2 Jan 2002 0 comments. tbs.pm/1793
Since the collapse of ITV Digital in April, it has been quite a dismal time for anyone involved with or supporting a Football League team.
For the first time in football history in Britain, less has been spent on new players and new contracts, clubs have seen finances decimated and come close to bankruptcy. And there are more hard times to come.
In early August, it all ended for the Football League in their fight against Carlton and Granada. Their application for compensation to the High Court in London under Mr. Justice Langley to get Carlton and Granada to pay them the outstanding £178.5 million that ITV Digital owed for the contract that collapsed when the pay-TV operator closed, was thrown out when it was discovered that in the contract that was initially signed in 2000, that there was no clause that Carlton or Granada would be the guarantors of the deal, if OnDigital (as it was then) went under.
Football in the lower divisions now faces into a long and severe winter ahead. Over the course of the summer, we have seen a lot of clubs going very close to going out of business. Most prominently, Bradford City, in only the week before the start of the season, secured its finances for the time being after unloading all of its heavily paid players like Benito Carbone. Watford sacked its high profile manager, Gianluca Vialli, the former Chelsea boss. His wages (after a disappointing season) couldn’t be sustained.
Hundred’s of players have been transfer-listed across all clubs in an effort to reduce their wage bills, which can be astronomical in some lower divisions.
We have also seen the likes of Delia Smith, the chairwoman of Norwich City, picket the offices of Carlton and Granada in an attempt to raise the profile of the plight of the clubs and get the money they are owed. These are just a few examples of how clubs have had to adapt to the moved goalposts in front of them.
So who is to blame for the collapse? Undoubtedly, it is Carlton and Granada, the major shareholders in the collapsed platform. They ran the failed broadcast system and ultimately pulled the plug, but also there were aspects of the “cunning fox” about them. The contract with the Football League left them with a ‘Get Out of Jail Free’ card – if ITV Digital collapsed, they owed the Football League zilch.
The League themselves don’t come out if it brilliantly either. This deal was signed at the height of the football rights boom, when the Premiership went to BSkyB for over £1 billion for the first time.
They knew at the time that OnDigital was a struggling platform, but they went for the deal that gave them the most money. But, crucially, the draft contract included the guarantee from Carlton and Granada to underwrite the deal, but not in the actual contract that was signed. So the League’s lawyers must have a case to answer.
I don’t blame the clubs for getting into the trouble that they are now in. When the deal was signed, they went on a spending spree the lower divisions have never seen before. Most of them overspent in the first year, as they knew that over the lifetime of the deal, they were going to be paid in 3 annual instalments from ITV Digital.
They had budgeted for money that was due to arrive, not for money they had already. As it turns out this didn’t happen, and now are being tipped over the edge.
I also don’t blame Keith Harris or David Burns, the men in charge of the Football League over the past couple of years while ITV Digital spiralled into oblivion.
It was a problem that they had inherited from the previous chairman and chief executive, and their resignation came to me as a surprise and unnecessary, as they had done nothing wrong. It was all done before their time in charge.
So what for the future? The League signed a 4-year deal with BSkyB to show 60 games a season across the 3 divisions, worth around £90 million, a paltry sum compared with the £178.5 million for the 2 years that will remain outstanding from the ITV Digital deal. BSkyB was a good home for 4 years in the late 1990s for the Football League, so in the current marketplace, it’s a good deal for Sky.
It may ease some woes, but the League is still without a terrestrial partner, with the BBC, Channel 4 or Channel 5 seemingly disinterested. Understandably, they are not talking to ITV.
There is a lot of bad feeling not only between the clubs and ITV, but also the supporters. Many have tried to boycott ITV programmes, to hurt Granada and Carlton where it hurts most, but this has been largely unsuccessful.
Clubs will, in the short term, honour the current players contracts in most cases, transfer list those that they can’t afford and look for out-of-contract players, those being players who are available via the Bosman ruling and are not signed to any club.
The amount of “free” transfers this summer as clubs swap players to reduce wage bills has been quite high, with the likes of Wolverhampton Wanderers picking up decent players from the Premiership, like former Manchester United players Denis Irwin and Paul Ince, for example. This will be the way of the future for these clubs.
For the first time, football is not expanding. In fact, it’s turning in on itself. We have seen the rise and rise and rise of football, right up to its peak.
Players will now have to settle for less, as clubs coffers are running short and what has been perceived as the endless money pit from TV is being shut off.
What will be interesting now will be how the clubs adapt to the changed circumstances they find themselves in.
We’ve all enjoyed the football rollercoaster to the top, but will we enjoy watching the bumpy ride on the way back down? It may make for uncomfortable viewing.