Continued Consolidation For Commercial Radio?

One of the big talking points at today’s MediaTel Group seminar on ‘The Future Of Radio’ was whether there will be a continued consolidation of the commercial sector, with one of the panelists saying that it remains to be seen if H Bauer’s recent acquisition of Emap’s radio division could have “put a spoke in the wheel” of consolidation.

Although keen to stress that it is uncertain exactly how H Bauer will handle its new UK business, Phil Riley, former chief executive of Chrysalis Radio, said that Global Radio buying Emap would have signaled a greater chance of genuine consolidation.

Earlier this year, investment vehicle Global Radio paid £170 million for Chrysalis Radio, in a deal which Chrysalis said would see it make a £95 million profit (see Media In The City: Chrysalis Sells Radio Division).

Global had been one of the favourites to land Emap’s radio arm before H Bauer last week agreed to buy both its magazine and radio divisions for £1.14 billion (see H Bauer Buys Emap’s Magazine And Radio Divisions).

Fellow panelist at today’s seminar, Howard Bareham, investment director of radio at MindShare, saw things slightly differently to Riley, saying that new entrants in the commercial sector are a good thing for the industry.

He added that from a trading perspective, it is not great to just have one major player dominating the industry.

However, the general feeling from the radio company panelists was that the commercial sector would be better off forging ahead with consolidation, a feeling perhaps exacerbated by the power of the BBC.

Panelist Ralph Bernard, chief executive of GCap Media, oversaw the merger of Capital Radio and GWR in 2005, which created a single broadcaster with combined airtime sales accounting for almost 40% of the UK’s commercial radio market at that time. He said: “We’re at a critical point and i think consolidation is a part of it.”

This point was echoed by Scott Taunton, managing director of UTV Radio, who said that one way in which consolidation can help is by reducing unneeded overlapping, for example with the Big City and One networks.

MediaTel Group: 0207 439 7575 www.mediatelgroup.co.uk