LEAGUE ADMITS MISTAKE

David Burns, the chief executive of the league, admitted it made a "mistake"
in not ensuring that guarantees from the two ITV giants were included in the
full version of ITV Digital's £315m contract, one that will plunge the future of
clubs and players into doubt.

"Looking back it was a mistake. We are bound by that mistake," said Mr Burns
following Carlton and Granada's victory in the high court in London.

Although both Mr Burns and the chairman of the league, Keith Harris, made it
clear they were not in their posts when the contract was negotiated, pressure
is bound to increase for both to resign.

In a damning judgment, Mr Justice Langley said the league had got off to an
"unpromising start" in seeking to rely on a guarantee by third parties of
obligations involving £315m when the only reference to a guarantee was to be
found in one short sentence of a document which was still subject to contract.

"It is all the more unpromising when the relevant negotiations are conducted
in a major commercial context between two companies (the league and ITV
Digital) with the benefit of the professional advice of experienced
management and lawyers," he said.

"In my judgment, the Football League's case remains just as unpromising at
the finish as it looked at the start," he added.

The case hinged on the fact that the league's lawyers failed to ensure that
shareholder guarantees contained in the original bid document from ONdigital
(later ITV Digital) were not included in the contract itself.

"In my judgement, Carlton and Granada are entitled to the declaration they
seek that neither company is liable to the Football League for any sums due
under, or damages payable for breach of, the contract," said Mr Justice
Langley.

"There was no guarantee by either company of ITV Digital's obligations under
that contract," he added.

The judge said he did not think that in any normal commercial negotiation a
party would be content to rely on such a statement from such a source as
providing the security of shareholder guarantees in such large sums.
Nor did he think the league in fact did rely on the statement or even thought it
had obtained an effective guarantee agreement, despite the evidence of its
witnesses.

"The 'subject to contract' statement was indeed more than a rubric," he said.

"It was in commercial terms a statement of the obvious." The league's case
fell at this "first and fundamental" hurdle, he said.

The judge also rejected argument that Carlton and Granada had given actual
or ostensible authority to ITV Digital to give a guarantee.

In any event, he said, the league's case was "unsustainable" because there
was no written document as required by law.

Delia Smith, a director of Norwich City, said today's decision left the club with
a £2m hole in its budget for each of the next two years.

"There will be no 'fire sale' of players at Norwich City, but any new players'
contracts signed from now will have to be at a much lower level," she said.

The Football League is considering an appeal and will decide at a meeting of
all 72 club chairmen next Tuesday whether to carry on with the battle, which
has already cost £1.1m in legal fees.