Sports events 'must be on free TV'

[Dave Cahill]

Experts to advise minister on rugby TV plan

COMMUNICATIONS Minister Eamon Ryan has asked experts to prepare a report on his controversial plans to broadcast rugby matches for free.

The Irish Independent has learned that the minister ordered independent consultants to carry out a report into his proposal to add the Six Nations and Heineken Cup to the Government's list of free-to-air games.

But the consultants' contract will not be awarded until July or August and the report will not be expected until at least eight weeks after that.

This means that the next Heineken Cup and Six Nations season will be well under way by the time the minister brings the recommendations of consultants to Cabinet.

The appointment of consultants after the conclusion of the public-consultation process on July 4 means the divisive issue of match rights will effectively be kicked to touch until October or November at the earliest.

According to the advertisement for tenders, consultants will have to take into account any research and analysis into the impact of pay television and the designation of events.

Their report will have to examine the cultural importance of sporting events, the financial impact of any changes and the impact of pay television on viewership and sport.

The Irish Rugby Football Union (IRFU) has mounted a high-profile campaign against Mr Ryan's free-to-air plans. It claims that it will lose €12m if he makes Ireland's rugby matches free to view.

The minister has said he wanted consultants to take regard of submissions from the likes of the IRFU, rugby fans and clubs because the issue was "complex" and he wanted to get "outside advice".

The report will be used by the minister when he goes before the European Commission with his final decision on sporting events that are of "national importance".

Mr Ryan recently suffered the first blow to his plans when TDs and senators on a cross-party Oireachtas committee sided with the IRFU.

The committee passed a motion, stating that the IRFU should continue to have independence in selling off the broadcast rights to Irish rugby matches.

Revenue

At present, the Six Nations is available free of charge on RTE after it won the rights until 2013.

But the Heineken Cup is broadcast on pay television and is only available on RTE two hours after the final whistle.

Under Mr Ryan's proposals, both competitions would be added to a 'free-to-air' list, which would guarantee that they were broadcast free of charge in the future.

His plans would remove the possibility that the Six Nations would become pay per view in 2013 if RTE was outbid and outmanoeuvred by the bigger sports channels.

At the moment, RTE pays €3m for the broadcast rights but the IRFU receives another €11m from the central media pot, which is divided up among the six competing countries.

It gets another €2m from RTE for deferred coverage of the Heineken Cup and €3m from the central media pot that exists in relation to the European Rugby Cup.

In total, the IRFU gets €16m in broadcast revenue.

However, it argues that if the Government changes the way the games are sold, it will simply be left with the €5m from RTE.

Rugby bosses claim that the IRFU stands to lose between €10m and €12m because the minister's proposals would end the collective approach of splitting the media pot six ways.

- Aine Kerr

http://www.independent.ie/national-news ... 19633.html

I ran that through Google Translate and came up with

Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t Oh sh!t

[mikerob]

Classic politician trick of calling a committee/report/further study so they don't need to make a decision.

Mind you, consultants usually produce a report with the conclusions that you've asked them to produce.

[Scott]

Mind you, consultants usually produce a report with the conclusions that you've asked them to produce.

That would be a worry alright

[West Brit]

Both methods you've mentioned are certainly two valuation methods, and they may be perfectly acceptable methods too. I don't work for Sky so I'd have no idea how to value a HC.

But one thing they are certainly NOT is a way of calculating a fair market value. The ONLY way of seeing what the fair market value is, is to let a fair market decide. The Super 14 rights just went for $460m or something silly like that. That amount is well above the valuation that would be reached using either of your methods. And that's because neither of your methods include goodwill for a start. Goodwill is only really measurable in an open, free market. In fact, the whole right to broadcast a rugby tournament for a number of years would surely be an intangible asset on the books of a broadcaster, and intangible assets are notoriously hard to value. RTÉ would certainly be undervaluing the value of the rights using either of those methods, which would cost our sport, and our provinces money.

Super 14 rights are across three countries, one of which has a very large population and where it is their No. 1 sport (that might change now with the World Cup). Its the No. 1 sport in NZ, so I don't see how those methods I've suggested would not work. In the NH, rugby has very serious competition with soccer.

Goodwill doesn't come into it. RTE is the State broadcaster that we have to pay a licence fee to. The more money RTE pay the IRFU, the more money we will have to pay for our licence fee. It would be much simplar if those who are worried about the IRFU's finances should simply donate half their Sky sub instead. That way everyone would be a winner.

Worth considering also is that BOD, POC & Kearney earning potential from promotional work would stop. The Credit Union or Irish Milk won't be promoting their wares on Sky.

If goodwill doesn't come into it then it's not a fair market price, is it? All bidders would take into account all factors before determining what to bid, including goodwill, synergies with existing programming, potential new sponsors etc. Are you saying that RTÉ shouldn't have to pay a fair price just because we pay a licence fee to them? How is that fair on the IRFU, or Sky for that matter, or any other potential bidders.

By the way, soccer is clearly the number one football code in South Africa, and the rugger is third or fourth code in Australia, with cricket also a long way ahead of it. But these red herrings don't hide the fact that there is no accurate way of estimating what the price would be in this situation without letting a fair, open market decide.

[Hickiefan]

So Ryan is commissioning consultants to tell him what to do now? Great, just great, let's waste even more cash we don't have on a pointless feckin exercise.

[janeymac08]

Classic politician trick of calling a committee/report/further study so they don't need to make a decision.

Mind you, consultants usually produce a report with the conclusions that you've asked them to produce.

It looks like the IRFU needs the help actually; according to that article:

It [IRFU] gets another €2m from RTE for deferred coverage of the Heineken Cup and €3m from the central media pot that exists in relation to the European Rugby Cup.

The ERC (€3m) are really screwing the IRFU when you look at the number of games that Irish clubs play and having the capacity to fill the big stadia. (The ERC takes the gate for the final).

The €2m for the highlights from RTE compares very favourably to ERC/Sky's €3m (for live coverage).

[janeymac08]

If goodwill doesn't come into it then it's not a fair market price, is it? All bidders would take into account all factors before determining what to bid, including goodwill, synergies with existing programming, potential new sponsors etc. Are you saying that RTÉ shouldn't have to pay a fair price just because we pay a licence fee to them? How is that fair on the IRFU, or Sky for that matter, or any other potential bidders.

By the way, soccer is clearly the number one football code in South Africa, and the rugger is third or fourth code in Australia, with cricket also a long way ahead of it. But these red herrings don't hide the fact that there is no accurate way of estimating what the price would be in this situation without letting a fair, open market decide.

You can't just base the price on 'goodwill' (Sky don't do goodwill anyway looking at what they are paying for the broadcasting rights).

The way you figure out how much they are worth is:
Advertising sales (and if RTE a percentage of the licence fee) minus the production costs.

Soccer is the No. 1 Sport with Black/Coloured South Afrians. I don't think Niall Mellon is putting in subscription TV just yet into the houses he is building in Soweto. Rugby is the sport of the White Saffers (who can afford subscription tv). I know that RU is not popular in Australia - many claim the reason is that all the other sports are on FTA tv.

[mikerob]

The way you figure out how much they are worth is:
Advertising sales (and if RTE a percentage of the licence fee) minus the production costs.

... but advertising is peanuts compared to subscriptions. Take a look at Sky's financials - 82% of their money is from subscriptions, only 6% from advertising and the rest from other services like SkyBet.

What does a prime time advertising slot go for? Somthing like EUR 10k? Sky would get this in annual subscriptions from about 3 pubs...

[West Brit]

The way you figure out how much they are worth is:
Advertising sales (and if RTE a percentage of the licence fee) minus the production costs.

And if anybody is willing to pay more than your valuation method that becomes the market price. That's what capitalism is all about, not having government decide what prices should be. That's called something else.

[janeymac08]

The way you figure out how much they are worth is:
Advertising sales (and if RTE a percentage of the licence fee) minus the production costs.

... but advertising is peanuts compared to subscriptions. Take a look at Sky's financials - 82% of their money is from subscriptions, only 6% from advertising and the rest from other services like SkyBet.

What does a prime time advertising slot go for? Somthing like EUR 10k? Sky would get this in annual subscriptions from about 3 pubs...

Postby janeymac08 » June 11th, 2010, 3:15 pm

There is a way to calculate it.
Method One is based on the no. of viewers and how attractive they are to advertisers. What you earn from that + a percentage of the Licence Fee, minus production costs, camera crews, panelists etc.= the value of the broadcasting rights.

Method Two is based on how many subscriptions can be sold to the target audience at €600 a pop (Anything over 5000 subscriptions for rugby in Ireland and Sky are making money at the moment - not difficult if you consider that Munster & Leinster can get 40/50K+ to a Heineken Cup final in another country).

Of course Sky can pay more - and why the EU/Governments want to level the playing field a bit. I don't think that soccer has benefited greatly on the whole by the amount of money that has gone into it.

[janeymac08]

The way you figure out how much they are worth is:
Advertising sales (and if RTE a percentage of the licence fee) minus the production costs.

And if anybody is willing to pay more than your valuation method that becomes the market price. That's what capitalism is all about, not having government decide what prices should be. That's called something else.

And thats why this country is in such a mess at the moment. A pity the Irish Gov. didn't step in a bit sooner and we wouldn't have so many people unable to pay their mortgages at present and the rest of us having to deal with a debt that this generation will not live to see cleared.

[West Brit]

And thats why this country is in such a mess at the moment. A pity the Irish Gov. didn't step in a bit sooner and we wouldn't have so many people unable to pay their mortgages at present and the rest of us having to deal with a debt that this generation will not live to see cleared.

Do you really think it's up to the Government to legislate against people being stupid? If Sky want to be stupid and pay more than the rugby is worth that's up to them. If people want to buy a house they can't afford the moment anything goes wrong then that's up to them.

[janeymac08]

And thats why this country is in such a mess at the moment. A pity the Irish Gov. didn't step in a bit sooner and we wouldn't have so many people unable to pay their mortgages at present and the rest of us having to deal with a debt that this generation will not live to see cleared.

Do you really think it's up to the Government to legislate against people being stupid? If Sky want to be stupid and pay more than the rugby is worth that's up to them. If people want to buy a house they can't afford the moment anything goes wrong then that's up to them.

They could have done something about land speculation. They could have controlled the banks and how they were lending money. They could do what they are doing now, except its too late.

The problem is with Sky is that they put everyone else out of business so there is no competition. Then Sky will start paying even less than the peanuts that they are paying at present.

By the way some of you are going on, you would think that Sky were keeping the IRFU afloat at the moment. They are not.

[ronk]

And thats why this country is in such a mess at the moment. A pity the Irish Gov. didn't step in a bit sooner and we wouldn't have so many people unable to pay their mortgages at present and the rest of us having to deal with a debt that this generation will not live to see cleared.

Do you really think it's up to the Government to legislate against people being stupid? If Sky want to be stupid and pay more than the rugby is worth that's up to them. If people want to buy a house they can't afford the moment anything goes wrong then that's up to them.

And what about if that effects other people too, like people with savings in the banks who loaned the money.

It's not that the government should have stepped in to cool the property market, it's that they shouldn't have introduced the measures to stimulate the property market before, during and after it started to overheat.

[fourthirtythree]

They could have done something about land speculation. They could have controlled the banks and how they were lending money. They could do what they are doing now, except its too late.

Stop it with that COMMUNISM! The government isn't there to govern. Let alone to govern on behalf of the people. It is there to do what it is told by the financial services "community". And when they inevitably overextend it's there to mop up the mess so that the next shower on the production line of entitlement get to inherit.
Simples.

[West Brit]

It's not that the government should have stepped in to cool the property market, it's that they shouldn't have introduced the measures to stimulate the property market before, during and after it started to overheat.

Exactly my point. Governments generally do more damage with what they do than with what they don't do. They're far better off staying out of everybody's business wherever possible. Including here.

[Scott]

Labour: Ryan rowing back on rugby TV idea

24 October 2010 By Niamh Connolly Political Correspondent

The Labour Party has accused the government of stalling on a controversial consultants’ report on proposals to make major rugby matches freely available on terrestrial TV.

The report, which was commissioned by Indecon Consultants at a cost of €73,387, was due to be completed eight weeks after the contract was awarded. Labour’s communications spokeswoman Liz McManus said this deadline had ‘‘long passed’’.

She accused communications minister Eamon Ryan of rowing back from a rushed announcement in April to provide free-to-air rugby for Ireland’s games in the Six Nations Rugby and the Heineken Cup.

Ryan was ‘‘seemingly unprepared for any negative response as highlighted by the IRFU at the time’’, she said.

Ryan had previously promised a lengthy Dáil debate on the report after its publication, but he told McManus last week that it would be brought back to government colleagues and then to the European Commission.

‘‘This is not the first time this minister has announced a proposal and subsequently backed off," she said.

‘‘In this case, he had to row back after his initial announcement by employing Indecon Consultants to report at considerable cost to the taxpayer."

McManus also noted that Ryan’s department showed an increase of 140 per cent in the cost of consultants hired for work in the 2010 Estimates.

‘‘Since his initial announcement, Minister Ryan has never explained how the shortfall in funding for the IRFU will be made up.

The cost of this shortfall has been estimated at between €10 million and €12 million.

At this stage, it is vital that the uncertainty is ended and the report published."

[sarah_lennon]

Consultants.... sigh

[Dexter]

Labour: Ryan rowing back on rugby TV idea

Ryan had previously promised a lengthy Dáil debate on the report after its publication, but he told McManus last week that it would be brought back to government colleagues and then to the European Commission.

Jeez, you would think they would have more important things to be debating than sport on telly

[Broken Wing]

Consultants.... sigh

I know, they're dreamy.....