|ESPN Has Agreed To Pay Estimated $408M
For Setanta's Former EPL Games
ESPN is "developing plans to launch a standalone U.K. channel on the back of its successful bid
" for EPL rights, according to Steve Clarke of DAILY VARIETY. ESPN Monday agreed to pay an estimated $408M (all figures US) for 46 games next season that the EPL stripped from Setanta after a missed payment, as well as 23 games per season from '10-13, and the network is "now considering how best to maximize its ownership of a crown jewel of U.K. sports." ESPN currently runs two channels in the U.K., a "basic pay service ESPN Classic, which focuses on English sports events, and ESPN America, a premium offering showcasing U.S. sports such as American football, ice hockey, baseball and basketball." ESPN is "mulling either the launch of a standalone aimed at U.K. soccer fans or alternatively rebranding ESPN America," and the new service would be available on BSkyB "in time for the Premier League soccer season that kicks off in late summer." ESPN "does not intend to sell subscriptions directly to customers," but will use BSkyB's "proven expertise and infrastructure to market the channel" (DAILY VARIETY, 6/24
). ESPN Int'l Managing Dir Lynn Franks: "Our intention is to launch an ESPN channel that will carry all the Premier League sport and also other sport. Buying the Premier League rights is a huge step and we are excited to use that as a platform to move into (more) local live sport." In London, Jeremy Wilson reports the new channel would be "available across every platform." ESPN has "already signed a deal with Sky, which is expected to offer the new channel to the estimated six million who subscribe to its sports package, for a monthly fee of around" $16.60. Wilson notes in addition to the EPL, "much of Setanta's current portfolio will become available after the company went into administration yesterday," and Franks confirmed that ESPN is "looking into its options for other sports" (London TELEGRAPH, 6/24
). ESPN VP/Communications Katina Arnold: "Our whole strategy internationally is to be able to deliver locally relevant content, and this is very locally relevant content in the U.K. So fans will be able to access that from ESPN, and we'll be able to help build our brand" (USA TODAY, 6/24
INT'L EXPANSION: The FINANCIAL TIMES' Garrahan & Fenton write ESPN's acquisition of Setanta's EPL rights "ranks as its biggest international move yet." But having "inherited the reduction" to 23 games that "undermined the Setanta business model, ESPN faces the same prospect of disappointing its audience." An analyst said, "This surely indicates that ESPN are playing a long game, looking to be in UK football well beyond the end of this deal in 2013." Garrahan & Fenton note while BSkyB will be "cautious of the threat posed by a company backed by Disney, a giant that dwarfs even [News Corp.], it could have been worse." Enders Analysis analyst Toby Syfret: "Sky will be quite happy, because ESPN look like they are looking for a partnership with them, acting as wholesalers to Sky, rather than taking over as the dominant force" (FINANCIAL TIMES, 6/24).
ADMINISTRATION AFTERSHOCKS: The WALL STREET JOURNAL's Ainsley Thomson reports Setanta's 200 U.K. employees "have been laid off, and about 950 workers in third-party call centers may also be affected" after the broadcaster was placed into administration yesterday. Deloitte Partner Neville Kahn, one of three administrators assigned to Setanta, said that Setanta co-Founders Michael O'Rourke and Leonard Ryan, as well as shareholders Goldman Sachs Group, Balderton Capital, Doughty Hanson and Montrica, "will see their investments in the company wiped out" (WALL STREET JOURNAL, 6/24). Meanwhile, the administration leaves the PGA Tour without a television outlet in the U.K. The tour’s in-house international television group is working to secure a deal with another outlet as soon as Thursday’s start of the Travelers Championship. “Our main focus going forward will be to immediately, and aggressively, explore all options that will ensure the PGA Tour will continue to be made available on television in the U.K.,” said PGA Tour Exec VP/Communications & Int'l Affairs Ty Votaw. Sky was the tour’s U.K. outlet until Setanta signed a six-year deal starting in '07 that industry sources estimated was worth approximately $30M a year, or roughly 10% of the tour’s annual television income. Meanwhile, Golf Channel is again without an outlet in the U.K. after signing a deal with Setanta last September to syndicate 125 hours of original programming over two years. Golf Channel went eight months of '08 without transmission in the U.K. after Golf Channel U.K. went off the air. None of the other major golf properties air on Setanta. The Masters and British Open air on the BBC; USGA and LPGA events air on Sky (Jon Show, SportsBusiness Journal).
|Setanta's Administration Leaves PGA
Tour Without A TV Outlet In U.K.
TIME TO MOVE ON: In Manchester, Owen Gibson reports the Scottish Premier League is "believed to be close" to signing a $149.1M deal with Sky, a cut of $58M from its current deal with Setanta. Meanwhile, England's Football Association (FA) has a "clause in its contract that obliges ITV to pick up the rights to England's home friendlies" at a little over $3.3M per game. ITV yesterday said that it "would be 'very pleased' to take up the option, with insiders arguing that they would represent a bargain at that price." However, re-selling Setanta's portion of the FA Cup deal "may be more difficult, as ITV has first pick of the matches." Gibson notes other affected rights holders "have been scornful" of the EPL's stance regarding Setanta, "believing it pushed Setanta into administration when a way forward for the company could still have been found if a rescue bid had been allowed more time to complete." The EPL's decision, while "typically self motivated," is "supported by others who believe the Setanta business model was fundamentally flawed and it was only a matter of time before it unravelled" (Manchester GUARDIAN, 6/24).