lost that loving feeling - Football League incompetence cost clubs millions

The Football League have lost their court case against the TV companies Carlton and Granada concerning money owed following the collapse of ITV Digital. The joint-owners of ITV secured victory in the case when evidence was given that proved they were under no obligation to honour ITV Digital’s debts after the collapse. The Football League, upon signing the agreement, failed to check that the contract contained such a clause. The Football League, and it’s member clubs, have now lost out on a total of over £130m for the remaining two years on the ITV Digital contract - because the Football League forgot to check!

The implications for this ruling, given in the High Court yesterday, are far reaching. The new deal arranged with Sky is worth less than a third of the deal with ITV Digital, and many clubs have been banking on victory in the court case to secure their future. Now they must find this money from elsewhere because the Football League forgot to check!

Bradford City, whose chairman Geoffrey Richmond was instrumental in the signing of the ITV Digital contract, have been saved from financial implosion by an eleventh-hour agreement with the creditors. The price of this deal has been for Bradford to lose almost all of their first team, setting the team up for impending relegation. Other clubs will not be so lucky. They will not be able to strike a deal and the £2m hole that the ITV Digital collapse has left in many clubs’ budget could be enough to send the first victims of football’s financial crisis over the edge and into bankruptcy and disbandment - all because the Football League forgot to check!

There had been a clause in the original documents presented to the Football League that stated ITV Digital’s owners would bail out the company’s debt should the company collapse. The same clause was present in the second draft of the agreement. But when it came to the final signing of the deal that the Football League hoped would bring millions to its clubs and redress some of the imbalances of wealth between them and Premiership, the clause had been removed, clearing Carlton and Granada of all responsibility. Legal firm Hammond Suddards Edge, who represented the Football League during the contract negotiations (but not the trial), could now face a law suit by the Football League because they forgot to check!

The future of many clubs hangs in the balance, as does that of the Football League. The 114-year-old institution now faces an uncertain future because they forgot to check the final details of the biggest deal in their history.

Forest may well be fortunate, as the club have already been through a long process of restructuring, not aided by the £2m lost in the ITV Digital collapse, but certainly not destroyed by it either. Other clubs are currently not in as good as a position as Forest and the money they will now almost certainly miss out on could be the difference between success and failure, survival and extinction - because someone forgot to check!

In their keenness to sign the deal that many had predicted was doomed all along due to the unrealistic figures involved and the poor handling of the rights by ITV Digital, perhaps blinded by their greed and arrogance, they overlooked the absence of the crucial clause that would secure the whole deal in case of failure - “OnDigital [ITV Digital] and its shareholders guarantee all funding to the Football League outlined in this document”. Now the long and short term future of the Football League and it’s 72 clubs is in serious doubt because the Football League forgot to check!