Select Committee on BBC Charter Review Minutes of Evidence


Examination of Witnesses (Questions 1320 - 1339)

TUESDAY 13 DECEMBER 2005

Mr Mark McCafferty

  Q1320  Lord Holme of Cheltenham: I would like to ask a question about the BBC's grass-roots activity but could I just revert to the question Lord Kalms was asking about bidding. Let us assume in the next round you will be doing it and that you do market to Channel Four, ITV, BBC and Sky. I do not want you to betray any commercial confidentiality but do you do that by a process of on-going bargaining or is it a sealed bid? How does that work? Are you able to play bidders off against each other in a commercial way?

  Mr McCafferty: It would be a normal bidding process. We would describe the rights; we would then invite responses to those rights; it would then be narrowed down to a short list. There would be a selection committee and then a decision would be made and in the final throes of that decision there would be some negotiating going on.

  Q1321  Lord Holme of Cheltenham: Once you got to the shortlist you could say, "A is willing to pay more than you, you had better up your bid." You could do that?

  Mr McCafferty: We would negotiate in the final stages.

  Q1322  Lord Holme of Cheltenham: I just wanted to understand how that worked. My question was about the BBC. Do you think that the BBC with both its coverage of Rugby Football Union and some of the big listed events and its general interest in rugby should be doing more as grass roots promoters of rugby?

  Mr McCafferty: We are always looking for partners to work with in terms of grass-roots so I would like to see as many broadcasters or other types of partner involved in that.

  Q1323  Lord Holme of Cheltenham: Are they good partners at the moment in that respect?

  Mr McCafferty: They are pretty good. There is more that we can do but I always anticipate there is more we could do. I could give you one statistic. In our fans survey that I referred to earlier on, some 40 per cent of those fans, which I thought was an extraordinarily high number, will go to the BBC Sports web site for information. Within that fans survey over 80 per cent of our fans have Internet access and are active users of the Internet. So I think there are whole areas within emerging channels of communication and broadcast that somebody like the BBC is well-placed to work with us to explore not only covering the professional game but covering work that we do in the community with local clubs and schools and so forth, as I mentioned earlier.

  Q1324  Lord Holme of Cheltenham: When you say they are pretty good, you feel they could do more, particularly in respect of the Internet?

  Mr McCafferty: I always feel they could do more. We look for and expect to be challenged ourselves with being creative because we are competing in a pretty active market-place for sports, not only in terms of grass-roots—children's, boys', girls'—interest in the sport but also at the top-end professional area in terms of sponsorship money, et cetera. I am always looking within the organisation and the partners that we work with for creativity, innovation and new channels to market, et cetera. Once you get bogged down in only looking at one business model of the way in which a sport is promoted and developed and covered then that is the day that you start to become complacent and you go backwards. I personally come from a background in consumer businesses so I approach it first and foremost as a sport I love, yes, but also as a consumer business, and how do you speak to an audience and how do you build a brand over a period of time. I think in some of those emergent channels for information and coverage, if you look at what has happened in the film industry where people are able to make films at a much lower budget off the high-tech equipment, should we be looking at broadcasting in a more creative way and doing that type of thing as well.

  Chairman: We have got a whole series of questions and I am just going to come back to you Lord Kalms?

  Q1325  Lord Kalms: Just coming back to a point you made before, our role is to understand the BBC's commitment to broadcasting sport. You said before that the BBC was substantially outbid by Sky on the last bidding round. Firstly, I do not understand how you can be substantially outbid on the process unless it is an absolutely blind bid and you in your discussions might have marginally indicated (and I will not tell you how to negotiate) a little whopper as sometimes happens, but you said the BBC was "substantially" outbid. Do you think the BBC really was upset at not getting this? How committed was the BBC? One of the great dangers we see, and how I come to this question explores that aspect from our point of view, is if the BBC can always be number two and still make a respectable bid but making sure it never wins, but from your point of view, how was it that they were substantially outbid, and do you think they were disappointed?

  Mr McCafferty: First of all, they bid and won on the Powergen Cup. I am putting words in the BBC's mouth, I do not know this for a fact, but looking at the business model from their perspective they have the coverage of the Six Nations. As a result of winning the Powergen they now have three games of ours covered and could do more in the window between the start of the season in September and Christmas, and they also have coverage in the semi-final and finals. In terms of the coverage of Rugby Union as a sport during the season that is quite a neat progression, as it were, from Powergen coverage, into Six Nations, they can use the highlights as they want from the autumn internationals and from our Premiership and then they are into a semi-final of Powergen and into the final of Powergen, and that would happen in April. So I imagine that one of the ways in which they look at it is they have got a whole series of sports to cover, how much Rugby Union do they want and how does it fit into their scheduling when they do not have a dedicated sports channel.

  Q1326  Lord Kalms: Why do they bother to bid at all?

  Mr McCafferty: That is a question you will have to ask them to answer.

  Q1327  Lord Kalms: That is a rhetorical question. Nevertheless, if it went right to the end and at some stage there were the two of them eye-balling and yet the other side paid substantially more for something for which they did not get right the information regarding the BBC's bid, and the BBC still bid despite having this big package. So I am trying to get the logic of the whole process of bidding. I do not think you can give me the answers.

  Mr McCafferty: On that level of detail I would need to come back to you because I did not have direct experience of what they were like in the final stages. I cannot give a qualitative answer to your question about how they approached that.

  Q1328  Lord Kalms: When you told the BBC they did not get the last bid were there tears in the eyes of the man who put the tender in?

  Mr McCafferty: I do not know.

  Q1329  Lord Kalms: You were not there.

  Mr McCafferty: I was not there, I cannot speak for his emotions.

  Q1330  Chairman: Just to get it again on the record. I was rather concerned about Premier League Rugby being written off as a minority interest.

  Mr McCafferty: Not so much as I was, Chairman!

  Q1331  Chairman: But I just wanted to get that figure on the record. It was 1.9 million, shall we say 2 million people looked into the Powergen final on the BBC free to air. Is that the figure you are giving us?

  Mr McCafferty: The last pool game of the Powergen, just to divert for a second, the way that competition works is there are 12 English clubs and four Welsh clubs in groups of four and then in the case of the game that I am referring to, Leicester versus Northampton, that was the final game of three rounds in a pool which would decide whoever won that game is the side that would progress from that group with three other group winners into the semi-final stage. That is BBC free to air and it was a 1.9 million audience.

  Q1332  Chairman: Which by any measure is a pretty big audience?

  Mr McCafferty: It is and I think it demonstrates the strength of the club game and it demonstrates what a high stakes match can generate in terms of interest. I think one would have to say, as you well know, they are two pretty passionate rugby communities.

  Chairman: Lord Maxton?

  Q1333  Lord Maxton: Skill, passion and violence. Can I in a sense come back to the Internet question. As you quite rightly say, your audience is likely to be more broadband literate and have computers and use them. How do you divide out your rights in terms of them? Do you separate them out or does Sky get all those rights as well, or do individual clubs get them?

  Mr McCafferty: We do seek to separate them and Sky have a window of elapsed time—I do not know what that is, it might be 24 hours—and then after that there is a greater ability to exploit those.

  Q1334  Lord Maxton: But the individual clubs presumably are all contracted to you for all their broadcasting rights? You have the right to sell them for them?

  Mr McCafferty: Yes.

  Q1335  Lord Maxton: Do they retain any? Could BBC North East do a contract to show Sale's home games?

  Mr McCafferty: No, they are contracting into the centre in the area of broadcasting. In the area of local advertising and ground advertising that is not something we do on their behalf.

  Q1336  Lord Maxton: And each individual club, which presumably has its own web site, can show its own games live on that, or not?

  Mr McCafferty: After the delay, it is part of that contract there is, that is the window.

  Q1337  Lord Maxton: So they cannot show it live?

  Mr McCafferty: That is correct.

  Q1338  Lord Maxton: They cannot show it live.

  Mr McCafferty: That is correct but they can on a delayed basis once they are outside the window.

  Q1339  Lord Maxton: Do you have a web site yourself and do you show highlights?

  Mr McCafferty: Yes we do and no we do not.


 
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