ITV Digital given a week's grace by court

The administrators of ITV Digital were today given a further seven days by the High Court to negotiate a deal with the Football League and put an end to their bitter broadcasting contract dispute that threatens to bring the company down.

Michael Crystal QC, for administrators Deloitte and Touche, said that, after discussions with the key stake–holders in the company, they believed it was in the common interests of everyone concerned for the business to continue.

There was a real prospect of achieving a "restructuring of the cost base of the business" with a view to obtaining long–term investment from shareholders.

If no restructuring could be achieved within the next week, the business would come to an end and the administrators would then seek to sell it as a going concern.

Mr Crystal told Mr Justice Lightman there were "substantial obstacles" in the

way of restructuring, including the position of the Football League as a major

creditor.

The survival of the company "hangs on a knife edge", he said, but discussions with the League had not yet finally broken down. The administrators' proposals would be considered by chairmen of the League clubs at a meeting in Manchester on Thursday.

In the meantime, the administrators had sufficient funds to keep the company running for a week, even though the £20 million injected at the start of the administration on March 27 by ITV Digital's owners, Granada and Carlton, had now run out.

The administration order – which lasts for six months – struck a potentially fatal blow for cash–starved football clubs. The future for digital television was also thrown into doubt.

Before the administration, ITV Digital had hoped to strike a last–minute deal with the Football League, allowing it to renegotiate the terms of the £315 million contract.

ITV Digital still owes £178 million under the deal signed with football chiefs to allow it to screen Nationwide League and Worthington Cup matches.

But talks broke down as the broadcaster, hit by low audiences and falling advertising, said it could only afford £50 million.

Last week, the Football League turned down a new £60 million offer from the administrators, but it emerged today that £100 million could now be on the table and that the League might accept it if it was free to find a new buyer for its television rights.

After today's hearing in London, the administrators said in a statement that

restructuring had been hampered "by the unauthorised disclosure of private and

confidential discussions and the campaign of negative publicity which has

continued this morning and is severely undermining the administration

process".

If the League rejected the latest proposals or the administrators concluded that the "on–going recriminations have undermined our ability to achieve the business plan", there would be no alternative but to sell the business and its assets.

Unless legal complications arise, the administrators will not have to return to court in a weeks time – either ITV Digital survives, or moves to sell it go ahead.