Sky steps into ITV shoes with £95m deal for football

Sky Sports has stepped into the breach created by the collapse of ITV Digital and signed a £95m deal to screen live Football League matches.

The four-year settlement strengthens BSkyB's grip on sporting events, which have been at the heart of its business strategy.

And it concludes a good week for Rupert Murdoch's satellite service, which will become available in more British households because of its winning bid, jointly with the BBC, for the digital licences formerly held by ITV Digital.

The agreement announced yesterday values Nationwide League football at considerably less than the £315m over three years pledged by ITV Digital when it beat Sky to take over the rights from the end of the 2000-01 season.

But it could prove a lifeline for a number of smaller football clubs that had faced financial ruin after ITV Digital said it could no longer afford the contractually agreed payments and went into administration three months ago.

Live matches will return to Sky Sports in August, including 60 matches live each season across all three divisions. There will also be up to nine live matches from the end-of- season promotion play-offs.

They will also screen live ties from the Worthington Cup, the Football League's knockout competition, as well as its semi-finals and final.

David Burns, the League's chief executive, described the deal as "great news" and said the League was delighted to be returning to Sky, the company that had broadcast its games up until 2001.

"This agreement will help to provide financial stability to clubs at a very important time, as well as top-class coverage of our games," he said. Although he acknowledged some clubs would undoubtedly still have financial problems, he said it should save all of them from going under.

"Clubs have gone perilously close to the edge with the situation where a properly entered-into contract was broken and the money they thought they were going to get was taken away. The parlous financial state they were in has not been eased in total but it certainly has improved immeasurably today."

Recently, the Football League had rejected a final, revised offer from ITV Digital of £74m for the final two years of their agreement.

It is now seeking to recoup the £178m it regards as outstanding from Carlton and Granada, the main players in ITV Digital, through the courts.

But Mr Burns denied that the new deal proved that ITV Digital had been wrong to offer so much in the initial contract. Many in the television industry were stunned at the arrangement, which was expensive even for the headiest days of sports rights battles.

"They paid the market rate at the time. In June 2000, the market rate was significantly ahead of what it is today," Mr Burns countered.

Vic Wakeling, managing director of Sky Sports, said it hoped clubs would now be able to plan for the future. "We will soon schedule the first live matches, with the league and the clubs, so that fans can plan their opening weeks of the season," he said.

Some games will be broadcast live on Saturday evenings at 5.35pm with other matches shown on Friday evenings and Sunday afternoons. Fifty of the 60 live Football League games will be from Division One and a total of 300 live matches will be broadcast in all each season.