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| Global Radio's GMG buyout could harm competition, warns regulator | Global Radio's GMG buyout could harm competition, warns regulator |
| (about 2 hours later) | |
| Global Radio's £70m deal to buy Smooth Radio parent GMG Radio could lead to higher prices for advertisers in seven areas of the UK, the Competition Commission has ruled in a provisional decision. | Global Radio's £70m deal to buy Smooth Radio parent GMG Radio could lead to higher prices for advertisers in seven areas of the UK, the Competition Commission has ruled in a provisional decision. |
| The competition regulator is minded to rule that the merger of Global brands including Capital and Heart with GMG Radio's Real Radio and Smooth Radio could lessen competition in the local advertising market in areas including Manchester, Cardiff and central Scotland. | The competition regulator is minded to rule that the merger of Global brands including Capital and Heart with GMG Radio's Real Radio and Smooth Radio could lessen competition in the local advertising market in areas including Manchester, Cardiff and central Scotland. |
| Other areas where the CC expressed concern about the competition implications are the east Midlands, north Wales, the north-east and south and west Yorkshire. | Other areas where the CC expressed concern about the competition implications are the east Midlands, north Wales, the north-east and south and west Yorkshire. |
| However, the deal has been cleared in the key London market where Global Radio currently has six local stations – Capital, Heart, LBC, Choice, Gold and Xfm (as well as its national station Classic FM) and GMG Radio has Smooth. The CC also cleared the takeover in the West Midlands. | However, the deal has been cleared in the key London market where Global Radio currently has six local stations – Capital, Heart, LBC, Choice, Gold and Xfm (as well as its national station Classic FM) and GMG Radio has Smooth. The CC also cleared the takeover in the West Midlands. |
| The CC also found that advertisers booking airtime on a contracted basis through media agencies and national and sponsorship promotion would not be significantly affected. | The CC also found that advertisers booking airtime on a contracted basis through media agencies and national and sponsorship promotion would not be significantly affected. |
| "The CC has found that in many areas where Global and Real and Smooth stations currently overlap and compete, advertisers buying airtime on a campaign-by-campaign basis, directly or through smaller agencies (non-contracted advertising) could face higher costs for both advertising and sponsorship and promotion activity," the regulator said in a statement. | "The CC has found that in many areas where Global and Real and Smooth stations currently overlap and compete, advertisers buying airtime on a campaign-by-campaign basis, directly or through smaller agencies (non-contracted advertising) could face higher costs for both advertising and sponsorship and promotion activity," the regulator said in a statement. |
| The CC published possible remedies for the competition issues it identified in the seven areas. "These include Global selling the whole of the acquired business, the whole business apart from those stations in London and the West Midlands or selling individual stations in the affected areas." | The CC published possible remedies for the competition issues it identified in the seven areas. "These include Global selling the whole of the acquired business, the whole business apart from those stations in London and the West Midlands or selling individual stations in the affected areas." |
| Simon Polito, chairman of the Global/GMG Radio inquiry and CC deputy chairman, said: "The advertisers most likely to lose out from this deal are those who do not use national media agencies, and so includes smaller and medium-sized companies. These advertisers rely on the presence of competing commercial stations in order to negotiate a good deal. | Simon Polito, chairman of the Global/GMG Radio inquiry and CC deputy chairman, said: "The advertisers most likely to lose out from this deal are those who do not use national media agencies, and so includes smaller and medium-sized companies. These advertisers rely on the presence of competing commercial stations in order to negotiate a good deal. |
| "Whilst in many cases advertisers do have alternatives through other media, radio is often an integral part of a wider media campaign and there remain campaigns for which radio advertising is important. | "Whilst in many cases advertisers do have alternatives through other media, radio is often an integral part of a wider media campaign and there remain campaigns for which radio advertising is important. |
| "We will now look at ways in which we can preserve competition and look after the interests of advertisers in these areas." | "We will now look at ways in which we can preserve competition and look after the interests of advertisers in these areas." |
| The deal, which was announced last year, was cleared by culture secretary Maria Miller over news plurality concerns in October last year. It was then scrutinised by the Competition Commission on competition issues. | The deal, which was announced last year, was cleared by culture secretary Maria Miller over news plurality concerns in October last year. It was then scrutinised by the Competition Commission on competition issues. |
| Wednesday's finding by the Competition Commission will be subject to further scrutiny and discussion with interested parties until the commission's final finding – expected in the coming months. | Wednesday's finding by the Competition Commission will be subject to further scrutiny and discussion with interested parties until the commission's final finding – expected in the coming months. |
| The CC is opening a consultation on its provisional decision, which will run until 6 March, with a deadline for submissions on the possible remedies to be submitted by 27 February. | The CC is opening a consultation on its provisional decision, which will run until 6 March, with a deadline for submissions on the possible remedies to be submitted by 27 February. |
| GMG Radio has continued operating as a separate business while the CC conducted its inquiry. The deal was concluded last year and will not be unwound because of any competition issues. | GMG Radio has continued operating as a separate business while the CC conducted its inquiry. The deal was concluded last year and will not be unwound because of any competition issues. |
| Ashley Tabor's Global Radio is the UK's biggest commercial radio group, home to the Capital and Heart national network of stations as well as Classic FM and LBC. | Ashley Tabor's Global Radio is the UK's biggest commercial radio group, home to the Capital and Heart national network of stations as well as Classic FM and LBC. |
| Bauer Media, the UK's second largest commercial radio company, had opposed the Global/GMG deal and issued a statement saying: "Bauer Media UK recognises the importance and significance of today's provisional decision announced by the Competition Commission. We believe in a vibrant and competitive commercial radio sector which provides listeners and advertisers with a rich choice now and in the future. We remain completely committed to supporting the achievement of this goal for the benefit of listeners and advertisers alike and will continue to participate in the CC process." | |
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