Sunday, 16 June 2013

Why Global are right to appeal

I'm not an expert in the advertising market, however it's clear that Global are right to appeal the decision by the Competition Commission based on these simplistic factors.

Ofcom's investigation into the merger between Global and GMG Radio took on board all the other media outlets, such as tv, print and online and approved it.  Global also offered to provide increased news for Real Radio in Wales and Central Scotland with journalists to cover the Welsh Assembly and Scottish Government.

The other is Bauer Media who were proactive in being against the merger to Ofcom and the CC.  In Northern England and Scotland where Real and Smooth compete with them, Bauer own heritage brands under their 'Place' banner where if Global rebrand Real as Heart would be a threat to their business.   This is nothing to do with Bauer losing advertising to a new rival in those markets, rather than Global have ready made brands which are tightly targeted to a particular audience.    This would be a greater threat to Bauer's broad heritage Place brands which target a wider female audience.

Take Yorkshire for example.  Global have been asked to sell Real or Capital.  Only Capital serves the whole of Yorkshire on FM, Real is a smaller regional licence covering the South and West.  Each part of Yorkshire has at least one commercial rival, such as UTV in Bradford, the Lincs FM Group stations, UKRD in York and Bauer in Leeds and Sheffield alongside local and regional press and websites.  To base the decision on just the radio advertising market is archaic.

A part of me thinks that Global should just 'take it on the chin' and franchise the brands in the conflicting areas as Global did with Heart and Gold in the Midlands after the merger with GCap, but there's also a golden opportunity to bring the Competition Commission into the 21st Century by getting them to take on board the other media providers in each area.

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