Global Radio (owners of the Heart, Classic and Capital radio brands) now own what was GMG (Real Radio and Smooth radio brands), having had a rumoured £70m offer for the business cleared by the government in October 2012.
The GMG business was a strong fit for Global, as the GMG brands complement their stable in terms of both listener profile and geography. Global have a proven track record in investing in radio brands, having rebranded what was the Galaxy Network to Capital, and their regional FM licences to Heart (and grown listening as a result).
Inevitably, as the number one in the commercial radio marketplace now owns the number three, Bauer Media (number two and owners of brands such as Key 103, Magic and Kiss), have lodged strong objections with Ofcom and the Competitions Commission (CC) with regard to advertiser choice, regional competition and Global’s share of the market.
In February 2013, the regulator told Global it had provisionally concluded the Global/GMG deal could lead to advertising and competition issues in a number of regions across the UK (including Manchester, Cardiff, East Midlands, North Wales, the North East and South and West Yorkshire).
Global had proposed selling-off three radio stations in a bid to appease CC concerns. Real XS in Manchester and Scotland, and Gold East Midlands had been provisionally offered for sale if the CC concludes in its final report that a sale was necessary.
Where Are we Now?
The regulator announced on the May 21st that Global has to sell licences in areas where competition is an issue – Central Scotland, North East, Manchester and The North West, Yorkshire, East Midlands and Wales. It is likely that where possible, Global will opt to sell the Smooth licence in that area, to avoid having to dispose of a Capital licence or a Real (Global’s primary motivation behind this deal is to be able to extend the Heart network above the Midlands through the acquisition of Real). Central Scotland and Yorkshire will be of concern to Global as there is no Smooth licence to lose – in effect the media owner may have to consider either Capital or Real.
Undoubtedly, Global’s founder and executive president Ashley Tabor will not roll over in response to this decision – so a court date may be looming. In the meantime, both Global and Real/Smooth have issued statements to confirm both businesses will continue to be run independently until a final decision is made. From MEC’s perspective, it’s business as usual with regards trading with both sales houses.