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ITV Digital up for sale

UK Football clubs in jeopardy as attempts to save the ailing pay TV venture fail.

Attempts to save the troubled UK pay TV venture ITV Digital by renegotiating its deals with the Football League and others have failed. Deloitte & Touche, administrators of the stricken digital terrestrial broadcaster, are now hoping to sell the operation off as a going concern.

They acknowledged the need to move quickly, and said they expected to make an announcement about whether a buyer is likely to be found for the whole organisation by Thursday. For the moment services would continue as normal, Deloitte & Touche promised.

ITV Digital went into administration last month owing £178.5m to the Football League. The hope remains that, while the service has racked up heavy losses, its 1.26 million subscribers will prompt another broadcaster to buy its assets.

If the company can be sold the new proprietor would be free from all current liabilities and start with a clean slate, buying only the business and the assets, and not the liabilities. That means they would take control of the set-top boxes, the customer base, the call centres and the management team but would be free of the liabilities that have hampered the existing ITV Digital operation.

Crucially, any new purchaser will be free of the crippling £315m contract with the Football League. Carlton and Granada, ITV Digital's owners, still owe £178.5m of the £315m it promised to pay for the rights, precipitating the financial crisis that led ITV Digital into administration.

Carlton and Granada have sunk well over £800m into ITV Digital since it originally launched as ONdigital in November 1998 but will now walk away with next to nothing.

The service, which broadcasts a digital signal through conventional TV antennae, failed to attract the anticipated number of subscribers, and was hit by a sharp downturn in advertising spending last year. ITV Digital was also dogged by patchy reception in some regions, and lost revenue due to the wide availability of pirated subscription cards.

The sale has thrown the future of digital terrestrial television in the UK into doubt and dealt a possibly fatal blow to the government's hopes of switching off the analogue signal by 2010.

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