ITV Digital prepares for sale

The English Football League says one-third of its teams could go under if no deal is reached with ITV Digital

LONDON, England (CNN) -- ITV Digital, which called in the administrators last month, may be put up for sale if an agreement with its main creditor the English Football League cannot be reached.

A British High Court gave Deloitte & Touche, the administrator, one more week to formulate a rescue deal.

ITV Digital, the loss-making pay-television service jointly owned by Granada (GAA) and Carlton Communications [CCM], filed for protection from its creditors after saying it could not afford to pay the £178.5 million ($256 million) it owes to the league.

The money is owed for the remaining two years of a three-year contract, without which the Football League says about a third of its member teams could go under.

Deloitte & Touche warned if an agreement could not be concluded then it would put ITV Digital up for sale.

"We remain hopeful that our ongoing discussions could result in a successful restructuring," said the accountancy firm.

"However, should the Football League reject the proposals or we conclude that the ongoing recriminations have undermined our ability to achieve the business plan, we will be left with no alternative than to implement the sale of the business and assets."

The Football League rejected ITV Digital's £60 million offer to settle the dispute but is considering another proposal. League Chief Executive David Burns told the BBC it may accept £100 million providing it got back broadcast rights to its matches.

The clubs plan to meet on Thursday in Manchester to review their options. The league has threatened to sue ITV Digital and its parent companies if an agreement cannot be reached.

A failure to reach a deal could lead to the defection of ITV Digital's 1.26 million subscribers to rival British Sky Broadcasting (BSY), which is 37 percent owned by Rupert Murdoch's News Corp.

Europe's pay-TV industry is currently in disarray after splashing out million of euros for the rights to buy sport and film broadcast rights. KirchMedia, part of Germany's KirchGruppe, filed for insolvency last week as rescue efforts by creditors and shareholders failed.