John O'Donoghue (Kerry South, Fianna Fail)

I wish to preface my remarks by stating that I fully accept the bona fides of the Minister, Deputy Ryan, in seeking a public debate on whether the RBS Six Nations championships and the Heineken Cup should be on a free-to-air television basis. I thank the Acting Chairman for affording me the opportunity to contribute to this important public debate.

Everybody will accept that the growth of the game of rugby is directly correlated to the amount of money invested in the game and the consequential success of our teams. In effect, this means that there is a balance required between revenue and television exposure. I am concerned that a move to free-to-air would swing the pendulum all the way towards television exposure and upset the balance which currently exists. I say this because while various commentators have expressed doubts about the potential loss of between €10 million and €12 million to the IRFU, they fail to recognise the net beneficiary of their membership of the Six Nations and the Heineken Cup collectives which own the broadcast rights to these tournaments and which sell the rights centrally.

European rugby is structured in a very well organised way, whereby it can maximise the revenue potential, distribute the moneys in an equitable fashion and thereby ensure a vibrant set of well-resourced teams making up the competitions. Irish rugby is a net beneficiary of this structure with Irish broadcasters committing some €5 million to the central pools and the IRFU receiving back some €16 million from television pools. To upset the balance and structure of these collective selling organisations would be potentially disastrous for Irish rugby given the volatility, commercial tensions and different agendas of the partners in these collectives.

The other key issue is that the broadcast markets in the United Kingdom and Ireland are inextricably linked and are almost inseparable through overspill of signal, further complicated by the fact that Irish rugby spans both broadcast jurisdictions in the Republic of Ireland and the North of Ireland. If decisions are taken to ring-fence these competitions for free-to-air in the Republic of Ireland, in effect, it excludes Sky and ESPN from the market place not only in the Republic of Ireland but also potentially in the United Kingdom. Sky bought the rights to the European Rugby Cup in the United Kingdom and Ireland on the basis of driving sales in Irelandand Wales. If ESPN and Sky are not bidding for rights the IRFU is, in effect, left to the mercy of the State broadcasters in Ireland and the United Kingdom, as ITV and Channel 4 have insufficient funds to purchase rugby rights, who have shown time and again that they will use a monopoly position to their commercial advantage and drive down revenues.

I am very much afraid that if the Minister's proposal is put in place we will see a spiral of decline in the professional game which, in turn, will undermine the club and schools game in Ireland. The loss of revenue of between €10 million and €12 million per annum to the IRFU, in the order of up to 20% of its annual income - some would argue it is up to 24% - will lead to the loss of Irish rugby's finest players to foreign teams; a probable reduction in the number of Irish professional rugby teams; the inability of Ireland's international and provincial teams to compete at the highest levels in the World Cup, the RBS Six Nations championship, the Heineken Cup, the Magners League and the Amlin Cup; and a significant reduction in the levels of financial support for club and schools rugby.

It has to be remembered that Irish rugby's position at the negotiating table of the Six Nations and the Heineken Cup would be severely weakened as each partner is expected to deliver a series of assets to the table in a manner that will allow them to maximize the centralised negotiation of television rights by the respective tournaments. While I understand the French have designated certain elements of these tournaments, they are in the enviable position of being able to bring major terrestrial television channels to compete at the table for their rights and to compare their situation with Ireland is simply to misunderstand the commercial realities.

I have heard the academic argument being made to the effect, "But they will have the right to sell their games here into the other markets". That simply does not take account of the reality that broadcasters want to buy tournaments or events in their entirety. In this way they can build audiences and make it a success from their perspective. If the IRFU is no longer part of the central selling arrangements it will only own the rights to three out of five Irish matches in the Six Nations tournament in a good year in a competition that consists of 15 matches in total.

Trying to sell matches on a piecemeal basis hugely diminishes their interest and, in turn, value for broadcasters, leaving the IRFU seriously exposed as to the value of matches with no guarantee that broadcasters in other countries will actually want the match or that the rights' holders will sell the rights at Irish market values for the away matches back in to the Irish market. I support rugby on free-to-air channels as part of a balanced approach and indeed the Six Nations Championship is currently free-to-air and the Heineken Cup is available free-to-air on a deferred basis. What nobody wants is the dismantling of a hugely successful structure with resultant carnage. Ireland's failure to bring unencumbered television rights to the table would inevitably reverse the position whereby the IRFU receives greater revenues from television rights through its membership of ERC and Six Nations than it can put into the central pot. The unfortunate facts are that an enormous drop in revenue would lead to a spiral of decline with Irish rugby becoming a second class citizen on the world stage.

I am convinced that the ultimate consequences of the Minister's proposals would be as follows - a significant reduction in resources for the professional game; the inability of the Irish provincial teams to compete at the highest levels; the loss of Irish rugby's key income generators, that is, its best players; a probable reduction in the number of professional provincial franchises or teams; the inability of the Irish international team to be a serious and consistent force at international and World Cup levels; the rapid decline of Irish rugby into a second tier contender and the end of the game's mass appeal in this country; the consequential reduction in the effect and value of a strong and vibrant rugby sector to the national and regional economies; and the weakening of international sporting relations and patronage for Ireland incorporated.

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