Setanta considers sale

Shareholders in sports broadcaster Setanta Sport are considering appointing Goldman Sachs to consider exit options after an unsolicited approach for the company, which has the rights to televise certain English Premier League football matches.

Reports suggest that a media company might be interested in paying as much as £1bn for the business, which was set up in 1992 by two Irish entrepreneurs, Michael O’Rourke and Leonard Ryan. They wanted to televise an Ireland World Cup football game in London.

Since then, the two entrepreneurs have attracted backing from private equity firms Doughty Hanson and Balderton Capital, formerly Benchmark Capital Europe. Hedge fund Montrica is also an investor, as is Goldman Sachs itself. Montrica was set up by Andrew Metcalfe and Svein Hogset two years ago. Both used to be traders at Goldman Sachs.

The most likely buyer is thought to be ESPN, a rival European sports broadcaster that is owned by Disney. BSkyB would not be allowed to bid for Setanta as it has a rival contract to broadcast live premier league football matches.

Setanta has links with Virgin Media and BT, which both allow access to Setanta’s programmes via their respective digital networks. Setanta and Virgin jointly own Setanta Sports News. Virgin and BT might be bidders as well, alongside ITV.

Setanta claims to have more than 3m subscribers but is not expected to break even until next year. Revenues are expected to be around €500m this year.

Some have suggested that as Setanta remains a “work in progress” and that shareholders would be reluctant to sell as this point.

BSkyB has set out plans to launch a rival sports service over Freeview, at a similar monthly subscription rate. This prospect could be prompting Setanta to consider its options.

Neither Goldman Sachs nor Setanta would comment on the reports.