Setanta insists loss of £115m is part of long-term game plan
Subscriptions rise and revenues triple as big-ticket rights buys expensive
Eimear Cregan, Ireland, in action against Fanny Rinne, Germany, during the Setanta Sports trophy, Ireland v Germany, National Hockey Stadium, UCD, Belfield, Dublin, last year
Sports broadcaster Setanta lost a record £115m in 2007 but expects to achieve substantially lower losses this year as it replaces growth with "stability".
The 2007 results are revealed in Setanta's soon-to-be-filed accounts and come against a backdrop of heavy investment in big-ticket rights like the FA Cup and Premier League.
A senior source at Setanta last night described 2007's result as an "entirely planned outcome" and pointed out that company revenues had almost tripled during the period.
"Similar characteristics" are expected in the 2008 accounts, which will include more big-ticket rights buys as well as a "very significant rise in revenue".
Beyond that, the source said the Setanta will focus on "stability" rather than aggressive expansion, leading to losses "coming down very markedly" from 2009 onwards.
The figures come days after Setanta found out it had lost one of its Premier League packages, leaving it with just 23 games per season to show UK audiences from 2010.
Wrong
Setanta was reported to be raising £159m to fund the package it has won, but sources last night said that figure was "completely wrong" and an amount "much lower" was being sought.
The detail of the 2007 accounts shows turnover of £119m, up from £42m the previous year, along with an operating loss of almost £130m against a 2006 figure of £33.6m.
"There's always a bit of a lag between the revenues and the turnover because it takes a while to build the revenue," the Setanta source said.
The 2007 figures also include a £22m exceptional profit from the sale of US-based NASN and the sale of Setanta's interest in Servecast, leaving the year's loss at £115m, more than 3.5 times the £32m incurred in 2006.
Noting the higher losses In their accounts' commentary, Setanta's directors stressed that the company was in "development stage".
"The development of the business and its financial position . . . were in line with expectations and the major operating financial targets were achieved," they added.
The directors also point out that Setanta surpassed one million premium subscribers in the UK and Ireland by November 2007, largely because of the group's coverage of the Premier League and the US PGA golf tour.
Under "future expenditure", the 2007 accounts list commitments to spend £666.5m on TV programming rights that have already been agreed. This is understood to include amounts that were outstanding for the Premier League, the FA Cup and soccer World Cup qualifiers.
The accounts also note that Setanta raised £182m in January 2007 and about £90m in November, which "should enable the group to execute its business plan looking forward".
Founded as a two-man operation by two Irish friends in 1992, Setanta's headcount was at 310 by the end of 2007, up 72 year-on-year.
- Laura Noonan
