Global the Real winner if radio station takeover deal approved

SCOTLAND’S most popular commercial radio station, Real Radio, has been sold by Guardian Media Group (GMG) to Global Radio, owner of Classic FM and Heart, as part of a £50 million deal that has raised concerns over competition.

The deal will unite Real and sister station Smooth with Global’s Capital and XFM.

A review by the Office of Fair Trading will take nine to 12 months, but rival group Absolute Radio has already said it is opposed to the takeover “in its current form”.

It claims the combined group’s market share of total commercial radio listening would be more than 50 per cent across the UK, while in Glasgow it would be 53 per cent.

A spokeswoman said: “This deal would therefore enable Global Radio to distort fair and effective competition and provide no benefit to commercial radio’s listeners or advertisers.”

UTV Media, which owns the TalkSport station, said it believed the takeover “spells bad news for commercial radio”.

Real Radio Scotland, which began life in 1994 as Scot FM, became part of GMG in 2001. It is available via FM in the Central Belt and across the country on digital radio, attracting 650,000 adult listeners each week, according to figures from industry body Rajar. Around 290,000 people tune in to Smooth, which is broadcast digitally and on FM in the west of Scotland.

Global, already the UK’s biggest commercial radio operator, whose other brands include LBC and XFM, was established in 2007. It took control of rival GCap the following year, but had to sell eight radio licences in the midlands to Orion Media to appease the Office of Fair Trading.

However, one industry source said regulators would probably approve its latest deal, adding: “There will be a lot of noise leading up to it, but these competition people are pretty sensible and know the difference between a sensible complaint and someone trying to damage someone else’s business. I’d be very surprised if there is an issue.”

Revenues at GMG Radio fell 6 per cent year-on-year to £47.1m and it reported a £4.1m pre-tax loss for the 12 months to the end of March 2011. The business was launched in 1999 and has a 4.5 per cent share of the radio listening market. GMG chief executive Andrew Miller said: “Our portfolio of investments that lie outside our core national newspaper business exist to underpin the long-term financial and editorial integrity of the Guardian.

“If we believe that best value for the group lies in the disposal of a non-core asset, then we will do so.”

Insiders said it was too early to say what impact the acquisition would have on jobs at Real and Smooth, which together employ about 60 people across Scotland.

Stuart Taylor, who had been chief executive of GMG Radio since 2009, has left the company with immediate effect. Mark Lee, currently Global’s managing director for the regions, has been seconded to GMG Radio to run the business.

Ashley Tabor, founder and executive president of Global, said: “We are pleased to have concluded this deal, and once the required approvals have been received, we will look forward to welcoming the GMG radio stations into the Global family.”