Sky Italia money for Serie A

net1

Sky Italia, digital platform of News Corp, has thrown a partial lifeline to Italy's financially troubled football clubs by agreeing contracts with the three largest teams. Under previous contracts, clubs received multi-million euro advances for TV rights. The contracts will be important for Rome's two near-bankrupt football clubs, AS Roma and SS Lazio, and for AC Parma.
News Corp. has warned Juventus, AC Milan and Inter Milan that advance fees would be replaced by staged payments during the two-year deals between 2005-2007. Under previous contracts, clubs received multi-million euro advances for TV rights.

Virtually all the clubs in Italy's Serie A top division are expected to lose money this season because of rocketing salaries. About a dozen could be declared bankrupt unless they receive capital increases in coming months.

Teams feared being squeezed by Sky Italia, formed last year following the merger of Telepiu and Stream, the rival pay-TV companies. Telepiu and Stream incurred heavy losses by over-paying for previous football rights.

But the total value of the latest deals is thought to be similar to previous contracts. Sky Italia hopes to lift subscriber numbers from 2.6m to 3m.

Juventus, one of the most popular teams, said it would receive €90m for the 2005-2006 season and €94.5m for the following season. That compares with €90m for next season and €81.6m for the current one.

Inter declined to specify its contract extension, but a person close to the situation said it would not see a decline in revenue from its pay-TV contract.

AC Milan, owned by Silvio Berlusconi, prime minister, was expected to agree to a two-year extension.

The contracts will be important for Rome's two near-bankrupt football clubs, AS Roma and SS Lazio, and for AC Parma, the Parmalat-owned club that filed for bankruptcy this month.

Staggered payments could affect the ability of the clubs to meet criteria laid out in a new licensing system to be implemented by UEFA, European football's governing body, from next season. Clubs that do not meet the strict financial criteria will not be allowed to participate in UEFA competitions.