Back in June, when it gave its first trading update as a combined group, GCap warned that spending from advertisers would continue to be weak. It was right. But analysts complain that the shortage of information reaching the City is making a bad situation worse. No one will know the company's strategy until November, more than six months after the merger took place.
The abrupt announcement of Mr Mansfield's departure is a perfect example. It has left one analyst, who says there have been no presentations by management to the City since the merger, "spitting blood". He adds: "There has been an appalling lack of communication. It's outrageous."
If there's more bad news when GCap issues another trading statement this week, the knives will be out, this time for Mr Bernard. So why did Mr Mansfield really step down, and how does Mr Bernard plan to turn things around?
Peter Cawdron, promoted from deputy chairman to non-executive chairman last week, says that the original board structure was never supposed to be permanent, with Mr Mansfield running day-to-day operations and Mr Bernard responsible for strategy on areas such as digital radio. Having two hands-on bosses - an executive chairman and chief executive - rarely works, especially if the two posts are filled by two former rivals used to being in charge of their own companies. Nor is it recognised as best corporate governance practice.
"We said we could work it for a year," Mr Cawdron tells The Independent on Sunday. "Then, if there is a need, you can take a decision. But the advertising market was very bad. We decided we couldn't go on like that. There could only be one boss.
"If we could grow and expand the business, there would be room for manoeuvre. But in a difficult environment, two people trying to do one job is difficult."
He says Mr Mansfield did not offer to resign, and the board ruled that only one of the two could stay, choosing Mr Bernard. "Ralph did not play a part [in the decision]," he adds.
Of more importance is what happens now. Analysts expect this week's trading statement for the third quarter, to be bad, but not as bad as the 14 per cent year-on-year slump in revenues recorded for May.
The worst could be over. Derek Manns, a director at media buyer Starcom Mediavest, forecasts that total advertising spend on radio, of which GCap is by far the biggest recipient, will increase in the third quarter compared with the second. For 2005 as a whole, he believes it is still possible that spending will be up on last year.
The whims of advertisers are largely beyond GCap's control. What makes analysts and shareholders more nervous is the management's strategy - or apparent lack of it. Mr Bernard has been one of the biggest investors in radio's new wave. Thanks to him, GCap has a majority stake in Digital One, the only commercial national digital multiplex.
But media regulator Ofcom is considering releasing new bandwidth for new national digital stations, threatening the investment in Digital One. Mr Bernard has threatened legal action, claiming Ofcom has gone back on a pledge that no more bandwidth would be made available to commercial rivals. Broker Panmure Gordon estimates that, between them, Capital Radio and GWR have sunk over £50m into digital radio, which is not yet profitable.
The City is particularly concerned that any new investment would force GCap to cut its promised 18.5p per share dividend. Richard Marwood at Axa Investment Managers, which is a leading shareholder in the group, says: "If they were going to cut the dividend, that could remove a key support for the current share price."
Another analyst puts it more forthrightly: "If Bernard disappoints on the trading update - if he thinks he can get away with splashing the dividend on digital and not focusing on cutting costs - then his days are numbered."
Mr Cawdron won't be drawn on the dividend: "I can't promise anything. It's not something we've considered in detail to the point of making an announce-ment." On Mr Bernard's future, he says: "We have every confidence in Ralph."
Mr Bernard will hope the vote of confidence does not prove the kiss of death.Reuse content