Sources close to GMG said this was the most likely outcome. However, Julian Carter, GMG Radio Group director of sales, insisted that taking sales in-house was still an option.
The two companies agreed to end the deal that was set up between GMG and Chrysalis Radio after failing to agree new terms and conditions proposed by GMG.
Global, which bought Chrysalis in June for £170m, is said to have rejected the new contract as “commercially unacceptable” and wrote to GMG requesting an “orderly parting of the ways”, although the two companies are now rowing over who exactly ended the deal.
It is thought Global rejected the contract after GMG asked for a guarantee it would increase station revenues by more than 80% a year.
While the contract was held by Chrysalis, GMG’s business grew by 23% in a flat radio market and Global is said to have considered the new demands too high.
However, Global Radio is keeping on its entire sales team following the loss of GMG’s sales contract, with a view to winning in the bidding for Emap’s radio business.
The company is rumoured to be confident of its chances as Emap looks to sell off its divisions and believes that, as a private company with access to cash funds, it will be a preferred bidder.
Staff at Global were told immediately that there would be no job losses and that the sales teams working on GMG business would be deployed elsewhere within the company.
Global Radio was formed in June by Ashley Tabor, chief executive of Global Talent Group, and Owen McGartoll, an executive director of Barchester Healthcare, with former ITV boss Charles Allen as chairman and an investor group that includes Irish tycoons John Magnier and JP McManus.
The board, which includes former Capital Radio group programming director Richard Park, has already been making its mark on the industry.
It most recently pulled the plug on the deal set up between Chrysalis and Sky News to rebrand LBC News 1152 as Sky News Radio for the second national digital multiplex.
.jpg)
.jpg)