The board of ITV Digital plc, jointly owned by Britain's two largest commercial TV companies Carlton Communications and Granada Media, issued the following statement on Wednesday:
“It is proposed that Deloitte & Touche partners be appointed as administrators. A similar application is being made by ITV Digital (Services) Limited. The shareholders have agreed to provide short-term funding to the business during the administration. Deloitte & Touche partners have confirmed that they will maintain the services provided by ITV Digital during the administration.”
The accountancy firm will attempt either to resuscitate ITVd or find a buyer and report accordingly to London's High Court on April 15. But the Carlton/Granada move was slammed by ITVd’s Nemesis, chairman of the Football League Keith Harris, as “low, cheap, bad behaviour”.
The FL, which represent soccer clubs in the three divisions below the elite Premier League, is insisting that ITVd honour its £89 million ($126.60m; €145.28m) broadcast rights agreement due to run for the next two seasons. ITVd’s failure to do so will result in a £500m lawsuit, threatens the FL. “This money is undeniably ours,” says Harris. “As far as I am concerned the money is owed to us by two substantial media companies worth £5bn between them.”
No-one save the respective boards of Carlton and Granada know whether the administration move is a genuine prelude to winding-up or selling ITVd. Or, as many suspect, a negotiating ploy.
But genuine or not, one savvy media-watcher got to the heart of the matter: “ITV Digital (or any other business) which puts all its eggs into a one-contract basket – irrespective of whether it appears on the accounts payable or accounts receivable ledger – deserves everything that’s coming to it.”
BBC director general Greg Dyke was more sympathetic, opining it would be “a sad day” if ITVd went under. But he ruled out the possibility that the BBC would assume responsibility for the overpriced broadcast rights. “It was a mad week in June 2000 when these contracts came and prices were paid that I suspect will never be paid again,” he said. Dyke also hinted that soccer’s TV bonanza time is running out: “For people in football, I suspect this is only the beginning.”
ITVd is not the only casualty of the soccer TV rights frenzy that infected European broadcasters and clubs in the late 1990s. It is also a key factor in the financial crisis besetting Kirch Gruppe in Germany; and even Rupert Murdoch’s BSkyB could live to regret its profligacy two years ago when it bid £1.11bn for the right to broadcast England's twenty-club Premier League live for three years.
Tessa Jowell, secretary of state for culture, media and sport, described the debacle as “a pity,” and a “testing time for football”. Meanwhile, ITVd’s 1.26 million paying subscribers will continue to receive transmissions as usual – at least until April 15.
Most industry analysts think it unlikely, however, that the venture can survive in its current form; the three-year-old service was outgunned from the start by BSkyB’s digital service which now boasts 5.6 million subscribers.
Data sourced from: Financial Times, MediaGuardian.co.uk, The Times (London) and BrandRepublic (UK); additional content by WARC staff