Report: Setanta Sports on the Verge of Collapse
by Leland Roling on Jun 10, 2009 9:51 AM EDT
27 comments
For a few months, rumors have continued to circulate regarding the financial troubles that Irish sports broadcaster Setanta has been having. Some reports are indicating that Setanta could very well be 500 million pounds in debt while other reports are talking about how the company is scrambling to find additional capital to remain in business. The MMA media is asking the question as to whether UFC 99 will actually air in the UK this weekend, but the bigger question here is how will this affect the UFC's profitability in the UK.
First and foremost, television exposure in the UK for some of the more important upcoming events that will feature British fighters will become non-existent. Not only will the UFC lose profits from their deal with Setanta, but their stars will lose out on the much deserved exposure they would receive on those pay-per-view cards. Furthermore, The Ultimate Fighter Season 9 Finale would likely be unaired in the UK, which featured a UK team and Michael Bisping. Add in the fact that Bisping's battle with Dan Henderson from the show would also be unaired. That's a whole lot of money that Zuffa has put into production of the show, hyping these fights, and building these stars that will go unnoticed by British fans, not because they don't care, but because Setanta won't be able to continue operating.
Secondly, Setanta is paying out to have the exclusive rights to air UFC events in the UK. With the sports network struggling, it is likely that those payments are going to end soon or have already ended. Setanta has already skipped payment to the English Premier League and lost one of the matches' packages. This has lead to a significant portion of their customers cancelling their subscriptions.
The next option is that Setanta could be bought out, but Sky has the significant edge in the market. The UFC will need to take a lower bid for the deal or try to get into bed with Sky Sports or some other network willing to broadcast MMA. Furthermore, advertising dollars won't be at the rates that they were previously bid. I wouldn't be surprised if those companies simply dropped those dollars and shifted toward Sky instead.
And of course, the most significant problem is the UFC will lose exposure completely within the UK for its brand. They'll either need to work a deal with the new ownership when that time comes or move to a new network. I'm not too familiar with the network structure within the UK, but the options aren't exactly plentiful. Sky Sports is likely a very expensive option for the UFC, and I'm sure they'll want to go with the same model they have used in the US for quite some time.
What led to the collapse? Most analysts believe that Setanta's month-to-month subscription service was the biggest factor. According to the London Telegraph, Setanta allowed customers to subscribe for one month at a time, allowing them to cancel whenever they felt it to be necessary. It'll be interesting to see how this pans out in the next few months, but I wouldn't expect explosive numbers from the overseas market if Setanta dies off. With UFC 99 taking place in Germany, the UFC should be praying that Setanta can stay alive until after this weekend.
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in the industry i work, we have payment terms. 2%10 Net 30, Net 60, and so on. if setanta were to stick around until the end of the week, and air UFC 99, do we expect setanta to pay for the rights to broadcast the fights if their terms hold payment out for up to 2 months?
by MicahW on Jun 10, 2009 10:14 AM EDT reply actions 0 recs
What premium channel subscription doesn’t have a month-to-month membership? I don’t get that whole point.
by MMAEruption on Jun 10, 2009 10:17 AM EDT reply actions 0 recs
I’m not sure how it works. The London Telegraph stated that was whole reasoning behind it. Maybe there are different types of structures in the UK.
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by Leland Roling on Jun 10, 2009 10:22 AM EDT up reply actions 0 recs
One of my old clients was SkyTV and as I recall, their main competitor was Virgin (its been a while). Virgin offered a ton of OnDemand stuff while Sky ran the market in satellite television and sports. I wrote some stuff on this site before about it. Let me see if I can dig it up.
by Luke Thomas on Jun 10, 2009 10:28 AM EDT up reply actions 0 recs
I didn’t realize this was working much like Satellite provider packages, so it makes sense now. I’m so used the US Cable system in which I can simply order Showtime, and then cancel it. But we’re talking about packages here. That’s pretty stupid of Setanta to allow that.
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by Leland Roling on Jun 10, 2009 10:29 AM EDT up reply actions 0 recs
Basically 2 ways to get non-network TV here in the UK, cable (Virgin, formerly NTL) and satellite (Sky). Both show the same channels for the most part, and you can get Sky premium channels (e.g. Sky Sports) on Cable. Recently the one area where the difference is more marked is in HD offerings, with Sky offering many more channels.
Setanta is a package available on both platforms (although is a little prominent amongst cable subscribers perhaps due to it being part of a few set bundles, whereas it is exclusively an addon with Sky).
Virgins onDemand stuff is limited to a set top version of BBCs iPlayer, and maybe a few other bits and bobs. On Deman (true IPTV onDemand) hasnt really been widely deployed here yet.
Nothing particularly wrong with the Setanta model, but if you will allow me to quote myself from another fanpost on this yesterday as to my thoughts why:
Not guaranteed. When ITV Digital (a precursor to the clusterfuck that Setanta finds itself in – by also overpaying for sports rights in a bid to compete with Sky) folded, it took about 6 months before the administrators finished what they were doing and broadcast stopped. Given that most subscribers would have paid for this month already, I’m hoping that they will still be running on Saturday and showing the fights.
As for the future, Sky Sports is where they want to be. I’m not sure how the payments were structured, but I would doubt they will get any further money from Setanta or its backers. However, broadcasting rights will be theirs to sell again. Obviously they are not in as strong a position as the Premiership, who will have no shortage of takers at a decent price to supplement whatever they have taken from Setanta already, although I dont think they will be as bad off as the SPL, who it seems havent taken any advance payment and were grossly overvalued (£125 mil? Crazy talk.), with the smaller clubs likely to be in dire need of that TV windfall (just like the Div 1 clubs were with ITV Digital, who were highly leveraged against it in some cases).
But like I said, Sky Sports is where they should be looking at. They used to show Cage Rage live, with prominent sponsorship, so they are amenable to the idea of MMA. The fact that they wouldnt be able to show it live with any real benefit may dissuade them somewhat, but I think first time reruns on a sunday evening on one of the 4 channels would do decent business.
by -Sam on Jun 10, 2009 1:29 PM EDT up reply actions 0 recs
For one, DirecTV. If you order a package (I’m not sure about all of them, but certainly for anything HD) before the two year term is up, you still owe for the remainder of the two year contract. That’s what keeps you locked in. Setanta, as I understand it, was letting people in and out without penalty or incentive to not leave.
by Luke Thomas on Jun 10, 2009 10:26 AM EDT up reply actions 0 recs
Sorry, meant to say if you order a package and then cancel it before the two year term is up, they make you pay for the remainder of the contract.
by Luke Thomas on Jun 10, 2009 10:27 AM EDT up reply actions 0 recs
Weird, with Time Warner cable I could add and delete premium channels whenever I wanted, and you’re free to drop service any time. With specific channels, sometimes they’ll give you a month or two free as an incentive to stay with it.
by MMAEruption on Jun 10, 2009 10:32 AM EDT up reply actions 0 recs
I’m assuming this works like a package, kind of like MLB packages, etc. You pay a monthly fee for the package, but if you opt out of it, you still have to pay the entire amount. Sentanta was just letting people opt out of the package, and not making them pay.
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by Leland Roling on Jun 10, 2009 10:34 AM EDT up reply actions 0 recs
Its a subscription package for a premium channel on another platform that you need to be paying for already. DirecTV and Time Warner Cable as far as I know are the platform providers in each case, so its a different situation.
If they wanted 12 month subscriptions, they would have got a fraction of the subscribers they did end up with. And the company would have went bust a long time ago.
by -Sam on Jun 10, 2009 1:46 PM EDT up reply actions 0 recs
I’m a Setanta subscriber and I’m really hoping they stay in business.
They used to have the UK UFCs as PPV for €20 a pop – but that soon became part of the package you got with Setanta. Its a strange decision why they didn’t keep the PPV format for European shows because I would have thought it would have sold fairly well. I’m pretty sure I’m spending €20 a month for about 4 or 5 channels. The fact I can get Football/Soccer nearly every Saturday was a bonus!
If they do go bankrupt I pray that they’ll do a deal with some broadcaster in the UK/Ireland. Watching the repeats on Bravo the day after they finish is not the way to go again…
by constantin3 on Jun 10, 2009 10:44 AM EDT reply actions 0 recs
So, you pay 20 pounds for 4 or 5 channels in a package?
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by Leland Roling on Jun 10, 2009 10:48 AM EDT up reply actions 0 recs
I pay 20 euro (I live in Ireland) for about 5 channels that I know are part of the package… you get a couple of extra that are not worth watching really – Setanta Golf for example.
Considering that a PPV in the US costs $40, I’d absolutely pay €20 for a european PPV so I never did understand why they didn’t try and milk some extra €€€ out of UK and Irish customers.
by constantin3 on Jun 10, 2009 3:18 PM EDT up reply actions 0 recs
How many PPV did they offer before with MMA
Who carries the boxing PPV’s over there? I heard that seeing fighters like Hatton, Calzaghe were always PPV even if they were regular HBO over here.
"Boxing is dirty," said Casamayor. " The day I’m not ready to be a dirty fighter is the day I don’t fight anymore because it will mean that I have no heart for it anymore."
by Zocalo on Jun 10, 2009 7:19 PM EDT up reply actions 0 recs
Sky box office is the pay-per-view carrier over here. UFC 70 was on a ppv channel but god know what happened that,i think setanta owned it
by RealIrish on Jun 11, 2009 12:22 AM EDT up reply actions 0 recs
Yeah Setanta offered 70 and maybe 72 on PPV for like €18 euro a pop, and then some re-org of the company took place, and then they offered a package of channels for €20 a month…
Interesting to see how this plays out for both Setanta and the UFC.
by constantin3 on Jun 11, 2009 3:00 AM EDT up reply actions 0 recs
Well 99 is being shown on setanta ireland.It is usually shown on setanta sports 1.Which also has all the football,so maybe they are all separate companies and the uk one is just in debt cause according to reports setanta ireland is turning profit
by RealIrish on Jun 11, 2009 4:06 AM EDT up reply actions 0 recs
A Setanta USA Update
http://www.digitalspy.com/broadcasting/a159278/business-as-usual-at-setanta-us.html?locale
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by SSreporters on Jun 10, 2009 10:50 AM EDT reply actions 0 recs
Setanta deserve to go under, they’re an absolutely despicable company who routinely make it as difficult as possible to end a contract and continue to take (“steal” would be more appropriate here really) as many payments as possible from your account until you threaten legal action. Seriously, you wouldn’t believe the sheer volume of people who have nothing but bad things to say about them.
ANyways, yesterday “Justin Timberlake”/Craig Borsari said this:
[quote]
“We’re very confident that Setanta will carry UFC 100. The network may change ownership but our deal stipulates that the network carries our fights through the end of the year.”[/quote]
A few years ago ITV Digital went into administration in very similar circumstances and continued to broadcast for a further 6 months, so I dunno…
I’d prefer Sky Sports to pick it up anyways, hopefully under an agreement not to make it PPV just yet as the customer base isn’t really there to justify it just yet and the UFC have always said they’re looking for maximum exposure in the UK for now.
by An0nymous on Jun 10, 2009 11:42 AM EDT reply actions 0 recs
I took setanta before and had no problem ending the contract after a month,and when i came back to subscribe again they were more than happy to take me back,as far as im concerned,setanta show alot more UFC and boxing than sky do the only reason im still subscribed to sky sports is for friday fight night which showcases up and coming uk talent.Other than that setanta has all the big fights form the US and europe and at only 20 euro a month they have live NBA,baseball and all the NCAA tournaments.IN my opinion setanta are better value for money in terms of content shown,but in the uk and most of ireland everyone likes football so unfortunately that makes up a majority of subscribers and thats what the demand is for,hense why they are 500 million behind in payments for the premier league.Also are Setanta US,IRELAND,AUSTRAILA ,and UK all seperate?Cause it apears as if it only the UK side that is in debt ?
by RealIrish on Jun 10, 2009 2:14 PM EDT up reply actions 0 recs
Oh, and the month-by-month contract thing is only a problem because not enough people want to purchase their shoddy product, which is the crux of their downfall. Setanta competing with Sky actually meant consumers had to pay more for the same sports events they were already getting with Sky except with sub-standard coverage.
They also made a terrible error when they chose to broadcast over the Eurobird satellite when everyone else in the UK uses Astra 2, meaning anyone viewing Setanta via satellite would have had a relatively poor signal most of the time.
Really, in this sort of situation, new broadcasters simply cannot grow organically anymore – it requires vast amounts of capital investment and an excellent product and business plan. Unfortunately, Setanta had the capital investment but very little of the product or business plan.
Apparently there’s talk of ESPN swooping in and picking over Setanta’s leftovers to really kickstart their move into Europe. With the UFC, if Sky don’t pick it up I could see Virgin having a go (they already have the TUF rights.
by An0nymous on Jun 10, 2009 11:56 AM EDT reply actions 0 recs
Oh no, but Supernatural was such a good album? He was the pioneer of a blend of rock, salsa and jazz fusion!
by Patrick79x on Jun 10, 2009 12:03 PM EDT reply actions 1 recs
Incredible timing.
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by Rundownloser on Jun 10, 2009 12:28 PM EDT reply actions 0 recs
So I just added Setanta Sports to my U-Verse package – I take it I won’t be able to see the fight on Saturday.
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by lovingmma25 on Jun 10, 2009 1:11 PM EDT reply actions 0 recs
The MMA media is asking the question as to whether UFC 99 will actually air in the UK this weekend.
UFC will air this week. Setanta released a statement earlier today saying they arent going into administration. Even if they were, its still possible they could stay on the air (ITV Digital did so for 6 months under administration while they were shipped around and their assets were valued).
Furthermore, The Ultimate Fighter Season 9 Finale would likely be unaired in the UK
I dont watch TUF anymore but Virgin1 also shows TUF, I cant quite remember who actually shows the current series, but its possible that Virgin does. Virgin1 is available as part of free-to-air digital, so reaches a larger potential viewership.
Secondly, Setanta is paying out to have the exclusive rights to air UFC events in the UK. With the sports network struggling, it is likely that those payments are going to end soon or have already ended. Setanta has already skipped payment to the English Premier League and lost one of the matches’ packages. This has lead to a significant portion of their customers cancelling their subscriptions.
I’m not sure what the payment structure (upfront or incremnetal) but its very likely they will receive no more money from Setanta. Its rumoured that the English FA and the English Premier League have deals in place that guarantee their payments from the private equity backers of Setanta. Given the weight those 2 wield, this isnt too surprising. However, given the UFCs marginalised stature in the UK its fairly certain they wont have such assurances in their deal.
Setanta skipped a payment to the Scottish Premier League, not the English. They also havent lost either of the 2 packages they hold, yet (English Premiership games were split into 6 groups and then bid on individually). Sky will take one, but the EU/EC wont let them take both. Its rumoured ESPN are interested.
What led to the collapse? Most analysts believe that Setanta’s month-to-month subscription service was the biggest factor
Overpaying for any available Sports rights in a bid to compete with Sky and heavy amounts of borrowing when debt was cheap and the going was good (although they are not alone in that), are likelier candidates.
by -Sam on Jun 10, 2009 1:42 PM EDT reply actions 0 recs
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