Q&A: ITV Digital cash crisis

Nationwide soccer has proved a TV turn-off for fans

BBC Sport's Nigel Adderley looks at the reasons behind ITV Digital's plans to renegotiate its TV deal, and whether Nationwide League clubs are in danger of going under as a result.

Football League clubs meet on Thursday to discuss ITV Digital's attempt to renegotiate their £315m broadcasting contract.

Joint owners Carlton Communications and Granada are cutting costs at the ailing pay TV service, which has so far spent £800m and requires a further £300m to break even.

ITV Digital is reported to be offering the Football League just £50m for the remaining two years of its contract - far less than the originally agreed sum of £180m.

Q: Why is ITV Digital in trouble?

A: Quite simply because not enough people are watching it. It currently has 1.3m subscribers compared to the 5.7m who've chosen to install its rival Sky Digital.

Although ITV does carry much of the Sky package, including the three sport channels, it has been unable to negotiate to put its most attractive features, such as the ITV Sport Channel, on the Sky platform.

Renegotiation obviously means less money in the short term and could cheapen the Football League's image

BBC Sport's Nigel Adderley

Consequently, it has struggled to generate enough advertising revenue so its owners have demanded some belt-tightening to ensure ITV Digital's long-term future.

Q: Why did ITV Digital pay so much for the contract in the first place?

A: It was negotiated at a time when several deals were being discussed and every channel seemed desperate to have live football.

The profile of the average football fan i.e. male, 20s-30s is highly attractive to the advertisers and the leagues and clubs knew this and upped the price accordingly.

Some of them have admitted subsequently they were surprised the TV channels paid up and believe they won't get as much next time.

Q: Why don't the league clubs want to renegotiate?

A: Most of them have budgeted for what they'll receive from the ITV Digital over the next three years.

For some it means more expensive players and higher wages while the smaller clubs will simply use it to scale down their debts.

Renegotiation obviously means less money in the short term and could cheapen the Football League's image when it comes to finding another broadcast partner in the future.

Q: What is ITV digital's take on the situation?

A: They just want to cut costs but reason that keeping a renegotiated deal does at least maintain some sort of revenue for every league club over the three-year deal.

There has been speculation that the company could be forced to close if it cannot strike a deal.

Many armchair fans have chosen to save their money

BBC Sport's Nigel Adderley

And if ITV Digital goes under the next broadcaster would offer far less than a renegotiated package.

Q: What will happen if ITV digital default?

A: The Football League say it has a binding agreement with ITV Digital and if it walks away there are clauses in the contract which will safeguard the money agreed for the clubs.

But the Football League needs an established broadcast partner and may offer a compromise which would reduce the size of the contract.

Q: Will this affect ITV's coverage of the Premiership, Champions League and Worthington Cup?

A: The Premiership and Champions League deals are separate contracts and would be unaffected as they are already on ITV1.

The European coverage is very popular. Having Manchester United live at peak time a couple of times a month produces good figures and high-profile advertisers.

Even though the figures for The Premiership highlights programme have been disappointing it's the sort of high-profile sport a major channel needs so ITV will safeguard that.

Q: Do the low viewing figures for ITV Digital suggest that people have had enough of paying to watch football on TV?

A: ITV Digital has had the problem of fitting in its Football League coverage around the other sport at weekends and Thursday and Sunday evenings have not been popular with fans or clubs.

Supporting a Football League club is more parochial than the Premiership, and if you follow Stockport or Tranmere it's unlikely you'd pay to watch Portsmouth v Crystal Palace.

But the terrestrial coverage of the Football League has been very popular this season and with the Premiership on ITV1 and live FA Cup action and England internationals on BBC there is a wide variety on offer free-to-air, and many armchair fans have chosen to save their money.