The CMA has published its provisional findings on Bauer’s purchase of the stations it bought earlier this year, with the only issues to be resolved being local sales in Wolverhampton and the future for independent stations represented by First Radio Sales.
In Wolverhampton, the government agency says Bauer cannot keep two stations in the town – so must offer a solution such as selling either Signal 107’s Wolverhampton licence or Free Radio Black Country & Shropshire. The CMA says it’s concerned for local advertisers wishing to specifically target the Wolverhampton area, saying the other radio options that cover Wolverhampton also cover a far larger regional area.
It’s likely Bauer wouldn’t just dispose of the 107.7 licence for Wolverhampton, but include the Telford, Shrewsbury and Kidderminster licences in a sale of Signal 107 – as a potential buyer may not consider the Wolverhampton licence on its own to be viable.
A previous finding from the CMA that stations would have to be sold in Bristol and Yorkshire now isn’t the case. In Yorkshire, the CMA investigated a potential loss of competition between Bauer’s Hallam FM and Lincs’ Trax FM, Dearne FM and Rother FM – but has now found no issues with Bauer owning all the overlapping stations with regards to local advertising.
In the West, Bauer can own Sam FM, The Breeze and KISS because of the differences between the stations. The CMA says in its provisional findings: “We found that competition between Bauer’s Kiss West and the Celador stations is limited due to Kiss West’s larger broadcast area limiting it as a local option, differences in listener demographics, low levels of customer concern and other competitive constraints from radio and non-radio options.”
The biggest hurdle to clear, however, remains First Radio Sales. As part of its phase 2 investigation, the CMA says it’s still concerned about how Bauer’s purchases could affect the future viability of FRS, which currently represents more than 100 independent local radio stations. It now wants more detail from Bauer about the deal it would offer member stations to sell national advertising on their behalf.
The CMA said in a statement: “If FRS were to shut down, local radio stations would have to seek sales representation from Bauer or Global, leaving local radio stations with little choice when trying to sell national radio advertising airtime and potentially leading to them paying higher commission rates.”
Views are being sought on the provisional findings by 6th January 2020, with the statutory deadline for the CMA’s final report now put back to 17th March 2020. This means stations acquired by Bauer will remain in ‘hold separate’ for a few months more.
Bauer announced the acquisition of Lincs FM group and Celador Radio on 5th February this year, followed by the purchase of a collection of local stations from Wireless on 8th February. The sale of UKRD to Bauer was announced on 5th March.
The CMA started its investigation in June 2019, and Bauer’s proposals to run all the stations and First Radio Sales were rejected by the CMA in August, leading to further investigation.
Dee Ford CBE, Group Managing Director, Bauer Radio told RadioToday: “We note the CMA’s findings. We firmly believe that these transactions are pro-competitive and will benefit both the acquired stations and the broader local commercial radio industry as we look to invest in the radio industry’s digital future. Our focus now is on agreeing a route forward with the CMA that supports a strong and sustainable future for the local commercial radio sector.”