Ignoring Old Firm over Setanta deal may prove disastrous for SPL clubs

Published on Wednesday 3 June 2009 22:37

EVEN those who believe the Old Firm have too much influence on Scottish football must wish the advice of the Glasgow giants had not been ignored by most of their fellow SPL members last summer.

With the offer of a 125 million, four-year extension to Setanta's contract on the table, Celtic and Rangers urged caution and backed a rival bid from British Sky Broadcasting. While less lucrative, the Old Firm reasoned it provided the SPL with both greater long-term security and a higher profile.

Only Aberdeen supported that view, however, and the new Setanta deal was accepted by a 9-3 vote. It may yet join Scotland's 1961 defeat by England at Wembley by the same margin as one of the country's darkest footballing hours.

There remained no official comment yesterday from either the SPL or Setanta on the on-going financial problems facing the broadcasters who failed to make the final payment of 3 million for the current season on schedule earlier this week.

They have until next Monday before, under the terms of their contract, they have formally defaulted.

In a conference call involving the SPL board of directors yesterday, it is understood representatives of member clubs were informed that Setanta are still hopeful new investors in the company will allow them to meet their obligations.

But the growing concerns among many clubs, especially those who are heavily in debt such as Hearts and Kilmarnock, will not be soothed so easily.

While the individual sums due from the current overdue Setanta payment amount to between 150,000 and 250,000 per club, depending on their final league placing, it is the prospect of Setanta's complete financial collapse which is causing an outbreak of cold sweats in boardrooms throughout the country.

The first instalment of next season's Setanta money would be due on 1 August and entails far more significant payments of over 500,000 per club.

The SPL were already in negotiations with Setanta to reduce the terms of the new 125 million contract, which is due to kick in at the start of the 2010-11 season, but now face the grim prospect of being left without any television deal.

"It looks like the decision to sign that new contract last year could turn out to be a pretty catastrophic mistake," one SPL club official, who did not wish to be named, told The Scotsman. "At the time, the general feeling was that sticking with Setanta was the right thing to do. They had been good partners for the SPL and the deal on the table was better than the one being offered by Sky.

"Hindsight is a wonderful thing, but it is clear that if the Sky offer had been accepted instead, then it would have provided far greater security.

"These are definitely worrying times. There are clubs who will be in serious danger of having to go into administration if the situation is not resolved over the next few weeks.

"Times are already difficult financially for many of our clubs anyway and in the current climate, there is unlikely to be much help available from the banks. We just have to hope that Setanta find a way to survive."

With 1.2 million subscribers, Setanta had pinned its hopes of reaching an estimated break even figure of 1.9 million on its coverage of the English Premier League. That strategy was seriously undermined, however, when they saw Sky win five of the six packages of live EPL matches on offer in the last round of negotiations.

Sir Robin Miller, the former chief executive of publishing giants Emap, has been recruited to lead an attempt to attract new investors and create a viable new business model for Setanta. It has also been suggested that Setanta are in talks for their SPL and EPL matches to be screened through Sky's platform of channels. That, however, would still mean significantly reduced revenue for the SPL.

In the worse case scenario of Setanta's total demise, the SPL would be reduced to scrambling around this summer to try and secure a new television contract, just as they did following the collapse of former chief executive Roger Mitchell's ill-fated SPL TV proposal in 2002.

On that occasion, they found original television partners Sky unwilling to return to the table and were forced to take a far less lucrative offer from BBC Scotland. The crisis they may be facing seven years later is potentially far more severe.