Global Radio competitors comment on GMG

Global Radio’s competitors have had their say on the takeover of GMG Radio, with mixed reaction from Orion Media, UKRD & More.

An anonymous submission, known as “Competitor B” says Full Divestiture would represent a comprehensive solution to the SLC (substantial lessening of competition) and an independently-owned Real and Smooth Limited (the new name for GMG Radio) would involve relatively low composition risk.

The other two options, to sell operations in all but London and the West Midlands or to sell parts of the operation could “represent a comprehensive solution to the SLC but may involve higher composition and purchaser risks.”

Competitor B comes to the same conclusions as Bauer Media, reporting potential problems of selling the Smooth network without an FM licence in London (the ‘shop front’) and Birmingham (the ‘second city’) and how it could have an impact on running costs and advertising revenue.

The importance of Smooth being able to continue as a stand alone business is highlighted. Competitor B also suggests the best option in the East Midlands is to sell Capital rather than Smooth, whilst in the Northwest selling Smooth, Real and Real XS or selling Capital and Xfm would represent viable businesses. In Scotland Competitior B suggets selling Smooth and Real or just Capital would be the best option.

The Christian Broadcasting Council offered five suggestions, including Keeping Real, selling Smooth and selling Capital in Cardiff and Wrexham (although there is no Capital in Wrexham).

In the summary of a hearing with Orion Media Ltd on 4 March 2013, the Free Radio owner says there would be fewer risks associated with a divestment of Real stations. Orion said that it was important that commercial radio retained strong national brands such as Heart, Capital and Smooth and that these helped radio to compete for national advertisers with other media such as television.

“Global’s increased investment in marketing and programming had raised the bar for radio competitors,” the Midlands company said.

Orion also noted that consolidation of local radio ownership did encourage greater diversity of music offered as owners tried to differentiate their stations to attract advertisers.

Town and Country Broadcasting says in Cardiff and in North Wales Global Radio should divest some of its stations there to restore competition that existed pre-merger.

However, commenting on Manchester, North East, Yorkshire, Scotland and the East Midlands the Nation Radio owner says that the combined Global/GMG entity is strong but not dominant in their markets and believe “competition would persist in each of these five areas and it is possible for both local and national advertisers to fulfill an effective advertising campaign by using a non Global/GMG station.

“As such, we do not believe the merger would lead to a substantial lessening of competition in any of these areas.”

William Rogers, UKRD Chief Executive writes: “I simply wanted to make the strongest representations that their proposals are fundamentally short of anything which remotely addresses the issues perfectly properly and correctly identified by the Commission. To offer up some AM services and those representing such a small part of this acquisition along with licences, which by their nature, have relatively little longevity or potential dominance or audience, is totally shy of the mark.

I understand that the Commission has indicated that the AM services are not considered adequate as a means of solving this problem and, if correct, I totally concur with that assessment.”

Read all of the responses on the Competition Commission website, and make sure you’re on RadioToday.co.uk on May 22nd for the final decision.