Graham Kelly: Contracts cut both ways for hard-pressed clubs

The Football League chairman Keith Harris never spoke truer words than when he prefaced the 72 clubs' meeting last week with the observation: " We face difficult times."

When ITV Digital went into administration, he and his chief executive David Burns were already investigating ways of restructuring the League's finances and competitions following the proposed Phoenix League breakaway. The League Cup sponsors, Worthington, chose to pull out and just as clubs were planning policy in arguably the most crucial area of their operations, youth development, they were struck a blow almost as low as that dealt by ITV Digital.

It transpired that funding was no longer guaranteed for their centres of excellence. Most clubs had already gone through the Football Association's rigorous audit of criteria and only today will a crucial Sport England meeting decide whether clubs can continue to receive their grants of £137,000-per-year for the next four years.

The League is also gamely fighting against Uefa's imposition of transfer windows. Supported in their wish to 'inject stability' into the game by leagues across Europe, including the Premier League, Uefa want to restrict transfers to the close season and January.

The Premier League has, though, given its backing to the Football League in the battle with ITV Digital, which is more than can be said for the government, whose only comment has been to bemoan the slapdash way some clubs are run.

No one can claim that needy clubs should receive hand-outs in preference to much more deserving cases, but contrast the hectoring and lecturing of modest clubs by Culture Secretary Tessa Jowell and Sports Minister Dick Caborn at the height of the crisis with the ready provision of loan guarantees by the German federal government for clubs jeopardised by the collapse of Kirch Media.

Probably most of us do not like to look too far ahead but, between now and the end of this decade, Carlton and Granada will be reclaiming digital tax breaks of £1.95 billion. The two companies' total 'digital dividend' will thus add up to more than 10 times the money ITV Digital, owned solely by them, are due to pay the Football League.

Little wonder that, upon hearing about sums of this magnitude, the club chairmen united as they have rarely done before to fight for their full contracted £178.5m from ITV Digital, as details also emerged of complaints the League has made to the Stock Exchange, the UK Financial Services Authority and the Independent Television Commission about statements made by Carlton and Granada between November and March, which it alleges were misleading.

Moreover, a naïve attempt to absolve the television companies' officers from liability for ITV Digital's debts was received with derision. So, the end of the first half, as it were, saw the League counter-attacking strongly. If Carlton and Granada failed to engage in proper dialogue to resolve the matter, litigation would have to ensue for damages of £500m, it said.

There is no doubt that the chairmen's anger is justified. Carlton and Granada are cynically attempting to exit subscription television by the cheapest possible route. But, while considering the sanctity of contracts, let's look at these comments and facts:

David Burns: "We have a contract. We are entitled to have it honoured Our member clubs and their players have a right to expect that their contracted income is protected."

Keith Harris: "Carlton and Granada must not be allowed to renege on their commitments. The clubs have in good faith built their medium-term plans on contracted revenues."

To John Hollins, the former Arsenal and Chelsea player who lost his manager's job at Swansea City last September, those words will ring hollow, for he has not been paid one penny of the £250,000 that was outstanding on his contract when he was ousted.

Hollins is just one in a line of managers for whom the League Managers'Association has had to fight a long, hard battle since the same chairmen who are rightly indignant about ITV Digital's behaviour removed the one tiny scrap of protection the managers had from the rulebook a couple of years ago.

If there should result, either by good fortune or by the strong resolve of those chairmen, anything remotely resembling a settlement of the ITV Digital dispute, the first item on the agenda thereafter should be the re-instatement of meaningful negotiations for a managers' arbitration tribunal.

It already exists in the Premier League, so why not in the Football League? Maybe then their leaders' words might mean something.

grahamkelly@btinternet.com