GCap extends Vaughan's contract despite massive listener losses

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Former television presenter Johnny Vaughan has won a three-year extension to his contract with London's Capital Radio, despite losing almost 600,000 listeners since taking over the station's breakfast show in 2004.

GCap Media, the company that owns Capital, had been tipped to replace Mr Vaughan, who is rumoured to earn £3m a year for the show, when his existing contract expires in April. Yesterday, however, Steve Orchard, GCap's group operations director, surprised analysts by announcing the three-year deal.

When Mr Vaughan took over the breakfast show in April 2004, he was bequeathed 1.37 million listeners by his predecessor, Chris Tarrant. By the end of last year, figures from Rajar, the organisation that monitors radio listening trends, showed the audience had fallen to 782,000.

More significantly for GCap, the breakfast show also lost its top ranking as London's most listened-to commercial station. While Capital continued to attract a few thousand more listeners than its main rival, Chrysalis, Rajar said people tuned into the latter's breakfast show for longer.

Last week, GCap announced it has appointed Fru Hazlitt, the former chief executive of media company SMG's radio business, to its board, as managing director for its London operations.

However, while Ms Hazlitt has specifically been tasked with restoring Capital Radio's number one position in the London commercial radio sector, Mr Orchard said he had already taken the decision to renew Mr Vaughan's contract. Ms Hazlitt is not due to joined the company until 1 May.

"This year we are determined to bring those listeners who have gone to other stations back home," Mr Orchard said. "No one can deliver the warmth and humour that Londoners want from their breakfast show as well as Johnny can."

Capital had hoped that a revamp of its music policy last year would attract more listeners, but it has subsequently begun concentrating its efforts on higher marketing spending.

The decision to re-appoint Mr Vaughan, who has attracted some criticism for an overly "laddish" style, reflects Capital's view that its audience losses reflect problems with the station as a whole, rather than with particular DJs.

Rajar is set to announce listener figures for the final quarter of 2006 on Thursday, which could give GCap further problems.