Global’s CC appeal judgement due on Friday

The findings of an appeal by Global Radio against the Competition Commission’s ruling on the takeover of GMG Radio are to be announced by the end of this week.

The Competition Appeal Tribunal held a hearing on 3rd October, and the judgement of the tribunal is being handed down at a public hearing at 1.50pm this Friday (15th November).

Global Radio appealed in June against The Competition Commission’s ruling that the group should have to sell stations in seven areas of the UK in order to take full control of the assets purchased from GMG Radio in June 2012.

At the hearing last month, Global highlighted an apparent error made by the Competition Commission when considering the Manchester and North West England market, where the radio group has been instructed to divest at least one station, or a combination of stations.

Global Radio owns Greater Manchester stations Xfm and Capital FM and has bought Manchester station Real XS plus regional stations Smooth Radio and Real Radio based in Manchester. It was claimed by Global that the Competition Commission did not carry out its assessment quite properly in relation to the situation in Manchester where Global offered Gold, Real XS and Xfm for sale. One of the issues focused on whether or not the regional stations compete for the local advertising.

Global told the tribunal: “You have not gone far enough in your analysis of these matters. You took into account listening share, we think that is right. You took into account revenue matters, we do not dispute that is right, but given that listener share of this collection was rather similar to the listener share of Capital, and you say divesting Capital is good enough, that means this group must be good enough, and revenue alone concerns are not sufficient”.

Global Radio argues that selling a regional radio station will not address the apparent problems with the radio advertising market in Manchester: “At a local and regional level, radio stations and advertisers told us that a station’s transmission area relative to the catchment area of the advertiser’s business was the most important factor when considering radio. We were told that advertisers want to minimise ‘wasted’ advertising: that is, advertising heard by listeners outside the area from which the advertiser’s customers are likely to travel. When considering radio, advertisers take into account the audience of radio stations in their target area with the aim of reaching as many potential customers as possible. Advertisers may or may not use the regional stations because they know that 50 per cent of the coverage is wasted.”

Global’s argument is that the North West and Manchester area is similar to the West Midlands and Birmingham area, where the Competition Commission said that advertisers who want to advertise in Birmingham only are likely to perceive Orion’s Free Radio Birmingham to be a better geographic alternative. The Competition Commission did not reach the same conclusion in the North West, instead saying “The loss of Real and Smooth as alternatives for those advertisers primarily focused on Greater Manchester will therefore also reduce competition.”

The CC’s official response was: “Sometimes they compete, sometimes they don’t.” It is this finding that Global Radio is challenging saying it is ‘not good enough to be the foundation stone of a requirement to divest not just the local station but one of the regional stations as well’.

You can read the transcripts of October’s hearing on the Competition Appeal Tribunal website.