Select Committee on BBC Charter Review Minutes of Evidence


Examination of Witnesses (Questions 260 - 279)

WEDNESDAY 9 NOVEMBER 2005

Mr Roger Mosey and Mr Dominic Coles

  Q260  Lord Peston: I want to take us back a bit to the economics of this which Lord Kalms also raised. If you take the 24 million who watched England versus Portugal, you could argue that, even if some of them are casual, the marginal utility as a minimum is £1 for each of them, so you are talking £24 million-worth of value. That would be a very considerable under-estimate. Does that not lead us to the view that in the new age it would be a good idea for you, in addition to the licence fee, to have a kind of system where you could buy in for quite low sums, it would be affordable for poor people, some of these events? Sky is actually—if you are as devoted to football as I am—incredibly cheap, although it is not the same as going to the match. Being at the match is an infinitely better experience in my view than watching on TV. You can get the Sky Premium service for £50. Even if it includes rubbish quite a lot of the time, it is still £50 for over 50 matches. Going to Highbury costs £50 just for one match. Do we not have to look again at all sorts of events and see how the BBC in the digital age could have a different access approach as well as lots of free-to-air? I speak as someone totally devoted to the licence fee, but the fact is that if that were worth £20 million, you are not going to take £20 million out of your licence fee income to buy that, are you, yet in economic terms you ought to?

  Mr Mosey: If you pay for the licence fee our belief is you should get a mix of genres for the licence fee.

  Q261  Lord Peston: We are not arguing with that.

  Mr Mosey: If you are saying that the most watched football match in the last three or four years should be subscription, in that case should the Shakespeare retold programme on Monday night be subscription or a major movie at Christmas be subscription? What you can see is a model where bringing in the major national events as part of the licence fee feels philosophically right, but putting an extra tax on something just because it is the big moment of Euro 2004 I would not feel comfortable about.

  Q262  Lord Peston: So you would be totally opposed to any additional form of BBC financing for some of these things? I understand the argument if you are. I would just like to know whether you are.

  Mr Mosey: Yes.

  Mr Coles: That fantastic audience for the Portugal versus England match happened during Euro 2004, which was a listed event and we secured those rights alongside ITV for a price which was fairly reasonable, as we are required to do within the legislation, but without the protection of that legislation it is arguable whether we could have competed. At the end of the day, as I mentioned much earlier, we have to look at how we commit our portfolio of sports funding to which sports and the relative weighting we give is calculated by that measure I mentioned, the cost per viewer hour. If you are getting 24 million viewers then the amount you are prepared to commit for that particular area because of the fantastic audience draw will be higher and that is where you skew your budget. You are absolutely right to point out that, outside of listed events, we would struggle and that is where we do struggle because the amount that Sky pay on a per match basis for the Premier League is way beyond the audience generating capability for a terrestrial broadcaster.

  Q263  Lord Maxton: It is the breadth of coverage that you simply cannot provide at the present time. I am a rugby fan. Over the Heineken Cup weekend, as a subscriber to Sky I can watch six rugby matches over three days and then a highlights programme at the end of that, so that is seven programmes. I also would have gone and watched a live rugby match on the Saturday afternoon as well. It is impossible for you at the present time, even if you had the rights, to give that sort of coverage because you just cannot compete. It is not a matter of competing for the money, it is a matter of competing for the genres that you have to do. Therefore, is it not time the BBC, instead of looking at BBC Three and Four, if they are looking at a new channel, looked at a sports channel dedicated entirely to sport, where they can show live matches and they can show that wonderful archive of sporting moments that you have?

  Mr Mosey: The upside of the present system is that when we do show rugby, and we show it on BBC One or Two, we bring it to the biggest audiences who watch rugby. On the PowerGen Cup which we have acquired this year, we are streaming some PowerGen matches on the internet, but they are also available on digital channels, including BBC Two Wales which is seen across the UK or by subscribers. Over time channels may be eroded by the amount of choice you can give through broadband and interactivity. If you take the Olympics, we have provided up to eight streams of Olympics sport through interactive television which is equivalent to eight old fashioned channels. In terms of delivering choice to viewers and listeners, using digital technology to expand when you need it and then to contract on a Wednesday morning when you do not, for example, may be the way we should be going in future.

  Q264  Lord Maxton: Are you looking at your sporting archive material and putting it on the web so that people can look at England winning the World Cup whenever they wanted and however often they wanted?

  Mr Mosey: Yes. The BBC is looking at the question of how we do our archive generally, both the creative archive and making the archive available. We are looking at ways we can give people a choice of archive material on the internet.

  Q265  Lord Peston: Is a minority sport a sport that many people are not interested in watching or is it a sport that many people are not interested in doing? Secondly, I am interested in the decision-making process. Is it you two who say pigeon racing is a minority sport and you do not think it is show-able and therefore you are not showing it? Is there a list of minority sports and you two have a meeting once a month to say, "Is there one here that we ought to be showing?"? What goes on?

  Mr Mosey: I think it is a very good point about levels of interest in various sports. I would hope that as we go to the Olympics the BBC would have a commitment, at least on the internet, to every single Olympic sport and that we would provide at least news and results and coverage of Olympic sports. Part of the programme strategy review we are doing at the moment is to assess which sports we think are developing. For instance, we have figures that MotoGP is a sport which is up about 10 per cent year-on-year.

  Q266  Lord Peston: What is it?

  Mr Mosey: It is Motorcycle GP.

  Mr Coles: It is the equivalent of Formula One but for motorbikes.

  Mr Mosey: It is all sorts of people racing round on motorbikes in places like Dubai and so on and it is very popular. It is increasing about 10 per cent year-on-year. Other sports are struggling a bit more. What we try to do is assess our level of coverage based on audience response underpinned by a public service commitment. I think a commitment to minority sports going towards the Olympics will be part of the public service commitment. What I would hope is there will be some sports who will have their big chance between now and 2012 to get themselves onto the British sporting landscape and we would like to support them in doing that.

  Q267  Chairman: Surely some minority sports, like pigeon racing, do not lend themselves particularly to television, do they?

  Mr Mosey: It is an interesting debate. The pigeon fanciers may not think that.

  Q268  Lord Maxton: Let me give you a better example. Squash is a widely played game by a lot of people but it is not a televised sport. You cannot really watch squash on television very well. I cannot because I cannot see the ball. I cannot see the ball when I play!

  Mr Coles: There are sports that are more difficult to cover. Using squash as an example, there has been a lot of technological advancements particularly in terms of the fact that the courts are now completely transparent and the balls are now coloured in a way which is ideal for the cameras to pick them up if not the players. It does mean that with the advancements of technology you can address some of the issues. There is absolutely no doubt that it is not the same as football.

  Q269  Baroness Howe of Idlicote: Minority sport, what does it cover? For example, does it cover some of the sedentary sports, chess, bridge, the sort of things perhaps that the disabled might be able to play quite apart from watching or indeed the elderly who are veering towards the disabled? What is the approach there? Thinking again of the use of encouraging sport back into learning processes and so on, you could get a lot of interested people, skilled people, perhaps going back into schools and starting the whole business of clubs. Is it a sport?

  Mr Mosey: I think the definition is one which is a matter of intense debate. Evan Harris, the Liberal Democrat MP, is passionate about chess as a sport. Some people do not think that snooker and darts are proper sports. The debate about what is a sport is a tricky one. I think from our point of view we are committed. There are some things which the BBC covers which I do not think any other broadcaster in the world would cover in the way we do, eg the Paralympics for which we recently one an award, we did European wheelchair rugby on Grandstand recently and we have done wheelchair basketball. There are sports which we do think we have a role in supporting outside a normal commercial judgment on our sports generally.

  Q270  Baroness Howe of Idlicote: How would chess qualify? Would it be current affairs? What would it be under if it is not sport?

  Mr Mosey: Chess is the most troubling anomaly about what a sport is and what it is not. One of the biggest growths on multi-channel television has been card games and poker. They tend now to have commercial applications alongside them. Should the BBC support poker? I am not really sure. Should we be support chess? We probably should. That sort of thing we will debate.

  Q271  Baroness Gibson of Market Rasen: If darts is not a sport, what is it?

  Mr Mosey: I think darts we do categorise as a sport and we are committed to the World Championships. We had darts from Bridlington on Grandstand a couple of weeks back.

  Q272  Chairman: You never quite know what is going to work and what is not. Twenty years ago I would not have given much for darts appearing on television or snooker, but they both appear to be very popular now.

  Mr Coles: It is also about what audience you are delivering to and what audience you want to appeal to. We devoted whole weekends to extreme sports and we knew that they would not rate with our core Grandstand audience, but we felt it was important to bring extreme sports to a terrestrial station to appeal to a much younger audience who otherwise play on their Playstations or on the internet or whatever.

  Q273  Bishop of Manchester: Understandably, this morning we have been talking almost entirely about television but it is important not to forget radio. I do need to ask you if you feel that the present coverage within radio is as you wanted and, if not, what plans for expansion do you have or indeed what opportunities for expansion are there?

  Mr Mosey: I am a former controller of Radio Five Live. Radio Five Live has been one of the most conspicuous successes of the BBC innovation in bringing in fresh audiences in the last 11 years it has been going. The big development for us in the past three or four years has been the growth of Five Live Sports Extra which has enabled us to cover more minority sports. I am a Rugby League fan. Rugby League is difficult to schedule nationally sometimes because it obviously has an appeal in the heartlands of northern England and Sports Extra has been able to cover some Rugby League that would not make it on to Five Live, some of the big games like the Charity Cup Final. I think that sense of digital technology offering people more choice is the way that we would like to go. The big events are becoming bigger and they should have a home on BBC One. For minority sports and for niche sports the ability to give broadband streaming, audio commentary, web news, is the way we would like to go forward.

  Q274  Bishop of Manchester: Have you any information about audience figures? We have talked about audience figures on television. What about radio? Those who listen in to sport, are they up or down?

  Mr Mosey: Five Live has grown pretty much consistently since its launch. Its latest audience figures were about 6.1 or 6.2 million a week and probably 3 or 4 million of those listen to the major sports programmes, so they are healthy. Five Live Sports Extra, we are seeing growing year-on-year.

  Q275  Lord King of Bridgwater: In all sport now, since becoming much more professional, the people playing them are demanding huge salaries and it is all about seeing what footballers get and it has moved into rugby and into cricket. This puts great pressure on governing bodies to raise funds, the combination of that upwards pressure of people desperate to get the funds to maintain their clubs and keep their teams going coupled with the commercial competitors you have. The sports budget of the BBC is going to have to grow significantly faster than any possible increase in the licence fee or anything else and you are going to be looking for a bigger and bigger share of the BBC's budget. Is that understood by the governing body?

  Mr Mosey: I hope so. The fact is that the BBC has to allocate funds recognising its range of commitments to drama, the arts, culture and so on. There is a clear worry that some sports rights are not solely and hugely in a cost. We feel we have the support of the Chairman, the Director General and the Management Committee of the BBC to the importance of sport. Does that mean we can spend any amount of money we want? Obviously not.

  Q276  Lord King of Bridgwater: The inflation index for sports broadcasting is going to be significantly higher than the other cost elements in the BBC budget.

  Mr Coles: Absolutely. Sports super inflation has been prevailing now for a number of years. That was affected by an increase in our funding back in 2000-01 when Greg Dyke came on board. What we have done is given a commitment under the current Charter of negotiations to try and absorb as much as possible that super inflation. That does mean, through re-privatisation, our portfolio of sport rights we have described may have to be tweaked, may have to be mixed. I do believe our funding is adequate for us to remain competitive because it is not just about the money we give these major sports, we also give those very highly paid participants profile and their own image rights are very valuable to them, particularly those in football, rugby and cricket and the absence of that, if they do get in some ways shunted across into a walled garden which is a subscription service, the loss of the eyeballs on their own image rights will deflate their own value. This is why we need rights holders to appreciate the fact that it is a balance. It is not just about pure rights fees but what other things broadcasters can bring to their sports. At the end of the day the reason listed events legislation is there is because often it is very difficult for a rights holder who is looking at the short term to take a longer-term view about the impact of taking sports away from the BBC on the visibility, on their future fan base and on the long-term impact it will have on the image rights of their participants.

  Q277  Baroness Gibson of Market Rasen: Ofcom can fine non-BBC broadcasters if they think there is anything wrong with the information they are giving etc. The BBC is exempt from this. Why should that remain the case?

  Mr Coles: I am not clear that has any impact on our regulation because we have a very close dialogue with Ofcom. At the request of Talk Sport, they recently looked at our Radio 5 Live FA Cup contract and exonerated us from any impropriety. I do not think any regulatory exclusions impact on the way we conform to regulations and the regulatory environment in which we operate.

  Q278  Baroness Gibson of Market Rasen: If you were to include it therefore it would not make much difference?

  Mr Coles: I am not close enough to this particular point to answer with any degree of confidence.

  Q279  Lord Maxton: Can I ask about the link between sports broadcasting rights and sponsorship rights of sporting events? I know of one golfing event in Scotland which you do not cover but it lost sponsorship because it went to a satellite channel. Do your negotiations involve the sponsors?

  Mr Coles: Absolutely, because this is one of our competitive advantages and it obviously has a long term impact on sponsor values. Unfortunately though, if you look at the escalation in the value of sports rights compared to the sponsorship value of the sport, you are still only talking about 10 or 20 per cent for sponsorship compared to 80 per cent of the income they are receiving from rights fees. Although you are right to point out that it is a competitive advantage for us which we should and do exploit, it still comes under rights fees and still requires the rights holders to believe in the BBC.


 
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