SETANTA SPORTS faces an uphill task to turn its £131 million a year purchase of Premier League football rights into profit, after it emerged that its rival BSkyB generates only £35 million a year from a near-equivalent service.

It is understood that Sky’s Premiership Plus service, which shows 50 games a year separately from the principal Sky Sports offering, has struggled to generate income because football fans see the extra games as optional.

The £35 million was derived from subscriptions — the service does not generate advertising revenue.

However, Setanta, the little-known but fast-growing Irish sports broadcaster, is confident that it can make money after it won the right to air 46 Premier League games a season from 2007 because it can generate additional sources of revenue.

Last week, Setanta joined Sky in becoming a broadcaster of future Premier League games. BSkyB, which is 38 per cent owned by News Corporation, parent company of The Times, won the rights to 92 games a season, at a cost of £1.3 billion.

Sky’s Premiership Plus is available for £50 a season and is offered separately from Sky Sports. It is thought to be roughly comparable to Setanta’s Premier League ambitions, because it shows a similar number of games and generates its own income stream.

Setanta believes that it can generate additional income by supplying its games to pubs and clubs, as part of joint deal with Sky that the two broadcasters are expected to announce today.

On some estimates, income from pubs and clubs is as much as £200 million a year, although that figure is disputed by Sky as being too high.

The Irish company, which is 40 per cent owned by Benchmark Capital, currently charges £14 a month for its sports channels on satellite and cable. Setanta also owns rights to show Scottish Premier League football, and NASN, a channel dedicated to American sports.

It is expected to increase the subscription fee by a few pounds, rather than follow the pay-per view model under which Premiership Plus originally operated.

Setanta’s Premier League matches will also be available on Freeview, via a subscription channel on the Top-Up TV service, also priced a little above £14 a month.

Sky moved to counter perceptions that it had paid too much for its games, after the price increased by £290 million. It produced figures showing that the cost of the rights, at just below 8 per cent of group revenue, would rise marginally above that figure in 2007-08 — the first year of the new deal.

WAYS TO PAY

Sky users subscribing to Setanta Sports receive Setanta Sports 1, Setanta Sports 2, Setanta Ireland, North American Sports Network, Celtic TV, Rangers TV and Racing World for £14 a month

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