The boss of UK music publishing and radio group Chrysalis is today understood to be considering the possibility of a management buyout of the firm’s radio business if private equity backing can be secured.
Chrysalis chief executive Richard Huntingford is believed to have mooted the idea of a management buyout for the Heart and Galaxy radio station arm, which could include senior staff such as Chrysalis Radio chief executive Phil Riley, according to a report in The Sunday Telegraph.
The group announced two weeks ago that it was considering its future ownership of the radio division.
The radio sector has come under increasing pressure to consolidate amid a climate of falling advertising revenues.
Chrysalis said on announcing the review that it was the right time to look at its options for the radio business “in the light of continued consolidation” in the sector – a move which also followed a more upbeat trading update on the radio market and strong listening figures for London radio station Heart.
Mr Huntingford told The Sunday Telegraph that a management buyout was “not on the agenda at the moment”, but it is understood that private equity backing would put the option firmly on the table.
Chrysalis recently gave a trading update suggesting that the radio advertising market may be on the verge of a recovery, with revenues rising by 5% in the four months to the end of January.
The group said that industry figures showing Heart was now the most listened to local station in the country, together with the positive signs in the advertising market, had given it confidence of meeting expectations for flat year-on-year revenues for 2007.
Chrysalis is the third largest commercial operator in UK radio.
Rajar figures released earlier this month revealed that Heart breakfast show host Jamie Theakston had pushed Capital’s Johnny Vaughan into second place for the first time, having grown its audience by almost a quarter to 948,000 in the final quarter of last year.
Chrysalis declined to comment on a possible management buy out of the radio arm.