Less than 24 hours after RadioToday.co.uk brought you details of Global Radio ending a joint venture with Sky, the new radio company has received notification from GMG to end their sales agreement after terms of revenue increase could not be mutually agreed.
The deal was inherited by Global when the company took over Chrysalis Radio, but a change of ownership gave GMG a three month window to either review details of the deal or end the contract. GMG served notice on October 1st and today officially announced termintation of the contract.
A spokesperson for Global Radio told RadioToday.co.uk that the radio group had received a letter from GMG on Wednesday outlining its final proposal for the ongoing airtime sales contract for GMG stations. Global Radio reviewed the details and sent a letter last night to GMG rejecting the terms and conditions as commercially unacceptable and requesting an orderly parting of ways.
GMG wanted to change the terms of the contract so that Global would have to guarantee a 50% increase in radio advertising sales across its stations within the next two years. Global counter-proposed a 15% revenue increase guarantee which it believed was more realistic.
Radio Today understands that only GMG Radio could technically terminate the contract, thanks to a change of ownership clause in the agreement between GMG and Chrysalis. An announcement regarding a new sales arrangements for GMG will be made shortly.
It is understood that the Chrysalis sales house has previously grown the GMG business by 23% in a marketplace that has declined by 7%.