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Monday, 21 October, 2002, 10:14 GMT 11:14 UK
Who's to blame?
The ITV Digital emblem before its collapse
ITV Digital's collapse has had a huge effect
A number of factors have played their part in the financial crisis now endemic in football - but none more so than the collapse of ITV Digital in April.

When the company pulled out of their 315m sponsorship deal, Nationwide League clubs were left with a huge black hole in their finances.

The league has since signed a 95m deal with Sky to broadcast some live games for the next four years.

But clubs have been left with roughly a third less income than they were expecting.


The problem is a large cash hole in the finances of league clubs created by the collapse of ITV Digital
John Nagle of the Football League

Among those most heavily hit were sides recently relegated from the Premiership - and still obliged to pay Premiership wages despite a dramatically-reduced income.

Many First Division clubs signed players on lucrative contracts in anticipation of receiving 2.5m a year from ITV Digitial.

In fact they are now likely to receive just 90,000 a year - with Second Division teams getting 45,000 a year and Third Division outfits just 35,000 a year.

Compare that with the minimum of 17m each that Premiership clubs received from their TV agreement at the end of last season.

Clubs relegated from the Premiership receive a "parachute" payment of 6m for two years - but after that their lifeline is severed.

John Nagle, a spokesman for the Football League, explained: "The problem is a large cash hole in the finances of league clubs created by the collapse of ITV Digital.

"Because of the way football is, clubs have players contracted to them for some time. And those costs are not being met by their incomes due to this dramatic loss in revenue."

In the ensuing debate, ITV Digital have been marked out as the clear villains, blamed for signing a contract they were later unable to honour.

But others were subsequently singled out for wrongdoing.

The Football League have been criticised for brokering the initial deal with ITV Digital, then a new company without a proven track record.

The League and the clubs themselves were then castigated for failing to obtain the necessary legal guarantees for the brokered deal.

Rupert Murdoch
Murdoch was also blamed

That slip-up paved the way for ITV Digital to walk away without seeing out their part of the agreement.

BSkyB boss Rupert Murdoch did not escape without accusation, the head of ITV Digital's rivals accused of barging his rivals out of business.

Football agents came under a certain amount of scrutiny for their part in the spiralling costs of the sport.

As they increased players' wages and demands, clubs too had to immediately and, in some cases, drastically increase their revenues.

And, perhaps to a lesser extent, public pressure also played a part.

With fans of clubs across the country increasingly demanding new players and improved results, their clubs took greater risks with, in certain instances, devastating consequences.


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Links to more Football stories are at the foot of the page.


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