Global-GMG Radio deal 'bad news for commercial radio', claims rival

Global Radio's purchase of Guardian Media Group's radio business has already run into opposition from rivals, with TalkSport owner UTV Media claiming it "spells bad news for commercial radio".

Global Radio: purchase of Guardian Media Group's radio business attracts criticism
Global Radio: purchase of Guardian Media Group's radio business attracts criticism

In response to confirmation that Global Radio has bought GMG Radio, the owner of the Real and Smooth Radio brands, a UTV Media spokeswoman said: "A combined Global and GMG Radio spells bad news for commercial radio."

In a statement Absolute Radio said it "opposes the proposed sale in its current form", citing the combined company’s market share of 56% in Manchester, 53% in Glasgow, 58% in Birmingham and 61% in Cardiff.

Global has said the GMG radio business will be run separately until the acquisition gains regulatory approval.

A spokesman for the Office of Fair Trading (OFT) said a public investigation has not yet begun but the first step would be an invitation to comment.

After parties have been invited to comment the OFT will have around 40 working days to decide whether the merger raises any competition concerns.

Ahead of the formal invitation to comment the UTV spokeswoman said UTV fails to see a "public interest" justification for the deal and a merger would enable an enlarged Global Radio to "lock out the competition at a national and local level".

She said: "Listeners and advertisers are currently well served by the leading operators. However this merger would leave the enlarged Global Radio controlling more than 50% of commercial radio revenues, and more than 50% of listening in key markets like London and Manchester."

Likening Global Radio’s position in radio to that of ITV in TV, an Absolute Radio spokeswoman noted that Contract Rights Renewal remains in place to prevent market dominance abuse in TV advertising trading.

She continued: "This deal would therefore enable Global Radio to distort fair and effective competition and provide no benefit to commercial radio’s listeners or advertisers."

The OFT has four possible options: it could decide the merger does not merit investigation; it could clear the deal; it could pass it on to the Competition Commission for further investigation or it could accept undertakings in lieu of a referral.

A spokesman for Bauer Media, owner of Magic and Kiss, said: "Bauer Media believes the merger of Global and GMG Radio will be fully investigated by the competition authorities as this combination will increase the dominant market position that Global already has in local and national markets and permanently lessen choice for radio advertisers."

Stuart Taylor, chief executive of GMG Radio, has already left the business and Global Radio has seconded its managing director for the regions Mark Lee to run GMG Radio as chief executive.

Businesses usually have to be run separately while a merger is being considered and UTV Media said it was "seeking urgent clarification" as to how that can be reconciled with Global Radio’s "transfer of executives" to run the GMG Radio business.

Global Radio has been through the regulatory procedure before following its merger of Chrysalis and GCap Media and was forced to sell eight Midlands-based stations to avoid a Competition Commission review.

Follow Maisie McCabe on Twitter @MaisieMcCabe

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