ESPN lost the U.S. broadcast rights for the Champions League it had held for over a decade.  However, with Irish broadcaster Setanta Sports facing financial ruin, ESPN may have a route back into European soccer.

Setanta Sports, operating in the U.K., North America, Ireland and Australia, relies on paid subscribers.  It fell 700,000 short of the 1.9 million subscribers needed to break even over the past six months.  The network, without miraculous investment, will default on its contracts to televise soccer, rugby and other sports.

Setanta’s demise could have stern ramifications for many if not dealt with swiftly.  The network has multiyear contracts for U.K. television rights from the English Football association ($279 million), the English Premier League ($207 million) and the Scottish Premier League ($200 million), as well as deals with Rugby leagues. Clubs have already accounted for that money in their operating budgets.  Failure to pay could force the clubs into financial trouble as well.

ESPN has had interest in television rights for the Premier League to build its brand in Britain.  Under its agreement, Setanta televises 46 matches per season.  The simplest solution would be the WWL taking control of Setanta by offering to take on their debt.  ESPN could also wait out the company’s dissolution, offering an even lower bid for the Premier League when the rights are resold.  (U.K. law prevents Sky from owning all six television packages.)  ESPN could sidle it’s way into the U.K. market for a relatively scant investment.

This also could see soccer back on ESPN in the United States before the 2010 World Cup.  In the U.S. Market, Setanta Sports leases rights to up to four Premier League matches per week and the Europa League from Fox Soccer Channel.  Until last season, ESPN had sub-licensed Setanta rights to Champions League matches, with speculation the relationship would continue with FSC.  Dealing with ESPN, FSC might be more reticent, as most would not hand their rival a sword to stab them in the jugular.

Setanta also holds American rights for French Ligue 1, the Scottish Premier League, lower division English league soccer, the Asian Cup, World Cup 2010 qualifying, international friendlies and an assortment of minor cup competitions.