LONDON — In 1990, two budding Irish media entrepreneurs spotted a business opportunity when they bought up closed-circuit rights to an Ireland World Cup soccer fixture and screened the match live to an expatriate Irish audience in a London theater.
Michael O’Rourke and Leonard Ryan lost money on that deal.
But 15 years later, the idea of providing top class sports events to expats has become a successful business model across three continents for their Dublin-based company, Setanta, now shaping up to be a powerful force in the international pay TV sports arena.
There is even speculation the duo may attempt to challenge Rupert Murdoch-backed U.K. satcaster BSkyB’s dominance of live pay TV soccer coverage.
BSkyB’s exclusive grip on English Premier League matches may end when the present contract expires in 2007, especially if European Union regulators succeed in breaking the satcaster’s monopoly.
Setanta will be waiting in the wings, possibly backed by a private equity group,
Alongside Hollywood movies, sports — particularly English Premier League soccer — is the main driver of BSkyB’s success, with its 7.7million subscribers.
Thanks to its deep pockets and the skills of its negotiating team, Sky has held onto English Premier League matches since outbidding terrestrial rivals in 1992.
Setanta operates pay TV sports services in the U.S., the U.K. and Australia and is flexing its muscles more and more.
“This company has gone from strength to strength,” spokesman Brendan Murphy says. “It has shown it has the ability to acquire rights to premium sports and appeal to sports fans in Europe and beyond. Its ambitions speak for themselves.”
Setanta, formed in 1992, has operated pay-per-view and closed circuit sports in bars and clubs across North America for the past nine years.
In the U.S., it launched Setanta Sports USA on DirecTV in April as an 18-hour-a-day service. Come August, it will expand to a round-the-clock channel.
In Blighty, where Setanta recently scored a coup by buying exclusive Scottish Premier League matches for a reputed £50 million ($91 million), it runs a portfolio of channels on satellite and cable.
Earlier this month, the scale of O’Rourke and Ryan’s ambitions were confirmed when Setanta bought Microsoft billionaire Paul Allen’s 50% stake in pay TV sports broadcaster North American Sports Network.
Setanta, which takes its name from a mythic Celtic warrior, now wants to spread its wings still further by hiring the joint architect of BSkyB’s soccer success, Trevor East, deputy managing director of Sky Sports.
“We don’t comment on individual contracts,” insists a spokesman for Sky Sports, which pays around $612 million a year for English Premier League matches.
But if Setanta, a private company that declines to disclose hard figures regarding its business performance, succeeds in wooing East, it would pose a potential threat to BSkyB.
Setanta has already wooed Irish broadcaster RTE topper Niall Cogley, who runs one of its Irish sports channels.
Sky, which can look forward to two more seasons of exclusive live Premier League games before the contract expires, declined to comment on suggestions that Brussels wants to prevent it from having exclusive rights to more than half English Premier League matches.
It is up to league authorities to announce when the next round of negotiations begins, Sky explains.
With the stakes so high and the rewards so great no one directly involved in the negotiations would speak on the record to Variety. “The uncertainty is all part of the game,” says a rights broker.
“If Sky is allowed only half the Premiership games, it presents an enormous threat to the future of its business,” adds a former Sky topper. “Live soccer is the crown jewel of its content drivers.”