SELECT COMMITTEE ON COMMUNICATIONS, MARINE AND NATURAL RESOURCES debate -
Tuesday, 8 Apr 2003

Vol. 1 No. 1

Broadcasting (Major Events Television Coverage) (Amendment) Bill 2003 [Seanad]: Committee Stage.

NEW SECTION.

Mr. Broughan

I move amendment No. 1:

In page 3, before section 1, to insert the following new section:

"1.-The Minister shall keep the list of designated events under section 3 of the Principal Act under review from time to time and at least every 2 years.".

This arose from the debate on Second Stage and from an examination of the 1999 Act. It was perceived that there were problems with that legislation. We thought we had addressed the important issues concerned but it turned out that we missed some key aspects.

The amendment also relates to the discussion on the ministerial order designating events. There was a lengthy discussion at that stage and I will not therefore detain the committee too long on this issue. The discussion focused on what Members considered to be the key events which should be available under the free to air, television without frontiers directive. It was stated that these should be kept under constant review. The ministerial order, which is in line with the 1999 Act, stated that it would be a two yearly process. The amendment seeks to place that requirement on the Minister because I am not sure he is required to do so.

I will not go over the debate but Members referred to GAA, rugby football and other sports. The designation of events should be kept under review because culture tends to change. The basic principle was brought home to everyone last week when our international team was playing in Tirana in Albania and a large segment of the population appeared not to have been able to see what was an important game. The committee is trying to ensure that important cultural and sporting events will be available to everyone. Will the Minister accept the amendment in this spirit and ensure that there is ongoing review of designation, given the interesting discussion we had in the Dáil on the ministerial order and this Bill?

Minister for Communications, Marine and Natural Resources (Mr. D. Ahern)

I accept that a formal review process as proposed by Deputy Broughan in the amendment would be helpful. Section 2 of the 1999 Act allows me to amend or revoke a designation order. There is a statutory obligation to review the order from time to time. I accept that including the amendment would reassure all parties affected by the designation that any problems that may emerge after the initial designation could be addressed.

I propose to table an amendment on Report Stage to deal with the issue raised by Deputy Broughan. It is not my intention to undertake a review before a period of two years with further reviews at regular intervals thereafter. Perhaps the Deputy would withdraw his amendment in light of the fact that I will table an amendment to cater for the principle he raises.

Mr. Broughan

Why does the Minister not accept the amendment? The Minister for the Environment and Local Government, Deputy Cullen, has lectured us to the effect that we should all be present in the House legislating for the country and that the Opposition should play its full part in making law. Why does the Minister not accept the amendment and run with it?

Mr. D. Ahern

The amendment the Deputy has tabled is incorrect in that it refers to section 3 of the principal Act, whereas the correct reference is section 2. I have an amendment in mind which is before the parliamentary counsel for approval. Perhaps the Deputy would give it the benefit of approval by the parliamentary counsel. The Deputy's amendment is erroneous.

Mr. Broughan

On that basis, I withdraw the amendment. It is rare that Opposition amendments are accepted, if ever. If we are supposed to spend all our time attending committees, the Government should be prepared to accept well thought out amendments, even if in this case it was in need of slight correction. I thank the Minister and withdraw the amendment on the basis that I will see something similar on Report Stage.

Mr. Coveney

May I speak on the amendment before it is withdrawn? Is that in order?

Chairman

I am sure it is.

Mr. Coveney

There is an issue concerning retrospection about which I am sure the Minister has been contacted. If the list is under review and the Minister decides to add another event in two years' time, and if before that time a sporting body enters a contract with a non-qualifying broadcaster, how do we propose to deal with that in legislation? Does the Minister intend to include an amendment to deal with a situation similar to that we are now facing with the FAI, who had done a deal with Sky? The FAI signed a contract with Sky which seems no longer valid because of legislation being introduced, though it signed the contract before the legislation was even mentioned. If we are to keep this under review we also need to deal with retrospective concerns which sports bodies and non-qualifying broadcasters may have in doing deals with Irish sporting bodies, particularly if those deals are not secure because of a future change to the list.

Chairman

Is the Deputy speaking to the amendment?

Mr. Coveney

This relates to the amendment and I will raise it again later. The Minister knows what I am referring to.

Amendment, by leave, withdrawn.

Section 1 agreed to.

Sections 2 and 3 agreed to.

SECTION 4.

Chairman

Amendments Nos. 3, 4 and 5 are alternatives to amendment No. 2. Is it agreed to take those amendments together? Agreed.

Mr. D. Ahern

I move amendment No. 2:

In page 5, lines 1 to 13, to delete subsection (1) and substitute the following:

"4.-(1) Where an event has been designated under section 2 of the Principal Act, and if within 28 days, or such other lesser or greater period which the Minister directs, before the event or a part of it takes place the event organiser has not made an agreement or arrangement with a qualifying broadcaster to enable it to provide coverage on free television services in the State of the event or part of it, as determined under section 2(1)(b) of the Principal Act in the designation order which designated the event-

(a) subject to subsection (3), a qualifying broadcaster may apply to the High Court in a summary manner for an order directing the event organiser to give rights to the qualifying broadcaster to provide such coverage and upon such terms as are fixed by the High Court, including the fixing of reasonable market rates, in respect of the acquisition of the rights, or

(b) within that period a qualifying broadcaster has not so applied, the event organiser may apply to the High Court in a summary manner to request the High Court to invite qualifying broadcasters to make such an application.”.

After the publication of the Bill my officials met the IRFU and FAI and both organisations pointed out that under the existing section 4(1), it was possible for a qualifying broadcaster to apply to the High Court for access to a designated event right up to the day before the event takes place. They argued this would severely affect their ability to do a deal with a non-qualifying broadcaster were a qualifying broadcaster to decide not to apply to the High Court for access or not to pay the reasonable market rate decided by the court. In the light of those concerns I propose amendment No. 2, which allows an event organiser to request the High Court to invite qualifying broadcasters to make an application under section 4(1)(a) to the court for access to a designated event.

This would allow the event organiser to bring matters to a head at the earliest possible time. If, having been invited to the court to do so, a qualifying broadcaster does not apply under section 4(1), an event organiser is free to sell the TV rights to a non-qualifying broadcaster. In the event that a qualifying broadcaster decides to apply to the court under 4(1)(a), the amendment facilitates the early fixing by the court of reasonable market rates and thereby require the qualifying broadcaster to accept or reject the rate set by the court.

Can I speak about Deputy Coveney's amendment?

Chairman

Is the Minister amending his own amendment?

Mr. D. Ahern

I will be, yes. In relation to amendment No. 3, proposed by Deputy Coveney, I accept that extending the period during which the High Court may be called upon from 28 days to 56 days would further facilitate the early resolution of the issue. If it is acceptable to the committee I propose to accommodate Deputy Coveney's amendment by amending my amendment to read 56 days instead of 28.

The issue raised in amendment No. 4 by Deputy Broughan is adequately dealt with in section 4(10) which allows the High Court to adjust an existing contract between an event organiser and a qualifying broadcaster. Under that section it will be for the court to determine the extent of the adjustment and I am satisfied the provision is sufficient for the court to deal with it in a reasonable and fair way. Accordingly, I oppose amendment No. 4.

Amendment No. 5 seeks to allow a qualifying broadcaster to apply to the High Court for access to a designated event held in Ireland, the rights to which are held by an event organiser based outside the State. The combined effect of the Bill and Article 3A of the television without frontiers directive is sufficient to provide protection for the list of events designated by Ireland. Article 3A provides protection for Irish designated events by requiring other member states to ensure broadcasters under their jurisdiction do not exercise exclusive rights to those events in such a way as to deprive a substantial proportion of Irish viewers access to such events. Protection is provided, therefore, by controlling non-qualifying broadcasters based anywhere in the EU in exercising exclusive rights to events designated in Ireland. The Bill is designed to complement and strengthen the protection by providing a remedy within the State, where possible, by allowing a qualifying broadcaster to apply to the High Court for an order requiring the event organiser based in the State to provide access to a designated event subject to the payment of reasonable market rates and such other terms as are determined by the court.

The combined effects of the Bill and the directive afford the maximum practical protection that can be achieved so I oppose amendment No. 5.

Mr. Coveney

I thank the Minister for accepting my amendment. He clearly understands my point.

Mr. Broughan

The Minister says the powers of the High Court are provided for adequately in section 4(10) because the existing arrangement can be adjusted in respect of rights. When I asked our legal advisers if this would encompass setting events aside they felt that was not necessarily the case. Despite our efforts and those of the Minister to get the legislation on the Statute Book to sort out the continuing problem regarding international football, future developments may require us to go a step further. Is the Minister certain that, if necessary, the absolute setting aside of a contract is provided for in the legislation? It is on this basis I am pressing the amendment.

Mr. Eamon Ryan

I accept the Minister's argument that Article 3 of the directive provides certain coverage. I put down the amendment to give encouragement or protection to Irish qualifying broadcasters who would seek rights held overseas, as many of these rights are. The amendment does not materially affect this so much as to give more back-up and the force of Irish legislation to the television without frontiers directive. I encourage the Minister to reconsider and to insert this provision as an additional guarantee that rights held overseas would be applied. Is it his legal advice that the directive is watertight in this regard?

Mr. D. Ahern

We have taken legal advice on amendments Nos. 4 and 5. There have been intense discussions on this legislation and we are more than happy that the amendments do not further the proposed legislation or directive.

In regard to Deputy Ryan's proposal, the High Court would have no jurisdictional rights over event organisers based outside the jurisdiction.

Chairman

Before moving amendment No. 3, I ask the Minister to move a verbal amendment to this amendment before the question is put.

Mr. D. Ahern

I propose to amend my amendment by changing the dates specified in line 2. I propose to delete "and if within 28 days," and substitute "and if within 56 days,".

Chairman

Is it agreed that the amendment to the amendment be made? Agreed.

Amendment, as amended, agreed to.

Chairman

As amendment No. 2, as amended, is agreed to, amendments Nos. 3 to 5, inclusive, cannot be moved.

Amendments Nos. 3 to 5, inclusive, not moved.

Chairman

Amendments Nos. 6 to 9, inclusive, are related and will be discussed together.

Mr. Coveney

I move amendment No. 6:

In page 5, lines 14 to 23, to delete subsection (2).

I feel strongly that if we are to treat broadcasters and event organisers fairly, and if a High Court case is to be taken by a broadcaster, that court case should be done and dusted three weeks before the event takes place. I reject the notion that the High Court should be allowed grant a broadcaster access to an event without having decided on the rates and conditions of that access. It would be treating the sporting body or event organiser unfairly if the broadcaster were allowed to cover the event without their being aware of the conditions or rates they would be paid for the coverage. That is why I propose to delete lines 14 to 23 in section 4. That section allows the High Court to give broadcasting rights and access to a qualifying broadcaster, notwithstanding that all of the terms for the acquisition of the rights to provide coverage under subsection (1), have not yet been fixed by it, including the fixing of reasonable market rates.

The purpose of the legislation is to try to get a balance between treating the broadcaster fairly and ensuring that the broadcaster can afford to cover the events, and also treating fairly the event organiser and sporting body. If the court decides on rates, that should happen three weeks prior to the event at a minimum. If, for example, RTE were to decide it could not afford to pay the rates decided by the High Court, and decided not to cover the event at all, then the event organiser needs time to get someone else to cover it. Surely three weeks is the shortest period we could ask an event organiser to get a non-qualifying broadcaster, so to speak, to cover the event.

I feel strongly about these four amendments which I will be pushing to a vote, if necessary. I hope the Minister will consider them valid amendments in an effort to treat fairly sporting bodies. All parties should know three weeks prior to an event what the situation is and they should be able to take the necessary action, should there be problems. It is unacceptable that two or three days before an event the organiser and broadcaster still do not know the rates they will have to pay to cover the event. That is leaving it too late. This should only happen in exceptional circumstances, perhaps with the direction of the Minister. In normal circumstances, we should insist on a 21-day period between the end of the High Court case and the event. I will be interested to hear the Minister's response in that regard.

Mr. D. Ahern

I gather from Deputy Coveney that he is anxious to ensure that the High Court must, following an application by a qualifying broadcaster under section 4(1), deal with the fixing of terms for access to a designated event at least 21 days before the event takes place. As a consequence of his amendment No. 7, amendments Nos. 6, 8 and 9 would be required to bring subsections (2) and (6) into line with amendment No. 7. These amendments taken together are designed to require the High Court to fix terms in sufficient time to allow an event organiser make other arrangements in the event that a qualifying broadcaster decided to withdraw its application under section 4(1).

Obviously, we are all anxious to ensure that the issue comes before the court and comments can be brought to an early conclusion. I do not agree, however, with the approach taken by Deputy Coveney. The effect of my amendment No. 2, including my acceptance of amendment No. 3, would allow the court to deal with an application at an early date. The new section 4, as amended by these two amendments, gives the event organiser an opportunity to trigger the High Court route 56 days before the event takes place. I am happy to allow the court to take whatever time it considers necessary to deal with the matter, including the possibility of allowing the court to set reasonable market rates after the event has taken place. The situation where a court might postpone finalising terms and conditions is not unusual. It is used in other scenarios.

Mr. Coveney

The purpose of proposing 56 days - I welcome the fact that the Minister has accepted the proposal in a previous amendment - and now proposing 21 days as the cut-off period by which a decision must be made before the event takes place, means there is a 35-day window for the High Court to make its decision on rates and conditions, which is reasonable. It would be unfair to an event organiser if, 56 days before the event, a High Court case was to start and, if that case turned out to be complicated and went on for more than 56 days, the event organiser would be forced to allow access to cover the event, yet would have no idea what rates it would gain from the event or the conditions of access. That is treating the sporting body unfairly which is why I am anxious to push the amendment to a vote, if necessary.

Mr. D. Ahern

I have nothing further to add based on the current situation, particularly the situation in regard to the FAI and Sky. That is what causes all the difficulties in that there may not have been sufficient time before the relevant events for a decision to be made by the court. I am trying to ensure that a court could make a decision while at the same time leaving over the issue of terms and conditions until after the event. To a certain extent we have taken care of that by accepting Deputy Coveney's amendment giving the event organiser the opportunity to bring matters to a head if he or she feels the qualifying broadcasters are not coming forward and are leaving things until the last minute.

Mr. Coveney

They have no control over the length of time the High Court takes to make a decision.

Mr. D. Ahern

I do not want the High Court's hands to be tied. If we agree to this amendment we will in effect be tying the High Court and making it much more difficult for it to make a rational decision on the terms and conditions and particularly regarding the reasonable market price for the event.

Mr. Coveney

I understand the Minister's concerns in that regard. That is why I have included in my amendment, "at least 21 days prior to the event commencing, or such other lesser period which the Minister directs". If the High Court clearly needs more time to make a decision on rates and conditions and needs to move within the 21 day window approaching the event a Minister can so direct. The wording should be in place to encourage the High Court to take all practical measures to ensure a decision is decided upon three weeks before the event in order to allow the sporting body find an alternative broadcaster should that ruling not be to the liking of the broadcaster.

Mr. D. Ahern

I have confidence in the High Court's ability to make a rational and reasonable decision. This device is used in other scenarios before the courts where there is pressure of time and where granting of terms and conditions are postponed. I would rather leave it to the discretion of the court than to involve the Minister. I am a reluctant intervener, as I have said time and again, in this scenario. The less I intervene the better, particularly in terms of forcing the hands of the High Court to make a decision which it may not be able to make in the short time available to it.

Mr. Coveney

My amendment requests the opposite. The Minister can give more time to the High Court should it require such a directive from the Minister. The guidelines are in place to request the High Court to have its dealings completed three weeks before the event. That is not, in my view, unreasonable.

Mr. D. Ahern

I do not think the Executive should intervene and tell the court when it should make a decision once it has been given discretion in relation to the fixing of terms and conditions. The Opposition has tabled a number of amendments in relation to being more specific on the terms and conditions. I would much rather afford entire discretion to the courts than be as specific as the Opposition suggests.

Mr. Broughan

Is the Minister trying to anticipate events? Association football is the most designated game. We have had to endure many unscheduled play-off games in the past. Is the Minister saying that where UEFA announces Ireland must play Switzerland in a play-off in Lisbon, a court might have to make a decision afterwards? Is that the Minister's thinking?

Mr. D. Ahern

I cannot second-guess scenarios. I would have thought that if a play-off arose it would be included in the package of European Championship games. There may be scenarios as the Deputy postulates which would require a shortened period of time and where an application might be made to the High Court at the last minute. The High Court would then have to seek advice on what is a reasonable market price for the event - a High Court judge would not have that information at hand. It may be necessary for it to postpone the decision about the fixing of the terms until after the event is held but it would, in effect, determine the event could be held.

Mr. Coveney

Does the Minister not think that we as policy makers have a responsibility to the public to ensure events are covered at some level but preferably by a qualifying broadcaster and that we also have a responsibility to event organisers to ensure there is a reasonable period of time before the event in case a decision is taken by a qualifying broadcaster after a High Court case not to cover the event? We are asking that people know where they stand three weeks before the event as opposed to allowing a decision on rates and conditions to limp on past the time when the event has taken place. I am not suggesting for one minute that the Minister would direct the High Court on what type of decision it should make or the arbitration procedure it should follow. We are setting down a timetable which states that within 56 days of the event taking place either the event organiser or broadcaster can apply to the High Court which should make its decision within three weeks of the event unless there are exceptional circumstances in which case the Minister can give permission to allow that case continue.

Mr. D. Ahern

My acceptance of the Deputy's amendment in respect of changing the 28 days to 56 days coupled with my amendment No. 2, in my view, takes care of that. I do not to have to amend an Act in a rush to take care of a particular situation that might arise. The court is the last resort. There is an arbitration procedure but the issue may ultimately end in court in the last few days or weeks before an event. In that case, the court would, in my view, have to take some expert advice in relation to the market value, which it may not have available to it in the time required. It would be far preferable to give the court the discretion it has used in relation to other scenarios. It is not unusual for the decision in relation to the fixing of terms and conditions to be postponed until after the event.

Mr. Coveney

The problem is that if the issue goes to court in the first instance it means the voluntary arbitration process has failed. It is unlikely then, through the arbitration process, the qualifying broadcaster and the event organiser can agree a price. Let us say RTE is involved and it goes to arbitration and the arbitrator recommends a particular figure and RTE says it is too expensive and takes the matter to court to get access to the event. If it then transpires that the court does not decide on a rate before the event takes place but relies on an arbitration process of its own, which it is entitled to do, RTE may then have to pay a price after the event takes place which is possibly more than the original arbitration price which it refused to accept on the grounds, presumably, that it could not afford it. It is important broadcasters know the rates in a reasonable period before the event takes place as otherwise RTE could be paying a price greater than or equal to the price it refused to pay under the arbitration process.

Mr. D. Ahern

We could argue about this all night. The determination of reasonable market price by the court would be no different before or after the event. All we are endeavouring to do in not accepting this amendment is to ensure that full discretion is given to the court, greater discretion than the Deputy is suggesting. That, in my view, is a better scenario. The rationale behind this Bill is to ensure the general public sees as many of these important games as possible. If we are to tie at least one of the hands of the court behind its back, as is suggested, we will be hamstringing the court's discretion.

Chairman

Is the amendment being pressed?

Mr. Coveney

It is.

Amendment put.

The Select Committee divided: Tá 4; Nil 7.

Tá

• Broughan, Thomas.
• Coveney, Simon.
• Deasy, John.
• Ryan, Éamon.

Níl

• Ahern, Dermot.
• Brady, Martin.
• Carthy, John.
• Fitzpatrick, Dermot.
• Kelly, Peter.
• McEllistrim, Thomas.
• O’Flynn, Noel.

Amendment declared lost.

Mr. Coveney

I move amendment No. 7:

In page 5, subsection (5), line 44, after "issued." to insert the following:

"The High Court shall fix reasonable market rates, or an arbitrator shall issue an award under subsection (4), and the High Court shall make a final award in respect of the application at least 21 days prior to the event commencing, or such other lesser period which the Minister directs.".

Amendment put and declared lost.

Mr. Coveney

I move amendment No. 8:

In page 5, subsection (6)(a), line 49, to delete “, or” and substitute “and at least 21 days prior to the event,”.

Amendment put and declared lost.

Mr. Coveney

I move amendment No. 9:

In page 5, subsection (6), lines 50 to 53, to delete paragraph (b).

Amendment put and declared lost

Mr. Coveney

I move amendment No. 10:

In page 6, subsection (10), line 26, after "broadcaster." to insert the following:

"The High Court may, if adjusting an existing agreement, made prior to the passing of this amending legislation, award compensation to the non-qualifying Broadcaster and-or the event organiser if it is deemed that the adjustment for broadcasting rights has made a financial impact on the parties concerned.".

My wording may be crude but it makes a point which I hope the Minister will consider reflecting by making an amendment on Report Stage. If an event organiser or sporting body has entered into a contract in good faith prior to the discussion on and the passing of this legislation, and has made plans in regard to how to spend the money or made investments on the strength of the contract, is it not reasonable that if it is required by the High Court to give access to a qualifying broadcaster to the event at the rates outlined, that the High Court should also have the power to award compensation to the sporting body and/or the non-qualifying broadcaster who entered into the contract in the first place? It is not the fault of the event organisers that we have decided to move this legislation forward yet they are the ones who will suffer financially as a result of it. At a minimum, it is reasonable for the event organiser, and possibly even the broadcaster, to make an application to the High Court that if they are to be required to allow access to a qualifying broadcaster, they will also be able to make a case for reasonable compensation. That is an important principle to put into the legislation at this stage.

The point I tried to make in regard to Deputy Broughan's amendment, which he withdrew, was that the issue of making a contract null and void retrospectively will make it difficult for sporting bodies to enter into contracts over any period of time with non-qualifying broadcasters because the broadcaster may suspect that at some stage in the future the Minister may decide to designate the event. We need some security in the legislation so that non-qualifying broadcasters and/or event organisers, know that if the Minister decides to designate an event that is not designated at the moment, they will at least get some compensation for the change in contract that will arise. I am interested in hearing the Minister's views.

Mr. D. Ahern

Section 4(9) makes more than adequate provision for this situation. The Deputy is proposing to give the High Court power to award compensation to a non-qualifying broadcaster and/or an event organiser where the court has adjusted an existing contract. Section 4(9), as we have put it, gives the High Court the power to, "decide to whom and in which proportions monies in respect of the reasonable market rates, fixed under this section in respect of the acquisition of rights to the event or part of it, should be paid." What we are doing is ring-fencing any moneys that would be paid in the context of reasonable market rates. The definition of what compensation is could be endless, therefore I could not accept the Deputy's amendment.

In regard to the specific deal with the FAI and Sky, the FAI may suffer a financial loss as a consequence of the provisions of the Bill because the price that Sky is willing to pay for exclusive rights is most likely greater than the reasonable market rate set by the court for non-exclusive rights. That is the context in which the FAI entered the deal. It knew well that there was a strong possibility that the events would be designated and was warned that there was an EU directive and pending national legislation. The act of designating an event impacts on the ability of an event organiser to maximise the revenue it can generate from the sale of television rights. The rationale behind the television without frontiers directive was to allow for an intervention in the market to ensure that, in the public interest, television viewers would continue to enjoy events of major importance as designated by, in effect, the Oireachtas when it approved the draft order.

I have included a provision in section 4(9) which would allow the court to decide what proportion of moneys should be paid, and to whom, in the context of reasonable market rates. This section, as proposed, is a fair and reasonable approach to the issue. I would guard against the Deputy's proposal.

Mr. Coveney

I seek further clarity. My problem with subsection (9) concerns the reasonable market rates, the allocation of the money and to whom it should be paid. The problem is that reasonable market rates, in what is a duopoly with RTE and TV3, is not the same as reasonable market rates on the open market.

Let us take the FAI and Sky deal as an example. Clearly, RTE or TV3 or whoever were to get the rights, not going to be asked to pay the same as, for example, Sky may well have been offering. It is paying open market rates when competing against qualifying and non-qualifying broadcasters. In this scenario, there are effectively only two qualifying broadcasters under this legislation, TV3 and RTE. Reasonable market rates will be very different in that market environment compared to an open market environment. The sum of money that is being paid may well be a lot less than the sum of money that the FAI and Sky had signed for in their contract. If it is proposed that the reasonable market rates be given to one of the interested bodies in that contract as a form of compensation, then it will be grossly inadequate because it will be nowhere near as large as the original contract amount.

The FAI, through no fault of its own, has done a remarkably good financial deal, whatever about the consequences for the viewing public. It may well have made investments or commitments on the strength of that financial deal and now it finds it has no way of getting any compensation for the fact that the Government is now overturning that contract. I do not wish to be overly political about this but it is the fault of the Government that this legislation did not come forward two years ago and the FAI would not have found itself in the position it is in now if there had not been that delay. I know that is not necessarily the fault of the current Minister but his predecessor should have made this happen 18 months ago. The issue, which has now arisen through no fault of the FAI or Sky, would not then have arisen. Whether we like it or not, the FAI is suffering significantly from a financial point of view as a result of this legislation. I do not think it unreasonable to ask the High Court to measure that loss and decide appropriate compensation.

Mr. D. Ahern

The rationale behind the directive is to ensure that an event organiser only gets the value for non-exclusive rights. What the Deputy is suggesting is that the sporting bodies would still be able to get the value of exclusive rights even though those would not be available to one organisation or another. The Deputy is in effect suggesting that an inflated price should be given to an event organiser for these events whereas in fact only non-exclusive rights have been given to them. The Deputy is asking the taxpayer to subvent a commercial deal done on the basis of fully exclusive rights.

Mr. Coveney

I accept the Minister's point. I agree that it should not be facilitated if an event organiser is trying to secure a deal after this legislation has been passed. If an event organiser has a valid contract signed before this legislation was even spoken of, then they are entitled to get that full market value, in my view, because the deal had been done. The FAI is suffering because we have delayed the legislation. I am not suggesting that if a deal was to be done tomorrow or after the legislation has been passed that there should be an issue of compensation. I am only talking about a retrospective case where clearly a legal contract was signed before this legislation was even mentioned. There may even be legal issues as to whether we are entitled to effectively make that contract redundant after it has been legally signed.

Mr. D. Ahern

I am not going to allow a situation to arise where commercial organisations would be compensated by the taxpayer for what they thought they would get when that is not what is being made available. I cannot see why commercial companies should be paid way in excess of what would be the reasonable market rates, in view of the fact that it is non-exclusive rights that are being delivered. It is not this legislation that is triggering this, rather it is the directive which specifically mentions World Cup and European Championship matches. Those people who entered into the contract did so with eyes open and full knowledge of what was coming down the tracks. In my view, they decided to take a chance that nothing would happen. The legislation was passed in 1999 following the directive. I cannot see why the taxpayer should be asked to pay compensation to commercial organisations who entered into these contracts knowingly and who were aware of what was contained in the directive.

Mr. Coveney

Is the Minister aware of any other examples in Europe of a legal contract being overturned retrospectively by this directive?

Mr. D. Ahern

The Deputy's party was in Government when the Family Home Protection Act was introduced.

Mr. Coveney

I am referring to events coverage.

Mr. D. Ahern

That legislation in effect curtailed pre-existing contracts in relation to the sale of matrimonial homes.

Mr. Coveney

The Minister is introducing a red herring.

Mr. D. Ahern

It is not a red herring. The Deputy is saying that it is not possible to intervene and amend contracts.

Mr. Coveney

I am asking the Minister a question. Are there any examples in Europe of this happening? There are not.

Mr. D. Ahern

It is possible for the courts to intervene in any contractual situation and change or amend the terms of contracts.

Chairman

Is the amendment being pressed, Deputy Coveney?

Mr. Coveney

I will withdraw the amendment and return it on Report Stage because I think the wording could be improved.

Amendment, by leave, withdrawn.

Section 4, as amended, agreed to.

SECTION 5.

Mr. Coveney

I move amendment No. 11:

In page 7, subsection (5), lines 2 to 5, to delete all words from and including "concerned" in line 3 down to and including "broadcaster's" in line 5 and substitute the following:

"or the event organiser unless, within the period of 21 days from the date of issuing of the award of the arbitrator under subsection (4), the qualifying broadcaster and the event organiser have reached agreement on".

This is a straightforward amendment, with a similar theme to some of the previous amendments, to try and give some parity to event organisers and sporting bodies as the broadcasters enjoy in relation to the negotiation process on rates and conditions. The present wording says the broadcaster can reject the arbitration figure but the sporting body cannot, which is unfair. The idea of voluntary arbitration surely means that either body could reject the findings of the arbitrator and move the process to court if necessary. My amendment seeks to make a very small change and proposes that within 21 days after the arbitration figure is decided by the arbitrator, the event organiser and the broadcaster need to agree on that figure. If they do not , that figure is not accepted. The existing wording allows the broadcaster to reject that figure and does not give the event organiser an adequate bargaining chip during the arbitration process. I seek parity between the broadcaster and event organiser. I accept it is not possible to have that parity if they go to court because it would be a different scenario. However, during the initial arbitration process, both bodies should have the capacity to turn down that figure if they wish.

Mr. D. Ahern

I introduced this section as a result of the public consultation on the designation of events. The sporting organisations stressed that the market is limited and designation constrains them to a certain extent. The sporting organisations made the point that qualifying broadcasters would use the fact that an event is designated to drive down the price of access to the event in the future. Without the provisions I have introduced a qualifying broadcaster could continue to negotiate for access to an event right up to the date of the event in an effort to obtain an advantage.

The arbitration process provides a basis for bringing negotiation between the event organiser and the qualifying broadcaster to a conclusion well in advance of the event taking place. The arbitration mechanism can achieve this by providing a finding as to what constitutes reasonable market rates. The qualifying broadcaster then has to take a decision whether to acquire the rights to the event at the price fixed by the arbitrator. At that stage either the qualifying broadcaster will agree to pay the price fixed by the arbitrator and the deal will be concluded or a qualifying broadcaster will withdraw. If the qualifying broadcaster withdraws the event organiser can pursue other options for selling the rights.

The aim of amendment No. 11 is to provide that the arbitration would not be binding on either the event organiser or the broadcaster. This would not be helpful to the event organiser. The Bill provides that the finding of an arbitrator is binding on the event organiser if the qualifying broadcaster accepts the finding within 21 days. The Bill, as drafted, provides a basis for arriving at a fair price and bringing the negotiations to a conclusion. It provides that after the arbitrator has issued its findings, the qualifying broadcaster has to make a definite decision to pay the price or withdraw. Without the mechanism negotiations could continue forever. This would not be in the interest of the event organiser, which would still not know if the qualifying broadcasters would be prepared to pay market rates for acquiring the rights to televise the event.

If the arbitration mechanism was non-binding on both we could face a scenario whereby an event organiser could in effect try to get around the principle upon which this legislation is based. Section 5 was inserted to help event organisers. Some people have complained that broadcasters may have in some way tried to use the fact that there is a relatively limited market. I cannot accept the amendment, which would create further difficulties for event organisers.

Mr. Coveney

I recognise that the Minister introduced this arbitration process following consultation and that is welcome. However, the whole point of an arbitration mechanism is to find a balance with which both parties are happy. This is similar to the principle of the Labour Court. If, after the arbitration process, the broadcaster feels it has got a raw deal, it can reject it. If, after the arbitration process, a sporting body feels it has got a raw deal, it should also be entitled to reject it. The whole point of an arbitration process is that it be balanced on both sides. The existing text is slanted towards the broadcaster and is not balanced.

Mr. D. Ahern

This will be non-binding on the broadcaster because it is not possible to oblige a qualifying broadcaster to buy the particular rights. To go further and make it non-binding on both could have the effect of frustrating arbitration right up until the event. In the arbitration process, where there is an agreement that the event would take place by both the event organiser and the broadcaster, there is agreement that they will do a deal. If both of them could walk away once the arbitration is made, that would tend to frustrate, possibly right up to the event date, the broadcasting of the event. That is why we did not insert a clause making it non-binding on the event organiser which could possibly try to frustrate the prior agreement it made with the broadcaster to allow the event be broadcast on free-to-air.

Chairman

Is the amendment being pressed?

Mr. Coveney

Yes.

Mr. D. Ahern

I wish to inform the committee I intend to introduce a draftsman's amendment on Report Stage to delete section 5(3). It is a drafting amendment not a policy amendment. I am advised by the draftsman that subsection (3) is not required as the matter is already dealt with in section 48 of the Arbitration Act 1954.

Mr. Coveney

In order to be helpful, I will not press the amendment and table it again on Report Stage.

Amendment, by leave, withdrawn.

Section 5 agreed to.

SECTION 6.

Chairman

As amendments Nos. 12, 13 and 16 are related it is proposed that they be discussed together by agreement.

Mr. Broughan

I move amendment No. 12:

In page 7, between lines 8 and 9, to insert the following:

"(a) the needs of free to air broadcasters,”.

Before dealing with amendment No. 12, I wish to say I do not agree with amendment No. 10. I did not want to get involved in the previous discussion. The whole purpose of the directive and the 1999 Act was clearly in the public domain when the FAI acted as it did. That body does not have a good track record in managing some of its affairs over the years.

Chairman

The Deputy should speak on amendment No. 12.

Mr. Broughan

I will get on to that. I am generally supportive of my colleague Deputy Coveney, but I agree with the Minister on that point.

This amendment arises from the consultation process. The Minister says both sides asked for the arbitration process. Both the Bill and the 1999 Act refer to reasonable market rates. Section 6 refers to considerations including previous fees, time of day, etc. We felt the needs of the designated broadcaster should also be taken into account. In the drafting of this I should have developed it more fully. My colleague Deputy Eamon Ryan has tabled a more detailed amendment.

As the Minister is aware the two main broadcasters addressed the Joint Committee on Communications, Marine and Natural Resources. Some people said I was too hard on TV3, but in both cases we reviewed their overall performance as well as their financial performance. As regards the difficulties of RTE maintaining its national remit and those of TV3 in developing new commercial competition in this State, I believed I was trying to encourage TV3 to compete more fiercely with RTE and to provide a real choice in every possible aspect. That being said, it is a small market in viewing terms, having regard to our small and relatively dispersed population. The remit given to broadcasters is, therefore, difficult at times.

The provision in the Bill for fixing reasonable market rates regarding such other matters as may appear relevant does not really refer to the needs of broadcasters, as such. That should be reconsidered. It still does not address the free market situation. However, I will not go into a long discussion on the important issues raised by Deputy Coveney regarding the existing deal. The Sky deal shows, in the context of non-exclusive rights, that some sporting occasions are valuable. In its submission to the Minister, the FAI made a strong case that, over the years, it has not been treated well by the national broadcaster. The national league and the only money spinner, the international team, have been taken for granted. It is understandable that the FAI would feel aggrieved about that. As regards the designations, perhaps the GAA and the IRFU, which have powerful connections in this House, got off lightly. The bulk of the designations refer to soccer. In that regard, I commend some of the issues raised by Deputy Coveney.

However, even with a number of designations, we could still have an escalating price spiral and who knows what may happen in future? The existence of the BBC's programme "The Championship" shows there is at least one other broadcaster with an interest in Gaelic games, in terms of market share in Northern Ireland, as well as being available to viewers in the Republic. Perhaps, later on, Network 2 may have its own remit and the market may be more competitive, with one or other broadcaster being placed under intense pressure. When my colleague, Deputy Michael D. Higgins was working with European colleagues to bring forward the directive, the objective was to enable great events to be seen by the people. When important matches are not available to all viewers, such as in the recent instance involving the FAI, I wonder if that has a negative effect on the saleability of the game. Perhaps that is a two-edged sword which people may try to use. I ask the Minister to consider this or one of the related amendments which seek to have regard to the special needs of broadcasters in our small market.

Chairman

I call Deputy Eamon Ryan on amendments Nos. 13, 15 and 16. Deputy Coveney is next and then the Minister will respond.

Mr. Eamon Ryan

I wish to outline the background to these amendments which relate to the heart of the Bill. I hope the Minister will consider amendments in this area. In his speech on Second Stage, he noted that the arbitration process was being introduced under pressure from the sporting organisations which were concerned that they would not do as well, financially, in this new arrangement. While I am keen on the Irish sporting bodies being financially well structured, my fear is that the main outcome, if we accept this section of the Bill as is, is that the satellite, non-qualifying broadcasters would have a more powerful position than we or the Minister would wish in the control of major sporting events. That is a serious concern.

The ability of satellite broadcasters to broadcast in this State and collect advertising revenue, without any real input or interest in the day-to-day aspects of broadcasting in the Republic, means that the Minister has to regulate and control their power in order to protect Irish terrestrial broadcasters. I am glad the Minister has recently indicated he is looking at ways of regulating broadcasters such as Sky, which now has 270,000 paid-up subscribers in this country and is taking advertising out of the State, without any real input or commitment to Irish public sector broadcasting. As we have seen in recent years, the tactics of those companies involves gaining sporting rights as a leverage to attract further viewers and increase their commercial activity within the State. It is not a fair trading situation because those companies pay for rights in a situation where they do not incur any cost or expenditure within the State. That gives them an unfair competitive advantage in terms of setting rates for sporting events.

That is the reason for my proposed amendments to this section. The market rate is the key issue regarding this Bill. If the arbitrator is given an indication, through legislation, that the market rate is that set by Sky, which can buy up sporting rights as a loss leader to gain greater access in this State, that is not a fair market rate. The first of my three amendments is intended to address that issue. Whereas the Minister proposes that the arbitrator should consider previous fees for an event, or similar events, my amendment provides that it should relate to previous fees paid by a qualified broadcaster. It is unfair that a qualified broadcaster should have to compete with Sky which, as I have stated, simply draws advertising revenue from within the State without any of the commitments or costs which qualified broadcasters incur. The wording could be amended further to provide for consideration of what qualified broadcasters pay in other countries. The essence of my first amendment is to assist in defining market rates for the arbitrator. The market rate cannot be determined on the basis of what the highest bidder is willing to pay. If we allow that to occur, the legislation, effectively, has no purpose.

My second amendment is, perhaps, less significant but I believe it is worthy of inclusion in the Bill in terms of recognising the estimated production costs as a factor for consideration by the arbitrator. This may, in fact, be of assistance to the sporting organisations. One could argue that if a sports event organiser is providing some of the production facilities within a stadium, as opposed to a situation where the qualified broadcaster had significant costs in setting up and covering an event, it is appropriate that the arbitrator should take that into account in deciding the appropriate fee. That may be a small issue but I believe it is an important one.

My third amendment is significant. It is valid for an arbitrator to take into account the extent of coverage the qualifying broadcaster actually provides to the particular sport involved throughout the year. We wish to have preference given to sporting broadcasters who show a genuine interest in sport, week by week, rather than one which is trying to cherry-pick major events. I believe we should steer the arbitrator and, ultimately, the High Court in the direction of taking into account how the sport is covered all year round by the qualified broadcaster and how earlier events were covered. That would lead to greater investment in Irish sports coverage, for the benefit of Irish fans, as opposed to the cherry-picking of main events. If we do not set the right conditions for the arbitrator this Bill will become ineffective, leading to a continuation of the current situation where the highest bidder could set the tone in terms of the cost of sports coverage. If the arbitrator sets a rate, it would be difficult for the High Court to overturn it. It is very important that the Minister considers these amendments, or further amendments he may bring forward that are similar to those I have proposed, so that the arbitrator in the High Court can set a market rate which is one that we want and not one that a satellite broadcaster wants.

Chairman

Amendment No. 14, in the name of Deputy Coveney, is being discussed with amendment No. 12.

Mr. Coveney

I agree with the previous speakers. I said during the discussion on one of the previous amendments that the market rate is not the same on the open market as it is under the market we are creating here, which has only two qualifying broadcasters, in effect. The market rate needs to be reflected in the definition of a reasonable market rate. One could accuse me of fighting the case of the sporting organisations so far today, but we have a responsibility in this instance to——

Mr. D. Ahern

The Deputy wanted to give Sky compensation.

Mr. Coveney

It is typical of the Minister to try to pick a political point in such a manner.

Mr. D. Ahern

Is the Deputy saying I should sit and listen to him making political points and not say anything?

Mr. Coveney

That was a minor point on a much wider issue.

Mr. D. Ahern

Deputy Broughan, with whom I have clashed swords many times, knows that I do not sit here mutely.

Mr. Coveney

Good luck to the Minister.

Mr. Broughan

He is very quiet in the leadership contest.

Chairman

Deputy Coveney to continue making his point.

Mr. Coveney

The issue here is——

Mr. Kelly

What about the Labour Party's leadership contest?

Mr. Broughan

The Fianna Fáil leadership contest is rumbling.

Chairman

Deputies, please.

Mr. Coveney

Thank you, Chairman. It is always nice to have your protection on these issues.

It has been outlined that there is a clear difference between the open market rate and the market rate that should be defined under this Bill to ensure that the qualifying broadcaster can afford to pay. My amendment tries to create a balance between the ability of the qualifying broadcaster to pay and the right of an event organiser to receive a fair rate for giving access to the event to a broadcaster. The arbitrator must ensure there is a balance that both parties can buy into, as opposed to a balance that RTE or TV3 can afford to pay. I hope, therefore, that the Minister will look favourably on amendment No. 14.

Mr. D. Ahern

Deputy Broughan referred to strong and powerful GAA and IRFU interests in the House. In response to the suggestion that the GAA was treated leniently, I should clarify that the association was quite clear that it would not do a deal with a non-qualifying broadcaster. The association said, to be fair to it——

Mr. Broughan

Does the Minister have that in writing?

Mr. D. Ahern

It was stated and continues to be stated publicly. The GAA has emphasised that it will not do a deal with a non-qualifying broadcaster. I felt that the sporting organisation was being realistic about the legislative scenario that was in place since the EU directive was agreed.

In relation to rugby, politicians are often accused of ramming things through without listening to the views of others in a consultation process. The IRFU made a cogent case in relation to the pooling issue. The Government accepted that the IRFU was not the master of its destiny in relation to the television rights for certain pooled games.

I have been going to Oriel Park since I was four years of age and I hope to be there for Dundalk's game against Finn Harps next Thursday, if time permits. I played soccer at junior and Leinster senior league levels until I was 35, three years after I entered this House. I am surprised that the FAI feels that an exclusive deal with Sky will promote its games. Like everyone else, members of the Government were somewhat surprised that the FAI did a deal which, in effect, restricts the viewing of games to a select few people who can afford to pay the Sky premium. It defies my personal logic that the FAI believes it can promote its games in such circumstances.

Mr. Broughan

The FAI lost about €6 million as a result's of the Government's actions in relation to the Eircom Park project.

Mr. D. Ahern

How can the FAI promote is games by restricting the broadcasting of international matches to 270,000 people, as opposed to 1.2 million? The FAI knows that I have some legitimacy in speaking about soccer, having been involved in it all my life. It is somewhat ironic that I am the Minister who is, in effect, intervening in relation to the FAI. I return to my original point that Sky and the FAI were aware of the national and international political scenario in this respect.

Deputies Broughan, Coveney and Ryan have made a case for these amendments. Section 6 of the Bill was deliberately drafted to be flexible as I did not want to tie the hands of the court in relation to the fixing of what should be a fair price. RTE will argue in court, as Deputy Ryan has done today, that the precedent should be based on what qualifying broadcasters previously paid. The Deputy has suggested that we include such a provision in this Bill, but such a measure would have the effect of tying the hands of the court in its discretion. The FAI will say that it wants a deal for exclusive rights, similar to that agreed with Sky. There are two scenarios. If such a matter eventually goes to court, both parties will have to argue about what constitutes a fair and reasonable price. RTE will say that it should be restricted to the price paid previously by free-to-air, or qualifying, broadcasters, as Deputy Ryan has proposed, but the FAI will say that the sky is the limit - it will want the terms of its deal with Sky to be taken into account.

The amendments that have been proposed are intended, in some way, to tie the hands of the court in its discretion. I oppose them because the court should be given as much flexibility as possible. I suggest to the Deputies that paragraph (f) of section 6, which refers to “such other matters as may appear to be relevant to fixing reasonable market rates” provides the court with the discretion in that respect.

Mr. Eamon Ryan

We should make a political statement or judgment by deciding whether we want to support satellite or terrestrial broadcasters. The Minister has come out very strongly recently on the need to control satellite broadcasters. The controls that can be imposed are minimal, however. Very little financial or other powers are available to the Minister to increase his control over satellite broadcasters in Ireland. There will be a serious threat to terrestrial broadcasters if the Minister allows the growth of satellite broadcasters to continue unimpeded. He should direct or give some indication to the court that the State or the Government wants to see the thrust of the European directive put in place in this limited area of listed games. The programmes should be protected and presented on free-to-air channels. The Minister needs to make a decision and issue a statement. If he does not accept one of these amendments, he will be seen to be backing Sky and not RTE. The wording means that a court can make only one decision on it taking into account previous fees for the event or similar event. It means the court has to take into account the fees paid by Sky. The Minister should make a real decision in terms of introducing restrictions - I do not refer to restricting people's freedom to access satellite stations.

There should be an attempt to rebalance the power scenario in which one broadcaster with no costs or special broadcasting requirements is drawing revenue from this State from advertising which it inserts into British or satellite programming. On the other hand is an Irish broadcaster with significant public service obligations which is expected to bid on an equal footing for broadcasting rights. If the Government talks in the newspapers about putting balance in our broadcasting legislation, it is required to direct the courts to make decisions on the basis of what qualifying broadcasters have been able to pay historically and internationally. They should not be subject to unfair comparisons with Sky.

While that amendment is one the Minister might have a problem with, the other two I have proposed should be ones he is willing to accept.

Mr. D. Ahern

I do not wish to repeat myself. In effect, the Deputy asks the Government to determine what a fair price is, but that is up to the court. The FAI, for example, will want a Sky deal based on exclusive rights at the fair market price and the court will have to consider the fact that the directive and the designation by the Oireachtas has meant these cannot be exclusive to a satellite broadcaster. Therefore, that scenario does not arise. The court must decide a fair price only on the basis of non-exclusivity. In effect, the court must look at the price of previous non-exclusive rights to these events and it is on that basis that it will make its decision. By putting in too many conditions, the legislation would tie the hands of the court in relation to all of the Deputy's particular wants.

Mr. Eamon Ryan

If the words "previous fees" were included in section 6(a) regarding events, or similar events covered on a non-exclusive rights basis, they could only refer to qualifying broadcasters in this State.

Mr. D. Ahern

I can look at that between this and Report Stage, but it is probably not necessary. The basis on which the court will make decisions will be non-exclusivity.

Mr. Eamon Ryan

If I were reading this as a High Court judge, the first thing I would have to take into account would be the €12 million Sky paid for European Championship rights. I take the Minister's point when he says he will look at the possibility of a wording based on non-exclusive rights.

Mr. D. Ahern

I will look at it, but I do not think it is necessary. I may very well say it is not necessary on the basis that the court will not be dealing with an exclusive rights scenario. The right of the court to decide is based on the non-exclusivity of these events according to the legislation. Whomever is designated to make the valuation will look back on non-exclusive, not exclusive, events.

Mr. Eamon Ryan

I agree with the Minister, but the point should be encapsulated in wording which is included in the legislation. Otherwise, it might be read differently.

Does the Minister agree that it is valuable to take into account production costs and the level of coverage the broadcaster can provide?

Mr. D. Ahern

Those matters are well addressed in section 6(f) which refers to “such matters as may appear to be relevant for fixing reasonable market rates.”

Mr. Eamon Ryan

Does the Minister have a problem with the proposed amendment which seeks to provide that the High Court will take into account the level of coverage?

Mr. D. Ahern

The Deputy is being too specific and he may very well be leaving other issues out.

Mr. Eamon Ryan

The High Court judge would have to be a soothsayer to work out what our intentions are.

Mr. D. Ahern

I do not think so.

Mr. Coveney

He can call an arbitrator if he wishes.

Mr. Eamon Ryan

Under this wording, an arbitrator would not take into account the level of coverage provided by the qualifying broadcaster of a particular sport. The six conditions set out say very little and any right thinking person would argue that it is valuable to encourage broadcasters to cover a sport weekly rather than to cover the large events only. Does the Minister agree?

Mr. D. Ahern

The Deputy is trying to second guess what the event organisers and the broadcasters will be saying when they ask a court to fix a market price. It is better to deliberately provide full flexibility to the courts. If you tie them up in specific details——

Mr. Eamon Ryan

It is a very——

Chairman

I ask Deputy Ryan to allow the Minister to speak.

Mr. D. Ahern

The Deputy is trying to make the case for the broadcasters in what he is saying.

Mr. Broughan

We should include something about the broadcasters in the conditions. The elements as outlined by Deputy Eamon Ryan are fair. Can the Minister give us any consideration? If I withdraw amendment No. 12, will the Minister consider amending the reference to such other matters as may appear relevant to include the needs of the qualifying broadcasters? Would not that be fair enough?

Mr. D. Ahern

I would not. One has to be fair to everyone on both sides of an argument. The Deputy is suggesting something similar to Deputy Ryan, which very much leans on one side. I am loathe to do that. The price is up to the courts and I do not agree with Deputy Ryan when he says we should give them specific directions as to a fair and reasonable price. That is up to the court, not us, to decide, which is why we are giving them the remit. Deputy Ryan and I cannot decide the matter. If the arbitration process cannot determine a price, it will be a matter for the courts of the land.

Chairman

I am putting the amendment after Deputy Coveney speaks.

Mr. Coveney

I agree with the Minister on one level. If we add a provision which states that we need to take into consideration the specific needs of a qualifying broadcaster, we must also include the words "an event organiser" to achieve balance. Perhaps it is better not to include either.

I agree with the principle of refusing to put too many parameters in place, but Deputy Ryan's concerns relating to section 6(a) are valid. If a High Court judge looks at that, the first thing he will see is the wording “previous fees for the event”. The section would be perfectly adequate if subsection (a) were removed altogether to reduce the parameters we are putting in place as the basis of a decision. Previous fees will be taken into account anyway as part of the cases sporting bodies and qualifying broadcasters make. To include previous fees as the first thing to be taken into account puts a slant on the matter, perhaps unintentionally. I would be perfectly happy with the section if subsection (a) were deleted altogether.

Mr. D. Ahern

The words "inter alia" are also used. The court will have regard, inter alia, to six matters, the last of which includes virtually everything that might be relevant as proposed by either side of the argument as well as professional suggestions.

Mr. Coveney

That is all the more reason to get rid of section 6(a).

Mr. D. Ahern

If a valuation office is asked for a valuation of a property by the State, it will first find out the value of neighbouring properties. It would, therefore, have to take into account previous fees.

Mr. Coveney

The Minister's analogy relates to two different markets. One would not compare a house in the west with a house in the Foxrock district of Dublin.

Mr. D. Ahern

What is the Deputy's point?

Mr. Coveney

The point is that the open market in which Sky may be competing is different. This means the reasonable rate which will apply will differ from the rate in an enclosed marketplace in which only the qualifying broadcasters compete.

Mr. D. Ahern

It is purposefully an enclosed market, which is the rationale behind the directive. Sky will not enter the market once the event has been designated.

Chairman

I am now putting the amendment as the debate has again gone off course.

Mr. Eamon Ryan

This discussion goes to the core of the most important part of the legislation. If the rights were exclusively available to qualifying broadcasters, the Minister would be correct. However, there is a system by which if the arbiter sets a high rate which the qualifying broadcasters cannot or does not want to accept, the event in question will go to satellite broadcasters. Therefore, a scenario is possible in which an arbiter will take the going rate for a European Championships game, which is €400,000 under the Sky system, and the qualifying broadcasters might decide they cannot afford to pay such a sum for an Ireland versus Albania match. The rights would then be given to the satellite broadcaster. Does the Minister not agree that it is possible that the market rates will be set by the satellite broadcasters?

Mr. D. Ahern

No, if Sky enters the market, it will only do so at the point at which a non-qualifying broadcaster does not want to pay the rate set by the court. At that stage Sky would do a private or commercial deal with the event organisers. This is not part of the group of ring-fenced, designated events.

Mr. Eamon Ryan

Sky currently sets the market rates.

Mr. D. Ahern

It does not set the market rates in respect of non-exclusive rights. If that were the case, it would be fair enough. There are certain rates for non-exclusivity which is the issue addressed by the legislation, namely, free-to-air events. While I accept that fees for free-to-air events, like everything else in society, have risen slightly in recent years, the matter we are discussing is ring-fenced designated events which are only open to qualifying broadcasters, unless Sky wants to participate in free-to-air events.

Amendment, by leave, withdrawn

Amendments Nos. 13 to 16, inclusive, not moved.

Section 6 agreed to.

Sections 7 to 9, inclusive, agreed to.

Title agreed to.

Bill reported with amendments.

Chairman

I thank the Minister and his officials for attending today's session.

Mr. Coveney

While I do not wish to continually intervene, during Second Stage I asked the Minister to——

Chairman

I cannot allow this.

Mr. Coveney

Do we not have to approve the Bill in its entirety?

Chairman

We have just done so.

Mr. Broughan

On another matter, the Minister was kind enough to——

Chairman

I am advised that according to procedure we cannot accommodate the Deputy now.

Mr. Broughan

May we have an informal meeting afterwards?

Chairman

That will be possible when the business has been concluded.