George Pitcher: ITV Digital foul was really Football League own-goal

Although running Football League clubs like businesses may be impractical, some management nous is vital to avoid future financial meltdowns, says George Pitcher

You quickly learn in this commentary game that you can write about accounting standards at Enron and WorldCom, the phoney price-wars at supermarkets, or the ineptitude of the Government’s economic policy and not hear a peep out of the readership.

But write about something that marketers really care about – football – and the postbag bulges. So it was that I was met with vigorous correspondence in April when I wrote that the Nationwide Football League should stop whingeing self-righteously about Granada and Carlton Communications pulling the plugs on ITV Digital and leaving many of our less glamorous football clubs facing bankruptcy (MW April 11).

Now that the League’s chairman, Keith Harris, and his chief executive, David Burns, have taken an early bath and, in the words of Harris, left “the asylum in the care of the lunatics”, I thought it might be the right time for a pre-season business review.

But first, a reminder of the letters we published in response to my previous column on the subject. Gareth Rule (I like to think his nickname might be “Offside”) wrote to say that it was the job of the league clubs to extract as much money as possible from Carlton/Granada’s ITV Digital (MW May 9). And that if anyone had demonstrated “bone-headed management” (my phrase for those who allegedly run football clubs) then it was my “oh-so-precious media chums” who provided the money.

Dave Watson, who is publicity manager at DTI Communications, chipped in to say that I was wrong to think of football clubs as brands and that they “do not, never have and never will run at a profit”. He adds: “That is why we have 92 clubs and not six.”

He echoed the point that “the Football League can hardly be blamed for taking the money it was offered”. Since Watson is from the branch of DTI Communications that is responsible for the Government White Paper on broadcasting reform, we should take that last view seriously.

Simon Larter of Berkshire-based Motive Public Relations meanwhile wrote to say that I had made a “valid point” that had been spoilt by “an objectionable style” that made me sound like “a self-congratulatory know-all” (MW April 25). I was actually most stung by this letter, since I had thought that the column in question was one of my more humble efforts.

So much for my correspondents. What has happened since? Well, in short, Harris and Burns embarked on ill-conceived litigation against Granada and Carlton to recover the outstanding &£178.5m of the ITV Digital sponsorship deal.

This course of action failed because no one had noticed in the league’s expensive legal camp that the original contract with ITV Digital did not oblige it to cough up in the event of its withdrawal.

In the meantime, Harris and his league team had cleverly turned down the out-of-court offer of &£75m from Granada and Carlton, leaving the league ultimately without a settlement, a bill for &£1m in legal fees and a new deal with BSkyB worth just &£95m, which many clubs felt railroaded into.

Brilliant. But that’s not all. By early June, Harris was attacking Granada and Carlton in a manner that left nothing to the imagination. He told league-club chairmen in a speech that “they have embarrassed government; they have damaged the reputation of public-service broadcasting; they have undermined the basis on which business is decently done in this country.”

He added that “we will not rest until these companies recognise and face up to their responsibilities. We will also not rest until the pressure for new and responsible directors to replace [Michael] Green and [Charles] Allen becomes irresistible.”

At the time of writing, Green is still chairman of Carlton and Allen has just enjoyed a board shake-up at Granada, which has strengthened his position as executive chairman. By contrast, Harris is no longer chairman of the Football League. But he is still chairman of City finance house Seymour Pierce. I trust his staff there aren’t awaiting early instruction on the next deal to come out of Granada or Carlton.

I leave DTI Communications to decide how much Granada and Carlton “have embarrassed government”. But what we do know is that the League has been brought to the edge of financial ruin and that mild-mannered representatives of ITV Digital have not felt especially obliged to deal with people who slag them off.

Where does the league go from here? As it happens, I agree with Watson of DTI Communications when he says that football clubs “don’t fit the normal idea of what a business is” and that “they are there to represent the place that they are from”.

I gather there are plans for new regional leagues. As I said in my original column: “The answer is for league clubs to be run as local businesses, financed regionally.”

What they deserve is sound and stable management in this endeavour – and that’s not what they got from the hyperbole of Harris. In the end, he might not have liked the way that Granada and Carlton did business. But at least they did business.

There’s a well-known and rude football-terrace chant that suits Harris and his team. But out of deference to the correspondent who accuses me of “sarcastic clever-dick attitudes”, I paraphrase it more politely thus: “You’re not entirely blameless and you know you aren’t.”

George Pitcher is a partner at communications management consultancy Luther Pendragon

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