MEDIA: Independent radio needs Evans the entrepreneur

’He’s like our Uncle Richard. He’s going to give us all his wisdom,’ burbled Chris Evans, the morning after he struck the deal with Richard Branson to buy Virgin Radio.

’He’s like our Uncle Richard. He’s going to give us all his

wisdom,’ burbled Chris Evans, the morning after he struck the deal with

Richard Branson to buy Virgin Radio.



Branson, training for his next Boy’s Own adventure, popped up to say

that he had opted to throw in his lot with the maverick candidate. But

what are the media realities behind this undeniably eye-catching

development?



Capital Radio, which fixed up an engagement with Virgin this summer, has

been struck a serious blow. Quite how serious will become apparent

during 1998. It gave up its national radio sales house to further this

merger, now it suddenly looks vulnerable, shorn of a strategy, which an

expansion into restaurants can hardly fix. Virgin, remember, actually

consists of two licences, a coveted London FM frequency and a less

attractive national AM frequency.



If Capital had pulled off the deal it would have been the first operator

to exploit the liberalised broadcasting rules, allowing a company to own

three of the 15 commercial licences in London: Capital FM, Capital Gold

and Virgin FM, and all with a national station attached. This would have

restored its audience share in London to around 25 per cent, back where

it was in the late 1980s. It would also have taken a major role in the

switch to digital audio broadcasting.



Instead, Capital, if Evans’ Ginger Media Group gets it right, will have

a very serious competitor on its hands. For example, in return for

investing in digital the holders of national radio licences get an

automatic valuable renewal.



Now, the Radio Authority, as regulator, had already waved through the

Capital/Virgin deal on the issue of plurality - three out of 15 licences

can hardly be said to constitute a danger. But the Monopolies and

Mergers Commission dragged out its competition inquiry, above all on the

issue of whether the merged group would unfairly dominate the London

radio advertising market, where the combined share would be well in

excess of 50 per cent. The MMC only handed its report to the Department

of Trade and Industry last week. It would be fascinating to know what it

recommended.



And finally, where does this leave both listeners, and the sector?

Virgin has been an undistinguished national franchise. Under the Capital

option it would have been better managed. Under this deal, the star

talent is locked into the station. Despite the propaganda being pumped

out by Radio 1, Evans has certainly raised Virgin’s breakfast audiences

and profile.



The discipline of having a stake in the business could do wonders for

his time-keeping. This is a sector with room for both Owen Oyston and

Mohamed al Fayed as licence holders. I’m rather pleased Evans is getting

the chance. If he has entrepreneurial skills to build a proper media

group, good luck to him. The sector needs him.



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