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Global Radio loses appeal against Competition Commission’s Real Smooth ruling

By | Published on Monday 18 November 2013

Smooth Radio

Broadcaster Global Radio failed on Friday in its bid to appeal a Competition Commission ruling on its acquisition of the Real and Smooth Radio networks.

As previously reported, Global bought the Real and Smooth stations off the Guardian Media Group last year, but various parties raised concerns about the dominance the transaction gave Global in the radio advertising domain in certain localities.

Responding to those concerns, back in May the Competition Commission told Global bosses that they would have to sell off more of the Real and Smooth outlets than they’d be allowed to keep (or offload existing Global-owned stations in the regions where the Commission shared market dominance concerns).

Although Global has been stretching media ownership rules ever since its launch in 2007, through its two big acquisitions (of the Chrysalis and Capital radio firms) and subsequent creation of quasi-national stations over its portfolio of local and regional AM and FM licences, bosses at the media firm argue that the rules being used to block their Real Smooth deal are outdated, and ignore wider competition in the modern advertising market.

Though in their appeal of the Commission’s ruling, Global’s case was mainly based around procedural issues, with the radio firm arguing that the competition regulator did not take reasonable steps to “acquaint itself” with information relevant to the Real Smooth deal, that it lacked evidence in some regions as to how local advertisers made buying decisions, and that it didn’t do sufficient research to prove the deal would result in a “substantial” lessening of competition.

But on Friday the Competition Appeal Tribunal said it did not accept Global’s arguments against the Commission’s original ruling. Responding, the radio firm said it was considering its options, while adding in a statement: “Obviously this is a disappointing outcome. We share the concerns of many within our industry, who believe the basis on which the Competition Commission formed their decision to be outdated”.

The ruling is a blow for Global, which has already integrated those bits of the Real and Smooth business it is allowed to keep with its other operations. Some reckon that Global will struggle to make back what it paid for the various Smooth and Real stations if and when they are sold, because as individual outlets they are less attractive than as a multi-region network.