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
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:
That’s why people were scratching their heads last week as they read the
press release about the purchase of Vision by Scottish Radio
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
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
’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.’