SBJ/March 5 - 11, 2007/This Weeks News
SCP to buy GolTV for $200M
Published March 5, 2007
SCP Worldwide, the company controlled by Dave Checketts, has agreed in principle to buy 80 percent of international soccer channel GolTV for $200 million, market sources said.
|GolTV is paying in the high seven figures for
the U.S. rights to Spanish soccer, sources say.
The proposed deal, which would value the channel at $250 million, has prompted concern among some in the industry because GolTV ostensibly competes for viewers of Major League Soccer. Checketts’ SCP also owns the MLS franchise Real Salt Lake.
Executives with some of the league’s broadcasters said they were aware of the letter of intent and are preparing to take official complaints to the MLS offices. They deem it inappropriate for one of the league’s owner-operators to buy a network that competes directly with MLS media partners.
MLS’s official broadcasters are ABC/ESPN, Fox Sports, HDNet and Univision.
“Until we have a greater understanding of the proposed transaction, it is premature to comment,” said MLS spokesman Dan Courtemanche.
SCP declined to comment. A GolTV spokeswoman said the company’s chief operating officer would comment, but he did not call by press time.
Checketts plans to create an international sports channel starting with GolTV, the market sources said, one of whom was reading from an e-mail sent by SCP to potential equity investors in the deal. According to that e-mail, the source said, two investors have already signed up: Lehman Brothers and IMG.
Checketts is also chairman of IMG Media, so it is not surprising that the sports marketing and media company is involved. IMG, which did not return calls seeking comment, would also advise on programming acquisitions, sources said.
Officials from Lehman Brothers could not be reached for comment.
Financial sources said the reason SCP is seeking equity instead of debt is because GolTV loses money. Borrowing against a money-losing venture would be costly. The deal is contingent on SCP raising the necessary funds.
Checketts has a long history in media. He ran Madison Square Garden and its MSG Network in the 1990s. More recently, he invested in College Sports Television. CSTV co-founder Chris Bevilacqua now works for SCP, which also owns the St. Louis Blues in addition to Real Salt Lake. Bevilacqua was with CSTV in November 2005 when that network was sold to Viacom/CBS for $325 million in stock.
GolTV is owned by two South American soccer agents, Francisco Casal and Enzo Francescoli, whose Uruguayan company is called Tenfield Inc. The network launched into a crowded market in November 2003, one that already had Fox Sports en Español, Fox Sports Latin America and Fox Soccer Channel. ESPN Deportes would launch just a month later.
The competition has resulted in higher-than-expected rights fees. GolTV, which is in 10 million homes, outbid its competitors, paying in the high seven figures for the U.S. rights to Spain’s main soccer league, sources said. It also holds the rights to the main soccer leagues in Germany, Italy and Brazil.
GolTV has a dual feed, one in English and the other in Spanish. Cable operators, sources said, don’t pay for the English-language feed. They would not say how much cable operators pay for the Spanish-language feed.
Cable carriers include Comcast, Charter, Cablevision and Cox. Satellite operators DirecTV and Dish Network, as well as Verizon’s cable offering, FiOS, and AT&T’s U-Verse also carry GolTV.
Of the 10 million subscribers, 3 million receive it on various Spanish-language tiers; 7 million receive it on English-language sports tiers.