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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