UK radio deal-maker steps down
The news that Ralph Bernard, chief executive of the UK’s biggest publicly traded radio company, would step down was met with no shock and no joy. GCap Media had just turned in a lower revenue and pre-tax profit report for the six months ending with September. Immediately afterward, Mr. Bernard announced his retirement
follow-up to:
UK radio giants GWR Group and Capital Radio announced a merger creating a billion euro radio company.
Nothing, almost, has gone according to plan for GCap since its’ 2005 creation, the merger of radio companies Capital and GWR. Bernard had been GWR’s chief executive; indeed, he virtually created that company. Former Capital chief executive David Mansfield left GCap shortly after the merger became official, ending the inevitable clash of corporate cultures.
Thereupon flagship station Capital FM saw the end of its reign as king of the London market, ratings crashing from number one to number four. (Recent RAJAR figures show it creeping back to number three) Despite aggressive marketing and programming among all UK commercial broadcasters nothing has dislodged the BBC’s dominant position. And the ad market crashed, local economics converging with advertisers newly found love of the Web. (Recent Radiocentre figures show radio advertising creeping back) Then, most expensively, listener uptake of digital radio of the DAB variety hasn’t blown the doors off the market. The UK media regulator OFCOM declined to commit to analogue radio shut-off. Projections of 50% DAB market penetration by 2008 were, ah, ‘irrational exuberance.’
But stock-traders invented irrational exuberance, though former US chief economist Alan Greenspan coined the expression. Publicly traded companies are expected to ‘perform’ for the shareholders – dance on the head of a pin - in the worst of climates. London stock traders swiftly punished GCap after Bernard’s announcement (Friday November 23), dumping the share price by 14%, effectively halving the company’s value since its formation.
There’s nothing to suggest that Ralph Bernard said to himself, “I’m never having another meeting with those people again.” In one statement to local media he offered that shareholders, which include the Daily Mail and General Trust (DMGT), had been ‘patient.’ He intends to stay on until a successor is named and will continue as Classic FM chairman through its license renewal.
His successor will, in Bernard’s words, “have to deal with the digital question.” Both insiders and outsiders have been touted for the job by UK media wags. Most expect GCap chairman Richard Eyre to make that decision yet this year. Bets are to an outsider who will ‘unlock shareholder value’ (i.e. start the sell-off). - Michael Hedges - November 24, 2007
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