Potential investors on the prowl at embattled M-Power FM

2012-07-28 10:46

Mpumalanga’s only commercial radio station, M-Power FM, has attracted interest from a number of potential investors recently after its financial difficulties over the past few years.

The situation worsened this month when signal distributor Sentech took the radio station off air between June 12 and June 24, allegedly due to an undisclosed outstanding payment.

M-Power has been struggling to keep its listeners in the face of tough competition from Jacaranda FM since it took to the airwaves in 2006. It has also suffered an exodus of employees amid allegations of failure to pay salaries on time.

However, M-Power FM acting general manager Mark Schormann and Sentech spokesperson Nthabeleng Mokitimi declined to discuss the reasons for the station’s silence.

“Sentech cannot provide client information to a third party,” Mokitimi said.

The majority shareholding in the station – which is owned by Mbombela Media Consortium, AME (Pty) Ltd and Direng (Pty) Ltd – is estimated to be about R10?million.

Schormann confirmed this week that the station had been approached by companies and individuals showing an interest in investing.

“Such expressions of interest could lead to an offer. We don’t have a firm offer yet, but we are hoping for one,” he said.

Schormann said the economic recession and budgetary cuts on public works spending after the 2010 Soccer World Cup had affected the station’s sales.

“However, our most recent formula – to be relevant to the community – seems to be working. M-Power did more community work last year than any other commercial radio station,” he added.

An interested investor who spoke to City Press on condition of anonymity said he believed the station could be turned around and notch up a listenership of 400 000.

M-Power was at the base of commercial radio listenership figures in December last year after going down from 108 000 listeners in December 2010 to 55 000.

The figure has slightly increased to 85 000 in the first five months of 2012, which Schormann said could be attributed to community outreach initiatives such as incorporating NGOs into the station’s programming, and focusing on rural development, schools and the business community.

“We believe the format and positioning of the station is wrong, and doesn’t target the people it should be.
“If we could be given a controlling share, we can turn M-Power FM around,” the investor said.

The Independent Communications Authority of SA granted M-Power FM a licence around the same time as Limpopo-based Capricorn FM and North West FM as the first commercial radio stations in those provinces.

Capricorn FM and North West FM have been coping quite well while M-Power, which aimed to compete with Jacaranda FM, experienced a dwindling listenership until recently when it embarked on community projects.

“We chose the Jacaranda FM format while Capricorn FM chose the less difficult route.

“I also think the negative economic climate has more to do with our difficulties than the format.

“Our listenership is 75% black and we’re not perceived as a white station,” said Schormann.

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