Investors will be lucky to recoup half the £70m it cost to buy Global Radio with a forced sell-off in a limited buyers' market
Ashley Tabor, the founder and executive president of Global Radio, was memorably described by one rival commercial radio executive as a "guy who is used to getting his own way". Except, last week, he didn't, after the Competition Commission put the mockers on Global's proposed £70m acquisition of GMG Radio. Tabor had offered to sell three stations to appease its competition concerns, first outlined in February; the commission, in its ruling, said it must sell eight.
There were two shafts of light amid the gloom – the regulator cleared Global's purchases in London and the West Midlands – but the stark reality for Tabor and his fellow investors is that they will be lucky to recoup half the £70m it cost to buy GMG Radio with a forced sell-off in a limited buyers' market.
The decision brought to a juddering halt the consolidation of the radio market that Tabor has been driving through since his £545m dual purchase of GCap Media and Chrysalis Radio completed in 2008, bankrolled by his father, the multimillionaire racehorse owner, Michael Tabor.
With his rollout of his Heart and Capital brands across the country, Tabor was either local radio's grim reaper – dozens of heritage station names were axed, such as Red Dragon in Cardiff and Nottingham's Trent FM – or its saviour, breathing new life into broadcasters which were out of date and in the red.
With an average weekly reach of 19.3 million listeners and a 15.6% share of the audience, Global, which is also home to Classic FM and talk station LBC, is by some distance the biggest commercial radio group, ahead of second-placed Bauer Media, with 13.7 million listeners, and an 11.1% share.
But it is a measure of the dominance of the BBC that just one of its stations, Radio 2, has a bigger audience share (17.7%) than the entire Global group.
"They wanted to change how local radio worked and while the Competition Commission ruling has been seen by many as a big disaster for them, they have been incredibly successful at it up to now," says Matt Deegan, director of the radio and digital consultancy, Folder Media.
"Heart and Capital are strong brands with solid programming. They may not be the most challenging, and if you really like old school local radio it's unfortunate for you, but the vast majority of listeners are relatively happy with it."
Bauer Media is playing catch-up, however, with the recent purchase of Planet Rock, and the rival company is tipped to buy Absolute Radio from the Times of India Group. The acquisition, in the light of the Competition Commission ruling over GMG Radio, would really rankle with Global.
Unlike Bauer, Global has no digital-only stations, with Tabor not the most enthusiastic proponent of digital radio, or the long mooted switchover.
Global reported pre-tax losses of £27.7m in the year to end of March last year, the last set of results which are publicly available, but underlying profits grew 12.5% to £56.6m on the back of revenues up 5.2% to £209.4m.
The losses were attributable to a £59.6m coupon payment, effectively a dividend, to the controlling shareholders of its Jersey based parent company.
The broadcaster expanded into television last year, with the launch of the Capital and Heart TV channels, but its switch on to the small screen might have been rather more dramatic after it mulled the purchase of Channel 5 before it was bought by Richard Desmond.
Global's board includes chief executive and former Associated Newspapers man Stephen Miron, director of broadcasting Richard Park and its chairman, ex-ITV chief executive Charles Allen.
The company also has a talent arm which includes the boy band Wanted. There was an unfortunate falling out with One Direction, after the rival boy band thanked Radio 1 rather than Capital – the award's sponsor – when they won best single at the Brit awards last year. An appearance on Capital was cancelled and they were bumped far down the playlist, their music conspicuous only by its absence.
But there is no such payback for the Competition Commission, which is unlikely to trouble the top 40 any time soon.
"Global will have to sit back, lick their wounds and decide what is best for them, and what is the most cost-effective way for them to retrieve something from this debacle," says one industry source. It could involve a sale, perhaps of all the stations to the same buyer, and a franchise agreement which could maintain them as Capital, Heart or one of the GMG Radio brands. Tabor will be hoping Global is still moving in one direction. Reported by guardian.co.uk 7 hours ago.
Ashley Tabor, the founder and executive president of Global Radio, was memorably described by one rival commercial radio executive as a "guy who is used to getting his own way". Except, last week, he didn't, after the Competition Commission put the mockers on Global's proposed £70m acquisition of GMG Radio. Tabor had offered to sell three stations to appease its competition concerns, first outlined in February; the commission, in its ruling, said it must sell eight.
There were two shafts of light amid the gloom – the regulator cleared Global's purchases in London and the West Midlands – but the stark reality for Tabor and his fellow investors is that they will be lucky to recoup half the £70m it cost to buy GMG Radio with a forced sell-off in a limited buyers' market.
The decision brought to a juddering halt the consolidation of the radio market that Tabor has been driving through since his £545m dual purchase of GCap Media and Chrysalis Radio completed in 2008, bankrolled by his father, the multimillionaire racehorse owner, Michael Tabor.
With his rollout of his Heart and Capital brands across the country, Tabor was either local radio's grim reaper – dozens of heritage station names were axed, such as Red Dragon in Cardiff and Nottingham's Trent FM – or its saviour, breathing new life into broadcasters which were out of date and in the red.
With an average weekly reach of 19.3 million listeners and a 15.6% share of the audience, Global, which is also home to Classic FM and talk station LBC, is by some distance the biggest commercial radio group, ahead of second-placed Bauer Media, with 13.7 million listeners, and an 11.1% share.
But it is a measure of the dominance of the BBC that just one of its stations, Radio 2, has a bigger audience share (17.7%) than the entire Global group.
"They wanted to change how local radio worked and while the Competition Commission ruling has been seen by many as a big disaster for them, they have been incredibly successful at it up to now," says Matt Deegan, director of the radio and digital consultancy, Folder Media.
"Heart and Capital are strong brands with solid programming. They may not be the most challenging, and if you really like old school local radio it's unfortunate for you, but the vast majority of listeners are relatively happy with it."
Bauer Media is playing catch-up, however, with the recent purchase of Planet Rock, and the rival company is tipped to buy Absolute Radio from the Times of India Group. The acquisition, in the light of the Competition Commission ruling over GMG Radio, would really rankle with Global.
Unlike Bauer, Global has no digital-only stations, with Tabor not the most enthusiastic proponent of digital radio, or the long mooted switchover.
Global reported pre-tax losses of £27.7m in the year to end of March last year, the last set of results which are publicly available, but underlying profits grew 12.5% to £56.6m on the back of revenues up 5.2% to £209.4m.
The losses were attributable to a £59.6m coupon payment, effectively a dividend, to the controlling shareholders of its Jersey based parent company.
The broadcaster expanded into television last year, with the launch of the Capital and Heart TV channels, but its switch on to the small screen might have been rather more dramatic after it mulled the purchase of Channel 5 before it was bought by Richard Desmond.
Global's board includes chief executive and former Associated Newspapers man Stephen Miron, director of broadcasting Richard Park and its chairman, ex-ITV chief executive Charles Allen.
The company also has a talent arm which includes the boy band Wanted. There was an unfortunate falling out with One Direction, after the rival boy band thanked Radio 1 rather than Capital – the award's sponsor – when they won best single at the Brit awards last year. An appearance on Capital was cancelled and they were bumped far down the playlist, their music conspicuous only by its absence.
But there is no such payback for the Competition Commission, which is unlikely to trouble the top 40 any time soon.
"Global will have to sit back, lick their wounds and decide what is best for them, and what is the most cost-effective way for them to retrieve something from this debacle," says one industry source. It could involve a sale, perhaps of all the stations to the same buyer, and a franchise agreement which could maintain them as Capital, Heart or one of the GMG Radio brands. Tabor will be hoping Global is still moving in one direction. Reported by guardian.co.uk 7 hours ago.