Friday, July 18, 2003

SOMEHOW, IT'S SLIGHTLY MORE ICKY THAN OUR PRISON ANAL RAPE METAPHOR: Clear Channel have snorted that Capital's rejection of a possible merger is like Anne Widdecombe turning down a date with Brad Pitt - which, while showing a nice deft touch with the choice of English and American icons isn't entirely spot-on, we'd suggest. Capital, with it's mainly chart-based formats of one sort and another is not really much like Anne Widdecombe; indeed, it's desperate bid to weld youth crediblity onto an aging roster of faces makes it more like William Hague. And Clear Channel is flattering itself if it really looks in the mirror and sees Brad Pitt. Maybe Mike Tyson might be more the mark?

Roger Parry, biggest cat of all the Clear Channel Fat Cats then puts aside the date-similes to crush Capital with maths, like a giant, um, Calculating-Godzilla creature: "If you do your mathematics, it's obvious why Clear Channel would not be making bids for Capital Radio. Capital's pre-tax profits are about £24m and its current market value is £410m. A company is worth its cash flow, so you'd have to take the tax rate off the £24m - say take a third off, and you've got £16m. You going to buy something for £400m that's producing £16m cash, that's a return of 4%. I'm expected to make a return of 15%. The gap between 4% and 15% is pretty large and only two things could close that gap - either you'd have to assume profits are going to massively go up, or the price would have to go down. Absent either of those two events, I don't think David needs to worry." In other words, Capital is a hideously overpriced beast right now. (We're sure you will have spotted that poo-pooing a merger is a good way to try and talk the price of stocks down).

Parry also says that, if the price was right, Clear Channel would be looking at music or rolling news stations, but not other speech-based radio because the BBC has got that all stitched up. He seems to not really have a very tight grip on the dynamics of the UK commercial radio market, which is pretty much all music-based, save for one brave rolling news operation and TalkSport. (Unless, of course, we're doing him a disservice and he really has been thinking if it's worth trying to take over OneWord, the pixie-sized book station on DAB). Ominously, he also suggests there's an untapped audience for Country Music. Now, there he is kind of right, but only in large enough numbers to sustain with a national analogue frequency - which would mean a hell of a shake-up at Classic FM or Virgin.

In conclusion, reports MediaGuardian, Mr Parry also said he wants to put paid to "myths and legends" about his company and address its image as "big bad" ogre of the industry. "They want to portray us as mindlessly commercial, only interested in selling hamburgers. We absolutely accept the fact we are a commercial broadcaster. Our success is based on maximising advertising revenue. The part [British radio executives] chose not to hear is that we do that by maximising and delighting listeners - if you don't have any listeners you don't have anything to sell." So, erm, that would be be being mindlessly commercial then, Mr. Parry - what you do is maximise listeners by appealing to the Lowest Sustainable Denominator. However much it might delight the audience, you're still flattening down the radio landscape to do it.



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