Media: Perspective - The task ahead will be an uphill one for the next GCap chief

Ian Darby, ian.darby@haymarket.com, Campaign 30-Nov-07

On the day that the Football Association sacked the England boss Steve McClaren, Ralph Bernard, the chief executive of GCap Media, announced that he was stepping down from the role.

GCap might not be in as parlous a state as English football right now,
but the task of taking it forward is no easy one. However, the job of
replacing Bernard looks much more straightforward than the FA's task in

finding a good candidate for England manager: GCap's London managing

director, Fru Hazlitt, was instantly installed as the bookies' favourite
to replace Bernard.

At least GCap will have options going forward, with three internal
candidates already keen to take the job ahead of an external trawl by
the chairman, Richard Eyre, and his board. But what of the legacy left
by Bernard?

In recent years, his reputation has sunk almost as low as McClaren's.
Much of this is to do with GCap's share price (its 132p price earlier
this week values the company at less than one-third of its worth at
launch in May 2005). But Bernard's true legacy - he steps down after 25
years at the top - is one of inventing Classic FM and being an
evangelist for digital radio. Certainly something to be proud of.

While some critics had grown tired of Bernard's "jam tomorrow" outlook
(improvements in GCap's fortunes never seemed to quite match
expectations), his decision to step down probably suits both himself and
GCap. It will give a new chief executive the chance to move forward by
reviewing both its investment in DAB and its minutage policy on Capital
Radio.

As Bernard has pointed out, there are mitigating factors behind GCap's
poor performance (in addition to a slumbering share price, its profits
for the past six months were down slightly on the previous year to
£5.6 million). He blames uncertain market conditions, but
continues to argue that GCap is in "good shape" for the future.

There may be some truth in this, but a significant percentage of the
company's revenues are derived from local analogue commercial radio,
which is facing falling audiences. In fairness, GCap has invested in its
local network to address this, but the results are by no means
certain.

It now has the chance to install a new chief executive who will truly
understand its future as a content-led company, offering more than a few
cheesy music tracks to a dwindling audience. Hazlitt, a former UK boss
at Yahoo!, certainly has a strong case to put, but GCap is considering
external candidates reported to include the former Chrysalis boss Phil
Riley and Virgin Media's Malcolm Wall.

Whoever gets the job, and an appointment is expected by Christmas, will
face an uphill challenge in terms of restructuring and refocusing the
business.