Missed SPL payment prompts urgent Setanta talks

Sports fans may soon receive all Premier League football and Premiership rugby from a single sports television outlet, as part of broadcaster Setanta’s last-ditch attempt for survival, according to a report by Matt Scott in today’s Guardian.

It has been reported that Setanta failed to make the latest £3 million rights payment due to the Scottish Premier League this week, leaving the 12 top clubs north of the border facing the prospect of an income shortfall of at least £25 million over the next 12 months.

The missed payment, confirmed by leading figures in Scottish football, has prompted renewed fears for Setanta’s future as a pay-TV sports broadcaster.

For Scottish football, it is a serious concern as it recalls the dire financial consequences for many Football League clubs in England and Wales after the collapse of their ITV Digital rights deal seven years ago. The missed Setanta payment comes just as the clubs contemplate two months without even the benefit of gate receipts for the clubs.

The SPL board is holding an emergency meeting today, but some clubs are already slashing their budgets in anticipation of the lost TV income. Scottish Cup finalists Falkirk have already told manager John Hughes he can offer deals to only six out of 14 out-of-contract players, while Motherwell manager Mark McGhee has warned that a repeat of the ITV Digital crash would leave him able only to field his youth team next season.

Meanwhile, according to the Guardian today, Setanta has been in talks with BSkyB to see its sports rights bundled together with its Murdoch-owned rival in an effort to preserve the broadcaster in some form.

Speculation in the broadcasting industry about Setanta’s future has been rife since the company miscalculated in the most recent round of bidding to retain half of the 46 English Premier League games it will screen live until the end of next season. From 2010-11, Setanta will show only 23 English top-flight matches a season, which has made it less attractive to new investors as it seeks an estimated £100 million injection.

At the weekend, Setanta’s coverage of the FA Cup final at Wembley, together with the TV return of Saint and Greavsie, was made available free-to-air in an effort to attract new subscribers for its non-football, summer sports offerings, including world championship boxing and top golf tournaments.

Setanta is about to enter the final season of a four-year SPL deal, worth £54.5 million – or less than the cost of the transfer of Kaka from Milan. The company has managed to maintain its payments to the FA, and this week’s installment for the SPL is believed to be the first payment it has defaulted upon.

Last summer, Setanta and the SPL extended their agreement, more than doubling the fees due to £125 million from the 2010-11 season until 2014.

A meeting between SPL clubs and Setanta early last month sought to renegotiate terms, including a cut of as much as £30 million from the extended contract or a shortening of the deal by two years.

In the Telegraph, Charles Barnett, a football industry partner with accountancy firm PKF, said: “This is not what the SPL teams wanted to hear at this stage in the year.

“Many will have been relying on the Setanta income to fund wages and running costs through June and July and the potential loss of this income could push many of the smaller clubs into great difficulty.

“These clubs tend to be very reliant on fixed income from broadcast rights, particularly during a period when there are no gate receipts or sponsorship opportunities and very little merchandise income.

“This means that an already strained financial environment has just got considerably worse.”

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