O’Brien’s €200m radio swoop not unexpected

ALTHOUGH just a few months ago Denis O’Brien was distancing himself from speculation regarding a bid for Emap’s Irish radio operations, his emergence as the successful bidder — through his Communicorp Group — this week, has really come as no surprise to the industry.

The Irish radio market may be in good shape at present, but it’s pretty well saturated. While it may be tough for a new investor to gain entrance from scratch, there’s definitely a market for existing industry players to ramp up and increase their portfolios.

Mr O’Brien obviously falls into the latter category — as Communicorp already owns Newstalk 106, Spin 103.8 and Dublin station 98FM (as well as a raft of stations across Hungary, Bulgaria, Estonia, Finland, Czech Republic and Ukraine).

And, according to one industry source, he’s something of an ideal candidate to push the sector here forward. “He may be involved in a lot of business sectors, but radio is really where his heart is; it’s where he started out from. The amount of personal work and attention he’s put in to 98FM alone outshines what he’s done at his other businesses,” they said.

The Irish radio sector is a buoyant market at present and that’s only likely to continue, they added.

“Once you get past your fixed costs and break even on advertising revenue, you’re in clover and into clear profit. Now, the three stations (Today FM, Highland Radio and FM104) may be spread out a bit, geographically speaking but there are definite synergy opportunities with back office duties and sales able to be handled centrally. There is also ample opportunity to make money from cross-selling.”

Emap originally bought the three Irish stations in 2005. In the year to the end of last March, the business had operating profits of €10.34 million and revenues of around €31m.