The channel will be looking to capitalise on airing two of the world's biggest sports events: the Rugby World Cup and the English Premier League, writes Richard Gillis
Where once it was just another channel to surf through, Setanta is now primed for promotion to the big league. For several years the Irish sports broadcaster has been the ever-ambitious underdog, pitching itself against the giants of Sky Sport and ESPN, and terrestrial heavyweights like the BBC. It's a business story that captures the essence of many sporting rivalries.
Setanta's pedigree was initially boosted when it secured rights to Formula One coverage and slowly its international reputation has grown in these islands and across the Atlantic.
The story of Setanta Sport takes a different turn this month. Sports fans and media analysts have looked on as Setanta built its reputation, which since 1990 has been defined by the daring opportunism of its two founding partners, Michael O'Rourke and Leonard Ryan.
The company is routinely portrayed as a David taking on Goliaths such as Sky, RTÉ and the BBC in the high stakes game that is the international sports rights market. Now, however, it is time for Setanta's potential to bear fruit. The channel will air two of the world's biggest sports events: the Rugby World Cup and the English Premier League.
Can Setanta turn their rights into compelling television? Will their production values match those of the competition? In short, are they any good?
Niall Cogley, chief executive of Setanta Ireland, accepts that it is time for the channel to put up or shut up, referring to September 2007 as "an important moment".
"Investors have been persuaded to buy into the ambition of the company," says Cogley. "And they have been persuaded by predictions about our potential to grow. They will be expecting some significant consumer signs to support those predictions. The phoney war is over."
The promise of Setanta has proved alluring to the international financial markets, and the company has raised up to €400 million over the past two years. Benchmark Capital and Goldman Sachs are substantial shareholders, with half the company's ownership retained by its management team. Founders O'Rourke and Ryan share a 35 per cent stake. About €100 million was paid by Doughty Hanson, owners of TV3, in return for 20 per cent of the company. This valued Setanta at €500 million.
Last year, they sold their share in NASN (North American Sports Network), which they owned with Vulcan Media Holdings, the investment company of Paul Allen, the Microsoft co-founder. This raised about €40 million for the Irish company, which was used to help fund further rights acquisitions.
The relationship with TV3 was further cemented when Setanta sub-licensed the rights to the Rugby World Cup to them. TV3 will screen all Ireland's games live, plus the semi-final and final. It is a move that fulfilled the International Rugby Board's (IRB) directive that every nation's games be available on terrestrial television in the domestic market.
It also served to further irritate RTÉ, who are frozen out of the tournament for the first time since its inception in 1987. But while the capture of the Rugby World Cup is a considerable coup, it comes with a caveat. The IRB ruling undermines the channel's exclusivity and the value of the rights, which includes the 2011 event, is also limited by the presence of ITV in Ireland. The British terrestrial broadcaster will be screening several big games, which will be shown in this country.
Against these factors is the sport's Brian O'Driscoll-fuelled boom, resulting in excellent audience figures, even for non-Ireland matches in the Six Nations.
These averaged some 511,000 viewers - double the previous year and four times higher than four years ago, according to TV Sports Markets, the industry newsletter. Setanta's basic-tier channel, available via the UPC cable platform to 650,000 Irish households, will show 38 matches exclusively live.
In addition to rugby, there is live soccer from the FA Cup and England home internationals from 2008, part of a deal with ITV, which cost Setanta €230 million. Likewise, PGA golf from America was scooped from under the nose of Sky, forming the basis of the Setanta Golf channel. But more than any other single event, it the audacious Premier League land grab that has transformed them from a marginal bit-player to a credible alternative to Sky.
Last May, the company agreed to pay €570 million for two separate packages of Premiership football rights. At a stroke the company ended Sky's monopoly on top flight English club football, one it has enjoyed since 1992.
The cost breaks down to £131 million a year or £8.5 million per match. To make this money back the rights will need to be worked hard.
In addition to Setanta Ireland, the company has become the de facto sports channel of the Virgin cable service, formerly NTL. Last month it claimed 2.5 million new subscribers in Ireland and the UK, 1.8 million of whom are in Britain. The UK total is made up of 1.4 million receiving the Setanta channels for free through Virgin, and 400,000 through other platforms. Setanta also launched a new broadband service, Setanta By Broadband, offering live online coverage of English and Scottish Premier League matches and archive coverage of previous matches. Games shown in pubs and sports clubs will recoup in the region of £200 million. In addition, their Premier League matches will be available on subscription via Freeview in Britain.
Sports television, however, is about more than where to watch. "It is time for us to do justice to the rights we have bought," says Cogley, who knows it takes time for a new channel to build a relationship with its audience.
Formerly head of sport with RTÉ, Cogley has firm views on what he calls, "the principles of theatre" that underpin good televised sport. He feels there is no one fixed approach, citing RTÉ's soccer coverage as an example. "They [ RTÉ] have different people doing different roles," he says. "John Giles is probably unsurpassed in his ability to analyse the mechanics of a game, whereas Eamon Dunphy is fantastic at bringing his own agenda into the studio, the potential for something interesting to happen.
"Sky doesn't cast in the same way, whereas the BBC tries to be more cerebral, and ITV is different again."
The Setanta way will evolve over time, he says, but points out that presenting sport is an inexact science, however much money is spent on the coverage.
"Take the Six Nations this year. There were 25 to 30 cameras in the stadium, but it was still possible to miss two tries. It was a case of trying too hard to impress. We [ Setanta] will strive to remember the basic principle of giving the viewer the best seat in the house."
The quality of Setanta's coverage will be monitored closely by the company's potential suitors. Given the fluid nature of today's media landscape, what happens next is hard to predict.
One endgame sees Virgin taking its current partnership with the company a stage further and buying them out. Whatever the endgame, the story behind Setanta Sports has been entertaining. The question remains whether what they show on TV will be of a similar quality.
