Opinion: Global Radio are right to fight

BLOG: By John Myers. So Global radio have decided to fight – good on them! I would do exactly the same in their shoes because the decision by the CC is basically, nuts. In fact, they have absolutely ballsed this whole thing up.

This won’t be welcomed by the radio purists who think Global are too greedy and own too much as it is, but this is NOT about programming. In fact, it’s not really about Global. It is about local advertising. It is clear to me the commission has never sat in front of a local advertiser of note in their life. Gone are the days when local advertisers don’t know their worth or can be trampled on by stations. Today, these people know their value and where the deals are. They are media savvy, social media friendly, hard negotiators and radio is just one part of their world. As such, the medium has to sell itself harder now than ever before in order to just keep pace.

In any case, if the commission is so worried about radio stations and their dominance how come they don’t feel it important to say anything about CFM in Carlisle and places of similar status? In this area of Cumbria, there is only one commercial station. As such they have 100% of the radio market, far greater than any of the seven locations where Global are aiming to be. Is the local advertiser in Carlisle not as important as those in Manchester or Yorkshire for example? Bauer, the owners of this wonderful station in Carlisle can charge what they like and conduct any sales strategy they like. Fall out with this station…. and you are barred from commercial radio altogether! Are local advertisers suffering? Absolutely not! Why? Because they regard radio as part of a larger media mix. CFM know the competition is other media, not other stations.

Has this driven up prices? Has this made local advertisers as mad as hell? Hell no! Yet, if we are to believe the wig-wearing chaps at the CC, this is a dangerous precedent to set, and one where the rights of local advertisers need to be protected. This is so far wide of the mark you could be accused of making it all up!

Let’s look at the CC’s ruling, and perhaps the ‘dodgiest’ area of all in terms of their thought process, Yorkshire! Bauer have stations in Leeds, Hull and Sheffield, all doing very well. There are also some smaller local stations within that region too and while Capital may be doing well, 88% of the population don’t listen to real radio at all in that market. The commission would have you believe that Global owning Capital and Real is dangerous and if they were given the go-ahead, prices for radio may rise accordingly. Not a single person in that market (privately) and honestly believes that to be the case. It is worth remembering that most of the big stations here take as much national advertising as they can get their hands on. When the national pound is good the local advertiser gets squeezed out, even if they want to pay the rate. That’s because these groups operate national share deals. The local rates go up or down depending on demand and availability. When the national market is hot, local clients find it much more difficult to get on the air at anything like the price they were paying when the market was on it’s knees. Talk to any number of local sales personnel. They will tell you about conversations internally where they have struggled to get their local clients on air at all at times.

For the record I have no business connection with Global whatsoever. I know them well, but I know the other groups equally as much. If anyone else had bought GMG I would be saying the same thing. The fight over this ruling has to be taken right to the bitter end, because it is, so very wrong. If you face losing £30m on a deal, then what’s another million to fight it? The decision makers have done their best, but their best has resulted in a verdict that is deeply flawed and woefully short of reality. OFCOM had no issue with this deal. Neither did any of the major radio competitors who only shouted foul when they lost the deal themselves. Let’s be honest, Bauer have done the most fighting… and an impressive one at that! However, they desperately wanted this deal for themselves and were only beaten to the post at the last minute. The complaints from them to the commission about too much dominance must have been tabled with more than a slice of embarrassment. They would have been in the same position. The reality of course is that if there were no self interest the whole of commercial radio would be better served coming together as one to tell the CC their decision is wrong. It didn’t and it won’t with the result that commercial radio has devalued itself forever. Very few can buy anything now.

Does anyone really believe that in 2013, this thing we call radio should be viewed as a stand-alone medium, in a world where multi-media is the norm and single media is outdated? Mark my words. This will not only be bad for radio (because the commercial radio you receive now is about the best you are ever going to get), but it will see the continued rise of The BBC. This is also very bad news for all media in the UK. Press, TV and Radio will all be affected by this ruling. Mergers will be far less, and we will all be the poorer for it…. and, before anyone shouts that we should go back to single ownership and the glory days of the past, please remember that in 2009, 80% of all commercial radio stations were unprofitable and going bust! The reality is the government and the regulator licenced too many stations. My message to the CC is quite a simple one. Wake up! There is no fear whatsoever from the local advertising community. You have been conned!

Of course I would rather not have the fight, but I certainly would not be walking away from one either, especially this one. Global may lose out in the end as organisations rarely change their minds but those who believe a sell off will lead to better programming are sadly mistaken. The CC have already given the green light to some sort of licencing deal and that is where we will no doubt end up. It is annoying and indeed frustrating that we are so wrapped up in a ridiculous backyard fight of who owns what. The BBC have parked their programming tanks on our front lawn and all we can do is shout at the neighbours. Programming is where the real war is taking place and we should all focus on that.

Read more from John Myers on his blog at MyersMedia.co.uk. Reproduced with permission.