Setanta (merged)

[Guest charlesmurdoch]

it says in the sun today that when the spl started every team in division 1 would get a quarter of the revenue :019: now setanta cant pay this then (cant remember what team it was) they would demand that the spl change structure (or something like that) because of brach of contract. so what exactly does that mean for division 1 if setanta go bust and the SPL cant pay the money to the teams..........??? :P

[Kirishima]

Things should pan out something like this:

The SPL forward a fraction of the 3m to the clubs, based on a sliding scale, to avoid clubs entering administration.

Meanwhile, they will have their lawyers in discussion with the administrators, working out how to get the 3m (or as much as possible) from a new buyer. Alternatively, if ESPN step in then this will see the money be released, which is most probable.

The SFL are free to negotiate a deal regardless, and BBC ALBA will be getting this as ICT and Ross County are in the same division now.

All in all, next season, it may be easier being in Div 1. So we should feel lucky to be relegated. Perhaps the board knew this all along, and was part of the plan....IHE?

[arbroath2ict5]

All in all, next season, it may be easier being in Div 1. So we should feel lucky to be relegated. Perhaps the board knew this all along, and was part of the plan....IHE?

:019: :P :P :P

[WYNESS101]

I wonder who will be next broadcaster to screen the spl, if setanta goes into admin.

Well there in talks the day with ESPN about them buying them over so...

[Renegade]

I hope they get it. I like ESPN.

[RiG]

Would we get American style commentators to cover the games in the style of Boston Goals from Soccer AM?

"Grant Munro with a Hail Mary pass way downtown to Imrie! Imrie fakes a pass off and goes at the blocker, runs a post pattern before unleashing to thunderclapper into the upper rectangular 90 past the goaltender! HOLY COW! What an awesome score by Imrie! One zero Inverness!"

[Jay_7]

Would we get American style commentators to cover the games in the style of Boston Goals from Soccer AM?

"Grant Munro with a Hail Mary pass way downtown to Imrie! Imrie fakes a pass off and goes at the blocker, runs a post pattern before unleashing to thunderclapper into the upper rectangular 90 past the goaltender! HOLY COW! What an awesome score by Imrie! One zero Inverness!"

If he shouts "Hadouken!" as Munro punts the ball then they can Americanise it all they want. :019:

[CaleyMad]

I read in the Daily Stay (Classy) that if Setanta go bust, then Kilmarnock and Motherwell are quite likely to go bust. Although it didnt mention Hearts, i presume i should add them to the list.

Now if The SPL dont get their 3 million pounds, and Kilmarnock and Motherwell go bust, Who will replace them.

Would it be us and Partick Thistle? Or The 2nd and 3rd Place teams from the Division?

[Renegade]

I read in the Daily Stay (Classy) that if Setanta go bust, then Kilmarnock and Motherwell are quite likely to go bust. Although it didnt mention Hearts, i presume i should add them to the list.

Now if The SPL dont get their 3 million pounds, and Kilmarnock and Motherwell go bust, Who will replace them.

Would it be us and Partick Thistle? Or The 2nd and 3rd Place teams from the Division?

Possibly could be. ICT's stay in the 1st Division could be shorter than anyone expected.

[Guest birdog]

Too many people getting their hopes up that this will materialise before the start of the season, as Scotty said we don't want to sound like Partick supporters. Let's enjoy a year in the SFL, I am looking forward to it now Livi, C*unty, Partick are all teams I relish watching us hump. Then, let's hope that a couple of overspending teams find themselves heading to the wall, Killie would be sweet, Motherwell too and I know it's a huge ask but I'd love Aberdeen to die too. It is well overdue that a few teams with bad business sense go the way of Gretna.

[CaleyMad]

Bad New for Caley

New Investor

meaning Motherwell, Hearts and Kilmarnock are unlikely to go bust. . .

[12th Man]

I think they will go bust, I cant see a large investment being made just to pay off promises to football clubs.

Setanta will still have a shortfall between income and payment to football clubs even with new investment.

The TV rights are over priced if they go bust the contracts are terminated and other broadcasters negotiate a new deal, theres no point bailing out Setanta if their contracts are losing money

[CaleyD]

More likely to be someone looking to buy a sizeable chunk of the business at a knock down price as opposed to a generous philanthropist looking to throw good money after bad.

I think that Setanta, as a company, has potential....it's just that they've made a few very poor decisions which have all but sent them to the wall and they don't have the cash to get themselves out of bother.

[Heilandee]

Setanta seem to be over the worst for now,just hope they do something to improve the appalling picture qaulity and dire customer service so i can subscribe again next season :sad01:

Setanta taking new subscribers again

Edited June 13, 2009 by Heilandee

[Yngwie]

Yep, they have been saved. This Len Blavatnik is a megarich Russian American who profited from Russian oil markets opening up. He's also been the biggest shareholder in TopUp TV for years - another seriously struggling venture. Maybe there is money to be made from these investments in the long term, but maybe he also fancies himself as a media tycoon.

It's reported that he's paying ?20m for 51% of Setanta. A year or two ago Setanta's shareholders were trying to sell the company, and there was plenty of interest but they priced themselves out of a deal, looking for ?1bn for it. Big mistake.

[Heilandee]

Now i dont understand or move in the world of high finance,but there seems to be a bit of history in the big money stakes, i spose beggars cant be choosers!

"Mr Blavatnik's petrochemicals business, Lyondell Basell, which filed for bankruptcy protection in January owing $26bn, sparked a row when it emerged that Royal Bank of Scotland had been forced to write off a ?2.5bn loan to the company made by ABN Amro"

As you say Ywngie, he's also invloved with top up TV which is possibly the limpest idea in TV broadcasting history,launching pay channels on a tv platform branded "Freeview"is hardly the work of a marketing genius! i've nae idea how that limps along,i've never had one customer enquire about it or ask how to subscribe etc. :sad01:

[Yngwie]

Well it seems that the acquisition has fallen through at the due diligence stage. The Premiership say they are putting Setanta's game rights back on the market.

Setanta are fecked.

[Alex MacLeod]

EPL have terminated the license to allow Setanta to show the pre-agreed matches for next season due to them failing to pay last months ?30m installment. Dire news for SPL I'd think.

[EWS]

I read somewhere that we were one of the SPL clubs that faced going to the wall if the Setanta deal failed??

What utter rubbish.

[ictchris]

Bye bye Killie.

[Yngwie]

What seems to have happened is that when the new investor inspected Setanta's books, they discovered potential large additional tax liabilities.

My understanding is that this relates to backdated VAT. Setanta created company in Luxembourg, and wrote to their customers notifying them that their subscription contracts were now with the Luxembourg company. Why? Because Luxembourg allows broadcasters to charge a very low VAT rate (less than 5% I think - so much for the EU level playing field) instead of the 17.5% in the UK at the time. This meant that more of each customer's ?12.99 per month goes to Setanta and less goes to the tax man. The Lux government are also happy because they suddenly get money for nothing.

The losers in that arrangement are the UK government who get no VAT. And I think what has happened is that they are challenging this arrangement with a view to getting all their money back.

I don't think Setanta are the only broadcaster to have this sort of arrangement and there's nothing illegal about it, but it's a bit of a grey area as to what constitutes being based in Luxembourg to qualify for the low VAT. Creating a company and having a small office with a server over there, when all your management, operations and customers are in the UK and Ireland? That's sounds like something for the lawyers to argue over.

The point is though, that nobody in their right mind will want to buy Setanta if that threat is hanging over them.

Administration surely seems inevitable now.

[WYNESS101]

http://news.bbc.co.uk/1/hi/business/8112158.stm

"Bids close on Monday for the rights to broadcast 46 live English Premier League games in the 2009/10 season that were to have been shown by Setanta"

Other rights

Attention could now turn to the other broadcasting rights that Setanta owns, including the 23 English Premier League games a season that it is due to broadcast for the three seasons starting in 2010/11.

It also has contracts with the FA for England and FA Cup matches, the Scottish Premier League (SPL), and the Blue Square Premier, the top division of English non-league football

[Alex MacLeod]

We dont have a level playing field in UK let alone Europe. VAT in Channel Islands is set at 3% and this only started a couple of years ago.

I think the problem here is not so much to do with Luxemborg but that we, the consumer, in the UK are obliged by law to pay VAT. So we are paying UK VAT on the service but it isn't getting back to the treasury. Its a very complicated area, for any provider from outside the UK, and one that is depriving UK citizens from a lot of overseas provided services that are freely available elsewhere in the world.

The biggest problem for Setanta though is that they counted their chickens too early. They committed to TV rights before knowing the customer base. They also failed to understand the customer. Had they been less biased towards the OF they may have had more customers in Scotland. In England they thought they'd compete with Sky for custom. They failed to realise that the existing Sky customers were happy with the coverage being provided by that company and that they weren't going to stump up more money for an extra one or two games a week. New customers were also more likely to opt for Sky because they still retained full rights to the more 'in demand' games.

[Yngwie]

I think the problem here is not so much to do with Luxemborg but that we, the consumer, in the UK are obliged by law to pay VAT. So we are paying UK VAT on the service but it isn't getting back to the treasury.

That's not actually the case. Consumers aren't obliged to pay VAT at all, they just pay the retail price/subscription fee of whatever they are buying.

The supplier of the goods/services is obliged to account for VAT at the appropriate rate and hand it over to the relevant government, regardless of what VAT (if any) they charged on to the consumer.

In Setanta's case, an element of the subscription fee comprises Luxembourg VAT, and no UK VAT at all. The Lux. VAT rate is actually just 3% after checking it out.

So if the subscription is ?12.99 a month, Setanta get ?12.61 and 38p goes to the Luxembourg tax man. If however the transaction was subject to UK VAT instead, Setanta would get just ?11.30 and ?1.69 would go to Gordon Brown.

[ilpadrino]

I think the problem here is not so much to do with Luxemborg but that we, the consumer, in the UK are obliged by law to pay VAT. So we are paying UK VAT on the service but it isn't getting back to the treasury.

That's not actually the case. Consumers aren't obliged to pay VAT at all, they just pay the retail price/subscription fee of whatever they are buying.

The supplier of the goods/services is obliged to account for VAT at the appropriate rate and hand it over to the relevant government, regardless of what VAT (if any) they charged on to the consumer.

In Setanta's case, an element of the subscription fee comprises Luxembourg VAT, and no UK VAT at all. The Lux. VAT rate is actually just 3% after checking it out.

So if the subscription is ?12.99 a month, Setanta get ?12.61 and 38p goes to the Luxembourg tax man. If however the transaction was subject to UK VAT instead, Setanta would get just ?11.30 and ?1.69 would go to Gordon Brown.

Not quite - according to HMRC "If you're VAT-registered you must charge VAT on all goods and services you sell unless they are exempt from VAT" - effectively if you're a UK company you are required to collect the tax from your customers. Similar conditions apply in all member states. Apart from the semantics of that, your sums are correct.

My understanding of the problem, however, is that it has nothing to do with moving to Luxembourg, and is simply an unpaid bill for VAT dating back to when they were legally based in Ireland/UK.