BY SEAN MAKIN
March 2002. The BBC launched their new radio station 6 Music, coal mining in Scotland came to an end, the Queen Mother died at the age of 101 and Gareth Gates was No.1 in the UK Singles Chart with yet another re-hash of Unchained Melody.
In the world of English football, ITV Digital, who had only been showing Football League matches on their network from August 2001, went into administration with a debt of £178million plunging Football League clubs into crisis.
Sky used to show Football League matches until ITV Digital paid a jaw-dropping £315million for three years of exclusive rights to show Division One, Two and Three matches (Championship, League One and League Two now of course) right at the end of the 2000/01 season with Worthington Cup (now Capital One Cup) thrown in for good measure.
Sky of course had turned the Premier League into a financial juggernaut that continues to grow year on year and the gap between them and the Football League gets wider with every passing season. At the time it was seen as a massive boost to clubs outside the top flight, giving them belief that they could now start to bridge the gap between them and the big boys.
The deal gave clubs a new level of security, which in turn gave players a safety net as they signed 2 or 3-year deals on lucrative terms as chairman were able to offer bigger salaries, believing the money would be coming from the massive increase in television revenue.
Equally as naïve as the owners of ITV Digital – who paid the eye-watering fee to show matches like Rushden & Diamonds vs. Hartlepool United – the clubs began spending the money before it arrived while Andy Townsend was allowed to wheel his Tactics Truck to stadiums around England and tell us nothing we didn’t already know.
ITV Digital believed the nation’s love of having football on their TV screens would drive sales up for the next couple of years and beyond, and they had comedian Johnny Vegas talking to a puppet monkey in the hope that people would buy their set-top boxes.
They thought they could attract similar levels of customers that Sky had but their hopes were flawed from day one and by October they had 1.3 million subscribers, compared to Sky’s 5.7 million and customers began to leave in their droves.
It was around this time began to rumours spread that ITV Digital was in financial peril, losing around £1million a day, and were desperate to renegotiate with the Football League over the terms of the £315million deal.
As the last throw of the dice they wanted to cut the original price by £130million, which the Football League turned down flat, and that led to the company being placed in administration in March 2002 with a host of football clubs following suit.
Sky picked up the pieces left behind by the collapse of ITV Digital to the tune of just £95million in July 2002 to show Football League matches over the next four years – a total reduction of £75million a season over the next three years for the 72 clubs.
With the money withdrawn and the TV signal turned off, the clubs turned to the government for help but were, not surprisingly, knocked back with The Guardian reporting at the time that at least 30 clubs were under threat of going under at the time of ITV Digital’s closure.
The ramifications were felt far and wide. Within a year of ITV Digital going under, no fewer than 16 clubs entered administration and it took some clubs years to recover from the damage, particularly Bradford City who were already in financial trouble from paying ridiculous wages to average players in the Premier League and fell to the fourth tier within five years of entering administration.
Holes were in the ships at Nottingham Forest and Sheffield Wednesday and the withdrawal of the money made the holes even wider and both clubs dropped into the third tier a few years later.
Lincoln City, now of the Vanarama National League, were close to going under as they were banking on the money due at the time, but the Lincoln supporters dug deep to raise £12,000 which at the time was enough to keep them afloat but it could have been a different story had they been relegated that season.
By contrast it was Halifax Town who fell through the Football League trap door that season having gone into administration within weeks of the collapse of ITV Digital. They never fully recovered. They went out of business in May 2008 after 97 years with the club £2million in the red. The club reformed as FC Halifax Town and have since climbed their way back to the top level of non-league football.
At the time, Chesterfield had been saved by the fans from going under just months earlier but they found themselves in serious trouble again when the money was withdrawn – as did so many clubs throughout the divisions.
Former Barnsley chairman John Dennis told the Daily Record in 2012 that the South Yorkshire club had turned a profit in 12 out of 13 years prior to the demise of the ITV Digital and the withdrawal of the TV money put the Tykes in administration in October 2002 with debts of £2.5million.
With less money coming into clubs, they had to cut their cloth accordingly which meant players were released at the end of their contracts and many ordinary workers, such as the programme sellers and the admin staff and so forth, were made redundant through no fault of their own.
Some might say the legacy left by ITV Digital is a huge number of players being available on a free transfer and clubs releasing a high number of their playing staff at the end of every season, plus the fact that they have made the wedge even bigger between the Football League and the Premier League in terms of finances.
But it seems clubs are back on the up as this recent summer transfer window has seen clubs in the Championship spend £100million on transfers – but as history has so often proved, chasing the dream may come at a terrible price.
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