Capital Radio is in talks with Xfm’s sales house, Katz International, to buy out its sales contract for the station, ahead of expected Office of Fair Trading approval for Capital’s 12.6m takeover of Xfm.
Katz, which is one of the largest independent radio sales houses in the country, has 18 months to run on a three-year contract to sell airtime for Xfm, the London alternative music radio station which struck a deal with Capital in May.
Katz thinks the remainder of this contract is worth between 60,000 and 100,000. Capital believes it can buy the contract for less. The company will then bring the station within its own sales house, Capital Advertising.
One source close to the deal says: “The deal will probably go through, but it has to happen quickly. This uncertainty means clients are not willing to spend on Xfm.”
Xfm usually turns in monthly advertising sales of 35,000. Its current monthly ad revenues are understood to be half this figure.
A spokeswoman for Capital says: “Our intention, if the deal goes through, is to sell Xfm through Capital Advertising.”
Last week the Radio Authority gave its blessing to the deal.
When Xfm was launched last year it predicted it would reach 500,000 listeners a week. However, the most recent set of Radio Joint Audience Research (JICRAR) figures shows that it reaches only 234,000 listeners each week.