Capital chief stays tuned as one of radio's big players

Business Profile: David Mansfield leads the industry's call for more liberal ownership rules in radio

David Mansfield, the chief executive of Capital Radio, is sitting in his office in London's Leicester Square in a casual shirt, surrounded by posters of Jimi Hendrix and Jim Morrison. These might seem surprising choices for a man whose flagship station, Capital FM, plays mainstream chart music.

"I'm a bit of an old hippy really. I still go and see bands but there are a lot of dead people in my office," he says, admitting that he does not care for the present fashion for dance music.

He is excited about a salmon fishing holiday in Norway which he won in a competition in his local tackle shop. The holiday is with his son, though he also goes on fishing trips with Chris Tarrant, his star DJ. "Chris spends the whole time shouting at me," he says. "I'm not very good."

What Mr Mansfield is good at is easy-going charm. In an industry over-populated with monster-sized egos, his style is quiet and understated, though he must have a ruthless streak to have come as far as he has. He is in his element at showbiz bashes, especially those hosted by Capital.

In fact he schmoozes rather more than he has to. He often lunches with leading figures in the record industry, which is unusual for a radio boss. This is despite the fact that Mr Mansfield started out in sales and marketing rather than the creative side of the business. One of his first jobs was selling chocolate for Terry's.

He seems to be good at delegating and says he rarely takes work home and never works over the weekend, spending his time off with his family – he has three children. He plays football every week, which is not bad going at the age of 48. And he used to spend his Saturday afternoons supporting Wimbledon FC, and is upset about the club's planned move to Milton Keynes.

Capital has grown enormously in the past 10 years since Mr Mansfield joined as commercial director. Back then it had just two London stations, Capital Radio and Capital Gold, which plays old pop classics. It now has 20 stations, from Scotland down to the south coast, and the workforce has grown from 150 people to 1,000. That expansion has coincided with a big increase in radio's share of the advertising cake.

"Our ambition has been to be a national radio company, to offer advertisers a national proposition. I'm very proud of what the company has achieved," Mr Mansfield says.

On the strategic front, the biggest blot has been Capital's disastrous foray into themed restaurants. The decision to enter this market – since exited at a huge loss – was taken before Mr Mansfield was appointed chief executive in 1997, but he was on the board at the time and many believe he was one of the diversification's leading advocates.

The core Capital business has built up well anyway, but now it is at the limits of expansion allowed by the current radio ownership rules. The problem for the radio industry is that it feels left out of the great liberalisation of media ownership laws now under way in the Communications Bill and no one feels sorer about it than Mr Mansfield.

Capital, the sector leader in this country, should be drawing up plans to swallow at least one of the other major players. Emerging from two years of severe advertising recession, the new rules ought to have crowned Capital's transformation into a national radio group.

The draft Bill, now passing through Parliament, allows a single ITV and permits US companies to buy into UK broadcasting for the first time. However, deregulation of radio is much more limited and it is unclear whether the new rules will allow Capital to make any big acquisitions.

"We're lobbying very hard to make sure they're written in a way that's great for the listener and therefore great for the company," Mr Mansfield explains.

In a joint submission with the sector's regulator, the Radio Authority, the radio companies had asked the Government to abolish the restrictive "points" system that has governed radio ownership, replacing it with a rule that allows consolidation in any region to three commercial operators and the BBC – the "three plus one" rule. The draft Bill adopted this proposal in May, but ever since, Mr Mansfield has taken the industry lead in complaining that this does not go far enough, which has infuriated the Radio Authority.

"The agreement we reached with the Radio Authority a year ago provided us with a reasonable degree of certainty that it would be accepted by government," Mr Mansfield says. "A year down the line, the Government has surprised everybody with its very liberal view of the future ownership of media and radio now looks like it's over regulated compared with what's likely to be allowed for television and the press."

Mr Mansfield has made it his mission to get the draft rules changed before they become law and feels he is making progress with the politicians.

He adds: "With greater consolidation allowed in other media, there's a real danger that radio will get squeezed out [of advertising]. And, with a much more commercially aggressive BBC, we need to be able to compete. If we stay at three-plus-one, it will be very, very unfortunate for the radio industry."

Now Mr Mansfield has decided that he wants specific local radio ownership rules thrown out altogether, though he maintains that even three-plus-one would leave Capital with room to do some deals. The disappointment of the Bill hasn't stopped Mr Mansfield thinking big. It emerged a few weeks back that he had sounded out Ralph Bernard, chairman of GWR, owner of Classic FM and one of Capital's most logical merger partners.

"We talk to everybody all the time, you'd expect us to. We haven't confirmed or denied talking to anybody," Mr Mansfield says.

The Government is concerned about plurality but Mr Mansfield argues that radio consolidation is actually a boost to plurality. He says: "If you put stations under common ownership you are likely to get more diversity. Taking our three stations in London, Capital FM, Capital Gold and Xfm, we have absolutely no interest in having overlap between those audiences. Whereas if they were under separate ownership, there's a much greater likelihood that they will converge much more on the centre ground."

The draft Communications Bill frees up players from other media sectors to move into radio and, most significantly, it allows Americans to buy into British radio.

"Our market capitalisation is £500m," Mr Mansfield points out. "For US companies we're a very small player. But even so, they say valuations in the UK are too high. If the phone was ringing red hot with serious cash offers, then the board would have to consider them. At the moment, it's not even approaching warm."

But Capital's biggest immediate problem appears to be Mr Tarrant, whose contract to host the London station's powerhouse Breakfast Show runs out at the end of this year. Although nothing is official, it looks as if Capital FM and London will have to go through the agony of getting used to a new voice to wake up to. Mr Mansfield admits: "Chris has told us that he doesn't want to get out of bed so early any more."

DAVID MANSFIELD SWITCHED-ON PLAYER

Title: Chief Executive, Capital Radio.

Age: 48.

Pay: £373,000.

Career history: Salesman for Terry's chocolate, moving into media as a marketing man for Scottish Television and Grampian. Joined Thames Television in 1985 as marketing controller, made deputy director for sales and marketing. Joined Capital in 1993 as commercial director. Appointed chief executive in 1997.

Interests: Fishing, football and music.