Merger move stirs up radio's minnows

News that the two trade bodies representing icommercial radio owners are to merge has sparked fears that the new body will be dominated by the big radio groups. Amanda Lennon reports.

Confirmation that the Commercial Radio Companies Association and the Radio Advertising Bureau are to merge has been generally welcomed as a move to help counter the growing threat to commercial radio from the BBC. However, there are dissenting voices among smaller radio owners, who fear domination of the merged body by the radio giants.

The CRCA is a democratic body with all radio owners having an equal voice, whereas the big players, with the greatest share of advertising, dominate the RAB. Some of the smaller radio groups believe they have lost their voice at the RAB and point to the lack of consultation over the merger as evidence of this. An industry insider, familiar with the workings of both bodies, says the RAB's strength, its independence, has been lost. "You would expect them to consult with their members, but this hasn't happened," he claims.

Smaller owners are calling for the new body, provisionally called the Radio Centre, to look at the radio market as a whole, rather than just the national market. Jon Hewson, managing director of CN Radio, believes the RAB has lost touch with what's happening in the industry. "It's become the marketing department for GCap. Just because it's best for the biggest group doesn't mean it's best for the whole industry."

Stronger voice

His complaint is backed by Neil Webster, managing director of First Radio Sales, which represents more than 115 smaller stations. He says the new body needs to clarify its purpose. "It needs to be accountable, it is lost in people answering to a digital radio model and shareholders."

CRCA chief executive Paul Brown denies the smaller stations will have less voice in the Radio Centre since smaller players' concerns are also in the interest of the bigger groups. "We are giving the industry a stronger voice - this is not to the disadvantage of the smaller players," he adds.

Some smaller groups also feel they are not getting value for money from the RAB and some are even threatening to resign from the RAB and not get involved with the new body. CN Radio's Hewson says he has been speaking to a number of stations about setting up a rival group and putting their funding elsewhere. "Around 200 to 250 stations could walk away - we need reassurances." Such a move has been tried, when Kelvin MacKenzie set up The Little Guys Radio Association in 2002.

Other small radio groups are looking at alternative ways of working. UBC Media, owner of digital station One Word, is concentrating on networking, an area the new body will also focus on. This means smaller stations broadcasting the same programmes but with local news, travel and entertainment. UBC Media chief executive Simon Cole says networking is a big part of the future of radio. "They are local services in a network environment and that is the way local stations will operate."

Those smaller radio groups that are positive about the merger want the new body to have a different focus. Kevin Stewart, chief executive of Tindle Radio, says the bigger radio houses should concentrate on the BBC, rather than fighting over the London market. "We may be smaller, but in the areas we cover, we are beating the BBC. We should concentrate on who the enemy is," he adds.

CRCA research last week revealed the BBC's growth is threatening small commercial stations, particularly those outside metropolitan areas.

Providing clout

The alternative is that small independent stations are swallowed up by the big radio groups to provide much needed clout and network programming to combat the BBC. However, there are fears this might lead to a diminution of the "localness" of stations' identity, something the BBC is perceived to do well. And the chances of such consolidation are remote, when prices for radio companies are relatively high and the sector has to fight hard to win advertising.

Until the conditions for consolidation improve, the radio giants are intent on flexing their already mighty muscle in the new radio body. Phil Riley, chief executive of Chrysalis Radio, believes the big players' dominant role on commercial industry issues is to the advantage of everyone and is the only way to combat the BBC. "Small owners don't have the resource. It's the major groups that need to drive that forward," he adds.

Between the mighty and the minnows, a hornets' nest of simmering discontent is emerging. For the good of commercial radio, the new combination of the RAB and the CRCA need to start mending some fences fast.

RAB MEMBERS

- Chrysalis

- Emap

- Energy Radio

- GCap Media

- Guardian Media Group

- Kent Messenger Group

- Lincs FM Group

- London Media Group

- Manx Radio

- Milestone Group

- Premier Christian Radio

- Q102.9 FM

- Reading Broadcasting Company

- Saga Group

- Scottish Media Group

- Splash FM

- The Local Radio Company

- Tindle Radio group

- Trafficlink (UK)

- UBC Media Group

- UKRD Group

- UTV Radio

All of the above plus:

- Blackburn Broadcasting Company

- Bright 106.4

- CanWest Global Communications

- Choice Media Group

- Club Asia 963 & 972 AM

- Dee 106.3

- Forward Media Group

- Garrison Radio

- Gaydar

- Hertbeat FM

- Independent

- Lochbroom FM

- London Greek Radio

- Mansfield 103.2 FM

- Murfin Media

- MNAB

- NECR

- Oban FM

- Passion Digital Radio

- Quay 102.4fm

- Radio Pembrokeshire Group

- Sabras Radio

- Sunrise Radio

- The Saint

- Telford FM

- Two Lochs Radio.

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