Examination of Witnesses (Questions 1860
- 1871)
TUESDAY 17 JANUARY 2006
Mr Brian Barwick and Mr Simon Johnson
Q1860 Baroness Howe of Idlicote:
Do you think they did better, say, than Sky on the promotion of
women and youth?
Mr Barwick: On the promotion of women's football,
I think one of the things that is critical to it is accessibility
to the largest audience. This is where the BBC will score for
us in this particular area because 3.5 million people, as I say,
watched the women's international. That is a fantastic number.
Q1861 Baroness Howe of Idlicote:
Do you have specific arrangements with the BBC where you agree
that they will aim specifically to promote football and encourage
grassroots participation?
Mr Barwick: I think whenever you are involved
in negotiations, as I must have been involved in dozens of negotiations
from the other side of the table, what a rights seller must do
is maximise the opportunity. Sometimes that is beyond revenue;
it is about how you want your product best distributed, best portrayed,
best promoted. Certainly, when we go out in 2007 to re-sell the
package in the market, the FA properties, one of the things we
will want is an acknowledgement that the FA has a broad spectrum
of football played in many ways and we will want it supported
properly.
Q1862 Bishop of Manchester:
Could I ask another question in the grassroots area in the sense
that the sports department of the BBC is coming to what some might
term to be the grassroots, other than the headquarters, in Manchester?
Do you have a view in the Football Association about that or is
it really a matter of little importance to you where the BBC sports
department is based?
Mr Barwick: I have no view personally. I am
from the north of England and I moved down to London to work for
the BBC. It would have saved me a train fare or two, I suppose,
if it had been in Manchester in the first place! I have no view,
other than that I am interested to see how it will work on a day-by-day
basis. They are four or five years away from this. They have to
work the practicalities through. I see no reason why it should
not move.
Q1863 Baroness Gibson of Market Rasen:
As you know, we have been taking evidence and one of the things
that has been quite interesting is the views on a BBC sports channel.
What are your views? Do you feel that the BBC at the moment can
really give you the coverage you require and need and would you
be better with a BBC sports channel?
Mr Barwick: I will allow myself a personal comment
here. I have always thought that if any free to air broadcaster
has the facility and ability to put a sports channel on the air,
it probably is the BBC. I do not mean a premium sports channel.
I think it has two genuine assets: one is its range and depth
and the divergence of its portfolio. The year I left the BBC,
it had 56 sports; I defy anybody to name 56 sports, but we had
them. I moved to ITV and in a week we had three sports. That was
the difference. In ITV the criterion was commercial return with
good product in a mixed schedule. With the BBC, their responsibility
I think is basically to play across the whole field. That means
that they do have lot of product. Secondly, I think they probably
have the best sports archive in the world. I cannot possibly tell
the BBC how to run their business. I did not do it when I was
at the BBC.
Q1864 Chairman:
Did you ever put this up when you were there?
Mr Barwick: It was always discussed. Some of
it was pre multi channel. It has never got there. It seems to
be an idea they did not want to pursue yet. It is an interesting
point for me as to who could possibly achieve that. Just on the
amount of material they have, it must be them.
Chairman: Thank you for that bit of your memoir.
That is great.
Q1865 Lord Kalms:
Our job is to look at the role of the BBC rather than inside out.
What we are trying to get are perceptions of the BBC. You are
a very interesting man, having been on both sides of the fence.
What we are trying to understand is the process and the thinking
process of the BBC when it has to go out and bid for whatever
product they want at any one time, bearing in mind that they have
a limited budget, or not so much that but the other side have
an unlimited budget, so you are not on a level playing field.
What we are trying to understand is the process of the BBC when
it wants a premium product, how it will play out its bid and the
considerations it makes, bearing in mind that it knows that it
may well be out-bid. Arising from that question, we are wondering
about the role of Ofcom. Ofcom does regulate, to some degree,
the other bids. It does not have any influence over the way you
bid. Do you have any thoughts about this? The third question which
these two questions lead to is this. Do you see any case for an
independent review of the way the BBC bids for sports rights?
That question has been raised quite a lot. Should the whole thing
be exposed as a particular exercise for others to see how transparent
the whole process is on both sides?
Mr Barwick: Why does the BBC buy sport? That
would be the first question you asked, broadly speaking. I think
it does that because it is a licence-funded organisation which
has a responsibility to provide a mix of programming that reflects
the mix of interests in the country. I think also it recognises
that sport is exciting television; it is dramatic and variable
in its life and it is guaranteed to have a different ending every
time. That is what sports television gives you. By its nature,
it can be the glue between the bricks in the nation. If you, as
we hope, this summer, see England doing well in the World Cup,
then millions upon millions of people will watch it. When the
games are on the BBC, they will watch it on the BBC. It embodies
a diverging television industry. Sport has almost a unique capacity
to draw a collective audience together in remarkable numbers.
I cannot think of anything else that achieves that. It can also
attract a variety of demographics to a channel which makes it
appeal. Certainly when I was at ITV, one of the issues we looked
at when we were buying sport was the demographic appeal of those
who watch it. Undoubtedly, that was the same for the BBC, albeit
in a non-commercial way. It is also part of the rich heritage
of the BBC; certainly it was before I arrived at the BBC, while
I was at the BBC, and subsequent to me leaving the BBC, although
it had to learn to live in a modern television economy where it
cannot have everything, cannot afford everything, and probably
has not the room to fit everything in. The sports rights market
has changed; it has exploded. I think I have answered your first
point.
Q1866 Lord Kalms:
I made the slight mistake in asking you to speak as if you were
still a member of the BBC. Once you are a member of the BBC, you
can never stop thinking BBC. Let us reverse the position and look
at it from the outside looking in. We want to know what happens
when the BBC goes into the process of bidding, knowing that it
reports to the market.
Mr Barwick: I think it has to reflect the market.
It certainly has to reflect whether there is going to be competition
for the rights. If you are asking me the question "how do
they come to the position where it is a specific rights game?"
I think they have to go through the same process of value to the
licence payer as ITV does, which is the value of return on investment
through commercials.
Mr Johnson: I think they do. Our experience
when we were competing with the BBC and now when we are preparing
to go out in the market and negotiate with them is that they do
look at it as a two-stage process. I think they work out the genuine
cost to the BBC according to their own economic model, which I
think is something called "cost per viewer hour". I
think they then also try to work out what this is worth to other
broadcasters. I am interested in what you said, Lord Kalms, because
you said that others have unlimited budgets. I do not think that
is the case. I think everybody has a finite amount of money. The
decision the broadcasters have to make is how they choose to allocate
their resources.
Q1867 Lord Kalms:
I should have said "larger budgets".
Mr Johnson: The BBC would make choices, just
as all broadcasters would. The first question they would ask is
how much they wish to win these particular rights if somebody
else is after them. From our perspective as a seller, what we
are entitled to ask of the BBC, and the same I suppose with ITV
and Sky, is that people would come and make offers for our rights
that reflect the value of those rights to them in the marketplace.
I have to say that all my experience of seeing the BBC bidding
for the FA's rights and then for the one or two events when ITV
and BBC bid together, they do bid in an open market. They do not
try to rely on regulation. They do not keep one eye on listed
events and say, "Do you know what, we have to have that anyway,
and so we will put in a low bid and require the Government or
the regulator to help us". I think they do value their rights.
Mr Barwick: One other important point to make
is that there is a misconception that the BBC spends less money
on sport. In all my time both at the BBC and at ITV, certainly
when Sky came on board, only Sky spent more money on sport in
the United Kingdom than the BBC.
Q1868 Lord Kalms:
That is what we are talking about.
Mr Barwick: It would be fair to assume that
perhaps ITV spend the same amount on sport; they do not.
Q1869 Baroness O'Neill of Bargarve:
I want to ask you a little bit more about the listing system.
You wrote to us that as long as the free to air broadcasters continue
to offer a fair market price reflecting the value of those events
to those broadcasters, there is no reason why the listed events
regime should distort the market. If I may say so, that is rather
standing on both sides of the fence, which is generally reputed
to be an uncomfortable position. I wonder whether you are really
with the free market or for the listed events system, or you are
with the listed events system providing it turns out to be entirely
compatible with the free market?
Mr Johnson: If I could answer that, maybe I
was trying to sit on both sides of the fence. The listed events
regime in the UK is a fact of life. We have had it since 1956.
In fact, the broadcast market has matured around it, funnily enough.
What is interesting is that if you look at other countries where
they have not had a listed events system and then have introduced
one, it has had a number of effects. Firstly, it has distorted
the market; secondly, it has created legal problems; thirdly it
has created huge political controversy. It has had a really distorting
impact, whereas here in the UK it has been rather more genteel
and gradual. There has been a listed regime. I think the FA Cup
Final has been on the list right from the beginning. The broadcasting
market has grown up around it. The broadcasters are used to operating
within it. The BBC, ITV, Channel 4 and Channel 5 are used to the
protection that it gives them. Sky is used to competing, if they
choose, on those particular events and people are comfortable
with that. Therefore, I think that it would distort the market
to remove the list now and just to make it a complete free-for-all
because the market has become accustomed to it. You can argue
around the edges: is it right that these particular events are
listed? A matter for debate has surrounded the World Cup. I think
we are the only country that lists all 64 matches in the World
Cup. This summer Mexico versus Angola deemed is worthy of protection
in the United Kingdom. It will not be anywhere else in the world,
probably not in Mexico or Angola. You can have those sorts of
debates. I remember that the House of Commons got themselves very
worked up in 1997 when England had to play a qualifying match
against Italy and they needed to get a particular result to qualify
for World Cup `98, that match was on Sky. That was the nature
of the deal at that time between the FA and the broadcasters.
A lot of politicians got quite heated about this. There was an
argument that key England qualifying games should be listed. I
think even then at ITV I felt, and I still feel this now, that
if you start listing particular events to suit the market at that
particular time, you are creating a distortion that is unnecessary.
As I say, I believe this is a mature market that can deal with
the fact that a number of events are listed.
Q1870 Baroness O'Neill of Bargarve:
So the listing is just seen as part of the framework for the market
at this stage?
Mr Johnson: I believe so.
Q1871 Baroness O'Neill of Bargarve:
It is accepted that changing it would have costs?
Mr Johnson: If you were to remove it, it would
distort the market.
Chairman: You have been extremely patient. Thank
you very much for coming and giving us very clear evidence. Thank
you for your clear paper. Perhaps if we have any other points
we can come back to you. For this afternoon, thank you very much
for coming.
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