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Page last updated at 14:29 GMT, Wednesday, 10 June 2009 15:29 UK

Foulkes warns of SPL bankruptcies

Player with Setanta sign
Setanta Sports may have broadcast its last live football

Lord Foulkes has warned that the loss of the television contract with Setanta could tip some Scottish Premier League clubs into administration.

The broadcaster is in negotiations to find a backer after being unable to make end-of-season payments to the SPL and the Premier League in England.

And Foulkes, the former Hearts chairman, said: "It is very serious.

"I think it puts the future of one or two SPL clubs in jeopardy. They are already struggling financially."

It is thought that other broadcasters would be keen to bid for Setanta's tranche of live Premier League matches and England's top-flight clubs are expected to be able to absorb any reduction in their value.

But the SPL contract is a less attractive proposition to the Irish broadcaster's rivals and the television money makes up a higher percentage of Scottish clubs' turnover.

"In some clubs, it represents up to 20% of their income and the loss of it would be really catastrophic," Labour peer Foulkes told BBC Radio 4's Today programme.

It's a difficult time enough for Scottish football, so this is a bit of a hammer blow and it's difficult for clubs to progress without it

St Johnstone manager Derek McInnes

"The bigger ones have got reserves that would carry them through even this kind of difficulty, but some of the smaller clubs in the SPL I know are already in financial difficulty and this kind of thing would just tip them over into a situation they could not recover from."

He thought Setanta had done "a very good job" in broadcasting Scottish football and said he hoped a solution could be found.

One SPL chairman has told BBC Scotland that his club's entire wage bill of £1.5m is paid for by the money from the broadcaster.

Another said that, if the broadcaster goes into administration, it would be "absolutely horrific" for the future of the game in this country.

Scottish FA chief executive Gordon Smith had not spoken directly to the SPL about the situation but said it was "a concern for the game as a whole" and one the parent body was monitoring.

Football finance expert David Glen, of PriceWaterhouseCoopers, pointed out that the latest crisis came at a time when most SPL clubs were beginning to resolve their historical debt problems.

"Every single club here is going to feel some pain, but there's going to be varying degrees of pain," he said.

"At the top of the league, that may not have a big impact as the Old Firm have a total income of about the £50m mark.

"It's going to be painful, but it is not going to be disastrous for them.

"Going to the other end of the league and we will find clubs like St Mirren, Motherwell, Falkirk and even Dundee United. Their income is only £3-5m and we are talking about 20-30% of their income.

"If they were to lose that income, that would be a very serious problem for them."

The problem for Scottish clubs was that present and potential owners, as well as the their bankers, were now less likely to be able to finance a rescue package because they too had been hit by the economic downturn.

"We have already been here before, when they were looking at SPLTV after the previous Sky contract came to an end," said Glen.

"That did not come to fruition and, at that point, the BBC stepped in for a lower level of income.

"The clubs went through a lot of pain and they had only just recovered from that and got debt under control and here we are again."

Even promoted St Johnstone, who have run for 22 years without any debt, admit that the uncertainty over the Setanta deal will hamper their activities in the summer transfer market.

Manager Derek McInnes said: "We are better off than most, but it's a difficult time enough for Scottish football, so this is a bit of a hammer blow and it's difficult for clubs to progress without it."



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see also
Setanta halts new subscriptions
10 Jun 09 |  Business
Why Setanta Sports is in trouble
09 Jun 09 |  Business
Last-ditch effort to save Setanta
09 Jun 09 |  Business
Q&A: The future for Setanta
09 Jun 09 |  Business
SPL pays up in lieu of TV money
05 Jun 09 |  Scotland


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