The commercial radio industry has won column inches for all the right reasons lately, as individuals with money to spend snapped up the UK's four leading commercial radio groups.
Last December, H Bauer swooped on Emap's consumer magazine and radio businesses, valuing the radio stations at £422m. On 31 March, after endless to-ing and fro-ing and some last-ditch attempts to save the group from a takeover, GCap Media's shareholders succumbed to the colour of Ashley Tabor's £375m and sold to Global Radio, which had recently snapped up Chrysalis Radio for £170m.
Finally, SMG turned to India to find a buyer for Virgin Radio, selling to the Times of India Group for £53.2m in May.
There have been many false starts in the so-called "next phase" of commercial radio, be it the arrival of Fru Hazlitt at GCap Media, the creation of industry body the RadioCentre, or the many new faces of one-time market leader Capital FM.
But today, for the first time since GWR and Capital Radio merged in 2005 to form GCap Media, there is a genuine industry-wide belief that radio can and will improve.
The evidence can be seen in the Guardian Media Group, whose radio assets have grown slowly but surely over the past two years, to a point where it has more than doubled the number of stations in its fold. By establishing a healthy network of Smooth stations aimed at the over-40s, it has quietly proved that, with time and expertise, anything is possible.
Behind closed doors
GMG Radio has gained ground and won over critics thanks to its ability to privately agree a strategy and then work behind closed doors to honour that plan.
However, had it been developing Smooth in the glare of the City's ever-critical analysis, it is questionable whether it would be as far down the road as it is today. Gossip, speculation and City criticism not only destroy morale, but put pressure on companies to change tack and stray from fastidiously laid-out plans.
Scott Taunton is managing director of UTV Radio, the only major group in the UK commercial radio market to remain under public ownership. He believes recent privatisation is "long overdue".
"There clearly needs to be major structural changes to a number of the (radio) businesses and that's very hard as a public company," he says. "That's one of the reasons GMG has performed very well, because they can talk behind closed doors. Shareholders and analysts look six to 12 months ahead and make decisions based on that."
Taunton also sees the more direct advantages of consolidation. "There are many ongoing issues, like the future of digital radio, but consolidation will help us address these challenges because there will be fewer people around the table. If we can get Ashley Tabor, chief executive of Global Radio and Dee Ford, group managing director of Bauer Radio to agree, we've got 65% of the industry in agreement," he says.
As the new radio owners bed in, their employees are already enjoying the benefits of privatisation. Karen Stacey, broadcast sales director at Bauer Advertising, believes one can become "battle-weary" as a plc. "It's not great when your team is reading the papers and their bosses are getting a slamming - that's how gossip starts," she says.
Stacey also points out there is a lot of lost time as a public company. "If you have board meetings, you spend all your time trying to work out why you haven't hit certain numbers rather than just getting on with the job," she says.
However, she argues that perspective is needed when analysing the radio industry. "The BBC has 73% of the analogue spectrum and only a 57% share," she says.
"Commercial radio has only 27% of the analogue spectrum and nearly half the share, which isn't bad. Consumers haven't got a problem with commercial radio; we just have to make sure advertisers know it can work for them."
Radio ad spend was down 10.2% year on year in Q2 and, although it is expected to be better in Q3, the industry is still exercising caution.
Stuart Taylor, deputy chief executive of GMG Radio, says: "Profitability has been eroded from all major companies, including ourselves, so it's not as if there's loads of money washing about.
"We have to focus on putting money into content and building for the future. The issue is about the uncertainty of the economy, not of media sectors. It is important to remember that downturns will end."
Room for optimism
To this end, media agencies remain positive about the spoils for the sector going forward. "2009 will be a tough year for advertising, but hopefully there won't be as much of a decrease as there would have been if radio was not as strong as it is now," says Erica Taylor, group buying director at Starcom MediaVest Group. She calls for more collaboration between owners to get radio further up the agenda.
Richard Park, executive director at Global Radio, has refused to rule out building on the cross-group selling deal that was initially discussed between Chrysalis's Galaxy and the former Emap's Kiss last year, but feels the principal concern initially is about product.
"What's happening in the businesses that have gone private is the products have come back to the top of the agenda," he says.
"There's an awareness that the products must be right and must massively appeal to audiences up and down the country."
The regional element is also becoming central to the strategies of every big player. Park, who oversees the overnight networking between Heart in London and its sister stations in Birmingham and Nottingham, is a life- time supporter of local radio, calling himself "an ILR (Independent Local Radio) man ahead of a Radio 2 man".
He says: "I would never take away local breakfast shows - I'm an absolute believer that when I wake up I want something that's in touch with me, wherever I am."
It is important to note that the self-proclaimed "new phase" coincides with the natural development of radio. No longer an analogue-only medium, it has morphed into numerous new forms that present further opportunity for financial growth.
Mark Story, managing director of national brands at Bauer Radio, believes he has witnessed a "quiet revolution" over the past year.
"The financial press has not really understood how radio is entering into the audio era rather than being the good-old medium-wave and FM," he says. "We're fortunate that we have great brands and it's easy to see ways of moving forward that aren't simply radio stations, be it MP3, mobile phone or downloads - we are now in the audio business."
These forward-thinking attitudes will contribute to the success of radio as much as the new, private owners will. Many old faces have left the industry in the past 12 months, from GCap's Ralph Bernard and Chrysalis Radio's Phil Riley to Virgin/GCap chief executive Fru Hazlitt and Chrysalis/Virgin chief executive Richard Huntingford, and many believe fresh life has been breathed into a suffocating medium.
Vote of confidence
The relaunch of the Radio Advertising Bureau has helped smooth out some of the problems radio has experienced in attracting advertisers. Last week, the RAB unveiled a £3m advertiser partnership fund, which will be invested to help advertisers get more from their radio spend.
However, Simon Redican, managing director of the RAB, acknowledges the benefit of the recent round of privatisation. "It's a huge vote of confidence in radio as a medium," he says. "The RAB and RadioCentre could talk up radio until we're blue in the face, but nearly £1bn has just been spent acquiring UK radio stations, which suggests people with plenty of money think radio is a good bet for the future."
He adds that private companies put a "very different complexion" on the way companies operate. He says: "We're already starting to see increased marketing spend from Kiss, Smooth and Absolute and that gives us confidence as a sector. If they're going to spend money on marketing to consumers and investing in programming, that is going to win new listeners and ultimately deliver ad revenue."
Perhaps it is pertinent that the last word goes to a City analyst as he bids farewell to commercial radio as part of his everyday remit. "It's the end of an era, but it's good that radio has gone private," says Richard Menzies-Gow, media analyst at investment bank Dresdner Kleinwort.
"Radio did very well in the City when it was growing consistently, but the City doesn't like uncertainty and will always paint the bleakest outlook until it has evidence to do otherwise. It will be interesting to see whether the private investors of today are still enjoying themselves in two years' time, or if they'll be scratching their heads and wondering what to do."
The radio industry has its own battles to fight, from the development of DAB and the regulation of local output to keeping afloat amid national economic uncertainty. But there is a definite feeling that in its new owners radio does, by chance or design, find itself in the best possible circumstances in which to weather the storm.
GLOBAL RADIO
In 1998 Richard Park, then group programme director of Capital Radio, told Capital's former chief executive, Richard Eyre, that in a decade's time most radio stations in London would be broadcasting out of Leicester Square. Eyre laughed.
But today, as Global Radio readies its troops for a move into the former HQ of Capital Radio, and later GCap Media, it seems Park was right. Indeed, when it comes to radio, Global Radio's executive director does not seem to have got much wrong.
After teaming up with Global's chief executive Ashley Tabor and paying £375m for Capital FM-owner GCap, Park is now preparing to shake up the stations and aims to have number one outfits in every conurbation where the company broadcasts.
"There will be many and varied changes to our output and we will be raising standards everywhere we possibly can," he says. "Global is a different company (from GCap) and it's time to move on."
Last month, Global announced the appointment of The Mail on Sunday's Stephen Miron as chief executive of radio, but will not wait around for him to make imminent decisions. "We've got to get on with the Global vision," Park says. That vision is having "more listeners listening for longer" to commercial radio.
Park is cagey about his plans for the group, claiming "empty vessels make the most noise", but reveals that he will move forward "prudently", grateful not to have a "man from the City in the front row of our presentations, tutting".
Last week, Global announced it will develop quasi-national Heart and Galaxy stations, and Park does not rule out continuing the sales relationship between Galaxy and Bauer's Kiss that was set up between GCap and Emap last year.
Park acknowledges radio's Q2 revenue drop, and while he says the issue is "right at the top of the agenda", he admits there is "a lot of water to cross". He adds: "No one is daunted. We can see the scale of the opportunity and can't wait to get at it."
BAUER RADIO
If the messy 2005 merger of GWR and Capital Radio was an illustration of how not to bring two businesses together, H Bauer's takeover of Emap Radio was perhaps the exact opposite.
When the German publisher picked up Emap's consumer magazines and radio stations for £1.14bn last December, the industry braced itself for a swathe of redundancies, poaching and restructuring.
Despite a few inevitable departures in the upper echelons of the company, it really does seem to be business as usual for the company's radio division.
The likes of Magic and Kiss moved into the Bauer stable for a mere £422m and were immediately left to their own devices.
Dee Ford, group managing director, Bauer Radio, says: "Post-acquisition, we could have found ourselves in a very different world. We could have found ourselves in the hands of a private equity buyer, facing a future of cost-cutting and asset-stripping.
"But the Bauer family saw our radio strategy as part of the acquisition process - they bought into those plans and the management team in place to deliver them."
Bauer Radio's multi-platform offering arguably puts it a notch above its competitors as it is able to offer advertisers numerous touchpoints via brands such as Kerrang!, which is now a radio station, TV channel, magazine and awards event.
However, Ford points out that local radio is still vital. "Any group that sees their heritage stations as a world that is product-led and facing managed decline is missing a trick," she says. "Being local will be the key point of difference that connects our brands and stations to a local audience."
Karen Stacey, broadcast sales director, Bauer Advertising, believes going private has helped her department.
She says: "As a plc, we were given a number to meet and we had to get there by hook or by crook.
"But if you keep veering off course to keep in line with the market you never fulfil anything. We're doing great stuff - for instance, our sponsorship and promotions have grown 45% this year. If you can stay at the top of your game when people are spending less, then you will come out of the recession the strongest."
ABSOLUTE RADIO
Virgin Radio always had something of an uncertain place in the radio sector, as its sole licence made it a stand-alone radio operator. Yet between its analogue, digital and online output, it clocked up five million listeners every month.
At the end of May, the station was bought for £53.2m by the Times of India Group, and earlier this month was rebranded as Absolute Radio.
The station may still be a stand-alone brand, but by relinquishing the Richard Branson-owned brand name, its new owners are now free to take advantage of revenue streams that have so far been off-limits.
Nick Hewat, sales director at Absolute Radio, says: "The brand licence didn't allow us to get into things like ticketing, concerts and downloads - all the things that are really important to the commercial success of a radio station."
However, Absolute has long been the darling of the agency world, with broadcast buyers falling over themselves to praise the station's website and "forward-thinking" commercial strategy.
But with £15m being poured into the creation and marketing of the new Absolute brand, is the fact that this coincides with a time of global financial meltdown bad news for the company?
Absolutely not, says Donnach O'Driscoll, chief executive of Absolute Radio: "In these economic times, people will be looking for entertainment that is free and mobile."
Optimism aside, O'Driscoll knows the process is not a quick one. "Our objective is to hold our good Rajar position, growing the audience definitely and quickly," he says.
"Ideally, we'd like to get our audience back in excess of 3.5 million a week - it's just a question of how long it takes. There is no quick fix, and it's not going to be perfect on day one - we're bringing the best of the old brand with us and introducing changes and we will need to tweak it along the way."
O'Driscoll has outlined the key challenge: migrating the internet traffic over from Virgin to the new Absolute domain and not losing existing listeners in the rebrand. Once that is achieved, he can start working on that 3.5 million target.
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