Football League to sue over ITV Digital debacle

The Football League has announced that it's to sue its former advisers over the ITV Digital debacle.

The action is being taken against Hammonds Solicitors (formerly known as Edge Ellison) in relation to advice they gave to the League during negotiations with ITV Digital in 2000.

The League says that during the negotiation and completion of its broadcasting agreement with ITV Digital, that Hammonds were negligent and failed to protect the League's interest. A claim for "substantial damages" is included in the proceedings.

ITV Digital was launched as OnDigital as a joint venture between Granada and Carlton in 1998 as a direct rival to Sky, with funding of £800m and was originally forecast to break even in 2003.

But advertising revenues nose-dived while running costs spiralled. OnDigital's Chief Executive taunted that Sky was "...for sad people living in lofts", but by the Maqrch 2002 the Administrators were called in, and their pay-TV services were switched off the following month. The company was liquidated later that year, owing more than £1bn.

However the knock-on effects went much further than just those people who had subscribed to the service.

Part of the deal was that ITV Digital would pay the Football League a massive £315m for the rights to broadcast League matches starting from 2001/02 season. But after making the first payment, it soon became apparent that the company would struggle to pay the remaining £178.5m owed to the League.