Scottish football clubs risk losing millions after it emerged that sports broadcaster Setanta was on the verge of financial collapse.
Scottish football clubs risk losing millions after it emerged that sports broadcaster Setanta was on the verge of financial collapse.
Setanta, whose current deal to show Scottish Premier League (SPL) games ends next season, agreed last year to pay £125m over four seasons for exclusive live coverage from 2010.
The company is now fighting for survival, and it is understood it is trying to renegotiate contracts that have yet to start.
The Irish company is due to meet SPL clubs in Glasgow on Thursday, and it is believed that negotiators will try to cut the length and value of the £125m four-year deal.
While Rangers and Celtic are expected to demand assurances that the firm will not go back on the arrangement, it emerged that both were in favour of striking a deal with Sky last summer.
The Old Firm, along with Aberdeen, wanted a longer-term decision and warned that Setanta might struggle to fulfil its obligations. However, other clubs supported Setanta in a 9-3 vote.
A spokesman for the SPL said he could not discuss issues ahead of the meeting, but it is thought that any reduction would have a significant bearing on budget preparations at Scottish clubs.
Just days ago Motherwell boss Mark McGhee said Setanta's financial problems could have "catastrophic" effects.
He fears he may be forced to dispense with his seasoned professionals and field an inexperienced second-string team if the cuts are severe.
Mr McGhee said: "It depends what the reduction ends up being. If it's a third of the money then that could end up being a third of our turnover. That would be catastrophic for our club and we'll end up playing the youth team next year. "
Setanta is understood to be touting a reduced offer of £20m, or may seek to shorten it so that it finishes in 2012 rather than 2014.
The Old Firm and Aberdeen were said to be angry their commercial expertise had been ignored during the original decision and they want to examine the contract due to start next year in detail.
SPL clubs were understood to have been attracted to the Setanta deal because it offered larger sums of money in its initial years than Sky and would have doubled their television revenue.
But the Old Firm and Aberdeen felt the decision should take account of the robustness of the competing companies' business models over the period of the contract.
It was also felt Sky Sports offered a greater exposure, as the channel is estimated to have more than twice as many subscribers as Setanta.
Setanta, which won the rights to broadcast the SPL from the BBC in 2004, admits it is hoping to re-negotiate all its future contracts.
That follows the terms of its contract with England's Premier League, which turned out to be less lucrative than it had hoped.
It lost half of its English Premier League rights to Sky in February, leaving it with only 23 live games from the start of the 2010-11 season.
Fears were also raised in England that the broadcaster was about to default on payments to some clubs However, Setanta's director of sport, Trevor East, was reported to have dismissed the concerns, saying: "We are having very positive discussions with all our rights partners as we move forward with a restructured business plan. Everyone wants to ensure Setanta have a great future."
A new management team has been holding talks to raise money and reduce the amount it pays for sports rights. Sir Robin Miller, the Emap publishing veteran, has been brought in as chairman.
The company, which has 1.2 million customers, is now trying to raise £100m from shareholders.
Accountants from Deloitte have been called in to work alongside long-time advisers at Close Brothers and could be appointed as administrators if negotiations fail.
