The news that Guardian Media Group Radio had terminated its national sales contract with Global (nee Chrysalis) Radio not only sparked off a series of tit-for-tat declarations about who was responsible, but also initiated questions about what happens next.
A year ago, GMG Radio was a small player in a big pond - it owned just six licences and had no mainstream presence in London - and there was speculation that it was planning to pull out of the sector altogether.
But in the past 12 months, chief executive John Myers has made significant progress, acquiring a further six licences and revamping Smooth to go more head to head with Magic and Heart, which gave it a higher profile in London.
Since day one, eight years ago, the company's radio division has had its national sales handled by Chrysalis Radio (its regional sales are done in-house) and the two companies regularly boasted of their strong relationship.
Working relationship
Though they remain tight-lipped as to their intentions, speculation is rife since the initial move from Global that GMG bosses are preparing to announce a deal with GCap. They are also adamant it will not be a done deal and that some of the contract will remain in-house.
GCap and GMG already have a working relationship - the Chrysalis-GMG partnership was rocked slightly in October 2006 when GCap sold two of its Century stations to GMG, but on the understanding the sales deal remained.
However, opinion is very much divided on whether it should place all 10 remaining stations with the market leader, or retain some power and go it alone as well.
Jonathan Barrowman, head of radio at Initiative, says: "If you're a small fish in a bigger pond you do get that scale in terms of sales representation, but from a non-spot point of view it's much better having your own sales team representing your own brand.
"The best stuff I've done is when I've spoken direct with (Virgin's breakfast DJ) Christian O'Connell and his team on a sponsorship. The more stations you represent the harder that is."
Barrowman supports the idea of GMG handling its own sales and praises Myers' recent tour of agencies, which has made the division a more "agency-facing brand".
Global Radio and GMG currently own 11% and 9% of the radio market respectively and were it not for Global's confidence in winning the bidding war and taking over Emap Radio, it would run the risk of finding itself in a tight spot.
"Global doesn't have the critical mass it used to have and that presents an argument for all radio companies to consolidate further," said one senior radio executive.
"In sales, we are very much dictated to by the customer - as an industry we can sell single brands and do a better job, but customers won't allow that as they don't want copious amounts of people coming in to see them."
He predicts a future with only two major sales houses - GCap and the combination of Emap's ultimate owners - and believes GMG Radio has "no choice" but to put its national sales contract with GCap, as it is the only significant sales house available when the unsteady Emap is discounted.
"Sadly, if you're not a major player in radio you will end up picking the crumbs up from whatever's left," he says.
Paul Bates, media analyst at Charles Stanley Securities, agrees: "GMG is not big enough to run its own sales house. Global is going to add more business so it can continue to justify that expense, but a lot of companies like to feel nimble on the ground."
Bold judgements
The benefit for GMG is that, as a private company, it can get away with making some bold judgements without feeling heat from the City. But, prince or pauper, no amount of money can pay for the expertise that comes from being part of an established sales house.
Tony Mellor, sales director at First Radio Sales, which sells ad space for 134 regional stations, says: "Simplicity is key. From a customer point of view, First Radio Sales means a single point of contact giving a level of service and trading that is as good as any of the sovereign sales points."
Launching Smooth was the latest daring move for John Myers and GMG Radio, and even competitors are confident it will pay dividends, with many predicting that the London station will soon be competing on a level with Magic.
But while the company has the finances to pour money into new programming or sales initiatives, the jury is still out on whether it is big enough to go it alone.
WHO OWNS WHICH STATIONS?
- GMG Radio 2 x Century FM in North West and the North East 5 x Smooth in Glasgow, North West, East Midlands, West Midlands, London and one yet to launch in North East 3 x Real Radio in Scotland, Yorkshire and Wales Rock Radio in Glasgow
- Global Radio 3 x Heart in East Midlands, West Midlands and London 4 x Galaxy in the North East, North West, West Midlands and Yorkshire 97.3 LBC in London and 1152AM LBC News
- GCap Media Classic FM - national Capital 95.8 in London Xfm in London, Manchester and Scotland The One Network - 42 stations across the UK Choice FM in London Gold network - national.