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Premiership ditches Setanta

last updated Friday 19th June 2009, 7:43 PM

Setanta will lose its two packages of games for 2009/10 season

Troubled sports broadcaster Setanta has failed to pay the latest chunk of the £30m it owes the English Premier League, and will now lose the rights.

The League has threatened to sell the rights to the 46 live matches Setanta has for the 2009/2010 season if the broadcaster failed to make the payment.

It will now put the rights out to auction, with offers needed by Monday.

A potential rescue deal, led by a US investor who had proposed buying 51% of Setanta, fell through.

The Premier League said it had "been working with Setanta for some time to help them continue as the broadcaster of 46 English live matches for the 2009/10 season".

The Premier League, in agreement with Setanta, stipulated that certain contractual requirements had to be met on or before Friday, 19 June, "to allow the preparations for the 2009/10 season to continue unaffected".

The league added: "It is with considerable regret that we announce that Setanta has been unable to meet their obligations. As such the existing licence agreement between us has been terminated with immediate effect."

The Premier League will now go ahead and auction the 46 UK live matches for the 2009/10 season.

Late last week, Access Industries, controlled by the US investor Len Blavatnik, tabled a £20m bid for a 51% share in Setanta.

It had been hoped Access could lead a consortium of investors to provide fresh funding for Setanta.

However Access has now said it was unable to proceed with a deal with Setanta.

It is understood that the deal faltered after it was revealed that there is a question mark over a reported £50m that Setanta is said to owe UK tax authorities.

"Access believed that this proposal could potentially have secured the future of the broadcaster for its customers, employees and for football, provided certain conditions required to put the business on a long-term viable footing were met," it said.

"Regrettably, despite intensive efforts on all sides over the past few days, and despite significant progress in a number of areas, there remain a number of issues which we have been unable to resolve within the time available.

"We are disappointed not to have been able to make this deal happen. Access remains committed to sports programming and will continue to explore opportunities in this area."

One of those which may be interest in acquiring Setanta's 46 games is Disney-owned sports channel ESPN.

ESPN would not comment directly on the new situation but said it continued "to be interested in rights where they are available and where they make business sense".

Meanwhile James Pickles, editor of industry newsletter TV Sports Markets, said that until Thursday there were expectations that Setanta would pull though.

"It's bad news for everyone - no one is a winner," he said, adding: "It's a disaster for rights holders."

He said it was bad news for Sky because having a competitor such as Setanta was beneficial to it from an EU regulatory perspective, which prevents one broadcaster owning all Premier League rights.

However Sky would be legally free to bid for one of Setanta's two packages of 23 games.

Last week Setanta reopened its website to new subscribers - having closed it for several days.

Setanta is running at an estimated loss of £100m a year, after missing subscriber targets.

The broadcaster has 1.2 million subscribers, 700,000 short of the 1.9million that industry experts believe they need to break even.

Attention will now shift onto Setanta's other contracts - such as those with the FA for England and FA Cup matches, the Scottish Premier League (SPL), and the Blue Square conference.

It recently missed a £3m payment due to the SPL - part of a four year deal worth £54m over four years from 2006 to 2010.

The company also owns rights to the PGA golf tour, as well as cricket and rugby union deals.

Source BBCSport
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