Troubled Setanta considering possible rescue deal

By DAILY MAIL REPORTER
Updated: 06:09 EST, 12 June 2009

Hopeful: Setanta, about to go into administration, is in last-ditch talks

The two founders of Irish sports broadcaster Setanta are in talks with a potential investor which could prevent the group from falling into administration, a source familiar with the situation said today.

Setanta has been looking for a £50million ($82.52million) investment as it needs to pay looming sports rights payments.

The source declined to disclose the identity of the possible investor.

The source's comments followed a report in the Irish Times which said Setanta founders Michael O'Rourke and Leonard Ryan would put an offer for a majority stake in the cash-strapped business to the company's directors at a board meeting in London today.

The offer would be backed by the investor, a major international group, and would dilute the existing shareholders' holding, the report said.

Setanta declined to comment.

Setanta's board has been engaged in emergency refinancing talks all week and has suspended signing up new subscribers. It hit trouble after signing sports rights but failing to sign the number of subscribers it needed to cover the cost.

The viability of its long-term business model was also thrown into doubt in February this year when it failed to secure its desired number of English Premier League live broadcast packages, a key draw for customers.

Setanta currently holds the rights to show two English Premier League packages, or 46 live matches a season, but it lost out in the auction for the next three-year deal to BSkyB and will only show 23 games per season from August 2010 against BSkyB's 115.

Setanta has around 1.2 million direct subscribers and needs nearer 1.9 million to break even, according to analysts.

The Walt Disney-owned sports network ESPN said yesterday it had no current plan to buy Setanta and the Irish group also failed to reach a wholesale deal with rival broadcaster BSkyB.