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Wednesday
May 6, 2009
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EPL Rejects Setanta's Request To Defer TV Rights Payment

EPL Has Rejected Setanta's Request To Defer
$90.1M Payment Due At End Of This Month

Setanta's "prospects of survival are in the balance" after the EPL rejected a request from the broadcaster "to defer a [US$90.1M] payment due at the end of this month," according to Paul Kelso of the London TELEGRAPH. Setanta execs met with EPL CEO Richard Scudamore last Thursday to "ask for more time to meet the scheduled installment" on its existing three-year, US$588.8M deal. The EPL's decision to reject the request will "come as a blow to the broadcaster as it seeks to persuade investors to provide the [US$150.2M] it needs to continue as a going concern." The EPL's position "may be informed by the need to distribute more than [US$901.1M] to its clubs at the end of the season, but its decision also demonstrates deep confidence in the value of its rights." The EPL has "shareholder guarantees from Setanta's major stakeholders and could expect to get close" to its valuation of US$195.3M for the last year of the contract if the broadcaster folded. Setanta's hopes of "avoiding that fate now rests on persuading" private equity firms Doughty Hanson and Balderton Capital to "back their initial investment with enough money to see the company through to the end of the year, by which time the credit markets may have recovered." Kelso notes there reportedly also are "internal discussions about the two finance houses taking equity stakes in the company similar to that held by Goldman Sachs" (London TELEGRAPH, 5/6).

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