This Town Ain’t Big Enough…

The rather precise time of 1350 today will be an interesting one for the radio industry. The Competition Commission Tribunal will hand down its ruling on whether Global Radio will be forced to sell a number of its radio stations.

This has all come about since Global bought RSL – the company that runs Real and Smooth Radio. In many markets, the Competition Commission deemed that Global would effectively control too much of the radio advertising revenue. And in the East Midlands, it could get particularly interesting.

One of the theories is that Global will use a convenient tool of franchising out one of its existing brands to another group. So for example, Smooth Radio could be under the management of a different company, but to all intents and purposes, the on air sound would be exactly the same.

It all sounds very cosy, but Global previously had its fingers burnt in the East Midlands. Its Heart station was operated by Orion – the group that runs the West Midlands Free Radio brand. The franchise agreement was about to run out, and Global wrongly thought the renewal was going to be a formality. Not so. Orion’s owners decided – somewhat controversially – to pull out of the Heart network altogether and relaunch as Gem 106, with the vast majority of output returning to its local roots. The result; Gem’s audience has so far stayed stable – disproving the idea that listeners had got so attached to one particular brand.

In any case, franchising the East Midlands Smooth station to Orion would probably be a non starter – since Orion would then own too much of the market.

Global’s other brand here is Capital – a flagship station in the network. Technically, Global could opt to sell these stations. But given the profile and importance of Capital to the younger end of the audience, this would seem unlikely.

There are various other options, including the possibility of a third operator entering the market. UTV Radio already has interests in Chesterfield, Stoke and Shropshire, skirting the north and west of the region. The question is whether they would enter into a joint partnership with Global. Or – and here’s a long shot – an international player could make an investment in the UK. In worldwide terms though, this would be loose change.

So we await 1350 with interest. One thing’s for certain – this is only the start of the latest evolution of the commercial radio industry.

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