It seems that Setanta has been on death row for weeks now, and this is the third re-write of this particular posting, but today the lights finally went out on a company which had only really entered the public consciousness when they won the right to televise the SPL in 2004.
Friday saw the announcement that they had defaulted on their £30 million payment to the Premier League, which lead to the cancellation of the current contract to show 46 league games, and the contract to show 23 league games which was due to start the following term. This news was followed by the announcement that prospective backers were pulling out of a financing package. That was followed on Monday by the news that the SPL would be pulling out of their contract and seeking a new television partner. To add insult to injury, the English Premiership wasted no time in announcing that ESPN would be taking over the remainder of Setanta’s contracts.
TwoHundredPercent has been blogging on the impact that the sinking of Setanta would have on the former Conference, and in many respects the impact there would be much worse than the impact felt in the EssPeeEll (© Bill Leckie 1999). Scottish Football hasn’t really been flush with cash since the first implosion of TV rights fees in 2002, which led to Motherwell going into administration and Clydebank and Airdrieonians going to the wall (only for a reborn Airdrie United taking Clydebank’s place in the League, ironically Gretna were admitted to the Scottish League at this point too). There was a feeling that Scottish Football had left those days behind when the new contract with Setanta was announced just weeks ago, a contract supposedly worth £125 million starting in 2010, and one which according to the Sunday Herald the Old Firm & Aberdeen were against signing. It now looks as if the SPL will go with the option favoured by those three teams, and take the Murdoch shilling once more, even if the offer is substantially less than the original offer.
Theoretically, Scottish football should be in a better position to weather any possible drop in revenues. However there are rumours that there could be 3 SPL clubs in trouble should Setanta go belly up. Kilmarnock are said to be heavily in debt, Falkirk were said to be in a bad position should they have gone down, while it is not clear who the other team could be. Outside of the Old Firm, who has big debts which are “serviceable” thanks to continued participation in european competition, the only teams closest to financial safety are Hibernian (thanks to the sales of promising players), newly promoted St Johnstone and St Mirren (thanks to tax dodgers Tesco). Everyone else will feel the squeeze, which would be exasperated by the poor economic situation.
Many of the “business correspondents” will point to Setanta having a business model which was doomed to failure, especially in poor economic times. This is one of the reasons why pay per view won’t really take off in the same way that it does in the USA. However, one of the key reasons must be the elephant in the room in the shape of BSkyB. Anyone entering the market for broadcasting sport in the UK must have deep pockets, and it is no coincidence that the collapse of Setanta, and earlier on this decade ITV Digital, came after both paid huge money for sports rights (ITV digital shelled out about £330 million for Football league rights, while Setanta paid part of the £425 million for FA Cup and England’s home games) in an attempt to challenge BSkyB’s dominance of the sports market.
Of course, with all the comparison’s with the English Football League’s ill fated broadcast marriage with ITV Digital flying about, with forecasts of a similar meltdown in store for the SPL, there is one similarity. Both the English Football League and the SPL felt that they had to go with small, untried sports broadcasters due to the monopoly which exists within pay-tv sportscasters, shown in the “poor” offer’s submitted for both sets of rights.
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