Skip to main content
Normal View

JOINT COMMITTEE ON COMMUNICATIONS, ENERGY AND NATURAL RESOURCES debate -
Wednesday, 22 Sep 2010

Sports and Free-to-Air Broadcasting: Discussion

I welcome Dr. Farrel Corcoran and Mr. Paul Rouse to our meeting this morning. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they give to this committee. If they are directed by the committee to cease giving evidence in regard to a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

I welcome the witnesses and ask Dr. Farrel Corcoran to commence his presentation.

Dr. Farrel Corcoran

I thank the Chairman. I am grateful for the invitation to address members. My background is not at all in sports, including rugby. I am an academic who has been working in a media department. I publish in media, media theory and the public interest. I had some hands-on experience in policy-making as chairman of RTE in the 1990s. I want to speak up for the public interest in this debate. What has been happening suggests to me that the public interest is not being heard very loudly at all. We have been inundated with all kinds of facts and figures about the economics of the game, etc. There is a whole other story to be listened to. I want to reframe the debate a little if I can. That is very important now. The bigger context concerns our arrival in a very profit-driven system of broadcasting. I refer to multichannel television. We are moving even into a higher gear in multichannel television very soon. When we have the analogue switchover, the whole country will find itself dealing with digital television, with all the extra possibilities digital media will bring both in terms of the number of channels and how we deal with them. The power to list certain television events must be seen against that broad background.

I will give a quick overview of what I want to say. I will only take about ten minutes of the committee's time. I want to consider very briefly the question of how popular rugby is today. Many people might be shocked if they had an inside look at some of the figures. I want to present a few facts from the evidence we obtain from ratings. What is the point of getting concerned about how big rugby has become compared to soccer and GAA games? I will address the matter, one which sociologists often talk about, of social capital and the role sports play in feeding into a healthy system of such capital. I will also address the impact of listing sports events on the two broad markets of broadcasting, particularly that of television, and sports rights.

Last year's Six Nations final game between Ireland and Wales was the third most popular television programme in the whole year, reaching a 66% audience share. Having worked in television, I know getting such a share is fantastic as it comes in at slightly under 1 million viewers. This was a larger share than that of the football World Cup qualifiers and the senior All-Ireland hurling and football finals. In 2007, the Six Nations final game between Ireland and England got an even higher share, 68%, which drove the audience to over 1 million viewers. In the list of top ten programmes for 2009 across all television channels, rugby appears four times, at Nos. 2, 3, 8 and 9, respectively. Many people may not realise the size of these figures and the quiet revolution going on in audience share.

One can only conclude Six Nations events are more popular than any other sport. They energise huge sections of the population. The question arises as to whether we should treat them the same way we treat the availability of other sporting events on free-to-air television.

This is interesting but raw data nevertheless. I believe there is much more involved than individual fans simply watching a rugby game. More must be involved when rugby has these enormous viewing numbers and which generates such excitement the country basically stops. Is its role in providing for what I as a sociologist would call the national conversation? What is the fall-out after a game across, say, a kitchen table or what the Americans term water-cooler moments?

These viewers would not necessarily be as fanatical about the game as a fan but it is important for them in the national conversation. There is plenty of sociological evidence to suggest the well-being of the nation, a cohesive set of relations between people, is in question. What provides the social glue for these kinds of events? What is the role of soccer, rugby and the GAA in providing this national resonance, so needed in today's world of great social fragmentation?

There is a huge unifying potential in rugby if it is available to all. Restricting access to pay-TV would have an impact on fans, but that is not the whole story. It would have an impact on the national cultural fabric. People will argue this is woolly academic nonsense. It is not. This notion of social capital to counterbalance the increasing fragmentation in society is important. As a teacher of young people in a university I know of this fragmentation. I am ready for retirement. Next week, I will meet a new generation of students. The gaps between us as to what we can talk about are enormous. Sport is one area, however, in which the national conversation can be encouraged. It increases the trust between people.

There is a ritual and spectacle aspect to this and other forms of television. There are shared massive emotional experiences around individual events like rugby. There is the unfolding drama, the uncertain outcome and the nail-biting tension. There is also national and community pride, be it in Ireland or in Munster.

When we ask in audience research which television genres are most important to holding society together, people will overwhelmingly opt for news, current affairs and sports. Social capital is all about binding society across social class differences. There are also age, gender and, increasingly, ethnic identity differences. Sporting events, if they are listed and available to free-to-air television, have huge potential to bridge and build up trust in a society like ours that is going through massive changes.

It must be kept in mind that we are coming to the end of analogue television with the digital switchover happening soon. We have been waiting some years for this. When I was in RTE, I believed we were going to launch DTT, digital terrestrial television, as early as 1999.

Dr. Corcoran is an optimist.

Dr. Farrel Corcoran

My fingers are still crossed. DTT has the potential to be available to everyone and which is not paid for except by the licence fee. We need to take a long hard look at where television is going. We also need to examine where television and the Internet are beginning to overlap.

Pay-TV is very well-established by now and has very deep pockets. In the UK over the past several years the year-on-year growth in pay-TV has averaged at 11%. I suspect the figure may be higher in Ireland. There is evidence, however, in western Europe that the subscriber base for pay-TV will peak with the digital switchover at 50% of the population. This may possibly be the case both here and in the UK but the research has not yet been done. What about the other 50% then? Does one tell them to go to the pub with their children if they want to watch their Six Nations or Heineken Cup matches? There are problems with such an approach.

Pay-TV is not capable of producing the social capital or offering a national conversation around sports. Logic dictates we need a mixed ecology in broadcasting of free-to-air television, with certain programmes that are universally acceptable to everyone, and pay-TV which will allow the real fan who wants to pay to get much closer to the sport. From 1997 to 2002, Sky Television had the rights, and the audience in Wales for the big matches was a little bit less that 120,000. From 2002 onwards the big matches were screened on free to air television, BBC and S43 and there has been at least a five-fold increase in the viewing audience. I will address the question of the negative and positive impact of listing on the rights holders in sports. The negative impact is the potential loss of income. I will come back to that point. I stress "potential" because this is where the debate has focused up to this point. On the positive side there is the real possibility of an increased audience reach if big spectacles are listed — in order words, free to air television has great potential to raise revenue. One may ask how that is done. It is achieved through sponsorship, advertising and merchandising when a game is increasing in popularity. If the numbers are going up and up through free to air television, there are other ways to produce revenue. Some sports have opted to go for free to air television. For example, in Italy Formula One is listed as it deliberately went for free to air television for this very purpose. It has a particular business model aimed at bringing in a very large audience so that it can make more money from merchandise, sponsorship and advertising. Does it take a drop in the rights fee that it gets? Obviously it has decided that the benefit is well worth it.

I mention the fear of on-line piracy, which is viewed as a real threat in Europe. We will definitely see the expansion of broadband access and we will see much more convergence between television and the internet. The pirates already there are able to steal television programmes causing a loss of revenue for the rights holder. The argument is that when a particular sport is definitely on free to air television, the risk from pirates completely diminishes. Why try to put something on a pirated system if it is already available to the majority in the population. Is the negative impact of listing real or exaggerated? I am not an economist of sports. Let other people speak up on this, but I have a strong suspicion that it is being exaggerated and it is not a real fear. In the UK experience, and I have looked at the figures, sports rights annual inflation is about 15% over the past ten years. That is doing pretty good.

There is a real fear expressed loudly and clearly by rights holders here that there will be a reduced pool of potential bidders and there will be a crash. Evidence from other countries does not show that this is the case at all. The big picture is that sports in general are significantly in demand by all broadcasters. The portion of them listed represents only a small percentage, 5% to 10% of all trading in sports between broadcasters and rights holders. We are talking about a small part. The free to air broadcasters are required to offer "a fair and reasonable price" for the rights and this can be refused. There is evidence in recent years that this system has worked pretty well. There is a very long term value in listed events and this remains high. Some people would argue that it will maintain itself even stronger after the switch over and everybody is on a digital system.

Another small point is that it is true in many countries that sports rights inflation generally has kept well ahead of advertising and licence fee revenue. To sum up, rugby is hugely popular, based on evidence and compared to the other big spectacles. That message is not necessarily getting out to the general population. It generates social capital. It is quite difficult to explain that concept to people but deep down people know instinctively what one is talking about when one talks about the fragmentation of society and the need for some major role of television to give us something in common to talk about, the so called "water cooler moments" to use that American expression.

There is no evidence of a collapse in value of rights. Let us take another example. For instance, there is evidence in France where they have listed the Six Nations and the Heineken Cup that there is no decline in value.

There has been a good deal of lobbying that has tried to frame this issue in one particular way. My humble role is to try to reframe the debate and sharpen the focus on the public interest, the 50% of people who will never reach into their pocket and pay for pay TV

Thank you Dr. Corcoran. I now invite Dr. Rouse to make his presentation.

Dr. Paul Rouse

I thank the Chairman for his invitation to appear before the joint committee. I am a lecturer in the School of History and Archives in UCD and one of the courses I teach is on the origins and development of modern sporting organisations. I am a director also of INQUEST Research Group. In 2007, I was commissioned by RTE to undertake a research project to analyse the impact of pay TV on sport in Ireland. The project was undertaken in advance of negotiations that RTE was embarking upon with the GAA to buy the rights to their games. The report of this project was completed in September 2007 and it largely focused on the impact of pay TV in Ireland as well as looking at the situation in England, in relation to cricket, in particular.

I will focus on four aspects of that report today. First, I report on the actual size of the audience watching sport on television. The report illustrates that showing sports events on pay TV leads to a collapse in viewership across the board. The scale of this collapse is stunning and consistent. Rugby is a prime example that bears this out. In 2007, Leinster played on an away Heineken Cup quarter final against London Wasps. The game was shown live on Sky Sports One and was seen at home by 47,000 people. Almost exactly a year previously, at the quarter final stage, Leinster had played away at Toulouse, again on a Saturday afternoon. This game was shown on RTE and the viewership was more than five times greater at 255,000 people. Similar collapses in figures can be seen for cricket in Britain. Audiences for Channel 4, which is free to air for the 2005 Ashes series between England and Australia had peaked at a viewing public of 8.4 million. By contrast, the following Ashes series in 2006 and 2007 was shown exclusively on Sky and it never drew more than 500,000 viewers to Sky Sports. Even allowing for the less amenable viewing time for the 2006 and 2007 Ashes and for the fact that England lost again and again, the collapse in viewing figures was striking.

The second aspect of my report relates to the type of people who watch sport on pay TV. While the strength of free to air broadcasting as Dr. Corcoran has demonstrated is that it provides equality of access to every community in a country, by contrast pay TV subverts this equality. When a sport moves to pay TV, people who are older or poorer or who live in rural areas are substantially less likely to be able to watch it, regardless of their interest in that sport. Even in the wealthier areas of cities, significantly fewer people watch sport on pay TV than watch it on free to air channels. If one looks again at the Heineken Cup quarter finals that I spoke about from 2006 and 2007, one sees that the number of children under 14 years watching the matches dipped from 27,000 on RTE in 2006 to 2,000 on Sky in 2007. The number of women who watched the match on RTE was 67,000, while on Sky that number fell to 9,000. The number of people in rural areas who watched the match on RTE was 111,000 and this fell to less than one tenth, just 9,000 on Sky. The number of farmers who watched the match on RTE fell from 19,000 in 2006 to just 1,000 on Sky in 2007. The number of people over 55 years who watched the matches fell from 98,000 on RTE in 2006 to just 14,000 on Sky in 2007.

The third point I wish to address relates to the fact that the sale of broadcasting rights to TV channels leads not only to a collapse in overall viewership and makes viewing less accessible to certain sections of the community, but it also leads to an increase in the numbers going to licensed premises to watch sporting events. There should be no surprise in this. After all, the model upon which pay TV relies, depends on the sale of rights to publicans. In Ireland, sports shown exclusively on pay TV doubles and even trebles the proportion of the audience who go to licensed premises to watch matches. More than that, the research shows that a significant proportion of the parents who go to licensed premises to watch pay TV sports events also bring their children with them. That figure reached one in five in the surveys that we carried out.

The fourth aspect of the report relates to the relationship between any given sport and the television companies that broadcast that sport. It has always been a major challenge for sports organisations to decide how best to present their sports on television. At its best, this relationship is finely balanced and mutually beneficial. More recently, it is clear that the increase in the sums of money paid by broadcasters to secure sports rights has redrawn that relationship. This is perhaps the most potent aspect of pay television channels. Once they secure the broadcasting rights to a sport, pay television money reorders a sports organisation to such an extent that it appears to become inconceivable to imagine life without that money. It is not just that the sport itself is changed and that sports organisations are changed, or even fundamentally restructured, but also so much of the control of the sport is ceded to television, as has happened with soccer in England. A local example of television companies deciding when matches in Ireland should be played is when Munster played Leinster in a rugby match on Good Friday this year.

In return for all this, sports organisations receive millions of euro. However, it is often ignored how pay television companies find the money to pay for these deals. Baldly, it comes from the pockets of diehard supporters, people from families who must now pay a subscription in order to watch their teams on television.

I would like to thank the two contributors. They have been compelling and plausible in the arguments they put forward.

I completely agree with the four points made by Dr. Corcoran earlier. There is an added issue to the last point, which is the huge cost to publicans, particularly rural publicans, of putting pay television into their pubs. Has any research been done on this? I like to meet friends in a pub to watch a game without being forced to go there. I am a subscriber to pay television, so I do not have to go. I would like to link two issues, namely, the idea of a national conversation as raised by Dr. Corcoran, and the subset of the pub issue. It is not all good news for a publican. In many instances, it is equally important to have free to air television in a small rural pub where community conversation takes place. I would like to see if there is any connection between those two issues.

Both witnesses raise points about who pays for pay television and the potential for sports organisations dealing with free to air. Is there any evidence anywhere in Europe of subscription channels going free to air at some stage? For the past two weeks, national newspapers have been carrying advertisements for next generation televisions with a built-in Internet receiver. There is no sports event in the world that cannot be found on the Internet via a website that robs the rights of television stations.

I am sorry for focusing on the economic area, because it is not the witnesses' expertise, but the point made about the national conversation is a given and the fact that pay television hits the elderly, the poor and those who live in rural areas. If the national conversation is reduced to free to air, then all we will have to talk about is Brian Cowen and "The X Factor", because they will not be able to see sport anymore. I am saying that to encourage my Fianna Fáil colleagues.

We have received very thoughtful and expert presentations. My family had many connections with rugby over the years, but I am still amazed at how popular it has become. Have the witnesses looked at the class basis of rugby? Munster rugby is clearly a community based sport, but there are many jokes about Leinster being the opposite. Sport can be a factor in how people view social cohesion and rugby's role in that. The Welsh focal point of nationality and rugby applies far more to the GAA than it would to rugby, but clearly there is a growing interest and free to air is a very important provision for universal access to watching sport. I am very supportive of that, but the problem is that we are politicians and we have to sort out how we ensure public policy is for the very best.

This is probably the worst time to be trying to ensure that free to air is applied in this area. I appreciate they are coming from a different perspective, but the witnesses state that the IRFU concerns about funding do not really stack up. We have to deal with that, and any further views from the witnesses would be useful. The IRFU submission refers to the money making up 20% of its income and it refers to standards of players, developing the game, investment and so on. One has to accept that there is a problem that we, as politicians, have to resolve. If we do not do that, we will be negligent.

I would be interested to hear if the witnesses have further views on how to resolve the issue, other than to say that sponsorship will sort it out with a growth in interest. The IRFU is already getting about €8 million in sponsorship, but I cannot envisage it doubling at a time when advertising revenue is down. I do not feel that there is any cushion. Are there other ways to reach this goal? I share this goal, but I do not underestimate the difficulties. Perhaps this should have been done during the period of the Celtic tiger, but it is only now coming down the tracks.

Did the witnesses have any input into the considerations being made by the Minister, following advice from consultants?

Dr. Farrel Corcoran

No.

Okay. I thank both witnesses again.

I thank both contributors for their presentations. I read the IRFU presentation to the Joint Committee on Tourism, Culture, Sport, Community, Equality and Gaeltacht Affairs. The report repeatedly makes the point that if the free to air model is adopted, there will be a deficit of about €11million in its accounts, which comes to 20% of the overall accounts. While there is no doubt there has been a huge growth in rugby viewing and in rugby participation, it is still the third football sport in this country. I speak as somebody who comes from the west of Ireland and who has seen the local rugby club increase in strength and numbers, but it still lags behind the number of those who play Gaelic games and soccer.

I understand that the IRFU has put huge amounts of money into local clubs over many years.

It now has the added burden of being obliged to pay to have its top professionals remain here to play for the provinces and the national team. In common with Deputy McManus and all members, I appreciate the point being made by the witnesses and agree it would be lovely for it all to be free to air. However, the stark economic reality is that there is a deficit of approximately €11 million. As a former chairman of RTE, perhaps Dr. Corcoran can provide some insight on whether it might be prepared to take up that deficit, were the free-to-air route to be adopted. However, this deficit is being pumped into the game in Ireland.

As the Chairman is aware, we participate in rugby on the national stage and often are compared to New Zealand, which is a country of similar size and population. However, the participation rates in rugby in New Zealand are infinitely higher than in Ireland. While Ireland is improving, it still is nowhere near the level that obtains in New Zealand. Moreover, the success of the teams, as cited by Dr. Corcoran in respect of viewing figures, is due to participation rates that start from underage level and increase thereafter. The kernel of the problem is how one can get around that deficit. Personally, I would love to see all major sporting events broadcast on a free-to-air basis but the economic arguments cited in the case made by the IRFU have great validity.

I thank both witnesses for their presentations. Some useful information has been presented to the joint committee that helps to broaden a debate that has not been allowed to so do thus far. I took from Dr. Corcoran's presentation the interesting fact about the diminished audience for pay-for-view television. If a sporting body's games were shown predominately on pay-per-view television, this should compromise the advertising rights that it would sell. If the reach of terrestrial television is five times greater, questions about issues such as shirt sponsorship and board advertising within the stadiums will arise and will compromise funding in future in any case.

I never have accepted the €12 million argument from the IRFU and given his experience in RTE, Dr. Corcoran has pointed out that there is an obligation on terrestrial channels to pay a fair price and that the sporting organisation concerned has the ability to refuse a price as and when it is offered. Dr. Corcoran also pointed out that although the audience share for rugby in Wales is lower than in Ireland, it is listed because rugby is a national game there. This year, the final of the European Rugby Cup, the Heineken Cup, was contested by two French teams after several years of success by both Munster and Leinster. In France, the Heineken Cup final is free to air when a French team plays in the final. I am unsure whether statistics are available on Irish viewership of that game, although I suspect it was quite low. However, given the Irish experience in recent years I would like to see it compared and contrasted to similar figures from France.

An aspect of this debate that I find strange is that other rugby countries, such as France or Wales, live quite comfortably with the concept of free-to-air television and it enhances their game. This pertains to the ability of the maximum number of people to view and participate in sport in Ireland. Dr. Rouse's presentation about the experience — incidentally that is not my mobile telephone——

It is the Senator's Twitter.

No, it is up in my office charging. I have someone else sending my tweets for me. I refer to the example cited by Dr. Rouse in respect of cricket viewership in England, whereby the audience for the Ashes series, which had been 8.4 million, fell to 500,000 on Sky Sports.

This debate is happening at an interesting time. We already have had one experience of a national sporting organisation moving from terrestrial free-to-air television when the FAI struck a deal with Sky Television in 2002. There was a huge political outcry at the time and, ironically, the Labour Party's spokesperson was its current leader. The questions that were raised then are not being raised in the current debate and I am curious to know the reason because the first example involved an Irish sports team that had recently qualified for the World Cup and which had been very successful. The FAI was obliged to reverse a decision that had been made and returned to terrestrial television. However, the arguments that are being made at present by the IRFU, on foot of the achievements of the most successful Irish team and the highly successful provincial teams, appear to be precisely the same arguments in exactly the same situation.

Such comparisons must be made because until now, there has been a free run for the IRFU. In the meantime, before appearing before other Oireachtas committees, the IRFU has maximised its income in other ways that have nothing to do with this debate and it has greatly increased its ticket prices. When members make a decision on how people have access to popular sports and participate in sports, one must take into account the broad overview and, sadly, that has been lacking to date. I would appreciate the comments of both witnesses in respect of these points.

I thank the witnesses for their attendance, for briefing members on this issue and for provoking them into a debate on the subject. Both witnesses stated that they have connections with RTE. To what extent, if any, were their presentations today influenced by RTE's position or their involvement with it? A point immediately sprang to mind when Dr. Corcoran stated that the highest viewing audience was for a rugby game last year. I had thought that I had read somewhere recently that the game between counties Tipperary and Kilkenny in the all-Ireland final broke all records for viewing figures.

A Member

Perhaps that was in County Tipperary.

No, it was not because people in County Tipperary were all watching the match in Croke Park. They could not look at it on television. While that is an interesting point, I come from the heart of rural Ireland and it always wakes me up when I hear someone becoming concerned about the people of rural Ireland and the availability or otherwise of facilities to them. One seldom hears people talking about the lack or poor quality of broadband that obtains in many parts of rural Ireland but pay-per-view television appears to be of major concern. From that perspective, Dr. Corcoran mentioned that 50% of people never see or use pay-TV. This prompts me to ask whether a breakdown exists of who has or has not pay-TV in Ireland or whether this is just a figure that has been pulled out of the sky. I have noticed that many people who are in financial difficulties will have Sky or will have a satellite dish on their house. A considerable number of my acquaintances have pay-TV and have been using it for a number of years. Is a figure available and can Dr. Corcoran back up that statistic of 50%?

In addition, while I do not wish to repeat the comments of other speakers, I note that at present more people than ever before are playing and coaching rugby and are involved in that sport. This begs the question as to whether the increased viewership is a result of the success in rugby of Ireland and the provinces. If so, to what extent? Is this a follow-on from the investment by the IRFU of more money in the game and in coaching and other facilities? Is this the reason that Ireland is being successful and that more people are watching it? Is this the reason members are involved in this argument regarding free to air and pay-TV? I remain to be convinced about either. I naturally would prefer for everything to be free as people already pay enough in taxes, licences and so on without being obliged to pay for additional services. However, one must balance the good of one against the other.

Is there a breakdown by sport or game of those events that are attracting people to watch games in pubs? What is the difference between pay-TV and free to air? Most people who watch pay-TV are watching soccer and on a Saturday afternoon and evening most pubs show soccer. Sometimes it is annoying because there may be only one goal in a number of matches and it is replayed over and over. Do the witnesses have figures on this point? It is clear I am not a real soccer fan. Has a cost-benefit analysis been carried out on the benefit to a sport from being seen free to air as against on pay-TV? I acknowledge the presentation, which I found worthwhile. A more serious debate on the matter is warranted.

I welcome Dr. Paul Rouse and Dr. Farrel Corcoran. It is good to hear all sides of the debate. Bobby Darin sang the song that says the best things in life are free and to give it to the birds and bees. In an ideal life everything would be free but I believe the public interest is best served by groups such as the Longford Rugby Football Club. This is a small local club in Longford with fantastic facilities for boys and girls, men and women from under age to seniors. I invite witnesses and members to visit sometime. I will not bore members with all the facilities the club has but it has two all-weather pitches and will be opening a new facility shortly. Everything costs money. Sports organisations in rural Ireland and urban Ireland, where I come from, are not profit-making organisations but they must break even and cannot afford to show a loss.

When talking about rugby, it would be remiss of me not to talk about other sports that provide major facilities. All of the talk is about rugby. I will not go through all the clubs but in Longford we have the Longford Slashers GAA club, which has fantastic facilities for our youth — both boys and girls — in hurling and football. There are soccer, basketball, golf, tennis, swimming and badminton clubs.

Is Deputy James Bannon a member of Longford Slashers?

He is a member of Legan Sarsfields, which is not taking part in the county final next Sunday. The Longford Slashers are in the county final and we take this opportunity to wish them well. The throw-in is at 4.15 p.m. at Pearse Park, Longford. They are playing Dromard and if people want to make a few euro, they should put a bet on it. It will be covered on local radio, ShannonSide Northern Sound. We get great coverage but I have not heard Deputy Noel Coonan on it for a long time. We are well able to cover ourselves there. There is also a Longford gun club and a greyhound track.

Sports have become professional. If people are worried about where to watch matches, they could go to their local club. Sports organisations are looking for people to participate in playing and administering sport. Where I come from, there is no class difference, distinction or favour in respect of sport. This is particularly true of rugby. One knows what one needs to do to play rugby and what to do to be in the forwards. No one will ask anyone if he has a PhD, a BA or MA when he is getting down in the scrum. There is no discrimination in sport. Pay-TV is a fact of life now. What is the alternative to it? Where does the IRFU get the funding to run the IRFU? Where does it get the funding to run the country and urban rugby clubs? Where does it get the funding for small clubs, which cost a lot of money? There are teams from under eight years to under 12 years and the costs are huge.

Whether right or wrong, sport is professional worldwide. From listening, watching and reading, we know sport has become professional. Should Ireland return to amateur status? Sport also creates many jobs and the Irish rugby team had to go professional in order to compete and become among the best in the world. When the team started winning triple crowns and Grand Slam titles and competing against the best in the world, the viewing figures increased. No matter what sport one is playing, even marbles, if one is winning in the sporting environment, the crowd will follow.

A bit like politics.

We find them dwindling at the moment.

Is that the marbles?

Deputy McManus is an experienced lady and she is telling the truth. It is the same in politics as in sport. When people are doing well, the crowds come out but we must wait for another day for that.

Should we seek sponsorship?

I think Fianna Fáil does.

I do not know how Senator Boyle feels about it but I am all for it.

My main concern is that sport is played and administered in every corner of Ireland. It needs all the support it can get, including finance. We welcome the views of the witnesses, which were very well researched. In this great argument, who will keep my local clubs in Longford going? I appeal to the Minister for Tourism, Culture and Sport to reintroduce national lottery sports grants, which I hope will happen in the very near future.

I thank Deputy Kelly for his wide-ranging contribution.

It is good to get the information and the background on this decision. It is easy to choose one route or the other but the IRFU has overstated the case in saying that it will lose €10 million or €12 million from the €17 million or €18 million it gets from media outlets in sponsorship. If the event is listed and RTE must broadcast it, RTE will pay some fee, the extent of which I would like to know. Is there an obligation on RTE to pay what Sky or another channel would have to pay? We could be opening up financial liabilities for the national broadcaster and potentially looking at an increase in the licence fee, which is something I am slow to support.

It seems that Sky Sports is held up as a good example but I think it is an appalling example. Some 20 years ago, when BSkyB got moving, it said it would use sport as the bulwark to get into the market, into homes and into pubs. Sky is not there for the benefit of rugby; it is there for the benefit of Sky, Rupert Murdoch and the News Corporation. Let us not hold Sky up as a good example; it is the worst example of capitalism.

The Minister jumped the gun very early. He made a statement and then had to justify it. I hold an open mind and my view is evolving and changing. I would like to see free to air broadcasting but potentially there could be a financial deficit for the IRFU and others.

I want to bring to the attention of the committee the expenditure of the IRFU of €32 million on the professional game. I know "the professional game" could cover many categories, but there are five professional teams in this country and the IRFU is spending €32 million on them. We have to have a look at this. This money is not trickling through to the rugby clubs throughout the country, and it is certainly not going to schools. While the IRFU has improved its game a lot, its game was zero. It was an elitist sport and it was not out there in the way it is in Munster and in some areas of Connaught.

I commend the Leinster branch of the IRFU, which has improved its game a great deal but it started on a very bad footing. It was for a small elite few in Leinster. According to the figures from the IRFU on the domestic game, €11 million out of €55 million is poor because thousands of people play rugby domestically, from competitions for those under seven years of age to the AIB league. With regards to the Aviva Stadium, the IRFU had very little difficulty in selling all of its boxes. There is sponsorship out there which the IRFU and others could potentially tap into if they choose to go down that route if there is a loss of funds from free to air.

I am concerned about the package costs. I am happy to debate this and put my name to one side or another. However, I would like to have all of the facts and figures. I do not believe the IRFU with regard to the €10 million or €12 million loss. What I say to both witnesses is that what I want to know about is the costs RTE will have to pay for free to air broadcasts. If it is obliged to deal with it, will the licence fee be impacted? The truth of it is that this would mean everybody who pays the licence fee would have to pay for it. According to the figures given by the witnesses, not everybody wants to watch free to air sport. It might be a little unfair if there were to be an additional cost as some people may not be interested in looking at it but they will have to pay for it through the licence fee.

I thank our two visitors for their presentation which was thought provoking. The viewing figures they gave and the arguments they put are reasonably compelling. However, I note the figures for rugby, with the Six Nations being the most popular sport, related to 2009 which is the year we won the grand slam for the first time in 61 years. That would distort the figures. I am not particularly knowledgeable about cricket, but in recent years, England won the Ashes for the first time in many decades. I think that was in 2005. Perhaps that distorted viewing figures in the same way. Having said that, free to air is a desirable route to take where it is possible. Much of the viewing public and the audience figures that sport receives will depend on the teams and how they perform. Success garners success in viewing figures also. It is interesting that Ireland generates only 5% of television revenues but receives approximately 13% of the take from the cumulative revenues across the board.

I respect the witnesses may not have the information on this, but the real question is that if the semifinals and final of the European Rugby Cup were free to air, and an Irish team was involved, would it impact negatively on the ERC's distribution of the revenue stream to the IRFU? The game needs financial support. I am conscious a weather eye should be kept on what happens in England with regard to soccer, where there is a very significant distortion of the game because of television revenues. Perhaps it is a bubble waiting to burst with regard to the number of clubs. We need to protect sports here from such a thing happening. I am in favour of free to air subject to it not undermining the stability of the game of rugby here, particularly its potential for success on the sportsfield nationally and club level.

Before I invite witnesses to speak, I would like to pick up on a point made by Deputy D'Arcy on something no longer being pay-per-view and returning to terrestrial television. Dr. Corcoran stated a fair and reasonable price has to be paid by the television company. Who sets that price? In the Irish context, is it RTE only or can TV3 also compete in the bidding scheme? How does this work and who agrees the particular price? This has been lost in the arguments. Either Sky will pay €13 million, €15 million or €18 million or RTE will pay nothing. It is important to clarify this. To take up Senator Walsh's point on the viewing figures, some of them are dated. Is it possible to have more up-to-date figures so that we can compare like with like in this regard?

Dr. Farrel Corcoran

I have heard a huge range of responses, and I thank members very much. I cannot possibly address them all. To address the Chairman's final point, we are discussing free to air television and not necessarily public service television. Of course, whatever channels are free to air are free to bid for the rights to the IRFU, and the IRFU can accept or refuse or it can play a very clever game of beating up the price and I presume it would. This has to be said and perhaps it got lost a little.

To answer the question on whether I have any connections with RTE at present, I do not. However, I am passionately interested in public service broadcasting, which happens to be in RTE and TG4. Other channels may come into existence when we switch off analogue and enter the huge world of digital TV. What I am passionate about is the public interest. Sometimes, I hear people take on board the financial worries and anxieties of the commercial director of the IRFU. He or she has to think creatively about how to raise revenue for the sport. There is very significant revenue going into the sport already in Ireland — I do not have the facts and figures — from television. It is already there. There is nothing free about it. Recently, the price of stadium tickets caused huge outcry. RTE has been doing very well over the years and the price has been increasing; of course, TV3 can come in on the game as well. It is the public interest that is crucial in all of this. I would not be staying awake at night taking on the worries and anxieties of the commercial director of the IRFU. He or she will have to come up with some bright ideas. Other sports are doing it.

The GAA is doing it.

Dr. Farrel Corcoran

Yes, and Formula One is doing it in Italy. As I said, it has deliberately stayed away from pay TV because the economic benefits are greater. Dr. Rouse can confirm that moving to pay TV could well have a negative impact on the IRFU — never mind the academic stuff I am saying about social capital. From its point of view, moving back to pay TV might be a negative thing because of the figures we have given here, such as the difference in audience size.

Dr. Paul Rouse

There is a range of different concerns. I have not seen statistics for the prices publicans pay in Ireland, but in the UK, subscriptions from publicans amount to half of the annual subscriptions received by Sky Sports. That shows how dependent it is on that model of watching sport in pubs.

Half of the total?

Dr. Paul Rouse

Half of the total comes from publicans. One can see on a pub television a little pint symbol in the corner of the screen, which shows the television is operating on a publican subscription rather than a household subscription.

Could they not just draw a stencil of a bar glass?

I agree it is very expensive — too expensive for publicans — but the publicans are providing the facility in the best interests of the sport. All over Ireland, up to recently, the biggest sponsors of sport were the local publicans.

Dr. Paul Rouse

As to the question of whether RTE would have to pay more, I cannot see how it could pay much more than it has paid already. It would be a matter of market rates, and TV3 could also bid for it. If RTE does not have the money it does not get the product.

If it is free to air and one company is obliged to pay whatever the amount is, could a case for compensation be taken by somebody else?

Dr. Paul Rouse

I cannot see how that would be the case. I do not think RTE would be obliged to do anything. It would contract for that figure as far as it was able, but that would be it.

I was struck by the figure of €10 million to €12 million which the IRFU says it will lose should these events be listed. This is not an area I covered in my report. I went back through the press releases for the last six or eight months, looked at the coverage in the media, and read the transcript of the meeting of the Joint Committee on Tourism, Culture, Sport, Community, Equality and Gaeltacht Affairs, and I was somewhat surprised by the assertions that underpinned the figure. Just to take one aspect of it, the IRFU imagines it will be entirely penalised and that the entire amount it receives from the pool will be withdrawn. However, France has already listed the Six Nations event and has not lost a penny from it. Why would Ireland necessarily be punished when France has not been? It seems to be case unproven in that regard.

The Heineken Cup is a separate issue; that is a commercial arrangement between the ERC, the various unions and the television companies. It is probably a more questionable area.

It cannot be called the Heineken Cup in France.

Dr. Paul Rouse

Exactly; it loses the name.

What I found interesting in the meeting of the Joint Committee on Tourism, Culture, Sport, Community, Equality and Gaeltacht Affairs was the comment by John Feehan, the CEO of Six Nations Limited, that he could not guarantee that Six Nations would not sell its rights to Sky in three years time or at any time in the future. Of course, we have been down this road before with the FAI. In addition, the English cricket authority gave an undertaking to the British State in 1998 that it would not sell its rights to pay TV but then did so, although not until seven years later.

I ask Dr. Rouse to clarify one thing. Is he saying that the figures provided by the IRFU to the Joint Committee on Tourism, Culture, Sport, Community, Equality and Gaeltacht Affairs were wrong?

Dr. Paul Rouse

Absolutely not.

Does he accept those figures?

Dr. Paul Rouse

I accept the figures for the amount the IRFU receives without question. I would not begin to impugn the integrity of the people in the IRFU. However, I am hugely sceptical of the assertions underpinning the suggestion that it would lose €10 million to €12 million should it go down that road. It is entirely unproven.

This is a crucial issue for us. Is Dr. Rouse saying the IRFU's stance is that it receives €11 million for these rights and that it would lose all of that?

Dr. Paul Rouse

No. What it is saying is that it would lose €10 million to €12 million, which is the share of the pool that it receives. It says it will lose the pool money and that it will be left with the €3 million that RTE puts into the pot.

Is this the Six Nations we are talking about?

Dr. Paul Rouse

Yes.

Is it fair to say that the pool money is mainly influenced by the biggest audience figures in the UK and France anyway?

That is right.

Dr. Paul Rouse

Yes. They are the biggest markets and they pay the greatest sums of money. I simply make the point that——

What, then, does Dr. Rouse estimate as the true position, accepting the figure of €11 million?

Dr. Paul Rouse

The current position is that it is free to air and the IRFU receives a sum of money. One does not really need to make an estimate of it; one looks at what it is.

It is a bit unfair to ask this question but I might as well put it out there. Is it possible that, in the future, if Sky were to come in and start outbidding other bodies to put together a Premiership-type package for the Six Nations, the numbers it is currently achieving could be increased by a considerable amount? Is that the kind of thinking that exists?

Dr. Paul Rouse

In terms of the funds to the IRFU?

Yes. It could potentially lose in the future.

Dr. Paul Rouse

I suppose that is part of it. Let us consider what happened with the FAI in 2002. It was receiving around €1.5 million across four years for the FAI home internationals, so it did a deal with Sky for €6 million or €7 million. That is the scale of the change. We all remember the public outcry against this move — and the political outcry as well.

Dr. Farrel Corcoran

It is important to remember that there is always competition in the free to air television sector, leaving pay TV out of it altogether. Since TV3 entered the market, not only has it slowly but surely accumulated a programming strategy, but it has also taken on RTE and won in a number of areas. Leaving aside sport, this has happened with major soap operas which were jealously guarded by RTE for many years. TV3 came in with its strategy, driven by Canwest, of taking over some of these soap operas, and people in RTE were extremely worried about it. In this case, the rights were held in England, and it was a nailbiting time in RTE. Eventually RTE realised that it would have to let the programmes go because of the fear that the cost would affect the licence fee. It is difficult to let it go.

There is a similar competition for GAA championship matches.

Dr. Paul Rouse

I should add, with regard to my connection with RTE, that I used to be a reporter for "Prime Time".

We will not hold that against you.

Dr. Paul Rouse

Thank you. I also run a research company which occasionally works for RTE, and I have also worked for Setanta Ireland in the past.

You have worked with RTE as a client?

Dr. Paul Rouse

It buys services from us on a reasonably frequent basis.

With regard to viewing figures, does Dr. Rouse have any update?

Dr. Paul Rouse

The most recent viewing figures are for the Magners League match between Munster and Ospreys last Saturday night. RTE has just started showing Magners League matches on Saturday evenings for the first time. That figure was almost 250,000 at the peak. I do not have a comparison——

What was the TG4 figure for the Leinster match last Saturday night?

Dr. Paul Rouse

I am not sure about that game, but the figure for the Munster match was 250,000. If we compare that with——

Most people want to see Munster.

Dr. Paul Rouse

The best example of a rugby club match played in Ireland was Munster versus Leinster in the Heineken Cup semi-final in Croke Park a couple of years ago. I have seen reports that about 150,000 people watched that match on Sky. There were more people watching the Magners League match on Saturday night.

Is it possible to get an equivalent figure for the Munster versus Ospreys match if it was on Setanta? I would like to compare those numbers.

We should try to obtain that number so that we can compare like with like.

Dr. Paul Rouse

I can find those figures and send them to the committee.

I ask Dr. Rouse to do that, because the figures will tell a tale.

I asked a question earlier about the viewing figures for this year's European Rugby Cup final on pay-per-view, which had no Irish team involvement.

Dr. Paul Rouse

I do not have those figures.

I suspect they were well down.

Does the delegation have figures on how many households have a television in Ireland?

Dr. Paul Rouse

That is information which pay TV companies guard relatively jealously. It is not something they put out. Let us consider the position at the time we issued the report in 2007. Some 18% of Irish households had only four channels. A further 9% did not have either cable or digital as a starting point. Approximately 70% had access to cable and digital television but it was projected that approximately 25% had Sky Sports.

There is one slight weakness in the argument the delegation is putting forward, that is, treating pay TV hours as a single entity. Let us consider the Premiership. It has fragmented. I had Sky because I like to watch soccer and I found it wherever it was on. Nowadays, it could be on ESPN or Setanta. It must change the position significantly if different companies are bidding against each other for a smaller audience.

Dr. Paul Rouse

As the Senator will recall, Setanta bought the rights to soccer and then sold them at a cheaper rate than Sky Sports. Then, it lost the rights to soccer because it did not have the subscription rates to continue. This means there is a fragmentation and it also means that if one wishes to see one's team at the moment, one must buy Sky Sports and ESPN.

There are pay-per-view subscribers who do not take the sports packages at all. They may just take the movies package.

Dr. Paul Rouse

Yes, some might just buy the movies.

I spoke to some people before this meeting . One gave me a very good example. Some 30 years ago when boxing was free-to-air, everyone watched it. Everyone knew who the world heavyweight champion was. I asked five sporting fans who the heavyweight boxing champion was and they had no idea.

For a start, there are six of them. That is because of pay-per-view television. They all have their own world champion.

They could not name one of them.

There are six titles.

I thank Dr. Corcoran and Dr. Rouse for their presentations. I realise this debate will continue but I commend both on their presentations. We will continue with other business.

Top
Share