MEDIA SPOTLIGHT ON: SCOTTISH RADIO HOLDINGS - SRH bolsters outdoor offering with its third poster purchase. But what is the attraction of the Birmingham-based Vision, Alasdair Reid asks

The S-word has been so central to media mergers and takeovers over the last decade that you almost take it for granted. S is, of course, for synergy. It’s supposedly part of the very fabric of deal-making and, if it’s not somewhere in the press release, you have to take it as understood.

The S-word has been so central to media mergers and takeovers over

the last decade that you almost take it for granted. S is, of course,

for synergy. It’s supposedly part of the very fabric of deal-making and,

if it’s not somewhere in the press release, you have to take it as

understood.



And on those rare occasions where you have difficulty in finding it, no

matter how hard you try, you can always look for an even bigger S-word:

strategy.



That’s why people were scratching their heads last week as they read the

press release about the purchase of Vision by Scottish Radio

Holdings.



This is a radio company with franchises in Scotland and Ireland

investing in a poster company based in Birmingham.



Synergy? Well, SRH already owns two other regional poster contractors

and, to a certain extent, all three will now be able to share systems

and other overheads.



But that ’certain extent’ is almost certainly tiny - and that alone

doesn’t explain the deal.



Synergy, then, as in sales cross-referrals? You could argue that this

sort of deal fits with the global picture - the theory is that the fates

of the two media will become increasingly intertwined. Some of the

emerging superpowers in outdoor - like Clear Channel, for instance - are

big players in radio.



And when SRH bought Trainer, a Scottish outdoor company, you could see

how cross-media selling might work - there were lots of radio

advertisers north of the border who could surely be chivvied into using

more outdoor.



But Vision can’t be shoehorned into that model, however hard you try.

SRH clients are Scotland-only regional clients. Vision’s clients aren’t

regional at all. They are national advertisers using a Midlands poster

contractor to complement outdoor campaign packages bought from an

ever-decreasing number of national, London-based contractors.



Richard Findlay, the chief executive of SRH, explains: ’This is a third

and very positive step forward in our planned expansion within the

outdoor sector. SRH now owns Trainer, Vision and Parkin, which together

represent a significant presence in the outdoor advertising sector.’



The notion is that any buy in the outdoor medium must be a good buy

because the sector has so much growth potential. And even if SRH’s

efforts look somewhat piecemeal - Parkin, acquired earlier this year, is

based in Bristol - SRH can argue that it now has a network and a

substantial presence in the medium.



But there are two problems with that. Firstly, growth in the outdoor

medium is by no means assured and the signals this year have been

ambiguous at best. Some formats - like the larger ones that dominate

SRH’s inventory - are actually down year on year. Last week, Maiden,

also a big format player, issued its second profits warning in two

months. Can SRH hope to push into the more attractive six-sheet sector?

Unlikely, given that it’s dominated by two extremely strong

international players: JC Decaux and Clear Channel.



The second question-mark is whether a player like SRH can have anything

but a transient presence in the medium. Media buyers are glad that

contractors like Vision and Parkin haven’t yet fallen into the hands of

the small group of superpowers that dominate the medium, not just in the

UK but internationally too.



But everyone agrees that further consolidation is almost inevitable.



Is that SRH’s real strategy? Are the Vision and Parkin deals no more

than good investments? Many in the market take that view.



Alistair Lines, the managing director of the outdoor specialist, IPM,

says it’s possible but he rather doubts it. He states: ’My guess is they

are not finished yet. I’d bet on them trying to get some London offering

together and have a group of regional companies covering the whole

country.



’Maybe they’ll even look at buying Maiden - if it’s up for sale. I get

the feeling they want to take on the big boys. I don’t get the

impression they’re short-term players.’