Stories
Bauer Media, the new German-based owner of the group of radio stations formerly known as Communicorp, is undertaking a radical simplification of the business’s corporate structure.
Under former owner Denis O’Brien, each business unit, from radio stations to advertising saleshouses, was housed in a separate company. On the scale of pan-European group Bauer, which has over €2 billion in annual revenue, all Irish operation is just one business unit.
To reflect this, ten companies are now merging into one. The resulting structure will comprise just two entities – a holding company, Bauer Media Audio Ireland, to connect the Irish business to its German owners, and its operational subsidiary.
The chosen survivor company is Maypril, the current operator of Dublin station Spin 103.8, with nine other group entities merging down into it. Some of the subsidiaries slated for destruction were previously used to house minority interests for partners of O’Brien’s in 98FM, Newstalk and Spin.
In the process, Bauer has just filed documents giving a snapshot of each subsidiary before it disappears, including a balance sheet summary of its assets and liabilities at the end of June. This offers unique insight into the health status of the various stations immediately after the acquisition agreed with O’Brien earlier in the year was completed on June 1. Communicorp previously reported consolidated figures only, with no financial data on individual subsidiaries, and had last filed accounts to the end of 2019.
After a full year of pandemic-induced advertising slump, this is how the balance sheet of each Communicorp group company looked when they transferred to Bauer.
Radio Ireland (Today FM) and Radio Two Thousand (98FM) stand out as the best-capitalised stations in the group, booking tens of millions each in shareholders’ funds. 98FM was O’Brien’s first foray into radio when he started the station in 1989 and formed the foundation of Communicorp.
By contrast, the balance sheet of Newstalk is over €30 million in negative equity, nearly nullifying the wealth accumulated in Today FM.
Some dramatic differences of fortune also appear among smaller stations, with assets of over €5 million at Maypril barely dented by any liabilities while liabilities at its sister Limerick station Spin South West and at the recent offshoot Off The Ball outweigh their assets three times over.
The broad balance sheet figures reported for each subsidiary do not give a full view of the state of each station. Figures for the group’s advertising saleshouses don’t tell us much about their performance as the stations’ ads are currently marketed by an external contractor, Media Central. We don’t know how advertising sales have been allocated to each station’s individual accounts annually, nor how much of their assets or liabilities may be owed to each other.
By pooling them all and flattening the structure, Bauer is taking away the metrics that allowed benchmarking between the group’s various business units and removing any notion of competition between them.
Instead, they’re now going to operate as a single company to maximise efficiency and go after growth where it can be got – including outside traditional radio broadcasting.
Further reading
Why is Bauer Media paying €100 million for barely-profitable Communicorp?
