The Competition Commission has released the results of its six-month investigation into the takeover of GMG Radio by Global Radio.
The CC has decided that Global Radio must sell radio stations in seven areas of the UK following its completed acquisition of Real and Smooth Limited.
In its final report published today, the CC has concluded that the merger is likely to lead to higher prices for advertising in seven areas of the UK, confirming the provisional findings in February.
Global will now be required to sell some of the acquired Real & Smooth stations, or its own stations, broadcasting to the following areas: the East Midlands; Cardiff; North Wales; Greater Manchester & the North-West; the North-East; the South and West of Yorkshire; and Central Scotland. The CC will have to approve the buyers to ensure they will be viable competitors to Global.
Global will, however, be able to license its brands to the purchasers of any licenses it has to sell.
The stations Global will be required to sell are as follows:
East Midlands: Smooth OR Capital
Cardiff and South Wales: Real OR Capital
North Wales: Real OR Heart
Greater Manchester and the North-West: Capital OR Real XS with either Real or Smooth
North-East: Real OR Smooth OR Capital
South and West Yorkshire: Real OR Capital
Central Scotland: Real OR Capital
Global Radio told RadioToday: “Global notes the CC’s report and will now consider the report more fully, and announce next steps in due course, including entering into a period of discussion with the CC to finalise the stations that may be disposed.”
It’s been a long year for staff at the company formerly known as GMG Radio but today’s news will see another wait for information on their job security.
Provisional findings were released in February 2013 saying there might be an issue, defined as a Substantial Lessening of Competition in the same seven areas.
The CC found that advertisers would not be adversely affected in London and the West Midlands. The CC has also concluded that advertisers using media agencies to buy airtime on a contracted basis and national sponsorship and promotion would not be adversely affected significantly.
Simon Polito, Chairman of the Global/GMG Radio inquiry and CC Deputy Chairman, said: “Radio advertising prices are negotiated and smaller and medium-sized companies in particular rely on the presence of competing commercial stations in their local areas to negotiate a good deal. In each of the seven areas, the merger would mean the loss of either the only main competitor or one of the three main alternatives. These smaller advertisers would stand to lose most from this loss of rivalry.
“Requiring Global to sell stations to new owners in the affected areas will preserve competition and protect these advertisers’ interests.
“Whilst for some campaigns advertisers do have alternatives through other media, radio is often an integral part of a wider media campaign and there remain campaigns for which radio advertising is important.”
The takeover of GMG Radio was made by Global Radio in June 2012 and following a referral to the Secretary of Culture, Maria Miller announced the deal will not be investigated on grounds of plurality but was then sent to the competition commission for investigation.