Global Radio ordered to offload eight stations amidst competition concerns
Global Radio has been ordered to sell-off eight of its channels in seven areas by the Competition Commission after it judged that a £70m acquisition of GMG Radio last year breached competition rules.
That purchase meant Global owned both the Real and Smooth stations in nine areas giving it the clout to raise advertising rates across seven regions but the move is likely to hit Global hard with the expectation being that they will struggle to recoup even half of that outlay in the current depressed market.
The commission has been ordered to off-load either Capital or Real XS in the North West and a mandatory parting of stations in the East Midlands, Wales, North East, South East and South West is also being demanded with only London and the West Midlands being spared.
This is designed to ensure that each region of the UK hosts three major radio players to ensure adequate competition.
Commenting on the saga Bob Wootton, ISBA’s Director of Media and Advertising, said: “We are pleased that the Competition Commission has recognised the fundamental points at stake had Global Radio been allowed to increase its market dominance. Intervention was certainly necessary - advertisers want the media they fund to be healthy but also competitive, whilst consumers benefit from a plurality of media voices.
“The CC’s insistence on the sale of stations in seven regions won’t be popular with Global, but it will go a long way in reassuring advertisers who buy commercial spots, and pay for sponsorship and promotional airtime. Especially the smaller and more local ones that may perhaps not be able to look after themselves so well."
The big winner in the saga is Bauer which had been relegated to a distant second in the UK market after it lost out to Global in its own bid for GMG Radio.