Clubs face crisis as ITV's cash problems mount

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The Independent Football

The short-term futures of several dozen Nationwide League clubs were thrown in doubt yesterday as ITV Digital sought an urgent re-negotiation of its current £315m television deal with the Football League. A worst-case scenario could see the deal collapse, leaving the League's 72 clubs with no television income from August onwards. Many clubs, shackled with expensive and binding players' contracts, would struggle to cope with the loss of revenue and could face going out of business.

ITV Digital could re-negotiate the deal significantly downwards, even though it is not yet at the end of its first season. This may allow the ITV Sport Channel, which hosts most of the Nationwide League's games, to stay in business long-term. The clubs may be forced to accept less, however, or face the prospect of no money at all.

Granada and Carlton Communications, joint owners of ITV Digital, said in a statement yesterday that a "fundamental restructuring of ITV Digital's cost base must be concluded as a matter of urgency in order to secure the long-term future of the business". ITV Digital's major contract is with the Football League.

"If the Football League doesn't accept a downgraded deal, it faces having no deal at all," said a source close to negotiations. "It would then have to go cap in hand, to Sky, effectively the only other potential rights' buyer. And Sky would be in a position to pay whatever it sees fit, which might not be very much at all."

The current ITV Digital deal, worth £105m a year to the League until summer 2004, sees First Division clubs receive around £2m per season each, Second Division clubs around £200,000 each and Third Division clubs around £150,000.

ITV Digital paid £47.25m up front when the deal was signed in 2000, and paid one of three further installments of £89.25m last August. Two more installments of £89.25m each are due this August and in August 2003. ITV Digital wants the deal re-negotiated before the next payment and is thought to be seeking urgent talks in the near future with the League.

A spokesman for the League said: "We have an agreement and we expect them [ITV Digital] to honour that. If they want to come and see us then of course we would be happy to talk to them because they are a valued commercial partner."

There are few observers, or even club chairmen, who now disagree that ITV Digital paid over the odds for Nationwide League football. Audiences for some games have been atrocious, with less people watching on TV than actually at the matches. The deal, at £105m a year, also looks poor value when compared to other broadcasting contracts. ITV1, for example, pays £61m per season for Premiership action – albeit highlights – that attract much greater audiences than live Nationwide League football.