Michael Connolly

Mike Foster talks to IRG's tough chief executive

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Mike Foster talks to IRG’s tough chief executive

Mike Foster talks to IRG’s tough chief executive

All work and no play makes jock a dull boy…

It augurs well for 1999 that Independent Radio Group chief executive Michael Connolly has finally restarted marathon training.

‘I’ve done them in London, New York, Amsterdam and Rome,’ he says. ‘But I haven’t had time for ages…’

Last year IRG was dragged through the mud in the Scottish media, over the departure of shock jock Scotty McClure from Radio Scot FM. Connolly also spent the year lunching media buyers, while seeking a new advertising chief. He made the painful decision to sell Mercury FM – once seen as key to IRG’s future. IRG’s shares at 52p are half the price they listed on AIM in 1995. And the company is yet to declare a profit. ‘Things haven’t exactly been easy,’ Connolly concedes.

A fit 58 year old accountant, Connolly used to advise Owen Oyston on radio acquisitions at Trans World Communications in Lancashire.

He joined TWC full time in 1989, then became involved in a shareholder campaign to reduce Oyston’s power within the group. Connolly became TWC chief executive in 1991, and Oyston ended up in jail following a sex offence. ‘Oyston was a man of great talent, who fell foul of the law,’ says Connolly, phlegmatically.

Post TWC, Connolly got back on the radio acquisition trail by forming IRG with ex TWC executives Neil Jones (sales director) and Tony Dewhurst (finance). Publisher Trinity provided backing and IRG became one of the first stocks on the Alternative Investment market.

The float was well supported. You didn’t need to be a rocket scientist to see that Connolly & Co were sufficiently qualified to profit from buoyant advertising trends.

Their plan was to secure dominant franchises, and win permission from the Radio Authority to start smaller stations near them to make decent advertising packages. But that’s not quite how it worked out…

To start off, IRG paid £4.5 million for Allied Radio, owner of Sussex-based Mercury FM. But, in its wisdom (not seen as consistent, by analysts) the Radio Authority decided not to award IRG enough start ups. ‘When they gave Lewisham Love FM instead of awarding us Bromley we called it a day,’ says Connolly.

IRG sold Mercury to Daily Mail & General Trust for £3.5 million, following restructuring. IRG washed its face by retaining real estate and a weaker Allied station, Lite AM of Manchester, which may also be sold.

In July 1997 IRG paid £5.2 million for Scot FM from Grampian. Scot FM had a handy following in Glasgow and Edinburgh thanks to the popularity of its earthy shock jock Scotty McClure.

But Scotty only wanted to work in the middle of the day, and Scot FM could not sell enough advertising for his audience, because of competition from pop music stations Forth and Clyde.

It was Connolly, not Grampian, who had the nerve to face up to Scotty and ask him to sign a new contract for late evening. Scotty wasn’t exactly keen on the idea, and IRG suffered abuse from the Scottish Sun for daring to let him go. Scot FM’s audience collapsed.

Scot FM has been rebuilt in the mould of London’s Heart FM and Radio Five Live. ‘We play adult contemporary music like Celine Dion, Simply Red, Lighthouse Family,’ says Connolly. ‘We also employ eight journalists to bring us strong Scottish news stories.’

The station’s audience is now bigger than before in Edinburgh, albeit smaller in Glasgow. But, crucially, the audience is aspiring middle class, and popular with advertisers. IRG has added smaller Scottish stations to the mix, but failed to win a new Central Scotland franchise in partnership with a music paper.

All this refocusing produced stresses and losses at IRG. Co founder Neil Jones suffered from ill health, and had to quit. Connolly has now persuaded EMAP’s radio advertising star Barbara Gardner (and team) to take Jones’ place. Ex EMAP (Piccadilly Radio) man Mike Bawden, aged 29, is being put in charge of Scot FM.

It’s too bad that the company has disappointed in the past. But evidently, there is light at the end of the tunnel.

Profits are on the cards this year. The company’s potential asset backing is 120p a share. But shareholder returns (and of course executive share options) have not been good. A venture capital backed buy out may be Connolly’s best route forward.

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