League to meet ITV Digital in court

Click to follow
The Independent Online

The football league said last night that it will use "all available channels" to pursue ITV Digital for the £178.5m the broadcasting company owes the League for the remainder of its three-year television deal.

ITV Digital was allowed by the High Court to go into administration yesterday, sending shockwaves throughout the Nationwide League, where it is estimated that between 30 and 50 clubs could go bust if the rights deal is not honoured.

Brendan Batson, the deputy chief executive of the Professional Footballers' Association, said the collapse of ITV Digital will see the League's strongest clubs "circling like vultures round the corpse" of English football. He said the battle to survive may lead to widespread job losses among players, with the strongest clubs free to pick up discarded players cheaply or for nothing as the weakest clubs perish.

ITV Digital has said it simply cannot afford to pay the balance of its three-year, £315m deal with the League. The next instalment of £89.25m is due in August and the last one, for the same amount, next year. The company offered the League £50m instead of £178.5m but that offer was rejected. The League maintains that ITV Digital's co-owners, Granada and Carlton, are legally liable for the deal and said yesterday that it will pursue those companies for payment if necessary.

"If ITV Digital defaults, the League has made it perfectly clear that it will use all available channels to pursue ITV Digital, Carlton Communications and Granada for the remaining rights fees, damages and costs," the League said last night in a statement.

Keith Harris, the League's chairman, added: "The actions of Carlton and Granada threaten the survival of professional football in this country, which would have a devastating effect on many local communities. They will not succeed."

David Burns, the League's chief executive, said that the ITV companies had made several attempts "to sow discord and disharmony throughout the football community" but that these attempts have failed. "The strength of the Football League is its unity," he said.

A League spokesman said Harris and Burns are "100 per cent certain" that they would win a legal battle against Granada and Carlton for the money owed to the League. Senior sources within the broadcasting companies insist that contractual technicalities leave them free of responsibility for underwriting the deal.

A lengthy and expensive court battle seems almost certain unless an unlikely compromise is reach while ITV Digital is in administration.

The League, meanwhile, is understood to be considering its broadcasting options if ITV Digital does not emerge from administration and folds completely. BSkyB and the BBC are the only realistic alternative broadcasters but no possible deals have been formally discussed. There has also been talk of the League setting up its own television station to broadcast games but this idea remains undeveloped, if not completely implausible.

With many clubs looking to uncertain futures, Batson said he feared for futures of hundreds of footballers. "At the end of a normal season you get 400 to 500 Nationwide League players looking for employment elsewhere," he said. Apart from the very best of those, he said, the others could become victims of cutbacks in recruitment and become unemployed.

The situation could be as bad for many other players on long-term contracts, Batson added. "Clubs have to make judgements about their staff levels at the end of the season and the loss of television money is a serious factor to take into consideration.

"I would take Keith Harris at his word that between 30 and 50 clubs could be in danger because that has been gleaned from the clubs themselves. We've already helped 13 clubs pay their wages this season and that was before this happened.

"There's going to be a lot of casualties. And when that happens you'll get some clubs forced to sell and others in a better position circling like vultures round the corpse."

At clubs like Bury, already in administration and struggling to survive, the loss of the television income will only make a bad situation worse. "In the long-term it makes my job of selling the club more difficult," Matthew Dunham, the Second Division club's administrator, conceded.

"For the clubs where television and advertising revenue is a significant part of their income it will be extremely difficult. It may lead to re- negotiating players' contracts. Creditors may be asked to take reduced payments or there will be a raft of insolvencies. We could see clubs go to the wall before we see the re-negotiation of player contracts," Dunham added.

Comments