Shropshire Star

Final decision published in radio merger inquiry

Bauer Media will not have to sell any of the radio stations it bought last year, including the Wolverhampton-based Signal 107 station, following a Competition and Markets Authority investigation.

Published
Signal 107 breakfast show presenter Dicky Dodd

A merger inquiry had found that advertisers could face higher prices for radio ads in Wolverhampton following a series of takeovers.

The CMA will now ensure local radio stations have access to advertising representation following the in-depth investigation into Bauer’s purchase of almost 50 stations.

Bauer bought some of the radio businesses of Celador Entertainment, Lincs FM Group and Wireless Group , along with the entire business of UKRD Group. These purchases included half of First Radio Sales , a firm that currently provides more than 100 independent local radio stations with access to national advertisers. Income from those advertisers is an important source of revenue for most independent local radio stations.

As part of theh phase two investigation of the transactions led by an independent group of panel members, the CMA has found competition concerns in relation to the future viability of FRS, which is now jointly owned by Bauer. Bauer’s purchase of the four radio businesses will take away over half of FRS’ business, leaving it unviable.

If FRS were to shut down, independent local radio stations would have only two options for sales representation: Bauer or Global, which is the largest commercial radio group in the UK. This would leave stations with insufficient choice when trying to sell national radio advertising airtime and potentially lead to them paying higher commission rates.

The CMA was also previously concerned that Bauer’s purchase of Wireless’s Signal 107 would reduce competition for local advertisers wishing to promote their products in the Wolverhampton area.

Following the further investigation, the CMA does not have concerns about this.

Due to the very unusual circumstances of this case, the CMA is not requiring Bauer to sell off the radio stations it has bought. In order to maintain FRS’ customer base, Bauer would have to sell all the acquired radio stations, and the CMA was concerned that another buyer would not have sufficient incentive to maintain FRS as an active competitor to represent independent stations.

Instead, Bauer will be required to provide advertising representation to independent radio stations on the same terms the stations were receiving from FRS, for 10 years.

Stuart McIntosh, CMA panel chairman, said: “It’s really important that independent radio stations have good access to representation for national radio ad sales as it is an important source of income for those stations. Without the CMA’s remedy, it’s likely that these stations would have to pay over the odds for national advertising representation.”

Bauer already owned Free Radio Wolverhampton, the Black Country and Shropshire – formerly Beacon – when it bought Signal 107, which was created in 2012 from former stations The Wolf, Telford FM, The Severn and The Wyre.

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