Friday, 7 February 2014

Commercial radio licences have value after all

After a long period of stagnation the UK commercial radio market is starting to warm up. A couple of years ago you could not give away the average commercial radio licence, indeed a few closed after failing to find buyers.

This past week has seen Irish telecoms billionaire Denis O'Brien buying eight stations from Global Radio in a sale reported to be worth £35m while mobile phone company Lyca Media has acquired four radio stations from the administrators handling those parts of Sunrise Radio which went bust last month, in a deal rumoured to amount to well over £3 million..

Sunrise Radio 1, Sunrise Radio 3, Time 107.5 and Time 106.6 are now owned by the international calling card company Lyca. Separately, Irish media company Communicorp has bought Smooth Radio North West, North East and East Midlands, along with Capital South Wales, Real Radio North Wales, Capital Scotland, Real Radio Yorkshire and Real XS Manchester (Global Radio had to sell the eight radio stations following a ruling by the Competition Commission when it bought GMG Radio in 2012).

Of course the value of these radio assets to both purchasers has a lot to do with their long term strategies. They may have over-bid just to get a position in the market. In the case of the former Global stations national sales and non-peak programming will still be provided by Global Radio under a franchise agreement.

It is perhaps more surprising to see such a high value being put on the London AM stations formerly owned by Avtar Lit. The Sunrise boss has kept the ex-Buzz Radio frequencies of 963 and 972 AM for a new version of Sunrise Radio. It is less clear how Lyca will use the former Kismat frequency of 1035 kHz or the original Sunrise 1458 kHz frequency. There has been speculation that the Time FM licences for 107.5 MHz (based in Romford) and 106.6 (based in Slough) may be transferred to other operators.

Whatever the outcome it is good to see that at least some companies are willing to put money behind conventional AM and FM licences – even if they are just stepping-stones to future developments.

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