ITV Digital dispute could end up in court

Troubled British channel ITV Digital could face high-profile court case with the English Football League claim analysts.

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By  Marcus Webb Published  March 31, 2002

Analysts at JP Morgan claim that British companies Granada and Carlton Communications, co-owners of ITV Digital, could find it difficult to avoid a high-profile court case with the English Football League.

Their comments come as the Football League, which is owed GBP180 million by the venture, accused ITV of plunging grassroots soccer clubs into their biggest ever financial crisis just for corporate greed.

"At the moment there is just a huge sense of uncertainty. How do clubs plan for their future? It is deeply unfair and I feel very let down," the league's chairman, Keith Harris, told the London Evening Standard.

JP Morgan said it did not expect attempts to renegotiate contracts with BSkyB, BT and the Football League to succeed.

"We think these concessions are unlikely to be achieved because of the difficulties of negotiating with so many parties - we expect each supplier will play a 'game of chicken' and hope that other suppliers will 'save' the platform," JP Morgan said in a note.

Deloitte & Touche, the accountancy firm now running ITV Digital, will report to the high court on April 15, when it will give an update on attempts to restructure costly programming deals, and could apply to have the venture put into liquidation if it has had little success.

The analysts added that ITV Digital and the Football League stood too far apart on the key issue of renegotiating the GBP315 million Nationwide League contract.

"The gap between the price needed for the Nationwide League to avoid bankrupting clubs and the price needed by ITV Digital to ensure survival is far too wide,” they said.

ITV chief executive Stuart Prebble said that negotiations with the League would still continue. 'We do have a contact with [the Football League]. We do feel a responsibility to that. We want to engage with them in a sensible dialogue, so that they can survive and we can survive. It's in everybody's interest,' he said. He will not be encouraged however by the Football League's reluctance to play ball.
Media secretary Tessa Jowell urged the two parties to continue discussion: 'This is a testing time for football. I urge the Football League to keep the negotiations going. While everyone is still talking, there is hope this can be settled.'

The ITV Sport Channel will continue to air as normal, at least until the end of the season.

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