'An Application To Ofcom For The FM Independent Local Radio Licence For Warwick By Warwick Local Radio' by Grant Goddard

An application to Ofcom for the FM
Independent Local Radio licence
for Warwick

October 2005

General Information
Description of applicant
(a)

Name of Applicant, Address, Telephone and Fax nos., E-mail address:
Name:

Warwick Local Radio Limited

Address:

Powers Court
Russell Street
Leamington Spa
Warwickshire
CV32 5QA

Telephone:

024 7671 3080

Fax:

024 7671 6108

E-mail:

stuart@warwicklocalradio.com
Certificate of Incorporation (Company
05222587) attached as Appendix 1.

(b)

Main Contact (For Public Purposes):
Name:

Stuart Linnell MBE

Telephone (day):

024 7671 3080
07939 520247 (mobile)

Fax:

024 7671 6108

Email:

stuart@warwicklocalradio.com

Address:

(c)

No.

63 Craven Street
Coventry
CV5 8DS

Proposed Station Name (if decided):
Warwick Local Radio

(d)

Brief Description of Programme Service:
A genuinely local radio station for 35 to 64 year
olds, focused on Warwick, Leamington Spa,
Kenilworth and the surrounding area, with
significant speech content such as local news,
interviews and community information forming an
essential part of the output.

(e)

Main Contact (For Ofcom Purposes):
This is to be found in Confidential Appendix 2.

Page 1

Section 105(a):
Ability to maintain proposed service
a)

Board of Directors

1. Ownership and control of company
which will operate the licence

(i)
Provide the name, occupation, other directorships, other media interests, background and
relevant media experience of each director (executive and non-executive), including the proposed
chairperson.
“Warwick Local Radio will provide grown-up radio for grown-up people.”
This statement is no idle rhetoric. It encapsulates the Board’s plans to create a genuinely local
radio station that will respect its audience as the educated, relatively affluent, economically
secure listeners that our research shows us they really are. Warwick Local Radio will be a
station that prides itself on maintaining the core values of public service broadcasting – to
inform, to educate, to entertain – whilst involving its audience in as many ways as possible in its
programme output. This is undeniably a tall order for an independent station in a relatively small
coverage area, but the Board’s intimate knowledge and experience of this part of Warwickshire
tells us that it is the only route that will make the business successful. Time and time again, the
potential listeners for a new local station in Warwick, Leamington Spa and Kenilworth have told
us that cheap “pop and prattle” is precisely not what they want.
I must admit that I have not been completely surprised by the results of our extensive market
research, which has shown clearly that the people living in the county town of Warwick and the
county’s commercial centre, Leamington Spa, feel overshadowed by the nearby cities of
Coventry and Birmingham. I feel exactly the same way too, having lived here for more than 25
years. Neither am I surprised that local people like me are actively demanding more from a new
local radio station than simply the same old hit songs, the same mindless DJ talk, and no more
than token coverage of the issues pertinent to their lives. For far too long, the people living in
the heart of Warwickshire have been denied their own communication medium to talk and listen
to each other’s voices and opinions. While Birmingham and Coventry have been blessed with
their second, third, fourth and fifth local stations, our neighbourhood has not yet been granted its
first. The huge circulation of the local weekly newspaper, The Courier, is testament alone to the
people’s hunger to know what is going on around them.
This desire to build a profitable local radio station is my, and my fellow Board members’, sole
motivation for making this application. Having launched one of the UK’s most consistently
successful local commercial radio stations from Day One in neighbouring Coventry, nothing
would please me more than to be able to achieve that same kind of success on my home patch.
Mercia Sound’s triumph was based largely upon the old-fashioned Independent Local Radio
notions of “localness” and community involvement. Within a short time, our audience felt that the
station truly belonged to them, and from that intangible goodwill came the listener loyalty that
Mercia FM still benefits from today. These are the same values that the Board wishes to imbue
in Warwick Local Radio.
On the other hand, the Board is very aware that the radio landscape of today is very different
from that of 1980. Warwick Local Radio will have to fight for its audience tooth and nail against
six existing local commercial stations, the BBC’s recently re-launched local service, successful
national networks, and all the other options that are increasingly competing for our limited
leisure time. Because we understand the difficulties we face in launching a station into an
already crowded marketplace, our application explores at some length the characteristics of the
audiences of our competitors, and explains how Warwick Local Radio plans to “fit” into the
market by being deliberately and assertively different. Neither do we underestimate the
economic challenge of building a new, independent local business, which is why our audience
projections are cautious and based upon empirical evidence of recent station launches in similar
markets, rather than simply on our own personal experiences.
Page 2

Section 105(a):

a)

Board of Directors


In order to maximise the potential success of this venture, we have assembled a Board that
provides the company with the requisite skills and necessarily detailed local knowledge. Both
Stuart Linnell and myself have extensive radio management and programming experience at
Board level within radio groups, having first worked together 25 years ago. In addition to our
own intimate knowledge of Warwickshire, fellow Board members John Spencer and Nigel
Robinson add even more local expertise and an in-depth knowledge of the local business
landscape gained from their many years' experience in enterprise development and public
relations. Nigel Reeve provides us with radio sales experience at both national and local level,
while Sue Hall imparts the financial expertise and the experience of accounting practices in
small local radio stations that are essential to our success.
Together, the Board is confident that its plans for Warwick Local Radio are appropriate for the
area, reflecting the tastes and interests of local people as voiced in our market research, and
are realistic for the creation of a successful, local commercial radio station. The involvement of
emerging radio group Laser Broadcasting provides us with the financial resources and industry
expertise to be certain we can transform our proposals into reality.
On a personal note, having been the first voice to be heard on Mercia Sound in 1980, nothing
would please me more than to be the first voice on a new radio station for my own
neighbourhood, were we to be awarded the licence.

Ian Rufus
Chairman
Warwick Local Radio Limited

PS – I should explain that “Warwick Local Radio” is merely the working title of the station. The
Board recognises that further market research and brand name testing will be required to
ensure that an appropriate on-air name is identified that will embrace ALL the towns the station
will be serving, without being unwieldy.

Page 3

Section 105(a):

a)

Board of Directors


Ian Rufus
(Chairman)
Occupation:

Company Director

Other
Directorships:

Hearts of England Limited, Midland Cornish Foods Limited

Other Media
Interests:

None

Brings to
Warwick Local
Radio Board:

Unrivalled commercial radio experience at senior management level

Background and
relevant media
experience:

Ian Rufus is an experienced and respected commercial radio executive who
has worked in the industry since it began in 1973. He has lived and worked in
the Midlands for more than 25 years and his home is in the heart of Warwick
Local Radio’s transmission area.
Ian began his broadcasting career with the BBC in Birmingham, after originally
training as a newspaper journalist. With the advent of commercial radio in
1973, he became a member of the original editorial team that launched LBC in
London. The following year, he moved to Sheffield to recruit and head the news
team of the newly opened Radio Hallam.
Five years later, he joined Mercia FM as launch Programme Director and
achieved the highest listening figures obtained by an English radio station – a
record that still stands.
In 1986, he was appointed Managing Director of BRMB Radio in Birmingham.
He instituted a radical overhaul of its programming and sales operations, which
resulted in a dramatic upturn in the station’s commercial fortunes. During his
time at BRMB, it was also named Station of the Year in the prestigious Sony
Radio Awards.
Ian instigated and oversaw BRMB’s takeover of Mercia FM in 1987, the first
occasion that two financially sound radio companies had been allowed to
merge by the regulator.
In 1989, he led the team that created XTRA-AM, one of the country’s first “split
frequency” stations and widely regarded as the best exponent of the gold music
format.
The following year, Ian again instigated and led his stations’ merger with the
Trent Group of stations to form Midlands Radio. As Deputy Group Chief
Executive of the new company, he was a key member of the team responsible
for the Group’s successful stock market flotation.
Page 4

Section 105(a):

a)

Board of Directors


In 1994, following Capital Radio’s acquisition of Midlands Radio, Ian joined the
GWR Group, initially as Special Projects Executive and later as Regional
Managing Director for the Midlands, where he had overall responsibility for the
successful and profitable operation of the company’s radio stations in
Nottingham, Wolverhampton, Coventry, Leicester, Northampton, Derby and
Worcester.
In 1998, Ian was appointed to the group-wide post of Development Director in
charge of Corporate Community Investment and worked to strengthen
individual stations’ links with the communities that they served.
In September 2002, Ian left GWR to pursue his own private business interests,
which include the development of a Midlands-wide chain of bakeries and coffee
shops.
Ian has made a major contribution to the commercial radio industry through his
Chairmanship of the Association of Independent Radio Contractors’
Programming Committee during the 1980s, which oversaw the introduction of a
number of industry-wide initiatives including the Network Chart Show and the
Programme Sharing Unit. He also served on the board of Independent Radio
News at the time of the introduction of Newslink.
For the last three years, Ian has served as a magistrate on the Warwickshire
bench sitting mainly in Leamington Spa.
Over the last twelve months, Ian has worked tirelessly to develop the
proposals for Warwick Local Radio and, as its Chairman post-award, he is
committed to spending half a day a week working at the radio station.

Page 5

Section 105(a):

a)

Board of Directors


Stuart Linnell MBE, Hon MA
(Non-Executive Director)
Occupation:

Company Director

Other
Directorships:

Shrewsbury Local Radio Limited

Other Media
Interests:

None

Brings to
Warwick Local
Radio Board:

35 years of commercial radio experience, with Sony Awards for local radio
programming.

Background and
relevant media
experience:

Stuart Linnell has worked in broadcasting and the media for 35 years. Before
the advent of commercial radio, he was a team member of BBC Radio
Birmingham when it was the only local radio station in the West Midlands.
Since then, he has worked for local commercial radio stations in Sheffield,
Coventry, Birmingham, Leicester and Derby.
Stuart was Sports Editor at Radio Hallam in Sheffield when the station
launched in 1974. In his six years at Hallam, he also became a regular
contributor to Yorkshire Television’s Sunday afternoon football highlights
programme.
In 1980, he returned to his native West Midlands for the launch of Mercia
Sound in Coventry, where he was afternoon presenter and sports editor. He
spent 15 years at Mercia Sound, where he became Programme Controller, and
later Managing Director, before the company was taken over by the GWR
Group in 1994. Whilst at Mercia, he was a founder of the Snowball Charity,
promoted jointly with the Coventry Evening Telegraph newspaper. Now, more
than 20 years later, Snowball has raised in excess of £2m for chronically sick
and handicapped local children. During the 1980s, Stuart also presented
programmes for the local Coventry Cable Television.
When Mercia Sound merged with Birmingham’s BRMB to form Midlands Radio,
Stuart was appointed Operations Director of the new group. Soon afterwards,
further expansion occurred to merge the two West Midlands stations with the
Radio Trent Group in the East Midlands. During the next two years, Stuart
became Programme Controller and Managing Director at Leicester Sound, as
well as holding those same positions at Mercia. During that time, both stations
won programme format awards at the International Radio Festival of New York.
The merged group of West and East Midlands stations were later acquired by
Capital Radio and then, with the exception of BRMB, were sold to the GWR
Group. Some six months after that sale, Stuart was appointed launch director
of RAM FM in Derby, hitherto a relay service of Radio Trent in Nottingham, and
saw the station through its pre-launch phase and into its first few months on-air.
Page 6

Section 105(a):

a)

Board of Directors


In 1995, Stuart returned to front-line programme presenting with BBC radio and
television in the Midlands. He won three major awards, including the
prestigious Sony Gold Award for Best Speech-Based Breakfast Show for his
BBC WM Breakfast Show in 1997, having won the Silver Award in the same
category the previous year, the first presenter to win Silver and Gold in the
same category in successive years. He was also part of the BBC WM on-air
team that won the Sony Gold Award for Regional Radio Station Of The Year In
1998.
For BBC television, he presented three series of “The Midlands at Westminster”
(BBC2) and weekend editions of Midlands Today (BBC1). On national radio,
he has been a presenter, producer and reporter for BBC Radio Five Live.
Stuart now continues his broadcasting career, in combination with work as one
of the UK’s leading conference moderators and facilitators. His consultancy, 1st
Principles Media Services, provides a range of services, including media
training and PR. One of his current contracts involves leading the mediatraining module for football managers enrolled in the business management
course at Warwick Business School, based at the University of Warwick.
He is also a freelance television reporter for Sky Sports News and, for the past
three seasons, he has reported on Premiership football in England for the Irish
national commercial radio station, Today FM. This season (2005-2006), he is
covering Premiership matches for the recently launched Irish service of Setanta
Sports TV, and he is the match-day corporate hospitality host for Coventry City
Football Club.
Stuart was awarded an MBE for services to broadcasting in the New Year
Honours in December 1994. He was further recognised when Coventry
University conferred on him an Honorary Master of Arts Degree in 1999, citing
his work as a broadcaster and his wider contribution to the community in
Coventry and Warwickshire.
Stuart is Deputy Chair of the Coventry Branch Council of the Coventry &
Warwickshire Chamber of Commerce and will succeed to the Chair for a twoyear period starting July 2006.
He was a member of the Millennium Forum, overseeing Coventry’s inner city
regeneration project “The Phoenix Initiative”, and continues to be a member of
the Chancellor’s Forum at Coventry University and the Coventry Ambassadors
group. Stuart is also co-Chair of the Belgrade Theatre Development Trust,
President of the Coventry Savoy Opera Society, a patron of the Jaguar
(Coventry) Band, a patron of the Circle Light Opera Company and a VicePresident of the charity Baby Lifeline.
Stuart is Project Director for Warwick Local Radio’s licence application.
Post-award, he will be actively involved as part of Laser Broadcasting’s
contract to provide a minimum of 30 hours a month management support
services to Warwick Local Radio. His role will be to oversee all aspects of
the station’s programming.
Page 7

Section 105(a):

a)

Board of Directors


Nigel Reeve
Occupation:

Company Director

Other
Directorships:

Laser Broadcasting Limited, Banbury Local Radio Limited, Chorley Local Radio
Limited, Exeter Local Radio Limited, Fresh Broadcasting Limited, Hereford
Local Radio Limited, Harmony Radio Ltd, Humberside Local Radio Limited,
Ipswich Local Radio Limited, Oxford Local Radio Limited, Shrewsbury Local
Radio Limited

Other Media
Interests:

Chief Executive & shareholder in Laser Broadcasting Limited

Brings to
Warwick Local
Radio Board:

35 years of media experience, including 30 years in radio advertising sales

Background and
relevant media
experience:

Nigel Reeve brings more than 35 years of media experience to the Board. He
began his career with the local newspaper in Ipswich in 1969, transferring to
the fledgling Radio Orwell in 1975. After six years, Nigel joined 2CR in
Bournemouth as Sales Manager. In 1983, he became Sales Director at County
Sound, before moving to Invicta Sound in 1985. Later, as Managing Director of
Invicta, he helped deliver a £1m profit and subsequent stock market flotation.
During the same period, Nigel was Chairman of the Commercial Radio
Advertising Awards, where he championed improvements in the standard of
radio commercials.
In 1991, Nigel joined the launch team of Classic FM, the UK’s first national
commercial radio station, with responsibility for all sales and marketing at the
station. After a very successful five years, Nigel was approached by London
News Radio and became Chief Executive there in 1996, transforming a
loss-making station into a profitable business by 1999.
At the end of 1999, Nigel established Fusion Radio Holdings, purchasing two
radio stations in London and a third in Oxford. In September 2001, Nigel
merged Fusion with Milestone Radio Limited, giving the new company
controlling interests in additional stations in Newbury, Rugby and Basingstoke.
Nigel formed Laser Broadcasting Limited in 2002, to bid for local FM radio
station licences and acquire minority holdings in existing commercial radio
businesses, as part of the company’s long-term strategy to build interests in a
group of locally focused radio stations.
Nigel is an experienced media sales trainer, having set up the UK’s first radio
sales training company in 1986. He brings this expertise, and over 30 years of
radio-based knowledge, to the Board of Warwick Local Radio.
Page 8

Section 105(a):

a)

Board of Directors


Post-award, Nigel will be actively involved as part of Laser’s contract to
provide a minimum of 30 hours a month management support services to
Warwick Local Radio. He will be responsible for providing advertising
sales training and revenue development, working closely with Chairman
Ian Rufus.

Page 9

Section 105(a):

a)

Board of Directors


Sue Hall
Occupation:

Financial Director

Other
Directorships:

Laser Broadcasting Limited, Banbury Local Radio Limited, Chorley Local Radio
Limited, David Hall Aero Consulting Limited, Exeter Local Radio Limited,
Hereford Local Radio Limited, Humberside Local Radio Limited, Ipswich Local
Radio Limited, Oxford Local Radio Limited, Shrewsbury Local Radio Limited,
Sums Accounting Services Limited, Swansea Local Radio Limited

Other Media
Interests:

Finance Director & shareholder in Laser Broadcasting Limited

Brings to
Warwick Local
Radio Board:

20 years accountancy experience in the media business

Background and
relevant media
experience:

Sue Hall started her career at Bourne Publicity Limited, where she worked for
sixteen years, progressing to the role of Finance Manager.
She left Bourne Publicity after being approached by an American-owned
multinational IT Company, and joined its team with responsibility for reporting
financial statements for the UK operation into the US head office.
Sue’s radio experience started in 2001 when she joined Fusion Radio Holdings
Limited as Group Financial Controller. She worked on the flotation of the
company on the AIM market in June 2003.
In January 2004, Sue joined Laser Broadcasting Limited as Finance Director,
with a brief to oversee all aspects of company business. Subsequently, Sue
has worked on the financial aspects and has managed accounts for the
fourteen applicant groups Laser is working with. Sue has been responsible for
producing all financial projections for the Board of Warwick Local Radio.
Post-award, Sue will be actively involved as part of Laser’s contract to
provide a minimum of 30 hours a month management support services to
Warwick Local Radio. Sue will be responsible for producing all aspects of
the company’s financial reporting, working closely with Chairman Ian
Rufus.

Page 10

Section 105(a):

a)

Board of Directors


John Spencer OBE
Occupation:

Company Director

Other
Directorships:

Lanemark International Limited (Chairman), Clayton Spencer Limited

Other Media
Interests:

None

Brings to
Warwick Local
Radio Board:

Unrivalled small to medium size business expertise

Background and
relevant media
experience:

John Spencer was a School Governor in Kenilworth for 18 years and Chairman
of Governors for six years. He was Musical Director of Coventry Savoy Opera
Society until December 2003, and Governor of Etone Community School &
Technology College until September 2004.
He is currently an Associate Fellow of the University of Warwick and Lecturer at
the Warwick Manufacturing Group on Strategic Planning in Small Companies.
He is also a Board member of the Coventry & Warwickshire Chamber of
Commerce and Chairman of the International Trade Advisory Committee and
the International Trade Forum for Coventry & Warwickshire Chamber of
Commerce.
He was awarded an OBE in the 2004 New Year’s Honours List for services to
business and international trade.
His business interests, in addition to Lanemark International, are the
development of strategy in small companies, encouraging the spread of an
entrepreneur culture and assisting SME’s to develop through international
trade.
John is an internationally renowned expert in small to medium sized
businesses and will bring this expertise to Warwick Local Radio, helping
to guide and develop the new business into a profitable local company.

Page 11

Section 105(a):

a)

Board of Directors


Nigel Robinson
Occupation:

Company Director

Other
Directorships:

Newsline Press & Public Relations Limited

Other Media
Interests:

None

Brings to
Warwick Local
Radio Board:

Local business experience

Background and
relevant media
experience:

Nigel Robinson has been involved in the media industry for the past 40 years.
He began as a journalist on the Warwick Advertiser and has worked for the
Leamington Spa Courier, the Coventry Evening Telegraph and the Birmingham
Post. After spells working on newspapers in the United States and South
Africa, he returned to the UK in 1977 and was appointed Account Director with
a Leamington firm of public relations consultants.
In 1980, Nigel launched his own agency, Newsline Press & Public Relations,
which now has offices in Leamington Spa and Coventry. As Managing Director,
he has spent the last 25 years working with both the local and national media
on behalf of a wide range of local businesses and organisations.
Locally, he is Chairman of the Old Warwickian Association, Vice-Chairman of
the NSPCC Warwickshire Business Group, and a member of Leamington
Rotary Club and the Warwick School Development Campaign.
Nigel has an in-depth perspective of the local business community,
having spent 25 years running a local PR company. This, combined with
his thorough knowledge of the local media landscape, makes him a key
member of the Warwick Local Radio Board.

(ii)

If there are firm plans to appoint any further directors, provide information (with details of any
specific individuals in mind). This information may be submitted in confidence.
One further Director will be appointed once the Station Manager is in post.

Page 12

Section 105(a):

b)

Proposed Investors and
Shareholding Structure


Full details of the shareholding structure should be provided, including:
(i)

Names and addresses (the latter may be submitted in confidence) of all existing or proposed
shareholders.
Names and addresses of shareholders are listed below:

Shareholder
Laser Broadcasting Limited
Ian Rufus

Address
Crowther Road, Washington, Tyne & Wear NE38
0BW
1 Wilkins Close, Barford, Warwickshire CV35 8EX

Stuart Linnell

63 Craven Street, Coventry CV5 8DS

Malcolm Crump

Anthony Duffield

Avonstone, Long Marston Road, Welford-Upon-Avon,
Warwickshire CV37 8EG
16 Brookside Avenue, Kenilworth, Warwickshire CV8
1ET
Seascape Hotel, Polzeath, Cornwall PL2 7SX

Nigel Robinson

21 Leam Road, Leamington Spa CV31 3PA

Sally Carrick
Sheilagh Moffat

Spring Gardens, Upper Spring Lane, Kenilworth CV8
2JR
17 Newbold Terrace, Leamington Spa CV32 4EG

Ian Dunwoody

230 Warwick Road, Kenilworth CV8 1FD

Chris Goodrem

Limecrest, Marton Road, Birdingbury CV23 8EH

Michael McCaffrey

Elliot’s Farm, 14 Bridge Street, Barford, Warwickshire
CV35 8EH
Avon Cottage, Wasperton, nr. Warwick CV35 8EB

John Spencer

David Derbyshire

(ii)

Total number, class/classes of shares and issue price of shares (specify voting, non-voting,
preference, other etc).
A total of 200,000 ordinary voting shares will be issued at an average price of £2.63.

Page 13

Section 105(a):

b)



(iii)
All voting shareholders and holders of 5% or more non-voting shares and loan stock should be
named. State the number, class/classes and price of shares to be issued to each investor.

Name
Laser Broadcasting Ltd

Total Shares
140,000

Price
£2.46

Value
£343,700

%
70.00

Ian Rufus

10,400

£3.05

£31,720

5.20

Stuart Linnell

10,400

£3.05

£31,720

5.20

Malcolm Crump

8,400

£3.05

£25,620

4.20

John Spencer

8,400

£3.05

£25,620

4.20

Anthony Duffield

3,312

£3.05

£10,102

1.66

Nigel Robinson

1,656

£3.05

£5,051

0.83

Sally Carrick

1,656

£3.05

£5,051

0.83

Sheilagh Moffat

1,208

£3.05

£3,685

0.60

Ian Dunwoody

1,656

£3.05

£5,051

0.83

Chris Goodrem

4,800

£3.05

£14,640

2.40

Michael McCaffrey

3,312

£3.05

£10,102

1.66

David Derbyshire

4,800

£3.05

£14,640

2.40

200,000

£2.63

£526,700

100.00

TOTAL

(iv)

Outline any shareholders agreements or arrangements which exist.
A shareholder agreement is in place, ensuring any shares that become available must be
offered to all other shareholders. A copy of the document is available on request.

(v)
Where a corporate body other than a current Ofcom licensee will be providing 30% or more of
the required funding, details should be given of its directors and main shareholders, and of its activities.
Laser Broadcasting Limited is the only corporate shareholder with a holding of more than 30%.
Laser Broadcasting Limited was established in 2002 to bid for local FM radio station licences
and acquire minority holdings in existing commercial radio businesses, as part of a long-term
strategy to build interests in a group of locally focused radio stations. Warwick Local Radio
would be pleased to provide more information upon request.

Page 14

Section 105(a):

b)



The main shareholders of Laser Broadcasting Limited are (Directors are marked with an
asterisk):
Full Name
Capital North East No. 1 Limited Partnership *
Nigel Reeve *
Charles May *
John Roberts
Keith Rawlings
Tim Jones
Hugh Morgan Williams *
Susan Hall *
miscellaneous shareholders
TOTAL

Holding
36.56%
18.25%
13.42%
8.69%
6.20%
4.58%
1.90%
0.50%
9.89%
100.00%

(vi)
Ofcom may request additional information (e.g. a banker’s letter, statutory/management
accounts) regarding the shareholders, or any other providers of finance, listed in the application.
Warwick Local Radio would be pleased to provide any additional information that is required.

Page 15

Section 105(a):

c)

Involvement of the Applicant in
Specified Activities


Details are required of the involvement by the applicant and its participants (including shareholders or
other subscribers of more than 5% of the applicants total funding requirements) in any of the activities
listed below, and the extent of the interest. For these purposes, the applicant includes associates of the
applicant (i.e. directors and their associates and other group companies).
(a)

Advertising agencies:
None

(b)

Newspapers:
None

(c)

Other broadcasting interests:
Laser Broadcasting Ltd was established in 2002 to bid for local FM Radio Station licences and
acquire minority holdings in existing commercial radio businesses, as part of a long-term
strategy to build interests in a group of locally focused radio stations. It is involved with 14
applicant groups around the UK.
Laser Broadcasting Limited is a 25% shareholder in Fresh Broadcasting Limited, Ofcom radio
licensee for the Yorkshire Dales.

(d)

Bodies whose objects are wholly or mainly of a religious nature:
None

(e)

Bodies whose objects are wholly or mainly of a political nature:
None

(f)

Local authorities:
None

(g)

Other publicly-funded bodies:
None

*Applicants should note that this information is required for the purposes of checking compliance with
the ownership rules, and is not relevant to an applicant’s ability to maintain its proposed service. If none
of the categories above apply to the application this should be clearly stated.

Page 16

Section 105(a):
2. Financial and business plans
a) Overall Financial Strategy

Provide a concise summary of how the applicant considers it is able to establish and maintain,
throughout the licence period, its proposed service, and how this licence fits in with the investors’
strategy.

1.

The Broadcast Area

The proposed broadcast area [see answer to Question 3] will reach a population of 103,703
adults and is almost coincidental with the boundary of Warwick District Council. The population
of the district is projected to increase by 15% during the life of this licence, and by 23% by 2021.
It is the only district within Warwickshire where the number of 30 to 49 year olds is expected to
increase over this timeframe (20% increase by 2021) [source: Warwick District Council].
The area’s central location in the UK has influenced the development of an excellent transport
system. London is only an hour away by road or rail, and nearby Birmingham International
Airport provides links to the rest of the world for tourists and business people alike. The area
can also boast an extensive canal network, developed 200 years ago, which now provides a
wealth of recreational opportunities. There are many other leisure facilities catering for all tastes
- including first class golf courses, racecourses, theatres, country parks, museums and local
leisure centres.
The leading sectors of employment within the district are distribution/hotels/restaurants (26%),
finance/IT (24%), the public sector (21%), manufacturing (11%) and tourism (9%). Between
1998 and 2002, employment in the retail sector grew by 21%, education by 30%, computing by
75% and construction by 29%. However, employment in manufacturing industries fell by 39%,
public administration by 24% and financial/banking services by 28%.
The Warwick district combines a modern manufacturing base with a strong service sector.
There is a high concentration of jobs in business services, public administration, education and
health. In recent years, a number of ICT companies have moved into the area, such as
Codemasters, a global computer games developer and publisher, based in Leamington Spa.
Unemployment in the district is low at 1.1%, compared with the West Midlands average of 2.6%
and UK average of 2.2%. The highest unemployment in Warwick district is in the Brunswick
ward (covering the Old Town part of Leamington Spa) at 2.2% [source: Claimant Count with
rates and proportions, December 2004].
Tourism makes a significant contribution to the local economy, with Warwick Castle being
recognised as one of the finest attractions in the country.
The University of Warwick, although partly based in Coventry, has a student population of over
16,000 and is highly regarded as one of the UK’s leading research establishments, forging
strong links with local businesses.
Many leading companies are based within Warwick district, including Ford, Conoco, Volvo
Trucks, IBM, Calor Gas, Ricardo and Cheltenham & Gloucester Building Society. The area
covers three key centres: Warwick, Leamington and Kenilworth.

Page 17

Section 105(a):

Warwick
Warwick is a delightful town steeped in history. It is perhaps best known for its magnificent
castle, one of the finest in the UK. However, Warwick also has many other buildings of historic
interest. Even though the Great Fire ravaged the town in 1694, many important mediaeval
buildings survived. The commercial centre of Warwick has a large selection of antique, china
and gift shops. There are also a wide variety of small, specialised shops located around the
Market Square, Swan Street and Smith Street. Warwick has a growing reputation for dining out
because of its good selection of pubs, wine bars and fine restaurants, while the nationally
acclaimed Warwick Racecourse is situated just outside the town centre.
Royal Leamington Spa
Royal Leamington Spa is a fashionable and elegant town in the heart of South Warwickshire.
The Georgian and Victorian architecture, tree-lined avenues and squares and glorious gardens
give it a distinct character and personality. Leamington has a deservedly good reputation for
shopping, ranging from small independently run shops offering unusual and exciting goods to
larger stores offering a wide range of products, and from boutiques selling designer labels to
high street fashion favourites. Like Warwick, Leamington Spa has many high quality places to
eat and drink, from wine bars, pubs and cafés to bistros and restaurants. The magnificent Royal
Pump Rooms have been converted to a culture and tourism complex, housing the town’s
Museum, Art Gallery, Library and Tourist Information Centre. Leamington has benefited from
investment in a £4.3 million restoration project for Jephson Gardens, which includes a sensory
garden, a temperate glasshouse, a refurbished boathouse and children’s play area. Stoneleigh
Park, owned by the Royal Agricultural Society of England, is being transformed into a “Home of
Rural Excellence” that will include an innovation centre and park, international-quality equine
facilities, and major exhibition and conference facilities. The Leamington Spa Cultural Quarter is
home to over eighty creative industries, magnificent regency architecture and spectacular parks.
Development plans include incubator and grow-on spaces for creative industries and a new
venue for performance and rehearsal.
Kenilworth
From the earliest of times, Kenilworth has been strategically important. In 1119 AD, Henry I
gave land to Geoffrey de Clinton to build a castle from local sandstone beside an ancient ford.
From those beginnings, Kenilworth Castle became one of the most impressive castles of
Elizabethan England. Around the castle and the St Mary's Abbey ruins, there are lovely walks,
delightful old houses and thatched cottages in “Little Virginia”, said to be named after the
planting of potatoes brought there by Sir Walter Raleigh. Like Warwick and Leamington,
Kenilworth is known for its shops and restaurants.
[Sources of information: Warwick District Council; Nomis Database of Labour Market Statistics;
Office of National Statistics; Nomis Official Labour Market Statistics; Labour Market Profile,
Warwick District; Warwickshire Economic Profile, Warwickshire County Council, September
2004; Warwickshire County Council Census 2001 County & District Profile; Welcome to
Warwick District, Warwickshire Investment Partnership.]

Page 18

Section 105(a):

The broadcast area has:
•
a high proportion of local businesses to support a new radio station;
•
a population that is relatively affluent (60% in socio-economic class ABC1);
•
a population that is well educated (29% have a degree qualification or higher);
•
a population with a high proportion of managers and professionals (34%);
•
a population that is growing considerably (11% from 1982 to 2002);
•
a population whose age structure is very close to the UK average;
•
a population whose average weekly earnings are above the regional average (£429,
compared to £417);
•
an economy that is prospering because of its lack of dependence on manufacturing and
its high proportion of jobs in professional and management services.
Warwick Local Radio is fully committed to the area and has no doubt it is able to support its own
independent local radio station.

2.

A Gap in the Market

Despite the existence of six local commercial radio stations audible in the market, research
commissioned by the Board [see Research Project #5] showed that none of these stations
include more than cursory mentions of the towns of Warwick, Leamington Spa or Kenilworth.
This will make Warwick Local Radio totally unique for its audience.
Because so many existing stations are broadcasting variations of similar pop music formats, the
results of research [see Research Projects # 3 and 4] showed that people in the broadcast area
want and expect something different from a new local radio station. This is why the
programming proposals for Warwick Local Radio [see answer to Question 4] describe a music
format that offers its listeners a more varied and innovative mix of familiar hits and less familiar
album tracks that will differentiate the station from its competitors.
The target audience of 35 to 64 year olds was very carefully selected by the Board after having
conducted a full analysis of the audience profiles of stations audible in the market and an
exploration of the changing dynamics within the local radio industry [see answer to Question
2(c)]. Warwick Local Radio will be the only station to “super serve” the key 44 to 54 year old
demographic, but will have sufficiently broad appeal to attract considerable listening outside of
that demographic.
The experience gained from Warwick Local Radio’s trial broadcast earlier in the year [see
answer to Question 7] and the feedback obtained both informally from listeners and from followup market research [see Research Project #1] provided the Board with conclusive evidence that
demand exists in the broadcast area for a new local radio station.

Page 19

Section 105(a):

When a specific description of the proposed radio station was tested in market research [see
Research Projects # 3 and 4], the results endorsed the viability of the Board’s proposals. The
description offered to respondents was:
A local radio station focused specifically on Warwick, Kenilworth, Leamington Spa and the
surrounding area with:
well-know hit songs from the 1960s to the present day
presenters who know and understand the area
hourly local news bulletins during daytime
regular local weather, travel, entertainment and what’s on information
community information and daily interviews or features involving local people
regular publicity for community organisations and their events

64% of the 35 to 64 year old target audience said they would be “very likely” or “likely” to listen
to such a station. This response included 72% of 35-44 year olds, 64% of 45-54 year olds and
57% of 55-64 year olds.
Warwick Local Radio believes that it has identified a viable gap in the radio market and, as a
result, it has carefully produced a viable business plan and a set of programme proposals that
will satisfy the demand of local people for a new local radio station that considers their particular
tastes and interests.

3.

Skills & Experience to Maintain the Service

The Board of Warwick Local Radio Limited and the staff of major shareholder Laser
Broadcasting Limited bring together an unrivalled range of radio management skills and long
term commitment to the industry, both in the Warwick market and elsewhere, to ensure that the
station will maintain the highest standards during the entire twelve-year period of its licence.
In addition to the directly relevant experience of its Directors [see answer to Question 1(a)], the
Board is able to draw upon a wider range of skills and services. The Board has agreed to
contract Laser Broadcasting Limited to supply Warwick Local Radio Limited with a full accounts
service, commercial traffic system, commercial production, sales training, IT support and a
minimum of 36 hours per month of management time during the launch period, and then 30
hours per month thereafter. The contracted provision of these essential back-office services will
ensure that Warwick Local Radio can concentrate its efforts on delivering the local radio station
that the people of Warwick, Leamington Spa and Kenilworth really want.

Page 20

Section 105(a):
The following key executives with substantial radio experience will ensure that Warwick Local
Radio Limited has the ability to successfully launch and maintain the service throughout the
duration of the licence:

Ian Rufus (Chairman)
33 years radio experience, including former Managing Director of BRMB and Mercia Sound.

Stuart Linnell (Laser Broadcasting and Non-Executive Director)
33 years radio experience, including 20 years senior radio management and programming
experience. Former MD of Mercia Sound.
Sue Hall (Non-Executive Director)
20 years media accounting experience, including four years in commercial radio.

Nigel Reeve (Non-Executive Director)
30 years radio sales and management experience.

Grant Goddard (Laser Broadcasting)
20 years radio programming, management and research experience in the UK, Europe and
Asia.
David Mortimer (Laser Broadcasting)
10 years radio management and programming experience.

As with any radio station, the launch period is critical, which is why Warwick Local Radio has
assembled an experienced launch team to ensure that the station achieves the highest possible
standards during the first twelve months after the award.

4.

Board Structure

The Board of Warwick Local Radio Limited has been structured to ensure that the company
benefits from an appropriate balance of radio experience and business experience. The
Directors represent 85% of the share issue of Warwick Local Radio Limited. The decision was
taken to structure the Board with only seven Directors to ensure that the decision making
process is kept simple and easy to manage, and so that Warwick Local Radio can react quickly
to changes in the market.
It is the Board’s policy to aim to pay the first dividend after five years of trading, which will further
ensure that long-term retention of shareholdings remains attractive to the investors.
The stability of this corporate structure enables the Board to plan and develop the company
over the twelve-year period of the licence.
Page 21

Section 105(a):
5.

Necessary Funding

The shareholders and board members of Warwick Local Radio have gone far beyond simply
offering their skills and experience to develop the business plan for the proposed radio station.
They have spent time and money investing in a trial broadcast, awareness building, research
and consultations [see answers to Questions 6 and 7]. Over the last 18 months, they have
invested over £90,000 in the project. Post-award, existing shareholders have committed a
further £490,000 in order to launch the station and maintain it for the full period of the licence.
Based on the projections detailed in the profit and loss account, these sums will be sufficient to
avoid requiring an overdraft facility, even when a sensitivity test is applied that reduces
projected revenues by 20%. However, the company’s banker, Lloyds TSB, has indicated that an
overdraft facility could be arranged, if required post-award. A copy of this letter can be supplied
on request.
As an emerging radio group, Laser Broadcasting Limited’s substantial shareholding provides the
company with the financial support and long-term commitment requisite for a radio station
launch in a relatively small local market. In addition, Laser has agreed to underwrite any
required funding, if shares in Warwick Local Radio were to be made available. As per the
shareholders’ agreement, any shares in Warwick Local Radio that become available must be
offered to the existing shareholders in the first instance.
There exists a clear commitment from the shareholders to finance the company to the level
required.

6.

Accounting Policies

The Board of Warwick Local Radio Limited has produced a realistic business plan that is based
on the following assumptions:
•
•
•

2005
2006
2007
2008

Conservative audience forecasts, with a projected weekly reach in Year One of 17%,
rising by Year Three to 19%, based upon empirical evidence of recent local station startups of comparable size [see answer to Question 2(d)];
Conservative revenue projections based upon a static Total Survey Area of 103,703
adults, rather than including allowances for the area’s projected population growth;
The historical benchmark industry average revenue of £31 per 1000 hours per annum
listened was used to produce the financial forecasts, with a year-on-year growth
progression applied using the average values of Advertising Association projections for
UK radio revenues [see table below];
RADIO REVENUE: Year-On-Year Growth Projections (%)
High option
Low option
3.0
7.7
2.7
2.0
9.3
2.2
9.2
4.7

Average
5.4
2.4
5.8
7.0

source: Advertising Association forecasts, November 2004

Page 22

Section 105(a):

•
•
•
•

Realistic expenditure projections for the station launch that include £6,000 to be spent on
local promotions and advertising in Year One and £15,000 for marketing in the pre-launch
period;
A projected operating profit in Year Three;
Projections that require no overdraft, even if revenue records a shortfall of 20%;
The first dividend to be paid to shareholders after five years.

These are the policies on which the Warwick Local Radio Limited business plan is based. It is
the Board’s stated intention to deliver a profit in Year Three, not to have to resort to any form of
borrowing, and to pay a dividend to shareholders after five years.
The financial planning involved in Warwick Local Radio’s business plan has been rigorous,
detailed and based on reasonable assumptions.

7.

Investor Strategy

The strategy of the company’s investors has been discussed and agreed upon by both the
Board and shareholders. The main points of Warwick Local Radio Limited’s investor strategy to
date are:
•
•
•
•
•
•
•
•
•
•
•

The focus of the enterprise is to build a successful local radio station in Warwick for the
residents and business community of Warwick;
The company will remain focused on long-term growth and the integrity of its product;
Shareholder Laser Broadcasting Limited has a long-term commitment to developing
interests in an emerging group of genuinely local radio stations;
Investors are involved for the potential long-term returns rather than immediate short-term
gains;
The company should remain fully funded with no borrowing requirement;
A shareholder agreement requires that any shares for sale are offered, in the first
instance, to existing shareholders in proportion to their existing holdings;
Dividends will be returned to shareholders after Year Five;
Shareholders are committed to the establishment and maintenance of the business for the
full duration of the permanent licence;
Simulcast opportunities via internet and cable streaming are important ways to extend the
station’s potential audience;
Opportunities to increase the radio station’s penetration through DAB (Digital Audio
Broadcasting) in the Warwick area will be pursued when multiplexes become available;
An ongoing programme of market research will ensure that the station remains relevant
and focused on the listeners and advertising community in Warwick at whom it is aimed.

Page 23

Section 105(a):
b) Funding
Detail the sources of finance that will be used to fund the licence, under the following headings:
(i)

Share capital
Post-award, 200,000 shares will have been issued in the company, raising a total of £526,700.

(ii)

Loan stock
Warwick Local Radio has no plans to issue loan stock.

(iii)

Leasing/HP facilities (capital value)
Three company vehicles with a capital value of £30,000 will be leased.

(iv)

Bank overdraft
Warwick Local Radio Limited’s business plan does not anticipate the need for an overdraft.
However, the company’s banker, Lloyds TSB, has indicated that such a facility would be made
available.

(v)

Grants and donations
None

(vi)

Other (please specify)
None

Where relevant, provide information on:
(i)

Loan terms (e.g. interest rate, repayment terms, redemption/conversion terms)
Not applicable

(ii)

Assets leased
Warwick Local Radio Limited will lease three company vehicles over a three-year period. A
written quote is available upon request.

All of the funding above should be confirmed to the applicant. Explanation should be provided if this is
not the case.

Page 24

Section 105(a):
c) Financial Projections
The purpose of this question is to allow the applicant to demonstrate its understanding of the market.
The forecasts should be based on reasonable assumptions, that are logically applied and justifiable.

Understanding The Market
The population & economy
The Warwick District local authority area is almost identical to the planned broadcast coverage
area of Warwick Local Radio and it includes all three main towns of Warwick, Leamington Spa
and Kenilworth.

Warwick District
coverage area

POPULATION COMPARISON BY AGE
0-14 15-24 25-44 45-64
65+
21,603 15,961 36,837 30,888 20,642
21,968 15,226 36,731 31,151 20,595

total
125,931
125,671

15+
104,328
103,703

source: 2001 Census, Arqiva

The District has an adult (15+) population of 104,328 [2001 Census] that has grown
tremendously in recent years. Between 1982 and 2002, the population grew by 10.7%,
compared to an increase of 2.4% in the West Midlands region as a whole. The population
density is 453 persons per square kilometre, compared with an average of 408 for the region.
The average age of the population is 39.4 years, compared to the average for England & Wales
of 38.6 years [National Statistics].
Bordered by Coventry to the north, Stratford-upon-Avon to the south, Solihull to the west and
Rugby to the east, Warwick is a considerably more affluent and economically secure area than
much of the West Midlands region. Out of the 34 districts in the East Midlands, Warwick has:
•
The highest proportion of residents with a degree qualification or higher (29% compared to
the 16% regional average);
•
The lowest proportion of residents with no qualifications (22% compared to the 34%
regional average);
•
The second lowest proportion of residents with limiting long-term illness (15% compared
to the regional average of 19%);
•
The third lowest proportion of adults who are permanently sick or disabled (3% compared
to the regional average of 6%);
•
The fifth highest proportion of one-person households (31% compared to the 29%
regional average);
•
The second highest proportion of post-16 students (3% economically active and 7%
economically inactive, compared to the regional averages of 2% and 5% respectively);
•
The fourth highest proportion of single people (31% compared to the 29% regional
average).
In the 2001 Census, 72% of residents described their health as “good”, compared to 67% in the
West Midlands region; while only 7% described their health as “not good”, compared to 10% in
the region. The death rate in Warwick, as indicated by the Standard Mortality Ratio, was only 89
in 2003, compared to the UK average of 100. In 2001, full-time employees comprised 44% of
adults, compared to the regional average of 40%; while self-employed persons accounted for
9%, compared to the 7% regional average. Between September 1999 and September 2004, the
number of young people aged 18 to 24 who were claiming work-related benefits fell by 63% in
Warwick, compared to the UK average of 31%.
Page 25

Section 105(a):
From 2001 Census data, the average household size in Warwick is 2.3 people, compared to the
average of 2.4 for England & Wales. Only 11% of households are rented from the local
authority, compared to the regional average of 14%; while 42% of households are mortgaged,
compared to 39% across the West Midlands region. In 2002, the average price of a semidetached house in Warwick was £149,613, compared to the West Midlands average of £95,664
and the England & Wales average of £119,748.
This data illustrates how Warwick district is comparatively more affluent and far less
economically deprived than surrounding areas in the West Midlands. Based on its economic
and social characteristics, the government officially classifies Warwick in its “Prospering Small
Towns” group of districts (in “Sub-Group A”), the most typical example of which is Stockport.
Through detailed analysis of a range of data, the Statistics Office has declared that the districts
to which Warwick is “extremely similar” are Bath & Northeast Somerset, Chester and
Cheltenham, all considered to be “highly desirable” areas. These comparisons highlight why
local residents are so vociferous in distancing themselves from Coventry and Birmingham [see
Research Projects #3 and 4] which, though geographically close, are cities a world away from
their own existences and that face the difficulties of post-industrialisation economics.

WARWICK DISTRICT - POPULATION STRUCTURE
Age

0-14
15-24
25-34
35-44
45-54
55-64
65+
total
35-64

2001 Census
UK
Warwick
%
%
no.
19
17 21,603
12
13 15,961
14
14 18,115
15
15 18,722
13
14 17,143
11
11 13,745
16
16 20,642
100
100 125,931
39

39 49,610

2003 estimates
Warwick
%
no.
16
21,600
14
18,200
15
19,700
15
20,200
13
16,900
11
15,100
16
21,100
100 132,800
39

52,200

2028 estimates
+/- 2003 to 2028
Warwick
Warwick
%
no.
%
16
28,100
30
11
18,900
4
13
23,200
18
15
25,300
25
13
21,700
28
12
20,400
35
20
35,100
66
100 172,700
30
39

67,400

29

source: 2001 Census, National Statistics

Analysis of the age structure of the population shows that it is very close to the UK average.
Government projections show that the population is expected to increase by 30% between 2003
and 2028, continuing the rapid growth already witnessed over the previous two decades. The
age structure will change significantly with an increasingly elderly population, as is the case
throughout the UK, although the 35-64 year old target audience for Warwick Local Radio is
expected to remain at 39% of the total population, just as it is today.
While manufacturing remains the most significant employment sector in Warwickshire as a
whole, in the Warwick district it is computing, business and professional services that provide a
significant proportion of the district’s 69,230 jobs. The County Council has noted that the area’s
business profile “has begun to look rather dissimilar to the rest of the West Midlands and has
taken on some of the characteristics of the economy of Southeast England” and concludes that
such trends are most evident within the Warwick district [“Warwickshire Economic Profile”,
September 2004].
Page 26

Section 105(a):
Employment in knowledge-based industries is becoming increasingly important, buoyed by
businesses related to Warwick University, which has a student population of more than 16,000
and is highly regarded as a research establishment. In Warwick district, employment in
computer and related activities increased by 75% between 1998 and 2002, compared to the
national average of 29%. Tourism also makes a significant contribution to the economy, typified
by the 793,300 visitors to Warwick Castle in 2000. Business tourism is an equally important
contributor to the economy, with business events held in the area because of its excellent
communication links by road and rail to the rest of the UK.
Warwick district has a much higher proportion of jobs in business services, health and social
work than surrounding areas. Conversely, it has the smallest proportion of employment
opportunities in the construction, transport and communications sectors. In April 2003, the
average weekly pay of jobs in Warwick district was £429, compared to the West Midlands
average of £417 [New Earnings Survey, 2003]. Interestingly, the average weekly pay of
Warwick residents was £529, indicating that many people commute to higher-paying jobs
outside of the immediate area. This is also a reflection of the high educational qualifications of
many Warwick district residents, who can only find appropriately specialised jobs in cities such
as Coventry or Birmingham.
The local newspaper market
In market research, 71% of respondents mentioned local newspapers as their main source of
information for finding out what is going on in Warwick, Leamington Spa and Kenilworth [see
Research Projects #3 and 4]. The biggest challenge for a new local radio station serving these
towns is to develop the same kind of loyalty that their citizens have developed over more than a
century for their local newspapers. [All data below is sourced from JICREG 2005 and TNS
2004.]
The Coventry Evening Telegraph, founded in 1891 as the Midland Daily Telegraph, is the
dominant regional daily, and is owned by Trinity Mirror plc, the UK’s largest local newspaper
group. The Telegraph has a 15% penetration in Kenilworth, but only a 6% penetration in
Warwick and Leamington Spa, which are more distant from Coventry. Circulation in these three
towns is 4,180, out of a total daily circulation of 58,217.
The Leamington Spa Courier (founded in 1828), and its sister publications - The Warwick
Courier and The Kenilworth Weekly News - are weekly paid-for newspapers published by
Johnston Press. They have a penetration of 38% in Leamington Spa, 34% in Kenilworth and
22% in Warwick, selling a total 10,850 copies per week in these three towns out of a total
circulation of 20,808. The Courier was by far and away the most frequently mentioned
newspaper in the market research commissioned by Warwick Local Radio [see Research
Projects #3 and 4], and is undoubtedly people’s main source of local information.
When The Courier started life as a four-page broadsheet on Saturday 9 August 1828, it had the
longest title of any newspaper in the country, and possibly the world: “The Leamington Spa
Courier, and Alcester, Atherstone, Coleshill, Henley-in-Arden, Kineton, Kenilworth, Knowle,
Nuneaton, Rugby, Solihull, Southam, Stratford-upon-Avon, and Warwick Borough and County
Gazette”.
The Leamington Spa Review is the free weekly version of The Courier, launched in 1962, with a
combined circulation of 27,074 in Warwick, Leamington Spa and Kenilworth, where it achieves
75%+ penetration.
Page 27

Section 105(a):
The Royal Leamington Spa Observer, another free weekly launched in 1988 and now owned by
Observer Standard Newspapers of Redditch, has a combined circulation of 27,920 in Warwick,
Leamington Spa and Kenilworth, where it achieves 70%+ penetration.
In February 2005, Trinity Mirror launched The Kenilworth Citizen, a free weekly that was to be
delivered to 87% of homes in an area the company described as a “lucrative market” where
“71% of the adults are in the ABC1 socio-economic group”. The paper’s Advertisement Director,
Debbie Davies, explained: “There are so many local businesses in Kenilworth…. Kenilworth
also has great appeal to businesses in the surrounding towns and cities. Companies want to
target people in Kenilworth because of the attractive demographics – they are very good
customers.”
In fact, the success of The Kenilworth Citizen in attracting advertising has been so immediate
that, in September 2005, Trinity Mirror announced the launch of two further free weekly papers
in neighbouring areas. The Warwick Times and The Royal Leamington Spa Times will be
delivered to 85% of homes in the area, as a direct challenge to The Courier’s lucrative
penetration in the market. Debbie Davies said: “There are so many local businesses in Warwick
and Leamington Spa, and the Times series will provide them with a way to reach over 40,000
homes in the town.” The Kenilworth Citizen will be re-branded as The Kenilworth Times as part
of the marketing strategy.
The Local Radio Market
From the very beginnings of local radio, the towns of Warwick, Leamington Spa and Kenilworth
have suffered from being on the fringes of other larger towns’ coverage areas, but never having
had a radio station themselves.
When Mercia Sound launched in 1980 in Coventry, it had simulcast its radio service on AM and
FM. The station was only audible in Warwick, Leamington Spa and Kenilworth on the AM
frequency because of the geography of the area. In 1988, Mercia Sound and BRMB Radio in
Birmingham were merged into a new company, Midland Radio plc and, the following year, the
two stations launched a separate station on their AM transmitters called XTRA AM playing
oldies for an older audience. Because the main Mercia service (now renamed Mercia FM) would
no longer be audible to residents of Warwick, Leamington Spa and Kenilworth, the Independent
Broadcasting Authority approved the installation of a 50-watt transmitter on 102.9 FM at
Newbold Comyn in Leamington Spa to relay the FM service to the local area.
Initially, the Leamington Spa FM transmitter merely carried identical programming to the
Coventry service but, once a landline was installed to link it directly to the Coventry studio, it
started to broadcast separate programmes and separate commercials for the area. In 1990 and
1991, Rob Jordan presented a daily afternoon show for Leamington Spa, and Mercia opened a
contribution studio in Leamington Spa Town Hall. This local programming was dropped by 1993
when Midland Radio was bought by Capital Radio plc, who subsequently sold the two Coventry
stations to GWR plc in 1994.
The BBC’s commitment to local radio in the area has been just as intermittent. In 1988, the
Corporation identified several areas across the UK that were underserved by its local radio
services, including Warwickshire. In 1990, the new station BBC CWR (standing for Coventry &
Warwickshire Radio) opened with two transmitters, one on 103.7 FM serving the south of the
county, including Warwick, Leamington Spa and Kenilworth. Producing 18 hours a day of
programming from its main studio in Coventry and several contribution studios, including one in
Leamington Spa Town Hall and another in Warwick, the station provided a comprehensive local
Page 28
radio service.

Section 105(a):
Under John Birt’s tenure as Director General, the BBC made considerable cutbacks in local
radio provision, and BBC CWR was closed as a result. In 1995, it was achieving only a 12%
weekly reach, compared to Mercia FM’s 32% reach. From February that year, the station
became merely an opt-out from BBC WM in Birmingham and was renamed BBC Coventry &
Warwickshire. Within a few years, the opt-out shows disappeared and the station simply
became a relay of the Birmingham service with no separate branding. Then, in 2003, Birt’s
successor, Greg Dyke, announced that the local station in Coventry would be re-opened and
admitted that the closure of BBC CWR eight years earlier had been a mistake. Initially, six hours
a day of local programmes were reinstated on the BBC WM relay. Then, on 3 September 2005,
BBC Coventry & Warwickshire was launched as a full-time station, with contribution studios in
local libraries throughout its broadcast area.
Although no RAJAR data is available for the Warwick, Leamington Spa and Kenilworth area on
its own, the Board of Warwick Local Radio commissioned an analysis of the last five year’s
ratings data for the larger Coventry market, in which these towns fall. RAJAR data for the
Coventry market [Research Project #2] shows that the BBC not only has the highest-ranking
station in the market (BBC Radio Two), but also takes five of the six top stations. Despite six
local/regional commercial stations being audible within the Coventry market, the BBC still
accounts for 57% of radio listening, compared to the UK average of 54%.
To ensure that the data from the Coventry market would yield information relevant to the smaller
Warwick, Leamington Spa and Kenilworth market, a comparison was made between the results
of the latest RAJAR survey for Coventry and the results of two separate market research
projects commissioned by the Board within the smaller local area for this licence:
WEEKLY REACH COMPARISON (%)

Source
Market
Sample size
Demographic
BBC Radio Two
Mercia FM
BBC Radio One
BBC Radio Four
BBC Radio Five Live
BBC WM
Classic FM
Heart FM

RAJAR 2005 Q2
Coventry
1369
15+
28
32
27
22
16
11
14
15

Research Project #1 Research Project #4
Warwick
Warwick
505
431
15+
25+
33
42
27
22
29
22
23
45
17
24
12
21
14
27
10
19

Page 29

Section 105(a):

The results of Research Project #1 match quite closely with the RAJAR data. The results of
Research Project #4 match less closely because only respondents aged 25 and over were
interviewed. As would be expected, in this latter survey, stations aimed at older demographics
such as BBC Radio Two and BBC Radio Four scored better with this 25+ demographic, while
youth stations such as BBC Radio One scored worse. The conclusion is that that Coventry data
bears useful examination for this licence application, because the Warwick, Leamington Spa
and Kenilworth market is not so dissimilar.
The most noteworthy characteristic of the Coventry radio market is the decline in local/regional
commercial radio’s listening share from 32% to 30% over the last five years, despite the launch
of two new regional commercial stations during that period [Research Project #2]. Substantial
cannibalisation of local/regional commercial radio audiences has happened during that time,
combined with the substantial decline of oldies station Classic Gold 1359, which has lost more
than half its hours listened [all references to hours have been indexed for changes in population
and station survey areas] and which now has only a 2% share.
During a period when heritage stations in many UK local radio markets have suffered
substantial audience decline as a result of increased competition in their market or poor
programming, Mercia FM is a remarkable success story. Its weekly reach (32%) remains
unchanged from ten years ago, just after Heart FM had launched as the first regional station in
the West Midlands. Hours listened to Mercia FM have increased by 7% over the last five years,
and its share of listening has barely changed [Research Project #2]. This is partly due to the
quality of Mercia’s programming, but also partly due to the station’s willingness to adapt in the
marketplace. Because Mercia FM dominates the local radio market so effectively, a closer
examination of its audience profile is worthwhile.
In February 2005, Mercia FM changed its on-air “tag line” from “today’s best mix” to “playing the
best mix of the 80s, 90s and today”. At the same time, it introduced more songs from the 1980s
and 1990s into its music mix. The recent monitoring report commissioned by Warwick Local
Radio shows that, outside of the breakfast and drivetime shows, the station is now playing three
or four hit songs from the 1980s and 1990s in each hour [Research Project #5]. This represents
a substantial change from a format that had previously been dominated by current and recurrent
hits.
To understand how this is changing the audience profile of Mercia FM, it is necessary to look at
the constituent age groups of the station’s listeners, and what proportion each age group
accounts for of the total hours listened. To explain these issues easily, it will be necessary to
display the information graphically (whilst understanding Ofcom’s guidance to minimise the
inclusion of graphs and tables within licence applications). All data has been indexed against
the proportion of different age groups in the population, so as to exclude the effects of the
ageing population and differences between the demographic breakdown of local markets.

Page 30

Section 105(a):

250

MERCIA FM: DISTRIBUTION OF HOURS LISTENED BY
AGE [indexed]
2000Q2

INDEX: 100 = normal distributio

2005Q2

200

150
100

50
0
15-24

25-34

35-44

45-54

55-64

65+

An index value of 100 shows that the proportion of hours listened to the station by an age group
is exactly proportionate to its size relative to the whole adult population. A value above 100
shows that the station’s listening is skewed towards that age group. It can be seen that, five
years ago, Mercia FM’s listening was dominated by 15-24 year olds attracted to its
contemporary chart music. Although the format change only took place in February this year,
the effects have been immediate. In the latest quarter (April to June 2005), Mercia FM’s
listening is now dominated by 35-44 year olds, whilst the residual 15-24 audience continues to
record an index value above the 100 mark.
Mercia FM’s “Format” contained in its Ofcom licence continues to define the station’s target
audience as “under-40s” and its format as “contemporary and chart music” (following Ofcom’s
Change of Control review when GWR was merged into GCap). Whereas, five years ago, only
50% of hours listened to the station accrued from 35+ listeners, already the audience has aged
significantly enough that 69% of hours derive from that 35+ demographic. Mercia FM’s shift
towards an older audience was confirmed by owner GCap Media in its May 2005 submission to
Ofcom (“Response by GCap Media plc to Ofcom on the proposed change to the Format of Kix
96”):
“From its heritage ILR broad position, Mercia FM has experienced declining market
share, with specialist services targeting demography, geography and genre-based music
interest eroding its audience share. As a result, Mercia FM now concentrates on superserving the 25 to 44 year old audience…….”
The GCap Media submission also confirmed that the “30 to 50 year old demographic is
significant for Mercia FM”, as the graph clearly shows. Original market research was attached to
the submission showing that, amongst the people sampled in Coventry, “for Mercia FM, it shows
widespread understanding in the market for their music position of the 80s, 90s and today.”
These findings are essential to understanding the dynamics of the local radio market because of
the existence of Heart FM as a competitor to Mercia FM. An analysis of Heart FM’s listening
hours shows that the station is similarly focused on the same 35-44 year old demographic.

Page 31

Section 105(a):
HEART FM: DISTRIBUTION OF HOURS LISTENED BY
AGE [indexed]
200
2000Q2

INDEX 100 = normal distributio

2005Q2

150

100

50

0
15-24

25-34

35-44

45-54

55-64

65+

Heart FM’s key demographic has changed little in five years. What has changed is Mercia FM’s
decision to fight Heart FM head-on for the same demographic. Already, after only a few months,
Mercia FM has had a substantial impact on Heart FM in its local market. Heart FM’s share of
listening dropped to 4.3% in the last quarter, down from a peak of 7.3% two years ago, while
Mercia’s share has risen from 11.5% to 13.2% in the last year [Research Project #2].
It is interesting to note that Heart FM’s “Format” defines its target audience as “25 to 44 year
olds”, although the above graph shows it becoming more narrowly focused over the last five
years on 35-44 year olds. The net result of two stations moving towards the same demographic
target is the audience cannibalisation that was documented earlier, and the resultant diminution
of local/regional commercial radio’s share of listening in the market. Such “in-fighting” has
allowed the BBC to continue to dominate the market, because its most popular stations succeed
in reaching very different demographics from either Mercia FM or Heart FM. To illustrate this
phenomenon, it is worthwhile examining the demographics of the two dominant BBC stations in
the market (ranked first and third by audience share).
BBC RADIO TWO: DISTRIBUTION OF HOURS LISTENED
BY AGE [indexed]


200

150

100

50
2000Q2
2005Q2

0
15-24

25-34

35-44

45-54

55-64

65+

BBC Radio Two’s audience is completely different from that of Mercia FM or Heart FM, and is
dominated by 45 to 64 year olds. The station has become slightly younger over the last five
years, with more 30 to 40 year olds attracted by younger presenters and a more contemporary
music policy that has, simultaneously, lost the station some of its impact within the 65+
Page 32

Section 105(a):
demographic. BBC Radio Two’s audience profile is similar to that of Saga FM, which is another
of the regional stations available in this market.

250

BBC RADIO ONE: DISTRIBUTION OF HOURS LISTENED
BY AGE [indexed]
2000Q2

INDEX: 100 = normal distributio

2005Q2

200

150
100

50
0
15-24

25-34

35-44

45-54

55-64

65+

At the other end of the age spectrum, BBC Radio One’s hours listened are dominated by 15-24
year olds although, over the last five years, more 25-34 year olds are listening, as both the
station’s presenters and listeners begin to age. BBC Radio One’s audience profile is similar to
that of Kerrang!, which is the third regional station available in the market.
Given the existence of three pairs of stations in the market targeting similar demographics:
•
•
•

Mercia FM + Heart FM
BBC Radio Two + Saga FM
BBC Radio One + Kerrang!

It is the contention of Warwick Local Radio that it would prove counter-productive to propose a
further station in the same market that tried to target too narrow a demographic. To understand
how a new local station could fit into an already crowded radio market, the audience profiles
were analysed of 28 “full-service” local stations launched since 1999, using the latest RAJAR
data [2005 Q2] with performances indexed against the population in each station’s survey area
to eradicate the demographic differences between different markets. The average full-service
station has this audience profile:


200

FULL SERVICE STATIONS: DISTRIBUTION OF HOURS
LISTENED BY AGE [indexed]

150

100

50

0
15-24

25-34

35-44

45-54

55-64

65+

Page 33

Section 105(a):
Although, like Mercia FM and Heart FM, the peak of the audience is in the 35-44 demographic,
the graph is much more shallow and extends across a much wider age range in the important
area above the 100 index value, demonstrating broad audience appeal. This empirical evidence
demonstrates that recently launched full-service stations (the majority entering markets
dominated by heritage stations) succeed in attracting a wide range of ages with their
programming, not dissimilar to the audiences of most local commercial radio stations in the
1970s and 1980s.
A pertinent example from the local area of a typical station attracting a similarly diverse
audience is FM 102 The Bear in Stratford-upon-Avon, whose audience profile is:
FM 102 THE BEAR: DISTRIBUTION OF HOURS LISTENED
BY AGE [indexed]
250

2000Q2
2005Q2

200

150

100

50

0
15-24

25-34

35-44

45-54

55-64

65+

Like the previous graph, the peak of the 2005 data falls in the 35-44 demographic, and the area
above the 100 index value extends from the late 20s up as far as the early 60s, showing the
station’s success at attracting a diverse audience. This was not always the case and the graph
shows that, five years ago, before present owner CN Group purchased the station, it was much
more sharply focused on the 35-44 demographic. Like Mercia FM, The Bear now faces
competition from the three regional stations in Birmingham (though only across the northern part
of its survey area) but, unlike Mercia FM, CN Group has decided not to try and compete headon for Heart FM’s 25-44 year old target audience.
This brief analysis of the shifting demographics of radio stations within this local market
demonstrates how important it is to consider existing competitive forces when planning a new
radio station for the area. Although Warwick Local Radio will undoubtedly be unique in the
market by providing listeners with editorial coverage directly relevant to Warwick, Leamington
Spa and Kenilworth, it is nevertheless in competition for listeners with stations that have
considerable strengths and loyalties. It is enlightening to look at the demographics of all the
local/regional commercial radio stations audible in the market on a single graph:

Page 34

Section 105(a):

M ercia
Classic Gold
Heart
Saga
Kerrang
Bear

INDEX 100 =normal distributio

300

DISTRIBUTION OF HOURS LISTENED BY AGE [indexed
by population]
MARKET GAP

0
15-24

25-34

35-44

45-54

55-64

65+

Although the resultant graph is over-crowded with data, it is clear to see that a market gap
exists in the 45-54 demographic because this age group is not “super served” by any particular
local commercial station. This age group will be the cornerstone of the plans for Warwick Local
Radio whilst, at the same time, the station is anticipated to attract substantial numbers in the
age groups directly above and below. As noted above, it is imperative for the station to have as
broad a listener base as possible, which is why the Board decided to define Warwick Local
Radio’s target audience as 35 to 64 year olds, and the station’s programming [see answer to
Question 4] is designed to have wide appeal to this entire demographic.
The Board believes that, by formulating its business plan using empirical evidence from the
specific local market to be served, and using empirical data derived from similar station
launches across the UK, its proposals are made both realistic and feasible.
The applicant should provide financial projections on an annual basis for the licence. The projections
must include:
(i)

Profit and loss accounts

(ii)

Balance sheets

(iii)

Cash-flow forecasts

The period covered is at the discretion of the applicant, but should be justified. The forecasts should be
supplied on an Excel spreadsheet or similar, with any accompanying guidance notes. The applicant
must also complete and submit the spreadsheet entitled ‘Financial Template’ located at
www.ofcom.org.uk/radio/ifi/rl/commer/ar/lapr/ftap.xls using information from its business model.
All financial projections, plus the “Financial Template”, are included as Appendix 3. In addition to
profit and loss accounts, balance sheets and cash flow forecasts for the first three years, also
included are full details of all workings, the sensitivity analysis, depreciation, staff costs, revenue
calculations and pre-operational expenditure.
The projections are based on the first three years of trading. Warwick Local Radio Limited has
decided to submit projections for the first three years, as this takes the company through to its
first year of projected profits.
Page 35

Section 105(a):
This section must include a full listing of the underlying assumptions on which the financial projections
are based, relating such assumptions clearly to other parts of the application (e.g. proposed format,
extent of coverage area)
Underlying assumptions are as follows:
•
•
•
•
•
•
•
•
•
•
•
•

•

Warwick Local Radio will broadcast to an adult population of 103,703;
Warwick Local Radio’s programming of local news, information and music will appeal to all
adults in the area, but have particular appeal to both sexes aged 35 to 64;
Warwick Local Radio will launch no later than six months post-award;
Tangible assets will be purchased outright prior to broadcast. The asset depreciation
policy is defined in the attached financial information at Appendix 4;
Revenue projections have been based on rationale acquired through trial broadcasts,
industry standards, market research and knowledge of existing advertising rates in the
local marketplace;
Royalties are calculated on the current published percentages;
Sales commission is calculated as 3% of revenue;
A management services contract has been agreed with Laser Broadcasting Limited to
supply Warwick Local Radio Limited with back-office services such as accounting, sales
training and commercial traffic scheduling;
Vehicle leasing for the sales executive cars is based upon a written quote from a local
supplier;
The vehicle to be purchased outright is to be used by the news team for outside
broadcasts and brand awareness;
Premises will be leased and the cost is based on a similar property available at the time of
application;
Bad debt provision in based on 1% of budgeted revenue. It is the intention of the Warwick
Local Radio Limited Board to operate a strict debt collection policy that requires new
customers in Year One to pay for commercials before they are broadcast. Credit facilities
will be offered subsequently as the debtor profile becomes apparent;
The transmission facilities will be supplied by Arqiva under a Total Broadcast Contract.
Arqiva will design, procure, install, commission and maintain the system, as well as be
responsible for any necessary replacement equipment, repairs and emergency callouts.
This arrangement requires no capital outlay from Warwick Local Radio Limited, as
payment for this service is made by monthly Direct Debit for the contracted period of the
licence. It is intended to site the transmitter at Arqiva’s recommended location at Warren
Heath [see answer to Question 3].

The applicant should detail how revenue figures were derived, distinguishing between local, national
and sponsorship revenue.
The response to this question may be submitted in confidence.
Revenue figures were derived as follows:
•
•

Projected weekly reach in Year One of 17%, rising by Year Three to 19%, and projected
average hours have been benchmarked against empirical evidence of recent local station
start-ups of comparable size [see answer to Question 2(d)];
Conservative revenue projections are based upon a Total Survey Area of 103,703 adults;

Page 36

Section 105(a):

•

2005
2006
2007
2008

The benchmark historical industry average revenue of £31 per 1000 hours per annum
listened was used to produce the forecasts, with a year-on-year growth progression
applied using the average values of Advertising Association projections for UK radio
revenues [see table below];

RADIO REVENUE: Year-On-Year Growth Projections (%)
High option
Low option
3.0
7.7
2.7
2.0
9.3
2.2
9.2
4.7

Average
5.4
2.4
5.8
7.0

source: Advertising Association forecasts, November 2004

•
•
•
•
•

National revenue has been assumed to be 1.5% of total revenues;
Local revenue has been assumed to be 73.5% of total revenues;
Sponsorship income has been assumed to be 20% of total revenues;
Income from promotions has been assumed to be 5% of total revenues;
Commercial production costs have been assumed to be 7% of total revenues.

Page 37

Section 105(a):
d) Audience Projections
Provide the following information:
(i)

The projected adult (aged 15+) population of the Total Survey Area (TSA) within which it is
intended to measure the listenership of the service.
The projected adult population (aged 15+) is 103,703. This has been derived from 2001 Census
data and the coverage prediction supplied by Arqiva [see answer to Question 3]. The
population count has been calculated against a signal strength of 54 dBuV/m.
According to Arqiva’s analysis of data from the 2001 Census, the population within the Total
Survey area comprises:
•
51% females;
•
93% of the population describe themselves as “white”;
•
4% of the population describe themselves as of Indian origin, the most numerous ethnic
minority;
•
60% of the adult population are within ABC1 socio-economic class and 40% are C2DE;
•
18% of the employed adult population are “managers & senior officials”;
•
16% of the employed adult population are “professionals”;
•
73% of households own their own home.

(ii)

Projections for listenership ratings (e.g. weekly reach, average weekly hours of listening) over
the first three years of the service, with detailed demographic breakdowns as appropriate.
The Board’s analysis has determined that the station’s projected performance will be:

Adult (15+) TSA
Weekly reach %
Reach #
Average hours/week
Total hours

YEAR ONE
103,703
17 %
17,630
7.0 hrs
123,410

YEAR TWO
103,703
18 %
18,667
8.0 hrs
149,336

YEAR THREE
103,703
19 %
19,704
9.0 hrs
177,336

Extensive market research [see answers to Question 6] has demonstrated the wide appeal of
the proposed radio station to a substantial proportion of the potential audience between the
ages of 35 and 64. This age group comprises 48% of the adult population of Warwick,
Leamington Spa and Kenilworth. Additionally, there is likely to be some overlap of the station’s
appeal to 30-34 and 65-70 year olds, who comprise a further 15% of the adult population.
The Board expects the demographic breakdown of the station’s audience to be similar to that of
other “full-service” locally focused stations targeting older audiences that have launched in
markets with existing heritage stations. In the answer to Question 2(c) earlier in this document,
a graph was included that showed the average demographic breakdown of 28 “full-service” local
stations launched since 1999. Warwick Local Radio’s audience is expected to have a broadly
similar distribution of hours listened across the range of age groups.

Page 38

Section 105(a):
(iii)

The expected impact of the proposed service on existing services, in listenership terms.
The impact of Warwick Local Radio on existing services within its Total Survey Area at the end
of Year One is summarised in the table below:
IMPACT ASSESSMENT OF WARWICK LOCAL RADIO ON WARWICK RADIO MARKET (103,703 TSA) - YEAR ONE
ALL
BBC
RADIO RADIO 2

MERCIA
BBC
BBC
FM RADIO 1 RADIO 4

WARWICK
L.R.

BBC RADIO
FIVE LIVE

BBC WM

CLASSIC HEART
SAGA
CLASSIC
FM
FM 105.7 FM GOLD 1359 KERRANG!

pre-launch
WEEKLY REACH (000)
% REACH
TOTAL HOURS (000)
AVERAGE HOURS

28
27%
361
13.0

34
32%
305
9.1

29
28%
296
10.2

23
22%
294
12.6

17
16%
124
7.5

12
11%
119
10.1

15
14%
110
7.4

16
15%
101
6.4

6
6%
56
8.8

6
6%
53
8.3

7
7%
40
5.8

100.0%

MARKET SHARE

96
93%
2317
24.1

15.6%

13.2%

12.8%

12.7%

5.3%

5.1%

4.8%

4.3%

2.4%

2.3%

1.7%

119

109

107

92

51

52

38

5.1%

4.6%

4.5%

3.9%

2.2%

2.2%

1.6%

end of Year One
WEEKLY REACH (000)
% REACH
TOTAL HOURS (000)
AVERAGE HOURS
MARKET SHARE

2359

346

294

291

289

100.0%

14.7%

12.5%

12.4%

12.3%

18
17%
123
7.0
5.2%

The launch of Warwick Local Radio will increase hours listened to all radio by almost 2% in Year
One to 2,359,000 hours. Warwick Local Radio will rank fifth in the market with a 5% share of
listening in Year One, a performance that is projected to improve by more than 40% by Year
Three.
The launch of Warwick Local Radio is projected to reduce listening hours to these stations by
these amounts within the station’s Total Survey Area in Year One:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

BBC Radio Two (15,291 hours per week less)
Mercia FM (11,024 hours per week less)
BBC Radio WM (9,957 hours per week less)
Heart FM (8,535 hours per week less)
FM 102 The Bear (8,535 hours per week less)
BBC Radio One (4,979 hours per week less)
BBC Radio Four (4,979 hours per week less)
BBC Radio Five Live (4,623 hours per week less)
Saga FM (4,623 hours per week less)
Classic FM (3,556 hours per week less)
Classic Gold 1359 (1,778 hours per week less)
Kerrang! (1,422 hours per week less)
Virgin Radio (1,066 hours per week less)
Talksport (356 hours per week less)
Other (1,422 hours per week less)

(iv)
The basis on which the estimates above have been calculated, and any assumptions taken into
account.
Audience Projections:
The Board’s projections for the performance of the station in its first three years have been
derived from statistical analysis of empirical data from RAJAR ratings reports [1999Q2 to
2005Q2].
Page 39

Section 105(a):
A benchmark was provided by the start-up performances of all 21 local (not regional)
commercial radio stations with Total Survey Areas of between 100,000 and 300,000 that have
commenced broadcasting since 1999 and have participated in RAJAR. Their average
performance at the end of each of their first three years on-air was as follows:

Weekly
reach %
Average
hours/week

YEAR ONE
17.2 %

YEAR TWO
18.4%

YEAR THREE
18.6%

9.4 hrs

8.7 hrs

9.7 hrs

Warwick Local Radio’s programme format is comparable to the stations included in this
analysis, and its target audience, like those stations, is by no means a niche demographic.
These figures were rounded and revised with a more natural year-on-year progression to arrive
at the projections for the station’s performance in the first three years. The year-on-year
increase in hours listened has been approximated to 20% for Years Two and Three, a rate of
growth observed in start-up stations in similarly sized markets.
Impact on existing services:
The Board’s projections for the impact of the new station on existing broadcasters have been
derived from quantitative market research [see Research Project #4] in which respondents who
indicated they would listen to the new local radio station were asked how they would make time
to listen. Some respondents answered that they would listen to the radio longer, while others
said they would listen to existing stations for less time or not at all. Because existing RAJAR
data is not available for the market the station will serve, several assumptions have been made
in calculating the impact on existing stations:
•

The Total Survey Area of Warwick Local Radio is assumed to have the same listening
characteristics as the larger Mercia FM area in which it is included. This assumption is
supported by the results of market research [see Research Reports #1 and 4] that shows
the same stations to have similar popularity in the Warwick market as they do in the
Coventry market [see Research Report #2]. The results of Research Project #4 were
skewed more towards stations with older appeal (BBC Radios Two, Four and WM)
because the sample was aged 25+ rather than 15+, as shown below:

Source
Market
Sample size
Demographic
BBC Radio Two
Mercia FM
BBC Radio One
BBC Radio Four
BBC Radio Five Live
BBC WM
Classic FM
Heart FM

WEEKLY REACH COMPARISON (%)
RAJAR 2005Q2 Research Project #1
Coventry
Warwick
1369
505
15+
15+
28
33
32
27
27
29
22
23
16
17
11
12
14
14
15
10

Research Project #4
Warwick
431
25+
42
22
22
45
24
21
27
19
Page 40

Section 105(a):
•
•

The existing listenership to FM 102 The Bear in the Warwick market cannot be accurately
quantified because the station is not available within most of the Coventry market;
Listening to Warwick Local Radio is assumed to replace listening to an existing station on
an hour-for-hour basis, a simplification of the real situation where listeners are more likely
to add a station to their listening menu and share time between them (if anything, this
results in an overestimation of the impact on existing services, and an underestimation of
the new listening added to the market).

CALCULATION OF IMPACT ASSESSMENT
Col #1 Col #2 Col #3 Col #4
%
%
no.
%
Listen to the radio for longer
32
33
Spend less time listening (or
stop altogether):
64
67
……….. Mercia FM
31
13
Classic Gold 1359
5
2
The Bear
24
10
Heart FM
24
10
Saga FM
13
6
Kerrang!
4
2
BBC Radio WM
28
12
BBC Radio 1
14
6
BBC Radio 2
43
19
BBC Radio 3
0
0
BBC Radio 4
14
6
BBC Radio 5 Live
13
6
Classic FM
10
4
Virgin Radio
3
1
Talksport
1
0
other
4
2
Don't know
3
Total
100
100
231
100

Col #5
%
33

Col #6
hours
41264

9
1
7
7
4
1
8
4
12
0
4
4
3
1
0
1

0
11024
1778
8535
8535
4623
1422
9957
4979
15291
0
4979
4623
3556
1067
356
1422

100

123410

In Column #1, the results of Research Project #4 are tabulated, in which 32% of respondents
who said they would listen to the new local stations then stated they would listen to the radio for
longer; 64% said they would sacrifice listening to existing stations; and 3% said they did not
know how they would make time.
In Column #2, the 3% who “don’t know” are removed and redistributed proportionately to the
other two categories.
In Column #3, the 231 mentions of stations that respondents said they would listen to less (or
not at all) are tabulated.
In Column #4, these mentions of stations are converted into percentages of those respondents
who would listen less to existing stations.

Page 41

Section 105(a):

In Column #5, these preferences are converted to percentages of all respondents who said they
would listen to the new radio station.
In Column #6, these percentages are applied to the total hours listened per week to Warwick
Local Radio to determine the impact on existing stations.
The results show that:
•
41,264 hours per week listening to Warwick Local Radio is “new listening” that has been
added within the market;
•
the remainder of the total 123,410 hours per week listening to Warwick Local Radio in
Year One is derived from listeners replacing former listening to existing stations.
These changes in hours listened to different stations have then been applied to the “pre-launch”
snapshot of the Warwick market. Although recognised to be a simplification of the complex radio
listening dynamics, and to be based on assumptions about the Warwick market, the results
nevertheless give some indication as to the anticipated impact of Warwick Local Radio on
existing radio stations and its projected position in the market after its first year on-air.

(The figures within the above tables may not sum precisely to totals, because they are rounded
from spreadsheet formulae.)

Page 42

Section 105(a):
3. Transmission Proposals
(i)

Provide details of the transmission site you propose to use, under the following headings:

(a)

Name and National Grid Reference of site
Site Name:
National Grid Reference:

(b)

Leamington Spa
SP 329 663

Height of site above Ordnance datum (in metres)
91 metres

(c)

Height of transmitting aerial above ground level
39 metres

(d)
Radiated power in either or both planes of polarisation, and aerial radiation pattern (if no aerial
radiation pattern is submitted, it will be assumed without exception to be omni-directional).
Radiated Power:
Pattern:

100 watts vertical + 100 watts horizontal
Antenna pattern is Directional. A copy of the radiated pattern is included
as Appendix 5.

The applicant should confirm whether he believes that his intended mast aperture will be available, and
whether, where required, planning permission can be obtained. Where appropriate, evidence to support
this belief should be provided. Details of any negotiations which have been entered into with the site
owner should also be provided.
Arqiva has informed Warwick Local Radio that it owns the Leamington Spa site and the existing
antenna system used by Mercia Radio. This can be made suitable for sharing. Planning
permission is not required for the changes required and can be accommodated within the
present building. The site provides excellent coverage for Warwick, Leamington Spa, Kenilworth
and the surrounding area.
The information provided above must take into account any requirements set out in Section 2 of this
Notice. In the event of minor non-compliance, Ofcom may revisit an applicant’s proposals with a view to
modest adjustment following award and closer scrutiny. Significant non-compliance may render the
application liable to disqualification.
(i)

Please provide a detailed computer predicted map (in colour) of the coverage anticipated using
the transmission site and parameters described above.
Arqiva Coverage Predictions for the area are attached as Appendix 6.

Page 43

'An Application To Ofcom For The FM Independent Local Radio Licence For Warwick By Warwick Local Radio' by Grant Goddard

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