The Competition Commission has released its provisional findings for the Global Radio / GMG Radio takeover inquiry .
The Commission has objected to parts of the takeover on competition grounds, particularly where stations overlap.
The Commission believe there may be an issue, which they define as a Substantial Lessening of Competition in seven areas. These are: East Midlands, Cardiff, North Wales, Manchester, The North East, South & West Yorkshire and Scotland.
The seven areas mentioned are pretty much every area where GMG Radio operates. The CC will publish a Notice of Possible Remedies which sets out ways the loss of competition in the seven areas identified might be addressed. These include Global selling the whole of the acquired business, the whole business apart from those stations in London and the West Midlands or selling individual stations in the affected areas. The full provisional findings report will be published on Friday, 15 February.
However, Global Radio has been provisionally cleared to sell the merged company’s national sales, the merged company’s national S&P and to keep both parties stations in London & the West Midlands.
Simon Polito, Chairman of the Global/GMG Radio inquiry and CC Deputy Chairman, said: “The advertisers most likely to lose out from this deal are those who do not use national media agencies, and so includes smaller and medium-sized companies. These advertisers rely on the presence of competing commercial stations in order to negotiate a good deal.
“Whilst in many cases 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.
“We will now look at ways in which we can preserve competition and look after the interests of advertisers in these areas.”
Further engagement will take place between Global Radio, Real and Smooth Ltd and the CC over the next couple of months ahead of a final decision which is expected in April or May.
Historically, provisional findings by the Competition Commission have been significantly different to final decisions.
A spokesperson for Global Radio told RadioToday: “Global Radio & Real & Smooth Ltd (RSL) note that the Competition Commission (CC) has today released its provisional findings into this transaction.
“It is important to note that as provisional findings, these do not represent the CC’s final report, and as such, it would not be appropriate to comment further on these provisional findings.
“RSL will continue to be run separately from Global Radio whilst the CC finalise their review. Global Radio will however continue to represent RSL’s national airtime sales, as it has done since 2006.”
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.
Both companies, Global Radio & Real and Smooth Ltd will continue to operate independently in a “Hold Separate” situation.