Three years ago, Capital Radio’s fortunes turned on the outcome of a takeover deal. Its proposed purchase of Virgin Radio was blocked by the Monopolies and Mergers Commission and Chris Evans sashayed in to pick up Richard Branson’s radio operation.
At the time, Capital chief executive David Mansfield had been in the job only a few months. He has gone on record as saying the episode was a tough one for Capital, and that it taught him some harsh lessons.
Now the wheel has turned full circle. Capital is about to acquire Border’s radio interests and Virgin has itself been snapped up again, this time by Scottish Media Group. In the meantime, Capital’s share price has soared, valuing the company at more than £1 billion and making it the UK’s largest commercial radio group.
The purchase of Border’s Century and Sun brands will give Capital an enviable spread of regional stations, from London to the north-east. Mansfield’s aim is clear. “Our aim is to be the national radio company in the UK,” he stated when the Border speculation was at its height.
The proposed £150 million deal places Capital in pole position in that race, as it competes with Emap, GWR, The Wireless Group and SMG to grow its listening base ahead of an anticipated relaxation in radio ownership rules. In order to do this, it needs to keep its share price at a healthy level and Capital’s popularity with the City is partly down to Mansfield’s influence.
Hot in the city
As the business grows, Mansfield is concentrating more on this area than the day-to-day running of the radio brands. “He’s certainly well respected in the City,” says one analyst. “He has a good relationship with his shareholders and, while he has to grow the business, he won’t do anything to jeopardise that.”
It was perhaps this reputation that allowed Capital’s Border raid to be hailed as a coup by most in The Square Mile, even while others in the industry were expressing surprise at the high price paid. “The deal with Granada to sell off the TV side of the business for £50 million was a very shrewd bit of business,” said one City analyst. “The price Capital paid was close to the top end, but in today’s climate most have seen it as a good deal that fits well with its other stations.”
It was also seen by many as a good time to buy with Chrysalis, which handles national sales for the Border stations, having done a good job of raising the profile of the Century brand. “In many ways Capital has got a good deal because Chrysalis have done all the hard work in making the brand an attractive proposition to agencies and advertisers,” says Mike Hope Milne, head of radio at MediaCom TMB. It is thought Capital will take over the sales operation from Chrysalis as soon as the takeover is ratified.
Mansfield has also continually reiterated the fact that Capital is concentrating only on its radio business at a time when most other media groups have been diversifying. In particular, Capital’s approach is in marked contrast to that of Emap, which is attempting to dovetail its burgeoning radio interests with its magazine, online and television brands.
Over the last three years, Mansfield has divested Capital of its loss-making restaurant interests and concentrated on growing the value of its core radio business, acquiring Xfm in London and Red Dragon in Cardiff along the way. Before he arrived at Capital five years ago, Mansfield had spent 14 years in TV, first at Scottish Television then at Thames. This fresh outlook, suggest some observers, was useful at a time when the radio industry was undergoing huge changes.
“There’s a definite distinction between the old guard, who may be having trouble coping with just how far radio has come, and people like Mansfield who are striving to grow the medium as quickly as possible,” said one agency head of radio. “At the big radio groups, you’ve now got that mixture of expertise and enterprise, while still leaving scope for expansion and creativity. It’s a very exciting time.”
Commercial face of Capital
Having progressed through the ranks at Capital, from commercial director, to group managing director to chief executive, Mansfield is well known throughout the industry. As much as Chris Tarrant is the public face of the station, so Mansfield is seen as the business face of Capital.
Almost universally, he’s seen as a no-nonsense straight talker, albeit with a healthy dose of humour. Predictably for a man who is more concerned these days with balance sheets and bottom lines than the day-to-day running of the stations, he’s also known as a tough negotiator. A passion for Harley Davidson motorbikes and Neil Young’s music shows he isn’t completely adverse to the rock ’n’ roll lifestyle, even if at 46 his tastes might be more Capital Gold than Xfm.
He is also something of a digital evangelist – although that’s hardly surprising either when you consider that Capital has started broadcasting its first national station, Life, on the national digital multiplex and is looking to run at least one station on most other local and regional mulitplexes.
His recent call for the Government to switch off the analogue spectrum within the next 15 years did, however, cause widespread surprise. Whether this was merely a PR stunt to promote the launch of Life and ride the wave of technology hype on the stockmarket or a genuine call to arms, is debatable.
“Revenue will be limited until the take up of digital radio reaches critical mass,” he said at the time. “We’re asking the government to show its commitment by announcing a switch off date for analogue radio. It is not a question of if digital radio will happen, it’s a question of when.”
Ready for digital Life
Some praised Mansfield’s foresight while others questioned the sanity of a man who was prepared to switch off his business’s main revenue stream in order to push nascent, unproven technology. Most, however, saw the statement for what it was – a case of Mansfield seizing the opportunity to grab some much-needed publicity for digital radio in general and Life in particular. With much of the medium’s thunder having been stolen by digital TV, it was in danger of being forgotten altogether before Mansfield got on his soap box.
Despite his enthusiasm for new technology, and especially the internet and digital radio, Mansfield is wise enough not to bring down the curtain on analogue radio just yet. “Analogue is where the cash is for the forseeable future and, providing the market still has growth, we’ll buy more analogue stations,” he commented in February.
With a regulatory playing field on the horizon and Capital well placed to play a major part in the digital radio revolution when it finally arrives, Mansfield will still have his hands full keeping Capital on top of the pile. In the years to come, the title of his favourite album – After the Goldrush by Neil Young – will never have seemed more appropriate.