Global Radio offers Three Options by CC

Story from Radio Today.

The Competition Commission has offered three possible remedies for how Global Radio can overcome the provisional findings for taking over Real and Smooth Ltd.
They range from selling the entire Real and Smooth Ltd business to offloading individual stations to a collective or single buyers.

Provisional findings, issued this morning, say the takeover may be expected to result in a substantial lessening of competition (SLC) in seven areas – the East Midlands, Cardiff, North Wales, Greater Manchester, the North-East, South and West Yorkshire and Central Scotland.

The three options are full divestiture of the acquired business Real and Smooth Ltd to a suitable purchaser, divestiture of Real and Smooth Ltd excluding its operations in local areas where no SLC is expected to arise, and partial divestiture of certain local operations to address individual areas of overlap where an SLC is expected to arise.

The Competition Commission expects the merger to lead to a worsening of the competitive offering, in the form of higher prices, to advertisers purchasing non-contracted airtime and sponsorship and promotion at a local and regional level.

If option three is executed, it means Global Radio will need to dispose of at least one station each of the seven areas below:

Media Boy HQ we have added the following 

- RED for Global Radio and GREEN for Real and Smooth Ltd.

East Midlands:

• Capital FM, made up of three stations previously known as RAM, Trent and Leicester Sound.
• Smooth Radio.

Cardiff:

• Capital FM Cardiff/Newport.
• Real Radio Wales

North Wales:

• Heart North Wales/North West, made up of four stations previously known as Marcher, Buzz, Champion and Coast.
• Real Radio North Wales (an extension of the South Wales licence).

Greater Manchester:

• Xfm.
• Capital FM.
• Real XS.
• Smooth Radio.
• Real Radio.

North-East:

• Capital FM.
• Real Radio.
• Smooth Radio.

South and West Yorkshire:

• Capital FM Yorkshire (which also covers East Yorkshire).
• Real Radio.

Central Scotland:

• Capital FM.
• Real XS.
• Smooth Radio.
• Real Radio.

(The CC is not counting mediumwave station Gold in its reports)

The Competition points out that partial divestiture is likely to involve significant additional composition and purchaser risks.

In particular, the individual local radio stations operated by Global Radio and Real and Smooth Ltd may not operate entirely on a stand-alone basis, and may depend on the wider business to which they belong for important aspects of their operations, such as branding, programming or support services.

The resultant composition risk may in turn limit the pool of potential acquirers, thereby increasing purchaser risks.

The CC says it would consider any other practicable remedies that Global, or any interested third parties, may propose in order to address the expected SLC and any resulting adverse effects.

These should be submitted in writing, with any practical alternative remedies to be considered, by 5pm on 27th February 2013.