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They undoubtedly both knew that it was a win-win position.
It could be said that they underestimated the scale of the News spilt milk reaction but that will be mostly forgotten after they sign the final contract.
Most of the News nonsense is just BS and idle threats. It has little impact in the real world. It's true that you should never pick a fight with someone who buys ink by the barrel. But it's also true that News pays for the same amount of ink regardless of what story they run. Of course they'll have a rant when it doesn't cost them anything extra -- but when it starts to hurt the hip pocket (like losing or having to pay extra for a broadcast deal), you'll see them quietly change tact...
Three or four years after this final deal is signed, only a handful of people will remember the $1.4 billion valuation or the 6pm game or the silly threats etc. News might have won a few of the daily battles for the hearts and minds of stupid people but they risk losing the war.
I don't know if anyone else has noticed this, but the news journalists have backed off a hell of alot IMO. They're still there, but the attacks, especially against Grant and Smith have dropped significantly.
I don't know if there's any specific reason for this, but it is in the middle of negotiations and the EPL have just shown that they are vulnerable. It could be that stars have aligned, might not be.