The radio industry has largely welcomed the news that the ailing
London radio station, Xfm, is to be bought by Capital Radio in a deal
which values the eight-month-old broadcaster at pounds 15.9 million.
The deal comes as a kiss of life to Xfm, which has seen a decline in
listener figures after its troubled launch last September during the
nation’s unofficial period of mourning for Diana, Princess of Wales.
A Radio Authority public interest test will determine the success of the
bid, but obstacles are not expected. Xfm’s sales will be handled by
Capital Advertising once the deal goes through - they were previously
handled by Katz Radio Sales.
However, industry watchers voiced concern this week that Capital had
found it too easy to pick up Xfm, which is effectively the licence it
failed to win just over a year ago. Another concern is that Xfm’s
identity will be diluted when it is absorbed into Capital.
However, others, such as Derek Morris, a founding partner of Unity which
handles media strategy for Capital, said the deal was sensible. ’It
looks as if the only way for marginal stations to survive is to take
them into big ones. This move safeguards the choice for listeners;
Capital has to get its money back, therefore there is no point in
turning Xfm into Capital Two, only to lose half of Capital FM’s audience
to its new station,’ he said.
Chris Parry, the chief executive of Xfm, who retains a 9.9 per cent
share in the station, said of the deal: ’There would be no benefit for
either Capital or Xfm to converge into a grey, merging identity.
Capital’s strengths aren’t core to the Xfm brand, but its resource will
work well for us. The promise of performance set for Xfm by the Radio
Authority is very rigid, and we’ll continue to perform faithfully to
Morris added: ’Capital isn’t buying Xfm to relaunch it - it is buying
Chris Parry’s vision.’
Paul Davies, the commercial director of Capital Radio, said: ’We want to
make the very best out of what Xfm has promised to be.’