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Setanta eyes up British sporting heroes after winning baseball deal
Richard Gillis



IT'S THE summer of 1990 and the Top Hat ballroom in Ealing, west London, is heaving with Irish expats there to witness the national team's World Cup journey.

The crowd strains for a view of the screen erected by two 20-something Dubliners who, like the rest, are desperate to catch Ireland's game against Holland live.

The BBC and ITV, meanwhile, are screening England vs Egypt. From this piece of opportunism, a media empire is born.

Nearly 16 years on, Setanta has built a global network by selling niche Irish and British sport to expats in the US.

The two now 40-something entrepreneurs, Michael O'Rourke and Leonard Ryan, are at the company's Dublin headquarters. "Less than 10% of our business comes from Ireland, " says O'Rourke.

Setanta turned over 43m last year and has a presence in San Francisco, London, Sydney, Glasgow and Dublin.

Its American subsidiary, NASN, last week announced a $20m five-year deal to broadcast American baseball across Europe.

The NASN deal is just the latest in a series of high-profile rights auctions won recently by Setanta and backer Benchmark Capital.

Setanta beat the BBC to the Scottish Premier League.

In Ireland it secured Formula One and 2007 Rugby World Cup rights from under RTE's nose. Last April, Setanta launched a channel in America showing football World Cup qualifiers, Champions' League and top-line rugby.

Under the terms of the baseball deal, NASN will screen five major-league games a week. The American channel's chief executive, Amory Schwarz, said last week he hopes the deal will help increase subscribers "to between seven million and ten million in continental Europe" over the next year.

This would represent a quantum leap for NASN, which currently reaches 200,000 people in the UK on cable and satellite and 1.4 million in the rest of Europe.

Positioning itself as the main home of American exports, NASN recently bought the European rights to broadcast the National Hockey League, the main ice hockey league.

So far so good. But the plum prize for Setanta is the Premiership. Very soon, the FA will invite interested parties to bid for the rights to screen live Premiership action from the start of the 2007 season, the end of the current Sky contract. Intervention from the European Commission means Sky will no longer be the only place to watch live top-flight football in the UK.

It is another opportunity too good to pass up for O'Rourke and Ryan. "It's very simple: we will bid for the rights when the tenders go out, " says Ryan.

The Premier League's senior management team has spent the past year in fevered negotiations with the EC's competition commissioners.

The outcome, announced in November, has laid ground rules for the sale of Premiership screening rights in the UK. The inventory will be broken up for the first time, with six tranches of 23 live games on offer. No one broadcaster will be able to buy all six groups of games.

This effectively ends Sky's monopoly on live Premiership coverage, for which it has paid a premium since the league's inception in 1992. Sky paid £1.024bn for the current three-year contract, which expires at the end of the 20062007 season.

A feature of this sale, which has potentially far-reaching consequences, is that the rights will be offered on a 'media-neutral' basis, which means technologies such as broadband and mobile could be a platform for at least one of the packages of 23 games.

"The price paid may go up this time around, but three years after that it will come down because the media landscape will have been decided by then, " says Ryan.

He believes questions of media convergence during the next contract will inject dynamism into this round of talks.

"Viewing audiences are fragmenting because of technology. IPTV (internet television) will impact on choice.

It will be like going to a newsagent and choosing which magazine you want from the vast array that are on offer. You pick what you want to watch, when you want to watch it."

Recent deals concerning the top leagues across Europe may offer a guide to the UK picture, he says. "In Holland an IPTV broadcaster [Versatel] has bought all the rights to the top league. In Belgium, Belgacom has done likewise. In France everything went to one DTH player (Canal+). Who knows maybe a bookmaker will bid for the Premiership rights."

Ryan is referring to the situation in Germany, where exclusive international broadcast rights to the Bundesliga were bought by Bet and Win, an internet gambling service.

Those mentioned as contenders for the Premier League have included telecom giant BT, cable operator NTL, and France Telecom, owner of Orange.

And there are other, perhaps less obvious, bidders.

Top Up TV offers 11 channels, including Setanta Sports, as an additional digital terrestrial service for Freeview subscribers. It has money and expertise on its side. Top Up TV is run by two former Sky Sports executives, David Chance and Ian West, and is part-owned by RTL, the German media group that also owns Five.

A collaboration with Setanta on Premiership rights would be a powerful proposition, but O'Rourke refuses to comment on the suggestion that Setanta would form part of any consortium bid.

"We're not going to discuss our strategy in public before the event, " he says.

Whatever the configuration of bidders, the interest from these new entrants into the TV sports market promises to play well for the FA Premier League.

For Setanta, the largescreen pub business upon which it made its name is less significant now to the overall direction of the company.

"Sky is generating the guts of £100m from the pub business and it all falls to their bottom line, " says O'Rourke. "It is not where we are going but we understand the business, which is not easy to do. Apart from ourselves and Sky, I doubt anyone else could do it."

Setanta's board of directors reflects the ambition of its two founders. Over the past two years it has attracted a number of high-profile names from the international sports television business.

Steve Bornstein, ex-chief executive of ESPN, ex-Sky heavyweight Richard Brooke and Michael Watt, founder of the CSI broadcast agency later sold to Octagon, have all come on board.

The luring of Trevor East, the former Sky deputy managing director and head of ITV Sport, has also created headlines, mainly because he is linked so closely to Sky's Premiership strategy over the past decade.

Whatever the outcome of the next few months, the emergence of Setanta Sports is a significant boost to those with top sports rights to sell.

"We don't bid for everything; we're selective about what works for us, " says O'Rourke. "There is the odd occasion when we want something very badly and someone else does too. Then rights value will go up substantially. But that's not the norm. We don't go out and try to push up the prices for Sky, ITV or the Beeb."




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