ITV And Setanta Review Rights Payments
ITV and Setanta Sports are both reportedly looking to restructure their repayment plans for all their major sports rights deals, including the two broadcasters’ contract with The FA for coverage of the FA Cup and England internationals, in the wake of the economic recession.
ITV, whose profits dropped 41% in its latest financial results announced this week amid a £2.6bn loss, is thought to want to space out the payments of its £275m contract to screen the FA Cup and England home internationals in a different fashion to the initial deal it signed with The FA so they are more closely aligned to revenues brought in through advertising and sponsorship.
It is also understood that Setanta has already deferred one payment of £10m as it seeks to renegotiate its own £150m four-year contract with the FA and its other rights deals, raising further concerns about its future within the sports that it helped to bankroll.
It has emerged that both broadcasters are to approach all of their sports rights partners in an effort to renegotiate their contracts in light of the different economic pressures they are facing.
As well as the £275m deal with The FA, which began this season and runs for four years, ITV last year paid £160m to renew its contract with UEFA for live Champions League football and shares the rights to the next two football World Cups and the next European Championships with the BBC.
In Setanta’s case, the surprise loss of 23 live Premier League matches per season from 2010 to BSkyB in the recent rights auction has led its shareholders to instigate a wide-ranging review as they calculate whether they can afford to continue backing a revised, cut-down business model.
The review is likely to suggest a range of measures, including restructuring the broadcaster’s payment schedules and reducing its total costs with another option of handing back some of the sports rights it has already purchased.
As well as the four-year FA deal, Setanta has contracts with the English Premier League and the Scottish Premier League in football, the Indian Premier League in cricket, the US PGA Tour in golf, and Premier Rugby, which represents to the top English rugby union clubs.
ITV and Setanta both declined to comment on confidential contractual negotiations.
