GCap Nabs Classic Gold Network In Almost £4 Million Cash Deal
GCap Media has bought the Classic Gold network, consisting of 18 AM Classic Gold radio stations, from UBC Media for just shy of £4 million in cash.
The radio giant, which already held a 20% stake in Classic Gold, plans to merge Classic Gold with Capital Gold to create a single classic hits network. The deal also includes a number of Classic Gold digital radio licences.
GCap Media already sells all the airtime on the Classic Gold stations and provides back office support including studio space, technology and inventory control.
The company predicts that bringing the two networks together will reduce operating costs, improving earnings before interest, tax and amortisation (EBITA) by £0.8 million this year.
Ralph Bernard, chief executive of GCap Media, said: “Classic Gold is an integral part of our advertising proposition. Acquiring these stations will enable us to create a single classic hits network with the potential to become a fast-growing national brand as audiences increasingly migrate to digital platforms.
“We therefore welcome Ofcom’s recent announcement that it is considering the conditions for a switch off date for AM, as this would greatly accelerate the uptake of DAB.”
Ofcom is proposing a review of the AM spectrum in 2009 and of FM in 2012 or when 50% of all listening is via digital, whichever is earlier (see Ofcom Outlines Its Future Vision For Radio).
The acquisition, which includes relevant DAB digital licences held by Classic Gold, is subject to Ofcom approval.
When GCap Media released less than impressive financial results late last year (see Capital Radio Continues To Impede GCap Media’s Growth), Bernard responded at MediaTel Group’s seminar on the future of radio, saying it was all part of a forward-thinking strategy which would be necessary for others to follow as ad revenue models adapt to the changing media landscape (see Bernard Defends GCap Results).