The failure of Setanta UK

Setanta Sports was a relatively small sports channel - known for showing SPL matches and in the case of Freeview, taking up valuable space on Sundays from the now defunct ITV News Channel and CITV.

In 2006, it pulled off a spectacular feat - taking up two of the Premier League rights from Sky. It then began to expand with the FA Cup, PGA Tour and IPL, among other sporting rights throughout the next three years. However in 2009, Setanta UK collapsed with multiple unpaid debts to sport rights.

Why did they fail? I can point to the fact that their expansion was too quick across the wall, and the private equity firms funding Setanta refused to honour these contracts.

Cracks began to show after Setanta was only left with one package of Premier League rights, unattractive to most customers. And yes, the Setanta business model was wildly similar to ITV Digital, who tried bidding for expensive rights to the Football League and failed against Sky.

I followed this story throughout June 2009, when Setanta went into administration - there was a plan to save the stricken broadcaster with funding from Blavatnik, but that never materialised and led to the down spiral of Setanta.

They were insolvent of course, and were put into administration after their FAPL and SPL rights were revoked when they couldn't honour their payments to the rights holders.

But Setanta survives under other names. Michael O'Rourke continues to run Premier Sports, which is effectively the "Phoenix" of Setanta GB - working on a much smaller scale of course, and concentrating of sports of interest to Irish, Australian, and US/Canadian expats.

Meanwhile in Ireland, Eir has taken over Setanta's Irish operation - itself probably saved by a seemingly extraordinarily generous deal to market BT Sport in Ireland.

Indeed there are still companies operating under the Setanta name in Asia, though I think some of these have also been sold and are no longer connected with O'Rouke and Ryan.

Also forgot to mention that the collapse of Setanta gave rise to ESPN and eventually, BT Sport, to the sports TV market.

Setanta's rise also coincided with the souring of relations between Sky and Virgin Media. With the removal of the Sky basic channels from Virgin's platform, Setanta, Virgin and ITN quickly set up their own sport news channel to replace Sky's. Even after the return of the Sky channels it still continued till the very end of Setanta's reign.

The relationship between Setanta and Virgin also saw Setanta's premium sports channels included for those who were subscribed to the top TV package from July 2007. This has continued with ESPN and now BT, over nine years later.

Setanta Sports News was strikingly, similar to Virgin1 - channels set up to fill the void left by the Sky basics. After they returned to Virgin, things actually went sour for both channels.

Setanta Sports News was caught up in the financial difficulties suffered by Setanta UK and went off air soon after the company went bust.

Virgin 1's owner, VMTV, was put up for sale, then was bought up by Sky, who rebranded V1 as Channel One, and then subsequently closed it on the grounds of spreading content thinly, and their attempts to undermine Freeview (already blatant through the once ghastly Sky3/Pick TV schedule).

Something like this could happen at BT - it's a telling sign when it's the only pay platform with no Sky basic channels and a BT Sport executive leaving the company over the proposed development of a new BT flagship channel.

The closure of Setanta Sports News in 2009.

To be honest, it wasn't perhaps a big surprise that they won the rights to the Premier League in that auction. It had already been said that they were no longer able to sell them all to one broadcaster, but the packages were too big for any terrestrial broadcaster to go for them. Setanta were probably the only other place they could have gone.

I reckon the moment when it all went wrong for them was when they bought the rights to Premiership Rugby - it was simply buying stuff for the sake of it, because although it gave them first choice domestic rugby, Sky still had loads of rugby so you didn't miss much by not having it. It was a waste of money, really. And it didn't help that Setanta didn't have first choice rights in any of its football contracts, sharing the Premier League with Sky and the FA Cup and England with ITV. The only bit of exclusive premium content it had was the away England matches, and that backfired on them when they didn't offer highlights and got lots of bad publicity out of it, not helped by their customer service never quite being up to scratch.

I had Setanta for the two years it had the Premier League via Virgin, though I can't really remember much about it, to be honest, it was a channel I generally tolerated (because of the football it showed) rather than especially loved. Of the three rivals to Sky, Setanta was the one that most obviously aped the Sky formula, although that was probably to its detriment because it just meant it always looked like an inferior version of Sky. ESPN and BT have both been more distinctive and so appeared more of an alternative. ESPN also had much lower overheads, contracting out virtually everything (and of course they haggled for ages over the FA Cup rights, it took a year to agree the contract, emphasising how they'd rather have no sport rather than pay over the odds), while BT have much more stable foundations and have spent money on proper exclusive content rather than Sky's off-cuts.

The one thing that used to totally infuriate me about Setanta was they used to unencrypt their football build-up in an attempt to whip up more subscribers and would on numerous occasions invite you to subscribe, to the extent of for a while having a "SUBSCRIBE" DOG constantly on screen during the build-up. And if you'd already subscribed, it was incredibly irritating. Just looked like bad manners.

I had forgotten about that aspect. To this day Eir Sport, Setanta's successor still do some FTV "free view" programming, some of is required because of their use of licence fee money.

The way had somewhat been cleared for Setanta by PremPlus, the now mostly forgotten about pay per view service which, though it was Sky competing against themselves, established the principle that football fans would be prepared to pay more than one subscription to see more matches:

From memory PremPlus was born out of the latterly unsuccessful NTL bid for the contract. They won the contract for the PPV rights from the 2001 season, however this was during the era when NTL filed for bankruptcy which meant they couldn't fulfil the rights. I'm not sure what agreement was reached but you had PremPlus which also ran on NTL, which was £10 each season, and you also had the games on ITV Sport Select on ITV Digital. When the 2004 rights came up you then had a fully Sky backed PremPlus which saw the NTL subscription fee increase massively.

PremPlus was probably best known for its James Nesbitt-fronted adverts - "50 games for £50" - which seemed to run at least once every advert break for months at a time.

I still don't think I've met anyone who actually subscribed.

Nice to meet you. You should get out more

Well, I did as well, although I went for the fifty quid a season offer - the matches were eight quid each otherwise - and in the event I think most people simply did that option and were in effect subscribing to it like they would subscribe to another Sky Sports channel. Quite exciting, though, to see the countdown clock before it, and there was an added frisson on NTL as on a couple of occasions they forgot to switch it on.

The original concept for PPV was I think a compromise between offering more matches but keeping them scarce enough to encourage people to go to the games. They were sold as a bonus service for people who wanted more than Sky were offering and they were very quick to point out they were matches that would otherwise be untelevised so you wouldn't lose anything from Sky Sports, they were absolutely second choice fixtures. As mentioned, it was initially sold to NTL (and I remember reading somewhere they were going to contract out production to the BBC) but then they realised they couldn't afford it so they gave them back, and they were sold to a consortium of Sky, ITV and the cable companies. The production of the matches was contracted out to Sky so Alan Parry was heard on all platforms, but Sky and ITV did their own presentation, NTL showed the ITV presentation. When ITV Digital went bust in the second season, NTL took the Sky presentation and from then on it was pretty much just Sky Sports in all but name.

In the 2004 rights deal, there wasn't a specific package for PPV, but the Premier League said that certain packages (the third and fourth choice matches) could be PPV if desired. So Sky bought the lot and did indeed make those packages PPV, but even though they were now wholly owned and operated by Sky they kept the PremPlus branding. I first got it in that season and I remember in 2004-05 the graphics were the same as the Sky graphics but in a different colour scheme, but from 2005-07 they had their own unique graphics. Also from mid-2005, they started alternating the commentators across all the Sky matches, so whereas before Alan Parry had done about 99% of them, everyone had a go, including Martin Tyler.

Anyway, in 2007 it all ended and Sky ran a load of trailers proclaiming "No more pay per view!"