1.
'FIRST LOVE RADIO': A SOUTH
LONDON PIRATE STATION THAT
HAD SUCCEEDED WAS
TRANSFORMED INTO A LEGAL
LOCAL COMMERCIAL STATION
THAT FAILED
by
GRANT GODDARD
www.grantgoddard.co.uk
April 2009

2.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 2
©2009 Grant Goddard
Two local commercial radio stations in London – 'South London Radio 107.3' and 'Time 106.8
FM' – closed forever on 3 April 2009 with little fanfare. South London Radio had launched in
1999, initially to serve the Borough of Lewisham, but its roots were in South London’s black
music pirate radio stations of the 1980s. Time 106.8 had launched in 1990, serving the
Thamesmead area of Southeast London, but it had been part of the cable community radio
experiment of the 1970s. The closure of these two stations leaves London with only two local
FM/AM radio stations based south of the River Thames ('Radio Jackie' in Kingston, 'Spectrum
Radio' in Battersea). Even 'Choice FM', launched in 1990 specifically to serve the Afro-
Caribbean community in Brixton, is now relocated to Leicester Square, its latest owner having
closed the station’s studios that had always been located south of the river in Borough High
Street.
At first glance, the closures of South London Radio and Time might seem simply an expected
outcome of the current pressures faced by many local media, particularly radio and
newspapers, particularly in the UK’s largest and most crowded media marketplace. More local
commercial radio stations have gone out of business in the last month than in the previous two
years, with the Credit Crunch inevitably blamed for declining local advertising revenues.
However, if you scratch a little deeper, the recent closures of these two stations were horribly
inevitable, almost from the day they opened. What surprises me is that they managed to last
this long, having struggled with a succession of owners who failed to turn them into successful
businesses, and under a radio regulatory system that failed to ensure that South London’s
population was offered the local radio services it had been promised.
I must declare a personal (non-financial) interest in both stations. I live within the coverage
area of South London Radio and listened to it on the last occasion only days before it suddenly
closed; and I had worked a one-year contract at Time’s forerunner, 'Radio Thamesmead', as
Head of Programmes in 1986 when it was still a community cable radio station.
Before they closed this month, each of these two stations was losing more than £100,000 per
annum. Their accumulated losses since launch ran into millions. Yet, only five years ago, their
combined market value was over £1m. How does that make sense? Their closures speak
volumes about the UK commercial radio system and its inability to satisfy consumer demand
for radio content via a regulated licensing system that seems to fail listeners again …. and
again …. and again. Although these two legal local commercial stations are truly dead and
buried, the FM airwaves of South London nevertheless remain alive with the sound of dozens
of unlicensed ‘pirate’ radio stations, many of which seem to know exactly what content their
audiences want and know how to give it to them.
‘Pirate radio’ had been the starting point of South London Radio, though it might have been
hard to believe if you had listened to the station in its final years. Between 1986 and 1990, a
pirate station named 'Rock 2 Rock' had broadcast from the roof of the three 24-story tower
blocks behind New Cross station. Its programmes of soul, reggae and community information
attracted a loyal following in South London and, although the station might not have been as
well known as competitors such as 'LWR', 'Horizon' or 'Solar', its signal reached across the
capital, and its DJ roster exhibited a love of the music they played at a time when legal radio
continued to shun black music almost totally. “Most of the people who were involved in [Rock 2
Rock] lived or worked in the Lewisham Borough,” DJ Inspector Scratch-It told me in 1992. “I
don’t even really know what the secret [of our success] was. It was just something
[indefinable].”
In the late 1980s, local resident Stella Headley had walked into her local reggae record shop,
'Sound City' in Deptford, and asked if she could present a show on pirate radio. Despite having
no radio experience, but armed with a passion for jazz music, Stella was offered a show on
Rock 2 Rock where she called herself Lady X. The station quickly became ubiquitous in the
area. “The way that we had broadcast was so down-to-earth and friendly,” Stella recalled when
I interviewed her in 1992 ['Radio Scan', City Limits #562, 16 July 1992]. “It was something that
everyone could relate to.”
In late 1990, the government of the day introduced draconian laws that made it a criminal
offence to be involved in the promotion or broadcast of pirate radio, with the possibility of a

3.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 3
©2009 Grant Goddard
prison sentence even just for wearing a pirate station T-shirt or having a pirate radio sticker on
your car. Rock 2 Rock, along with dozens of other pirate stations of the time, decided
voluntarily to close down. “It was pressure,” explained Inspector Scratch-It, “realising that
things could really start getting bad if we did get caught”. Some of the station’s twenty DJs
moved on to work at new, legal ‘incremental’ stations that had just been licensed to satisfy
previously unfilled gaps in the radio market – Mistri, one of the most popular club DJs of the
era, joined short-lived 'WNK' in North London; and I recruited Angie Dee to the launch of the
legalised London ex-pirate 'KISS FM'. Ten others, including Stella, started a new venture
called 'First Love Radio' which went on to campaign for Southeast London to be given its own
commercial radio station.
A £5,000 grant from South Thames TEC enabled the group to organise formal radio training
for local residents. A temporary, one-month FM licence (under the Radio Authority’s Restricted
Service Licence scheme) showcased to residents of the Borough of Lewisham the content
which the station wanted to be able to broadcast legally. Inspector Scratch-It explained: “We’ll
be doing things we would have liked to have done when we were a pirate. Now we can plan
ahead and use more people from the community, without fear of being arrested. I know how
hard it was to maintain the [Rock 2 Rock] station. Every time there was a knock on the door,
your heart was going thump, thump, thump”.
First Love Radio completed several, successful one-month local broadcasts, and by 1997 the
Radio Authority was sufficiently impressed to advertise a small-scale commercial radio licence
for Southeast London. To be sure of winning the licence, Stella involved commercial radio
group UKRD as a partner and majority shareholder who, in turn, recruited community radio
consultant Des Shepherd to write the licence application. In January 1998, the Radio Authority
announced that it had selected First Love Radio as the winner from amongst eight applicants.
The Authority noted proudly that “this is the 22nd ILR [Independent Local Radio] service to be
awarded covering Greater London or parts of the capital”.
However, the station’s winning licence application promised, somewhat surprisingly, that its
output would “represent the diverse tastes and interests of its target audience by providing a
dynamic music mix from the 60s through to the 90s with high quality local news and
information for the Borough of Lewisham”. Gone was any specific commitment to serving the
substantial Afro-Caribbean community within the Borough. Gone was any specific commitment
to playing soul and reggae music. It seemed that, while the Radio Authority was busy
congratulating itself that it had licensed its 22nd station in London, it had condemned First
Love Radio to become simply another tiny little station in the UK’s biggest radio market that
would be playing the same pop music hits that everyone else was. The eventual fate of First
Love was sealed there and then.
Whereas Rock 2 Rock had embodied a quite Unique Selling Point in its music format, First
Love Radio was destined to be ‘all things to all people’. As one writer noted of its music policy,
“this is perhaps as diverse as a radio station can get”. Owner UKRD was not really interested
in the business of operating a black music station for Lewisham. UKRD was in the business of
collecting local radio licences. A London licence held intrinsic value, whatever you did with it,
and the cost of a licence application was probably no more than the low tens of thousands of
pounds, while the scarcity value of any London licence made it worth millions. UKRD was an
investment machine, turning paper licence applications into valuable licences, rather than a
turnaround specialist turning poorly performing radio stations into success stories.
First Love Radio launched as a full-time station in 1999 but achieved dismal ratings so, in
2000, UKRD sold it to Fusion Radio Holdings, a new company established by radio salesman
Nigel Reeve to acquire local radio licences. Stella Headley tendered her resignation from the
Board little more than a year after her station had launched, abruptly bringing to an end her
decade of hard work to secure a local station for Lewisham. The ideals of First Love Radio
were already dead. Veteran radio presenter Roger Day was appointed Programme Controller
of the station, whose name was quickly changed to 'Fusion 107.3'. Reeve said: “We are
delighted to have acquired two radio stations [Lewisham and Oxford] with huge growth
potential. Plans are in place to build revenue and increase audience figures….”

4.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 4
©2009 Grant Goddard
In 2001, Fusion Radio Holdings and its three stations (Lewisham, Thamesmead and Oxford)
were acquired in a deal worth £4.1m by another corporate collector of local licences, the
Milestone Radio Company, which was run by former radio presenter Andy Craig. Media
Business reported that the deal “puts an end to industry speculation concerning the demise of
Fusion Radio [Holdings], following the move from its West End location to Lewisham”.
In 2002, Fusion 107.3 was instructed by the Advertising Standards Authority to withdraw a
poster campaign that featured “a photograph of the naked torso of a woman” whose “nipples
were airbrushed out and radio dials were positioned at the bottom right-hand side of her
breasts”. Complainants had objected that the poster was “sexist and demeaning to women”,
though the station’s owner argued that “the poster was designed as a high-impact campaign to
attract new listeners” and that the model’s “radio dials [were] pointing south east to emphasize
the geographical range of their broadcast”.
Three owners in three years were still failing to make First Love Radio/Fusion 107.3 a
success. In 2003, Milestone raised £8m from an AIM share listing, despite admitting that it had
“limited revenues to date and … accumulated net losses”. The pre-AIM company had suffered
pre-taxes losses of £5m in 2001 and £4m in 2002, on turnover of £0.6m and £1.7m
respectively. By 2003, Fusion 107.3 was still only attracting 6,000 listeners per week in a local
market of 322,000 adults. The station was already losing more than £300,000 per annum, so
Milestone put it up for sale.
In February 2004, after a year on the market, Sunrise Radio acquired both the Lewisham and
Thamesmead stations for £1.2m. Sunrise (coincidentally an ex-pirate station) had run a
successful, legal Asian radio station in London since 1989 and wanted to diversify into
mainstream radio formats. In January 2004, former Radio Authority finance director Neil
Romain had been recruited to head new Sunrise subsidiary London Media Company which
would manage these stations.
Once again, the station’s new owner appeared to miss the opportunity to imbue the station
with a Unique Selling Point to differentiate it from its many competitors in the London market.
The station was renamed 'South London Radio' and its web site was branded “All Time
Favourites”, a radio format similar to that already offered in London by 'Heart FM', 'Magic FM',
'Gold London' and 'Smooth Radio', amongst others. As a result, in 2006, the station was given
a ‘Yellow Card’ sanction by Ofcom because it was found to be failing its mandated music
format. Ofcom said the station “should have a distinct musical sound” whereas “over 50% of
the daytime output fell within the Hits/Pop genre”.
As well as the change in station name, the new owner asked Ofcom’s approval in 2006 to
temporarily move the station’s studio out of its Lewisham service area to share premises with
co-owned Time 106.8 in Thamesmead. There was a subsequent period when the station
operated from a business centre in Croydon. At the same time, it appears that improvements
to the station’s transmitter were granted that enabled the station to be heard across a wider
area that included parts of the Croydon and Bexley boroughs for the first time, extending the
potential audience to 645,000 adults. Eventually, the station returned to co-location in
Thamesmead.
During this whole period, the station’s music policy continued to be a bizarre mish-mash of
current hits and the oddest selection of ‘black music’ that seemed scheduled purely to satisfy
Ofcom’s prescribed Format requirement to appeal to “listeners with a preference for
soul/Motown, R’n’B, reggae and dance hits”. So the daytime output might make transitions
straight from Nat King Cole to Lily Allen, or from Dionne Warwick to the Pussycat Dolls. Whilst
I personally like eclectic mixes of music styles, South London Radio ended up sounding
particularly schizophrenic. Five years under the same owner should have provided plenty of
time to make the station at least sound consistent and instil it with a sense of purpose. Neither
Romain, without prior radio management experience, nor Sunrise, without experience in black
music formats, achieved a successful turnaround of the Lewisham station.
In 2008, a notice appeared on the consumer-facing homepages of the Lewisham and
Thamesmead stations, informing interested parties that both were up for sale and inviting bids.

5.
Sunrise Radio’s Avtar Lit explained: “They are good local businesses but they do not fit in with
our portfolio. Traditionally these stations have always made losses but we have reduced those
losses dramatically. The days of large companies running a number of local radio stations are
gone, simply because the decision-making process is too far removed." There was at least one
bid lodged for South London Radio, but the offer deadline passed and no transactions were
reported. Precisely what happened next is open to interpretation…………
The official web site of South London Radio includes a message which explains (in part):
“Both stations were sold on 22 February [2009] to an individual who, after seven days of
ownership, informed staff that he could not afford to fund the stations and would need to sell
one station to fund the other. At this point, staff had already not been paid for the month of
February. Since the announcement, staff have been working at the station free of charge in the
hopes a new buyer would be found. After a lot of work, a potential buyer was found who was
very keen to acquire the stations and take them forward. Several obstacles were put into their
way which saw the sale of both stations put on hold……”
The 'Radio Today' web site initially reported on 4 April 2009 that both stations had closed
because they had been “up for sale but no suitable buyer was found”, though its storyline was
later amended to match the explanation on the stations’ web sites.
According to the Company Register, on 22 February 2009, Sunrise Radio’s Avtar Lit, London
Media Company’s Neil Romain and Company Secretary Sonia Daggar resigned as directors of
South London Radio. On the same date, Arvind Kumar Audit was appointed sole director of
South London Radio, and a loan to the value of £1,029,704.61 was made from Sunrise Radio
to South London Radio which gave Sunrise first call on the station’s assets. Staff at the
stations have suggested that a relative of Lit was brought in to manage the Thamesmead
operation, though this allegation remains unsubstantiated. For the brief period the two stations
remained on-air, Audit was listed in their Public Files as Station Manager. However, Ofcom did
not publish a Change of Control review for these transactions.
In legal terms, it would appear that Sunrise Radio/London Media Company sold the stations
weeks before they closed, though why someone would decide to purchase a loss-making
station that had a £1m loan outstanding to its previous owner remains a mystery.
Nevertheless, the circumstances make it impossible to suggest that Sunrise Radio/London
Media Company themselves closed these stations (as Radio Today had initially stated)
because the stations were not officially under their control when the plugs were pulled. This
subtlety might hold some importance to Sunrise or Ofcom, but it remains wholly irrelevant to
the local people of South London who no longer have a local commercial radio station,
whatever did or did not happen.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 5
©2009 Grant Goddard
SOUTH LONDON RADIO: SHARE OF LISTENING
(%)
0.0
0.5
1.0
1.5
1999Q2
1999Q3
1999Q4
2000Q1
2000Q2
2000Q3
2000Q4
2001Q1
2002Q2
2001Q3
2001Q4
2002Q1
2002Q2
2002Q3
2002Q4
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
2006Q3
2006Q4
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4

6.
Admittedly, listeners to South London Radio were few in number as a result of the station’s
consistent failure to connect with an audience. Its market share only surpassed 1% during two
quarters of its decade on-air, though most of the time it registered less than 0.5%. In the
station’s launch year, its listeners numbered less than 1,000 adults per week although, by the
time it closed, that number had risen to 19,000 within its significantly enlarged coverage area.
These numbers would still prove too low to adequately finance a local radio business in
London. The station had never stood a chance from the time that UKRD saddled it with a pop
music format in its licence application.
-438,724 -522,310 -597,066 -461,372 -121,592 -235,277 -273,910
-322,693 -345,996 -404,768 -361,530 1,091,807 -43,449 -197,637 -223,559 -329,704
-1,071,332 -1,449,392 -1,820,041 -2,181,959 -1,091,024 -1,134,880 -1,333,127 -1,557,206 -1,886,910
2000 2001 2002 2003 2004 2005 2006 2007 2008e
Revenues 116,031 176,314 192,298 99,842 100,174 78,143 37,640 50,351
Costs 991,633
Operating Profit/Loss
Accumulated Profit/Loss
SOUTH LONDON RADIO PROFIT & LOSS ACCOUNT SUMMARY
South London Radio never made an operating profit from airtime sales, not even in its earliest
days. The only period of positive cashflow occurred in 2004 and 2005 when £1.7m
compensation was received from its landlord when the station was forced to vacate its
premises, presumably before its tenancy had expired. Ironically, this windfall was twice the
size of the advertising revenues received by the station during its entire lifetime. Although, in
recent years, its owner had managed to substantially reduce the station’s overheads, revenues
had fallen to as little as £1,000 per week by then. There are pirate stations in South London
that earn more money than that.
South London Radio’s final owner (or ‘penultimate’ owner legally) seemed to know where the
blame lied for the station’s failure. In one set of Annual Accounts, its directors said:
“Despite significant investment by the management, the station has continued to
perform below expectations. The impact of illegal broadcasters compromising the
transmissions of this station is the main reason for the poor financial performance. The
Directors are continuing to lobby the regulators in an attempt to find a solution”.
It was this lobbying by Sunrise Radio (a former pirate) of Ofcom which led to the transmitter
power increase that significantly extended the station’s coverage area. Its owner then
increased the survey area for the station’s RAJAR audience ratings from 304,000 to 1,472,000
adults, but the station’s weekly reach stubbornly remained at around 1%. Perhaps the owner
thought that a station which claimed to reach 1.5m people across South London was more
likely to find a buyer than a station that served only the relatively poor Borough of Lewisham.
Whatever, South London Radio eventually closed with accumulated losses estimated at
almost £2m, a figure that would have been twice the size, had it not been for the windfall
settlement the station received from its previous landlord.
So it’s all over now, a sad end to Stella Headley’s dreams and also the death of what was
supposed to be my local radio station. Hopefully, some lessons can be learned from this sorry
tale. Some of these ‘lessons’ seem so glaringly obvious that it is almost embarrassing to point
them out, but the 36-year history of commercial radio in the UK is so littered with repeated
failures that it is worth spelling out some of the things that evidently went wrong. First Love
Radio is just one of many local stations that have failed with both audiences and advertisers
because of structural and procedural faults within the UK’s commercial radio system.
POSSIBLE LESSONS
1. CAN A DESIGNATED LOCAL MARKET SUPPORT AN ADVERTISING-FUNDED
COMMERCIAL RADIO STATION?
Before advertising a new licence for a specific geographical area, the radio regulator did not
evaluate whether there were sufficient local advertising revenues to support a commercial
radio station for that area. This was true of Lewisham when the Radio Authority advertised this
licence in 1997. A decade later, it was probably just as true of Ofcom when it awarded new
licences for a talk station in Edinburgh (now closed), a rock music station in Plymouth (never
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 6
©2009 Grant Goddard
opened), a station serving a population of 65,000 adults in Barrow (now closed), or a station

7.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 7
©2009 Grant Goddard
nce
. LOCAL RADIO GROUPS ARE FODDER FOR THE AMBITIONS OF COMMERCIAL
not the first local radio group to have organised short-term broadcasts in
.
. NEW LOCAL COMMERCIAL RADIO LICENCES ARE AWARDED TO APPLICANTS
and again. How many of
ts that
l area,
. MOST LOCAL RADIO GROUPS’ EXPERTISE IS IN COLLECTING LICENCES, NOT IN
pplication is usually a five-figure amount,
serving a population of 30,000 adults in Northallerton (now annexed). Whether it was the
Radio Authority or Ofcom, the regulator was issuing ‘licences to fail’ that never stood a cha
of being successful, standalone businesses.
2
RADIO GROUPS
First Love Radio is
their area, organised training, raised public funds and raised local awareness of it campaign
for a local station. Then, when it comes to writing the licence application, many such groups
jump into bed with a commercial radio group that has no understanding of the group’s aims,
the proposed station’s format, or the local marketplace. The radio group is interested in the
licence, and the local group believe that such an alliance will ensure that licence will be won
An outside ‘consultant’ is brought in to write an application that is likely to win the licence,
rather than an application that tells the truth.
3
THAT ALREADY HAVE COMMERCIAL RADIO LICENCES
To those that already have shall be given …. again and again
Ofcom’s 39 new local radio licences between 2004 and today were awarded to applican
did not already own a radio station? Ony one. It’s a regulatory gravy train of licence awards,
which works great for those lucky few who already have a seat on the train. For those
genuinely local radio groups who simply have a desire to run a radio station in their loca
the message is – you don’t stand a chance of winning a licence on your own.
4
TURNING AROUND LOCAL RADIO STATIONS
As noted previously, the cost of making a licence a
whereas the balance sheet value of a radio licence is either a six- or seven-figure sum. The
‘business’ skill of most local radio groups has been based upon turning paper radio licence
applications into valuable intangible assets to add to their balance sheets. Sadly, it has not
been based upon launching successful local radio stations (‘successful’ meaning profitable), or
upon turning around unsuccessful stations.
-100
-75
-50
-25
0
25
50
0 500,000 1,000,000 1,500,000 2,000,000
MCA
. RADIO LICENCE APPLICATIONS ARE GENERALLY NOT GROUNDED IN REALITY
h
e
5
The promises made in most licence applications are mostly over-optimistic ‘waffle’. The lavis
programming, the potential profitability, the audience targets – most of these are written purely
to fit what the applicant radio group thinks the regulator wants to hear. Almost every licence
applicant promises that its business will break-even within three years, despite evidence that
there are very, very few newly-launched stations that have achieved such a performance in th
last 20 years. Rule Number One of licence applications – never let the facts get in the way of a
good story. As a result, the performance of most start-up stations is more than dismal. The

8.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 8
©2009 Grant Goddard
st
ecause of the untruthfulness of most licence applications, if you were to submit a more
t)?
. THE REGULATOR DOES NOT ‘POST MORTEM’ ITS LICENSING DECISIONS
it publish
. A LOCAL RADIO LICENCE ONLY ACQUIRES INTRINSIC VALUE IF YOU DO
utting inflated values for their local radio licences on
ion
er-
. THE TRACK RECORD OF MOST SMALL LOCAL RADIO GROUPS IS NOT GOOD
,
radio
al
. THERE IS A WIDENING ‘REALITY GAP’ BETWEEN WHAT THE REGULATOR IS
O
ch of the UK’s 300 commercial radio stations has a distinct ‘Format’ it has to
o
ions,
,
graph above shows the percentage plus/minus achieved in hours listened versus the foreca
hours listened in the station’s licence application for new local stations licensed during the last
five years. Only four stations managed to beat their targets. (The crosses represent stations
that have closed.)
B
realistic assessment of your business plan within a licence application, it would look very
gloomy compared to your competitors. Do you get any credit for being realistic (i.e. hones
No, you are unlikely to be awarded the licence.
6
When the Independent Broadcasting Authority licensed the ‘incremental’ stations, did
a report to show why so many of them went out of business within their first year? No, it didn’t.
When the Radio Authority licensed the ‘regional’ stations, did it publish a report to show why
these stations had no impact on enabling commercial radio to be more competitive for
audiences against the BBC? No, it didn’t (I did my own research). Now that Ofcom has
licensed so many new local stations, has it published research to show why so many are
already proving unviable and whether awarding new licences to existing licensees had proven
the appropriate regulatory policy? No, it hasn’t (see my research in John Myers' report). In all
these cases, there seems to have been no attempt to learn from past experience, and thus no
attempt to assess the positives and negatives of regulatory policy. To an observer, the attitude
might look remarkably like ‘OK, that didn’t really work, so let’s try something different now’.
7
SOMETHING CONSTRUCTIVE WITH IT
Local radio groups can play the game of p
their balance sheets. But unless you can actually find someone who is willing to pay that
inflated price, your licence in reality is worth nothing at all. After an era of crazy acquisition
prices during the 1990s, we are now in a period where there have never been so many stat
sellers, but almost no buyers for the majority of small local radio licences. The ‘house of cards’
that was carefully constructed over the last two decades is already falling down. The radio
licence gravy train bears some similarities to the vulnerability of a Ponzi scheme. Now that
Ofcom is no longer offering new local radio licences, the ability of radio groups to continue to
improve their balance sheet valuations through more licence wins has ended abruptly. As a
result, their existing stations are now revealed to be worth a lot on paper, but worth almost
nothing in reality because there are no buyers (i.e. other local radio groups with similarly ov
inflated balance sheets). The underlying fallacy of the licence award system is now revealed.
8
There is simply no money to be made from owning a number of small local radio licences
unless you have proven turnaround skills. Plenty of companies have raised millions of
shareholder funds, promising to return them a profit from a cluster of loss-making local
stations. The profits never arrived. Laser Broadcasting went bust. Forever Broadcasting went
bust. The Wireless Group sold out. Golden Rose sold out. Milestone sold out. The Local Radio
Company is on its knees financially. You might think that this history of failures would be
sufficient warning to future investors that adding X number of loss-making local commerci
radio stations to Y number of loss-making local commercial radio stations does not equal
profits. Apparently not.
9
REGULATING ON PAPER, AND WHAT IS ACTUALLY HAPPENING IN LOCAL RADI
MARKETS
On paper, ea
follow, theoretically offering it a unique position in its local market. In this highly regulated
system, Ofcom is supposedly ensuring that a diverse range of consumer demands for radi
content are being simultaneously satisfied in each market. Even a casual radio listener
realises that this system is a fiction. London has a large number of local commercial stat
and many of them sound remarkably similar, despite on paper them being meant to be
different from their competitors. If South London Radio had offered different content and
satisfied local demand for content, it might have thrived. Despite its Yellow Card sanction

9.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page 9
©2009 Grant Goddard
n
0. THE CLOSURE OF A LOCAL STATION IS THE FAULT OF BOTH ITS OWNER AND
regulator to step back and say that the commercial failure of a specific
wisham
es
second
1. RADIO STATION OWNERS ARE NOT REQUIRED TO SELL STATIONS, RATHER
dio group executives say that they would rather close down one of their
g for
2. THE SCARCITY OF LOCAL RADIO LICENCES HAS TURNED THEM INTO TROPHY
t to start a local newspaper, you simply start it. You don’t need a licence. If you want
t
3. THE LACK OF CREATIVITY IN COMMERCIAL RADIO
o sector that is severely holding
posal
4. THE REGULATOR PRETENDS TO ADOPT A ‘LIGHT TOUCH’ APPROACH TO
e UK were genuinely ‘light touch’, then it would be
appropriate that the regulator makes no attempt to intervene in the failure of individual stations.
Ofcom failed to ensure that South London Radio was satisfying the demand in South Londo
for a local, black music station.
1
THE REGULATOR
It is very easy for the
local radio station is not its responsibility because it does not interfere in the business
operations of its licensees. Frankly, this is a cop-out. Eight applicants applied for the Le
licence awarded to South London Radio. Seven were never even given the opportunity by the
regulator to create a successful local radio station. Our public servants in the regulator were
supposed to use their knowledge and expertise to select the applicant that was most likely to
‘win’. Ofcom even has a web page where it explains why it selected one applicant above the
others for each licence. If the regulator’s choice was misguided, mistaken or ill-informed, it
should have to explain what went wrong (a bit like this blog entry?). Surely, the regulator ow
such an explanation to the listeners the station was supposed to serve and also to the
unsuccessful licence applicants who, as a result of the regulator’s judgement, have no ‘
chance’ to put their own proposals for a radio station into action.
1
THAN CLOSE THEM
I have heard several ra
loss-making stations than sell it for £1. There are several issues at play here. Firstly, closing a
company creates an opportunity to move some liabilities from elsewhere in the group before
the station is made insolvent. Secondly, radio owners don’t want the embarrassment of
someone else successfully turning around a station that they had not managed to make
profitable over several years. Thirdly, if an owner paid £1m for a station, it is embarrassin
the CEO to have to tell their Board that it had to be sold for £1. The end result, as in South
London, is that listeners no longer have a local radio station at all, rather than the baton being
passed on to someone else to try and make the business work. Again, it is the listeners and
the unsuccessful licence applicants who lose out.
1
ASSETS
If you wan
to start a local radio station, you cannot. You have to wait for Ofcom to decide to offer a
licence for your area, then you have to apply for it, and then you have to win it. In this case,
Ofcom is unlikely to offer another South London FM licence to replace South London Radio.
That opportunity came and went in 1997. As a result, there are far too many owners coveting
local radio licences because of their scarcity, hoping that at some point in the future a ‘white
knight’ will still ride over the horizon and pay an outrageous sum for it, regardless of the fact i
is losing money every year and has accumulated losses of millions. After the Communications
Bill opened up UK radio ownership to non-European Union stakeholders, there were several
radio owners who were waiting for a global media company such as Clear Channel to ride into
town and offer them a small fortune for their failing businesses. It never happened, and sadly
there was no ‘Plan B’.
1
There is a terrible lack of creativity within the commercial radi
back its ability to compete with the BBC, let alone to compete with the flood of audio content
available via the internet. It is far easier for radio companies to simply do either the type of
content that they have always done and/or the content that everybody else is doing, rather
than to be innovative or creative. In the case of South London Radio, I understand that its
owner was approached last year by at least one radio consultant (not me) with a plan to
resuscitate the station by returning it to its original roots as a black music outlet. That pro
was rejected.
1
COMMERCIAL RADIO REGULATION
If the regulation of commercial radio in th

10.
'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page
10
©2009 Grant Goddard
it
ome shape
n
fcom makes a big noise about its consultation system and its willingness to listen to the
tation is threatened with closure,
ow
(I
he irony of South London Radio’s closure is that, over a ten-year period, things have already
one full circle. South London Radio was born from the experiences of pirate radio in the
in
irst Love Radio R.I.P.
regulated and interventionist commercial radio system has:
 completely failed the people who originally put the idea together for First Love Radio
their
ntinue to have to be filled (though not fully because of the
reat to those involved of criminal prosecution) by the efforts of unlicensed radio stations in
ed of his Rock 2 Rock days: “We even had links with the police
nd [Lewisham] Council. They used to send us information that was relevant to read out, even
irst published by Grant Goddard: Radio Blog
However, the system of radio regulation (even under Ofcom) intervenes heavily in almost
every aspect of the commercial radio landscape, down to such detail as whether a particular
station can play a specific song within its output. In such a highly regulated market where
Ofcom exercises such a high degree of control, the regulator should surely have a
responsibility to the citizen/consumer to ensure that the relatively small number of stations
selects to license (compared to the total number of applicants) continue to exist in s
or form. It is not consistent to intervene at every moment of a station’s existence, except whe
it is finally threatened with closure as a direct/indirect result of the regulatory system.
15. NO CONSULTATION WITH LOCAL STAKEHOLDERS
O
opinions of a wide range of stakeholders. However, when a s
has the regulator ever consulted with local advertisers to consider the impact on them, with
local community organisations who used the station to inform the local population of their
activities, or with the local population itself? Would it not be useful to talk to Stella Headley n
and canvas her opinion of what precisely had gone wrong with First Love Radio since 1990
tried to locate her for this blog entry but failed)?
T
g
Borough of Lewisham, and now it is the pirate stations once again that are carrying the torch
for those of us living in this area of South London. There is presently a great pirate station
Lewisham that sounds like the natural successor to1980s pirate Rock 2 Rock, playing reggae
and soul music for ‘big people’. I can listen to this station on FM or via the internet (telling you
its name would break the law) and it entertains me in a way that the latter day South London
Radio never achieved. I used to listen to Rock 2 Rock in the 1980s, and now I am listening to
its successor.
F
It appears that our highly
 completely wasted the public money invested in training people from the local
community in Lewisham to make radio programmes
 has completely failed the population of Lewisham and beyond who should have
own radio service.
These failures in public policy will co
th
Lewisham. A document published by the publicly funded Creative Lewisham Agency lamented
that “television and radio is a very small Creative Industries sub-sector” in the north of the
Borough ….. but then it noted that pirate radio is “a contributor to the Creative economy” and
“is certainly vital for networking and showcasing”. When you find public bodies extolling the
citizen value of pirate radio, you know for sure that something in our radio licensing system
has gone very badly wrong.
As Inspector Scratch-It recall
a
though we were a pirate.” Twenty years on, it is still pirate radio filling that gap.
[F as 'First Love Radio (aka South London Radio) R.I.P.',30 April 2009.]

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'First Love Radio': A South London Pirate Station That Had Succeeded Was Transformed Into A Legal Local
Commercial Station That Failed page
11
©2009 Grant Goddard
rant Goddard is a media analyst / radio specialist / radio consultant with thirty years ofG
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk