Communicorp, the radio group controlled by Denis O'Brien, has agreed a sale of the company to UK-based Bauer Media Audio for a sum understood to be more than €100 million.
The deal, which is subject to regulatory approval, will see Bauer take control of the national stations Today FM and Newstalk, as well as local music stations Spin 1038 and 98FM in Dublin and Spin Southwest in Limerick.
Digital radio sport station Off the Ball, digital audio exchange audioXI and aggregated listening platform GoLoud are also part of the company.
Speaking at a webinar for Trinity students on Thursday night Mr O’Brien said he was was “delighted with the offer”. He went on to say that his decision had been influenced by the changing listening habits of consumers.
“I just don’t know whether a 12-year-old today who is going to be 15 in three years’ time is going to be listening to Spin,” Mr O’Brien said.
The move follows Mr O’Brien’s sale of his 29 per cent shareholding in Independent News & Media (INM) in 2019 and marks his exit from the Irish media market.
Communicorp employees were informed of the sale on Thursday morning.
The company's chairwoman, Lucy Gaffney, said the agreement to sell marked "the culmination of an exciting and dynamic journey" for Communicorp.
“Hundreds of incredibly talented and special people, both in front of and behind the mic, have made that journey possible and I want to thank them for their enormous contribution to the company. I also want to thank our advertisers, our stakeholders and especially our listeners, for their support and loyalty over many years.”
Mr O’Brien’s decision to offload Communicorp was not unexpected. In 2016, Communicorp explored a deal to sell Newstalk to INM while Mr O’Brien was still the largest shareholder in the newspaper group.
The Digicel founder entered the Irish media market through his interest in Classic Hits 98FM in 1989, the year licences were issued to independent radio stations for the first time. Communicorp went on to become the majority shareholder in Newstalk, then only a Dublin station, in 2004. It later gained a national licence.
Mr O’Brien’s media holdings expanded significantly when he bought Today FM from Emap in a landmark €200 million deal in 2007 during a buoyant spell for the Irish advertising market. This deal also included Highland Radio and FM104, both of which were sold soon after – in FM104’s case to satisfy the concerns of the Competition Authority.
He first bought shares in INM in 2006, becoming its largest shareholder in 2012 following a six-year battle with Sir Anthony O’Reilly. After years of boardroom upheaval, the company was sold to Belgian publisher Mediahuis in 2019, ending Mr O’Brien’s relationship with the company.
The latest accounts for Communicorp show that Mr O’Brien, its majority shareholder, increased his financial support to the group in 2019, bringing his total loans to Communicorp to €104.2 million.
The accounts, filed in December, show that the company made an after-tax profit of almost €1.6 million in 2019, compared to a €700,000 loss the year before.
Its revenues rose 4 per cent on a like-for-like basis to €43.8 million, despite significant challenges in a radio market that is increasingly vying with for advertising revenues with technology companies such as Google and Facebook. Since then, the Covid-19 pandemic had a “significant impact” on the operations of the group, which employs about 255 people.
The most recent figures from the Joint National Listenership Research survey show that Today FM has a market share of 7.8 per cent, which is a five-year high for the station, while Newstalk has a market share of 6.7 per cent.
In Dublin, Spin 1038 and 98FM have a 6.8 per cent and 6.5 per cent share respectively, while Spin Southwest has a 9.8 per cent share in its licence area. Both Spin stations perform especially well among 15-34-year-old listeners, while Newstalk is stronger in Dublin than it is nationally.
Bauer Media Audio president Paul Keenan said Communicorp's radio stations and digital brands were "well positioned to capitalise on the future development potential of the wider world of audio" and that the company looked forward to working with Communicorp chief executive Simon Myciunka and his team.
The deal represents Bauer’s entry into the Republic’s radio market and extends the commercial radio group’s holdings to eight European countries.
In the UK, Bauer operates the stations Magic, Kiss, Absolute Radio, Scala Radio and the Hits Radio network, while it also has a presence in Sweden, Norway, Poland, Slovakia, Denmark and Finland. In the North, it owns Cool FM, Downtown Radio and the digital-only Downtown Country.
Its stations, which are estimated to reach some 55 million listeners, are mostly music-led, raising a potential question mark about its future interest in Newstalk.
The radio business is part of Germany’s Bauer Media Group, a family-owned media conglomerate that is headquartered in Hamburg and led by chief executive and majority owner Yvonne Bauer.
The fifth-generation company, which owns hundreds of websites and magazines – including Grazia, Heat, Empire and Take a Break – dates back to a small printing operation in 1875 and employs about 15,000 people.