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Global GMG Deal - Competition Commission


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Old 14-02-2013, 07:47
andys corner
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I hope real xs stays as a rock station- it has almost a cult following and caters to those ignored elsewhere

I can imagine smooth becoming an interesting proposition for someone wanting a classic hits station, or real for someone wanting a similar station to put their own spin on
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Old 14-02-2013, 09:33
bluesdiamond
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Okay really left field here
New Company buys Absolute and Smooth.
They also get Real XS in Manchester and Scotland and Absolute goes on FM in two new markets.

New Owner Dicky Branson explains he wanted to get back into Radio, and with digital the future,
has Virgin 1, the station for those a little old for BBC Radio 1. The Best New Music with hits from 1990 onwards.
Virgin 90's
Virgin 80's
Virgin Gold (Smooth 70's with some 60's)
and Virgin 2 to compete with BBC Radio 2.

Simples
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Old 14-02-2013, 11:03
Harris Tweed
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Not much wild speculation I can add to this splendid crop, but:

- Extending the Heart brand to as close as nationwide as possible is surely corporate target number one. Given which:

- Real Wales > Heart and sell off Wrexham/Cardiff etc seems a much safer bet than selling Real Wales (notwithstanding Wrexham's current higher audience and having to retune)

- They will sell Ashley's grandma to keep both regionals in Yorkshire (although I concede she may not be able to bring the price of local ads down ). If the CC digs its heels in, it's a fascinating coin toss between their killer national brand and a massive station they've invested much in relaunching. I think they'll mount a strong argument to say the Bauer heritage stations are stronger than the CC's given them credit for.

- The "Bauer or not" dilemma for the divestments is also fascinating. Some massively attractive licences up for grabs which Bauer are surely best placed to stump up the cash and make a profit from them. But I agree Global would be creating a powerful competitor in markets it wouldn't want one. Would an attractive deal with Bauer in other markets buy their silence on a Yorkshire stitch-up?

- UTV and Orion would surely want anything in Wales, NW or E.Mids (and probably anywhere else). But I guess they'll need to convince a bank manager first. And the same maybe true of people like Celador, who I know less well.
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Old 14-02-2013, 12:04
Harris Tweed
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PS.. Just thinking of North Wales and UTV. How much would Terry Underhill and Trevor James like to get their hands back on the former Marcher group? And in Terry's case, probably Smooth too.

Not that they have the company wallet, but..
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Old 14-02-2013, 12:29
hanssolo
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Celador tend to buy struggling stations at a low cost they can turnround, so the stations which may be for sale by Global which will be probably at the top market value may not suit them?
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Old 14-02-2013, 12:38
casaboy22
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Not much wild speculation I can add to this splendid crop, but:

- Extending the Heart brand to as close as nationwide as possible is surely corporate target number one. Given which:

- Real Wales > Heart and sell off Wrexham/Cardiff etc seems a much safer bet than selling Real Wales (notwithstanding Wrexham's current higher audience and having to retune)

- They will sell Ashley's grandma to keep both regionals in Yorkshire (although I concede she may not be able to bring the price of local ads down ). If the CC digs its heels in, it's a fascinating coin toss between their killer national brand and a massive station they've invested much in relaunching. I think they'll mount a strong argument to say the Bauer heritage stations are stronger than the CC's given them credit for.

- The "Bauer or not" dilemma for the divestments is also fascinating. Some massively attractive licences up for grabs which Bauer are surely best placed to stump up the cash and make a profit from them. But I agree Global would be creating a powerful competitor in markets it wouldn't want one. Would an attractive deal with Bauer in other markets buy their silence on a Yorkshire stitch-up?

- UTV and Orion would surely want anything in Wales, NW or E.Mids (and probably anywhere else). But I guess they'll need to convince a bank manager first. And the same maybe true of people like Celador, who I know less well.
Agreed. Bauer might be the only one with enough dosh, and that's the over-riding factor. UTV don't really have the scale for large scale regional acquisitions and Orion have their own challenges.

We kind of know the likeliest stations to go and where, but it's an absolute crapshoot to predict who will buy them and where. Bauer are the most obvious suitor in terms of formats, scale and talent but Global will definitely not want to give them anything more they have to. We are in for a very interesting few months.

One other thing - presumably if the Smooth stations are broken up in some form and ultimately not on D1 nationally on DAB then they'll all have to reintroduce local programming?
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Old 14-02-2013, 14:34
Bingethink
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Celador tend to buy struggling stations at a low cost they can turnround, so the stations which may be for sale by Global which will be probably at the top market value may not suit them?
Surely not at top market value if the regulator is insisting you sell them. The seller has to do a deal - may be forced to sell cheap.
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Old 14-02-2013, 14:39
darkknight77
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They won't be the only bidder. The Smooth stations are very attractive assets, all except London are profitable. There will be Celador, UTV and possible new entrants to the radio market.

I think Bauer's bid would need to be considerably more than other bidders for Global to sell to them.
Could Celador and UTV (who mainly own very small failed Sallies that they bought for £1 and took on debt) really afford say £10million for a large regional station/s?

I think Bauer maybe the only feasible buyer.
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Old 14-02-2013, 17:00
Harris Tweed
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Could Celador and UTV (who mainly own very small failed Sallies that they bought for £1 and took on debt) really afford say £10million for a large regional station/s?

I think Bauer maybe the only feasible buyer.
Yes... unless you find someone to bankroll it.

Orion had no money when they bought their stations from GCap... it's all bank lending.

I'm not pretending it'll be easy to prize cash off the bank manager, but if the assets are reasonably priced and need to be sold - preferably not to Bauer - then he might see some value in backing the deal.
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Old 14-02-2013, 17:07
Harris Tweed
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On UTV's scale... I accept it would be an odd fit, but things like Signal and Pulse are reasonably-sized heritage stations which could join a network (of Signals???)

Orion likewise... Free is a brand ready-made for rolling out.

Celador probably trail a bit on the scale thing, but for any of them it's "who dares wins" if they're serious about being a player. (Who dares wins and an anorak bank manager, obvs)
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Old 14-02-2013, 17:28
hanssolo
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Could Celador and UTV (who mainly own very small failed Sallies that they bought for £1 and took on debt) really afford say £10million for a large regional station/s?

I think Bauer maybe the only feasible buyer.
UTV and Celador have made money via TV, it's if they want to risk it in radio?
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Old 14-02-2013, 17:33
hanssolo
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Orion likewise... Free is a brand ready-made for rolling out.
If they keep Global for advertising Global will probably sell for less like the midlands stations.
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Old 14-02-2013, 18:28
russellelly
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If they keep Global for advertising Global will probably sell for less like the midlands stations.
Erm, isn't the sale to promote competition in advertising? Can't see that flying.
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Old 14-02-2013, 18:34
Martin Phillp
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On UTV's scale... I accept it would be an odd fit, but things like Signal and Pulse are reasonably-sized heritage stations which could join a network (of Signals???)
UTV also own the heritage stations The Wave and Swansea Sound, which would give them both major South Wales heritage stations if they acquire Capital SW and Gold SW.
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Old 14-02-2013, 18:38
jack846
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When will Global be allowed to sell or change any of the stations (i.e. when does the hold separate situation end)?
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Old 14-02-2013, 18:43
omnidirectional
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When will Global be allowed to sell or change any of the stations (i.e. when does the hold separate situation end)?
Not until a final decision is made by the Competition Commission, which is now likely to be later than expected, in April or May.
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Old 14-02-2013, 18:49
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Old 14-02-2013, 18:51
-ajm-
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UTV also own the heritage stations The Wave and Swansea Sound, which would give them both major South Wales heritage stations if they acquire Capital SW and Gold SW.
Wouldn't the fact that they're different TSAs make a difference? I genuinely don't know.
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Old 14-02-2013, 18:53
Martin_S
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Far from blocking it Ofcom actually said there were no media plurality issues with the deal.
Exactly. And there's the problem
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Old 14-02-2013, 19:02
BMR
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- They will sell Ashley's grandma to keep both regionals in Yorkshire (although I concede she may not be able to bring the price of local ads down ).
They will, but it's hard to see how they will be allowed to. If it was OFCOM, they could make considerable public service commitments- local programming etc. But the CC aren't interested in things like that. They could offer to sell more stations elsewhere- eg sell 2 or even 3 stations in Manchester instead of 1 or to sell stations in London or Birmingham but that won't help the Yorkshire market.

Actually it's pretty poor that a conurbation the size of Leeds only has 3 commercial radio stations on FM, but that's another matter.
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Old 14-02-2013, 19:06
Black Label
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Surely not at top market value if the regulator is insisting you sell them. The seller has to do a deal - may be forced to sell cheap.
Exactly. This for Global may be the problem.

Firstly it hasn't been a sellers' market for quite some time anyway,secondly Global are being forced to sell which is by definition a price lowerer and thirdly there are- thanks in part to Global themselves.......less buyers available! No John Myers to the rescue with wads of cash anymore!

(I am assuming that Global actually own the former GMG stations (i.e money has changed hands) and the sale itself isn't pending the CC decision (i.e. Global can't just pull out and leave the GMG stations back with the Scott Trust)

In Scotland there is no possibility of any local group buying what is currently Real XS 96.3 as the station carries an obligation to be on DAB, something which has hobbled the licence ever since previous owners IRG signed up for it in 1999 to avoid what I can tell you was shaping up to be a big fight for it in readvertisal. It was felt that many of the failed bidders for the second Central Scotland licence would have gone for it as a consolation so the timing for what was then QFM was bad.

There is the possibility of Global offlloading Smooth 105.2 to Bauer who could do Clyde 2 105.2, or to some other consortium who would try to do a stand-alone. Whether in these times with so much water under the radio bridge there would be many takers for such a project I cannot say.

Perhaps, however, Global may prefer to let Capital Scotland go.....to Bauer.....who can turn it into Kiss. This licence has always been a problem as the audience profile it draws up here is commercially unattractive, so (having now had experience of it) selling it to Bauer might not overly trouble them. It might be better 'fit' though for Bauer who can run Kiss Scotland cheaply and sell as a compliment/add-on to Clyde 1 and Forth 1, without troubling Global to much.

Just as a thought, I understand the CC's concern about severely reducing competition for ads but surely too much competition is what the whole problem has been for radio.
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Old 14-02-2013, 19:06
MrUK
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So Global gets to cherry pick its assets from the current Global and Real & Smooth Ltd station portfolios.
Prediction time.

My predictions would be that Global disposes of three Capital FMs, Heart North Wales/West, the two Real XS stations it has bought and one of the Smooths.

Why?

On a region by region basis, Iíve looked at the minimum that Global needs to dispose of and who would be interested in what is on offer. Iíve used a list bit of pure speculation and considered the (potentially flawed) theory that Globalís core brands come in this order: Capital, Heart/Real, Gold/Smooth, Real XS; so in each area itís the station Ďlowestí in that list that is perhaps most at threat of having a new owner. Iíve also only considered Bauer, Orion and UTV as potential owners which of course is also flawed. Only these groups themselves know the ins and outs of their expansion strategy. Media Ďexpertsí have repeatedly said, however, that Bauer needs to be bigger in order to compete with the enlarged Global. This is one way of doing it. If Global are willing to sell to themÖ

East Midlands
Global Radio owns Capital FM, made up of three stations previously known as RAM, Trent and Leicester Sound. RSL operates Smooth Radio.
Orion to buy the Capital FM licences and rebrand as Free Radio
Global retains Smooth and rebrands as Gold
(The most logical thought would be that Capital stays and Smooth goes, but Iíve gone out on a limb here because I canít work out who would want Smooth East Midlands. Iíve gone for this because a Gold East Mids would have no local programming requirements; it can all come from London. Whereas if Capital stays in the East Midlands, so does the local breakfast and drive programming, news commitments etc. )

Cardiff
Global Radio owns Capital FM Cardiff/Newport. RSL operates regional station Real Radio Wales based in Cardiff.
Bauer to buy Capital FM South Wales and rebrand as Red Dragon
Global retains Real Radio and rebrands as Heart

North Wales
Global Radio owns Heart North Wales/North West, made up of four stations previously known as Marcher, Buzz, Champion and Coast. RSL operates Real Radio North Wales (an extension of the South Wales licence).
UTV to buy the Heart North Wales/NW stations and rebrand as Signal
Global retains Real Radio and rebrands as Heart

Greater Manchester
Global Radio owns Greater Manchester stations Xfm and Capital FM. RSL owns station Real XS plus regional stations Smooth Radio and Real Radio base in Manchester.
Bauer to buy Real XS and rebrands as Planet Rock
Global retains XFM, Capital FM and Real Radio; rebranding the latter as Heart

North-East
Global Radio owns Capital FM. RSL operates Real Radio and Smooth Radio.
Bauer to buy Smooth and rebrand as Magic; switching off their Magic AM licences (?)
Global retains Capital FM, Real Radio and Smooth Radio; rebranding the latter two to Heart and Gold respectively.

South and West Yorkshire
Global Radio owns Capital FM Yorkshire (which also covers East Yorkshire). RSL operates Real Radio.
Bauer to buy Capital FM and rebrand as Kiss
Global retains Real Radio and rebrands as Heart

Central Scotland
Global Radio owns regional station Capital FM. RSL operates Paisley station Real XS, Glasgow station Smooth Radio and regional station Real Radio
Bauer to buy Real Radio XS and rebrand as Planet Rock. (BUT WOULD THIS BE ENOUGH?)
Global retains Capital FM, Real Radio and Smooth Radio; rebranding the latter two to Heart and Gold respectively.
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Old 14-02-2013, 19:27
MSB
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I don't think selling XS or Smooth would be enough.

If the issue is the Central Belt rather than just Glasgow, then it's a straightforward choice between selling Capital or Real.

Global may argue that Clyde/Forth 1 & 2 are competition enough, given Clyde 2's higher than average Rajars.
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Old 14-02-2013, 19:27
Martin_S
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All these ownership and rebranding predictions... what a complete utter mess UK commercial radio is in. All the progress of the 70's, 80's and 90's completely being undone. Radio going backwards with less choice not more. ZERO frequency planning, no local radio and the BBC taking up half the band. You couldn't make it up...
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Old 14-02-2013, 19:38
Black Label
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Global may argue that Clyde/Forth 1 & 2 are competition enough, given Clyde 2's higher than average Rajars.
They will probably argue that but it doesn't really fly.

The fact that Clyde and Forth are currently enjoying good RAJAR is nothing more than a matter of present day happenstance.
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