Setanta collapse raises fears over Clydesdale's SPL sponsorship

Published on Saturday 27 June 2009 13:54

SPORTS industry experts are warning that the Scottish Premier League risks being dealt another blow if Clydesdale Bank pulls its sponsorship on the back of the collapse of Setanta.

Setanta, which held all the broadcasting rights for the SPL, went into administration last week. Clydesdale Bank will receive no TV coverage this season if a new partner is not found.

Fears are emerging that the bank could withdraw or reduce its multi-million pound sponsorship if a late substitute is not signed up to replace the Irish pay-to-view broadcaster.

The indebted Irish broadcaster was forced into administration last Tuesday and went off air when the last of several rescue and refinancing deals failed. Earlier this month the SPL paid its 12 member clubs a reported 3 million in lieu of a payment on which Setanta defaulted.

But the SPL, which is owned by its member clubs, may soon be in no position to offer such largesse. Its latest accounts, dated 31 May 2008, show a deficit of 181,000.

The SPL receives an estimated 2m a year from Clydesdale Bank which signed a four-year contract in July 2007. But the 13.5m due for next season by the now defunct Setanta is in the hands of the administrator, Deloitte.

As well as being the SPL's title sponsor, Clydesdale Bank is its banker. Bank insiders are downplaying the impact of the collapse of Setanta. A source said: "Hopefully another broadcaster will see the opportunity, thus it's an academic argument."

Steve Reid, director of retail at Clydesdale Bank, said: "The Clydesdale Bank Premier League provides exciting and competitive football and we are hopeful the SPL will be able to find a new broadcast partner by the beginning of next season."

But a Scots sports law practitioner who is close to the situation said: "I would normally expect there to be a number of highly specific performance clauses in regard to broadcast coverage in the contract between the title sponsor and the rights holder with provisions for material breach and other remedies to deal with other scenarios."

He added: "Failure by the rights holder to deliver their contractual obligations on mainstream media might be viewed as material breach and remedies could include stopping stage payments and even claw-back provisions."

A spokesman for the SPL said: "We are keeping Clydesdale Bank closely in touch with developments and will be very surprised if we are not in a position to deliver live TV coverage in the UK next season."

Nigel Currie, a director at leading sponsorship agency Brand Rapport and former chairman of the European Sponsorship Association, said if Clydesdale Bank did end the deal it would be "incredibly difficult, almost impossible" to find a replacement.

Scottish football giants Rangers and Celtic want individual rather than collectively negotiated rights. Professor Raymond Boyle at Glasgow University Centre for Cultural Policy Research said: "This could provide the Old Firm with just the opportunity they have been looking for."

He added that if another pay-TV channel replaces Setanta it will meet consumer resistance. "As many as a million Setanta subscribers have had their fingers burned. It will be a very hard sell indeed to regain loyalty and trust, especially in a recession," he said.