CSTB’s half dozen or so UK based readers might remember the era of OnDigital, the joint digital-thru-your-aerial venture of Carlton and Granada. Amongst the pay service’s most highly touted offerings was an extensive slate of Division One, Two and Three contests. Some of them barely registered viewship in the three figures.
Scary enough for Carlton and Granda, but downright devestating when you consider they’d made a £315 million pound deal with the Football League in 2000.
When Carton and Granada pulled the plug on said joint venture in 2002 —- since reborn as Freeview (jointly owned by the BBC, BSkyB, ITV, Ch. 4 and National Grid Wireless), the Football League sued the pair, and lost. A High Court ruling decreed that neither Carlton nor Granada were liable for the outstanding portion of the contract.
The judgement was crushing to many lower division clubs, some of whom were counting on the rights fees from ITV Digital to survive (and in some cases, had made their own foolish deals with players based on income projections from the TV scheme).
Yesterday, the Football League’s negligence lawsuit against the solicitors who represented them in the ITV Digital proceedings, described by the Financial Times as “one of the largest and most high-profile professional negligence claims” was opened at the High Court in London.
Hammonds, a commercial law firm that absorbed the former Edge Ellison practice, is being accused by the League of breach of duty and failing properly to discharge its obligations because no security was obtained for ITV Digital’s liabilities under the contract.
Justin Fenwick QC, appearing for the League, told the High Court the sports organisation had suffered “a very large loss, in excess of £140m” as a result. Court papers showed the alleged damage is now put at £142.4m, including interest.
Mr Fenwick told the court that key issues would be whether the firm – and Richard Alderson, the now late “relationship partner” – should have involved themselves in obtaining guarantees for OnDigital’s obligations, and what the reactions of OnDigital, Granada and Carlton would have been.