It will probably come as little surprise to learn that Deloitte & Touche might not become the liquidator of ITV Digital.
It is understood that the major creditors of the collapsed terrestrial digital broadcaster now favour the appointment of a different liquidator – and if this were the case, Nick Dargan and his team at Deloittes, currently ITV Digital’s administrator, would probably breath a big collective sigh of relief.
Combining a subscriber base of 1.2 million viewers with the emotive subject of football, you create an impressive cocktail of massive media interest and logistical difficulties.
On the face of it, communicating with the subscriber base was not difficult – when the administrators finally turned off the paid-for services, they were able to broadcast a message to all the subscribers.
Instead of the 50 channels they had been used to, subscribers were greeted with a blue screen and a simple message from the administrators.
Previously, the million-plus subscribers had received letters from Deloitte explaining the situation. But while this was happening behind the scenes, there was a very public battle taking place in the media – the Football League wanted its money and was happy to tell anyone so.
In the process, the league accused Deloitte of having a conflict of interest – the firm produces a number of football finance surveys – and sought to have an additional administrator appointed.
David Buchler, of Kroll Buchler Phillips, was tipped as a likely candidate, and it is possible he could pick up the liquidation of the failed pay-TV broadcaster.
Deloitte was not happy to play the media game and kept its head below the parapet, saying it was more interested in trying to sort out the business to enable an orderly sale ‘as a going concern’.
This left the pitch clear for the league – it demanded an ‘independent’ administrator be appointed, and that parent companies, Carlton and Granada, should honour the debts of ITV Digital or be blamed for the collapse of numerous football clubs around the country.
Such public posturing is not unusual in high profile company collapses.
Ernst & Young was dragged into a very public and political role when it was appointed administrator for Railtrack plc.
E&Y’s Alan Bloom did not duck the media attention, but it soon became clear he and his team could not handle the sheer volume of press enquiries.
‘Alan didn’t want to worry about calls from the press, so this is why we brought in an external PR agency, Edelman Worldwide,’ said E&Y spokesman Raynor Peett.
In the first two weeks, the E&Y press office received more than 500 calls from the media, many of which were from overseas.
But there were also many other stakeholders who contacted E&Y for information.
‘I had several irate people shouting at me because their trains had been delayed,’ said Peett. He explained part of the communications process was to ensure all parties, include employees, knew exactly which parts of Railtrack were in administration.
‘We needed to make sure the employees understood what the situation was and that they were not now employees of Ernst & Young,’ he said.
Another headache for the Railtrack team came in the form of the collapsed company’s asset register – they needed to know exactly which assets were owned by the company.
The administrators were forced to bring in an external firm of surveyors to calculate an accurate value of the assets, despite Railtrack’s own claims that its register was complete.
In the early stage of the administration, there were 30-odd E&Y insolvency practitioners working on the case, which went some way to explaining the initial running costs reaching #2m a week.
‘It was a fascinating project, probably involving more stakeholders than ITV Digital – politicians, the City, employees and shareholders,’ said Peett.
Other recent high profile collapses included Enron’s European operations – PricewaterhouseCoopers was brought in to salvage what it could from the collapsed energy trader.
This included the sale of a number of subsidiary companies, and the need to close out thousands of forward energy contracts.
With ITV Digital, the administrators are now facing the task of realising as much value from the remaining assets of the company, including the subscriber base.
Each subscriber will also have a set-top box at home – nearly all of which are technically the property of ITV Digital.
It is understood that the boxes, which cost #150 but were usually given to subscribers free of charge, would almost certainly be sold with the subscriber list.
But so far there has been little interest from UK media companies to acquire the digital terrestrial licences that were put up for sale by the Independent Television Commission when ITV Digital’s screens went blank.
Instead it is likely that the licences, which would be sold alongside the subscriber database, could go to either a US-based media group or a major continental European player.
Whatever the outcome, the ITV Digital collapse has dented the government’s hopes of switching off analogue broadcasts by 2010 – another example of the political dimension faced by administrators of high profile corporate failures.