Setanta’s two founders were tonight racing against the clock for extra time in which to organise a £100 million rescue of the embattled sports broadcaster.
Leonard Ryan and Michael O’Rourke hope to find funding from new investors, as rumours swirled that the broadcaster would fall into the hands of the administrators sometime tomorrow.
Setanta was forced to deny talk that it go off the air at the end of Tuesday, but there remained intense speculation that staff could be told tomorrow morning that the broadcaster had fallen into administration.
Should the Irish duo pull off the emergency fundraising, Setanta would continue to operate broadly on current lines, selling its subscriptions independently. But with cash not secured, Setanta had today stopped taking orders for new subscriptions from customers.
Would-be subscribers clicking on the subscribe option on the company’s website were told “Oops! Something has gone wrong” with no further explanation. A recorded message at the company’s call centre told customers there was an unspecified “technical fault”.
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Setanta has been teetering on the brink since the weekend, with Deloitte, one of the company’s advisors, remaining on standby to take over as administrators. A rescue or collapse of the company is expected this week, although the fact that Setanta has survived so far has given it a glimmer of hope.
The Ryan-O’Rourke rescue attempt comes after the collapse of a plan led by key shareholder Doughty Hanson. The venture capital firm wanted to persuade the football bodies to let Setanta off with reduced payments, in a high-risk game of brinkmanship that has gone badly wrong.
The FA Premier League refused to budge, arguing that it could not favour Setanta over broadcasters that had paid to win rights to broadcast games in the UK and abroad. However, others such as the Scottish Premier League and the Football Association were thought to be more flexible.
Doughty Hanson’s scheme, which also would have seen Setanta sell its channels via Sky and not directly to consumers, has now been abandoned. It and other Setanta shareholders had only been willing to provide about £50 million of £100 million thought to be needed — forcing Mr Ryan and Mr O’Rourke to hunt for cash.
Setanta insiders described the situation as “extremely fluid”, with new proposals and ideas constantly emerging. Efforts to involve ESPN, the American sports broadcaster controlled by Disney, are not thought to have been successful, even though ESPN bid against Setanta for the rights to show Premier League matches earlier this year.
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Mr Ryan and Mr O’Rourke, both Irish sports fans, founded Setanta Sports in 1990, after they bought the UK rights to show the Ireland versus Holland game in the World Cup of that year. It was not available live on British television because channels were scarce and the match clashed with an England fixture — and the two showed the match in a West London pub, charging entry.
They have gradually built the business, raising money from private equity investors to buy up sports rights, starting with Balderton Capital and more recently Doughty Hanson. Mr Ryan and Mr O’Rourke, along with Balderton Capital and Doughty Hanson, are the three largest shareholders, with the two men combined and the venture capitalists each holding about 20 per cent.