Select Committee on BBC Charter Review Minutes of Evidence


Examination of Witnesses (Questions 1520 - 1536)

WEDNESDAY 14 DECEMBER 2005

Lord Currie of Marylebone and Mr Tim Suter

  Q1520  Lord King of Bridgwater: Would it be within your power to do that?

  Lord Currie of Marylebone: I am not sure. Does this fall within our power?

  Mr Suter: I am not sure.

  Lord Currie of Marylebone: Could we write to you on this? I think that might be sensible.

  Q1521  Chairman: Let us ask you about television then. Do you think that the sale of Premier League broadcasting rights and what appears to have been the Commission's view does present a genuine opportunity for others to acquire live rights, that you cannot have more than five parts of the six?

  Lord Currie of Marylebone: This whole area is one that needed a detailed look. The fact that the Commission has taken up the issue has been helpful. The fact that there will be more than one acquirer is a significant step forward. Our understanding is the Commission is currently looking to get undertakings from the Premier League, the fact that in the market mechanism for allocating the rights, the auction processes, there will be some quite detailed rules to ensure that process is fair and if that is indeed the outcome that is an important step forward, yes.

  Q1522  Chairman: Do you think it is an important step forward? On the face of it, it seems that if you are only able to acquire one-sixth of it—

  Lord Currie of Marylebone: That is not necessarily the case.

  Q1523  Chairman: No, it is not necessarily the case.

  Lord Currie of Marylebone: If there is a fair auction it may be that there will be a bidder who will come along and acquire more than the minimum one-sixth; indeed, you might find a bidder acquiring a third or more. That is the relevance of the fairness of the auction process which is a rather critical element in this. Even if it is the one-sixth, I think that is a step forward in this market.

  Q1524  Chairman: To put it the other way round and I now come from the opposite direction, why should the Premier League not just sell whatever they want to sell? They are the owners, why should there be any restraints placed upon them?

  Lord Currie of Marylebone: I think there are questions about the fairness and the openness of the process. This is not a matter for Ofcom, let me emphasise. We have provided some research to the Commission, they asked for that, but it is not for us to decide these issues. There are questions of the appropriateness of all the rights going in one direction and not necessarily changing hands. In other countries you have them all going to one acquirer, but different acquirers over time have been able to get into the business.

  Q1525  Chairman: So you really have no say in this at all?

  Lord Currie of Marylebone: No, this is purely a European Commission matter.

  Q1526  Lord Holme of Cheltenham: As I understand it, you have got a duty to ensure that due process is observed in bidding so that if non-BBC broadcasters provide false information or withhold material information in the bidding process you can fine them, is that right?

  Lord Currie of Marylebone: If we found a breach in competition law of an auction process we would certainly have powers. This one rests with the Commission because of the inter-connectivity between the different markets in the different national countries.

  Q1527  Lord Holme of Cheltenham: To the extent that you are the UK market I have two questions. First of all, do you think it would be appropriate to extend those powers to the BBC which at the moment are not subject to you playing that role? The second question is, given how important these great sporting rights are to the British public and, therefore, how they are prone to all sorts of lobbying, do you think it would be appropriate that all bidders should have to declare any lobbying of public officials they make in the course of trying to acquire sports rights?

  Lord Currie of Marylebone: I think the latter one is a rather hot potato that I prefer not to be drawn on. On the first, we are in discussion as part of the Charter Review process about the question of whether there are certain specific competition powers that we should be given over the BBC in addition to the powers that we already have, because we are a competition authority that does include the BBC in those powers. The question of how far that should be extended is an interesting set of issues.

  Q1528  Lord Peston: Very briefly, you do have these responsibilities to the public as citizens, it is not just economic.

  Lord Currie of Marylebone: No.

  Q1529  Lord Peston: What interests me is if we look at outcomes so that free-to-air broadcasting includes no test cricket, no top class football, who would the citizens think would be standing up for them within the broadcasting area to say these outcomes are less than satisfactory? I thought it was you.

  Mr Suter: Our role is to define what we think public service purposes are and how they can be used. Can sport be legitimately part of public service broadcasting? Clearly it can be. Clearly we would expect to see public service broadcasters position themselves in relation to how do we meet that public need, how do we meet that public purpose. They will do that in a variety of different ways and some of those will be driven by the extent to which that sport activity is already available elsewhere and the extent to which it is not, and therefore there is a prima facie role for them to get involved. If you ask the question whose job is it to define that space, I would say it is our job in relation to the public service broadcasters to define the parameters of the interaction between public service broadcasters and sport. It is not our role to define which public service broadcasters should carry which kinds of sport, that is for them to decide in relation to their own objectives and priorities.

  Q1530  Lord Peston: I will give you one specific example and then I will stop. Someone pointed out to this Committee that the way the Test rights were sold means that a young person from a not very well off family who could not afford pay-per-view in the next five years would not see the rest of Freddie Flintoff's career, perhaps, because he might be gone in the next five years. I was rather shattered by that because it had not occurred to me at all that that is the outcome of this kind of market process. You say you have got no duty to say that at least consideration ought to be put that people as citizens have the right to see a team called England available to them when they cannot afford pay-per-view?

  Mr Suter: I take the force of the question but you could argue the same for a whole load of other activities that may well be constituted equally as public service—great musical careers that we ought to find access to, great acting talent, great moments of heritage—which would all form part of public service ambition, public service purposes. It is our job to define that challenge, and representing those aspects of our culture and our heritage are part of the responsibility of public service broadcasters, but it is not our job to say, "That means you must cover these individual things", it is for broadcasters themselves to decide how they rise to that challenge.

  Q1531  Lord Peston: So you do not feel you should speak up for the citizen who does not like the monopolistic outcomes that occur?

  Mr Suter: We feel very much that we should speak out for the citizen in defining what their expectations should be and for the broadcasters to rise to it.

  Q1532  Chairman: You do not want a wider role than that?

  Mr Suter: We do not seek a wider role than that. It seems to me that the consequence of the wider role than that is to start to determine precisely what broadcasters should or must carry and actually gets us into the business of dictating their programme planning.

  Q1533  Lord Kalms: We have been talking around it and we have spent a lot of time talking to the BBC and the providers about the Premier League, rugby and cricket, and it is quite clear that in the bidding process all the time, whatever happens, Sky get the cream and the BBC is lucky if it gets the skimmed milk. The process has been conducted in a totally unsatisfactory way, and anyone in business would know that you do not go into a battle if you are going to get beaten up, so it shapes the BBC's thinking. I can bring this down to one simple question. There is a problem there which you have half recognised but you have ducked away from it. Would you support an independent review of the way the BBC bids for sports rights because it is an unsatisfactory process and it ought to be reviewed properly and in public with a transparent look at the process? We did not get a transparent look at the process; we got a lot of half truths, half expressions and platitude after platitude. Would you support an independent review of the process of bidding for sports rights? It is a simple question.

  Lord Currie of Marylebone: I am not sure that is a question that we, as a body, have considered. The prime question is, is there a major problem in this area and, if so, where does the responsibility lie? It seems to me the BBC Governors have a responsibility for appropriately managing the way in which they bid and pay for programmes they buy, including sports rights, and it may well be that the BBC Governors should be asked to look at that question and be held to account for it.

  Q1534  Lord Kalms: They may be happy to keep on losing bids because a lot of people are happy to be second, it keeps their budgets intact. I think there ought to be a public review, not a private decision as to whether the process is right. This is about the public interest. As Lord Peston just said, people are being denied, therefore, it is not the BBC, who are very happy not to spend whatever millions in getting the rights, the public ought to understand the process of why the BBC comes in at number two regularly. It is an issue of public interest and, therefore, you ought to be involved.

  Lord Currie of Marylebone: If there was a review we would certainly wish to contribute to it and help to facilitate it.

  Q1535  Chairman: You could not do it yourself?

  Lord Currie of Marylebone: I think it would be a matter for Government if it wished to ask us to do that. It would be a matter for you if you wish to recommend that as a course of action.

  Q1536  Chairman: You have been very patient, thank you very much indeed, both Lord Currie and Mr Suter, for your evidence. I am very grateful. There were a number of points that came up and if you could let us have those as soon as possible we would be very grateful.

  Lord Currie of Marylebone: Thank you very much. We look forward to your report in due course.

  Chairman: Thank you.




 
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