Memorandum submitted by BSkyB
INTRODUCTION
Sky notes the intention of the Committee to
hold a one-day hearing into cricket broadcasting rights, covering:
— The availability of cricket coverage
to television and radio audiences throughout the United Kingdom.
— The commercial procedures governing
the acquisition of broadcasting rights, and constraints imposed
by the statutory framework within which they operate.
— The importance of the income and
exposure associated with broadcasting rights in fostering excellence
and participation in cricket.
We are happy to provide the Committee with the
following information which may assist it in its work.
SKY AND SPORT
Sky has been covering sport since 1989 and launched
its first dedicated sports channel, Sky Sports, in 1991. We now
have five dedicated sports channels, which in 2004 broadcast over
38,000 hours of sport.
Sky broadcasts a wide range of sports content
on its channels, with football, cricket, rugby union, rugby league,
golf and boxing being shown in greater depth than ever before.
However, over 30% of our sports programming in 2004 was devoted
to sports from outside this group, including athletics, tennis,
sailing, motorsport, and equestrianism. Over 100 different sports
were featured on Sky in 2004.
Sky covers a variety of different sports in
depth and at a grass-roots level, rather than cherry-picking only
the most prestigious fixtures and events. In the case of football,
for example, this includes coverage at all levels: international,
European, Premiership, Football League, non-league, women's football
and youth.
Sky has maintained its outstanding track record
of innovation in sports broadcasting and has developed and invested
in many production technologies since it started broadcasting
sport, many of which are unique to the relevant sport. In comparison
with viewing in the past, sports broadcasting on Sky offers a
much richer experience. For example, up to 30 different camera
positions and 20 directional microphones can be used to cover
a Barclays Premiership football match.
In cricket, we introduced innovations such as
super slow motion replays, stump cameras and stump microphones
in the early 1990s. This was followed in the mid-1990s with "Skyline",
the first virtual LBW technology. In 2004 we introduced the super
Ultra Motion camera. From 2000 we have offered coverage with interactive
features which include different camera angles, highlights and
statistics which considerably enhance viewer experience.
In 2006 we plan to launch an HD television service
which will bring another dimension to the viewing of sport and
transform the quality of pictures and sound. In addition, Sky
is shortly to include content for the mobile phone and PC as an
integral part of its monthly subscription for Sky Sports. The
current England v Pakistan test series is also available free
of charge to all Vodafone 3G customers as part of a launch promotion
for Sky Mobile TV Service.
Sky's achievement in sport has been recognised
by other broadcasters. Peter Salmon, until recently BBC Director
of Sport, has said: "Sky Sports raised the bar, and raised
expectations, because of the breadth and depth of their sports
coverage. They have driven everyone in the pursuit of excellence
. . ."
Enclosed with this submission are copies of
Sky Sports' publication "Sport for All", which
contains more detail on Sky's sports coverage (not printed).
SKY AND CRICKET
The income derived from the cricket broadcasting
deals will enable the England and Wales Cricket Board (ECB) to
fulfil its strategic plan "Building Partnerships, from playground
to Test Arena", an ambitious initiative which aims to nurture
talent and to focus on community cricket.
Sky's coverage will be comprehensive: we are
able to broadcast every ball of the test and one day international
series live—a commitment that other broadcasters are unwilling
to match—and happy to see the traditional starting time
of 11.00 am restored for every Test. Alongside our coverage, Five
will show highlights at peak viewing time.
Sky has also committed to transmit live and
in their entirety at minimum 10 Twenty20 matches plus one quarter-final,
both semi-finals and the final of the Twenty20 cup; no fewer than
30 Forty-over League matches; the final, both semi-finals and
one-quarter-final of the C&G Trophy; and two County Championship
matches.
Sky will also cover the various competition
draws that will make the competitions and information about them
more accessible to the viewer. To support our live coverage we
will develop new and innovative support programming to broaden
the viewer's interest in and knowledge of the game.
From the beginning of the 2006 season, Sky will
be transmitting the ECB cricket support programme "Extra
Cover" to be broadcast every day on which an international
match takes place and on certain other days. Sky will also be
endeavouring to provide a monthly debate and/or chat show; include
a series of coaching tips in Sky's cricket programming; and develop
other support programming in consultation with the ECB.
That reflects Sky's long-term commitment to
cricket. We were the first to offer cricket fans the opportunity
to see live ball-by-ball coverage of an overseas England tour
in 1990. Sky Sports has since followed England live every winter,
and has covered 94 live England tests to date. We support every
level of the game: alongside the Tests and One-Day Internationals
is coverage of every form of the County game and live women's
and youth internationals. We offered 182 days of cricket in 2004.
Sky's coverage can capture public imagination.
Twenty20 cricket has been live on Sky Sports since its inception
(with just one game shown on terrestrial television) and it attracted
500,000 spectators to the grounds last season, many of them new
and young fans.
Sky has also introduced two new offers to help
cricket clubs and their members: a promotional offer for members
of County and Minor County clubs, and a special reduced rate for
cricket clubs to install Sky's services.
TELEVISION VIEWING
DATA
Sky has nearly 8 million subscribers, and 40%
of people aged between 15 and 25 have access to Sky. Among young
people, a recent Guardian/ICM survey indicated that one in five
of those who had access to satellite nominated Sky Sports as their
favourite viewing.
There are about 45,000 non-domestic Sky subscribers,
including leisure centres, sports clubs, pubs and clubs. These
venues attract 5.3 million viewers for televised sport in the
average week, according to Continental Research estimates.
The growth of multi-channel television has been
rapid in recent years. According to BARB, 82% of children (aged
4-15) now live in multi-channel homes, and 75% of adults aged
16-34 are in the same category. In 2004 multi-channel viewing
overtook both BBC1 and ITV1 for the first time with an aggregate
26.3% share (BBC1's share was 24.7% and ITV1's 22.8%).
THE DEVELOPMENT
OF SPORTS
BROADCASTING
The impact of Sky in providing greater choice
for sports viewers is clear from the broader development of sports
broadcasting.
In 1989, there were only 2,200 hours of sport
on terrestrial television. Since the launch of Sky Sports the
availability of sport on terrestrial channels has more than doubled,
with 5,747 hours being broadcast in 2004.
On the BBC, for example, football viewers are
able to watch the FA Cup, the UEFA Cup, England home internationals,
the FIFA World Cup and European Championships. In addition the
BBC carries Six Nation's Rugby, Wimbledon, the Grand National,
the Olympics, the Open and Masters Tournaments, and the World
Darts Championship—over 40 sports in all. ITV carries live
UEFA Champions League (shared with Sky), live World Cup and European
Championship football (both shared with the BBC), Formula 1 motor-racing
and boxing. C4 has a strong presence in horse-racing, including
the Cheltenham Festival and three classics.
In 2004-05 the BBC increased its hours of televised
sport on BBC1 and BBC2 by some 6% (1,447 hours compared to 1,359
hours in 2003-04), figures which exclude the extensive coverage
of the Olympics, Paralympics and the European Football Championships
as well as sports news coverage on BBC News 24 (BBC Annual Reports
and Accounts 2003-04 and 2004-05).
In total BBC1 and BBC2 offered 2,465 hours of
sport in calendar year 2004. According to Peter Salmon in 2004,
the BBC had "the best sports rights portfolio in modern times".
SPORTS RIGHTS
Sports broadcasting rights are now a significant
part of the funding of many sports. In the case of cricket, for
example, the ECB has stated that 80% of the game's income derives
from television revenues.
Sky believes that, unless there are overwhelming
public interest reasons, both sport and the public are best served
by the holders of sports rights having unrestricted freedom to
market their rights as they think best. It is the governing bodies
of individual sports that are best-placed to determine the right
balance of income, exposure and coverage for their sports, rather
than broadcasters or third parties.
In the UK, the principal restriction on the
freedom to market sports rights is the listed events system, which
ensures that certain universally available free-to-air television
broadcasters (BBC1, BBC2, ITV1 and Channel Four/S4C) have a reasonable
opportunity to acquire and televise live rights to certain events.
In practice this means that such events will remain on free-to-air
television and the value of those rights to the owner is sharply
reduced, as there is less competition for the rights than otherwise.
The Government has announced that there will
be a review of the listed events system in 2008-09. We welcome
that review and will contribute to it at that time.
23 November 2005
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