Bauer Media’s response to the Competition Commission’s provisional findings and possible remedies to Global Radio’s GMG Radio takeover have been published.
Bauer considers that full divestiture of all former GMG Radio stations is the best of three options which is most likely to address the SLC (substantial lessening of competition) most effectively and in the shortest time period.
“Keeping the Real and Smooth networks under common ownership is the simplest approach to dealing with shared infrastructure between Smooth and Real and the network structure of Smooth,” Bauer says.
Bauer points out that the networked structure of Smooth Radio means it doesn’t have studios in most of the regions it serves which would not be attractive to buyers, especially without a national DAB slot.
Bauer also suggests that if all the new stations were sold on, the divestment package should at least include the option for the purchaser to terminate the national sales contract with Global, should they wish to do so, within a short time frame.
Bauer comments that divestiture of the new group excluding London and the West Midlands is also likely to remedy the anticipated SLC but says there are greater risks with this aproach as Smooth London, which isn’t required to be sold, is the shop front and provider of programmes for the national station. Bauer suggests one answer would be for Global Radio to enter an arms-length network affiliation arrangement.
Bauer says partial divestiture of local operations will inevitably be more complex and time consuming to implement, and makes various suggestions. “Based on the Provisional Findings it is clear that in order to address the SLCs identified it would be necessary for Global to divest Real Radio Yorkshire; Real Radio South Wales; Real Radio North and Mid-Wales; and Smooth Radio East Midlands.”
The North East situation is less straightforward, and Bauer’s recommendation is to sell both Real and Smooth together, or if only one needs to be sold, then it should be Real because of its attractiveness to advertisers and current set-up of local premises and content.
In the North West and Scotland, Bauer does not consider that the divestment of Real XS alone would be an effective remedy because of its current assets, accounts and niche content. The station on its own is unlikely to be regarded by advertisers as a credible alternative, Bauer says.
Instead, Bauer suggests selling Real Radio along with Real XS (or Smooth in Glasgow) to address SLC issues.
In the North West, Bauer says the Competition Commission should consider the two regional stations, Real and Smooth, instead of just Manchester, saying advertisers wishing to target the Greater Manchester area still consider advertising on Smooth and Real as viable options irrespective of wastage.
You can read the full Bauer response here (PDF) and follow this on-going story right here on RadioToday.co.uk.