While last-minute frantic talks are still continuing, it looks unlikely that ITV Digital will continue in its current form.
ITV Digital, owned by ITV companies Carlton Communications and Granada, has been trying to renegotiate its contract with the Football League and the 拢178m it still owes for the remaining two years of its 拢315m contract.
ITV Digital instead offered the league 拢50m and said it could not afford to pay any more than that. It claimed that if it paid more it would be forced to close.
The league rejected the offer and told ITV Digital that if it failed to stump up the remaining 拢178m, it would sue Granada and Carlton for the outstanding sum plus loss of earnings for the football clubs involved, which it has been reported could amount to around 拢500m.
This latest turn of events put increasing pressure on the digital terrestrial broadcaster and although this was by no means the extent of ITV Digital's woes, it is being viewed throughout the industry as the straw that broke the camel's back.
ITV Digital's failure to reach an agreement with the league has finally given Carlton and Granada the excuse they have been looking for to close down ITV Digital and plug the drain on their ever-dwindling resources.
The news will please their shareholders, which are keen to see the two concentrate on running ITV and making money, and end the flow of profits being eaten away by loss-making ITV Digital.
The death of ITV Digital -- if this is what we have witnessed today -- leaves a large chasm in the UK's digital landscape, not to mention a black hole on the TV screens of its 1.2m subscribers.
Currently, there is nothing in place that can fill this sizeable gap. Reports have surfaced about an emergency skeleton service being developed by the BBC that will broadcast free-to-air channels such as BBC4, BBC Choice and ITV2 using existing ITV Digital set-top boxes. Whether this might also include some of Sky's channels has yet to be seen.
However, any BBC-backed venture would be limited to offering a free-to-air service, because the BBC would not be allowed to advertise an add-on pay-TV service on its public service channels without causing an uproar about competition issues.
This potential lack of a digital terrestrial pay-TV service would seriously limit the digital offerings available to those people who can not receive cable or satellite.
This would leave the market with cable, satellite and a very limited free service, which would fuel the long-running debate about lack of competition in the industry and leave the government's much-touted vision of a digital TV future in tatters.
This was one of the main reasons the government asked Carlton and Granada to set up ITV Digital in the first place -- to provide an alternative to Sky -- and one of the reasons they have been unable to pull the plug on it until now. Earlier this week, sports minister Richard Caborn had volunteered to act as an intermediary, but his intervention came too late to affect the outcome.
The government's analogue switch-off target of 2010 could also be placed in jeopardy, especially since the government has all but washed its hands of responsibility for the broadcaster.
The government has already come under fire from the Conservatives, which attacked the government for not doing more as the crisis developed.
There are other issues to consider as well. These include the loss of revenues to those subscription channels that would not be carried on a BBC-backed free-to-air service. It is another nail in the already struggling fortunes of some digital TV channels.
If the negotiations do spell the end for ITV Digital, it will suddenly become very clear what an important role digital terrestrial broadcasting plays in the UK's broadcasting landscape.
A replacement will have to be found quickly and before it has disastrous consequences for digital broadcasting, not least a total shattering of what little consumer confidence is left in UK digital broadcasting.
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