Talk radio groups must hit right note to win London FM licence

When agony aunt Anna Raeburn switched from Talk Radio to the new Viva! substitute, 963 Liberty, the move prompted several questions. Why would one of commercial radio’s biggest stars leave a national station for a local one? Why did Talk’s new, deep-pocketed management let her go? And will she single-handedly attract enough female listeners to ensure Liberty meets the “promise of performance” that won Viva! its licence, as a station appealing primarily to women?

As the Radio Authority ponders these questions, it might also ask itself what impact Raeburn’s move might have on the selection of radio’s next glittering prize – the new London FM licence.

For the rival backers of Talk and Liberty are both bidding for the new licence with other radio formats. And both believe that, aside from their programming proposals, there are good strategic reasons for the Authority to give it to them. Both companies can claim to be rescuing Authority chestnuts from the fire.

CLT UK Radio, which bought into the ailing Talk a year ago, is painstakingly restoring its fortunes, repositioning it as a station of argument and debate. Liberty Broadcasting, owned by Harrods boss Mohamed Al Fayed, is investing in programming and marketing to transform the disastrous Viva! into a high-profile, relatively star-studded music-and-conversation station.

CLT wants the London FM licence so it can launch a London version of its national pop station, Atlantic 252. It’s also backing another music bid, that of the frequently overlooked XFM. Liberty, too, has put in a rock music bid – under the label Rocket FM. At a time when Capital Radio – which also wants the FM licence for its Capital Gold service – has just diversified into restaurants (a move which underwhelmed the City), CLT and Liberty hope their commitment to the medium will be rewarded.

With 25 bids for the FM licence – including several new formats (children, business and sport, the Irish, the French, European issues and, from Saga, people approaching retirement) – many believe either group will be lucky to succeed.

The smart money suggests Capital won’t win because it is too dominant already. But why should CLT, which already has two national radio stations (and a stake in the new Channel 5 to boot), believe it should extend its Atlantic format into the capital? And why should Liberty get another licence, when it is just trying to make a go of its first station?

Travis Baxter, managing director of CLT UK Radio, argues that London Atlantic, as it would be called, offers the best chance of bringing real competition for Capital, which has 23 per cent of listening in London and 60 per cent of UK radio advertising, through sales house MS&M – a situation which concerns advertisers.

But surely the Authority tackled this problem the last time around, when it awarded licences to Virgin FM and Heart FM? Capital would argue that giving a licence to another pop station would do less to increase choice and quality than giving FM-quality sound to the already popular (but medium-wave) Capital Gold.

Baxter claims that though Virgin and Heart are successful, there is a limit to how far they can temper Capital’s dominance of the advertising market, partly because their target audience is 25-plus. He says London Atlantic would broaden choice for audiences and advertisers by playing music aimed at a 15-plus age group.

He also points out that CLT UK Radio has invested heavily in its own sales company, handling advertising for Atlantic and Talk, “and is able to provide the financial backing and resolve to ensure fair and effective competition in the area of sales”.

Paul Robinson, the new general manager of Talk Radio, takes the argument further. “We are making progress with Talk, but we are not yet making money. Atlantic 252 is profitable but is facing much more competition, and the London licence would offset that. CLT is in this for the long term and has the money to fund a national speech station.”

Which brings us back to Anna Raeburn. If CLT has the money and the resolve, why has it let one of commercial talk radio’s biggest stars go? “We were sad to lose Anna” says Robinson. “I think she’s a great broadcaster. But Liberty offered her about 200,000 a year and that was much more than her market rate.”

Liberty Broadcasting’s md Mike Hollings-worth denies the figure is that high, but says pointedly that Raeburn was keen to move to a station which appreciated her worth. Liberty will offer a sharp point of comparison over the next few months, for Raeburn is not the only former Talk star to turn up on its airwaves.

Simon Bates, once Talk’s mid-morning presenter, now fills the same slot for Liberty. Carol McGiffin, also ex-Talk, presents its breakfast show with former Virgin presenter Richard Skinner. And Hollingsworth has also lured other high-profile names such as Bruno Brookes, Zoe Ball, Caron Keating and Emma Forbes to regular slots.

Liberty is offering a mix of music and conversation, which it believes will meet the old Viva! promise of performance by attracting a predominantly female audience. (Time will tell if the Authority agrees).

By contrast, Talk is developing a less starry format, promoting itself as the UK’s “most interactive station”, with its listeners and guests (and arguments) as the stars. Paul Robinson says when Mandy Allwood and Gerry Adams took questions from listeners, Talk received more than 70,000 calls.

The Radio Authority should be grateful to CLT and Liberty for investing in speech radio, where the commercial sector’s reputation (since the heyday of LBC) has been weak. Whether either is rewarded with a London music licence remains to be seen.