The investigation into Global Radio’s £70 million purchase of the radio assets of Guardian Media Group limped a little closer to a resolution last Thursday as the Competition Appeal Tribunal heard from both sides.
Global Radio is contesting whether the Competition Commission was right to rule that the merger would lead to a "substantial" lessening of competition as well as the process it took.
In May, the CC blocked the deal in seven out of nine regions across the UK. It ruled that, in the regions where Global Radio and Real and Smooth (as GMG Radio is now known) overlap, advertisers buying space in the £60 million market for non-contracted airtime and sponsorship would face higher prices.
The Office of Fair Trading referred the deal to the CC in October 2012 after the then culture secretary, Maria Miller, approved it on the grounds of plurality. Miller endorsed the merger despite lengthy petitions from Global Radio’s rival, Bauer Media.
The owner of Magic and Heat has been very vocal in its opposition throughout the process, despite having made a last-ditch effort to buy the assets itself.
Global Radio already manages the national advertising sales contract for GMG Radio stations. However, critics of the deal claim that actually owning the stations, and taking on the local and sponsorship and promotion sales, will give Global Radio an unfair advantage.
Unsurprisingly, Global Radio disputes this and insists radio advertising cannot be seen as a separate market from other media.
Parties expect the CAT to make a decision by the end of November, but that might not be the end of the matter. There could be appeals or the CC might have to assess the deal all over again, using updated criteria.
Meanwhile, Global Radio is said to have friendly investors lined up to buy the stations if it is ultimately unsuccessful (possibly for a nominal fee) – so it could all but own them anyway.
Whatever the outcome of this long, fraught process, the main winners will be the lawyers and financial advisors who have sucked millions out of the industry in fees.