Select Committee on BBC Charter Review Minutes of Evidence

Examination of Witnesses (Questions 320 - 339)


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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