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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