Communications Bill

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Michael Fabricant: Ah!

Dr. Howells: If the hon. Gentleman will contain himself for a moment more, I will try to answer him. The public teletext service is in a special situation because it uses spare capacity of frequencies assigned to other broadcasters. That is why-in theory-there is a risk of interferences that would affect the viewers of Channel 3 and Channel 4 services.

Question put and agreed to.

Clause 288 ordered to stand part of the Bill.

Clause 289

Categorisation of listed events

Question proposed, That the clause stand part of the Bill.

Mr. Whittingdale: How things change! Some of us who are veterans of the 1996 legislation, including you, Mr. Atkinson, and my hon. Friend the Member for Blaby (Mr. Robathan), the hon. Member for Ellesmere Port and Neston (Mr. Miller) and the Minister for E-Commerce and Competitiveness, the hon. Member for East Ham (Mr. Timms). This issue led to the greatest Government defeat in the House of Lords since the second world war, and when we debated it in the Committee on the 1996 Broadcasting Bill it could be described, if not literally, as having caused blood on the Floor. It was one of the most hotly debated and contested issues in the entire Bill, and had I not risen to my feet it might have passed without debate-and here we are again six or seven years later. It is worth pausing, because this is an issue of great importance to sport, and sport often generates great passion.

In the past, both sides in the debate have recognised the importance of the decision to maintain a list of protected events that are required to be shown on free-to-air channels, rather than to have the rights going to a subscription service. I accept that there is probably a need for that, although I am not utterly persuaded about that in the long term. That immediately gives rise to a huge argument about which sporting events should be on the list. That, too, was something that generated great controversy during the passage of the 1996 Act.

On balance, I think that the existing list is correct. Certain sporting events-those that are now on the

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group A list-will always be central to the life of the nation. We can argue about whether one or two events are equally important to some people. The Minister would probably want all Pontypridd matches in a special category on the group A list. Each sport has its fans. Some have argued that Formula 1 motor racing, perhaps the British grand prix, should be on the list, but it is not at the moment. Not everything can be included, however, and the list probably reflects a general consensus. It has evolved over the years; there has been much talk about it, and I would not necessarily argue about it.

It is interesting that the sports bodies sometimes argue about which events should be on the list. I remember that in 1996 the England and Wales Cricket Board argued vigorously that test matches should not be listed. We must bear in mind the fact that nowadays the sale of television rights is one of the greatest sources of revenue for all sports. It is inevitable that if the number of bidders for those rights is restricted, the outcome will be a lower price. In maintaining a list we are making a conscious decision that is likely to deprive the listed sports of the full revenue that they might have received had there been an open market for the sale of rights.

Michael Fabricant: My hon. Friend is right in pointing that out, but does he accept that that occasionally works the other way? People at Wimbledon said that they would prefer not to have tennis available only on pay-per-view. It follows that they do not think that there needs to be a list, because they would decide whether to restrict broadcasts to the BBC.

Mr. Whittingdale: My hon. Friend is entirely right. He makes the point I was coming to, which is that the sporting bodies have to strike a balance. They must try to maximise the revenue that can be invested in the development of their sports, their facilities and in training and other areas, and they have a duty and a desire to ensure that the maximum number of people are able to enjoy the major events. There is also a related matter of access. That is a difficult balance to strike, and it is one that has occupied much time in the House over the years.

I noticed that the hon. Member for Milton Keynes, North-East (Brian White) had an Adjournment debate a couple of years ago on the subject of pay TV and the suggestion that particular matches might be available only on a specific charge. The hon. Member for Gloucester, who has temporarily left his seat, also secured an Adjournment debate a couple of years ago on access to sport and the development of the list of protected events, which are known colloquially as ''the crown jewels''. There has been a lot of argument.

My hon. Friend the Member for Lichfield made an interesting point. Who is best placed to judge what should be listed and whether a potential loss of revenue for sport should be accepted in the interest of getting the widest possible audience for events? Is that for us in the House to judge or for the sporting bodies? As my hon. Friend said, the tennis authorities have concluded that it is important for the Wimbledon finals, at least, to be broadcast free to air so that the

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maximum number of people can enjoy them. I welcome that sensible decision.

The fact that sporting bodies can reach such a conclusion inevitably makes us ask whether we need to intervene to maintain the list of events. On balance, we probably still do, but it is important to accept at every stage of the debate that we might be depriving sport of money. A fantastic amount of money has been raised for sports through the sale of television rights.

A debate is being held outside this Room to consider whether London should bid for the Olympic games, although our debate will influence that. Much consideration is rightly being given to potential costs, because significant expenditure would be required to build sporting facilities. However, the Arup report, which the Government commissioned to examine potential costs and benefits, points out that there would be a guaranteed income associated with the games and that the principle source of that would be from the sale of television rights. Television rights for the Olympic games are sold throughout the world, and that raises huge sums.

The greatest sporting event in the world is obviously the Olympic games. No one would suggest that the event should not be listed in group A as a fully protected event for live coverage on free-to-air channels. However, a subscription channel might think that buying the rights to cover the Olympic games would be the very thing to boost its number of subscribers. It could not do that-probably rightly-but that would deprive the Olympic games and London, if its bid were successful, of revenue.

There has been much controversy about the sale of football television rights. One is tempted to reflect on the recent history of ITV Digital and the sale of television rights for the Football League. The immense consequences for league clubs due to loss of revenue after the premature demise of ITV Digital show how important such money is to sport. One such consequence has been the bankruptcy of several clubs. Argument still rages about ITV's responsibility and whether it has liabilities, although there has been movement on that at last. That is an illustration, if we needed one, of how important the issue is.

Dr. Howells: Will the hon. Gentleman accept from me strong encouragement for what he is saying? We must remember that the market might look very good, but he will remember that World cup rights were bought by the Kirsch Group, which bit the dust in no uncertain terms. ITV Digital is not the only casualty, and not the only company that has had a detrimental effect on the fortunes of the sport the hon. Gentleman is talking about.

10.45 am

Mr. Whittingdale: The Minister is entirely right, but when a commercial company makes a judgment about the value of a contract and gets it wrong-ITV Digital, for example, clearly believed the value of exclusive coverage of league matches would be greater than it was-to some extent, it has made its bed and must lie on it. It is not for Government to intervene, and I am sure that the Minister is not suggesting that they should. They cannot say to ITV Digital, ''Look, you're

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paying too much; you can't do that.'' The Government cannot second-guess the market in that way.

There will be casualties, I am afraid. There is a big question about if not the legal liability, then the moral duty that some ITV companies have towards football league clubs. However, I shall not go further down that road, although it is an issue about which many people feel fairly strongly. I should also like to reflect on the benefits that football has gained from the coverage of the deal reached in the past 10 years or so with Sky. When the first contract was signed, it was worth roughly £192 million to the premiership. The second contract, which was signed five years later, was worth £670 million, and the third BSkyB live contract £1.1 billion.

The Chairman: Order. The clause is about listed events and their categorisation. Although I am interested in what the hon. Gentleman has to say, he is going rather wide of the essence of the clause.

Mr. Whittingdale: Of course I accept your judgment, Mr. Atkinson; I merely add that the question of whether premiership matches should be included in the list is a live issue that many people have debated. The fact that the premiership matches are not in the list has resulted in £1.96 billion going to the premiership because of the deal that it did with Sky. That deal would obviously not otherwise have happened, but the premiership would have made some money, because ITV or the BBC-whichever got the rights-would have paid a large sum for such a deal. However, it is clear that they would not have paid as much as Sky was willing to pay. Both Sky and the premiership have benefited as a result.

We are not just talking about the really big events or big players; it is perhaps not so well known that the voluntary code on sports broadcasting rights included an agreement that a minimum of five per cent. of TV income should be set aside for grass-roots sport development. We should consider what that has meant right across the board to different sports. The Minister's Department published a document outlining some of the benefits not so long ago. In 2000, some £7 million went on grass-roots cricket, £32 million on grass-roots football, and £17.5 million on youth development in football. That has been hugely beneficial right across the board.

When considering restricting the market for sports events, it is important that we bear in mind the wider question of the good that the sale of television rights has done in benefiting sport, right from the very top to the very bottom. That raises another interesting question. At the moment, the justification for listing events is that there are many people who would not have access to those matches or tournaments or if they were exclusively shown live on a subscription sports channel. There are two reasons why people might not have such access: first, they might not have digital television, and so would not get the chance; secondly, they might not be able to afford to subscribe to Sky Sports or whatever the channel. We hope that the first reason will be removed in time, because we all agree on the need for digital switchover. That cannot happen until virtually the entire population are willing to change over to digital transmission. Therefore, the first

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reason for maintaining a list of events will be removed as everyone will be able to access digital subscription channels.

The second reason still applies-whether it is right to require that matches or events are free to air. We will need to revisit that question when we reach the point of digital switchover to decide whether it is still necessary to maintain the list. I do not suggest that it will not be, but it will be interesting to see what the broadcasting world looks like by that stage. We will also need to re-examine the various individual tournaments and matches that appear on the list. That will provoke a widespread debate in which we must listen to the sporting bodies themselves.

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