Football League considering appeal

The Football League is considering whether to appeal the British High Court's decision that they should not recoup the £178.5m (€282.5m) they say they were owed from the collapse of ITV Digital.

The Football League today lost their High Court case to recoup the £178.5m (€282.5m) they claimed they were owed by ITV Digital’s parent companies Carlton and Granada.

The court ruled the broadcasters were not liable to pay the remaining two years of their three-year contract with the League worth a total of £315m (€498.5m).

The League signed a deal last month with Sky worth £95m (€150m) over four years.

The court action hinged on whether the shareholders were liable for the remaining two years of the deal agreed by the TV channel, which went into administration in April after failing to attract enough subscribers to watch Division One, Two and Three matches.

League lawyers relied on a statement of parental guaranteed funding made during negotiations and on public statements by Carlton and Granada that they would continue to fund the company and pay its debts.

The League sued Carlton and Granada for £131.9m (€208.8m), a figure based on the two years of payment they claimed were outstanding (£178.5m (€282.5m)) minus the amount the League is set to receive from BSkyB from the first two years of that deal.

But the judge upheld the shareholders’ assertion that there was no legally enforceable guarantee because offers made in a bid document during negotiations were always subject to contract and there was no guarantee written into the final contract.

In a statement to the London Stock Exchange, the two companies said they welcomed the judgement.

The statement said: "Carlton Communications plc and Granada plc welcome the judgement given today in the High Court declaring that neither Carlton nor Granada have any liability whatsoever to

The Football League Limited in connection with the broadcast rights contract between the Football League and Ondigital."

Shares in both companies were down around 2% just before the announcement.

After the judgement, Carlton’s shares were flat at 180p and Granada was down a marginal at 95p.

The judge said: "In my judgment, Carlton and Granada are entitled to the declaration they seek that neither company is liable to the Football League for any sums due under, or damages payable for breach of, the contract.

"There was no guarantee by either company of ITV Digital’s obligations under that contract."

In a damning judgment, Mr Justice Langley said the League had got off to an "unpromising start" in seeking to rely on a guarantee by third parties of obligations involving £315m (€498.5m) when the only reference to a guarantee was to be found in one short sentence of a document which was subject to contract.

"It is all the more unpromising when the relevant negotiations are conducted in a major commercial context between two companies (the League and ITV Digital) with the benefit of the professional advice of experienced management and lawyers," he said.

"In my judgment, the Football League’s case remains just as unpromising at the finish as it looked at the start."