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08|08|05

Ofcom publishes its statutory assessments in respect of the takeover of Scottish Radio Holdings by Emap

Ofcom today announces the completion of its statutory assessments in respect of the takeover of Scottish Radio Holdings plc (SRH) by Emap plc (Emap).

Separately, the Office of Fair Trading (OFT) has today announced the conclusion of its assessment of key competition aspects relating to the takeover of SRH by Emap.

Ofcom has been given a number of specific duties under the Communications Act 2003 and other legislation in relation to takeovers and mergers of commercial radio companies.

Ofcom has a duty to apply ownership rules that are designed to protect plurality of ownership of the media. It is also required to conduct a review of any local radio licence that undergoes a change of control, in order to ensure that the character of the service, the quality and range of programming and the amount of local programming would not be prejudiced as a result of the change of control.

Ownership rules

In respect of the takeover of Scottish Radio Holdings by Emap, Ofcom has concluded that the local digital multiplex ownership rules and the local digital sound programme service (DSPS) rules would be breached. Ofcom's conclusions do not prevent Emap from proceeding with the takeover but require it to take actions following the completion of the takeover.

The local digital multiplex ownership rules would be breached in respect of the Glasgow and Ayr multiplexes. Ofcom has issued a direction to Emap requiring it to comply with these ownership rules within a specified timeframe. Compliance could be achieved through the divestment of control of either the Ayr or Glasgow local digital multiplex. However, it is for Emap to decide how to proceed.

The DSPS rules would be breached on three multiplexes:

• Aberdeen
• Ayr
• Dundee/Perth

Ofcom has issued a direction to Emap requiring it to comply with these DSPS ownership rules within a specified timeframe. There are a number of different options open to Emap which would ensure compliance. Again, it is for Emap to decide how to proceed.

Change of control reviews

In addition to the ownership rules assessments, Ofcom has also carried out change of control reviews for those local analogue licences that change control. It has determined that the 21 local analogue licences owned by SRH will change control as a result of the takeover.

Following statutory change of control reviews of the 21 licences, Ofcom has determined that no licence variations are required in respect of these licences.

The document setting out Ofcom's conclusions on these issues can be found in Related Items.

Competition matters

In relation to competition matters, the OFT has today announced its conclusions on the takeover of SRH by Emap.

Ends.

NOTES FOR EDITORS AND CSEs

1. The local digital multiplex rules state that no one individual may hold licences for two local radio multiplexes that overlap with each other by 50% or more. SRH currently owns both the Glasgow and Ayr local multiplexes. These local multiplexes overlap by 60%. SRH is not currently in breach of the rules due to transitional arrangements provided for in the Communications Act 2003. However, these provisions will cease to apply following the takeover, placing Emap in breach of the rules.

2. The local digital sound programme service rules state that an individual may provide up to four digital sound programme services in a local multiplex area. A local multiplex area is the area covered by a local digital multiplex, and any other local multiplex, that shares a 50% or greater overlap with it. If an individual wants to add a further service in the multiplex area in question, a points test is applied and no individual may hold more than 55% of the points.

This rule will be breached on three multiplexes: Aberdeen, Ayr and Dundee/Perth, as services operated by Emap or SRH account for more than 55% of the total points on each of these multiplexes.

The digital radio services on these multiplexes which are operated by Emap or SRH are:

• Aberdeen multiplex - Kerrang! (Emap); Kiss (Emap); Smash Hits (Emap); Northsound One (SRH); Northsound Two (SRH)
• Ayr multiplex - Smash Hits (Emap); 3C (SRH); Vibe (SRH); West FM(SRH); West Sound (SRH)
• Dundee/Perth multiplex: Smash Hits (Emap); 3C (SRH); Vibe (SRH); Tay FM (SRH); Tay AM (SRH)

3. Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.

For further details please visit www.ofcom.org.uk.

CONTACT

Ofcom Media Office
mediaoffice@ofcom.org.uk
(+44) (0)20 7981 3033

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