In June 2012 Global (owners of stations including Heart, Classic FM & Capital) purchased GMG (owners of Real Radio, Real XS & Smooth), however the Office of Fair Trading and the Competition Commission instructed Global to sell radio stations in certain areas of the UK to ensure a substantial lessening of competition.
Bringing us up to the present day, on 6th February 2014 – over 18 months on, Global has announced the sale of eight stations to Communicorp – for a reported £35 million. Although this deal has been approved by the Competition Commission, it is still subject to the approval of the Competition Authority in Ireland as a media merger. Hold separate will continue across the two companies until the deal has been cleared. There are no dates as of yet for the changes.
This agreement means Global will provide all national and regional sales via a franchise agreement – although the new owners will sell airtime to local non-agency clients. Real and Smooth Radio chief executive officer (CEO) Mark Lee will remain in charge to lead the business.
The eight stations sold are Smooth Radio North West, North East and East Midlands, Capital South Wales, Real Radio North Wales, Capital Scotland, Real Radio Yorkshire and Real XS Manchester. Combined these stations reach 2.8 million listeners (Source Q3 2012 RAJAR).
The reported upshot of these changes is that Real Radio will cease to exist and instead the Heart brand will occupy these former stations. Smooth will grow by absorbing Gold stations on the AM frequencies across England, with the exception of London, Manchester and East Midlands where Smooth already operates on FM. Capital will also experience some growth as Heart North Wales will become Capital and Real Radio XS in Glasgow will be turned in to Xfm, but there’s no news as to what Real Radio XS Manchester will become.
Communicorp will become the fourth largest commercial radio group in the UK. Established in 1989 and owned by Denis O’Brien, Communicorp is a major player in the Irish and European media and telecommunications market with stations in Ireland, Czech Republic, Bulgaria, Latvia and the Middle East.
Stephen Miron, Global’s group CEO said: “We are delighted to have agreed this deal with Communicorp so quickly. Most importantly the conclusion of this deal solidifies Global’s position as the number one commercial radio company in the UK, and enables our brands to continue to grow, extending their reach into all parts of the UK, making Global’s offering truly national.
“The future launch of Heart in five new regions, Smooth in many new regions and a new Capital in North Wales is particularly exciting and enables us to continue our strategy of ‘national brands delivered locally’. This is great news for listeners and advertisers.”
MEC Opinion
Global’s core brands are now in a stronger position than ever before. The commercial share of Heart will rise from 10.80 per cent to 14.5 per cent and Smooth’s commercial share will rise from 5.5 per cent to 7.4 per cent.
The rebrand from Real Radio to Heart is an unsurprising one given the national feel of the station but lack of presence in the North and this will make an attractive option for advertisers looking to target Nationally but with regional upweights.
Global already has solid experience in rebranding – for example when Galaxy and selected local stations such as Red Dragon in Wales rebranded to Capital in 2011. This was a successful rebrand (growing from 6.3 million listeners in June 2011 to presently 7.5 million listeners), receiving marketing support in the way of TV, Outdoor, launch events and promotions. We wonder if this support will be replicated in light of the new branding.
Global’s brands are quite defined in the audiences they reach – there are now clear choices when considering commercial radio stations for different types of audiences, helping to make radio more than ever, an efficient media choice.