Kelvin Mackenzie wants auction for national licences

Kelvin Mackenzie is calling for analogue national licences to be put up for auction.

The Department for Digital, Culture, Media & Sport has asked for responses by February 21st to a consultation, and there is a DCMS roundtable on Tuesday hosted by Radiocentre.

“Boris Johnson’s policy guru Dominic Cummings has never made a secret of wishing there was a centre Right radio or television station in the UK along the lines of the successful Rupert Murdoch owned Fox News. I share that view and always have.

The Left have got the BBC, C4 News and James O’Brien’s LBC show but where is a comfortable Conservative listen? Regrettably nowhere.

I have a solution. Just before Christmas the Department of Culture Media and Sport announced they were looking at the future licence renewals of the three national analogue radio stations.

The three are Global’s Classic FM with an audience of 5.46 million (3.3 million, of whom listen on analogue radio), News Corp’s talkSPORT 1053/1089 AM has 2.9 million listeners (nearly half its audience listen weekly on AM) and Absolute Radio (with an audience of 2.3million (36% tune in on its analogue platforms).

For reasons impossible to divine these hugely profitable stations only have to pay the treasury £10,000-a-year to reach almost every radio in the land.

To give you some idea how cheap this is the dreadful monopolists at Arqiva who dominate the analogue and digital transmission world demand north of a £1million a year for a slot on their oldest digital multiplex. Until recently I was forced to pay £35,000-a-year for an AM licence covering just London with its 11million population. And yet a licence covering the whole of the UK and its 55million audience is only £10K. Go figure.

So DCMS have asked the radio industry to say by February 22 what should be the future of these three stations. Ofcom has given three potential solutions.

1) Open the licences to auction
2) Give the current holders a 5-year rollover
3) Give the current holders an 8-year rollover

I do know about the radio business as I founded and sold talkSPORT a decade ago for £100million and have just started a national competitor called Love Sport.

In my submission to DCMS I have proposed that we throw open these stations to the highest bidder. My company and its investors would dig deep to land 1053/1089AM and extend Love Sport into the AM world. I would also bid for the bandwidth currently held by Classic FM to start a Fox UK equivalent.

The last time these stations came up renewal back in 2017 the media regulator Ofcom argued that the £10K fee should stay the same as there were no competitors out there and it would be too expensive to create and market a new national radio station.

That is clearly no longer true as my national station Love Sport is anxious to bid against my alma mater talkSPORT and Bauer’s new station Scala is more than capable of taking on Classic.

In my view market forces should dictate the value of the licence. Why not decide the minimum cost based on the percentage of analogue listeners.

The market rate for a national licence on DAB digital radio is over £1million a year.

Let’s place the same value on each listener on analogue.

talkSPORT has 1.52 million listeners on DAB, and 1.38 million listeners on analogue. They should be paying £905,000 for the right to broadcast to this large analogue audience

Classic FM has 3.324 million analogue listeners, whilst reach only 2.34 million on DAB, so why aren’t Classic (Global) paying £1.4million for this licence.

It’s not as though a fearsome bidding process is unknown to commercial radio executives.

There’s always big money battles over breakfast show presenters. LBC beat off talkRADIO’s interest in Nick Ferrari while Chris Evans turned down the blandishments of Smooth for the sunlit uplands of Virgin. Not to mention what talkSPORT had to pay for the radio rights of the Premier League in their battle with BBC Radio 5 Live or the eye-watering numbers all radio pays to secure national digital distribution where the Arqiva people charge like wounded rhinos.

None of the three station owners has any right to believe they would hold on to the licence under all circumstances. After all this is the third time there has been a DCMS review in the last 15 years.

Under my proposal there would be two clear winners:

1. The listener. Finally, they would be able turn off Corbynista FM and turn on for Boris FM.

2. The Treasury. The bidding process would mean much-needed funds to pay for more nurses and teachers. Who could possibly argue with that?

Global (47%) Bauer (45%) News Corporation (6%) own 98% of all radio in the UK so it’s hard to envisage them writing to DCMS saying they were in favour of a national free for all.

However since all three have made their fortunes over the decades by embracing and competing in the free markets, surely its time they were put to the test in the analogue world.”

Kelvin.

“PS. Audience figures show that 891,000 under 45-year-olds tuned into Classic FM every week, and 743,000 15-44 year olds listen to talkSPORT. Analogue is clearly not the preserve of the older generations, and remains a hugely valuable platform, even when it comes to attracting listeners born into the digital age.”

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36 Comments
  1. Mark Budgen says

    Are you ok hun?

  2. David says

    Highest bidder for licenses, it should be focused on remit and content. Yes services need financial backings and plans, but to say it should be allocated on who has the most money to bid isn’t the right way to go.

    Kelvin Mackenzie if you’re that annoyed then try buying stations rather than moaning at the current licensing system.

    1. mb23 says

      The “auction off to the highest bidder” is the current licensing system in place for the national analogue stations, in the event of no extensions being granted. It’s a legacy of the 1990 Broadcasting Act which is still in place today.

      I don’t think the Tories want to lose Classic from FM, it will annoy a lot of their voters.

      1. Dave says

        Who on earth is seriously going to bid for a AM national licence????.
        Absolute nearly handed there 1215khz licence back not so long ago. AM is just about dead.

    2. Radio Geordie says

      He can’t – Bauer’s just bought most of them.

  3. Adrian says

    One thing he says I do totally agree with-no station owners should believe they can retain licences under all circumstances,I think that is one of the reasons we have a race to the bottom in UK radio,the big companies don’t have any challenges to worry about so they can water down quality at will.Whatever else I think about Mr.Mackenzie and his proposals I do believe this.

  4. Inside Track says

    The existing national analogue licences were awarded to highest-bidder – although the first failed to raise its finances and the licence went to Classic FM instead. The second’s bid and finances were considered unrealistic so that licence went to Virgin instead.

    The left may have James O’Brien on LBC, but Kelvin appears to have conveniently forgotten the existence of other LBC presenters, such as Nigel Farage, Nick Ferrari, Iain Dale, Andrew Pierce and Tom Swarbrick, – all of who lean to the right..

    1. Radio Geordie says

      The original winner of the national FM licence was a consortium who planned a [then] Radio 2-style [Easy] service called Showtime.

      Not only that, but Virgin very nearly had to hand back their AM licence when TV-AM pulled out of the consortium and Talk Radio (as they were called at the time) had gone through a number of owners when he bought it on the cheap with Murdoch’s money.

      Its’ funny how he forgot that.

    2. Mark budgen says

      James No Brain is no lefty.

  5. Des Kehoe says

    LBC not a conservative station? Yes James is to the left but pretty much the rest of them are Tory. JRM had his own show. Andrew Pierce has Tory boy as his Twitter name. As for the BBC. The left say it’s to right wing. Kelvin is as usual off the ball

    1. mb23 says

      Shelagh Fogarty & Eddie Mair are not Tories, so that’s most of the daytime line-up from 10am-6pm.

  6. Joe Smith says

    No one should ever take any notice of anything Kelvin Mackenzie says. He is a man totally devoid of common decency.

    1. Dave says

      Who on earth is seriously going to bid for a AM national licence????.
      Absolute nearly handed there 1215khz licence back not so long ago. AM is just about dead.

  7. Jack says

    The BBC left wing? I work there and I’m not left wing. The BBC get lefties saying it’s right wing and right wingers saying it’s left wing… so it must be doing something right! Just another BBC badger who wants the media in this country to be owned by the rich not the people!

    1. Mr Boltar says

      The BBC isn’t left wing in the sense of Corbyn, its liberal left and while the people who do the day to day behind the scenes work are probably of all persuasions, its pretty obvious from its output that the people who decide on air content very much are liberals.

      1. Ben says

        Mr Boltar,

        Why do you think “its pretty obvious from its output that the people who decide on air content very much are liberals.”?

        Not having ago just interested in your point of view.

        1. Joe Smith says

          Because it’s very easy to say that what you believe is obvious to everyone else.

  8. david worth says

    There plent of room on am with all the bbc local am closures to build a new am network and 693 and 909khz when radio five live comes off am

    1. Radio Geordie says

      You could build a network primarily with 1458 & 1548 alone as these were largely used by the BBC.

  9. Mr Boltar says

    “My company and its investors would dig deep to land 1053/1089AM and extend Love Sport into the AM world”

    Wtf is he talking about? He already has an AM license for Love Sport in london on 558 and no one is listening. Still! And no one was listening when it was on 1458 before they did a frequency swap. If he can’t get an audience in London on AM he can forget about a national one.

    1. Radio Geordie says

      Love Sport was on 558 London-wide, before he swapped it for a North London one on 1584.

      Totally agree with the rest of what you said though!

  10. Sue says

    Quick bauer sell Kevin your absolute radio AM licence.

    1. Ian Scott says

      Fox radio? G-d forbid!

      News is supposed to be impartial.

  11. Ste says

    I didn’t know Kelvin Mckenzie was still alive

    1. Mike says

      Likewise. Now a very bitter, unfulfilled, misinformed has been by the sounds of it.

      1. Joe Smith says

        “Now” ?

  12. Mike Rose says

    Yes Kelvin, if you say so Kelvin, who historically created The Wireless Group and killed Classic Gold in West Yorkshire and Signal 2 in Stoke (the 1st time) by creating the highly innovative (NOT) Big AM! Look what happened there. Why don’t you just retire and live quietly somewhere?

  13. Simon Lewis says

    Yes we need something like Fox News to foster hatred against the minorities even more. The Mail and the Sun have done a good enough job without a Fox News Radio station to spout more racism and hatred.

  14. Lisa says

    Other than the nonsense he writes about the BBC and C4, he manages to mention one left-leaning presenter on LBC when for years, nearly all of their presenters have followed a Daily Mail agenda.

  15. Andrew Barker says

    Kelvin McKenzie’s view that Fox News is ‘right leaning’ and not the source of racist and lying diatribe says it all, really.

  16. Ian Scott says

    Does a national DAB slot really cost £1m a year?

    I’d have thought the multiple AM transmitter network for UK coverage would be knocking up a fair proportion of that.

  17. Simon T says

    Isn’t he confusing license costs with transmission costs? They are two different things. Arqiva charge for DAB carriage. Classic fm, talksport etc have to pay FM or AM carriage costs in addition to their license fee.

  18. Mike Simmonds says

    Give the AM channels to Radio Caroline, when finished with, they would make use of it. Small scale DAB is a good idea for small stations, not to mention the spare Switch Digital DAB channel for London at a sensible price.

  19. Smoggie says

    If this bloke thinks the BBC is left wing then he needs his head looking at.

    Also licences going to the highest bidder!? Worked well for ITV back in the 1990s didn’t it NOT.

    Some European countries are switching off AM and even FM so quite what this foaming at the mouth extreme right wing bigot wants a National AM licence to bore the pants off us all for with another version of TalkSport is beyond me especially when TS and Absolute are closing some of their AM transmitters.
    The future is digital Kelvin DIGITAL, NOT AM.

  20. Smoggie says

    Ps. So we have a lot of Left leaning broadcasters in the country eh? Hmm. So how come Kelvin do we constantly have Right wing governments?

    Mr McKenzie, you do talk some s***e
    Have you heard Julia Hately Spewer, Andrew Castle Ian Dale etc. In fact is that all the broadcasters you can name that are supposedly Left wing?

  21. Robin Dee says

    This is dinosaur stuff! National AM has had its day in the UK. I don’t know anybody who listens to AM radio anymore, and I only listen sometimes to pull in Radio Caroline on 648 kHz (which historically sounds best on AM). There is so much QRM and interfering splurge on AM now from PCs, broadband routers and LED lighting etc that FM and DAB are the clean options for serious listening.
    The Netherlands have the right idea with the AM band. All of their big national clear channels on AM have been handed over to low power “hobby broadcasters” enabling multiple stations to share frequencies and multiple affordable licence fees coming in, ensuring the future of the industry with new blood, new ideas, and providing an inspiring choice of listening from region to region.
    I would like to see a similar system instigated here, or at the very least something like the American Part 15 low power licence on both AM and FM.
    AM will always live on – the spectrum isn’t going anywhere, but it needs a total rethink.

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