Thursday, 26 June 2008

Secret Scam

“Gross failure of senior management”… “Serious, repeated and deliberate breaches”… “Fundementally misleading and inaccurate”. These are not words you would wish to have used to describe your company, or the way it behaved regarding an Ofcom investigation.

The phrase ‘damning indictment’ hardly does justice to UK regulator Ofcom’s adjudication that’s just been released regarding the (almost defunct) radio group GCap Media, and its breaches of the Broadcasting Code in respect of their networked ‘Secret Sound’ competition.

I’ve read a few adjudications in my time (and been part of a few too!), but having just finished all 29 glorious pages of this particular one, I don’t even know where to start!! You can read it for yourself here… but be warned, this is like ‘hardcore regulator porn’. It’s dirty stuff and you may need a stiff drink and a lie down after reading it.

I’ll try not to recount the sordid tale in all its details, as I would need…well… 29 pages… but in essence GCap ran a Secret Sound competition across its One Network for 4 weeks. The problem was that the practise of deliberately putting callers to air with wrong answers to prolong the competition was agreed by a “Director” responsible for networked output. Basically listeners were paying on a premium line to enter a competition that they couldn’t win, and people within GCap knew this was going on. Oh dear…. Oh dear!

Some brave individual grassed GCap up and Ofcom launched an investigation. So did GCap. Only, apparently GCap's investigation wasn’t really very good and “… not thorough or extensive” with “… no formal or written report produced”. In fact, Ofcom thought that GCap didn’t take the matter seriously enough.

When they did finally issue a statement (4 months later!) on their corporate website, GCap said something like ‘Terribly sorry listeners... Didn’t mean any harm... No hard feelings?’ Actually what they really said was, that this was an “an isolated incident” and a “system error”, when actually they knew it was a little bit more than that. This part has really annoyed Ofcom .They said today in their ruling...

“For GCap to describe this deliberate and repeated unfair conduct as “an isolated incident” and a “system error” was fundamentally misleading and inaccurate and represented, in Ofcom’s view, an inept attempt at “news management” on GCap’s part. The fact that GCap’s Board had authorised the wording of this statement, and its publication on GCap’s corporate website, was a matter of serious concern to the Committee.”

Spin gone wrong! Very badly wrong.

There’s quite a comedic moment in this story which refers to the fact that listeners could get a refund if they wanted to... but as GCap only publicised this on their corporate website, and not on station websites... or on air, out of the 297,215 entries they received, they refunded... wait for it... a single listener the grand total of £2!

Ofcom’s tongue lashing didn’t stop there. They go on to say that they...

“... considered it wholly inadequate that GCap had demonstrated an unwillingness to disclose for several months the specific details and seniority of those responsible for the unfair conduct. This was the first case of its kind in which the behaviour of the licensee (or as in this case, the parent company acting on behalf of the licensees) had effectively hindered Ofcom’s investigation.”

Sweet Jesus!! Could this get any worse? Well yes actually. As a direct result of this hindrance, the fine was going be higher. Ouch. How high in total? Well how about £1.1 Million! There goes the Christmas Party... for the next 20 years!

The list of bad practice goes on and on... from allowing junior members of staff to run a huge network competition with no apparent managerial supervision, to no accurate record of entries, to lack of proper training, to the GCap board signing off on a statement that was ‘economical with the actuality’!

All of this resulted in a... “...significant breakdown of the fundamental relationship of trust between 30 local station and their audiences” which according to GCap is its “most valuable asset”. Funny way of showing it I guess!

So, as GCap is in its final throws as a company, with this rather ignominious end to its life, what can we learn?

Simple. Don’t con your listeners. In any way. It will come home to roost.

Meanwhile, new owners Global are having to get out their cheque book. And just in case there was any delay, on the front page of the ruling Ofcom have made it clear that cheques are “payable to HM Paymaster General”.

How very helpful.

1 comment:

Anonymous said...

I'm not talking about the comp fixing, just the way GCap dealt with the aftermath and with Ofcom and to me, the whole sorry affair sums up the entire company at the time. Is it any wonder that from it's inception to this that GCap was a laughing stock in the industry and the city if all this was capable of happening? No wonder all the senior management 'left'. It's no wonder the industry is in the mess it is. Lets hope Global do a better job at running the UK's biggest radio company. It can't do any worse.