The planet’s largest radio conglomerate, US-headquartered Clear Channel Communications which owns around 2,000 stateside stations, is clearing its relatively minor assets from the UK deck to make way for the big meal – Capital Radio Group.
According to Roger Parry, chief executive of Clear Channel International: “We are selling our minority stakes but this does not mean we have lost interest in UK radio. Clearly we want scale and there is no point buying just one business.
“You have to have a coherent strategy to allow you to consolidate the industry. Any buyer considering a UK play has to include Capital high on their list of potential candidates. It is the largest and the most visible.”
But not at any price, Parry was quick to add. “The slide rule has been well and truly worn out working out what assets are worth. It is no secret we would be loathe to pay more than ten to twelve times future cash flow and Capital is trading at that level.
“But that is the cash flow of the business being managed now. With our outdoor advertising business there would be some synergies [or a boost to cash flows],” Parry added.
Other tasty morsels for gourmand Clear Channel are GWR and Emap. Acquisition of the former would depend on striking a deal with 26.7% stakeholder Daily Mail and General Trust, chaired by Viscount Rothermere. “If he wants to sell then it is a candidate. If he doesn’t then it's not,” said Parry.
Emap, attractive though it is, would be less easily digested, with potential heartburn triggered by the need to separate its magazine assets from its radio and TV activities.
But Clear Channel clearly needs no appetizer for its British banquet: “We think UK radio is very attractive because it is so very dysfunctional,” Parry opines. “There are too many radio companies. You are moving toward a single ITV company but there are still eight or nine radio companies.”
Data sourced from: Telegraph.co.uk; additional content by WARC staff