News story about the rage expressed by local business leaders following the award by UK media regulator Ofcom of a new local commercial FM radio licence for the Plymouth market to an Australian bank, written by Grant Goddard in March 2006 for The Radio Magazine.

1. NEWS: OFCOM'S AWARD OF
NEW COMMERCIAL FM RADIO
LICENCE FOR PLYMOUTH TO
AUSTRALIAN BANK ENRAGES
LOCAL BUSINESS LEADERS
by
GRANT GODDARD
www.grantgoddard.co.uk
March 2006

2. Ofcom’s decision to award the new Plymouth local commercial FM radio
licence to Australia's Macquarie Bank has outraged local business leaders,
who have vowed to “fight this decision through to the highest authority in the
land.”
They have sent a 1,000-word letter, drafted by TV presenter Hugh Scully and
signed by Charles Howeson, chairman of the Plymouth Chamber of
Commerce, to culture secretary Tessa Jowell, demanding “a full examination
of this decision by the Select Committee for Culture, Media & Sport”.
The letter was the first outcome of an emergency breakfast meeting last
Tuesday, attended by the unsuccessful licence applicants and the editors of
'The Western Morning News' and 'Evening Herald' newspapers. Arguing that
the licence award is “a vitally important national issue”, the group’s letter noted
the “astonishment and anger” caused by Ofcom’s decision, which it said has
implications for all local radio stations.
It went on to accuse Macquarie of making “three cloned applications” to Ofcom
in different areas for its proposed 'Diamond FM' radio station and asked: “If a
licence can be won with such minimum effort, despite massive resources, what
signal does that send to the whole of the radio industry?” The letter concluded:
"The consequences for local media groups having to compete against
international banks are already clear. Ofcom's decision will result in fewer
applications for local radio licences, less choice and less diversity for local
audiences … Now that Ofcom have opened up applications to huge
international financial interests, the British-based industry faces sharp decline."
After the meeting, the letter’s signatory Charles Howeson said: "This is only
the second time in memory that all business organisations have come
together. The last time was for the need to have a power station at Langage."
Much of the local debate has focused on the fact that Macquarie Bank is
Australian and that Tim Schoonmaker, chairman of the winning applicant
group, Radio UK Holdings Ltd, is American (though he has lived in the UK
since the 1980s).
The day the licence was awarded, Howeson had commented: "It's an
enormous smack in the face that Ofcom doesn't consider that anyone local is
apparently suitable to run it. Quite where this sits in the firmament of serving
local interests through a local radio station, I don't know.”
This is the second radio licence that Ofcom has awarded to an overseas
company, in contrast to its predecessor, The Radio Authority, which never
made an award to a foreign group. Controversy over the licence award has
received significant coverage in the local 'Western Morning News' paper,
owned by Daily Mail & General Trust [DMGT], the largest shareholder in GCap
Media plc, which owns the local heritage radio station 'Plymouth Sound'.
Responding to criticism that the Plymouth station will be Australian-owned,
Schoonmaker said: “There are two things from that. One, how the station is run
News: Ofcom's Award Of New Commercial FM Radio Licence For Plymouth To Australian Bank Enrages Local
Business Leaders Page 2
©2006 Grant Goddard

3. News: Ofcom's Award Of New Commercial FM Radio Licence For Plymouth To Australian Bank Enrages Local
Business Leaders Page 3
©2006 Grant Goddard
is what matters. Two, ownership is funding. The biggest foreign investor in
radio in Australia is DMGT. Some of their radio stations have been pretty
successful with audiences. If a radio station is good, people will listen to it.”
Asked why Macquarie had not made a bid for Plymouth Sound, which GCap
offered for sale last year, Schoonmaker replied: “We just felt that the price that
was being asked was too high, and it is a lot more fun to build something from
scratch. Diamond FM may prove to be the local radio station with the most
local output. Plymouth Sound pumps out overnight programming from Bristol.”
When asked about his future plans, Schoonmaker responded: “Radio UK
Holdings [Limited] is expanding by going for other licences. Also, what we did
[at EMAP] was to start with a radio brand, like 'Kiss' [in London] and build from
that with a TV channel linked to it and services to mobile phones. We are
thinking about how we will build.”
Answering critics who argue that a rock music format is too niche for the
Plymouth market, Schoonmaker added: “It's a town that's going places and it
has only got one FM commercial radio station that serves Plymouth, rather
than the wider region. I could see there was an opportunity to get some
listeners off the BBC. My thesis is that the rock audience is really big and is
almost entirely unserved by local commercial radio. Our research confirmed
that.”
Schoonmaker’s words received short shift in Plymouth, where Charles
Howeson was still describing Ofcom’s decision as “bizarre” and “an absolute
farce”. He said: “We are locked solid with indignation”.
[First published in 'The Radio Magazine' as 'Will Diamond Make The Cut?' [sic], #728, 22 March 2006]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
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