Broadcasters Combine, Expand With Newspaper Help

Michael Hedges March 2, 2007

Throughout 2006 changes have been afoot with Switzerland’s broadcasters. The pace quickened as the year ended with consolidations and new concessions tendered. Provisions in new Swiss broadcasting rules, effective in April 2007, jogged broadcasters into action.

Major Swiss newspaper groups showed renewed interest in radio companies. Through different holding companies Neue Züricher Zeitung (NZZ) acquired control for four stations and shares of others. LZ Medien Holding, majority owned by NZZ, bought majority interest in Radio Pilatus in central Switzerland. LZ Medien Holding also owns Lucerne newspaper Neue Luzerner Zeitung, which owns a minority stake in Radio Sunshine, also in central Switzerland, and Radio Sunshine Sales. In the December transaction for Radio Pilatus shares owned by Ringier, another giant Swiss publishing house, were bought out.

Freie Presse Holding, 89% owned by NZZ, controls 70% of St. Gallen Tagblatt (SGT), which in turn owns 92% of Radio Aktuell. In November SGT increased its shareholding in Radio Ri to a majority.

NZZ’s radio strategy is centered in central and south-eastern Switzerland. Spokesperson Beat Lauber said, “Local radios only make sense if they strengthen the regional media houses.”

This leaves Berne radio station BE1, majority owned by NZZ, a possible – even probable – take-over target. “We have a solution in sight,” said Lauber, suggesting without being specific that NZZ would reduce its’ holding in BE1. The Berne market is outside the region where NZZ is concentrating on radio.

The recently tendered DAB-T concessions, originally three and now eight, have attracted broad interest among Swiss broadcasters, the NZZ included. Radio Zürisee and the three stations owned by NZZ applied for a pop music channel, radio.ch, to be presented in standard German (hochdeutsche). Radio Sunshine, primarily owned by broadcaster Markus Ruoss and distantly related to the NZZ, applied for Swiss Music Radio. Radio 32 applied for Radio 32 Goldies. The Swiss Department of Energy, Transportation, Environment and Communications (DETEC) changed its ruling on the DAB-T coding layer, changing from MP2 to AAC+, allowing eight channels on the central Switzerland multiplex. Within the last month DETEC determined that coding layer three would be abandoned.

Big publishers also increased stakes in French-speaking western Switzerland. In October, Edipress, publisher of Le Temps and Tribune de Genéve, increased its shareholding in Geneva station Radio Lac after the majority shareholding was sold to Rouge FM Group, owner of Rouge FM.

Radio Lac General Manager Gerard Schoch said the transaction was necessary to prevent the station from “falling into the bosom of a French group.” Radio Lac’s major shareholder, free newspaper CHI, has sought to divest for several years. The Ville de Genéve registered similar concerns but gave support to the transaction in the interest of saving the station.

With this transaction, the four primary radio stations in the French-speaking part of Switzerland are owned by two companies. One FM and Lausanne FM are jointly owned.

Not just main-stream broadcasters escape the interests of publishers. Minority language (English) radio station WRG-FM, a local commercial license, is majority owned by State broadcaster SSR-SRG and the BBC World Service. Minority interest is owned by Edipress through its dormant Journal de Genéve company. The BBC intends to relinquish its ownership as the station ownership is transferred to public broadcaster SSR-SRG control. Unknown is the status of the Edipress shares. Repeated questions to Swiss media regulator BAKOM about the ownership status of WRG-FM were answered only with vague references to the equally vague DAB plans of SSR-SRG. European regulators notoriously roll-over to demands by State broadcasters and big newspaper publishers. The Swiss public broadcaster had held minority shares in Radio Lac, which it sold to the new Rouge FM owner.

Minority shareholders are generally financial investors, holding while the market is good. Strategic investors – looking beyond cash buy-outs – insist on majorities. This is turned up-side-down in much of Europe, perhaps one reason serious investment in local broadcast media is lacking.

Media concentration critics tend to ignore State broadcasting and, often, newspaper publishers as participants in the dreaded media concentration. Clearly, board membership – which comes with shareholding – has a powerful influence on restricting business development that just might interfere with the greater strategies of publishers and State broadcasters. The easiest means of competing is killing competition before it starts.

Though not an ownership consolidation issue, the sales organizations of three stations in the Basel area formed a single sales-house. From January Radio Vision AG will represent Swiss stations Radio Basilisk, Basel 1 and German station Radio Regenbogen. Radio Vision is primarily owned by Tamedia, the electronic media division of newspaper publisher Tages-Anzeiger.

Based on an article previously published in Radio World International, February 2007.

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