Select Committee on BBC Charter Review Minutes of Evidence


Memorandum by BSkyB

THE BROADCASTING OF SPORT

INTRODUCTION

  Sky notes the intention of the Committee to extend its inquiry into the BBC to cover a number of other matters. These include the BBC and sport. The Committee intends in particular to cover the following questions:

    —  Should the BBC have a duty to bid for certain sports events?

    —  Is the BBC too aggressive in the way it bids for sports rights?

    —  Should there be an independent review of the way the BBC bids for sports rights?

  These are principally questions for the BBC, rights holders and for government, rather than for Sky. Sky wishes to contribute to the Committee's work by offering the following background information which the Committee may wish to bear in mind when investigating these issues.

SKY AND SPORT

  Sky has been covering sport since 1989 and launched its first dedicated sports channel, Sky Sports, in 1991. We now have five dedicated sports channels, which in 2004 broadcast over 38,000 hours of sport.

  Sky broadcasts a wide range of sports content on its channels, with football, cricket, rugby union, rugby league, golf and boxing being shown in greater depth than ever before. However, over 30 per cent of our sports programming in 2004 was devoted to sports from outside this group, including athletics, tennis, sailing, motorsport, and equestrianism. Over 100 different sports were featured on Sky in 2004.

  Sky covers a variety of sports in depth and at a grass-roots level, rather than cherry-picking only the most prestigious fixtures. In the case of football, for example, this includes coverage at all levels: international, Premiership, European, Football League, non-league, women's football and youth.

  Sky has maintained its outstanding track record of innovation in sports broadcasting and has developed and invested in many production technologies since it started broadcasting sport, many of which are unique to the relevant sport. In comparison with viewing in the past, sports broadcasting on Sky offers a much richer experience. For example, up to 30 different camera positions and 20 directional microphones can be used to cover a Barclays Premiership football match.

  Sky covered 182 days of cricket in 2004. As well as being the first broadcaster to offer live coverage of England overseas, Sky has broadcast women's test matches, under-19 and under-15 internationals, the Cricket World Cup and the ICC Trophy, and Twenty20 cricket.

  In cricket, we introduced innovations such as super slow motion replays, stump cameras and stump microphones in the early 1990s. This was followed in the mid-1990s with "Skyline" the first virtual LBW technology. In 2004 we introduced the super Ultra Motion camera. From 2000 we have offered coverage with interactive features which include different camera angles, highlights and statistics which considerably enhance viewer experience.

  In 2006 we plan to launch an HD television service which will bring another dimension to the viewing of sport and transform the quality of pictures and sound. In addition, Sky is shortly to include content for the mobile phone and PC as an integral part of its monthly subscription for Sky Sports. The current England v Pakistan test series is also available free of charge to all Vodafone 3G customers as part of a launch promotion for Sky Mobile TV Service.

  Sky's achievement in sport has been recognised by other broadcasters. Peter Salmon, until recently BBC Director of Sport, has said: "Sky Sports raised the bar, and raised expectations, because of the breadth and depth of their sports coverage. They have driven everyone in the pursuit of excellence . . ."

TELEVISION VIEWING DATA

  Sky has nearly 8 million subscribers, and 40 per cent of people aged between 15 and 25 have Sky. Among young people, a recent Guardian/ICM survey indicated that one in five of those who had access to satellite nominated Sky Sports as their favourite viewing.

  There are about 45,000 non-domestic Sky subscribers, including leisure centres, sports clubs, pubs and clubs. These venues attract 5.3 million viewers for televised sport in the average week, according to Continental Research estimates.

  The growth of multi-channel television has been rapid in recent years. According to BARB, 82 per cent of children (aged 4-15) now live in multi-channel homes, and 75 per cent of adults aged 16-34 are in the same category. In 2004 multi-channel viewing overtook both BBC1 and ITV1 for the first time with an aggregate 26.3 per cent share (BBC1's share was 24.7 per cent and ITV1's 22.8 per cent).

THE DEVELOPMENT OF SPORTS BROADCASTING

  The impact of Sky in providing greater choice for sports viewers is clear from the broader development of sports broadcasting.

  In 1989, there were only 2,200 hours of sport on terrestrial television. Since the launch of Sky Sports the availability of sport on terrestrial channels has more than doubled, with 5,747 hours being broadcast in 2004.

  On the BBC, for example, football viewers are able to watch the FA Cup, the UEFA Cup, England home internationals, the FIFA World Cup and European Championships. In addition the BBC carries Six Nation's Rugby, Wimbledon, the Grand National, the Olympics, the Open and Masters Tournaments, and the World Darts Championship—over 40 sports in all. ITV carries live UEFA Champions League (shared with Sky), live World Cup and European Championship football (both shared with the BBC), Formula 1 motor-racing and boxing. C4 has a strong presence in horse-racing, including the Cheltenham Festival and three classics.

  In 2004-05 the BBC increased its hours of televised sport on BBC1 and BBC2 by some 6 per cent (1,447 hours compared to 1,359 hours in 2003-04), figures which exclude the extensive coverage of the Olympics, Paralympics and the European Football Championships as well as sports news coverage on BBC News 24 (BBC Annual Reports and Accounts 2003-04 and 2004-05).

  In total BBC1 and BBC2 offered 2,465 hours of sport in calendar year 2004. According to Peter Salmon in 2004, the BBC had "the best sports rights portfolio in modern times".

SPORTS RIGHTS

  Sports broadcasting rights are now a significant part of the funding of many sports. In the case of cricket, for example, the England and Wales Cricket Board has stated that 80 per cent of the game's income derives from television revenues.

  Sky believes that, unless there are overwhelming public interest reasons, both sport and the public are best served by the holders of sports rights having unrestricted freedom to market their rights as they think best. It is the governing bodies of individual sports that are best-placed to determine the right balance of income, exposure and coverage for their sports, rather than broadcasters or third parties.

  In the UK, the principal restriction on the freedom to market sports rights is the listed events system, which ensures that certain universally available free-to-air television broadcasters (BBC1, BBC2, ITV1 and Channel Four/S4C) have a reasonable opportunity to acquire and televise live rights to certain events. In practice this means that such events will remain on free-to-air television and the value of those rights to the owner is sharply reduced, as there is less competition for the rights than otherwise.

  Requiring any broadcaster to bid for certain sporting events, as suggested in the Committee's question about the BBC, would appear to be a substantial additional distortion of the market, presenting many practical difficulties of definition and implementation. It is not easy to see why any broadcaster should be compelled to bid for particular sports rights, as opposed to exercising its judgement as to what is in its commercial interests, or in the BBC's case, as to what is an appropriate use of the licence fee.

November 2005


 
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