working through a number of options, thought to include raising £40 million in new investment and looking at selling some, or all, of its international operations in Ireland and the US.
The company needs £100m to secure its future but its City backers, including private equity houses Doughty Hanson and Balderton, have refused to make more than £50m available. The latest rescue effort is being led by the company’s advisers, investment bank Close Brothers and accountants Deloitte.
Setanta, which missed a £3m payment to the Scottish Premier League last week, is also understood to have held talks with BT and ESPN over investment in the company. BT Vision, the broadband TV venture, said that as a “precaution” it was suspending sales of Setanta Sports subscriptions.
Other partners including ITN, which produces the broadcaster’s rolling news service Setanta News, and Virgin Media, a joint venture partner in the Setanta Sports News service, are both “monitoring” the situation.
If the company goes into administration, Disney-owned ESPN is regarded as the most likely buyer for parts of the operation.
ITV, with which Setanta jointly owns the UK rights to the FA Cup and England’s home football internationals, could also benefit if the pay-TV business goes under.Under the terms of the FA deal, ITV would reportedly pick up rights to eight England friendly internationals at a significant discount on the estimated £5m Setanta is thought to have paid for each match.