Organisation: GCap

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Analysis and commentary by Echo Research.

GCap's strategy to slash advertising and play more music to tempt back listeners to the ailing Capital FM may be viewed historically as doing a 'Ratner'. Acknowledging an "extremely disappointing set of results" (Daily Telegraph, 25/11) as well as falling audience figures and a halved interim dividend, GCap CEO Ralph Bernard attempted to put a gloss on his " high risk" (The Times, 25/11) strategy, pointing out that similar action had improved audiences at Classic FM, and that the £7m hit to 06/07 revenue should be regarded as long-term investment. A few of the next day's headlines were hopeful : "Capital Radio halves ad breaks to woo listeners" (Guardian, 24/11), but most highlighted the share rout that accompanied GCap's announcement: " Radio group's advertising revamp wipes £100m off stock value" (The Herald, 25/11 ), "GCap Media share dive as profits slump" (Media Guardian, 24/11). " Sell" advised The Times (25/11).

With analysts dubbing GCap's strategy " a very aggressive initiative, with significant execution risk" (Independent, 25/11), the talk by the weekend was of a takeover bid: " Bidders pick up GCap signals" (Independent on Sunday, 27/11), " Bidders circle after GCap's 'commercial suicide'" (The Observer, 27/11). Ratner demonstrated that self-flagellation as a PR and business tactic can backfire. Only time will tell for GCap.