SOCCER ENGLISH PREMIER LEAGUE TV RIGHTS: ENGLISH PREMIER League clubs will find out early next week about the financial health of one of the media groups that bankrolls them with Setanta due to lodge a seven-figure deposit to secure the live rights it won in last week's auction.
Setanta and Sky, which won five of the six packages of live matches on offer in last week’s rights auction, are required to sign a binding agreement by today and lodge a deposit with the Premier League early next week in order to secure their contracts. Having narrowly lost out on the package of 23 Monday night games after submitting a bid around 20 per cent lower than the amount it currently pays, Setanta has approached the Premier League to plead its case in the hope of regaining access.
Executives at the Irish broadcaster had hoped that Sky would entertain the idea of sublicensing the matches but without them Setanta faces real questions about its future. Insiders have conceded that it will be forced into major cutbacks but have suggested it could refocus as a scaled-down operation. While the company is engaged in talks with its investors and carries out a wide-ranging strategic review, executives plan to continue with business as usual and expect the deposit to be paid. However, they will have to convince their private equity bankers, who have sunk hundreds of millions of pounds into the business, that they will eventually be able to see a path to selling or floating the company and making a reasonable return.
Both the Premier League and Sky are believed to be implacably opposed to the idea of re-opening the auction or re-selling the matches to Setanta. Next week’s deadline for lodging a deposit with the Premier League will send a clear signal about whether or not its investors believe it has a future.
According to sources, the deposit is typically set at or just below five per cent of the final rights value. That would mean Setanta having to pay between €5.5 million and €8.8 million, followed by six equal tranches when the deal starts in 2010. It still has at least two instalments to pay on its existing €434 million deal for 46 matches per season, which runs until the end of 2009-10. The payments, due before the season in question starts and halfway through, are equally divided and Setanta is effectively paid up until the end of this season.
Setanta plans to take its case to UK media watchdog Ofcom and competition authorities in Brussels. But Sky would argue that the margin by which it was defeated was so narrow, that Setanta’s error was one of judgment rather than a result of unfair competition.
Guardian Service
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/YVIRIOZQ35EWRPZXR27KGMO6YU.png)