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Setanta Sports headed towards financial collapse
By Zach Arnold | June 7, 2009
I wrote a short article about this topic that should be appearing at MMA Memories soon.
Will European MMA fans not be able to watch UFC 99 from Germany? That’s one of the many questions coming this week.
If you hear the phrase “headed towards administration,” it means collapse for the network.
Topics: Media, MMA, UFC, UK, Zach Arnold | 15 Comments » | Permalink | Trackback |
Setanta are in huge trouble. I would be surprised if they get through the next 3 months as this is the time when everyone cancels there subscription as the Soccer season is finished.
i would be suprosed if they make it to the end of the month… they have a 3 million pound payment to the scottish premeir league that they are having trouble meetin, much less a 35 million pound payment to the EPL…. unless ESPN steps in and gives them cash for equity, they may be toast… i’ve seens scenarios where the rights would revert back to the sports orgs but also seen where they woulg go back up for auction… so not sure what will happen there…
Actually administration in the UK is pretty much the same thing is Chapter 11 bankruptcy in the US. It’s a non-liquidating attempt to reorganize the debts and operations of the company so that they can resume operations, and in my cases they can continue operating while under administration.
It is in some ways different though, mainly technical issues. The company can continue running, but they have to ask for permission to do more things, and the company has to explicitly ask their existing creditors for more loans to continue operating while in bankruptcy, whereas here you can go to a third party and ask for a line of credit that gets repaid ahead of the existing creditors (DIP financing) in Chapter 11.
It’s not the end of the line for Setanta, but I think we’ll definitely be seeing a lot of their exclusive broadcast licenses being auctioned off for pennies on the dollar as part of these proceedings. It’s going to wreak havok on soccer in Europe for sure. The amount to which the sport’s high salaries are dependent upon television money is insane.
my/many
It won’t affect me and I’m european.
Here in Sweden its TV4sport who has the ufc rights.
Sky must see the ratings for Ultimate Figher that Virgin gets. I dont see why Sky wouldnt want UFC if they could get it.
“The amount to which the sport’s high salaries are dependent upon television money is insane.”
I’m sensing deja vu!
There’s a history of sports networks disappearing in the UK that’s not present in the US, and its a very real possibility that A) Setanta goes off the air ASAP B) if they do, the UFC rights end up going for a fraction of what Setanta paid for them in what will assuredly amount to a firesale. Don’t fool yourself otherwise as to what is gonna happen here. The reason they’re going into administration is that they can’t come up with the funding to pay the various leagues and deals they have out there and they’re not willing to take a massive cut. After all, they’ve leveraged themselves based on those deals. Its not an issue of labor costs or something they can reasonably cut down.
some people who tried to subscribe to setanta sports on the weekend have been told that “no new subscriptions at the moment”
It is over for them..
This could turn out to be good for UK people or it could turn out to be absolutely shocking. Worst case scenario it ends up on PPV. Given the frequency of shows and the time that they are on (3am), I HOPE that’s not a viable business option for whoever takes up the rights.
If it goes to Sky Sports, it will become minority broadcasting which is a bit rubbish but on the positive side, I don’t have Sky Sports now and I wouldn’t mind having it. So that would probably be the best case scenario.
Middle choice scenario is either Virgin Sport being created, which I would imagine would be a poor man’s Setanta (which itself is a poor man’s Sky), so that wouldn’t be great but would be manageable. Likewise if it regressed a couple of years and went on to somewhere like Bravo – as long as they didn’t do it on tape delay that would be fine too.
All in all I’m certainly in the better the devil you know category so I’m not happy about this, but I’m not spitting my dummy out about it either. I managed before Setanta and I’ll manage after.
UFC 99 is in Germany, so its on in primetime, basically. Worse, just because Setanta goes bankrupt doesn’t mean that the UFC is free to go wherever they want on the dial. They may get tied up in waiting.
Ah man! Where else am I going to get 20 hours of rugby a day?? And where else am I going to get my Gaelic Football fix?
“It’s going to wreak havok on soccer in Europe for sure.”
Extreme overstatement. Carnage in the SPL (already seeing the ITV Digital redux with the SFA subbing the clubs) for sure, and not good news for the Blue Square Premier either.
It’s not like they’re bankrolling Ligue 1, Bundesliga etc, tho. The most valuable properties (FA and their Premier League packages) would find a home quite easily if it came to that.
I think Sky would only show the european UFC events on PPV you know.
Showing every UFC event on PPV would be a financial disaster.
STV in Scotland is reporting that around midnight tonight local time, Setanta is going off the air.