Setanta files for bankruptcy protection, says will cease broadcasting shortly

Setanta files for bankruptcy protection

LONDON — Irish broadcaster Setanta Sports filed for bankruptcy protection on Tuesday, saying it will shortly cease broadcasting to customers in Britain after failing to make a number of payments to football organizations.

Setanta, which is backed by private equity firms Doughty Hanson and Balderton Capital, said it has suspended the collection of subscription payments in Britain after appointing accounting firm Deloitte to run the collapsed company.

The company’s international and Irish businesses are not part of the bankruptcy filing and remain on air while Deloitte holds discussions with potential buyers to take on those businesses as going concerns.

Setanta had the rights to screen the English Premier League, FA Cup matches, cricket’s Indian Premier League and the US PGA tour to around 1.2 million subscribers in the U.K. and Ireland.

But it was pushed to the brink last week when it lost its right to broadcast live Premier League matches after failing to meet a deadline on a 10 million pound ($16.3 million) installment payment to the league.

That was swiftly followed by the loss of its rights to broadcast the Scottish Premier League when it also missed a payment to that organization.

“This is a sad day for all concerned,” Setanta chairman Robin Miller said. “Unfortunately, in a difficult and highly competitive market, and despite strenuous efforts by the board and management, it has not been possible to find sufficient additional funds in the time available to ensure its survival.”

Around 200 employees in Setanta’s British operations will lose their jobs, the company said. It employed a total of 420 employees in the U.K. and Ireland.

Setanta’s collapse opened the door for U.S. broadcaster ESPN to gain a foothold in Britain, where it currently draws only small ratings via just two channels, ESPN Classic and the flagship ESPN America channel.

ESPN, 80 percent owned by The Walt Disney Co., moved in swiftly Monday, snapping up the rights for the 46 English Premier League matches next season and the rights for 23 matches in each of the following three seasons, without disclosing the terms of the deal.

The U.S. channel reportedly paid less than the 130 million pounds ($212 million) agreed by Setanta for next season’s rights, followed by 159 million pounds in the subsequent years of the contract.

The deal puts ESPN in the unusual position of competing with British Sky Broadcasting PLC, which is tipped as a potential bidder for the remaining games and which ESPN also uses to reach viewers.

Under the terms of the Premier League deal, ESPN will broadcast the games on BSkyB’s satellite network, which has around 9.3 million subscribers.

Local broadcaster ITV PLC is tipped to gain the right to broadcast up to eight England away friendlies at a previously-agreed price, but all of Setanta’s other rights will be auctioned off.

Setanta said that existing investors were prepared to commit substantial additional funds to the business, subject to improvements in its operating performance, and that it had sought to make significant cost cuts by renegotiating its agreements with commercial partners and rights holders.

However, it said the improvements it achieved were insufficient to ensure that the business could become profit-making.

FA chief executive Ian Watmore said that the FA were not “able to agree on a way forward with Setanta” and would now consider its options “to find the best platform” to broadcast fixtures including England home friendly matches, FA Cup ties, England Under-21s games and the FA Community Shield.

“We remain confident in the strength of these fixtures and expect significant interest from broadcasters wanting to pay for the rights to partner the FA and the England teams,” Watmore said.