The big loser from the recent FAPL rights auction appears to be Setanta Sports.They currently have the rights to show two FAPL packages of games: the Monday night games and the Saturday afternoon package.
After last week’s auction they were outbid for the Monday night games by Sky.So from the start of the 2010 football season, Setanta’s broadcasted games will be cut in half.In our view, this makes their current £12.99 per month price point unsustainable and is likely to lead to many lost customers.This is at a time when, churn is already rumoured to be high and with only 1.5m subscribers, they are still short of their required break-even customer base of 1.7-1.8m customers.
Setanta clearly recognise the damage the FAPL rights loss has done, as it emerged earlier this week that they are trying to secure an additional £159 million in financing to attempt to buy the package, or the rights to some of the matches in it, back from Sky.
The respected city analysts Enders Analysis said “We… envisage mass subscriber defections,” “With live Premier League football such a jewel in its crown, the fear is that Setanta could easily lose upwards of a third of its current subscriber base. At the very least it has to review its entire business plan and survival cannot be taken for granted.”
However Sky’s gain of the Monday night games comes as a real bonus to the millions of football fans in Sky digital TV homes.It is unclear, what (if any) price increase Sky will charge to show the extra games, but it is likely to be significantly less than the incremental £12.99/month that Sky customers have to pay currently to watch the Setanta FAPL games.