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02/08/2002

Carlton and Granada avoid League fees

The Football League has failed in its attempt to recoup £131.9m in unpaid broadcast fees it claimed it was owed by Carlton and Granada, the owners of failed pay television firm ITV Digital.
This was because neither company had given financial guarantees to that effect, said Mr Justice Langley.
"In my judgement the Football League's case falls at this first and fundamental hurdle," he said.
Speculation suggests that the verdict might force some of the 72 lower division football clubs that make up the League into insolvency.
The League said it was disappointed at the judgement and would now consider an appeal.
Football League chief executive David Burns said: "There's no doubt that the result today will put in jeopardy the finances of many of the football clubs."
Delia Smith, major shareholder of the Nationwide First Division club Norwich City, added: "This decision means we have been left with a £2m hole in our budget for each of the next two years."
In a brief statement Carlton and Granada welcomed the ruling.
The court's decision followed a four-day hearing during which Carlton and Granada rejected liability, arguing that ITV Digital's final contract with the League did not include guarantees that they would bail their subsidiary out.
The League had argued that the two broadcast giants did guarantee ITV Digital's initial bid for the rights to screen its games, and the final deal went through on the understanding that Carlton and Granada would continue to support their pay TV subsidiary financially.
ITV Digital went into administration in April, just one year into a three-year contract to screen Football League games, owing it a total of £178.5m in unpaid fees.
The digital broadcaster had signed the broadcast contract, worth a total of £315m, in the hope that showing League games would help drive up its dwindling viewing figures.
But the hoped-for increase in viewing figures never materialised.
Satellite broadcaster BSkyB bought the rights to screen League games for the next four years for £95m in July, but the League and its clubs are still facing a dire cash shortage.
The League sued Carlton and Granada for a total of £131.9m - the outstanding £178.5m minus payments it is due to receive from BSkyB over the next two years.
There has been speculation that the court case might lead to a flurry of further legal action.
(GB)
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