BusinessBusiness RecoveryITV Digital tackled from behind

ITV Digital tackled from behind

The hardball stance adopted by the Football League over the money it is owed by ITV Digital has exposed the perilous state of the game's financial position.

Last week, the League wrote to Deloitte & Touche demanding a second administrator be appointed at ITV Digital, the collapsed pay-TV broadcaster, alleging a conflict of interest at the Big Five firm. In a letter to the firm, the League insisted the move was essential because Deloitte acted as auditor and adviser to a number of football clubs that will be directly affected if ITV Digital failed to pay up the money it owes for the right to broadcast matches.

Deloittes was brought in as administrator to ITV Digital two weeks ago after co-owners Carlton and Granada pulled the plug on the loss-making venture.

But a spokesperson from Deloittes said: ‘We are confident there is no conflict – we wouldn’t have taken on the work if there was a problem.’

The administrators, Nick Dargan and Nick Edwards, met with representatives of the Football League last Wednesday.

At the meeting, the League insisted it needed to meet with Granada and Carlton Communications, saying this would be the only way to resolve the situation – the two media giants control the purse strings for ITV Digital.

‘But there has been no comeback as yet,’ a spokesman for the League told Accountancy Age.

The urgency of the discussions has underlined the seriousness of the clubs’ finances. The League’s spokesman said: ‘There were already problems, but the collapse (of ITV Digital) has exacerbated the problems.’

This is a view held by other insolvency practitioners such as KPMG’s Blair Nimmo, who has been the administrator for Scottish club Ayredale for two years.

However, Nimmo does not see a meltdown in the game. ‘Will more clubs become insolvent? Yes. Will the clubs disappear? Probably not,’ he said.

Nimmo has effectively been running the troubled Scottish football club for free over the last two years. He argues administration is not necessarily the best solution for clubs in difficulties.

‘Clubs can cut costs and bring in other shareholders,’ he said.

But Blair is quick to point out football is a business run more on emotions than financial prudence.

‘It’s virtually impossible to run football clubs as a normal business,’ he said. ‘People can become very emotional.’

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