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No plurality issues in Global’s GMG takeover, so deal now proceeds to Competition Commission

By | Published on Friday 12 October 2012

Global Radio

The Department Of Culture, Media & Sport has said that Global Radio’s takeover of GMG Radio will not be fully investigated on the grounds of plurality.

Back in August, former Culture Minister, the clueless Jeremy Hunt, asked media regulator OfCom to consider whether the deal, which will see the UK’s biggest radio group get bigger by buying the former Guardian-owned Real and Smooth Radio networks, posed any obvious ‘plurality issues’, ie would sufficiently reduce the amount of independent local news provision to cause concern.

Yesterday Hunt’s successor, Maria Miller, announced that the regulator had decreed that plurality should not be a concern in the wider competition investigations into the proposed deal, partly because of commitments made by Global regarding local news provision in Wales, where the firm already has an FM presence via its Capital network (in the South) and Heart network (in the North), in addition to the Real Radio Wales operation it stands to acquire.

A spokesman for Global told Radio Today: “We welcome the Secretary Of State’s decision today. The enhanced news service that Global intends to provide in Wales post the merger of Global and Real & Smooth Ltd, in the event of full merger clearance in Wales by the Competition Commission, is of enormous value to the people of Wales, deepening and strengthening plurality in the nation, and we are pleased that the Secretary Of State, along with the Welsh Assembly, has recognised its enormous value”.

All of which means that the ongoing competition investigation into the Global/GMG deal will now consider simply competition issues, and not worry itself about plurality. It was pretty obvious from the off that the merger would need to go to the Competition Commission, if only because of the potential impact on the radio advertising market in areas where a combined Global/GMG will be particularly dominant. And, as previously reported, Global previously asked the Office Of Fair Trading – which initially considers the implications of any deal of this kind – to fast-track its case to the Commission so to get resolution as fast as possible.

Adhering to that fast-track request, and with OfCom having ruled on plurality, the OFT has now passed the whole shebang to the Commission, who have set a deadline of 27 Mar by which to reach a conclusion. Most of Global’s competitors are likely to argue that the deal should be blocked. The Guardian Media Group has already offloaded the radio business though – it’s now operating as Real & Smooth Ltd under the leadership of a Global exec on secondment – meaning that if the deal were blocked, it would be Global Radio’s problem to resell the Real and Smooth networks.

No one actually expects the merger to be blocked outright, though Global may be forced to offload some FM licences in regions where it will have dominance post any merger. .

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