Beleaguered British terrestrial TV platform ITV Digital has warned that it could go out of business if the Football League (the three soccer divisions below the elite Premier League) does not accept a massively reduced fee for broadcast rights.
Under the current three-year deal, ITV Digital has another £178 million (€288m; $255m) to pay to the League over the next two years. However, the cash-haemorrhaging platform is desperate to renegotiate, and has offered just £50m for the remainder of the contract.
The League, whose board meets today (Thursday) to discuss the offer, is caught between a rock and hard place: accepting the settlement means a major loss of cash, threatening the future of several smaller clubs; rejecting it could prompt the closure of ITVd, jeopardising the League’s chances of getting even a penny. It has warned that up to one-third of its 72 clubs could face bankruptcy if the deal falls apart completely.
Many analysts believe the offer will be accepted, as other broadcasters are unlikely to make a better offer [WAMN: 07-Mar-02]. Coverage of League matches has attracted tiny audiences, though it has hardly been helped by being on the ITV Sport channel, which is not carried by leading digital platform Sky Digital.
However, some League chairmen are still expected to resist the renegotiated deal, arguing that ITVd is obliged to stick by its original agreement.
A major problem for the clubs is that payment is not thought to be covered by guarantees from ITV Digital’s parents Granada Media and Carlton Communications, despite recent claims to the contrary by League ceo David Burns [WAMN: 05-Mar-02].
Forcing the deal could therefore pose a very real threat to the platform – a fact underlined by the presence of Charles Allen (Granada chairman) and Steve Murphy (Carlton ceo) at talks with the League.
Data sourced from: Financial Times; MediaGuardian.co.uk; additional content by WARC staff