TV chief offers to save Setanta

Jun 13 2009 by Iain Laing, The Journal

US tycoon Len Blavatnik has confirmed that he has proposed a rescue deal for pay-television group Setanta.

The £20m offer for 51% of Setanta is aimed at securing the future of the cash-strapped Irish broadcaster by helping it avoid administration.

Setanta’s potential white knight founded Access Industries, a privately owned industrial group, in 1986. It also has interests in Top-up TV, which is Freeview’s pay TV service, Israeli television’s Sport 5 and online sports provider Perform Group. Access currently has a holding of less than 5% in Setanta.

A statement from the firm said: “Access believes that this proposal would secure the future of the broadcaster for customers, football and employees.”

Setanta has TV rights including the FA Cup, World Cup qualifiers, Premier League, Scottish Premier League and the Blue Square Conference – but is struggling to pay for them as customer numbers have dwindled in the recession. The broadcaster has about 1.2 million subscribers, but that is short of the reported 1.9 million it needs to break even.

It has been trying to raise fresh funds from investors, reduce its rights bills or even sell a stake in itself to another company, but Deloitte has been lined up as administrator if the rescue efforts fail.

The group suspended all new customer subscriptions on Wednesday. Setanta has declined to comment on Mr Blavatnik’s proposal, although sources close to the company said it was still working hard on options to refinance the business.

It emerged earlier this week that BSkyB had refused a £50m lifeline to Setanta, which faces a payment of more than £30m due to the Premier League.

Backers including private equity firms Doughty Hanson and Balderton Capital as well as Goldman Sachs are reported to be refusing to advance it any more money. Another broadcaster, ESPN, has so far distanced itself from reports that it may look to take over Setanta’s Premier League games if the company goes into administration, although Setanta has won only one of the six live broadcast packages for 2010 to 2013.

Under a pre-arranged deal, ITV would take over the rights to up to eight England away friendlies for an agreed sum.