UK broadcasting regulator, Ofcom, has been called on to ensure the merger of Capital and GWR does not lead to abuse of position.
Agencies and media owners have until Tuesday to respond to the watchdog over the proposed merger, which would give the combined entity a 40% share of the radio sector’s advertising market.
Among the representations received by Ofcom are demands for safeguards to be put in place so the new giant cannot abuse its dominance in radio.
Rival radio groups are believed to have urged Ofcom to ban a merged Capital-GWR from bidding for FM licences for the next five years, would rule the group out of dozens of potential bids due to come up in that time. There have also been calls for the regulator to recommend limiting growth of the new entity’s digital radio empire.
Media agencies are torn over the merger, with the potential to reach bigger audiences through one buying point countered by the fear of being strong armed.
Head of radio at MediaCom, Richard Jacobs, says: “We’d be mad if we didn’t raise serious concerns on a deal which is going to give them 40% of the market. The potential this will provide for advertising opportunities across the two groups is very positive.
“It should help stop the radio industry from being so disparate and fragmented, which is good and progressive. But, at the same time, the merger will give them an enormously strong position from a trading point of view.”
Ofcom and the Office of Fair Trading are expected to refer the merger to the Competition Commission, meaning a final decision might not be made until next spring.
Whether Emap waits that long before launching an expected raid for the remainder of Scottish Radio Holdings remains to be seen. The company, which already owns 27.8% of SRH, is reported to be poised to buy the chain of Scottish stations.