Capital boss vents fury over regulation on ‘small deal’

The owner of Capital Radio and Classic FM, which is battling to get approval for its £70 million takeover of the group behind Smooth Radio, today launched a blistering attack on media regulation.

Global Radio’s chairman, Sir Charles Allen, told the Evening Standard that “the rule book is out of date” and dismissed fears about his company’s increased market share.

“Why do you need to go through all this compliance and plurality for 12 small radio stations?” said Allen, former chief executive of ITV, referring to the inquiry into his acquisition of GMG Radio.

“Rather than letting companies get on and grow, we have this level of regulatory involvement for such a small deal.”

Allen was referring to the decision by Jeremy Hunt, the then Culture Secretary, to refer the takeover to the Office for Fair Trading and Ofcom over competition and plurality.

Hunt received complaints from rival radio groups, including Bauer, which complained about how Global’s share of radio advertising would jump from 36% to around 44.5%.

But Allen said radio represented just 3.3% of the total ad market. The Global chairman added the media plurality test was “odd” when GMG Radio stations carry just “two minutes of news an hour” and he complained the inquires are costing “millions” in legal fees.

Allen also attacked Bauer. “We find it supremely ironic that a €3 billion German conglomerate is arguing about this when they were actually bidding for the same assets. If they had won, they would have had more assets in the north [of England] than us.”

Regulators are set to make an initial decision on September 28.