Wednesday, June 24, 2009

FA faces Setanta cash shortfall

Sports broadcaster Setanta's entry into administration has left the Football Association seeking new rights deals for matches valued at £100m.

Setanta was due to show England's home friendlies and the Community Shield, as well as some England Under-21 and FA Cup games over the next three years.

"We remain confident in the strength of these fixtures," said FA chief executive Ian Watmore.

The FA were 12 months into a four-year deal worth £150m with the channel.

The agreement, in partnership with terrestrial channel ITV, also gave Setanta exclusive rights to Fabio Capello's side's away World Cup qualifiers, the next of which is against Ukraine on 10 October.

Setanta went off air just before 1800 BST on Tuesday, with the channel displaying a message that the firm had "ceased trading in Great Britain".

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"We expect significant interest from broadcasters wanting to pay for the rights to partner the FA and the England teams," added Watmore.

If the FA fails to secure the same price for their broadcast rights, any reduction in income will represent a drop in profits rather than a loss.

However, the organisation's National Game Strategy, which is due to deliver £200m of investment into the game's grassroots until 2012, could suffer cuts from a loss of revenue.

Disney-owned ESPN has already stepped in to buy the packages of Premier League matches owned by Setanta through to 2013.

But the value of sports rights generally has been damaged by the failure of Setanta's audacious challenge to BSkyB, which currently dominates the market.

The Scottish Premier League is in negotiations with broadcasters interested in taking on Setanta's four-year £125m deal which is due to start in 2010.

It is thought that the SPL will have to accept significantly less than Setanta had promised from any successful rescue bid.

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Liverpool's official television station LFC TV, which was shown exclusively on Setanta, will continue to be broadcast online with the club "urgently investigating all possibilities available to us in returning to broadcasting in the British Isles".

Setanta also has contracts to show cricket's Indian Premier League, golf's US PGA Tour, rugby union's Guinness Premiership,Australian rugby league and Blue Square Premier football.

The Football Conference issued a statement expressing sympathy with the broadcaster.

"We are deeply saddened by the news," read the statement.

"Although the financial implications of this action will have an enormous impact on the competition, our clubs, partners and supporters must not forget their contribution to us over the last two years.

"Setanta pioneered many new initiatives during their association, some of which are now copied by other broadcasters.

"We did everything in our power to support Setanta in their time of financial crisis and we wish the very best to all those we have met along the way and who have become friends."

Boxing promoter Frank Warren signed a three-year agreement with the Irish-based company in 2008, but Setanta subsequently launched legal action against Warren after Amir Khan's September 2008 fight against Breidis Prescott was shown on BSkyB.

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