Football League sues ITV Digital for £178m

The collapse of ITV Digital degenerated into a legal dispute yesterday when the Football League launched a court case to recover £178m owed for screening Nationwide League matches.

The League, which represents 72 non-Premiership clubs in England, filed the action in the High Court against ITV Digital's owners, Carlton Communications and Granada Media. Although the League had been threatening to sue ITV Digital's owners since the company was put into administration last month, there had been hopes of a settlement.

An additional claim against the whole ITV network is being prepared and the League will lodge a claim for damages exceeding £500m with the liquidators of ITV Digital once they are appointed.

David Burns, the League's chief executive, said: "From the outset of this dispute, the Football League has made it abundantly clear that it will, if necessary, use all options to pursue Carlton and Granada for monies outstanding from our broadcasting agreement.

"Leading counsel has advised that the League has a strong case on the merits."

ITV Digital struck a three-year £315m deal with the Football League in June 2000 to show Nationwide League games. But it was hit by the slow take-up of its service and mounting debts, and collapsed, saying it could no longer afford to pay the £178m still owing.

The broadcaster's demise has plunged the future of a number of Football League clubs into doubt. Many have already spent the funds they were expecting from the broadcasting deal.

Mr Burns said the League had been forced to take legal action after the heads of Carlton and Granada refused to enter into talks.

The success of the court claim will depend on whether Carlton and Granada are liable for the remainder of the £315m television deal agreed by ITV Digital, which went into administration last month.

A statement from the League confirmed the ITV network would also be targeted, and it would be taking the television rights back from ITV Digital. The League will also press for an investigation by the liquidator into the collapse of the digital service, and into the actions of those at Granada, Carlton and ITV who have been involved.

ITV Digital launched in 1998 as OnDigital. But problems supplying set-top boxes meant it missed crucial targets.

In April 2000 it was rebranded and targets for the number of subscribers were lowered. But it was unable to attract sufficient viewers and ITV Digital bosses were forced to call in the administrators.

It was eventually closed last month and after the administrators, Deloitte & Touche, failed to find a buyer for the broadcaster.