Authority to investigate O'Brien deal

Elmo

The Competition Authority is to investigate a €200 million deal that saw Denis O'Brien buy three more Irish radio stations.

Mr O'Brien's Communicorp Group Limited said it had bought national station Today FM, Dublin-based FM 104 and Donegal's Highland Radio from Emap .

But Communicorp Group already owns Dublin's 98 FM and Spin FM and national broadcaster Newstalk.

The deal now has to get approval from the Broadcasting Commission of Ireland, the Minister for Enterprise, Trade and Employment and the Competition Authority.

Lucy Gaffney, chairman of Communicorp, said it was a very significant development for Irish commercial radio.

"Communicorp has for many years demonstrated its commitment to investing in independent commercial radio in Ireland, and to the goal of quality broadcasting to all segments of the market," she said.

It is understood Communicorp beat bids from The Irish Times , TV3, UTV and Scottish media group New Wave to secure the deal.

I don't know if this should be in broadcasting perhaps radio would be a better section for it.

Is it a good thing to be so powerful?

Elmo

Also from the irish times

Denis O'Brien's Communicorp Group is set to buy the State's largest commercial radio station, Today FM, and the leading Dublin station FM 104, in a €200 million deal.

The deal, subject to approval by the Broadcasting Commission of Ireland and the Competition Authority, will make Mr O'Brien the largest commercial radio station owner in the State.

Today FM is RTÉ radio's main competitor and has a number of shows that have challenged or surpassed RTÉ in sectors of the market.

The purchase of the stations would significantly increase Mr O'Brien's importance in the Irish media scene. As well as the radio stations he already owns, he has built up an 8.3 per cent stake in the largest newspaper group in the State, Independent News & Media. He has not commented on his intentions but there has been speculation he might in time seek to replace Sir Anthony O'Reilly as the main shareholder in the Independent group.

Communicorp already owns national radio station Newstalk, prominent Dublin station 98 FM, and youth station Spin 103.8. The Competition Authority will now have to decide if it can be allowed retain these stations, or if it is in danger of moving into a dominant position in particular sectors.

Communicorp was the top bidder for three Irish stations being sold by British media group Emap plc. As well as Today FM and FM 104, Communicorp is also set to purchase Donegal station Highland Radio. A number of entities put in bids for the three stations and Communicorp was identified as the winning bid at the weekend.

There was no comment from Communicorp or Emap yesterday, but both are expected to issue statements today. As a plc, Emap is obliged to advise the market first of the development.

All three stations are very successful in their markets. Figures earlier this year showed that Today FM had a 12.4 per cent market share. Newstalk had a 3.2 per cent market share, so together the stations command 15.6 per cent of the national market.

The figures also showed that Today FM's Ray D'Arcy Show was the eighth most listened to show in the State. Another of the station's most popular programmes, Matt Cooper's The Last Word, has more listeners than the RTÉ equivalent, Drivetime.

Nationally, Today FM attracts more young adults aged between 15 to 34 than any other station. FM 104 is the market leader in a number of categories in Dublin. Highland Radio has a 64.4 per cent market share in Co Donegal. A number of bidders sought to buy the three stations and they had been whittled down to just two when Communicorp was chosen at the weekend.

Its bid is understood to have been €10 million greater than that of the Vienna consortium, which included Ulick and Des McEvaddy, accountants Pearse Farrell and Greg Sparks, and others.

UTV and TV3 were also bidders as were The Irish Times and Vitruvian Partners, a UK private equity firm.

mike65

I don't see how the BCI could remain erm credible if the one company was able to run two national stations and two Dublin stations which are aimed at exactly the same market.

Could we see DOB 1 (talk) and DOB 2 (music)!?

Mike.

flogen

I added up the JLNR figures and if Communicorp took over Emap's Irish stations, DO'B would have around a 75% market share in the Dublin market amongst 15-34 year olds and around 45% in the "adults" category.

I don't see how that could be overlooked by the BCI/Competition Authority and I imagine they'll have to sell at least 1 Dublin licence to get approval - and not Spin... the kicker is whether they'll need to sell of Newstalk to get Today too...

icdg

As I've said elsewhere, the outcome would eventually be the merger of FM104 and 98FM and the dropping of current affairs programming from Today FM. I would say sell one of 98FM and FM104 AND one of Today FM and Newstalk, but I imagine the BCI will probably let O'Brien keep three of these stations and make him sell one. Probably Newstalk, which I believe is the least profitable...

flogen

icdg wrote:

As I've said elsewhere, the outcome would eventually be the merger of FM104 and 98FM and the dropping of current affairs programming from Today FM. I would say sell one of 98FM and FM104 AND one of Today FM and Newstalk, but I imagine the BCI will probably let O'Brien keep three of these stations and make him sell one. Probably Newstalk, which I believe is the least profitable...

I think there's more chance of him being forced to sell a Dublin station than Newstalk, just in market share terms.

Also, dropping current affairs programming from Today FM would require a renegotiation of their contract and I don't think merging 98FM and FM104 makes much sense - as long as they're both profitable/popular. They both have such vague remits he could do whatever he wanted with them anyway.

Elmo

Perhaps it would make spin fm actual become a Dance Music Station rather then the current pop station it is.

Cann't see 98 or 104 merging, perhaps their station management will merge but not the stations. Or like Spin perhaps 104 will become a ROCK station.

We could look at it with regards RTE Radio's share and the 6 extra channels on Digital they are planning, so why cann't communicrop have a large number of stations too?

Both Communicorp and Radio Ireland are bidding for the new multicity radio service for the over 45s.

Today FM, 98fm, fm104, SpinFM, Highland and spin south west would all get their news from NEWSTALK.

Matt Copper could remain on Today FM but as part of the news coming from NewsTalk.

They could merge The Last Word with the Right Hook.

Elmo

So they could sell off any of the stations to insure the sale is completed.

From the Irish Indo

COMMUNICORP would control about 45pc of the radio advertising market if it is allowed to buy Today FM, FM104 and Highland Radio without selling off any of its existing radio stations.


The company signed a €200m deal for the three stations at the weekend. However, the deal is still subject to the approval of both the Broadcasting Commission of Ireland and the Competition Authority.

Last night sources said the dominant position in the advertising market was likely to prove the biggest hurdle for the deal, which would see Communicorp owning the three new stations along with Newstalk, FM104, Spin 103.8, Spin South West and 27pc of East Coast fm.

"If you look at advertising, FM104 is probably doing €10m, Highland €2.5m, Today FM €20m, 98FM €10m, Newstalk €8m, Spin €4m, and East Coast €3m," said one source familiar with the stations.

"Together that would give Communicorp €55m of a total radio ad market that will be worth about €125m this year."

The sale was a "worrying development", said Fine Gael's Communications spokesman Bernard Durkan.

"While the considerations of the BCI and Competition Authority are awaited, it will be interesting to see what conditions, if any, are put on the venture."

The advertising landscape is expected to feature heavily in the Competition Authority's analysis of the deal.

The Competition Authority will also consider general dominance issues in individual markets.

Both the national radio market and the Dublin market are expected to pose particular problems, as the deal would see Communicorp own Ireland's only national (or almost national) radio stations, along with three stations in the Dublin market.

The BCI's approval process, to run concurrently with the Competition Authority's, is forbidden from considering the advertising market and will focus solely on broadcasting dominance.

Impact

In general terms, the BCI doesn't allow companies to control more than 25pc of radio licences; however, there is also scope to consider the impact of licence transfers on different markets.

"Just because the BCI's rules are for 25pc doesn't necessarily mean anything to the Competition Authority, they'll be measuring it on an entirely different scale," said one source.

The sale needs approval from both the BCI and the Competition Authority. A BCI decision is expected to come first, with the board set to decide on it at a meeting in early September.

Communicorp has one month to submit a proposal to the Competition Authority, which will then take at least a month for a Phase One investigation, and possibly 3-4 months later if a Phase Two probe is initiated.

The Competition Authority verdict may ultimately be decided by the Minister for Enterprise, who has the power to overturn an approval by the authority, but not a block.

If the case is blocked, owner Denis O'Brien has the option of taking a High Court challenge which could drag on several years.

Sources said Mr O'Brien was "likely" to offer to sell FM104 in a bid to get the deal through. Underbidders TV3 could prove the happy recipients of any sell-offs prompted by the deal.

"We would anticipate that over the next year there will be radio assets changing hands and we're still very interested in buying them at the right price," a spokesman said.

flogen

Elmo wrote:

Perhaps it would make spin fm actual become a Dance Music Station rather then the current pop station it is.

Cann't see 98 or 104 merging, perhaps their station management will merge but not the stations. Or like Spin perhaps 104 will become a ROCK station.

If I recall correctly, Spin's remit is either Youth-orientated music or Pop-music... so just like FM104 and 98FM it has free reign to play whatever the hell it wants!

If they did end up owning all three, I would see something similar to what you describe happening though. 98Fm traditionally had a slightly older audience and image than FM104 and while it's tried to make itself more youth-orientated that's still true to some degree. It's actually the biggest Dublin station for the 35+ age group and matches 2FM in the Dublin area.

To that degree I see FM104 remaining as is (general bit of everything), 98FM taking on more of a classic (maybe classic rock) route and Spin becoming more and more focused on bubble-pop, tweens and dance.

We could look at it with regards RTE Radio's share and the 6 extra channels on Digital they are planning, so why cann't communicrop have a large number of stations too?

That's assuming that those 6 stations get onto the eventual national DAB/whatever service - I don't think they will.

Both Communicorp and Radio Ireland are bidding for the new multicity radio service for the over 45s.

I think as part of whatever agreement that might be reached, they'll be told to forsake this bid. They'll happily use it to bargain against selling off the likes of Newstalk, anyway.

Today FM, 98fm, fm104, SpinFM, Highland and spin south west would all get their news from NEWSTALK.

Yeah - that would make sense, actually and could provide some nice savings for them. Even if all the broadcasts were different, they could consolidate the newsroom into one and save that way.

Matt Copper could remain on Today FM but as part of the news coming from NewsTalk.

I was thinking about this - would they put Matt Cooper onto Newstalk... it's a tough one because he and George Hook are now in direct competition on a national level, so there's a chance that they might.

I think they'd happily replace Hook with Cooper too and try to move Hook to another timeslot (after, perhaps?)

They could merge The Last Word with the Right Hook.

With both presenters remaining? That would be a nightmare.

mike65

Remember how The Last Word began with Eamo and someone who's name I've forgotten but she's well known, Disaster. Things only got going once Dunphy was in control.

Mike.

flogen

mike65 wrote:

Remember how The Last Word began with Eamo and someone who's name I've forgotten but she's well known, Disaster. Things only got going once Dunphy was in control.

Mike.

Don't remember that, but I can only imagine.

With two strong personalities like Hook and Cooper it would go one of two ways; It'd either be an intellectual pissing contest (just like Off The Ball when Gilroy did it) or a "you say, I say" type show where the two take opposing sides of an argument and see who wins.

Either way, it would amount to some massive egotripping and would make for terrible radio.

Elmo

That's assuming that those 6 stations get onto the eventual national DAB/whatever service - I don't think they will.

Not in their current format but RTE will need to look at other types of services if it wishes to remain significant in the irish radio market. And RTE have 4 of the 6 national services. Why cann't Communicorp own the other 2?

Yeah - that would make sense, actually and could provide some nice savings for them. Even if all the broadcasts were different, they could consolidate the newsroom into one and save that way.

Does the BCI want to provide communicorp with savings? This could mean laying off jornalist.

L1011

Because it is standard, all across Europe, to disregard the competition laws for public broadcasters. The BBC has 4 of the FIVE national FM broadcasters the UK has, we're endowed with a second one - so theres standard competiton rules between those two...

flogen

Elmo wrote:

Not in their current format but RTE will need to look at other types of services if it wishes to remain significant in the irish radio market. And RTE have 4 of the 6 national services. Why cann't Communicorp own the other 2?

What MYOB said - in theory RTÉ aren't meant to be in competition with anyone because they're not meant to be commercial etc.
It's hard to say that that's the reality, but the BCI may accept that it is.

Does the BCI want to provide communicorp with savings? This could mean laying off jornalist.

It doesn't really have anything to do with the BCI.
Communicorp could just set up their own equivalent of INN and get their stations to take news from it - it wouldn't have to have any effect on their station remits etc.

icdg

They already own a significant stake in INN through 98FM and East Coast Radio. INN were the ones who originally applied for the Newstalk licence before several ILRs got cold feet and wanted out, which is why News 106 Limited became a seperate company. FM104 and Highland Radio are also in INN. They will also own the Today FM news operation too, so there will be scope for either axing the Today FM news operation, or having the ILRs in Communicorp source their news from Today FM instead of INN.

Elmo

What MYOB said - in theory RTÉ aren't meant to be in competition with anyone because they're not meant to be commercial etc.

RTE 2FM is a profit making part of RTE. It does not get any of the licence to fund its operation.

Ok so RTE call their profit a surplus because they spread that surplus around for other programming and if they have a deficit they cut their budget (or at least thats what they should be doing).

A strong independent sector must be provide to provide a strong PSB sector.

But smaller companies are also need. If communicorp have stake in INN through other services then those stations should sell their stake in INN.

INN should be given an opertunity to provide news in another format. I.E. a TV news channel

L1011

Its entirely possible to have commercially funded PSB - Channel 4 for instance - so 2FMs lack of reliance on the licence fee doesn't make it a "commercial" channel.

Elmo

Its entirely possible to have commercially funded PSB - Channel 4 for instance - so 2FMs lack of reliance on the licence fee doesn't make it a "commercial" channel.

Neither are very PSB.

Bar S4C channel 4 doesn't own very many PSB services. And it receives exchequer funding from the British Government AFAIK.

Elmo

And from what i can now gather S4C is not part of C4, it only retransmits C4 shows at alternative times around their Welsh schedule.

L1011

C4 has to rely on commercial revenue, no exchequer funding. Prior to this arrangement, it lived off payments from ITV contractors, who were allowed sell ad time on C4 in return.

S4C on analogue show some C4 content. On digital, they do not, as all digital services in Wales carry Channel 4 also.

However, legally, C4TC is a PSB, and quite a lot of the content on More4 and during the daytime on C4 is likely loss making, and most certainly PSB content. They also provide (well, pay ITN for) an excellent news service, which is significantly different to ITNs other news outlets.

Elmo

However, legally, C4TC is a PSB, and quite a lot of the content on More4 and during the daytime on C4 is likely loss making, and most certainly PSB content. They also provide (well, pay ITN for) an excellent news service, which is significantly different to ITNs other news outlets.

All TV stations will have loss making programmes not just ones on during the day.

It works both ways. It is hugely important for a commerical broacaster to provide an amount of PSB programming, and it is hugely important for PSB broadcasters to provide programming to a wide audience in their Nation.

ITV (IMO) is losing viewers due to it insistance to go totally commercial.

e.g. ITV Play (Which is going to be axed or already has been), CITV's loss of homegrown shows.

Strangely C4 is producing the best news on TV yet it is produced by the worst news service (ITN), perhaps if ITN had adopted C4s news for its News service it would have worked, hence providing some PBS to a commerical audience.

As for more4. I find it to be repeats of C4's PBS shows, with a splash of good US tv which doesn't work on UK TV.

icdg

Elmo wrote:

And from what i can now gather S4C is not part of C4, it only retransmits C4 shows at alternative times around their Welsh schedule.

The Welsh Fourth Channel Authority and the Channel 4 Television Corporation (before 1993, the Channel Four Television Company Limited) are and always have been completely seperate bodies. C4 has from its launch allowed S4C to transmit its programming, as it was unable to broadcast in Wales anyway. This arrangement will end upon analgoue switch off as Channel 4 is available on digital platforms in Wales and S4C Digital is completely Welsh langauge.

Totally off-topic of course. RTÉ 2FM is not meant to be a completely commercial channel, and to say it recieves absolutely no licence fee money is not true. Even if the majority of its programming is profit making, its news service is part of RTÉ News which does use licence fee money.

BuffyBot

Strangely C4 is producing the best news on TV yet it is produced by the worst news service (ITN), perhaps if ITN had adopted C4s news for its News service it would have worked

ITN can't adopt C4's format for other broadcasters. It makes the news style it's comissioned to make. ITN isn't the "worst", they just make the programs they're paid to make. ITV want a news that's lower brow than C4 - well that's what ITV gets. They're paying for it after all.