Management team fired at Capital

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The Independent Online

GCap Media, the UK's biggest radio company, has ousted the management of its flagship Capital 95.8FM station as it struggles to improve its performance.

Less than five months into a radical new strategy for 95.8FM, its managing director Keith Pringle and programme director Nik Goodman have left abruptly, GCap announced yesterday. No replacements were named.

The news comes as speculation mounts in the City that GCap is being stalked by multiple bidders. The company's shares closed up 9 per cent at 243p.

GCap, formed in early 2005 through the merger of GWR and Capital Radio, is desperately trying to tackle five years of severe decline at 95.8FM. The station is still the single biggest source of revenues for the company but in the first quarter of this year, 95.8FM's advertising revenues were down as much as 47 per cent.

In December, GCap implemented a new commercial strategy that saw it halve the number of advertising slots sold on Capital 95.8FM. It now has no more than two ads per break to try to protect the 30 per cent premium that advertisers pay for a slot on the station.

In January, a rebranding and new music policy was implemented, designed to give 95.8FM a more adult character, with women aged between 25 and 35 in particular targeted.

Steve Orchard, GCap's operations director, said the advertising premium had been successfully protected and the relaunched station had received "excellent" feedback. "Capital needs nursing through a critical period and it's a case of so far so good," Mr Orchard said.

City analysts were not so kind. One described 95.8FM as a "basket case" yesterday, while another doubted whether the new advertising sales policy could ever deliver a recovery in revenues or profits at the station.

Capital 95.8FM, started in 1973, enjoyed a virtual monopoly in London until the early 1990s. Since 2003, it has at times been overtaken as London market leader by Heart, which is owned by Chrysalis, and by Emap's Magic. In the last official listening figures, the market share of Capital 95.8FM was 5.9 per cent, just behind Heart.

A number of private-equity players are believed to be preparing an offer for the company, with some pointing to Tim Schoonmaker, the former head of radio at Emap. Mr Schoonmaker, who has just joined the private-equity arm of CSFB, made a tentative approach to GCap last year.

Others have suggested that a trade buyer is more likely, with the US group Emmis Communications regarded as a strong possibility.