GCap Tunes Out From Digital Radio

12 February 2008

LONDON: The UK's biggest commercial radio group GCap Media is to ditch its remaining digital stations as part of new ceo Fru Hazlitt's strategy to cut costs and boost profits.

The company, which has languished in the doldrums since its creation in 2005 via a multi-million pound merger between GWR and Capital Radio, is also in discussions about the sale of its three regional XFM stations.

In addition, it plans to beef-up advertising on its London flagship Capital, moving to nine minutes of ads an hour from a previous policy of no more than two consecutive commercials.

The moves have been strongly criticised by Global Radio chairman Charles Allen, whose £313 million ($610m; €419m) takeover bid was rejected by GCap last month.

Thunders Allen: "You can't shrink your way to growth. The announcement lacked the passion that's needed to win people over."

Hazlitt, who has led GCap for just two months, further set the cat amongst the pigeons by declaring digital radio to be "not economically viable" and that take-up of the medium had been "incredibly slow".

Data sourced from Financial Times Online and The Times Online (UK); additional content by WARC staff