National Assembly for Wales

I'll go to you first, Nigel. I'll go from left to right.

Nigel Walker, executive director of rugby at the Welsh Rugby Union.

Abi.

Thank you. I'm Abi Tierney. I'm the chief executive at Welsh Rugby Union.

Thank you, both, so much for making the time to come in and talk to us. Firstly, could you talk us through, please, how, as you see it, the market for sports rights has changed since the listed events regime was first introduced, and how that's developed?

As you probably know, I worked for BBC Wales for nine or 10 years and I was the person responsible for negotiating sports rights, so I do have a little bit of experience. I wouldn't describe myself an expert—a little bit of experience. I think, over the years, the last 20, 30 years, if you want me to talk over that period, sports rights have become more valuable, certainly. If you look at 10 years ago, there was an upsurge, particularly in football. Sports rights—the fees paid have gone through the roof. In more recent times, it's become more difficult, and the market has become more difficult. Football is still bucking the trend—at least the Premier League is bucking the trend, not all the football, but the Premier League is bucking the trend—but other sports have found it much more difficult over the last five or six years in particular. 

There are more players in the market, depending on your sport. We've been through Sky, we've been through BT, we've been through TNT. TNT were BT until recently, effectively. And then there are other players like Amazon and Netflix. And you'd think that it would be more vibrant and the sums would be getting bigger and bigger and bigger year on year, but, because of the economic headwinds that are there, it's become much more difficult. Certainly, our experience in rugby over the last two or three years in particular, selling sports rights, whether it'd be the autumn internationals, whether it'd be the United Rugby Championship, whether it would be premiership rugby in England, whether it'd be European professional club rugby, there's a downward trend, and the offers being made over the last 12 months in particular are showing a 30 per cent downturn on what those organisations were able to secure three or four years ago.

The only thing I'd add—that's a great summary, and we were just talking about it this morning—is how people are consuming their content and media. I was trying to remember the last time I actually watched something that was live, and it was probably over Christmas, maybe. We watch it on demand, we watch it when it suits us, and that has also changed the dynamic. We were looking at some stats where 5 per cent, year on year, the live tv viewing has been dropping and people are choosing to use much more flexible demand-driven tv. So, that's another dynamic. 

Alun.

It's not true of sport, is it?

No, no, and, actually, the last thing I watched live was sport. But it changes the—

I watched super Newport on Sunday.

The overall ecosystem though, in terms of how people choose—. So, if you take something like—. My children watch the National Football League now in a way that they wouldn't have been able to previously, and it's provided in a way that they can access.

The FA Cup would be on its knees if it wasn't for the BBC and ITV broadcasting it, wouldn't it?

The FA Cup's an interesting one, and I'm hesitating, because football's not my game, in theory—

No, but we all saw the decline of the FA Cup from the days that we will remember, growing up in the 1970s—

Absolutely.

—when it papered Saturday, the build-up and all of that sort of stuff, breathless people walking along streets talking to other breathless people. It's not the same, is it?

And if I could bracket us together, when I was a child, FA Cup final day started at 9 o'clock—

Yes, exactly.

—but it was virtually the only live football game on tv at that time, if you compare it with today, which is why the FA Cup has struggled. The premiership clubs, the big hitters, the top eight or 10 clubs, they don't even field their strongest side until they get to quarter final, semifinal, final stage. So, lots of things have changed over the years, and I would say we're in a perfect storm at the moment, and that's why we need to tread carefully.

I accept that; I accept that.

Nigel, you'd said to the Welsh Affairs Select Committee that public service broadcasters need to be competitive, but you said that does not necessarily mean outbidding their opponents. Could you talk us through, please, how else you think that they could bid in a competitive way?

I'll start, and I'm sure Abi will supplement what I say. Public service broadcasters have reach, and although so-called linear television isn't the slam dunk it was 20 years ago, 30 years ago, the year that we were talking about, it still has greater reach. If they are must-see moments, you're likely to get an audience in multiple millions on free-to-air television, and that's why it's such an attractive proposition. The balance we must strike is between that reach and pounds, shillings and pence, because if you go totally for reach, the discrepancy between what you could get between free-to-air and pay tv is so large you won't make it up, so you get greater reach, but the money won't go as far, and, when you look at the extent of our programmes, we need a certain level of income in order to fulfil our obligations with those programmes.

I have nothing to add to that.

I could ask you what do you think the role of Welsh rugby at six nations, particularly, is to the national life of Wales, but I think we're all agreed on its significance. But I was looking at the criteria for listed events from the Department for Culture, Media and Sport, and it lists an event that's

'generally felt to have special national resonance'.

Well, there's no doubt that six nations rugby and Wales games in that respect tick that box;

'an element which serves to unite the nation,'

and we all come together in a way that we rarely do when it comes to the rugby;

'a shared point on the national calendar'

it's been heavily trailed already, hasn't it, the match on Saturday, every morning for the last week, they've been speaking of little else, and of interest to those who don't—not solely of interest, that's what I was trying to say,

'not solely of interest to those who follow the sport in question.'

Well, there are people who will watch Wales in the six nations and not watch any other rugby throughout the year. So, given that it ticks all of the boxes, surely that tells us that these matches really should be accessible to everyone on free-to-view television. You can't argue against that, can you?

Do you want to—?

Do you want me to—? I think it goes back to Nigel's point on the balance here, and the fact that, actually, we've got to balance the continued investment in Welsh rugby, for which we're heavily reliant on the money that we get from media rights. A significant amount of the money that goes to front line, community, regions and the national game comes from that. So, we absolutely need to strike a balance between the assessment on what reach we need to give with the investment in the game, because, without this investment, we would really struggle to continue to survive as a union.

So, how do you strike that balance, then, because it isn't easy, is it? We all want, and you would want, rugby to be freely available and accessible to everyone, but you also want the money that comes with potentially not allowing that to happen. There will be an impact, will there not, on participation levels if rugby goes behind a paywall—the more rugby you watch, surely, the more people play it.

There is a correlation between those two things, absolutely. I think it's worth saying, first of all, we're not responsible for the list, to state the obvious, because I think it's important to state that. If that list were drawn up today—it's been in existence for quite some time and it hasn't changed for quite some time—I'm not sure its composition would be the same. Even though it wouldn't be my decision, it's worth stating that. And what we're not saying—he says, thinking very carefully—is that we are going to select, as part of the six nations negotiating team, a pay-per-view broadcaster. What we are saying is that, if you take that off the table, you take the tension and the competition out of the market, and that would make it really difficult, because then the free-to-air broadcasters would know that they could pitch at a level that we would be forced to take without the competition, and then we’d have the things that you’re talking about—the sort of things that you wouldn’t want to see happen would happen as an unintended consequence, and that’s our position.

Yes, and that's reflected in some of the written evidence that you've provided, and I think it is important that people understand, I suppose, the value of that tension. But there is no getting away from the fact that, if rugby goes behind a paywall, then we've seen in other sports, haven't we, an impact in terms of participation levels, in terms of public interest and in terms of an impact on other sources of revenue as a consequence of maybe diminished interest and involvement. 

[Inaudible.]

Sorry, I'm not hearing anything, Chair.

Hello—can you hear me now?

Yes.

There you go, sorry about that—

It's not your fault.

As Nigel said that is the—. You've really captured and summed it up there; that's the balance we're going to need to strike. I think the other important point is that the money that we get from this is also invested in increasing participation and access by investing in the community game and in our player pathways et cetera. So, it is that fine balance between the two—it’s very difficult.

Oh, yes, Tom. You come in and then we'll go to Hefin. Tom.

Sorry, I'm just curious to pick up on that point you mentioned about almost having that leverage, if you like, in terms of broadcasters knowing that the event is listed and therefore needs to be free-to-air. Surely, you must have some degree of evidence that sporting events that are already listed don't garner the kind of commercial income that you're looking for. So, have you done a cost analysis on the impact that the FA Cup final or the World Cup final would have on the ability to gain that? Have you got a figure that you've worked out that perhaps we would be losing x amount if we lost that leverage?

The simple answer is 'no'. It's such a fluid market and it changes, or, at least, in the last three or four years, it’s changed so quickly. We haven’t done that analysis. But when we—'we' as part of the collective—put the rights on the market, which will happen some time in 2024—I don’t think the date has been specified—when we get the bids, that’s when you will do the calculation: you’ll work out what it means today so that you’re making a decision based on actual data and actual evidence.

When the—. Sorry.

Can I just add to that? Thank you. What we do know is that we've currently been negotiating for the autumn nations series, so, when Malcolm—Nigel—was describing the challenges within the market, we have been really feeling that there. So, we know how difficult the market is, so that's actually given us some really good evidence base for what we're going to be facing when we come with this—. I know they're different, but it's still rugby and so we understand some of the challenges.

Yes, I understand that. Sorry, just to pick up on what you were saying there, Nigel, you would assess that when you got those bids in and you'd be able to see that difference. Presumably, when the current six nations rights were negotiated, there would have been offers in that negotiation period from premium, if you like, broadcasters, or pay-to-air broadcasters: (a) were there, and (b) can you give us a flavour of how much, perhaps, over and above the free-to-air offer they would have offered?

I wasn't employed by the union at the time, but I understand there was at least one offer, possibly two offers, from pay tv broadcasters, and the decision was taken that the difference was not enough to make up for the reach. And that's the equation that we talked about earlier.

Thank you.

Okay. And I know that Alun wants to come in before we go to Hefin, but before that, quickly, when you were assessing those bids, it wouldn't necessarily be that you'd go to the highest bidder, you'd be making lots of different calculations, not just in terms of cost, but different types of values.

That's correct.

And it might be a combination of bidders as well, so that we get a good balance, a good mix.

Like when ITV and the BBC—. Yes, okay. Thank you. We're going to go to Alun and then I'll come to Hefin. Alun.

Yes, I just want to come back on something that Nigel mentioned, the correlation between access to sport in terms of the viewers and also their participation and the rest of it. And that's quite an interesting correlation, isn't it? Because you're right, and I think we all get a bit dewy-eyed, don't we, when we talk about the six nations and all of this; my speech yesterday was all about the 1980 game that I saw against France, for the first time. And it's easy just to go down that route, I accept that. But if we look at what happened with cricket, I think cricket is a really interesting example. I've just renewed my membership at Glamorgan, and I've got junior membership for my son, to take him there and I say, 'Sit down, watch this now', and he's got zero appreciation of it—zero appreciation of cricket. He hasn't seen a game, essentially, because there hasn't been the access on tv. And I'm thinking: do we want a generation of children to potentially grow up where international rugby union isn't a fixture in their lives? And you were one of my heroes, Nigel. Sitting here with you and Ieuan last year, I was in a terrible state. [Laughter.]

Don't soft-soap me. [Laughter.]

But you're in danger—. Yes, I think, obviously, the money is important—and I think Abi's letter yesterday was a very important letter and I've got no issue with any of that—but the price you pay is the loss of those icons and the loss of that place in our life. There must be other grandmothers like mine for whom that is a fixture, and she's waiting; she's up at 9 o'clock in the morning, she's had her toast, she's waiting for kick-off. And you lose that fixture in your national life, and then you lose the icons, you lose the role models, you lose the sense of who we are, and then rugby union loses far more than it gains in terms of the payments that it receives from a potential broadcaster. Now, I accept that broadcasting is completely different to when we were growing up and playing, and the rest of it, that's all absolutely the case, but there's still a sense of the nation coming together. 

And I think that the value of it, that's something that Hefin's going to want to go into as well. 

I think it's difficult to argue against the case that you make, and it's certainly a point that would be on the table and considered at that time. And if—and it's a 20 ft high 'if'—the decision was made to go to a pay-per-view broadcaster, outside of highlights being on terrestrial television, which would be one key thing, the way that young people consume their sport would also be taken into consideration. So, could there be clips on YouTube, on Facebook? And I'm not an expert in this area, but would there be other ways of providing the sport that we love, the competition that we love, to younger viewers, and not-so-young viewers? That would be a consideration.

Is cricket a warning?

One-word answer: yes.

Okay.

Diolch. Oh, sorry, Abi, did you want to add something?

I think it's how we tell those stories, isn't it, about the role models, because Nigel was also one of my heroes, and to be sat next to him—. I think it's the stories we tell, and I use the example of NFL; my kids love Mahomes, having never seen an NFL game, because of the stories that are told using Netflix, using—. So, who are our future heroes? And I think we've got to think much more creatively about how we invest in some of that storytelling in a really powerful way, because we all need our heroes.

I'd like to come back to the point Abi made in a second, but first of all, can I just clarify: how influential is the WRU over UK Government policies? If you went to the UK Government and changed your view, would the UK Government be more receptive?

An interesting question. I think one of the things within the six nations that's really important to think about is that we're part of a collective there, and, you know, we work really closely with our counterparts. So, for us to kind of—. I'm not sure how much influence we would have if we were unilaterally to do that, No. 1, and unilaterally to do that without the support of our other shareholders—

But if, collectively, the six nations' unions said together, would that be influential over the UK Government?

I think it absolutely would be, but I also think, having had the conversations, we would struggle to survive as a tournament, so it's kind of quite hypothetical from that perspective.

Okay. So, it's pointless trying to persuade you to change your mind and to change the Government's mind, then?

I don't think it's the right thing to do. I think we've got to work on how we get the right balance, yes.

Okay, that's fine. Then I'll try some emotive arguments, in that case. I was in school with Huw Bevan; our mutual friend Huw Bevan was my games teacher, and he kept me as far away from rugby as possible, and I was glad. But it was when I was a little bit older, it was 19—. I'll tell you the day, it was 19 February 1994, and a certain Nigel Walker and Scott Quinnell were scoring in the Wales versus France game. I happened to walk past the telly my dad was watching, and I think it was actually Nigel Walker's try, I sat down and started watching, and my love of rugby began at that moment—at that very moment. It was by chance it was on tv, and if it hadn't been on tv—and my dad certainly wouldn't have paid for Sky—I wouldn't have got any kind of love for rugby at all, certainly from that point. So, if we're going to inspire young players—and also, I would add, Huw Bevan still didn't want me in the rugby team—if we're going to inspire young players to engage, surely those chance opportunities need to be there, and, effectively, you're working that out of the system.

I was only seven in 1994, by the way. [Laughter.]

It's a good argument, and I'd just refer you to the answer that Abi gave a moment or two ago: if the decision were taken, we'd just have to work incredibly hard to create heroes and heroines in different ways, and to bring the appeal of the championship to as wide an audience as possible, by being creative and innovative, and that's all—

I'm not even thinking of those heroes that Abi mentioned, I'm actually thinking of the players who play for Pontypridd or Caerphilly or Bargoed; you know, they would be inspired in the same way. We're already struggling with numbers of male players and that's just going to impact it, though, isn't it?

Yes, and I—. We'll reiterate. I don't know if any of you watched Full Contact. Yes. So, that's last year's six nations series on Netflix. Episode 4 has a particular focus on Wales. The stories that come out of that about, you know, the players, about those inspirational stories, I think are really powerful. And that's where we've got to get really creative and get that balance right, because that's kind of how younger generations are choosing to consume a lot of their sport, as well as walking past. So, it's providing so many different entrances in, so many different opportunities that are beyond—and include—but are beyond walking past your dad on that Saturday afternoon.

You can see the cultural issue, though, can't you? I mean, Squidge Rugby is what I consume for my information on rugby these days; it's a fantastic site. But when I'm going to watch it, when I'm going to watch the game, I'm going to Gilfach Workmen's Club tomorrow—sorry, on Saturday—to watch the rugby there. We used to go to the stadium; I can't afford to do that any more. And the problem we've got there is that if rugby is going behind various different paywalls, that workmen's club can't afford to pay for public broadcasting rights within their club from a range of different broadcasters for different sports. And the regular sport watched there is football, therefore, they're only going to be able to afford that. They won't be able to show the six nations in Gilfach workies. That has a huge impact on the hospitality sector, particularly that lower end that is the co-operative sector, which is really reliant and supports those lower income people who want to watch rugby just next door, in the workmen's club next door.

We're going to be violently agreeing on some of this. We recognise that and that will absolutely be part of our consideration, looking at the number of different players in the market as we go through the bidding process, and trying to make sure that we're not making that access too complicated or unaffordable.

Well, put it this way: if you go for Amazon, it's not going to be shown in the workies, because they can't afford it.

As I say, that is the kind of thing that we will need to consider really carefully as we go through the process.

But it isn't reliant on what you consider, because Sky Sports are their broadcaster of choice because they show the Premier League. They can't afford another subscription. It really is that simple. And Gilfach, then, loses the main place people go to watch the rugby.

I think it's important to say, and this is a repeat, that we're not advocating that the best thing for rugby is to be behind the paywall. That's not what we're advocating. What we're saying is: if you remove the prospect of a pay tv bidder or bidders, that will reduce the eventual figure that we then have to work with. That's our argument, and I think it's important—. I don't think there's too much disagreement around the table here.

Okay. I think there probably is, or there will be, when the committee meets in private session. And the final thing is: the impact of this will have an impact on those people on lower incomes disproportionately. That's undoubtedly the case, isn't it?

We will repeat: our intention is to strike the right balance and ensure we get the best possible investment into Welsh rugby, because the other thing we want, for people who are watching it, whether it's in their home or whether it's in the club, is we want successful rugby. We want rugby that has great players, that has fantastic games to watch, and to do that we need to be able to have the money to invest in rugby at all levels, and that's what we really want to achieve through this process.

Thanks, Chair.

Okay, diolch. Just before we move on to Alun, could I check—? Would your principal concern of this proposal be the idea of it only affecting the Wales games? Would you be less concerned if all of the six nations—? I know this is a hypothetical within a hypothetical, but would that be less of a concern?

The fact that it's collective, it's one and the same thing for us. The six CEOs will sit down with the CEO of six nations rugby. They will assess the bids and they will come to a view, and it will be for the entire tournament—a range of broadcasters for the entire tournament. Has that answered your question?

Yes, I think so. I see where you're coming from.

I think if it was only Wales, we would take—. I can't imagine a world in which the other five nations say that if we get a lower bid, we would have to take our full share of any impact of that. It would disproportionately impact Wales if it was only Wales as well. So, both of those things are really challenging.

Okay, thank you.

I completely accept that. I've got no issue with that. I've no issue with the argument you're making either, as it happens. I think the tension there is clear, and it is a part of the negotiation, and I think moving the six nations onto a list of protected events would have an impact on the market value. I don't disagree with your analysis on that at all.

I think where the conversation sits is somewhere about the place of the game in the country and the community. Nigel, you remember from your time at the BBC the enormous viewing figures for rugby union, and when I worked at S4C, I was looking down the overnight figures and it was always rugby. Whenever there was a game played, it was rugby. I guess that remains the same. The regional games are now on Friday and Saturday, and I watch Ebbw Vale on a Thursday every so often. And it's fundamental to what the broadcasters in Wales require in order to maintain their business models as well. So, there is an interest there from the broadcasters to maintain the integrity of that service. I don't think the tension is immediately affected in that way, because, without Welsh rugby, I can't see either S4C or the BBC maintaining their reach numbers. So, I think there's a pressure on them as well. 

So, we're looking at how do we build the game, and I think there is a joint interest in that; I don't think there's any disagreement there. And, for me, one of the things I found really surprising earlier, to go back to last year, is there were very few people, Nigel—when you were sitting here a year ago—there were very few people out there supporting you. And you must have felt it. And I was thinking, why is that wall of silence around the WRU at this point, because it's been one of the most significant institutions throughout my life, long before this place existed? And I think there's a sense of the game, perhaps, moving away from people, and, as Hefin indicated, the cost—if I was to take my child to see Scotland on Saturday, you're looking at, probably, £200 or something for that, and then you're going to buy drinks and the rest of it. You're looking at an enormous cost to watch the game. I recognise the reasons for that; I don't have any issue with it, as it happens, although I do worry about it. When you take the game to another sphere again, you break another link with the people who sustain it, and the people who were standing on the bank in Ebbw Vale on Saturday watching the Neath game. You're breaking that link again, and my concern is for the long-term future of the game.

And it won't surprise you to know that we are very aware of the points that you make. We are cognisant of the fact that we need to re-engage in some areas. You referred to when I was here 12 months ago. It was a lonely place, and it was a lonely place for a while. The Welsh Rugby Union is not the only national governing body of sport that finds it difficult to engage with those it should do. We were in a strategy day just yesterday, where the entire executives were sat around the table talking about issues such as the one that you raise. We know we need to move further. We know there are some fans, some potential fans, who are either not in love with the WRU, or have fallen out of love with the WRU, and are not happy with some of the decisions they have made, and don't feel that they're communicated with well enough. All of these things were discussed. All of those things are on the table. And I think what you will see, and supporters, or potential supporters, throughout this great land of ours will see, is a change. It's going to take a while. 

The change has started. When we were here last week, we talked about some of those changes. But it goes beyond governance. It goes beyond understanding the audience we're trying to reach at all levels, irrespective of background or class, or whether they were brought up in Bala or Bangor or Cardiff—I'm not going to go through every single town in Wales. [Laughter.] That doesn't matter. But we feel it deeply, and we know we've got a special place in the hearts, the lives of people in Wales, and outside of Wales, and we take that responsibility incredibly seriously. I'm going to stop there, because I could go on. I don't know whether you want to add—.

I completely accept the points you make. I was in Brussels last week, so I wasn't able to be here, but the impression I've gained, reading the paperwork, and watching what's gone on over the last year, is that you're right, there has been a significant change in the WRU, and that, I think, is to be welcomed by everybody because we want you to succeed. We want rugby to succeed. And I think that's something that unites us all in the Chamber, even. 

So, the question is: how does that happen? I was interested, Abi, in your words in the letter you wrote to the committee—I think you said 'devastating' impact on Welsh rugby. That's quite a word to use over an issue about sport rights. And I'd be grateful if you could run through what you think that impact would be, and why you used that word. 

Yes. Let me just build slightly on Nigel's point as well, because one of the things—. I chose to come and do this job because rugby matters more in Wales. You know, it really, genuinely—

We're pleased you did. 

It genuinely does. And so I carry that heavily, actually, but in a way that I really understand that, and we need to do better, and we need to rebuild the confidence and the trust and the engagement, and that’s absolutely the No. 1 priority, and was right at the heart of the things that we talked about yesterday.

So, if I give you an idea of just how important the media rights are, and I've put some numbers in here. So, our total revenue is approximately £90 million a year, and our media rights revenue has been, on average, about £20 million, and of the money that goes outside of the stadium and our staffing costs and everything, three quarters of our spend goes into what I would call community and regional games—that's about £62 million. So, you can see what an impact losing even a small amount of that £20 million is. And that is against rising costs across the board, with the inflation that that's driving. So, if we were to get less in that media revenue, that's less money we can invest in Welsh rugby. And it's not a small amount of our revenue, and we had the conversation last week about the impact of our loans and all of those things—we would struggle to survive. So, that's why it's devastating. And, actually, I used that word—. I did think about that word, but I can't think about any other word. When I worked in the commercial sector, if I was looking at that, and I was thinking that, even losing 20 per cent, 30 per cent of that would mean massive impact across the game.

Look, I fully understand any commercial operator would not want limitations on what they can negotiate and their negotiating position. I completely accept that. I have no issue with that at all. But the £20 million figure you quoted is a figure that, at the moment, is being delivered by free-to-air terrestrial broadcasters, largely. So, there's no reason to believe that you would lose 20 per cent or 30 per cent of the current figure. The point where I accepted Nigel's point earlier is that the potential for growth would probably be affected. So, you wouldn't see the growth in the future, and I accept that. I think that's a reasonable argument to make. But it's difficult to argue that you'd see it going backwards from where it is today.

I think our argument is, if we were to move onto the A list, the tension would be taken out and therefore they would bid, potentially, lower because they wouldn't have to be competing. So, that's the challenge, so that's where you could lose it.

The pressures that we discussed earlier, on BBC and S4C in our context in Wales, are still great. Nigel.

Yes. What I will say is, when ITV, Channel 4 and BBC appeared before the select committee in the House of Commons, they talked, quite graphically, about the pressures that they were facing, and the suggestion was that they wouldn't have the moneys that they had three or four years ago, and that's what it's based on.

Nigel, nobody appears before a parliamentary committee and says they've got too much money.

I understand that too.

It is one of those things. Okay, I appreciate all your points. So, where do we go? Because as representatives—it's one thing that does engage the public, and the public care. They care deeply about Welsh rugby, and they care deeply about their ability to access it. Now, where do we go from here? I understand the points, and Steve Phillips made this point when he was in front of committee some years ago, because there are different demands, aren't there? Now, we've all been in the west car park in Twickenham before a game, and it's a very different experience to walking down Westgate Street and Church Street into the stadium. It's a very different environment. We've made that fantastic walk down to Murrayfield to watch a game. We've all done that. It's a different experience again, it's it? And I'm thinking, where are the needs of the average Welsh rugby fan and how do we protect those? In the way that Hefin was speaking about Gilfach, I can name a series of clubs and pubs in Tredegar and Blaenau Gwent who are in the same position, who rely on Saturday to fill the place up, and they want to see it. But I can also think of the people who won't be in the pub watching it. The older population will be sitting at home, who've been reading the papers, waiting for the game, the team announcement and all of that, the build-up to the match, and who desperately want to watch it. They were watching the under-20s game on Friday, and then looking forward to the game on Saturday. And now we've got the women's six nations. I went to my first women's game last year—I thought it was fantastic, really good, and it's great to see the game building up. My daughter loves rugby union; she wants to see those new heroines and heroes. Where do they go?

I think, firstly, all of that will be part of the bidding process. So, thinking about how do we, you know, best value, in the overall sense of the word, the rugby ecosystem, in the bigger sense, and that is about that reach, plus investment, and that will be the bidding process. And allowing us to go through that bidding process, bearing in mind that bigger picture you've described, is the freedom that we need, to be able to play to, I think, get the right balance between the two—of everything you've said—because rugby really matters, and it matters to so many people, and we need to get that balance right.

And the only thing I'd add to that is, we're aware that rugby needs to be visible, but it needs to be viable, and international matches, some would say, are expensive, but they're not all priced at the same level.

Yes, I know that. I've seen—[Inaudible.]

So, we've tried to be creative in what we've done. So, for example, if you're a family and you wanted to go and watch Italy—. I'm not being naïve to say everybody could afford to take their family—that's not what I'm saying—

I know what you're saying.

—but it's more affordable than a family going to see Wales play England, for example. And if you look around the UK in particular, I think the prices that are charged to go to the national stadium are competitive, they're on a par, and cheaper, in some cases. I'm not—

In a few cases, yes.

Yes.

Look, it's—

And one of the things I was really pleased to see—and I'm new, so I'm looking at this data for the first time—is as a result of some of the work that Nigel and the team have done, to really look at the ticketing prices, and the demand, we've seen a really significant increase in family and under-17s coming to this six nations series, because of the concessions we've put in place, so it's great to see that, actually. We're managing to reach those new generations.

It's a different crowd to the old five nations crowds, I accept that, and it's great to see. You know, you hear the voices, the children's voices, in the stadium on the second tier, in an autumn international game—I think that's all fantastic. My worry is the isolation of the game, and my worry is what happened to cricket.

And we are aware of the potential pitfalls—

I know. I'll leave it at that. We could talk about this all day.

Diolch. Abi, as you were saying that, I was just thinking, how many weeks into the role are you now?

This is my fourth week, so three and a half.

So, in those four weeks, you've appeared before us twice, so you're going to start to think that that's like a regular thing: 'Oh, and when am I going to be before the culture committee next?' We do appreciate it. Thank you.

Thank you.

Thank you. I just wanted to stick on the point Alun was making, about the importance of international rugby and the various other strands. I know we had a discussion last week about the finances of the regions and so on. Do you think Welsh rugby is too reliant on the broadcasting revenue from the six nations? Does it need to diversify as an income stream, so that it's not overly reliant on the need for a larger income stream from there?

It was really interesting, because diversification was one of the things we talked about in the strategy day yesterday, and I think finances are not sustainable at the moment. So, looking at how we can grow our revenues is a really important part of our strategy, going forward. Whilst also, actually, really focusing on what our core purpose is, which is to provide access and engagement with rugby across the broadest reach we possibly can. So, it's absolutely—. We need to make sure we've got a strong—

What does diversification look like, in reality?

So, actually—

Where else are you making money from?

Yes. So, is some of it diversification or is some of it growing revenues in different ways? So, thinking about, at the moment, we've seen, actually, a drop in the numbers of people who go and watch regional games, so how can we work collaboratively—and I've had some really positive meetings with my regional colleagues—to support them in a way that enables them to have really strong teams and great offers there, because that, actually, will increase the overall sustainability of the game? So, some of it's about diversification, some of it's about growing the fan base, engaging and extending the fan base for people that wouldn't usually engage and go and watch a game in their region. So, that's one example.

I think you've seen some of the things that have been done. One of the things we're looking at is how can we encourage people to come to the stadium for longer at games—what does that look like. What does that family offering look like is another example. So, there are lots of different ways. We're talking a lot to the merchandising. There are so many different things that we can do, but it's all about growing that revenue in a sustainable way, but that it doesn't take away from it's such a big portion of our revenue, that doesn't mean we're asking the Welsh population to spend more money on other things as well. So, it's just that balance. But that hopefully gives you some idea.

I appreciate the point about the regions, and I don't want to get—

The women's game is another great example.

Yes. I should have mentioned the women's game.

Sorry, I should have had that right at the top. So, we've seen the growth in women's sport, we've seen—. And there have been some fantastic reports on how much that is growing. So, that's another. So, diversification in that way as well is really important—and Alun mentioned that.

On the regions, just before I move on, I think you've got four individual problems, probably, across the four regions. I don't think there's a regional fix-all approach. When I've been to see Ospreys games in a quarter-empty Liberty Stadium, it's not a great experience, if I'm honest. And then I walk into the club shop, and three-quarters of it is Swansea City merchandise—and you mentioned about merchandising—and the Ospreys stuff is at the back, and it doesn't always feel like there's the parity. I know there's a wider discussion about whether that's the best location for the Ospreys in general, and other regions will have their own opinions. But I think it speaks to a malaise in the interest levels of the people of Wales, and the actual difference we've talked about already, between international rugby, six nations rugby—people really, really care. And it feels like they don't really care as much, frankly, about the regions. Is that a fair assessment?

I wouldn't have characterised it in quite that way, but I know the point you're making. And to Abi's point, it's not the Ospreys' problem, it's not Cardiff's problem, it's not the Dragons' problem, it's not the Scarlets' problem, it's our problem—our problem. And that's the way that we've entered into discussions, certainly in recent weeks, during my time as interim CEO, because we need the whole of Welsh rugby to be successful. And you've highlighted some problems, or potential problems, at the Ospreys. They've got a new CEO; he's got good ideas. We're going to support them, to the best of our ability, to make sure that we have international rugby that is successful—that's men and women—and that the regional game, and all that supports the international game, has a better chance of being successful too.

Thank you. I just wanted to go into the commercial negotiations aspect. You've both talked about the importance of rugby. I think, Abi, you put it best when you said, 'Rugby matters more in Wales'—that's why you're in this job. Because the way in which six nations rights are negotiated across the six participants in the tournament, how can you ensure that that bespoke voice of Wales is fed into that, so that you're not coming at the highest bidder, which might be a more material concern to us in Wales, in a way that perhaps some of the other nations wouldn't think?

That's a really good question, Tom. Nigel has been involved in this longer than I have. But we are a shareholder of the six nations, and I sit as a member of the six nations board. I will be absolutely making sure our voice is heard and that we're punching well above our weight in that process. And I've been given that assurance in terms of the level of engagement we will get from the six nations team. It isn't done over there to us, we're very much round the table as part of those discussions, right the way from what is the assessment and the criteria going to be for assessing the bids, right the way through to then engaging and choosing which ones strike the right balance. So, we'll be very much part of the conversation.

But from hearing the evidence you've given so far, I think there's an acceptance that the free-to-air offer brings that additional visibility, and that's very, very important, because of the place rugby holds in Wales. But if you've got five other nations that are more interested in the financial number at the end of it, that's really difficult for you as a sole voice to counteract that, isn't it?

Yes, it will be difficult. But talking to my peers around the table, I would say that they are facing similar challenges. I think rugby matters more in Wales, hence we're having this conversation with you, but I think everybody is aware of that balance between the reach—. We had some really good and, I think, constructively challenging conversations with our six nations colleagues leading up to this in terms of how important it was we do that. It will be challenging if there's a different perspective, and we'll need to go through that process. 

And I think if you look at the written submission from Tom Harrison, chief executive officer of Six Nations Rugby, and you look at our submission, there's not a great deal of difference between the two, and we didn't sit in a room and draft them together. They are aware of the significance of a free-to-air offer that is at the right level, and what that will bring. What they are saying, which is the same as our argument, is that it should be left to the Welsh Rugby Union and the six nations to make that decision because they are best placed to make the right decision for our sport. 

I wonder if at this point the record will show that Alun just mouthed the word 'cricket'. [Laughter.]  

I'm a member of Glamorgan as well. I sit in the stands; sometimes I feel very lonely. We don't have the following, at least partly because the exposure has been lost, and you don't want to feel that same loneliness when you watch a game of rugby, do you?  

No. 

I think Llyr wants to come in before we go back to Tom. 

I don't mind coming in after Tom. 

Okay. We'll go back to Tom and then we'll come to Llyr at the end. 

Diolch. You mentioned Six Nations Rugby. I wanted to ask about CVC Capital Partners. CVC is a hedge fund that owns a 14.3 per cent stake in Six Nations Rugby. What influence does CVC have on decisions regarding a broadcasting deal? 

As a shareholder in Six Nations Rugby and as part of the board there, they have a representative on the boards. They will be part of the conversations, but they will be a partner in that; they won't have an overly higher or—. They've got a percentage share. So, they're part of the process. 

But their interest will be in getting the best money deal, right? They haven't got the same investment as you would in growing the game in Wales. So, they've clearly got a voice there around the six nations table. 

I'd counter that—. Sorry to cut across you, Abi. Because I sat around that six nations board table, had numerous conversations and been part of numerous conversations, and they actually want to grow the game, because they understand that if they grow the game, the revenues will increase and they're more likely to get a return on their investment. So, they're not in it for short-term gain. I've not seen any evidence of that in my time around that table. 

I agree with that. I've been heartened, actually, in the short time—. I'd totally echo what Nigel said there. 

Thank you. That's reassuring. 

They'll be part of the same package, and as you'll know, certainly where six nations is concerned, S4C have been a partner, but in other negotiations where S4C have not been a partner, we have been able to secure Welsh language rights through the red button. I'd like to reassure the committee of our commitment to the Welsh language and our understanding of the importance of the Welsh language, and that certainly will not change during these negotiations. 

Again, we need to be careful about talking about a broadcaster, as valued as S4C is in Wales. I'm going to stick to the Welsh language and there being an offering in Welsh of Wales games, whether that be on S4C or through the red button. So, for a person who would rather consume their commentary through the medium of Welsh, it's our intention to make sure that offer is always there.

Diolch. There's a danger, I think, that we think that either it's free-to-air or it's behind a paywall, and of course there are arrangements that have been made in the past for non-PSBs to actually make certain moments or matches accessible to a wider audience for free. So, I'm sure you will agree that this is part of the mix and part of your considerations. The US Open final, I think, was simultaneously broadcast on Channel 4 and behind a paywall. So those, I imagine, would be some of the considerations that you'd be keen to pursue as well.

One hundred per cent, yes.

It may be a combination.

Yes. And to what extent would you be pursuing that, then? Because there are certain games—. And clearly it's the games that have the biggest financial or revenue-generating value to yourselves that are the ones the public would like to see, I suppose. So, there's another tension there, isn't there, in terms of you maximising revenue without forcing or asking for those to be available more widely as well. 

It's a really good question. It's difficult to know until we see what the different permutations are, and that balance will constantly—I just want to assure the committee—be at the front of our mind, which is how do we get the best value for money here whilst ensuring the greatest reach. And that's the exam question as we go through that process. And there may be some innovative things that come up through some of the bidders that we can't foresee here, but that will be the exam question, and it could be a whole combination of different models there. 

Diolch. Unless Members have any final questions—I don't see any—

[Inaudible.]

Predictions? Oh, I think that that's a fool's game. 

All I would say is it was a really good strategy day yesterday, with huge amounts of hope and optimism in the room, and thank you so much everybody around the table for your support. Certainly we are ready for what will be a fantastic six nations. There you go—I'm hedging my bets. 

I'm sure there will be plenty of highs and lows at the six nations.

Wonderful. Well, I am sure that we would all want to wish pob lwc, the very best of luck, to our teams. We're really excited for what the next few weeks are going to bring. Thank you both, Abi and Nigel, for being so open with us, for talking us through the nuances of this issue. We really appreciate it, and really appreciate your time, and, Abi, the fact that you have now made your second appearance in your first four weeks in the role. We really do appreciate it. 

I'll have a break for next few weeks, Chair. Thank you.

Diolch yn fawr. A transcript of what's been said will be sent to you so that you can be sure that it's a fair reflection of what has been said in the meeting. But thank you very much indeed.

I'm Dave Chapman, the executive director for UKHospitality in Wales—that's the trade association for all of the hospitality industry, really. 

Thank you so much. Diolch yn fawr. Richard.

Good morning. My name's Professor Richard Haynes. I'm a professor of media and sport at the University of Stirling in Scotland. 

Thank you.

How the ecosystem has developed since the listed events regime was first introduced.

I think that Professor Haynes wanted to come in. Richard. 

Yes. So, historically, a form of listed events has existed since the 1950s, actually, although the legislation in 1996 kind of gave that belt and braces. And I suppose sports broadcasting for decades was considered to be a public good. It was non-exclusionary, it was non-rivalrous, everybody could watch it. But, today, of course, as has been mentioned, most sport—live sport, that is—is behind the paywall—what economists would call a 'club good'. So, unless you pay to be in the club, you don't get to see it. 

One thing I'd say from 1996—. Obviously, Sky Sports began in the early 1990s and used sport, as Rupert Murdoch said, as its battering ram for a new era of television. And I think, in many ways, that equation continues. But one thing I think you'd say for audiences of sport is that that idea of paying for sport has been normalised. It's kind of common ground that if you want to watch the sport that you're interested in, then most likely you have to pay for it. But, of course, that raises lots of questions about ability to pay and so on and so forth, which we may get into later on. 

Does anyone else want to come in? Seimon, yes.

Dave, how affordable are sports subscription packages for hospitality businesses in Wales?

At the moment nothing is affordable for our industry. We've got really difficult times persisting from March 2020 until now and a succession of serious hits from COVID through to inflation, energy and food and drink inflation. The latest inflation figures show, I think, 2.9 per cent, but 6 per cent food and drink inflation is within that. And the effect of all of the economic pressures on our customers means that we can't really lift prices to be able to accommodate the soaring costs that are coming underneath. The margins are squeezed everywhere and that means that at the very best at the moment most local pubs, for instance, are now finding livings, but they're not actually making much profit. They can't reinvest and they can't take steps that might be available to them to try to draw more customers in, such as taking out subscriptions if they're really that close. 

First of all, there are specialist pubs that do that, and you'll be aware of that. There'll be sports bars and places that would want to bring in the type of customer that wants to see that and stays there for a number of hours watching a succession of games, perhaps. But local pubs don't tend to go that far and we're really not in a position to be able to extend the offer at the moment, just because things are really tight. And I should say at this point that, if there was any support and opportunity to be able to take business rates back to 75 per cent relief from where they were last year, from the 40 per cent that has now been put into the Welsh budget, in the few weeks that we've got between the draft and final budgets, the industry would be really appreciative of that, and it would make a huge difference over the coming year.

Thank you, Dave. Alun, you wanted to come in.

Can I say, I fully accept the point that you make about the difficulties facing the sector? We've all seen a decline, and I've been in more empty pubs recently than I've been in in my life before; it's very striking, the changes that are taking place at the moment. So, that makes sport more important. You've described—. I was reading this morning about people taking part in this dry January thing, which is alien to me, but it means that there is less public socialising, shall we say, and the rest of it. So, that makes sport, I would have anticipated, more important—so, that sort of event provision. I can't imagine that I'm alone in having watched a rugby match or a football match or something in a pub. It's a great social occasion and I would have thought that all hospitality venues, shall we say, would be looking towards a programme that includes, you know, we're talking about the six nations here, but we could be talking about other games as well, in the future.

It's very important—you're quite right. I think it's one of those occasions where I don't have to provide much empirical evidence to Members because you've all got your own experiences of how this works. And you're quite right to say, as well, that the community factor is probably as important to Welsh people as the perpetuation of the economic surroundings for their local pub—the chance to get together. There is a unique atmosphere in our pubs when these things happen. But I must come back to the economic factors. I haven't got any definitive research, but I've done some checking around with different businesses and I can give you some quotes that might highlight what you're saying, really: a single pub, a 70 per cent turnover improvement; 80 per cent in another one; one pub said that it's absolutely essential for them and it goes up 100 per cent when it happens. The 2019 figures that I've been given by members of the industry on the free-to-air competition was that there was a 40 per cent increase in beer sales during that, and the six nations have similar things.

I really do want to emphasise the importance of our industry as a special case for this, where we play a part in the culture, the community of Wales, in every single part of Wales, in every constituency in Wales. We are the third biggest industry in the UK, economically, but there are very few industries that touch every part of every nation in the way that we do, and help to create that. So, there is no doubt that, if it was free to air, there would be many, many of our establishments that would benefit. And, in the current environment—and I can't see the environment changing dramatically over night and there are always other things that could affect it over the coming time—it's the period between January and March that's really critical to pubs' survival. You will have seen—. I mean, we've got 10 per cent more pub closures than England in Wales. I think you will have seen the impacts of the current squeeze hitting, particularly in the early days of January and going forward, following the Christmas and new year season, which is traditionally a chance for us to get some money in and some protection for the year. It's this period now that is particularly relevant and that's when the key six nations comes in.

Thank you.

Let me play devil's advocate, because if, for example—. You've given the evidence that I think committee will accept without any issue at all. So, if the six nations, for example, goes behind a paywall and there are people who, for whatever reason, be it financial or other, aren't willing to pay for that, it might well be of benefit to some of your members, because we will have to go somewhere where it's being shown, somewhere public. So, you'd go down to a pub usually, wouldn't you, to go and watch, in the same way as, occasionally, I watch Premier League football on a pub tv, because I don't have—. I've just got the Cardiff City package, so if I want to go and watch any other game, I'd have to go to a pub to watch it, and I wouldn't necessarily make the choice to go to a pub if the football wasn't on. So, it might well be that your sector could be perhaps the only sector, if you like, to benefit from the six nations going behind a paywall.

You're proving to be a member of incredible discernment—dry January being neglected and a Cardiff City sponsorship is something else. [Laugher.] You're right, but, of course, what I think it demonstrates is the huge scale of our industry and it's very often considered to be leisure or an afterthought in the economic table, but we are so important and so diverse, that, really, all repercussions will vary across the industry. There will be people who will benefit; there'll be others who will lose. But, in the main, most pubs and most communities would have pubs without that specialist facility and I think that's something that the broad numbers of our members would appreciate. But we're obviously ultra supportive of all our members, particularly those who are able to find a niche and a unique selling point that will help them to keep going in the current climate.

Thank you, Dave. I know that Huw wants to come in on this, and Richard and then I've got Hefin, who wanted to ask a question as well. So, I'll go to Huw first and then to Richard. Huw.

Thank you, and I'd concur with the things just said there. So, there are two interrelated things here: one that was mentioned about the fragmentary nature of sports rights and the way that you can watch sport. A bit of research was done in Scotland for Scottish football fans, where, if you wanted to watch every single format of either club football or international football, it would cost a Scottish football fan about £53 a month with the various subscriptions—that's just the sports-related subscriptions. Many households just can't afford that, honestly, in this current climate.

The issue about pubs and public spaces is also important for, 'Well, where would young people go?' Some pubs might well let young people into pubs, but it's still an environment that has a generational divide, so you're starting to exclude certain audiences from watching live sport once it goes behind a paywall, either because the household can't afford it or because it's in a public space that is not really conducive for young people to attend and watch the sport. So, the issue, really, around free-to-air sport, and rugby in particular, which we're discussing today, is fundamental, really, it's about access and how people can access it and at what price point—so, going back to the idea of the listed events, which supports that public good argument that sport is an important part of culture and society, and sharing the ups and downs of your national team is actually quite an important part of identity and connecting people in particular ways. So, access to that is very valuable.

I'd like to pick up on what Richard said there and perhaps put it to our media experts. The WRU was pretty clear that—. Can you hear me, Chair?

Just at the beginning of your sentence we couldn't, but we can hear you now okay.

You can hear me, yes?

Yes.

Yes. So, I'll put it to the media experts. The WRU was pretty clear, they aren't going to shift on this, and the six nations committee looks to be hugely influential on UK Government approaches. So, we need a plan B. I'm just going to concentrate—. Richard, I know you made the point about domestic viewing, but I'm thinking about hospitality. Would a plan B—? Given that the fragmented nature of the subscription services means that no pub could possibly affordably subscribe to everything, certainly not Gilfach Workmens Club, which is where I'll be watching on Saturday, and the various workies and institutes across the Valleys communities in which I live, would it be better then to push for a deal, perhaps even regulation of subscription services by the UK Government across the UK, so that a single fee and point of offer is made to hospitality services at a subsidised level in order to make sure that all sport is available to watch at those venues?

Who would like to—? Richard.

I think that's a really interesting idea. There was a slightly different amendment proposed to the Media Bill by, again, a Scottish MP who is quite vehement in trying again to open up free-to-air access to Scottish qualifying games in football, but the same principle applies. I think the idea that—. I suppose, coming back to the governing bodies of sport, the argument about going behind a paywall is that it increases commercial income, which then trickles down the pyramid to grass-roots sport. But, of course, the flipside of that is that the visibility of the sport also decreases, and, if you can't see it, you can't be it, in a sense. And, again, I know Welsh rugby at the grass roots is very strong, or has been historically, but it potentially gets undermined if people can't view the elite level of the game in their communities. So, the idea of public funding for sport that's supporting the ability to watch sport, but also how then that feeds into just the visibility and the participation in sport at grass-roots level I think is a very valid argument to discuss.

The mechanisms for that obviously might be quite complicated in some respects—different sports would make, again, different claims for how that public money might be spent in the circumstance. But I do think that regulation needs to step in here to, in a sense, balance the playing field, because I think the danger is—. Because the other dynamic of all this in a global sense is that football, soccer, is by far the most dominant sport—. Sky have just done a new deal for the English Premier League and with English league football as well, and are going to show over 1,000 games a season, going forward. So, other sports are just getting pushed out, and following the model that football has done is not necessarily the best model for all governing bodies to follow, I think. And I think rugby maybe needs to take a look at that in terms of what's the benefit for itself in terms of growing the game and the passion for the game and so on.

The game is growing worldwide. Across Europe, there are more people playing rugby, arguably, and in African nations as well; obviously, there's a world cup forthcoming in the United States. So, the global growth of the game is there, potentially, but at its roots—which arguably Wales is—some of the commercial decisions could really undermine the value of the game in that nation, if they're not careful, by doing strange deals that just exclude people from watching it. 

[Inaudible.]—of time, so we will have to move on very soon to Llyr, but Tom wanted to come in just on one of the points that you were making.

Sorry, can I just come back to you, Professor Haynes, on the point you were making there about football—the 1,000 games a season, the record deals, the growth of the Premier League? The interesting aspect to me at least is there's clearly a demand or a willingness among many people to pay a premium for what they see as a premium product, which would be the Premier League, and with football being the most popular sport. Is there evidence that people are also willing to pay for what they might see as secondary sports, if you like—which, everything is, frankly, behind football?

I don't have the evidence for that. I think cricket was mentioned earlier, and I think what cricket has had to do is continually experiment with the format of the game of cricket into a shorter format to make it more exciting and entertaining. And we might come on to the discussion that, for younger generations of viewers of sport, or fans of sport, live sport is not always the kind of content that they want to consume. Again, Ofcom evidence suggests that, that younger viewers or younger fans of sport use different forms of content, either through social media or other streaming services, and other kinds of narrative about sport. So, Drive to Survive, for example, for Formula 1, has definitely grown the sport, particularly in the United States, amongst younger viewers.

So, again, governing bodies looking at their sports rights perhaps need to look a bit broader around what kind of content they're producing and who it's for. Live sport remains the premium and that's probably where people are most likely to want to pay, but there are, as we now know, lots of other platforms for delivering content. So, it really is about coming up with the right mix for any given sport that really showcases the value of the sport, the entertainment factor of the sport and so on and so forth, that keeps the appeal going. And it's a complicated balance; I'm sure you've heard that from the Welsh Rugby Union themselves.

Diolch, Huw. I think Richard's hand went up marginally before Seimon's, so shall we go to Richard first and then to Seimon?

I support the idea that, yes, the six nations as part of our cultural heritage across all parts of the UK is very much valued by many people across the country, watched by millions, obviously, when it is free-to-air, and it has been free-to-air. When you look at the other sports or events on the listed events, the six nations really should be on there.

I suppose the challenge, regulatory-wise, and particularly if you have specific Wales clauses in the listed events, is that, obviously, broadcasting policy regulation remains a reserved matter for Westminster. If a deal was done for S4C, it still would be available in Scotland and England and Northern Ireland to view on some platform or other, so it becomes very complex about how to slice this pie in ways that work for all.

Fundamentally, the structure of the regulatory area around broadcasting is one of the things that is creating this problem, really. The fact that sport is devolved is also complicated, because again, the amendment put in for the media Bill, which wasn't successful, had underlying it the idea that if governing bodies lost some of their commercial income by being free-to-air under the listed events, governing bodies of sport or the Parliaments and Governments of the devolved nations could receive funding to support the grass roots and that income lost. 

That, again, raises whole questions about the Barnett formula and how that would work and so on and so forth, so it's really, really complicated. The regulatory regime of broadcasting creates this scenario where it is difficult. I think if the Welsh Parliament were able to make its own listed events, the six nations would be the first thing on the list, I'm sure, for obvious reasons. That's the fundamental problem here, at root, and in terms of siphoning off one nation within the listed events, although it was recommended by the David Davies independent review of listed events in 2009, the mechanisms for that to work are very difficult, I think.

Forgive me, and I know that Seimon wants to come in as well, but there is a precedent, of course, with there being a different situation—. I think that Llyr probably was about to make this point—forgive me, Llyr. But with Scotland, with the Scottish FA Cup, there's a recognition within the legislation that there's a particular resonance. I'm having Alun gesticulating at me in the room implying it isn't quite the same thing, but there is that precedent there.

That's true, yes. I think anything is workable. I think the question about the S4C thing—which might have been not necessarily a listed events thing, but a commercial decision that the six nations could make, that, like with the football, a minority language channel could have access to showing coverage—is the idea that, also, it would still be available elsewhere in the UK, which, again, for the rights holder might be something that would stop them doing it. Welsh football games against whoever across Europe, or in qualifying games, is not likely to be as popular as six nations games of rugby, where all four home nations are involved. So, yes, there are issues there, commercially, around that idea. 

Can I come in there, Chair, because my question's related to that?

Yes, sure. 

To Huw and the experts: have we got any chance whatsoever of persuading the WRU to change their minds, and, subsequently, perhaps, even the six nations committee? 

It's going to be very difficult, isn't it? The commercial side of rugby is increasingly complex because of the type of investments that are going on there. As we know, CVC have invested in a whole range of different levels of rugby, internationally and locally, in the six nations. So, you've got private investment wanting to get a return on that investment. So, that's one immediate commercial challenge, which maybe is behind some of the conversations or pronouncements that the WRU make. But their principal job, really, though, is, as you say, growing the grass roots of the sport, because if you haven't got that pipeline of talent, the national team will flounder at some point because there aren't enough people playing.

So, I think, in terms of the challenge, other nations probably would support, in terms of politicians anyway—there seemed to be quite a lot of cross-party support in the house the other day regarding this, in terms of listed events. But the Government's view seems to be, 'Well, governing bodies know best. It's their commercial priorities that come first', so they won't touch it. That's the sticking point, isn't it?

One of the equations in all this is that I would argue that if more eyeballs are watching the content, on whatever platform it's on—whether it's on traditional television, streaming services, social media, you name it, wherever that is—if there's more content available to view, that is more opportunity for sponsorship, advertising and other forms of commercial revenue.

One of the biggest forms of commercial revenue for streaming services in particular is data—data about who's watching what, when, and where. A lot of that isn't shared publicly, but for the likes of Netflix, Amazon, Apple and so on, part of their business model really is about the data behind who's watching what. And so, sport needs to wise up to that, that they have a stake in that game about how that data is used for commercial purposes. So, arguably, the more people watch content, the bigger the value of that data, for them, and the market is around sport. Sports marketing is a huge multibillion-dollar industry; it's huge and global. So, I think that's all in the mix. It's very, very complex, of course. But I think that is part of an argument that could be made to the rugby unions, to say, 'Well, look, can we help you in thinking through broader commercial opportunities by keeping the game free-to-air, as many people watching it as possible, supporting the grass roots, through that visibility, at the same time, enable you to grow the commercial opportunities in different ways?' Because visibility can be across different platforms, different kinds of narratives and storytelling to different generations of people—that, for me, is a win-win. But at the minute, I don't think that's the way in which the current Westminster Government is viewing this at all.

Thank you. I think we're all asking more questions than we're actually answering this morning. The heart of the case that Abi Tierney's outlined against restricting the rights of the six nations is that, and I'll quote from her letter to the committee:

'Our position'—

the WRU position—

'is not that Six Nations Championship rugby should be moved away from free-to-air television channels. It is that to place this restriction on rugby would artificially
restrict the market for our media rights and significantly diminish our earning potential to devastating effect on our game.'

And I think Nigel Walker continued the argument this morning that we need to retain the option to broadcast on subscription services, in order to keep the existing tension in the market. Now, the question to yourselves—and I accept that you've all got different experiences, so will answer from different perspectives, and perhaps not wish to answer these questions at all, and that's all fine—is to what extent do you agree with the analysis of the WRU? To what extent do you believe that such a restriction on rugby would have the, inverted commas, 'devastating effect on our game'? And to what extent do you believe the WRU analysis is correct and, therefore, the six nations—despite what we might wish for—should remain on the open market?

Who would like to go first on that? Okay, I'll go to Seimon first now, as a change. Seimon.

Richard, I think you wanted to come in on this.

I think we can certainly see the point of view commercially. If an event like the six nations became a listed event, then, clearly, the market for who the broadcaster would be would be shrunk quite dramatically, potentially. And therefore, as has been said, the value of the rights would be diminished too. I suppose part of the answer might be about finding ways in which it could be free-to-air, on an open commercial basis, or that the six nations could be persuaded to view it as advantageous, so that—. It's a tricky one. I think part of what you have to listen to is what's coming from the broadcasters like BBC and ITV, because they're working from a shrinking pot as well. So, if it was on the open market, I would say the likelihood of BBC, ITV retaining rights to the six nations is also a bit of a dodgy proposition. I don't think they're increasingly going to be able to afford a competitive price, going forward, and that's been signalled by the outgoing head of sport, Barbara Slater, at the BBC, I think.

So, I come back to the idea that, by being listed and restricted in that form of commercial income opens up other potential opportunities around sponsorship and other forms of commercial income, by having more people watch it. And there are marketing opportunities there that need to be explored, I think. But part of the argument also is about, well, this isn't about finance, this is about the cultural resonance of rugby in Wales, and is that more important? Does that trump all? But the rugby union, obviously, argues that that's not how they see it at present.

[Inaudible.] We already have a listings process in place for some events. So, we do have experience, therefore, of a restricted marketplace. We've got a restricted marketplace in the group A events at present. Is there any evidence that that restricted marketplace has led to a significant diminution in the value of those rights, and in the income to the governing bodies?

Richard.

I suppose one case study there is if you look at Wimbledon. Wimbledon is a very thriving commercial enterprise. We might question whether they've capitalised on, let's call it the Murray factor, of the visibility of a British champion in tennis to then spread the game—probably there are a few people playing tennis. There's also a question about the elitism around tennis, to a certain extent. But that's, again, all about sports development and where priorities lie around that. But I think, commercially, Wimbledon is incredibly successful. They're looking to grow the tournament, globally—it's a huge brand, which has been very successful. Arguably, the six nations is a huge brand. There are international opportunities to sell the six nations games globally. That's potentially a very big income earner—in Australia or New Zealand, or wherever. As the game grows globally, more and more people want to watch it. So, I think there are opportunities, even if it is a listed event, to grow commercial income in other areas.

I fully accept all of that, but my question was slightly different, I'm sorry. My question was about the value of the rights. Now, intuitively, I would agree with the analysis of the WRU—if you're selling in a restricted market, clearly you don't have the same, I would have anticipated, value as you might be able to accrue in an open market, for clear reasons. And the argument I felt that Nigel and Abi were putting forward this morning was a very credible one for that reason. My question was: is there ever any evidence that that argument and that intuitive assumption is actually borne out by evidence in the existing marketplace?

My answer is I don't fully know, but I think the answer around, I would say—the Wimbledon championships; I don't think they're struggling commercially. If Wimbledon were to go behind a paywall I think that would change the dynamic of tennis in the UK, at least, quite radically. A lot of tennis, though, is already behind a paywall, of course. But the Wimbledon championships definitely still have very strong resonance across the country, I think, when they're on. Things like the world FIFA World Cup—the finals tournament is a massive fillip for football, the game of football internationally. I think the rights to world cup finals, again, are pretty valuable, and keep going up every four years. So, the evidence for that is that, in some cases, or maybe in most cases, those listed events still maintain their commercial value, or have done. And part of that is also a question about whether Sky or any other niche sports provider would necessarily want to carry some of these events, because they don't fit into their model, either. Wimbledon would be a tricky one in the sense, if it went to Sky—that's not really in the nature of what they're about. They want things that will keep people coming back to watch and subscribe month after month. Wimbledon lasts for two weeks. So, commercially it's very complicated, but I think that would be my answer to your question.

Thank you so much. I know that Huw wanted to answer Alun's original question and then we're going to go to Llyr, I think, probably for the final question, because we're almost out of time. 

We have 15 seconds left of time, so we might go a few minutes over. Llyr, for the last question. 

Diolch, Huw. Did anyone else want to come back in with any final reflections, or are you all content? I don't see anyone indicating—oh, yes, Richard.

[Inaudible.] One of the things, I suppose, for us to look at is the finances of the sport and where the money is spent. From what I know—and this applies in Scotland as well as Wales— is, although the turnover has increased through the commercial revenue, the costs have also increased, and it comes back to this idea of the retention of players within the game. Obviously, the athletes want to earn the highest living they can playing their sport, but it costs increasingly. We've seen this in the world of football with the amazing figures that people earn and, obviously, rugby has tried to manage and control that. But recently we have seen people drifting even out of the sport, never mind going elsewhere to play the game. There are so many different competing challenges that the rugby union faces in this, but, fundamentally, I think, if—. The women's sport, more broadly—team sport, in particular: football, rugby, cricket—that's an interesting phenomena, because most of that is free-to-air, is available for people to view, either on the main channels or, as in Scotland, BBC Alba do a lot of coverage of women's football, and it's been very successful in promoting the game. So, I think, again, if you can see it, then you maybe want to be it, and I think that edict still stands for rugby in Wales as well.

Thank you, Richard. Dave, you wanted to—

Very briefly, the associated point in that is to commend the events strategy for Welsh Government. I think it's vital that—. If we look at these matches, the three matches this year, the effect it has on city centre hotels and the city centre communities is really important, and we'd like to see as much support as Welsh Government could give to that events strategy to not only bring economic advantage to the locality, but also to project Wales as the wonderful place that is. I think the Champions League, for instance, was a great example to show that we're able to not only host but to lead in areas of that type.

Thank you, Dave. And then the final, final word to Seimon.

Thank you, all, very much indeed for your evidence this morning, your expertise and your different perspectives—they've really been incredibly valuable to us. So, thank you, all.

A transcript of what's been said will be sent to you to check that it's a fair reflection of what's been said this morning.

Thank you.

Thank you very much.