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  • Writer's pictureDavid Lloyd

How Long Must this Competition and Markets Madness Continue?

Any HR director and human behavioural expert will tell you that one of the worst things in life is uncertainty. It eats into you.

I feel real sympathy with all those individuals caught up with Bauer’s radio station acquisitions and awaiting the pronouncements from the Competitions and Markets Authority (CMA) which may or may not affect their careers. It’s been going on since February. Hitting Christmas and still not knowing how things will shape up for them and their families is not tremendously helpful.

It eats into business similarly - at a time in media history where change is at such a pace that battles are won and lost in six months and UK radio needs to be ahead of the game. And where there is time, there is cost – plus, in cases like this, there are significant legal costs too. And, as business suffers, so do its employees. In fact, you could suggest that the only winners are indeed the lawyers. They’ll have the best Christmas ever.

What’s the mischief here that the CMA is getting miserable over? Does it really boil down now to just one radio station in Wolverhampton which, whilst it will legitimately trumpet its achievements on the ground, has but a 4% reach? Before Signal/Wolf came on-air in 1997, advertisers seeking radio had only one 'localish' choice anyway (Beacon). And the purpose of licensing the incremental station was not to provide choice for advertisers - it was choice for listeners.

The CMA argument is that Heart etc are too big (West Mids), so that if the two Wolves station (Free/Signal) were both owned by Bauer, it could abuse that position and clients would be disadvantaged. But, knowing a few people from that neck of the woods, I suspect they’d just tell Bauer to piss off – and spend their money on Facebook, or Sky AdSmart, or OOH, or direct mail, or daytime telly… And the same is true of national buying of that market.

The CMA believes, however, that radio exists in a vacuum - a market of its own. “There was little direct evidence of a competitive constraint, sufficient to mean that non-radio advertising should be included in the same market”. I wonder if the person who wrote that that is driving a brown Allegro – as befits such 1980s thinking.

And - national sales representation. Stations once represented by one sales house are being offered another. And, again with due respect to the efforts of all at First Radio Sales, Bauer is bigger and likely gets through more doors. Would the non-Bauer stations be treated second-rate by Bauer? The Orion Media stations in the Midlands in which I was involved were once not owned by Bauer, yet Bauer as their appointed sales house did a thoroughly conscientious job as the scale benefited them too - and Global behaved similarly before. The CMA acknowledges that. History is littered with stations being represented by groups other than their own – sometimes groups in competition for audiences. And the bigger and more impressive the national sales house, the greater share of the advertising cake that radio as a medium can expect to command.

And – as a remaining independent station - the CMA suggests that, without the existence of FRS, you’d either have to talk to Global about national sales representation coupled with a brand deal – or Bauer. That looks to me like a very decent and healthy choice. And - anyway - “we (CMA) expect that FRS would have eventually exited the market absent the Acquisition”.

Let’s remember too, this is not a debate about local radio and whether stations should be able to network, that’s all an Ofcom job - in line with legislation. This is about sales concentration – whether there is would produce a: “substantial lessening of competition”.

Any human being who genuinely feels that clients or agencies will have nowhere else to turn for their media spend if these acquisitions go ahead has not spent much time with any local sales exec – or national sales rep. Nor have they listened to smaller stations with hugely loyal audiences which were frustrated at not always getting their fair share of the national ad pie.

After the deal was sealed, a day’s work by the competition authorities thinking through this whole issue sensibly should have sorted out any egregious matters arising - and by now everyone could have moved on. Poor old Dee at Bauer must be spitting blood as she chooses her measured response with due professional care.

This is a nonsense. Whatever the industry, if the UK is to lead in business around the World, it deserves and needs better.

Who was it who pointed out the irony of allowing a single body to monopolise this task?

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