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GMG Radio acquisition faces public interest review

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Global Radio logo
Culture secretary Jeremy Hunt has asked media regulator Ofcom to investigate the controversial takeover of GMG Radio by the Global Radio group.

Hunt has issued an "intervention notice" requiring Ofcom to investigate issues of media plurality that may arise from the proposed merger.

Global, owner of the Capital, Heart and Classic FM stations, agreed a deal worth an estimated £70 million in June with Guardian Media Group for its radio business.

Critics have said that the deal for GMG Radio - which launched in 1999 and has a total share of 4.5% of all radio listening - will give Global a dominant share of the £450m UK radio market.

"On the basis of the information available to me, I have decided that under all the circumstances and, in particular the concentration of ownership which will occur in some parts of the UK, the merger may be relevant to the issue of plurality, particularly in those areas," said Hunt.

"Accordingly, I consider it appropriate to issue an intervention notice in this case, and I am therefore asking Ofcom to prepare a report advising me in greater detail about plurality."

Ofcom has today published an invitation for interested parties to comment in the public interest test. After that process completes, the regulator will submit its final report to Hunt by September 28.

Alongside Ofcom, the Office of Fair Trading will also advise the culture secretary on "the competition and jurisdictional aspects of the deal". Hunt will make a further announcement once both reports have been considered.

In a statement, Global Radio said that it has already submitted a report "articulating our views" on the proposed takeover to the authorities.

"Global note, with interest, that the secretary of state has asked Ofcom and the OFT for submissions on a public interest intervention following the recent acquisition of GMG Radio," said the firm.

"We have already submitted a detailed paper articulating our views and opinions on this subject to the relevant authorities."

In buying GMG Radio, Global is acquiring a large commercial radio network including the five regional stations in the Real Radio network and the national Smooth network.

However, rival commercial radio groups, including Absolute Radio, Talksport-owner UTV Media and Bauer Media, have expressed concern that the deal will give Global control over more than 50% of commercial radio revenues, along with more than 50% of key markets such as Manchester and London.

"The competition authorities should see this for what it is, an attempt to achieve an unassailable position of market dominance," said Talksport chief executive Scott Taunton after the deal was announced in June. "Simply put, the proposed merger must not go ahead."

Taunton added that the deal would effectively allow Global Radio to "lock out the competition at a national and local level".

A Bauer Media spokesman said that the GMG Radio deal would "permanently lessen" choice for radio advertisers, and increase Global's "dominant" position in local and national markets.

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