Radio broadcaster, Capital FM, has agreed to sell Century FM so that the Competition Commission does not investigate its merger with GWR Radio.
In a statement posted this morning on the stock exchange, the Office of Fair Trading (OFT) said that the merger of Capital and GWR could lead to a ‘substantial lessening of competition for radio advertising airtime in the East Midlands.
The OFT was worried that the merger between Capital and GWR, may result in reduced customer choice in the East Midlands, with local and national advertisers voicing concerns.
The prospects for sufficient countervailing competition from other media, such as local newspapers, or new FM or digital radio entry are not significantly strong enough to remove the belief that there may be a substantial lessening of competition as a result of the merger.
The consolidation of Capital and GWR, reported to take place in May, will make a single broadcaster controlling more than 40% of the radio advertising market (see Capital And GWR Agree £711 Million Merger Terms).
Last month Capital issued a trading update, revealing a drop in the group’s overall revenue by 4% in the quarter from October to December 2004 (see Capital Radio Revenues Down After Slow End Of 2004).
At the same time, GWR reported a decline in its like for like revenue, falling by 3% year on year, for the same period (see Weak Radio Advertising Affects GWR).
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