Insiders in both the broadcasting and advertising industries are expecting more mergers in the radio sector in 2005 after the proposed Capital / GWR merger got the go ahead yesterday. Capital and GWR's proposals were being investigated by the Office Of Fair Trading - they ruled this week that the merger did not need to go to the competition commission for approval, essentially giving the two radio groups the green light to merge their operations.
The advertising industry, in particular, welcomed the decision - while a bigger radio group could in theory use their new power to force up advertising rates, the media buyers hope a combined Capital / GWR will be better able to compete with the BBC whose large radio audience is currently out of advertiser's reach.
George Howard of media agency OMD told the BBC: "We're pleased [with the merger] as long as it's used to grow audiences to compete with the BBC, which has been the issue for some time. We're confident any new company would not abuse its position."
Those in the know now expect EMAP to attempt a buy out of Scottish Radio Holdings, who own most of the flagship stations North of the border. EMAP already have a stake in SRH. According to the original share purchase back in Jan, if EMAP wants to buy itself control of SRH they would have to buy shares at last Jan's price - 15p per share more than the current SRH share price. However that proviso runs out next month and many expect EMAP to then attempt a takeover.
It remains to be seen which other radio groups will take advantage of last year's Communications Act, which originally changed the media-ownership rules, and the latest OFT ruling, which demonstrates mergers are unlikely to be blocked. The Guardian says that Chrysalis Radio, which is sometimes also linked to a possible EMAP deal, may well merge with the radio operations of, erm, The Guardian (and presumably they should know). That would leave the radio bit of the Scottish Media Group (ie Virgin Radio) and the Wireless Group with its national sport station and recent victory in winning the new Edinburgh licence.
Whatever, certainly it seems that while never dull 'major record label merger news' filled the CMU Daily in 2004, it will be radio group merger news that dominates in 2005.