Coventry City face a £3m loss of potential income after communications firm NTL pulled out of negotiations over pay-per-view.

Each Premier League club is now facing a reduction in the windfall it was due to receive from the latest big bucks TV deal negotiated earlier this year.

They bid £327m in June for the rights to screen 40 Premier League games per year, starting next season.

But the American company has now pulled out of the deal after discussions broke down.

Barclay Knapp, NTL's chief executive, said the company was unable to comment further on the collapse because of a confidentiality agreement signed with the Premier League.

It is thought that the firm feared they could not make the deal profitable.

Last week thousands of angry fans jammed the switchboards of u>direct after being presented with a blank screen when they paid to watch England’s game in Helsinki.

Although u>direct said the system worked well for people who booked early, it has increased scepticism surrounding pay per view.

Coventry City had been among the elite clubs looking forward to a bumper pay day of as much as £20 million after the TV deal was signed.

But there will have to be a recalculation unless at a new PPV buyer is found, at a time when fans are speculating the club could be dipping into the transfer fund to help pay for its new stadium.