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A look back at the ITV Digital disaster...

In 2001, at a cost of £315 million, ITV Sport chiefs bought the rights to broadcast Nationwide League football for the next 3 seasons. At the time, it was a seemingly brilliant deal for our clubs as more money than ever before was going to be pumped into the lower leagues. A little over 6 months later and ITV claimed they simply could not afford to cough up anymore cash. The ITV Sport channel (and ITV Digital as a whole) was nothing short of disastrous – terrible viewing figures, approximately 1500 staff were laid off and the company itself publicly admitted that 1 in 4 subscribers to ITV digital cancelled before the eventual demise of the service. In an attempt to improve the availability of the channel, ITV entered negotiations with BSkyB in hope that Sky Digital would carry the ITV Sport Channel. It was conformed that ITV demanded £80 million per annum (the same amount ITV are paying the Nationwide League P.A.) from BskyB for the ‘honour’ of carrying their sport channel. Hang on, ITV Digital was the company in a seemingly precarious financial position, not Sky. ITV was the company needing a ‘favour’ from Sky, not vice versa. So how could they have the audacity to play hard-ball – potentially risking the future of our clubs – just to recoup the silly money they paid out in the first place?! According to a BskyB spokesman, a deal was struck only for talks to brake down when ITV backed out of any deal at the last moment. Sky claim ITV bosses pulled out of the deal because they were informed at the last moment that any deal would be detrimental to ITV Digital’s Champions League coverage.

ITV’s chief executive reassured League chairmen that the deal would be honoured, but when it became apparent that ITV Digital had no future, they attempted to renegotiate. According to media reports, Carlton & Granada bosses made the Football League an offer of £50 million instead of the £178.5m still owed. The bid was quickly rejected and soon after, Carlton and Granada put the company into administration. Another offer (approximately £75 million) was also rejected, and when no buyers were found, ITV Digital was shut down with the League still owed over £178 million. The League however, refutes that any formal offers were made.

In the wake of the Digital collapse a number of clubs have been forced into administration, including Bradford, and most recently Notts County. Other clubs meanwhile, have been forced to cut staff and it has been predicted that 30 League clubs would be forced into administration if no payments were received from Carlton and Granada. The next instalment of the outstanding £178.5 million is due on August 1st, but with Carlton and Granada bosses pulling out of ITV Digital, they claim to have waived all responsibly to fulfil their commitments. As such, the Football League has decided to take them to the high court, with a hearing set for July. They will argue that Carlton and Granada have a moral obligation to pay the remainder of the money because they were the sole shareholders of ITV Digital.

Meanwhile, the League has entered into talks with rival broadcasters over the rights to air Football League matches next season and beyond. However, included in the League’s legal battle is a claim of £500 million in damages. This claim will be much weaker should the League secure a broadcasting deal as they will have no grounds to argue for advertising and sponsorship losses.

The full extent of the disaster continues to unfold...

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