Examination of Witnesses (Questions 35
- 39)
TUESDAY 29 NOVEMBER 2005
MR ROGER
MOSEY, MR
MARK SHARMAN,
MR ANDY
DUNCAN, MR
COLIN CAMPBELL
AND, MR
VIC WAKELING
Chairman: Can I welcome Roger Mosey,
Director of Sport at the BBC, Mark Sharman, the Controller of
Sport at ITV, Andy Duncan, the Chief Executive of Channel 4, Colin
Campbell, Director of Legal and Business Affairs at Five, and
Mr Wakeling, the Managing Director of Sky Sports. Since we are
running slightly behind schedule, can I suggest that you need
not all feel it necessary to answer every single question.
Q35 Mr Yeo: Can I start by saying
that one of the many reasons why cricket fans regret the passing
of Channel 4 was the fantastic quality of the coverage and the
innovative achievements that Channel 4 cricket coverage has recorded
over the last six years, I think.
Mr Duncan: Seven.
Q36 Mr Yeo: I think that has really
taken the whole coverage of cricket up to a completely new level
and, in my mind, shows the benefits of competition. However, is
it now the case that given the requirement for hours that we have
been hearing about in the previous session, 280 hours of Test
cricket alone, is it really impossible for a terrestrial broadcaster
with perhaps only one or two outlets to actually do a Test match
series?
Mr Duncan: We obviously put what
we regard as a full bid on the table to keep the main Test series
this summer. I think, as you say, and thank you for that comment,
Channel 4 has really helped transform cricket's coverage in this
country and actually, as a result of that, it also triggered an
improvement in sports broadcasting more generally, most notably
in some of the technology developments that Channel 4 innovated
which were taken on in Wimbledon, for example. We obviously have
put a very, very full investment over seven years of coverage
and it cost us, on average, over £16 million a year because
we are spending a significant amount on rights, we were spending
a record amount in terms of production and we were pumping about
another £5 million in terms of marketing and very innovative
marketing at that. I think we have really helped transform the
coverage of Test cricket in this country and it cost us over £100
million over a seven-year period. We put in what we thought was
a very full bid and were very keen and seriously interested in
obtaining the main Test series of the summer. The one adjustment
we made relative to what we had been doing up to that point was
that we originally won the tender for all home Test matches and
the ECB had requested that we share the junior Test series with
Sky, so it pointed to the way we actually ended up sharing, for
example, the Bangladeshi series, one each. We decided, on balance,
in view of the costs and the losses we were making, not to make
a bid for the earlier Test series in the summer, but, in our view,
we were happy to carry on covering cricket and were able, in scheduling
terms, to cope with that.
Q37 Mr Yeo: Clearly the fact that
you made a bid indicated that, but would you have been able to
make a higher bid if the losses that you incurred through cricket
had not been likely to be incurred again and are those not in
part attributable to the very high demand for hours, but also
the unpredictable scheduling of most interesting times and indeed
some matches finishing early, so you have nothing at all for the
last day or so? Do those circumstances, unique to cricket, add
to the losses which you incurred?
Mr Duncan: Yes, the key drivers,
to be honest, are that it is obviously on in the daytime which
tends to have lower audiences and also you tend to have an older
audience watching cricket and again, in terms of what the advertiser
is prepared to pay a premium for, there are obviously those scheduling
difficulties around matches finishing early and so on as well
that contribute, but the main issue is that certainly for the
first six years we had an average audience of just over one million
and this summer was exceptional when we had an average audience
of over two million obviously peaking at times at over seven million,
but you do get real low points during the course of a Test match
as well as high points in terms of numbers of viewers.
Q38 Mr Yeo: So, looking ahead, and
you have made a bid this time, do you think that in four years'
time or whenever it comes up again that actually the disparity
which we have seen between what the satellite broadcaster can
bid and what the terrestrial broadcaster can bid, is that going
to remain at this kind of gap and, if it does, it appears, from
what the ECB said, that it is, "Bye-bye" to terrestrial?
Mr Duncan: I think the BBC is
obviously in a different position with the privilege of licensing
funding, and I am sure Roger Mosey might comment in a moment on
their position. I think if you are looking to fund commercially,
as far as I can see, in four years' time some of the commercial
pressures we have been under in the last seven years will be even
worse, so the sorts of losses involved in covering cricket would
be the same. As I have said, we prepared and put a very full offer
on the table of £3 million a Test which was substantially
more than what we paid for the first four years we covered and
not far behind what we paid for the subsequent three years. We
were prepared to go on incurring significant losses partly because
Channel 4, although it is commercially funded, is effectively
a public corporation with a public remit and we felt it was part
of our duty to bring the sort of innovation that we had, but at
the end of the day we had to balance that with our other requirements
to deliver drama or current affairs and so on, so in the round
we bid as much as we thought we could. We possibly could have
moved a bit more and the ECB never came back to us for a final
push-up, but we could not have gone substantially above what we
bid.
Q39 Adam Price: We have just heard
David Collier explaining that there were 27 different packages,
I think, with millions of permutations. This is a question to
the BBC and ITV: is there anything that the Board could have done
to make the rights offer more flexible or more attractive and
why did you end up deciding not to make any bid?
Mr Mosey: Well, first of all,
there are difficult scheduling issues and, if I take next summer
as an example, the first Test against Sri Lanka clashes with the
FA Cup Final, the third Test clashes with the Derby and the one-day
internationals clash with the World Cup and Royal Ascot, so there
were scheduling difficulties. We did have at least a dozen meetings
of colleagues who were involved at the time with the ECB to try
to resolve those scheduling difficulties and it was disappointing
for us that we were not able to do that. I should just say actually
that on the question of the 27 packages, looking at the list submitted
to this Committee, we did actually of course bid for some of those
packages because they are radio packages or web packages, and
in terms of Test match packages, it does on the list appear to
be only the two and at the top of it they are listed as all seven
Test matches, so we had genuine scheduling difficulties and we
would have liked to resolve those.
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