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Thursday, 21 March, 2002, 18:33 GMT
Football chiefs reject ITV deal
Birmingham City vs Ipswich Town game
TV audiences have been poor for league games
The Football League has rejected a plea from struggling ITV Digital to waive payments due for screening matches.


If this contract is not honoured our national game will be devastated

Football league spokesman
League chiefs said, after a meeting on Thursday, that agreeing to a fee reduction could lead to widespread club collapses.

"Nobody should be in any doubt that if this contract is not honoured there will be widespread bankruptcies in many local communities," a spokesman said.

"Our national game will be left devastated."

While ITV Digital had proposed a "huge" reduction and "unworkable" amendments to its three-year contract, the league was entitled to further payments of 179m, the league spokesman said.

"The board's sensible expectation is that the contract will be honoured and payments made."

ITV Digital has not commented publicly on any revised offer but is reported to have proposed paying 50m for the remaining two years of the deal - a sum that would leave the clubs facing a substantial 129m shortfall.

TV giants 'liable'

The football chiefs' response will come as a blow to ITV Digital, which is rumoured itself to be facing collapse.

While the company hoped the football contract would help revive fortunes, audiences have failed to meet expectations, leaving ITV Digital unable to win the advertising revenues it had hoped for.

Gianluca Vialli, manager, Watford FC
Gianluca Vialli: Plea to Sky

Football League chiefs warned on Thursday that if ITV Digital failed to pay the remaining fees they would pursue ITV Digital backers Granada and Carlton for the cash.

"Carlton and Granada would be liable to fulfil the contract," the spokesman said.

Compromise

The media giants themselves are said to believe they are not liable.

ITV Digital's renegotiation plea came a month after finance experts at Deloitte & Touche were appointed to advise on ways of cutting costs at the service.

ITV Digital has so far swallowed 800m of investment, and requires a further 300m to reach breakeven point.

Some club chiefs had urged the Football League to consider a compromise deal, rather than risk forcing the end of ITV Digital and hopes of receiving any cash from the contract.

Eye to Sky

Gianluca Vialli, manager at First Division club Watford, called on digital broadcaster Sky to boost its contribution to UK soccer.

"If something happens with ITV, we hope Sky would be keen on getting the matches back on air," Mr Vialli, former coach at Chelsea, said.

A revenue squeeze would undermine the club's battle to regain Premiership status, he said.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Jeff Randall
"ITV now says it can't pay and won't pay"
York City chairman John Batchelor
"Clubs have budgeted around the income from the deal"
Kingston Business School's Professor Tom Cannon
"It is going to be a bitter and acrimonious meeting"
See also:

05 Mar 02 | TV and Radio
ITV Digital's flickering future
27 Feb 02 | Business
ITV Digital in crisis, owners say
12 Feb 02 | Business
Viewers desert ITV Digital
14 Dec 01 | Business
ITV Digital to cut 550 jobs
28 Nov 01 | Business
Analysis: ITV Digital's troubles
28 Nov 01 | Business
Digital woes cost Granada jobs
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