In 2002, the Football League in England had its multi-million pound football deal collapse when ITV Digital went bust.
There were dire predictions of financial disaster for the members of the Football League, on the basis that they had all budgeted for the ON Digital riches, without realising that the demand for watching Bristol City v Huddersfield might not match the demand for Manchester United v Arsenal or Real Madrid v Barcelona.
One of the Football League Chief Executives who spoke out about the collapse and the Titanic scale disaster about to sink the Football League was the Chief Executive of Norwich City.
He was quoted in the Guardian on 28th March 2002 saying:- “If Granada and Carlton are allowed to escape their liability they will put at risk a very large number of Football League clubs. At Norwich we are budgeting for a £12m income next year, £2m of which is television money. Even if we receive that we are heading for a £2m loss – £4m would obviously be unsustainable.”
The Chief Executive was Mr Neil Doncaster, now supremo of the SPL.
Norwich did not go bust, and indeed are now, as far as I am aware, in the Premiership.
At that stage the predictions were dire. As the Guardian put it:-
“Football bosses yesterday warned of impending disaster, with dozens of clubs going to the wall and wholesale redundancies among players as a result of the ITV Digital decision.
The chairmen of the 72 clubs in the Football League reacted with undisguised fury towards Carlton and Granada, the channel’s owners, claiming the companies had acted in bad faith in failing to uphold their end of the deal. Many warned that their clubs would be in dire financial straits unless the broadcasters paid up.
In a statement, the Football League vowed to use all available means to pursue Carlton and Granada for the remaining rights, fees, damages and costs of the deal.
Keith Harris, chairman of the Football League, said: “The actions of Carlton and Granada threaten the survival of professional football in this country, which would have a devastating effect on many local communities. They will not succeed.”
The clubs stand to lose more than £178m, with first division clubs forgoing £3m each, and second division and third division clubs £600,000 and £400,000 respectively.“
The Football League failed in its efforts to have the courts order Carlton and Granada to pick up the bill, as reported in the Guardian on 1st August 2002.
The warning of “dozens of clubs going to the wall” failed to come true. Since the collapse of ITV Digital 26 English Football League and Premier League clubs have entered administration, and indeed 10 of these did so in the two years following the failure of the TV deal.
None of them folded however.
Even though Mr Doncaster and his members have been very anxious now about the effects of Rangers not being in the SPL, with talk of four clubs in the League going bust immediately, perhaps he should take re-assurance from someone whose team survived the ITV Digital debacle, which was clearly in its scale a far large financial cataclysm for the Football League than the demise, should it happen, of Rangers would be.
The Daily Record on 9th July 2009 reported the words of a former Chef Executive of a Football League team.
Referring to the ITV Digital situation he said:-
“At the time ITV Digital collapsed we had budgeted to receive £3million in TV money and ended up with a deal which brought in £1m so over a two-year spell we ended up with a £4m shortfall.
“I can only speak from our experiences … and it was very difficult. “
“It was a difficult time but the clubs got through it at that time and I think they’re stronger for it.”
Who is this voice of realism and calm?
Step forward Mr Neil Doncaster, who was the newly appointed head of the SPL!
Posted by Paul McConville (with huge thanks to BillyBhoy68 for his marvellous researches, as always!)