There were some conflicting messages over the weekend, but it seems that Setanta has survived the FAPL’s call for a £30m payment that was due last Friday.
According to reports in the Guardian (which are contrary to the BBC website), the sports digital TV business Setanta has met the Premier League payment that was due and agreed a new payment schedule.
“The league received £10m on Friday and Setanta will pay a further £10m this Friday. A final £15m sum has been deferred until later this summer, despite indications from the Premier League that it would not consider renegotiating or deferring payments. However, the Premier League has reserved the right to put the final year of Setanta’s three-year deal, which kicks in at the start of the 2009-10 season, out to tender if it believes the rescue is foundering. Industry sources said it could begin the process of re-auctioning those rights before Friday by inviting offers from other bidders.”
This follows an agreed injection of cash by Access Industries, the Russian media group led by Len Blavatnik, who already owns 3% of Setanta and has a controlling stake in Top Up TV. Mr Blavatnik is said to have offered £20m to help Setanta plug its current funding gap in return for a 51% stake in the business, though the deal has yet to be finalised.
Setanta started taking on new customers again over the weekend, which seems to support the likelihood of the Access deal completing. As a result BT Vision, BT’s digital TV service which retails Setanta’s sports package, has also resumed sales of Setanta.
The BT Vision source said yesterday: “Following positive discussions with Setanta Sports today, BT will resume sales of Setanta Sports to BT Vision customers,” said BT tonight. “This is in line with other broadcasters. We will continue to work closely with Setanta during the coming weeks and will provide further updates to all our customers as appropriate.”
But we are not convinced that Setanta is out of the woods yet, either in the short or longer term. In the short term, there is still a huge risk in play, with large amounts of money requiring payment in a very short space of time. And in the longer term, it is not clear how Setanta plans to improve its business model. It seems to us that the amount of money raised is a short term lifeline, but does nothing to improve Setanta’s fundamental problems and loss making business model. Setanta remains well short of the 1.9million customers experts believe it requires to breakeven and it’s not at all clear what its strategy is to get there. In addition, the events of the last few weeks will not have helped one little bit.
If you want help to compare digital TV and sports packages, you can visit us at www.simplifydigital.co.uk