BCI set to rule on radio licence
The BCI has been poring over the details of two rival bids for a number of weeks and a decision is to be made at a meeting of its board later today. Oral hearings on both applications for the licence took place in July.
The two consortiums are Red FM South West, which already operates the Red FM station in Cork, and Spin, part of Denis O’Brien’s business empire.
A third consortium backed by publican Louis FitzGerald and Eircom deputy chairman Con Scanlon was eliminated at an earlier stage by the BCI.
The licence, which is aimed at 15 to 34-year-olds, will allow the station to broadcast across Kerry, Limerick, Clare, north Tipperary and south-west Laois and is considered to be among the most lucrative to have been offered in recent years by the BCI.
In its submission to the BCI, Red South West said it plans to invest €4 million in the station and hopes to become profitable within five years.
If it is awarded the licence it plans to be on air next March and employ 40 people.
It will have a main studio in Limerick and outside broadcast facilities in Tralee, Ennis and Roscrea.
It has forecast turnover in the first year of operations of €1.4m and a loss after tax of €1.5m.
By 2012 it expects turnover to rise to €3.3m and to make a profit after tax of €121,000.
The backers of Red FM South West are Thomas Crosbie Holdings (owners of the Irish Examiner), former FM104 boss Dermot Hanrahan, Billy Ryan of the Limerick Post, Sean Lyne of The Clare People, auctioneer Joe Carey and Claret Capital head Domhall Slattery.
Spin currently operates a similar station in Dublin. Since its launch a few years ago, it has gained a 12% share of the market.
Mr O’Brien has also lined up a number of high-profile backers for his bid for the licence, including Jerry Kennelly, the Kerry businessman who netted a fortune after selling his Stockbyte picture agency earlier this year, and former Irish rugby captain Keith Wood.
According to Spin’s business plan, investors will pump €3.8m into the station.
It is forecasting sales of €1.2m in the first year of operations, resulting in net loss of €954,000, with sales rising to €2.7m in year four and a profit of €142,000 and a 34% share of the radio market.
