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i just ask why?...the Setanta business model needs 1.9 million subscribers to break even...a long way from the 1.2 million they have at the moment

£20³¾?

They're due the EPL £30m by Monday, and have already defaulted on a £3m payment to the SPL. But even if Setanta have £13m of their own lying around somewhere, that doesn't exactly help them when it comes to making the next lot of payments.

Also, I know of a lot of people who have cancelled their direct debits as a result of the uncertainty: that could hit Setanta pretty hard come next month.

If the Freeview people are reading this, they'll be rather annoyed. There are no pay TV channels on Freeview, as Freeview refers to the free to air channels on Digital Terrestrial. Top Up TV should be described as the pay TV component of Digital Terrestrial.

It's of academic importance I realise, but Freeview has gone to great lengths to keep its distance from TopUpTV to avoid confusing consumers after the On/ITV Digital disasters.

Aside from that minor niggle, I really enjoy the insight this blog gives - thanks for all your efforts.

I don't see £20M sorting this. They owe more than that to the SFA and Premier League.

Setanta's in a really interesting position - it has, in effect, a state-sponsored licence for many of the rights it holds. The government would not allow Sky to get a monopoly position in sports broadcasting, and so Setanta can get away with bidding a lower figure than the market price for some of its coverage.

It does still need to pay more than the terrestrial broadcasters will, but that gives it plenty of space to negotiate downwards. New entrants to the market would either need to start out with a subscriber base big enough to compete with Setanta's 1.2 million viewers, or else absorb losses for a number of years until they can reach that target.

So Setanta is quite a valuable asset for someone who can jump in and make a good deal with the sporting rights-holders. £20m seems like a cheap deal.

4,

Its not mean to.

First they buy the company (Controlling stake), then they put their plan together to resolve the issues. Presumably they feel that there is value to be had for a 20m investment subsequently gaining a controlling interest.

Personally, I think they are buying into a service that may struggle to raise enough money via subscriptions in order to perpetuate the payments to the various football associations.

I cannot see the Pay-for-TV market expanding any time soon, and with the growth of Internet coverage, many folks are turning away from the 'deals' that BSkyB, Setanta and others offer, and keeping the weekly/monthly costs down.
Blavatnik might feel that there is an upside to the deal, but he may have a long wait.

Due to paying too much for the weaker sets of Premier league matches - Setanta have set a price point that not enough people have been prepared to pay.

To compare; when BSkyB marketed the extra games under the PremierPlus banner they were charging £50 upwards (dependant on when you signed up) for the whole season of about 40 games - or £5 per match on a pay per view basis.

Setanta's £13 per month is not regarded as good value by many football fans - some of whom would be happy paying per match - but not committing to an ongoing charge.

As well as providing some cash - the prospective new owner would be well advised to look at some more creative pricing for the product . . .

Robert, coming soon
cheers!

Blimey RP you haven't worked this hard in ages! Sterling effort.

I'm sure you mean pulling the plug as opposed to rug (presumably from under their feet), however given your frenetic pace today it matters not. Indeed i'm sure it won't be long until we also see you playing for Real Madrid, or snapped up by Sky. Now there's a thought.

As to Setanta- they really are in a spot of bother and I really can't see £20m being enough. There are others waiting in the wings (pardon the pun) who will swoop for the existing rights, ESPN to name but one. There is clearly another agenda here.

I disagree with #5- state sponsored digital football coverage? Not quite. BskyB aren't interested so its doubtful that the competition commission will become involved. What would be interesting would be if ITV and/or ³ÉÈË¿ìÊÖ came together and did a deal for the rights given they'd be distressed- but with these short term funds, and the fact that the contracts are soon to expire this seems unlikely.

As to the future- you're neglecting to consider the existing commitments that Setanta already has...including the £3million default to the SPL and forthcoming £30million English premier league money. I suspect that the real deal isn't to purchase the 51% of Setanta, that's just for starters.

The real deal being sought, and future success, will depend on and see Mr Blavatnik successfully re-negotiate the existing contracts. The underlying business simply isn't profitable therefore the liabilities must be downsized. With such a short period left on the contracts, and in the current climate- the associations may accept revised deals in the hope that the economy will pick up in the next 18months and the frustration of those such as ESPN will continue to grow to such an extent that higher prices for rights when they come up for renewal. This would also appease the fans who will not want to pay twice.

Interestingly enough Setanta also have some additional sporting rights within their portfolio which might look attractive to outside investors depending on re-negotiating the contract values.

Mr Blavatnik is rolling the dice... but not with Setanta, with the F.A et al.

Soon there will be just the ³ÉÈË¿ìÊÖ and the rest will be owned by foreign oligarchs! This situation is not satisfactory.

Sky controlled by a foreigner with his own agenda. Now, Setanta. Top-up TV already owned by Blavatnik. All that is needed is the financially troubled ITV to be sold off and this leaves Five owned by the German Bertelsmann Group via RTL (perhaps the least offensive organisation of the lot and possibly soon also to own Channel 4!).

There will be just the ³ÉÈË¿ìÊÖ and the rest will be controlled by foreigners with their own agendas. If Ofcom is worth its money it should do something about this situation before we find that we only have the ³ÉÈË¿ìÊÖ and foreigners!

Good to know that choice of channel in the sports arena has a stay of execution.

Now here's hoping one player or the other will show something other than football. (Unless the ³ÉÈË¿ìÊÖ want to jump in with some BBL coverage... ;p)

I was suprised when Setanta started because taking on Sky at their core competence is not an easy thing. Sky has a deeper pocket and Setanta took a bigger bite than they could chew.

People are canceling their subscriptions until they sort themselves out but bad news for cash flow.

Frankly, I find it disgraceful that we are expected to pay to watch national games of football etc. With the olympics coming up, we shouldn't be expected to buy some sort of tv package simply to be able to watch our national teams compete.

Serve them right for being so greedy. Get decent sport back into the free channels and available to all-at a time when many people are having to watch their pennies very carefully, having to pay to watch any sport is insulting. And so much for encouraging our couch potato electronics-mad offspring to play a sport.

Access to sports coverage should never be dependant upon what you can afford.

"There are no pay TV channels on Freeview, as Freeview refers to the free to air channels on Digital Terrestrial. Top Up TV should be described as the pay TV component of Digital Terrestrial."

Seconded.

Please fix the article - you'd think someone who works for the bbc (part of the Freeview consortium) would actually know the basic facts and not use totally incorrect terminology.

If it was on Freeview you wouldn't have to pay for it would you?

I don't care what happens to Setanta because it doesn't cover motor sport and I'm far too intelligent to be a football supporter.

@15 - you mean a bit like Sky have been doing for years and years without any competition? (and I assume you mean world cup rather than the olympics?)

18

Absolutely like Sky, except I understand that some sport is free-the expense being the purchase of the package.

Not everyone can afford Sky now either.

National teams playing should be viewable without having to pay anything. I thought that's what we paid out TV licences for!

I have enjoyed Setanta Premier games BUT the new owner whoever they be need to get a grip of customer service as I believe they`d increase their customer base if they didn`t have the customer service skills of Easyjet and Ryanair.

I think Setanta is dead in the water. The crucial thing here is not as the business is now (which is dying) but how it will be at the end of next season. from the start of season 2010 it will only have 23 English Premier games not 46 as it has now. I'm sure Sky would like to see it survive as a weak rival though. During the credit crunch people are now looking for ways to save money. The advent of Freesat will (in time) hit Sky too I'm sure as non-subscription HD channels become more readily available.

Setanta is just more dead wood for the fire, there is only a certain amount of money to go around, its hard enough for most people to pay there electric and gas every month, (as much as I love the game) there is no point in freezing just to be able to watch
a bunch of overpaid lads kicking a football around etc

oh sorry I forgot the recession is over

Considering their reliance on Setanta and their ambitions in the TV market with BT Vision feeview/IPTV hybrid, I'm gobsmacked BT haven't taken a punt and bought Setanta. With BT's solid retail business and, despite BT Globals issues, bucketloads of cash this could be a very good large scale sport rival to the Sky Jugganaut.

If Setanta go down, and ESPN don;t UK launch, Sky pretty much have UK Sports to themselves.

Setanta resumed taking subscriptions a couple of days ago!!!!!
I have been a subcriber but although their programme content was entertaining their customer service(I use the term loosely)was/is atrocious!!!

Why is your blog not accessible from the ³ÉÈË¿ìÊÖ Business news page now for international web users.
I've had to connect via my companies H.Q (UK) proxy server to gain access.
Why does the ³ÉÈË¿ìÊÖ think that international visitors want different news to U.K residents? Surely the migration tail of recent decades means there are many U.K citizens living off-shore. Can you ask that this be re-considered, or, some option put in place (as used to be) to select the U.K version of your site, with advertisements if need be.

£21 Million for 51% is cheap...but, rather like buying a football club itself; it's the fee charged to accquire the rights to the debt really.

Why I feel one can say it's 'cheap' comes in more clearly I think, should Manchester United, Arsenal, Chelsea, Liverpool, and perhaps soon Manchester City head down the road that Real Madrid and Barcelona have gone--and control their own TV rights.

The world's greatest league has been good for Sky as it bundles all games together and the recent 'unbundling attempts' have been clumsy and failed.... with Sky getting the worthwhile games and Setanta picking amongst the leftovers.

However the Premier league (a little like some MPs) has no real reservoir of mass affection to call upon, being a repository for inflated remuneration; so if the clubs named were to make the claim that they must maximise income to compete with the AC Milans and Barcelonas...I don't think most viewers, fans, consumers of football...whatever...would raise a finger in protest.

Fat cats crying 'don't let the fatter cats leave us behind!" isn't a rallying cry that will rally anyone.

At that point ITV digital will probably be reformed to have the rights to matches involving 'the rest' (only joking!) while the bigger players will be able to be more evenly spread...even the ³ÉÈË¿ìÊÖ may be able to gain Arsenal for themselves.....!

For Setanta to be able to be at that poker table with infrastructure in place, £21 Million seems cheap and £100 Million wouldn't be that much less cheap...

"To coin a phrase...", surely the phrase has already been coined. And "I am hearing..." Dear, oh, dear.

Who would want to invest in a busted flush like Setanta unless there were some ulterior motive, like getting your hands on Premiership football through the back door? Most of the other bits like US golf, Racing UK and Scottish football are like pick and mix at Woolworth as far as TV value is concerned. Tiger rarely appears in the matches they broadcast, the top racing meetings go to ³ÉÈË¿ìÊÖ or Channel 4, and other than Rangers and Celtic average gates of the other matches attract gates of less than 10,000 and are usually a dreary affair. I used to pay Sky £50 for an additional 50 matches, but got so bored that I stopped and only watch the matches in the normal package now. To make up for my football "deficiency" through not buying Setanta I watch Spanish football to supplement my "habit".

If the sums dont add up it is because there were not enough people buying Setanta before the recession. Now they have no chance unless they can find a couple of Irish philanthropists with deep pockets and little knowledge of economics.

MMMMMMMMMMMmmmmmmmmmmmm? Seems like a BAD move to me!

~29 Clean that m key; I think its sticky.

Forget football, its a satellite T.V network, if the ongoing limited liabilities are liveable with then they are prob thinking of the future ( Thats tomorrow and the time after that) and the possibliliteis inherent in the license and technology.

Could be good deal but maybe not depending on length of recession or if ARMAGEDION comes. That still tickles me.

Is it significant that he is like so many of the Russian oligarchs, or does't the Null Hypothesis and deviations from what's expected (i.e. chance) matter anymore? If the UK state had been 'liquidated' but its assets had found its way into the hands of a very tightly knit endogamous group, would we not a be a bit worried that we were not observing true liberal-democracy at work but a coup?

Did they just have a big in 1989 as predicted? The trouble with world is that, as Michael Meacher so rightly said a few years back, they really do exist - cf. once widely expressed about International Bolshevism and 'social-fascism' being the Janus twins of capitalism/anarchism ;-).

Having a choice is great, but it costs - it's not a good time to 'cost'

In addition, I'm guessing that unless Setanta continue to offer ridiculous amounts of money to retain the rights, come renewal time some sporting bodies will not feel too happy to jump into bed with them

This may be a lot of money for something without much of a future

Good it also will mean that the Venture Capitalists will have lost over £200 million so that is also good as they are at the heart of what is wrong with Setanta.

Its great news and the Directors of Setanta have been working very hard to save the situation.

#11 John_from_hendon : You could always sign up to Virgin Media...

Is it significant that he is Jewish like so many of the Russian oligarchs, or does't the Null Hypothesis and deviations from what's expected (i.e. chance) matter anymore?Could be good deal but maybe not depending on length of recession or if ARMAGEDION comes. That still tickles me.

Robert Peston:

I am very glad, that Blavatnik did the correct thing....Offering
SETANTA a financial lifeline....


=Dennis Junior=

This comment was removed because the moderators found it broke the house rules. Explain.

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I think this is not going to help much.