Media Forum: Should a Capital-GWR merger go ahead?

What are the implications of a merger between Capital and GWR? Should advertisers be worried, Alasdair Reid asks.

The City reckons the proposed merger between Capital and GWR is a pretty decent idea. The fit, the analysts argue, is neat. For instance, it bolts a national station, Classic FM, to the strength of Capital in London, and GWR always lacked a presence in London.

Meanwhile, at a local level, while Capital-GWR will have regional hotspots where the group's stations are relatively dominant, this will not seriously compromise listener choice. The enlarged group will, in theory, be more able to offer all things to all advertisers.

And, of course, the merged company will be able to make in the region of pounds 10 million in savings - principally by 'letting staff go' from airtime sales. Other costs can be shared more efficiently, too - marketing, for instance.

All of which is good news, provided you are not an employee whose job is now on the duplicated list. Agencies and advertisers, though, will inevitably focus on the downside, won't they? A merged Capital-GWR would have a large share of the radio advertising market.

Bernard Balderston, the associate media director of Procter & Gamble, which has increased its radio spend massively over the past decade, says some of the figures he has heard do indeed give him cause for concern.

He says: 'People have been talking about a 40 per cent share. If that is the ballpark in which the merger would take place, then that would be a matter of interest for advertisers. Anything that increases the concentration of media selling power has to be looked at carefully and the implications have to be thought through. We would like to hear from the regulatory authorities as to how this would fit within current broadcasting regulation.'