Sportech In Premature End To TV Contact
Published: Friday, January 06, 2006 Online-Casinos.com
BIG LOSS FOR SPORTECH IN PREMATURE END TO TV CONTRACT
ITV and Sportech kill TV gambling channel project "by mutual consent"
Four years into its seven year term, ITV's interactive betting and gaming contract with betting group Sportech has been terminated "by mutual consent" leaving the TV broadcaster without gaming services.
The deal with Sportech was due to run for another three years but it was announced this week that it had been ended with immediate effect. By ending the contract early, Sportech will have to pay ITV an estimated GBP 14 million over the last three years of the contract, but has managed to avoid total repayments of GBP 22 million.
Sportech, the operator of Littlewoods betting pools, signed the seven-year deal with ITV in March 2002 to capitalise on the growth of interactive betting. However, since the deal was made, Sportech has lost money every year including an expected operating loss of GBP 4 million due to low revenues in 2005.
Analysts say the service failed to take off as gamblers looked to the internet for a wider variety of services offered by the likes of Sportingbet and Partygaming, the online poker site.
British business press reports indicate that Sportech has been taking heavy losses on the contract, and it is understood that the company blamed lack of promotion of the service by ITV for very low use of the interactive services. Expressing a contrary view, ITV staffers said that Sportech's services, which used the Littlewoods brand, were simply not attractive enough.
A spokeswoman for ITV said: "Littlewoods' Gaming products did not capture the imagination of our mass-market audiences. We will be looking for another provider."
The Sportech services provided a betting facility for viewers to place wagers on the outcome of competitive hit shows such as I'm a Celebrity, Get Me Out of Here! and X Factor. It also provided sports betting for ITV viewers and a number of interactive games where prizes could be won.
Ian Penrose, who took over as Sportech's chief executive in October last year, said that the ITV contract would have landed his company with a loss of up to GBP 30 million over the next three years, in payments to the broadcaster and operating losses.
Sportech's services available on the BSkyB satellite platform and the attheraces horse racing channel are understood to be far greater than the returns achieved with ITV. Company spokesmen said that Sportech will continue to participate in the interactive betting market and have new launches in the pipeline for early in 2006.
