Last weekend, Setanta Sports broke the monopoly of Rupert Murdoch’s Sky TV, which has controlled the Premiership for 14 years. The Dublin-based company paid $727 million for the rights to broadcast 46 matches next season. While the deal only covers Britain, it puts Setanta in a very strong position for the broadcast rights in other countries.
Sky had to pay around $2.5 billion for the other 92 matches, even more per game than Setanta.
The move propels Setanta to the top tier of sports broadcasters in Europe. The company’s director of sport, Trevor East, who used to work for Sky, described the deal as “historic.”
“Most people in the UK haven’t heard of us. Now we’re on the map,” he was quoted as saying.
And yesterday, Setanta and Sky announced they had reached an agreement on how much they would charge commercial customers, typically pubs and bars, to televise live English Premiership games for the next three years.
The deal means commercial customers will be able to watch Setanta’s live matches as part of their Sky subscription.
Separately, the two companies agreed that Setanta’s games would be available, for purchase, to residential customers on Sky’s digital satellite platform.
Meanwhile fans in the United States watching the vast sums being spent by the two companies on soccer rights, and wondering how, exactly, Setanta expects to recoup its investment.
Setanta is regularly accused of gouging Irish fans across the United States because of its policy of charging $20 or more to enter any bar where one of its live GAA or soccer matches is being broadcast.
Throughout the summer, Gaelic football and hurling fans will be forced to line up on the street to pay the cash directly to a Setanta agent at many bars in New York, Boston and elsewhere.
After parting with the money, the GAA or soccer fan is typically asked to proffer their hand — not to be shaken in thanks but to be ink-stamped as a way of ensuring that no one evades the toll!
Many bar owners are also unhappy to see their premises effectively taken over by Setanta for the duration of the game, regarding it as an intrusion on their business.
Now, with Setanta starting the 2006-07 soccer season $727 million in debt, some fear Setanta will use its monopoly to extract further cash from hapless Irish Americans.
There is already talk of a price hike in Ireland and Britain, but spokespersons for Setanta have denied this, saying they will focus on trying to raise the number of subscribers rather than the price of a home subscription to its packages.
Reports on the financial pages of European newspapers cast doubt on this strategy, however, pointing out that Sky generates only $65 million from a package of games very similar to the one Setanta has just bought for $727 million.
Sky’s “Premiership Plus” package, which showed 50 games a year and is separate from the main Sky soccer package, could not attract enough customers to cover the cost because many fans saw the games as an “extra”, and were not willing to pay significant amounts to watch.
A further threat to Setanta’s profit line, especially in the United States, is in the form of technology.
As reported in these pages last September, gadgets are becoming available which, when attached to a cable or satellite signal, allow someone to control and view any channel available by computer, anywhere in the world.
California-based Sling Media has now released a PAL version of their device. This means that Irish sports fans in the U.S. can merely ask their relatives to purchase an extra cable box for the house – typically a low-cost add-on – and then watch all channels on it, including sports, from the United States.
Setanta’s marketing department in Dublin yesterday did not return calls or offer comment on the issue.