Lagardere, a European media conglomerate that owns local radio brands "RFM" and "Virgin Radio" in France, is looking to close some unprofitable local stations and centralize operations in Paris. This would change Category C local stations, which have local studios and staff, to Category D stations that operate nationally from one central studio. Lagardere presented plans to close unprofitable local stations to French media regulators and unions, though no final decisions have been made. Competitor RTL, France's top radio station, has also seen advertising revenues drop and plans restructuring to cut costs by 20 million euros over three years.

1. FRANCE: LOOKING TO EXTRACT
THE 'LOCAL' FROM LOCAL
COMMERCIAL RADIO
by
GRANT GODDARD
www.grantgoddard.co.uk
December 2009

2. Like the UK, commercial radio in France is delivered both nationally and locally. Category ‘C’
stations have local studios, employ local staff and are permitted by the regulator to sell local
advertising and use a national brand name, as long as they produce a minimum of 3 hours per
day of local programmes. Category ‘D’ stations are broadcast nationally from one central
studio, have no local offices and are only allowed by the regulator to sell national advertising.
Now it seems as if some of the local radio operations of European media conglomerate
Lagardere, branded 'RFM' and 'Virgin Radio' in France, might have to be closed. “We are in
the process of looking at some of them,” said Lagardere Active chairman Didier Quillot. The
objective, he told 'Le Monde', is to know “whether they are all profitable”. The newspaper
commented: “the future looks bleak for those that are not.”
Monday 14 December 2009 was a busy day for Lagardere. In the morning, it made a detailed
presentation to the CSA, France’s media regulator, about “the economic and financial
situation” of its 'RFM' and 'Virgin Radio' local operations. In the afternoon, it repeated the
presentation to the IRTS public body, trade unions and staff representatives of the two
networks.
RFM is presently available from 192 transmitters across France, of which 55 are local
Category ‘C’ stations. 'Virgin Radio' is available from 228 transmitters, of which 146 are local
Category ‘C’ stations. Each of the local stations employs at least one journalist and one
producer (as required by the regulator) plus advertising sales staff. Lagardere insists that, for
the moment, “no decision has been taken and no request has been filed with the regulator”.
A few weeks ago, the programme director of 'RFM' and 'Virgin Radio', Jean Isnard, produced a
study on the future of local radio. Its conclusion was that it would be more profitable to close
down some local stations and centralise them in Paris. Such closures, converting Category ‘C’
to Category ‘D’ stations, are unlikely to be implemented until February or March 2010, once
the regulator has approved. Lagardere has referred to this strategy as “drastic economic
measures” although it has reiterated its “determination to maintain a significant local
presence”.
One insider told Le Monde: “For Didier Quillot and Alexandre Bompard, CEO of 'Europe 1', the
crisis impacting the radio sector is not cyclical but structural.” Lagardere is also trying to sell its
Paris sports news station, 'Europe 1 Sport', which is losing 1.2m Euros per annum. It had
acquired the station two years ago, intending to transform it into a national station on T-DMB
digital radio. However, as 'Le Monde' commented: it is “too expensive, too late!”
The journalist union, SNJ, has denounced Lagardere’s proposed re-structuring of 'RFM' and
'Virgin Radio' “in the strongest terms”. It suspects that 25 local offices would be closed and 40
jobs are threatened. It accused Lagardere of using the economic crisis and competition from
new media as pretexts for a purge of local journalists.
Meanwhile, competing national radio station 'RTL' (owned by Bertelsmann) has seen
advertising revenues fall 10% year-on-year, despite being ranked #1 station in France for the
last three years. On Thursday 17 December 2009, management requested 30 voluntary
redundancies from the station's 300 staff. Chief executive Christopher Baldelii told Le Figaro:
“Being market leader is good, but we must not rest on our laurels. 'RTL' has to be modernised
to increase its competitiveness”. The objective is to save 20m Euros over the next three years.
[First published by Grant Goddard: Radio Blog as 'France: De-Localising 'RFM' And 'Virgin Radio'', 22 December
2009.]
France: Looking To Extract The 'Local' From Local Commercial Radio page 2
©2009 Grant Goddard

3. France: Looking To Extract The 'Local' From Local Commercial Radio page 3
©2009 Grant Goddard
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk