Former Sun editor Kelvin Mackenzie has urged the government to auction the UK’s analogue radio licences to the highest bidder, arguing that market forces should dictate their value.
The government has launched a consultation into the renewal of commercial FM and AM licences for national stations Classic FM, Talksport and Absolute Radio, which are set to expire in 2022.
The Department for Digital, Culture, Media and Sport (DCMS) said it would consider rolling over the licences for a further five or eight-year period, or allowing them to expire and be put up for auction by Ofcom.
But Mackenzie, who founded Talksport in 1999, has slammed the low fees paid by radio stations and called for the sale process to be opened up.
“For reasons impossible to divine, these hugely profitable stations only have to pay the Treasury £10,000 a year to reach almost every radio in the land,” he said.
Mackenzie, who now runs Love Sport, said his company would “dig deep” to land rival Talksport’s current AM slots. He also said he would bid for the bandwidth currently held by Classic FM to start a new UK equivalent to US network Fox.
The outspoken media executive said the going rate for a national licence on digital radio was more than £1m per year, and that listeners on analogue radio should be granted the same value.
“In my view market forces should dictate the value of the licence. Why not decide the minimum cost based on the percentage of analogue listeners?” he said.
While digital radio now commands a majority share in the market, analogue still accounts for just over 40 per cent of UK radio listening.
In its last review in 2017, regulator Ofcom opted to maintain the £10,000 fee due to a lack of competition and the high costs of launching a new national radio station.
However, Mackenzie said Love Sport was now “anxious” to bid against Talksport, while Bauer’s new classic station Scala posed a new challenge to Classic FM.
The UK’s commercial radio market is dominated by Global, Bauer and Rupert Murdoch’s News UK, which own Classic FM, Absolute and Talksport respectively.
Mackenzie acknowledged that the companies were unlikely to support an open auction. “However, since all three have made their fortunes over the decades by embracing and competing in the free markets, sure it’s time they were put to the test in the analogue world,” he said.
DCMS said its consultation on analogue licences closes on 21 February, and it will respond in due course. Global and Bauer declined to comment. News UK has been contacted for comment.