Offside, 4 April
ITV Digital collapse: the end of football, or a blessing for club chairmen?
The end, when it finally came, was a surprise to nobody. The obituaries had been written well in advance. No, not the Queen Mum, but ITV Digital.
The subscription channel was doomed from the moment it agreed to pay £315million for the broadcasting rights to Nationwide League football. You don’t need accountants Deloitte and Touche to tell you that this was a bonkers price to pay for football that neither man nor beast would want to watch. Indeed, the writing was on the wall in autumn 2001 when it emerged that some televised games attracted fewer than a thousand viewers. Not even a fat northern comedian and his woollen monkey could save the stricken channel.
The collapse of ITV Digital has sent tremors through the Football League, which is still owed £178million from the TV deal. So were the prophets of doom right all along? Has the football bubble finally burst?
‘It’s a doomsday scenario and it’s very disappointing’, wailed Gordon Taylor, head of the Professional Footballers’ Association. (Would you describe the end of the world as ‘disappointing’?) ‘I think the Football League is facing the biggest crisis in its history’, cried Bradford City chairman Geoffrey Richmond. Depending on who you believe, between 30 and 50 clubs face bankruptcy as a result of loss of the TV money.
Some fear that the repercussions will not be confined to football. ‘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’, warned Football League chairman Keith Harris. Former sports minister Tony Banks predicted that ‘the implications for the social fabric are profound’. Er, precisely what implications are we talking about here? Many small clubs survive on gates of three or four thousand. How is the social fabric damaged by the closure of Shit-Ground-No-Fans United? The local pie shop might suffer, but that’s about all.
The loss of TV revenue would certainly be a big blow to the Football League, particularly First Division clubs for whom TV money represents 30 percent of turnover. Some clubs may even go into administration, but I suspect that most will find a way of surviving. Why? Because a football club is not like a normal business. Most Nationwide League clubs operate at a loss year after year, but are bankrolled by wealthy benefactors who do it for the status and prestige, not the financial gain.
And as players’ wages have spiralled over the past decade, the cost of running even a small club has escalated, stretching the means of many club owners. Deloitte and Touche estimates that a Third Division club costs £500,000 a year to run today compared to £150,000 to 200,000 a decade ago. The collapse of ITV Digital is actually a blessing for club chairmen, giving them the perfect excuse to cut their wage bills.
‘The bubble has burst and I’m pleased because there’s been too much greed in the game’, said Darlington’s outspoken owner George Reynolds, who is already planning to overhaul his club’s wage structure. Geoffrey Richmond predicts that in future football clubs ‘will be paying players on more sensible and sustainable wages’.
Club chairmen appear to be gearing up to limit or reduce players’ wages. Moreover, up to 1000 professional footballers reportedly face redundancy this summer, as clubs trim their squads. There is even talk of smaller clubs turning semi-professional to survive, and the creation of regional lower divisions.
But all this is pure speculation. We won’t know the full implications for football as long as the wrangling over ITV Digital’s outstanding debt to the Football League remains unresolved. So tune in for the next instalment. My prediction, for what it’s worth, is that although clubs might have to restructure their finances, the end of the football is not nigh.
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