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Before Clause 1, insert the following new clause--

Rights to broadcast sporting events

(". After section 182 of the Broadcasting Act 1990 there is inserted--
"Rights to broadcast sporting events.
.--(1) The Commission and the Radio Authority, as the case may be, shall each have power to direct the holder of exclusive rights for the broadcasting of any sporting event to license rights, on terms that are reasonable in the opinion of the Commission or the Radio Authority, to any person providing a television broadcasting service or a radio broadcasting service for general reception, capable of being received in the United Kingdom for--
(a) inclusion on a sound broadcasting service of a programme which consists of or includes the whole or any part of that event, and
(b) inclusion on a television broadcasting service of a programme which consists of or includes a recording of the whole or any part of that event.
(2) In deciding whether to make a direction under subsection (2) the Commission and the Radio Authority shall have regard to the national and local interest of the sporting event.
(3) If the holder of the rights fails to comply with any direction made by the Commission or the Radio Authority under subsection (2) the Commission or the Radio Authority, as the case may be, shall refer the matter to the Director General of Fair Trading.
(4) Where a matter is referred to him under subsection (3) the Director General of Fair Trading shall determine the terms on which the rights, or any of them, are to be licensed.
(5) In this section--
"national interest" has the same meaning as in section 182; and
"local interest" means interest of persons living in the area or locality of a local sound broadcasting service.".").

The noble Lord said: I am glad to say that Amendment No. 2 will not take up much time. It deals with the subject called "unbundling". I can tell the Committee what that means in one sentence. In negotiations about television coverage the question of highlights has to be divorced from main television. As we have seen as regards one or two events recently, Sky has bought up all the rights, including radio, and is able to stop the BBC from showing highlights. That is wrong. I believe that Sky is beginning to realise that it is a mistake. The issue needs to be dealt with in the Bill. This clause deals with it. I beg to move.

Lord Inglewood: I am somewhat surprised that no other noble Lord wishes to speak to the amendment. As

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the noble Lord said, it is an interesting subject. As he explained, the amendment brings about an unbundling of broadcasting rights so that a broadcaster with exclusive rights to televise a sporting event of national or local interest will be obliged to license rights to live radio or recorded television coverage to other broadcasting services for general reception if the ITC or Radio Authority decides that it should.

There is one fundamental distinction between this and the previous amendment. The previous amendment might be described as a "bolt-on" to an existing provision in the 1990 Act. Whatever the merits behind the proposal, it is important that we are all clear that this amendment introduces an entirely new concept. It has wide-ranging implications.

We recognise, of course, the concerns with which the amendment seeks to deal. Those Members of the Committee who have read the consultation document will appreciate that the amendment covers what is described by everyone who considers this topic as an "unbundling" approach. It is perhaps a rather loose phrase. However, just as I spoke of a number of technical problems with regard to the previous amendment, similar difficulties of definition, regulation and enforcement apply. The Government were unable to support Amendment No. 1 and, in the same spirit, they are unable to support this amendment either.

If anything, the problems with the amendment are greater because its scope is wider. Indeed, as drafted, all events of national and local interest, actual and potential, are within its scope. By any standards that is fairly all-embracing and it is defined only in the most vague and general sense. I hope that the Committee will allow me to illustrate, rather more selectively than I might have done, some of the problems that the amendment poses.

First, the amendment gives the Independent Television Commission and the Radio Authority powers to direct holders of exclusive broadcasting rights to license rights to other broadcasters--who may be commercial organisations trading in pursuit of profit for themselves--on terms that the commission and authority consider "reasonable". But what does "reasonable" mean in these circumstances? A subscription broadcaster will have paid a certain sum to a sports rights holder for exclusive coverage. That sum could be considerable. Without exclusivity, the value of the rights to the original purchaser will be substantially reduced. Will he be reimbursed in full? If not, would that be "reasonable"? Could the broadcasters who are to receive radio rights or recorded coverage rights afford to reimburse the original purchaser in full? What would happen if they claimed to be unable to do so?

In the debate on the previous amendment there was quite properly considerable discussion about the place of sport in the national consciousness. However, it is significant that scarcely a mention was made of the financial implications. That matters because, when considering such a subject, they are clearly relevant. Of course the implications were touched on, but how does the market place work? There was no discussion of that.

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It matters when one goes into the detail inherent in such an amendment and it is at the heart of what we have been debating. The reason underlying the political discussion that we have had is that the terrestrial free-to-air broadcasters, for whatever reason, can no longer afford the price that such rights command in the free and open market.

In any event, how could the commission or authority make an assessment of "reasonable terms"? They are, after all, regulators, with no relevant expertise in the area and there is no elaboration of what might be involved in the proposals. Furthermore, the suggested reference to the Director General of Fair Trading does not seem to us to go far towards solving the problem. His responsibilities and expertise do not extend to arbitration or licensing.

The amendment goes to the heart of copyright law. No longer will a broadcaster be able to dispose of his copyright coverage of an event, he will be obliged to sell that material to someone else. It will be for the copyright tribunal perhaps to settle disputes, but it too would find it hard to define "reasonable terms".

There are further points and one which is particularly unfair in the position of the sporting bodies. The levels and extent of radio and recorded coverage will be a matter of considerable and legitimate interest to the sporting bodies. But the amendment gives them no status in the process whatsoever. In such a state of affairs as we are considering, it would not seem unreasonable for the potential purchaser of exclusive sports rights to be able to establish in advance whether the rights he proposed to acquire might be unbundled. Yet there is no mechanism for establishing that. Surely it is a serious and unjust omission. Moreover, would the provision apply to rights acquired before the coming into effect of that piece of legislation?

I have already referred to problems of definition and enforceability. It would be the height of irresponsibility not to think the issues through carefully before we seek to amend the statute. It has occurred to me that the proposed controls in the amendment could easily be circumvented by a broadcaster who bought up exclusive rights to all but a small part of a sporting event. He could, for example, make available 5 per cent. or even less of an event to other broadcasters on a non-exclusive basis. Then the controls as drafted would not apply. If I, as a comparative layman, saw that possible loophole, surely the broadcasters involved and their lawyers would be infinitely more expert in finding others.

I return to where I started. As I explained, the previous amendment was attached to and inherently connected with an existing statutory provision which has been understood and accepted for some time. What is being proposed here is something quite different and new. We are genuinely entering new territory. The point is relevant; we have been concerned about it and have raised it in the discussion document to which I referred earlier. I urge the Committee carefully to consider the important and fundamental distinction between this proposal and the previous one that we debated earlier this afternoon.

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We need to think the issues through with great care and to consider their implications fully. In conclusion, I must say that it is somewhat of a surprise that the noble Lord, Lord Howell, moved the amendment so quickly on an important issue, not merely because the amendment is significant in itself in what it might achieve but because of the much wider legal implications that are inherent in it.

Viscount Astor: I believe that all Members of the Committee would agree that recorded highlights are extremely important with regard to subscription or pay-to-view television. We would also all agree that those highlights should be made available to terrestrial broadcasters or any other broadcasters on fair and reasonable terms. That must be common sense. It is a bonus for the subscription channel. Interestingly, at the moment BSkyB currently makes highlights available but the BBC does not always do so. The amendment does not take the BBC into account at all. It seems to me that, if we are to consider this important issue, it must be done in an amendment which covers the whole of broadcasting and not just one part. The amendment covers merely the commission--the ITC--which is not responsible for the regulation of the BBC.

To say the least, the amendment is complicated and the noble Lord did not explain how it would work. He simply said that it concerned bundling. However, it is not about bundling but about unbundling, so far as I understand it. We should not suddenly have the amendment whistled through the Committee on the back of the noble Lord's earlier success. I hope that we can consider it as a separate matter.

The noble Lord, Lord Howell, has raised an extremely important point, but the amendment goes nowhere in dealing with the issue. He should think again and come back to your Lordships' House with one that works.


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