Bauer’s proposals for addressing CMA issues published

The Competition and Markets Authority has published documents from Bauer in response to its investigation into the group’s purchase of four smaller commercial radio groups and a share in FRS.

In August, the CMA announced there would be a full ‘Phase 2’ investigation into the acquisitions of Celador Radio, UKRD, Lincs FM Group and Wireless’ local stations. At the time it highlighted concerns over the future of national sales for stations represented by First Radio Sales (FRS) – half of which was purchased by Bauer – as well as local advertising in Bristol, the West Midlands and South Yorkshire.

In response in August, we learned that Bauer had indicated it would be prepared to ‘divest’ newly-acquired assets such as The Breeze South West, Sam FM Bristol, Signal 107 and Trax FM/Rother FM/Dearne FM in order to satisfy the CMA.

Documents submitted to the CMA as part of the Phase 2 investigation and published today (4th October) now show that Bauer continues to argue that there wouldn’t be a substantial lessening of competition (SLC) in those three geographic areas if the purchases were to be agreed by the CMA.

It argues that in Bristol, Bauer’s Kiss and the Celador stations are already facing ‘competitive constraint’ from Global and non-radio advertising. In South Yorkshire it says there are significant differences in coverage areas, audience sizes and demographics between Hallam FM and the Lincs FM Group stations and that Trax/Rother/Dearne are only an advertising competitor to Hallam when a client buys airtime across all three – which it says is a small percentage of advertisers. In the West Midlands, Bauer highlights the small audience share and reach of Signal 107, which it says generates ‘de minimis’ local advertising revenue in the areas of Shropshire and Wolverhampton covered by Free Radio. It also says that Global’s Heart, Smooth and Capital brands in the West Midlands present ‘much greater competitive constraints’ on Bauer than Signal 107 does.

In relation to First Radio Sales, in August we reported that the CMA had rejected Bauer’s proposal to represent local radio stations currently using FRS and had therefore taken the investigation to the full stage. It had said FRS stations would be given the same deal that they were previously on if they chose to be represented fully by Bauer, and also would be offered the chance to utilise Bauer’s brand names on air if they wanted to. The CMA however, said it believed there was “a risk that Bauer could discriminate in favour of its own stations in situations where both a Bauer and an FRS station are suitable for reaching a given target audience.”

In the documents published by the CMA today, Bauer says that it would be able to better represent the independent stations and smaller groups that are currently part of FRS by taking over the national sales contracts rather than continuing to run FRS as a separate entity.

FRS is now part-owned by Bauer (through new acquisitions – but operating independently) and Wireless.

Bauer says it understands that national advertising revenues generated by FRS have been declining, despite a growth in UK national advertising revenues relative to local radio ad spend. It also disputes the CMA’s suggestion that FRS offers a national advertising service to agencies, saying that it doesn’t have national coverage and that its main focus is on helping media buyers to ‘upweight’ certain regions as part of a national campaign booked through Global or Bauer.

Bauer says that FRS member stations have made representation about their concerns to the CMA without knowing what Bauer’s proposal is – and that there is a misconception that they will be forced to adopt one of the group’s brand identities, hence their opposition to the acquisition of the sales house.

In its submission to the CMA, Bauer says: “Bauer has no intention of requiring as a condition of representation either brand or content licensing although it would be open to discussing this with stations if they wanted this. Bauer’s previous national sales representation of Orion did not require this. As regards Nation, with the exception of brand and content licensing associated with a small number of stations which Bauer sold to Nation at the same time as the Celador and Lincs transactions, Nation’s arrangement with Bauer does not involve content or brand licensing. Concerns about brand and content licensing seem to have sprung from the arrangements between Global and Communicorp where Communicorp does operate stations under brand and content licensing arrangements with Global and Global in turn represents Communicorp’s national advertising.”

The current stage of the CMA’s investigation is likely to continue into the new year, with a deadline of 21st January 2020 set for a final ruling. The 50 stations in the former Celador, UKRD, Lincs and Wireless groups – although now technically owned by Bauer – are being run as separate companies under a ‘Hold Separate’ arrangement.

You can read the full documents on the CMA website.

RadioToday’s take
Bauer’s response to the CMA raises an interesting question for the 50 or so FRS member stations that wouldn’t be owned by Bauer if the purchase of the 4 groups is given the go-ahead: who do they want to represent them to national clients?

It seems to us that they would have a clear choice to pick either Global or Bauer/Wireless, both of whom might want to represent their stations to increase their proportion of the national revenue share. It’s in Bauer’s interests to give them a good deal – by offering the independent stations to clients together with the group’s own stations it would create efficiencies and improve the deal for Bauer too. That’s not in keeping with the CMA view that suggested Bauer would discriminate in favour of its own stations.

As we’ve seen recently with Quidem, Global appears to prefer to have clearly-defined brands to sell to national clients – so they’re likely to want stations to adopt those brands in return for sales representation. Bauer, however, already sells multiple brands – from Viking and Radio City, MFR and Wave 105 to Greatest Hits and Country Hits – to national clients all under the ‘Hits Radio Network’ banner.

Get real time updates directly on you device, subscribe now.



Join our WhatsApp messaging service

To receive WhatsApp messages from RadioToday with occasional news headlines and breaking news alerts, send a WhatsApp message starting with 'Yes' to 01612621004.

Then add the number to your phone contacts as 'RadioToday' for this service to work. This is a private list and your number won't be shared with other users or organisations.



Similar Stories
9 Comments
  1. Mark Budgen says

    Why don’t Global and Bauer merge and we can put an end to this ridiculousness?

    1. Martin Kong says

      The CMA would be against it.

  2. Adrian says

    except you’d then probably have loads more job losses and station closures!

  3. Rick Astley says

    No matter what the CMA say, “I’m never gonna give you up, never gonna let you down, never gonna run around and desert you!”

    1. Simon Parton says

      Was that a “Cry for help?”

  4. mb23 says

    If the CMA think that Kiss (Severn Estuary) and Breeze Bristol are competing for the same advertisers & audience they need to hire someone that knows something about radio.

  5. Greg Pipe says

    I don’t agree that Bauer would discriminate against the FRS stations and if anything could help increase spend with them. Global and Communicorp have an odd relationship as all their stations are essentially just Global brands ‘sold’ separately. I believe Bauer would genuinely try and operate them properly. Besides, it’s not like the same thing doesn’t happen in TV, Sky sell hundreds of stations, including Channel 5. Seems to work there.

  6. Simon Parton says

    I am sure that whatever happens to Signal 107 here in Telford, I doubt anyone would miss it. There is literally no awareness of the station at all in this area.

  7. Barry says

    Hi what about radio Norwich.i love radio Norwich.its local.i don’t mind if it changes its name.we will have to see what happens.

Leave A Nice Reply

Your email address will not be published.