LONDON — Carlton Communications and Granada have put their jointly owned ailing paybox ITV Digital into administration in a bid to save it from bankruptcy.
The move follows last-minute efforts to reduce the digital terrestrial platform’s £315 million ($449 million) rights deal with the Football League, the U.K.’s second tier of professional soccer. It still owes $264 million on the agreement.
ITV Digital’s administrator, Deloitte & Touche, will try to renegotiate that deal and others, or put the business into liquidation.
ITV Digital has cost Carlton and Granada, the two big ITV companies, roughly $1.1 billion to date and will need at least $400 million more before it breaks even. For now, the two will continue to fund the platform to the tune of nearly $1.5 million a day.
Carlton and Granada could have opted for immediate liquidation, but are banking on a resolution.
ITV Digital chief exec Stewart Prebble said he had a positive outlook and hoped to put the business on a firm financial footing.
However, if it folds, its licenses will be awarded to a different company or consortium.
League officials, who rejected an offer of $70 million from ITV Digital for the next two years as “derisory,” would be first in line among creditors, and have threatened to sue Carlton and Granada for more than $700 million. Carlton and Granada contend they are not liable for ITV Digital’s rights deals.
Other creditors include channel suppliers satcaster BSkyB, the BBC and cabler Telewest, as well as Carlton and Granada.
BSkyB has been in talks with ITV Digital over reducing what it charges its arch-rival to carry its sport and movie channels.
Keeping ITV Digital afloat would be to BSkyB’s advantage because the satcaster is under investigation over how much it charges competitors for its channels. It also is receiving $85 million a year from ITV Digital for its programming.