Media: Behind the Hype - Industry divided by talkSPORT's £66m Rajar claim

Is MacKenzie engaged in a serious suit or just seeking more PR?

The trouble with being Kelvin MacKenzie is that whenever you do almost anything, people ascribe your motives to a desire to make a public splash. Given that MacKenzie, now the chairman and chief executive of The Wireless Group, was previously (and notoriously) the editor of The Sun, it seems a fair assumption.

So last week's news that MacKenzie has issued Rajar with a writ for damages of £66 million was greeted with many mutterings of "PR stunt" among people in the the radio industry and media agencies.

Rajar's managing director, Sally de la Bedoyere, dismissed it as "ludicrous", pointing out that details of the damages claim "are for the purposes of a sensational press release, and are not detailed in the proceedings".

MacKenzie has been threatening just such a move for a year and has conducted a three-year struggle to get Rajar to move across to an electronic system of audience measurement, rather than the current manual diary entry format which he believes has been consistently underestimating listener figures for his talkSPORT station.

After commissioning his own electronic research from GfK, he claimed a weekly reach (the numbers of listeners tuning in at some point during the week) for talkSPORT of 6.6 million listeners, rather than the 1.9 million that Rajar's current system gave it for the last quarter of 2003. He also alleges that Rajar didn't properly test the first version of electronic measurement before rejecting it.

"Does he have a point (about the accuracy of Rajar's figures)?" Howard Bareham, MindShare's head of radio, asks. "Yes, he does. It's a no-brainer - we'd all like a more accurate system. But has he gone about in the right way? Probably not. The radio industry works best when it works together."

MacKenzie's move is more divisive for the industry than it first appears. He is also threatening legal action against other commercial stations that he believes are hampering action on a new system of measurement because the current system favours them. And theoretically, if he wins, it might provide a legal precedent for media owners to receive damages if they could successfully question the accuracy of their audience/reader figures from Barb or ABC.

However, some question the huge disparity that exists between the Rajar and GfK listener figures for talkSPORT. "Kelvin is making a big deal about the larger reach figures that his research gives talkSPORT," one industry source says. "But radio advertisers trade in listening hours and he's strangely quiet about the listening hours from the GfK study."

And though MacKenzie has announced that he is looking forward to his day in court, some in the radio industry doubt that the case will ever get that far. If the case does come to court, he faces a tough, long and expensive battle, a media lawyer says.

"He would have to show the contractual relationship between TWG and Rajar, and then prove that Rajar had breached its contract by being negligent in performing the duties that TWG was paying it for," the source says.

"But, in order to demonstrate negligence, he would have to be able to demonstrate that his system is more accurate than what is in operation at present, and that Rajar had willfully failed to adopt it."

MacKenzie faces another battle in his fight for damages. The £66 million is the amount that he says the company has lost in advertising revenue for talkSPORT because its reach figures were underestimated. But the court is only likely to grant TWG lost profit, rather than net sales, and this is assuming that the judge agrees with MacKenzie that TWG would automatically have attracted far more advertisers if the "true" figures had been known.

"The outcome is far from clear," the lawyer adds. "But I think I'd rather be acting for Rajar."

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