Radio bidders plan €2m marketing campaigns

Licence hearing: Two groups battling it out for a multi-city radio licence for over-45s told a public hearing in Dublin yesterday…

Licence hearing:Two groups battling it out for a multi-city radio licence for over-45s told a public hearing in Dublin yesterday that they will each spend €2 million on marketing campaigns to launch the new station.

4FM, a consortium of media groups led by former Lite FM chief executive Martin Block, and More FM, which is owned by TV3, made their pitches for the 10-year licence to the Broadcasting Commission of Ireland in Dublin's Conrad Hotel.

4FM, whose shareholders include Fox Radio, Bay Broadcasting, Vienna Investments, Thomas Crosbie Holdings and The Irish Times Ltd, has secured total funding of €9.1 million, while More FM is backed by €10.7 million.

4FM is projecting revenues of €2.2 million in year one, rising to €4.9 million in its third year of operation. It expects to turn a profit in year four, by which time the station will have accumulated losses of €5.6 million.

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BCI chairman Conor Maguire questioned whether the consortium would get a return on its investment during the 10-year life of the contract.

"Given the fullness of time and rising ad revenues after year five, we believe that we will recoup our investment," said Howard Block, 4FM finance director.

Mr Block added that 4FM would also hope to renew its licence at the end of the 10-year duration.

More FM has set aggressive sales targets. It expects to net €2.9 million in revenues in year one, rising to €7.9 million in year three and to €9.5 million by its fifth year.

More FM, which plans to begin broadcasting from next September, expects to spend €8.1 million on pre-launch costs and operating expenses for its first year.

Mr Maguire questioned More FM's aggressive revenue targets. David McRedmond, TV3's chief executive, said the television station had this year grown its revenues by 13 per cent against a budgeted target of 11 per cent.

"You can bet your bottom dollar that nobody would have thought we'd do that," he said.

More FM will employ 51 staff and said it would offer pensions and health insurance to workers as part of their remuneration.

The station plans to offer 24-hour live news each day and will carry 45 minutes of Irish programming each week.

It said it would not offer combined TV and radio packages to advertisers.

4FM said a share option and bonus schemes would be in place for key management and staff. It also plans to spend €250,000 on research and training.

Both groups said they expect to take significant market share from RTÉ Radio 1.

More FM highlighted the fact that it will operate regional studies in Cork, Galway and Limerick to complement its existing base in Ballymount, west Dublin.