"What A Hideous Own Goal by ITV!" (ITV 1)

Member Name: blackjane

Product:	ITV 1
Date:	24/03/02 (276 review reads)
Rating:

Advantages: I can't see any - can you?

Disadvantages: Disadvantaged Subscribers, English Football In Crisis, Happy Shareholders

These days, it takes an emotive subject to persuade me to put finger to keyboard, but the disgraceful behaviour of ITV over recent weeks has proved to be more than enough to bring me out of my temporary literarary hibernation. I am referring to the actions of ITV Digital and its threat to back out of its deal with the Nationwide football league.

The facts, for those that have not been following the saga, is that ITV have finally realised that their foray into the provision of a digital television platform has been a total disaster. Carlton and Granada, the two multi-billion pound backers of ITV Digital (formerly OnDigital), have spoken at length with their advisors and have come to the realisation that the whole venture has been one big mistake.

However, rather than facing up to the problem, they have threatened to pull the plug completely, leaving their subscribers who bought into their half-baked advertising, high and dry. Of course, this threatened action, which reeks of a baby throwing its toys out of the pram, is a gesture towards the shareholders of Granada and Carlton. It is their belief that the parent companies can walk away from their disastrous digital venture with only limited responsibility for compensation. Although the inconvenience to subscribers to ITV Digital is an important factor, the effects that this move could have on the state of English football, is perhaps even more acute.

The biggest thorn in ITV Digital's side appears to be the £315 million that they agreed to pay for coverage of Nationwide League football in a three season deal. £133 million has already been paid, but the remainder is still outstanding for the next two seasons. Last week £50 million was offered for the remaining two years of the contract - a bit like me buying a house for £100,000, and then asking the seller a year later if I could reduce it to just £60,000 (I can just imagine the response!)

The money that ITV Digital agreed to pa
y to the 72 Nationwide football clubs has now been budgeted for, and with many clubs already walking a financial tight rope, any reduction in this revenue (or a total withdrawal as is being threatened) would surely mean the end for dozens of clubs. If Carlton and Granada were to refuse to underwrite the remaining £182 million that is still owed for these rights, then the ramifications are unthinkable.

Although the problem appears on the surface to be specific to the ITV digital platform the ramifications are actually much wider than that for the ITV brand. The damage that could potentially be done to ITV if their threats are followed through would be enormous. I can't see too many football supporters wanting to tune in to see Emmerdale or Coronation Street, and this would make huge dents in ITV's advertising revenue as this is calculated based on viewer numbers. In fact, would we really believe Chris Tarrant when he writes out a cheque on 'Who Wants To Be A Millionaire', if the company has been seen to renege in its duty to honour the expensive habits of ITV Digital. I for one would be happy to boycott ITV altogether if they follow their current course, and I suspect that I would not be the only one. The negative PR is incalculable, and is likely to exceed the amount that ITV are now threatening to withhold from the Football League.

It could be argued that football clubs need to become less dependent upon the revenue from television, but pulling the plug in this way is not the way to do it. Perhaps once the current situation has been resolved, clubs will take stock of the situation and try to ensure that this revenue is used in better ways, rather than in the escalation of players' wages and agents' fees.

Digital TV in this country is more developed than anywhere else in the world, and is undoubtedly the viewing media for the future. By admitting that ITV Digital has failed, the Independent Television Network will a
lso take a huge step back into the pack that is following Sky (which has pioneered Sky Digital) and also the Cable companies (which have made a reasonable attempt to set up a Digital platfoprm for cable subscribers.)

Finally, I don't want to say "I told you so", but a cursory glance at a previous opinion I wrote about OnDigital's (as it was then) approach to buying up football rights in July of last year (Dooyoo Opinion # 282261), will demonstrate that it was plain to see there were fundamental problems even before the football season started last August.

The fact that two multi-billion pound organisations and a host of paid advisors could not see these problems in advance does not say much for the business minds of those involved. I just hope that sense prevails, and the bigwigs at Carlton and Granada do the decent thing and honour their agreement in full.

{Another original Dooyoo opinion
© Blackjane 2002}

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