Private equity’s Setanta switches off

Two private equity firms have written off a total of around €140m as Setanta, an Irish sports channel known for broadcasting live English Premier League fixtures, has pulled the plug and gone into administration.

Setanta, the Irish sports television network backed by Balderton Capital and Doughty Hanson, has ceased trading and called in the administrators after failing to meet a £10 million (€12 million; $17 million) payment last week for rights to broadcast matches from English football’s Premier League.

UK-based private equity firm Doughty Hanson has written off the €99 million it has invested in the broadcaster, having acquired a 22 percent stake in 2007 on behalf of its fourth fund. Venture capital firm Balderton Capital

The Premier League: too expensive for Setanta

has not disclosed its investment in the sports network, but a source close to the situation pegged its write-off at around €40 million.

Balderton’s investment in Setanta was made from its second fund, the $375 million Balderton Capital II, which closed in 2004. Other investments in this fund include social networking site Bebo, which generated $140 million – a return of ten times its original investment – on exit, and sports channel NASN, which was sold to Disney’s sports franchise ESPN in 2006 for a reported €90 million.

The Irish broadcaster’s failure means its rights to broadcast English Premier League football matches – the jewel in its crown – have been auctioned off the governing body for English football and ironically bought be ESPN.

Both firms declined to comment.

Other investors to write off equity in Setanta include the founders Leonard Ryan and Michael O’Rourke, who owned a 22 percent stake in the business that they had run since 1990.

Setanta had signed up around 1.2 million subscribers, but this was below the 1.9 million it needed to break even and was thought to be running at a loss of nearly £100 million a year, according to UK news agency the Press Association.