ITV Digital tries to stem loss of 3,000 subscribers a day

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The Independent Online

Crisis-striken ITV Digital has haemorrhaged 3,000 subscribers a day since it reneged on a £178.5m deal to screen Football League matches.

The scale of its financial meltdown was revealed as senior executives of Carlton Communications and Granada, the company's owners, held their first talks with league officials.

ITV Digital was placed in administration after it failed to honour its promised TV rights payments. The league turned down a reduced £74m offer for the remainder of the three-year contract and threatened to sue for more than £500m.

The company is facing a crucial weekend, as the £20m set aside for the period of administration period is due to run out on Monday.

If it is placed in receivership, ITV Digital's licences would revert to the Independent Television Commission, which would readvertise them. Meanwhile, the broadcast rights for Nationwide League games would revert to the League.

Since it was launched in 1999, ITV Digital, which offered subscribers up to 40 channels via a set-top box, struggled to build up 1.2 million subscribers. The revelation that they are being lost at the rate of 20,000 a week will increase pressure on Carlton and Granada to reach a deal with the football authorities to keep the company afloat.

A television industry source said: "There is no doubting the gravity of the situation. Something dramatic needs to happen within days."

An ITV Digital spokesman said the company did not comment on its subscription figures except at the time of its quarterly results. Granada's chairman, Charles Allen, and Carlton's chief executive, Gerry Murphy, are understood to have met senior League officials, believed to be its chairman, Keith Harris, and its chief executive, David Burns. The talks, described as delicate, are expected to resume on Monday.

At a meeting of all 72 Nationwide League chairmen on Thursday, Mr Harris demanded that Granada and Carlton come to the negotiating table.

At the meeting at Manchester City's Maine Road stadium, the League accused Carlton and Granada of making secret plans to put ITV Digital into administration as far back as November while at the same time making public statements expressing support for the company. As a result, the League have complained to the Stock Exchange, the Independent Television Commission and the UK Financial Services Authority about statements made by Carlton and Granada regarding ITV Digital between November and March.

Should the broadcaster be wound up, its provision of pay-TV services such as Sky Sports, UK Play, MTV and Eurosport could be withdrawn overnight, although its free services, such as those provided by the BBC as well as ITV1, ITV2, Channel 4 and Channel 5, will continue to be broadcast.

Such a move would spell the end of the attempt by Carlton and Granada, the two biggest ITV companies, to build a platform capable of competing directly with Rupert Murdoch's BSkyB.

BSkyB, financially the strongest of the country's four digital TV operators, may yet choose to add ITV Digital's customers to its own 5.7 million subscribers. This could, however, run into regulatory problems.

Other possible buyers include several venture capitalist groups, including a consortium surrounding the former ITV Digital chief executive Stephen Grabiner.