SLR - Ofcom Licensing

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Section 105(A): Ability to maintain proposed service 2. Financial and Business Plan c) Financial Projections All but four hours of daily output on Classic Gold WABC is now networked across all UBC’s Classic Gold frequencies so apart from the locally inserted news and commercial elements the station has a ‘national’ feel. On the day we monitored, there were a number of Shropshire-specific stories featured in the news bulletins on Beacon Radio / Classic Gold WABC making up around 64% of news content which, we would suggest, is well above average observed ratio. The day’s main local story concerned the attack in her home of an 84 year old woman, the threat of petrol shortages, the merger of midlands’ ambulance services and the death of a patient at a Shrewsbury mental home. However, apart from an extended 5 minute bulletin at 7am, the longest news update monitored was 2 minutes in duration. We believe that the people of Shrewsbury and Oswestry want and deserve more detail, a theory borne out by our qualitative research which showed that Shropshire residents are loyal to their area and take a healthy interest in local issues. It is our contention that this lack of local content from the existing local commercial stations’ opens up the gap in the market for a new station to fill. There is no doubt that Shrewsbury and Oswestry can generate sufficient news stories to build a new, highly locally focused radio station. Analysis of a random issue of the Shropshire Star (2 nd November 2005) showed that 77% of the news stories carried were local. There is every reason to believe that a locally focused radio station covering a substantial number of local news stories could be every bit as successful as the Shropshire Star, which enjoys 52% penetration in the county (Jicreg 2005). Over the 12-hour period 219 adverts were played on Beacon Radio. Of these 87 were for local or regional businesses and 132 were national adverts with no specific local reference. This represents a 60.3% / 39.7% split between national and local advertising. Many of the ‘local’ advertisements, however, were for businesses based in Beacon’s West Midlands area. Our face to face research with local businesses suggests that there is strong commercial demand for our proposition. Pricing and poor service were issues highlighted together with the narrow playlists of existing stations. We know we can win on all these fronts: • Our rates will be set at realistic levels for the local market; • From our base in Shrewsbury we will be able to service our clients frequently and professionally; • Our programming will be relevant, entertaining and more musically diverse than any of the existing stations. In putting together its business plan for Shrewsbury Local Radio, the Board has been determined to utilise as much empirical evidence as possible about the local market, existing media within it, and the dynamics of the population and the economy of both Shrewsbury and Oswestry. In this, we have been fortunate in benefiting from the wealth of local knowledge and experience provided by its Directors, one of whom personally initiated the campaign that originally brought commercial radio to Shropshire and went on to lead Beacon through its most successful period. It is through those shared experiences that the Board identified the gap that exists in the market for listeners who want a truly locally-focused station, and the gap that exists for potential local advertisers who presently have the choice of only MNA and GCap Media in the two most important local media – print and radio. The Board of Shrewsbury Local Radio is committed to offering both listeners and advertisers a genuine alternative to existing local media. 29
Section 105(A): Ability to maintain proposed service 2. Financial and Business Plan c) Financial Projections The applicant should provide financial projections on an annual basis for the licence. The projections must include: (i) Profit and loss accounts (ii) Balance sheets (iii) Cash-flow forecasts The period covered is at the discretion of the applicant, but should be justified. The forecasts should be supplied on an Excel spreadsheet or similar, with any accompanying guidance notes. The applicant must also complete and submit the spreadsheet entitled ‘Financial Template’ located at www.ofcom.org.uk/radio/ifi/rl/commer/ar/lapr/ftap.xls using information from its business model. All financial projections, plus the “Financial Template”, are included as Appendix 4. In addition to profit and loss accounts, balance sheets and cash flow forecasts for the first five years, also included are full details of all workings, the sensitivity analysis, depreciation, staff costs, revenue calculations and pre-operational expenditure. The projections are based on the first five years of trading. Shrewsbury Local Radio Limited has decided to submit projections for the first five years, as this moves the company closer to the repayment of initial setup costs and its dividend payment policy. 30
Page 1 and 2: An Application to Ofcom for the FM
Page 3 and 4: Section 105(A): Ability to maintain
Page 29: Section 105(A): Ability to maintain
Page 39 and 40: Section 105(B) and (C): Catering fo
Page 53 and 54: Section 105 (D): Evidence of Local
Page 69: Section 105 (D): Evidence of Local

SLR - Ofcom Licensing

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