Setanta: the Gordon Brown of sports broadcasting

David Crow

20 June 2009

David Crow says the Irish-based football channel — like the Prime Minister — looked a winner during the boom years but failed to attract fans and will struggle to survive

You have to hand it to Michael O’Rourke and Leonard Ryan, founders of sports broadcaster Setanta. Three weeks ago it was hard to find anyone who thought their firm would still be afloat today. Analysts pointed to annual losses of £100 million; the Scottish Premier League complained of missed rights payments; deadlines loomed for £35 million of fees due to the English Premier League. Fears were reinforced when Deloitte was lined up as administrator and Setanta’s call centre refused to sign up new subscribers, while its website announced ‘technical difficulties’.

Friends of O’Rourke and Ryan told me not to underestimate them, however. They were working round the clock to find a way out of trouble. A lifeline appeared in the form of the Russian-American billionaire Leonard Blavatnik, who is injecting £20 million in exchange for a 51 per cent stake. Other investors, including Big Brother-maker Endemol, are also being lined up as part of a refinancing that could raise a further £20 million. The fact that the existing investors — Doughty Hanson, Balderton Capital and Goldman Sachs — are willing to be drastically diluted shows just how perilous things were. Setanta says it’s confident of getting the finance in place, but this is clearly a race against time; if a crucial £10 million instalment is not paid to the Premier League by Friday of this week, it’s game over.

If the Irish duo do pull through, however, it will be an act of survival to rival Gordon Brown’s. And like the Brown regime, what remains will look much diminished. Setanta now has a valuation of around £80 million — from the £1 billion talked of in February — and its business model looks broken; if rescuing it from the brink of collapse was difficult, nursing it to profitability will be far harder.

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