After much speculation about Setanta’s financial future, there are reports this week that the sports digital TV provider has now actually defaulted on a payment of £3m to the Scottish Premier League.  This shows just how bad Setanta’s cash flow position must be and may herald the beginning of the end for the current Setanta customer proposition.

Neither the broadcaster nor the SPL would comment on the matter but one source has revealed an email was sent to Setanta staff in Glasgow confirming the payment had not been made and that no comment was to be given under any ­circumstances to the media.

Setanta’s future had been seriously undermined following its failure to retain half of the 46 English Premier League games it will screen live until the end of next season. From 2010-11 it will show only 23 English top-flight matches a season.

This default comes as reports in the FT suggest that Setanta is considering a radical reform of its business model that would mean ditching its retail customers and becoming a wholesale supplier.

Claire Enders and Toby Syfret of Enders Analysis said in a note on Setanta’s cash crisis that the participation of BSkyB would be a key to the success of a scheme that was “the one escape route from Setanta’s predicament”.

The note says: “The sum total of £125m in annual cost savings by 2011 comfortably exceeds the current estimated annual operating loss of £90m in Setanta’s UK operation. On balance, we believe that the switch to a wholesale-only model leaves Setanta with a fighting chance, and it is vital it happens quickly.”

A person familiar with the company’s strategy said: “Setanta has been considering a wholesale future because obviously, having lost 23 PL games, the business model as it has existed comes in to question”

This may mean that Setanta’s digital TV customers are left in the lurch before the start of the new football season and will need to work out where they need to go to get their sporting fix.  Most likely is that they will need to subscribe to Sky if they do not already, and the “Freeview plus Setanta” option will no longer exist.

Written by Charlie

Another day and another update on the Setanta saga.

It seems the Irish broadcasters immediate future is looking healthier with news today that they have just met a scheduled payment of around £50m to the English Premier League.

The latest payment means that Setanta is now up to date with their payment schedule and can start focussing on their long term survival.

Initially, the Premier League could’ve had cause for concern after Setanta applied for more time to pay the £50m. The reasoning behind the request was to address their cash-flow crisis but, the broadcaster managed to pay the lump sum before they passed the deadline.

Setanta’s footballing future is looking brighter than some.

With one bill paid, Setanta’s next important deadline is this August when the first instalment of the rights to the 07/08 Premier League season are due to be paid. Understandably, the FA are also looking for concrete reassurances concerning their other £150m deal before the new season begins.

Setanta have been treading water since losing out on most of the rights to the 2010-2013 seasons but to their credit they have installed new management and have made strategic cut backs to their core business, without having to cut back on the quality of their TV packages.

With that in mind, Simplifydigital say that the best place to catch the Premier League is on Sky but, Setanta do still have the rights to one of the six packages offered so, if you’re keen about football it’s worthwhile combining both Sky and Setanta when choosing a digital TV package.

Written by Chris

Further reports on Setanta’s future have emerged today.

The reports suggest that the big wigs at the Scottish Premier League (SPL) and Setanta are sitting down today to possibly renegotiate their 4 year deal that was struck last year. The deal, worth £125m, was to begin in season 2010/11 and run for four years. However, the Irish broadcaster is reportedly keen to reduce the annual payment and the length of the contract.

The Irish - Scottish connection is set to continue on Setanta.

The SPL are expected to agree to a renegotiated deal as long as Setanta don’t try and renegotiate again further down the line. The consensus is that due to the current financial instability in all things Football, a renegotiated deal is seen more superior than no deal at all.

If you’re a regular reader of our blog you will notice that much has been made of Setanta’s future ever since they lost one of their package rights to show the Barclays Premier League. The loss of such a viable deal has forced Setanta to rethink their business model and renegotiate deals, not just with the Footballing Gods, but also with the exec’s at Golf’s PGA and the Cricketing heads at the Indian Premier League.

Stay tuned to the Simplifydigital blog for more info…

Written by Chris

Setanta, the pay digital TV service, has to raise up to £100m from investors and restructure its existing contracts with sports rights holders in order to prevent bankruptcy, according to reports in the papers this weekend. Sir Robin Miller, the former Emap chief executive, has recently joined the group to oversee this huge task and only has a matter of weeks to deliver.

Setanta’s problems really came to light when it lost out in a bidding war for FAPL games in February this year - and lost 23 of its total of 46 live FAPL games to Sky.  This created a crisis of confidence among investors who were spooked by Setanta’s apparent inability to raise sufficient funds to make a competitive bid.

This week, Setanta will meet Scottish Premier League representatives to continue negotiations over a reduction in its existing contract and a new £125m deal due to start in 2010.  And the next £10m installment to the FA is due next month, with a payment of around £35m due to the Premier League immediately following the end of the season.

The key question is what does this mean for Setanta customers?  Luckily for them, these problems are occurring at the end of the football season, so should the worst happen, the rights holders should have time to ensure that the live games are passed onto another broadcaster before the start of the new season.

The two key slugs of live games in question are the 60 Clydesdale Premier League (Scottish Premier League) games and the 46 FAPL live games for the 2009-2010 season.  Though there is of course also a lot of other very attractive football, golf, rugby, horseracing, and boxing content.    

Rights holders for all these sporting events will be developing fall –back plans should Setanta fail, as they will want to ensure at all costs that their content actually gets broadcast.  So Setanta customers should get to see all Setanta’s sport next season, but it is not at all clear who they will need to subscribe to, to get it.

Written by Charlie

Setanta Sports has joined the likes of Sky, Eurosport and ESPN and created their very own on demand service.

Swarmcast, who is a major player in the live internet sports market have teamed up with the sports broadcaster to design their Setanta-i service which (depending on location) will give the user access to all of Setanta’s main channels.

Before you can start viewing Setanta’s channels you must first download the Microsoft Silverlight and Autobahn plugins from Setanta’s site. The plugins to enable your PC to view their content. After you have successfully installed the programs you can subscribe online and start viewing.

A monthly payment of £7.99 will give you access to Setanta Sports 1, 2 and Setanta Golf. Setanta Sports News is free of charge.

Setanta is set to become more global than ever.

Setanta have been in the news of late for securing just one English Premier League package for the 2009-2010 season onwards after Sky outbid them for 5 out of the 6 packages available. But despite this fact and unbeknown to many people in the UK is the fact that Setanta is still a large presence in the world of sports broadcasting. Their name is recognised in parts of the world including the USA, Canada, the UK, Ireland, Africa and Australia.

With this in mind it makes perfect sense to offer a platform that will allow the subscriber to watch their team play live no matter where they are in the world.

Like more information on Setanta or any other digital TV, broadband and home phone package? Then give one of our resident experts a call on 0800 1388 388 or click here to use our unique requirements tool.

Written by Chris

It was reported in the Telegraph yesterday that Setanta’s failed to meet a £10m payment to the Football Association this week, as it tries desperately to renegotiate all its rights deals.

Technically Setanta has more time to pay the FA, but seems to view this withholding of payment  as a negotiation tactic.  But the FA are highly unlikely to let Setanta renegotiate their £150 million contract, especially as it would set a precedent for the £275 million ITV deal.

The crisis at Setanta has been brewing for a long while, but was exacerbated by Setanta’s failure last month to retain both the packages of Premier League rights that it presently owns. It paid £155 million for one package of rights but missed out on the second by just £15 million.

Setanta’s business model requires it to spend enormous sums to retain rights to popular sporting events (mainly the Premiership, Premier Rugby, the US PGA Tour and the Scottish Premier League).  It then has a race against time to build and maintain its subscriptions over the time period, before the rights run out and have to be renewed again with another huge payment.

As a result, it depends on two private equity backers, Balderton Capital and Doughty Hansen, for its viability. And it appears that their patience is wearing thin – hence their decision not to provide enough cash for Setanta to win the second Premiership package.

So Setanta now needs to maintain its existing customer base with just 23 Premier League matches a season.  It can potentially cut back on the 12 channels it offers, but it currently charges consumers around £13 per month for the privilege of subscribing on a non-contract basis. So customers can churn with just 30 days notice.

There must be a real danger of Setanta’s business unwinding as customers exercise their right to churn following the start of next Premiership season.  So customers should enjoy Setanta while they can.  Whilst it is highly unlikely that it will fail in the short term, its medium term future does seem very bleak.

Written by Chris

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.

Written by Charlie