Setanta bust! FA face £100m crisis
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Setanta bust! FA face £100m crisis after TV company is forced to pull the plug
English football spiralled into the first stages of a financial crisis last night as Setanta's rescue bid ran out of time. The Premier League had given the sports subscription network until the close of business yesterday to come up with the latest instalment of £10million - or they would reclaim the two packages of 46 games from their current deal and sell them elsewhere.
The end for Setanta came with a terse Premier League statement at 18 minutes past six which 'terminated their existing licence with immediate effect'.
The major losers are likely to be the FA, who could face a £100m black hole in their finances. They are just concluding their first season in a four-year deal for England and FA Cup rights. Setanta's share was £150m and the FA have no hope of recouping anything like that sum.
It is understood that Sky Sports, Channel 4 and the Disney-owned ESPN have already alerted the Premier League about their interest in buying the two packages available for next season. ESPN, who have been circling the PL for some time, are the most likely successful bidders, although Channel 4 would bring live action from the Premier League to terrestrial TV for the first time.
The future of Setanta remains uncertain, as does the rest of their sports portfolio and their one set of 23 PL games for the three years starting with the 2010-11 campaign.
Administration now looks inevitable following the collapse yesterday of Russian billionaire Len Blavatnik's proposal to buy 51 per cent of the business for £20m through his Access Industries media arm.
Turn off: Setanta are on the verge of collapse after losing Premier League contract
That plan, delivered at the 11th hour a week ago, had saved Setanta from calling in the administrators at the start of this week and brought initial renewed confidence that fresh investment would arrive on the back of Blavatnik's funding.
But the Premier League's desire to start working on their television schedule for next season following the publication of the fixture list meant they would not extend their deadline despite Setanta's hope that the Access Industries' accountants could have completed their due diligence given a few extra days.
Elsewhere in the TV industry, it was suggested that Blavatnik's people had allegedly discovered huge tax debts owed by Setanta. It was claimed as much as £50m was owed to the Inland Revenue and further millions in Luxembourg.
Ironically FA chief executive Ian Watmore had already renegotiated their deal with Setanta but it was always dependent on the Premier League's approach.
Co-partners ITV Sport will pick up the available England games at a highly discounted £2m-a-match. But Watmore's hardest task will be reselling the FA Cup for anywhere near Setanta rates.
It is not just the top of the English game that will be devastated by Setanta's imminent demise. A £3m-a-year loss of revenue will be just as critical to the Blue Square Premier, while the Scottish Premier League have already had to bail out clubs after Setanta reneged on the latest instalment of their £45m deal. If the Setanta money is not replaced, Kilmarnock and Motherwell are likely to go into administration.
There will be few takers, if any, for Setanta's golf and boxing coverage, while English rugby's Guinness Premiership will now regret ditching Sky for Setanta the season after next.
Setanta released a statement last night saying the sports channels would stay on air over the weekend at least.