Pay TV channel Setanta is expected to go bust in the UK today after failing to find a white knight at the weekend. London reports say the channel’s intense struggle to survive that has consumed it for the past month, ended when previous groups said to be interested, walked away. At the same time the tottering Independent News & Media group (which controls APN News and Media in Australia) is said to be considering a deeply discounted cash issue to raise enough money to keep staggering on.
The two companies’ woes are symptomatic of the intense pressures still on the media sector in the UK, although in the case of Setanta, there are claims of poor management. UK media reports say Setanta plans to appoint Deloittes as administrators if there’s no money forthcoming in the next few hours. Len Blavatnik, the Russian-born US citizen and billionaire who offered Setanta a 20 million pound lifeline a fortnight ago, has walked away.
Setanta missed its deadline to make a 10 million pound payment to the Premier League for its soccer broadcast rights on Friday night, our time. The media reports said that triggered a loss of its rights to broadcast football fixtures next season. Those rights were its major asset, as they are the main attraction for most subscribers. BT’s television arm has stopped selling subscriptions to Setanta Sports.
Rival broadcasters have until the end of business Monday (London time) to bid for the rights to Setanta’s 46 English Premier League games. BSkyB and ESPN, are expected to buy the rights to 23 games each. Setanta had paid 392 million pounds for these 46 live games. Setanta’s has contracts to show the Scottish Premier League, golf and some other sports. It also broadcast the Six Nations Rugby series in Australia.
The reports say 1100 people in the UK and Ireland will lose their jobs if Setanta folds, as is now expected.
Meanwhile Independent News & Media is considering making a quick rights issue to shareholders to raise less than 100 million euros (85 million pounds). The desperation for the cash can be seen in the share price last Friday for INM of 32 cents. To get any money and attract interest, the discount would have to be half that to get any interest. 200 million euro of 10 year bonds were due for payment last month and a six-week standstill agreement to repay that loan ends this Friday.
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