Sportech Terminates its Interactive TV Betting Contract with ITV

--ITV Plans to Launch New Interactive TV Betting Service

Sportech--the company which, through its subsidiary, Littlewoods Gaming, provided interactive TV betting and gaming services, under the brand "Littlewoods Bet Direct," that were linked to programming on the Independent Television Network (note: the latter, which is generally referred to by the acronym, ITV, is the UK's largest commercial broadcaster)--says that it has terminated its contract with the broadcaster "by mutual consent," a move that has resulted in the closure of the interactive TV betting service. The company says that it has lost money on the contract--which was signed in March 2002--since inception, and that it is expecting an operating loss of £4 million in 2005, due to low revenues. It says that termination of the contract will allow it to avoid an operating loss this year, as well as avoid additional potential payments of £22.2 million (with pro rata reduction of £8.4 million, as long as its service is not launched on cable) over the remaining three years of the contract. As a result of the termination, Sportech will incur an exceptional charge in its 2005 results of approximately £14 million, reflecting the write-off of payments already made to ITV, related assets and redundancies. However, it says that it expects the cash cost of the termination to be less than £1 million: "Following a thorough review of the business, it has been established that our contract with ITV is commercially unviable," Sportech CEO, Ian Penrose, said in a prepared statement. "After negotiations with ITV we have ascertained that this position will not change and have agreed to terminate the contract by mutual consent. Given the huge contractual payments due under the contract from February 2006 onwards, we are not prepared to expose the Company to this ongoing liability. Sportech will continue to participate in the interactive betting market and we look forward to updating the market about new launches we have in the pipeline early in 2006."

An ITV spokesperson told [itvt] that the broadcaster plans to launch a new interactive TV betting service with a new partner.

Click http://www.itvt.com to subscribe to our free email newsletter, which contains all the news stories you see on this Web site, and additional breaking news and scoops, in-depth features, interviews, screenshots, videos, and other exclusive content you will not find anywhere else.