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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