Examination of Witnesses (Questions 320
- 339)
WEDNESDAY 16 NOVEMBER 2005
Mr Paul Vaughan, Mr Allan Munro and Mr David Moffett
Q320 Chairman:
In what way would you want it to do that?
Mr Munro: Perhaps I could give you an example.
Like Wales and England, we have three games in this autumn series.
The only game that is going national is the New Zealand game.
The Samoa game on Sunday and the Argentine game last Saturday
were only covered on BBC Scotland. They had to bring in people
who quite frankly were not used to covering sport and some elementary
mistakes were made in the production.
Q321 Chairman:
What does that mean?
Mr Munro: They were hiring in people from the
outside to cover the game. For example, when the camera was going
along each side before kick-off, with 15 mascots in front, the
producer did not have the savvy to pull the camera back, and therefore
all the grannies who were watching to see their grandson on the
TV just did not see them. There were many other examples like
that, where the coverage was not as great as it should be.
Q322 Chairman:
Do I get the impression that Wales feels the same, that the BBC
could do more? You have talked about how important it is.
Mr Moffett: I do not think we share that view.
I think we have a very positive partnership with the BBC and we
work very closely with them. If I could give you an example of
how we do that, where our association with the BBC works outside
of rugby. We have a very impressive stadium in the Millennium
Stadium. The tsunami concert was put on in three weeks—which
was pretty much of a world record—and we did that with the
BBC. We raised £1.6 million for the Tsunami Appeal. That
was just that one event which we organised but, as I said, we
did it with the BBC, who were an existing partner. The other thing
is that when we were playing for the Grand Slam against Ireland,
on the Monday that I was leaving Scotland I rang Keith Jones,
the head of programming, and suggested that the BBC find a big
screen to put in the square so that many more people could watch
their game—we just did not have enough tickets. They organised
that within a week. I do not think anybody else could have done
that. Our experience with the BBC, if we go to them, is that they
are very proactive, very responsive to our requests. Indeed, 25,000
people were watching that match on that big screen in the centre
of Cardiff.
Q323 Chairman:
What about England?
Mr Vaughan: Our relationship with the BBC is
very good as well but we have a good relationship with all of
our broadcasters. We have a split between Sky Sports and the BBC
in terms of our coverage, so, for instance, our autumn internationals,
the series of three that we are in at the moment, are broadcast
live on Sky and then the BBC have rights to show it as a delayed
game, which they are now showing on BBC Three and then the following
day, on the Sunday, as a highlights package on Grand Slam on BBC
Two. We have a relatively good balance of coverage and quality
of coverage. In England, according to our research, we have over
9 million people who are interested in the game, so we have an
interesting market from all the broadcasters in terms of what
they want to show. The audiences that England's games drive are
actually of great interest to both parties, therefore we are able
to get into a competitive bid situation for our rights.
Q324 Chairman:
There is no particular issue you have with the BBC.
Mr Vaughan: Only that they always cry foul when
it comes to money, but you would expect that anyway.
Q325 Chairman:
How do you mean?
Mr Vaughan: That there is never enough in the
pot. Again, as with any organisation, you have to balance your
resources in a way that suits your organisation. If they decide
that only so much is devoted into sport and then only so much
of that is devoted into rugby rather than football or anything
else, that is the balance they have to make and that is the judgment
call they have to take.
Q326 Lord Maxton:
In Wales rugby is a national game.
Mr Moffett: Absolutely.
Q327 Lord Holme of Cheltenham:
National religion.
Mr Moffett: Yes.
Q328 Lord Maxton:
There are three Scottish professional teams who play against the
Welsh in the Celtic league. As far as I understand it, when they
are playing in Wales their games are shown on BBC Wales and S4C
as well.
Mr Moffett: Yes.
Q329 Lord Maxton:
Whereas they are not of course being shown in Scotland at all.
Mr Munro: No.
Q330 Lord Maxton:
That must be very hard on the professional team
Mr Munro: It is, yes.
Mr Moffett: It also raises the other question
which might be anathema to discussion about the BBC: the importance
of being on terrestrial television in terms of our sponsors, because
obviously our sponsors get much greater recognition in a passive
way. Obviously the BBC cannot advertise, but that plays an important
part in our deliberations as to where we want to go. The Six Nations,
I would argue, is now a better competition than the World Cup
because of what it gives you every year rather than once every
four years. I was on the negotiating panel last time when the
rights came up for extension with the BBC, and the BBC ended up
paying us substantially more than we were on because that was
the value that was placed on this particular competition—which
the BBC had also helped build, there is no doubt about that. But
when you start to think that perhaps England versus Wales next
year, the opening game of the Six Nations, could attract 8 million
viewers, then that is some serious viewership and you cannot get
that on pay TV. It just would not happen. We think that is terribly
important. There is a balance to be had. We are a small country
not likely to be as attractive to pay TV as England or our SANZAR
in the southern hemisphere, where I was involved in doing the
deal with Rupert Murdoch, which was very obviously pay TV. We
are in a different world in Wales.
Q331 Lord Maxton:
Of course there were problems between the various unions when
England signed a deal with Sky. How did that affect the audience's
viewing of home games on television from Twickenham? When they
were being shown exclusively on Sky, did that drop in comparison
with the BBC?
Mr Vaughan: Sky had the right for England home
games at Twickenham for the Six Nations from 1997 to 2001. In
a reciprocal deal, they also took England away games in France
(because there was a barter deal between Sky and the French broadcasters).
In real terms, there were two and maybe three games per year every
other year across that period of five years. The distribution
of Sky at that time was obviously a lot less than it is now, therefore
it was restricted to that distribution of homes. All the numbers
you ever see tend to measure in-home viewing only and not out-of-home
viewing, so all the clubs or pubs that happen to have a screen
never count those numbers in, which is always slightly odd, particularly
in our game, as Rugby clubs tend to have gatherings of people
to watch internationals after they have played in the morning
or earlier in the afternoon. If we move up to the present day,
Sky have distribution in over 10 million homes and very large
distribution through pubs and clubs, so therefore it does reach
a broader audience. If you compare the terrestrial coverage of
the BBC to Sky, the BBC is inevitably going to be much higher
in terms of absolute numbers. For instance, if you looked at the
Six Nations this year, the average on the BBC was just a tad under
4 million per game. If you take the England games, 5.3 million
was the average. If you look at Sky number for this autumn series,
it is probably around one million all told. It does have a distinct
advantage on the BBC in terms of breadth of coverage, but we have
to balance our needs for revenue as well as our coverage. That
is why we have a mixed package with the BBC. For last year—and
we have not obviously seen the figures for this year—if
you take the Sky broadcast of about one million, the delayed-as-live
rights on the BBC brought it up to about 4 million. Broadly speaking
we had the reach we wanted, in terms of reaching the audience,
and we also had the revenues as well, which then invest back into
the game. It is probably also worth mentioning the type of people
who view, the types of audiences that the BBC can drive versus
the ones that Sky can drive. Sky obviously drive a dedicated audience
that want to watch the game, because it is an appointment to view.
With the BBC, it is an appointment to view still, and they grow
it and market it very well—certainly for the last couple
of years with the Six Nations they have done fantastically well—and
they have helped us market the game broadly speaking. They do
drive a big audience but it tends to be a slightly older audience
who do not have Sky or will not get Sky and it tends to be slightly
down the scale socio-economically rather than the Sky audience.
Q332 Chairman:
Is the crucial thing revenue, when it comes to it?
Mr Vaughan: Absolutely. From the point of view
of all three unions, in order to develop and grow the game we
need the revenue. We have a duty to that. If you take the RFU's
point of view, our revenues last year were around £85 million,
of which we distribute about £10 million to the professional
clubs and the rest is about development of the grassroots, support
of the grassroots, and the cost of doing it. It is a huge business.
Q333 Chairman:
What percentage of that would come from television rights?
Mr Vaughan: From and England point of view,
last year our total revenue in England was £16 million, which
is about 20 per cent. We have purposefully gone away from a reliance
on television revenues. Unlike cricket, for instance, where 80
per cent of its revenue is TV, we have purposefully gone the other
way. We are now developing a hotel and trying to generate other
revenue streams that would give us a 365-day revenue rather than
relying on only six or seven games a year.
Q334 Lord Peston:
To go back to the Chairman's opening remark, could you tell us
in each case what your legal status is. Are you companies or do
you have charters or what?
Mr Vaughan: We are a provident society.
Mr Moffett: We are a company.
Mr Munro: We are another company.
Q335 Lord Peston:
Excuse my ignorance, but does that mean that the two of you who
are companies have shareholders?
Mr Moffett: Our shareholders are our clubs.
Mr Munro: It is the same for us.
Q336 Lord Peston:
You are essentially companies set up by the clubs.
Mr Moffett: Yes.
Mr Vaughan: It is the same for us, basically.
Q337 Chairman:
Actually there is not much difference, is there, between a provident
society and a club.
Mr Moffett: No.
Mr Vaughan: No.
Chairman: It tends to be the same.
Q338 Lord Peston:
But you are not any old company, in each case you are a rugby
union company, so somewhere in whatever you have that sets you
up, it says that your business is rugby union. Is that right?
Mr Vaughan: Yes.
Q339 Lord Peston:
Within that, does the legal specification of what you are include
in it what you do?
Mr Moffett: Yes.
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