OFT decision on Global Radio / GCap Media merger

OFT grounds (96 pages, PDF) for clearing the merger of Global Radio and GCap Media subject to divestments in the Midlands.

In London, the merger brings under common ownership the Heart, Galaxy, LBC, Capital Radio and Classic FM stations. In the OFT's view, the merger combines essentially complementary businesses in terms of the demographics that they offer to advertisers, and:

30 ... there is compelling evidence that Global will have the profit incentive to bundle together former GCap and Global stations at a lower package price than the equivalent mix-and-match bundled price pre-merger, when the stations were not commonly-owned.

31. Global will reposition its now commonly-owned stations to attract listeners ... and increase the demographic focus of the respective station audiences. While directly benefiting end-consumers — who are at no risk of price effects — advertisers also benefit: ...

On the basis of these “rivalry-enhancing efficiencies”, the OFT decided that there would be no substantial lessening of competition in London.

Comment: Is this the longest ever OFT merger decision? Yet at first glance I cannot see much analysis of the potential lessening of competition in developing programming and attracting audiences — the OFT seems to have relied on a belief that any such lessening of competition would be detected by considering competition for advertisers. Franck

For further information or advice please contact Franck Latrémolière.

Filed under Media, OFT.

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