Real progress in gaining regional radio share, but elsewhere not so smooth

John Myers, chief executive of Guardian Media Group Radio, has an ambitious plan. He has built GMG Radio from scratch to become the fourth-largest player in the UK radio market in five years, and his eyes are now firmly set on the top three.

The group took a step closer to realising Myers’ dream last month, when it acquired the two Century stations, based in Manchester and Newcastle, from GCap Media for £60m. The deal was a double celebration for Myers as he originally launched Century for Border TV during the 1990s and has long been keen to acquire the brand.

This deal, and the appointment of Myers to the GMG board earlier in the year, demonstrate that GMG now sees radio as a serious investment. Its interest in the division has been unclear, particularly when it spent £600m to take full control of Auto Trader in 2003.

There was also speculation about a potential deal with Chrysalis Radio, which handles the national sales for GMG, but it failed to get as far as a formal offer.

Myers says: “A few years ago, I would have said maybe GMG would sell, but these are not the actions of a group not intending to have a stake in UK radio.”

GMG is expected to re-brand the Century stations as Real to build the brand as a quasi-national network. Myers says he is happy to use the two brands “for now” but adds that he is “not ruling it out next year”. However, a possible barrier could be that GCap will continue to handle the sales for the two Century stations for five years, whereas the Real stations in Scotland, Wales and Yorkshire are sold by Chrysalis.

Strategic shift Industry insiders suggest that this could signal a change in strategy for GMG and, in the long term, it may move its sales contract into GCap, a new revenue stream the struggling market leader would welcome. Chrysalis commercial director Don Thompson strenuously denies this and points out that GMG has just signed a new three-year deal with his team.

In the latest Rajar results, for the quarter ending September 17, GMG reported that the group is now attracting 3.1 million listeners every week. The jewels in the GMG crown are Real Radio in Scotland and Smooth FM North West (formerly Jazz FM).

Last week, Real in Scotland reported its highest reach, with an audience of 736,000 every week, and it is the most listened-to commercial station in the region. Smooth also reported its highest reach with 687,000 adult listeners every week and retained its title as the most listened-to commercial station in the North-west region.

The Smooth station in London, however, is a different story. It lost 17.1% of its audience over the quarter and is 3.9% down on the same period last year. GMG has already admitted defeat in London and has applied to Ofcom for a format change. It wants to widen its music remit during the day in a bid to appeal to the over-50 market. Myers says: “I am enormously disappointed that we haven’t done better in London. We just cannot compete, so we have to get out of the mainstream and into an older market.”

Industry sources believe the move may be about more than just boosting Smooth’s London audience. One senior figure says it would pave the way for GMG to acquire the Saga stations, which are understood to be up for sale and already sit in the over-50 market.

Myers admits a “Smooth/Saga thing could work”, but he adds that the move is “totally independent” of the rumoured Saga sale.

Relative freedom Myers is viewed as a savvy operator, who is not burdened by pressure from the City — unlike his counterparts at rival operators. His experience at the sharp end of the industry as a presenter, and his passion for radio, make him one of the industry’s “characters”.

But one source warns that his ambitions to expand GMG could be the division’s downfall if too much is acquired too quickly.

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