ITV Digital teetering on the brink

Soccer deal refusal may be final straw

LONDON — Carlton Communications and Granada are threatening to pull the plug on ITV Digital.

The troubled pay TV platform has been pushed to the brink by the Football League’s refusal to renegotiate its £315 million ($448 million) rights deal, which ITV Digital wants to reduce by $185 million (Daily Variety, March 22).

It is reported that preparations are underway to shutter the platform after the Easter weekend. Some observers consider that brinksmanship, others all but a done deal.

The impact of such a move would be enormous, at a stroke scuppering the U.K. government’s digital TV plans, tearing the nation’s 100-hundred year-old fabric of professional soccer, and forcing 1.2 million subscribers to look elsewhere for multichannel TV.

The government plans to shut off Britain’s analog TV frequencies by as early as 2006. Closing ITV Digital would seriously impede that plan.

Meanwhile, the human cost would be a public relations disaster for Carlton and Granada.

The Football League, Britain’s second tier of professional soccer, has warned that a third of its 72 clubs would have to fold if it accepted the reduction, clubs that are integral part of British local life.

And if there were no TV outlet at all for the clubs, many of which have already spent their money, the cost would be even greater.

The league has threatened to sue if ITV Digital shutters.

Legal opinion is divided. Granada and Carlton believe they would not liable for a deal struck with ITV Digital. The league too thinks it has a case, including the moral argument against two big companies reneging on an agreement with such wide-ranging consequences.

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