Clubs' ultimatum over TV cash

ITV Digital: Collapsed owing the Football League £178m

The Football League says it will take legal action against ITV Digital's backers if a settlement can not be reached over TV money.

The broadcaster - which is owned by Carlton and Granada - was put into administration last week and says it can not afford to pay the £178m it owes for football broadcasting rights.

ITV Digital has said it can only afford £50m, which has been dismissed as unacceptable by the Football League.

At a press conference following a meeting of First Division clubs on Tuesday, the Football League said the next instalment of the deal, £89m due in August, was "not negotiable".

I feel very strongly that the Premiership and FA should stand shoulder to shoulder with the Football League

David Sheepshanks

The league said that unless a settlement could be reached, they would initiate legal proceedings to recover £500m they say the collapse of the deal would cost them.

A statement from the league after the meeting said: "Carlton and Granada must not be allowed to renegotiate their commitments or cause irreparable damage to professional football clubs and their local communities.

"The First Division clubs are speaking with one voice. Their mandate to the executive is clear: our strategy will continue to be pursued remorselessly until we have achieved a satisfactory conclusion to this highly regrettable state of affairs.

Their cause has won support from the chairman of one Premiership club, who feels the country's bigger teams should be doing more to support their lower league colleagues.

David Sheepshanks, chairman of Premiership strugglers Ipswich, warned Carlton and Granada their names would be "mud" in football if they did not act to resolve the TV money controversy.

"I feel very strongly that the Premiership and FA should stand shoulder to shoulder with the Football League and support them by urging Carlton and Granada to pay up and honour their obligations," said Mr Sheepshanks.

Seeking compromise

The FA has been working with the broadcasters and league clubs to broker a deal, but have not made any public comment so far.

Chief executive of the Football League David Burns told the BBC he believed the clubs were in a strong legal position to challenge ITV Digital's backers.

But he added: "No-one is going to be foolish enough not to look to compromise if there is a deal to be made, and we are open to any offers, as long as they are sensible and reflect the contractual value we have with Carlton and Granada."

Carlton and Granada have already agreed to honour £20m owed to Premiership clubs through a rights deal negotiated last year jointly with BSkyB and NTL, the Financial Times newspaper said.

Court hearing

But whereas the Premiership is believed to have ensured Carlton and Granada underwrote ITV Digital, the media giants claim they did not sign "parent company guarantees" for the Football League contract.

ITV Digital signed its £315m contract with the Football League last year in a drive, through enhanced sports coverage, to boost subscriber numbers.

While the first payment on the contract was made as due, ITV Digital owes £89m this August and £89m in August 2003.

Courts which last week placed ITV Digital into administration are set on 15 April to hear the results of efforts to save the firm.

A successful hearing could see ITV Digital, which collapsed after swallowing £800m of Granada and Carlton cash, emerge from administration.