Setanta investment written down

TWO OF Setanta Sport’s biggest shareholders have written down their investments in the Dublin-based pay TV broadcaster following its recent loss of a valuable package of rights to live Premier League football in England.

Private equity group Doughty Hanson, which owns Irish terrestrial broadcaster TV3, and financial services group Goldman Sachs are both believed to have written down the value of their stakes in the business to zero following concerns about Setanta’s business model.

Doughty Hanson is believed to have invested about €120 million in Setanta in 2006, the year that the Irish broadcaster broke BSkyB’s stranglehold on live Premier League football. This is thought to have given it a stake of just more than 20 per cent and valued Setanta at up to €600 million.

Goldman Sachs is reported to hold about 5 per cent of Setanta directly but has advanced substantial sums to the business by way of payment-in-kind loan notes.

Setanta has invested heavily in its Premier League coverage and the recent loss of one pack of rights is expected to result in the business being slimmed down. It could also affect Setanta’s 1.5 million premium subscriber base.

Sources said the write-downs reflect mark-to-market accounting rules and not the actual value of Setanta were it to be sold.

Doughty Hanson and private equity group Balderton Capital, which also owns about 20 per cent of the business, are believed to be calling the shots at Setanta.

The two groups are reported to have overruled senior executives in relation to the bids it lodged for the lucrative Premier League rights with the result that they were outbid by Sky for one package.

Setanta secured rights to show 23 live games on Saturday evenings for three years from August 2010 for £159 million. This was 20 per cent below what it paid to win the rights in 2006.

It also emerged recently that Setanta is seeking to renegotiate its four-year £150 million contract with the Football Association for live FA Cup and English international rights. It recently missed a £10 million instalment due under that deal.

Setanta made a loss of £114.9 million in 2007.