Examination of Witnesses (Questions 66
- 79)
TUESDAY 29 NOVEMBER 2005
LORD SMITH
OF FINSBURY
AND LORD
MACLAURIN
OF KNEBWORTH
Q66 Chairman: Lord Smith and Lord
MacLaurin, can I begin by thanking you both very much for agreeing
to come and give evidence to us this morning. Obviously our interest
relates to the precise events which occurred in 1998 leading to
your decision, Lord Smith, as the then Secretary of State, to
move Test matches from category A to category B. Now, obviously
the actual decision to put Test matches on the category list B
meant that it enabled the sale of the broadcast rights to Sky
to take place, but at the same time there has been much reporting
that there was an understanding between you and Lord MacLaurin
that nevertheless, despite that decision, at least some live coverage
would remain free to air. Can you tell us, each of you, what your
view is of that understanding and whether or not you think that
the deal that has been made breaches it?
Lord MacLaurin of Knebworth: I
wrote to Chris on 23 June 1998 when it was agreed that Test cricket
would go from the A list to the B list and on the second page
of my letter to Chris, I said, "As you will recall, I have
given my personal reassurances to you and the Prime Minister that
in such an environment, the ECB would wish to keep a substantial
amount of live coverage on the BBC". We did not know that
Channel 4 was going to get involved in those days and we were
obviously talking to the BBC, so I am absolutely quite clear that
in the deal that we did, Chris and I, we had to keep a substantial
amount of cricket on free-to-air television.
Q67 Chairman: So the ECB breached
it?
Lord MacLaurin of Knebworth: I
do not know whether the ECB breached it because I ceased to be
Chairman in 2002.
Q68 Chairman: But if it was your
understanding that the ECB would maintain a substantial proportion
and they have not, then clearly the deal has been breached.
Lord MacLaurin of Knebworth: I
do not know what discussions they had with the Department, so
I cannot say that. All I can say is I am very clear on my negotiations
and understanding with Chris. In fact Chris said to me, "Ian,
go ahead and do your deals, but before you announce anything at
all, you've got to confirm it with me". We did the deal with
Channel 4, we did the deal with Sky, I confirmed it with Chris
and he said, "Yes, you can announce it".
Lord Smith of Finsbury: The decision
that I made at the time to move Test matches played in England
from category A to category B was taken really for three reasons.
The first was that Lord Gordon's Committee, you will recall, had
deliberated, taken a lot of evidence and had reported with its
recommendations for the category A/category B structure, a very
important report and I took it very seriously. It was their recommendation
that Test cricket should be moved into a category B position.
Their principal reason for recommending that was the scheduling
issue in that if you have 30 days of Test cricket potentially
to cover it is very difficult for a terrestrial broadcaster to
cover that comprehensively. I took their report very seriously.
The Lord Gordon Committee was composed of a number of very distinguished
people, including Jack Charlton, Steve Cram, Michael Parkinson
and Parliamentary colleagues Kate Hoey and Alistair Burt. The
second reason was that the ECB and the county clubs had made very
strong representations to me that they needed the freedom to negotiate
with a range of different broadcasters in order to enable them
to derive the best possible income for cricket. Their aim was
to enable cricket to develop, to grow and to put in place a lot
of new cricketing activity, particularly for young people. They
wanted to use the broadcasting income that they believed they
could derive from having a broader marketplace to go out and trawl
in order to develop the game. As well as strong representations
from them, I should also say I had very strong representations
from the former Prime Minister, Sir John Major, who was also extremely
strongly of the view that this was a move that was necessary.
The third reason was that I had indeed been given a very clear
reassurance from Lord MacLaurin and also there were public statements
from the ECB themselves that indicated that they would wish, in
any circumstances, a substantial amount of live coverage to be
available on terrestrial free-to-air television. I checked back
on this in preparation for this morning. When I announced my decision
on 25 June 1998, knowing that the cricket decision was the really
controversial part of the decision that I was announcing, I said
the following, "My decision to accept the Gordon recommendations
on cricket allows the sport more freedom to negotiate a fair price
for its flagship events. This is something for which the ECB and
county cricket clubs have specifically asked. I expect to see
that freedom used responsibly, with continued access for all viewers
to a substantial proportion of live Test coverage and any new
income derived for cricket devoted to improvements in the facilities
needed to play the game and to raise our standards. If these expectations,
especially the test of achieving substantial live coverage on
free-to-air television, are not fulfilled then I may, of course,
need to review the listed criteria again."
Q69 Chairman: So you allowed the
ECB to legally sell all live rights to a subscription channel
in the expectation that that would not happen and, given that
it now has happened, if you were Secretary of State you might
move it back to List A.
Lord Smith of Finsbury: As to
the first part of your question, the answer is yes. On the second
part of your question, I obviously would not wish to comment on
decisions made more recently because I am not privy to all the
discussions and debate which may have gone on. However, I am aware
that it is always possible for the Secretary of State to initiate
a review of the listed criteria.
Q70 Chairman: The Secretary of State
has said that the status of the agreement between the two of you
is "somewhat unclear". Is that a surprise to you? Do
you think in the records of the DCMS there is a very clear record
of the understanding that you had?
Lord MacLaurin of Knebworth: From
my point of view it is very clear indeed. I did the deal with
Channel 4 and Sky and I had to confirm it with the Secretary of
State before I was allowed to announce it. You could not have
anything much clearer than that.
Lord Smith of Finsbury: I think
the terms of my announcement on 25 June 1998 in public terms could
not have been clearer.
Q71 Paul Farrelly: Chris, some people
might say that your decision to move cricket to Group B at the
time was very pragmatic because Group A is one-off events and
you simply could not, because of the serious nature of cricket
and notwithstanding the Ashes success, specify the Ashes under
Group A because we would have lots of members of other communities,
for example Indian and Pakistani, up in arms about that. It is
a very pragmatic decision. Clearly we have explored the issues
of what is best in terms of the money or coverage for the long-term
development of cricket. Is there not another important issue for
public interest here as to what message is sent when assurances
that have been seen to have been given to a Secretary of State
appear to have been broken in a subsequent deal? Is the message
that Government should not take verbal assurances in the future
but should have binding legal agreements?
Lord Smith of Finsbury: It is
an interesting question. I would, however, say that because it
is always possible for a Secretary of State to review the criteria,
to have another look at the listing arrangements for the so-called
`Crown Jewels' of sport, it does place considerable weight and
authority in the hands of any Secretary of State. You are right,
however, to draw attention to the fact that Test cricket was different
from the other items which were previously on the A list. When
I launched the whole process of the Gordon Inquiry and the subsequent
decisions I put in place what I viewed as the principal criteria
for judging something to be an A list event and the two most important
of those criteria were, firstly, that something should have a
national resonance, that it should be something not just of interest
and engagement to the followers of that particular sport but to
the broader population of the country as a whole, and, secondly,
that it should be a shared point in the national calendar, something
that people grouped around. With 30 days of Test cricket in a
normal year it is actually difficult to describe that as a shared
point in the national calendar. However, what we do know is that
there come moments in the life of cricket when you do get that
shared national interest, but it is very difficult to predict
in advance where that shared interest is going to lie. We did
consider, for example in the course of our discussions and debates
leading up to my decision, whether A listing the Ashes Tests was
something that ought to be considered and the immediate and obvious
point was made that there are many communities in this country
for whom the other Tests are far more interesting and important
than even the Ashes. We considered and rejected that as an option.
Q72 Paul Farrelly: Chris, you have
said that the assurances that were given can have weight but only
if there is a sanction and clearly if there is a reasonable prospect
of that sanction being used. In this instance what message do
you think will be sent out if a sanction is not used about the
deal that has just been done which seems to break the assurances
that you both gave each other?
Lord Smith of Finsbury: What I
do not know is what decisions and discussions were undertaken
in conversations between the Secretary of State and the ECB in
the run up to the deal that took place at the end of last year;
you will need to ask them about that. If I had been approaching
this, I imagine I would have been in fairly close discussion with
the ECB in the run up to any new deal that was taking place or
I would have had a sense of what the likely approach was going
to be, but I am afraid you will have to ask others about the detail.
Q73 Paul Farrelly: And that would
have been important to you because of the nature of the deal that
you did.
Lord Smith of Finsbury: Partly
because of the nature of the assurances that I had been given
seven and a half years ago but, more importantly, because there
is a twin objective that has to be achieved here, you have to
both secure the maximum possible income for cricket and you also
have to ensure the maximum possible engagement from a broad audience
with the excitement of cricket on television. Balancing those
two objectives is something that Government can assist in, although
ultimately it is up to the broadcasters and the ECB to do the
deal.
Q74 Mr Yeo: You have both made the
point that obviously you are not privy to the discussions that
take place and different people have been doing your respective
jobs but, equally, it is clear that what has happened is very
substantially different from what would have happened if you had
both still been in the jobs and had been trying to honour the
agreement you reached. What do you think could have occurred that
has enabled your successor to take such a different view?
Lord MacLaurin of Knebworth: I
think we can only surmise. I presume that the ECB was talking
to the Department and getting clearance that they could deal with
any broadcaster exclusively. I know that when the deal was going
through I spoke to my successor, David Morgan, the Chairman of
the ECB, and reminded him of our conversation and I reminded him
of the deal that I had done, so he knew exactly what that was.
I would add that English cricket at that time was in a pretty
poor state, we were eighth in the world and we did not have any
money at all. To get this deal up and running was very important
and subsequently during my time we actually increased that deal
with Sky and Channel 4. What we have in cricket at the moment,
which is very encouraging, through all levels is due to Chris's
decision and the money we were able to generate. It would be very
sad in my view if any consideration was given to put cricket back
on the A list because I am afraid then it would put us right back
in the dark ages.
Q75 Mr Yeo: Nevertheless, what you
have described is a situation where cricket was benefiting significantly
from the arrangement that you reached and the income was rising
and so on. There is now obviously a lot of concern that, although
more money is immediately coming in, that progress might now be
jeopardised for other reasons, with the disappearance of cricket
from freely available television.
Lord MacLaurin of Knebworth: Everybody
I have spoken to is not happy with the deal that has been announced.
Even the top executives in the ECB would rather have a deal that
maintained the balance. I certainly would rather have maintained
that balance and if I had been chairman I would have worked very,
very hard to see if I could have done that.
Q76 Mr Yeo: The implication of what
you said is that you think there must have been at least a tacit
approval from the Secretary of State before this deal was announced.
It would only be with that tacit approval that it could have gone
ahead.
Lord MacLaurin of Knebworth: I
would surmise that by going back to my letter to the Secretary
of State in June of 1998.
Lord Smith of Finsbury: One of
the things that will never be put into black-and-white documents
is the regular process of discussion which goes on between any
Secretary of State or Minister of Sport on the one hand and the
senior figures in the major sporting organisations on the other.
I think I am right in saying that even prior to the now famous
letter of 23 June 1998 I had been at Lords and had had quite a
lengthy discussion with Ian at the time in which the same assurances
that he then subsequently put into writing were given to me. This
is a process of constant discussion and conversation.
Q77 Adam Price: In a letter to Sir
Peter Tapsell, James Purnell, the junior minister in the Department,
said that we must be clear, "there was no binding agreement
between Chris Smith and Lord MacLaurin". Is that a fair and
accurate construction given what you have told the Committee?
Lord MacLaurin of Knebworth: No.
Q78 Adam Price: Would you like to
elaborate on that?
Lord MacLaurin of Knebworth: It
was quite clear. I had a conversation with Chris which was very
clear; he would not allow me to announce anything until he was
satisfied with the deal that was on the table. So I phoned Chris
and said "This is the deal", and he said, "Okay,
you can announce it". In my letter it quite clearly says
that a substantial amount of live coverage would be on free-to-air
television. I do not have any doubt about that.
Lord Smith of Finsbury: My answer
would be slightly different in that the agreement that we had
was in no way legally binding. It would have been perfectly possible
for the ECB back in 1998 to have said, "We're going to sell
to Sky because it is now a B list event and we are tearing up
any sort of commitment that we have given to you". The assurances
were so public and the statements that I made when I made my announcement
were so clear that it would have been inconceivable for that to
happen. Whilst it is fair to say it was not a binding agreement,
it was a very strong agreement relating to that particular moment
and that particular deal.
Q79 Adam Price: And it was a clear
deal with specific undertakings in which, if the ECB had actually
broken those undertakings, there would be clear consequences,
ie the Secretary of State would then have the opportunity to revisit
the decision.
Lord Smith of Finsbury: I would
then have wished to review the criteria that were put in place
on the list.
Adam Price: It sounds like a binding agreement
to me.
| 
