Competition authorities to investigate local radio takeover
“2011/365/63 On The Air” by cogdogblog is licensed under CC BY 2.0
Bauer Media’s takeover of three radio businesses will be investigated by the Competition and Markets Authority (CMA) after it decided the deals could affect the ability of local radio stations to compete.
Bauer had bought dozens of local radio stations earlier this year when it took over Lincs FM Group, UKRD Group and The Wireless Group.
Lincs FM Group has eight stations – Compass, Dearne, Lincs, Ridings, Rother, Rutland, Trax and Suffolk First – with part of its footprint covering Lincoln, Skegness and Rutland.
The CMA is concerned the deals will lessen competition in Yorkshire, the West Midlands and West of England because Bauer has acquired key rivals to their existing local radio stations in those areas.
The acquisitions could also “affect the future viability” of advertising sales business First Radio Sales (FRS), the CMA believes.
FRS currently sells radio advertising on behalf of over 100 independent local radio stations across the UK, and is the only firm providing these stations with access to national advertisers.
Colin Raftery, the CMA’s senior director of mergers, said: “About 90% of adults listen to the radio every week, and local radio remains an important way for advertisers to reach potential customers.
“FRS is particularly important for independent local radio stations because it’s currently the only realistic way for them to reach national advertisers. That’s why we’re concerned that Bauer’s buy ups, which could lead to FRS exiting the market and local stations losing access to national advertisers, could damage competition.”
The CMA has completed its phase one investigation and found that FRS may not be able to continue to stay in business after Bauer’s takeover of a large number of the stations that currently make up its customer base.
Without FRS, independent local radio stations could lose access to revenues from national radio advertising sales, which the CMA believes could then make it more difficult for them to compete at the local level.
