ITV digital ‘in administration’

Digital broadcaster ITV Digital was refusing to comment today on reports it could be placed into administration this afternoon.

Industry sources were quoted as saying the loss-making venture’s two co-owners Granada and Carlton had decided to pull the plug.

An ITV Digital spokeswoman refused to comment on the ‘‘speculation’’, adding she did not know if a statement would be made later today.

It is understood accountancy firm Deloitte & Touche, brought in last month to advise ITV Digital, could be appointed administrators.

Granada and Carlton have been in frantic talks with the Football League in a bid to revise its £315m (€513m) broadcasting deal with the channel.

The League has threatened a £500m (€814m) lawsuit if it does not receive £178m (€290m) owed for broadcasting Nationwide League and Worthington Cup matches.

Carlton and Granada have poured £800m (€1.3bn) into ITV Digital but have been hit hard by a severe downturn in advertising over the past year.

Figures last month showed the channel - promoted by stand-up comic Johnny Vegas and a knitted monkey - had just over 1.26 million subscribers.

Rebecca Allen, media analyst at JP Morgan, said ITV Digital was losing at least one customer for every four it recruited a churn rate of 25%.

She added: ‘‘The reason ITV Digital has failed is because it has a large cost base that’s far too big given it only has 1.26 million subscribers.

‘‘It also has a very high churn rate and the fundamental business model cannot work when you are giving away free set-top boxes.

‘‘They thought that within 18 months of starting up there would be integrated digital television, but that has not happened.’’