Where it all went wrong for LBC

Listeners to London's only commercial talk radio station, LBC, won't be surprised to learn that it is about to be relaunched. Over the past decade the station - the pioneer of "phone-in radio" in the UK - has changed its name more regularly than Steve Bruce switches football clubs.

But now the ITN-operated station is gearing up for its most radical relaunch yet - switching frequencies with its sister outfit, News Direct. LBC will switch to News Direct's 97.3 FM, while News Direct will move to LBC's old home on 1152 AM.

This is the latest and perhaps last attempt to revive the fortunes of the station, which during the 1980s was listened to by one in four Londoners every week. Millions tuned in to the breakfast show with Bob Holness and Douglas Cameron, while Brian Hayes's phone-in show set the standard for the format before Nicky Campbell was out of short trousers.

In the three months to September this year, LBC - now broadcasting only on AM - reached just four per cent of the audience. It has a 2.5 per cent share of the market, down nearly a third on the same period last year.

The key moment in LBC's decline came in 1989 when its then owner, Crown Communications, split the station in two - Crown FM and London Talkback. The Crown FM rebranding backfired, and it rapidly changed its name to LBC Newstalk. But the damage to the LBC brand had been done, and a succession of revamps under a string of different owners served only to confuse listeners further.

In 1996 new owner Reuters was joined by ITN, GWR, and the Daily Mail and General Trust. The same shareholders remain today: Reuters owns 32 per cent of London News Radio, GWR 20 and DMGT two per cent, with ITN the largest shareholder at 46 per cent.

ITN took editorial control of both stations in 1999, but suffered the embarrassment earlier this year of being rapped by the Radio Authority for recycling material from its 24-hour TV news channel onto News Direct, as London Talkback had become. News Direct, relaunched yet again as a rolling news station, has struggled to develop any warmth or character. Not surprising, given that its website boasts it has "four full-time members of staff ".

Former News Direct editor Chris Mann claims: "ITN never put the resources behind News Direct that were needed. Switching the frequencies is the last throw of the dice. They obviously think LBC is the strongest brand and want to give it all the help it can get. As for News Direct, I think it's white flag time."

LNR station director MJ Olaore says the frequency switch - a date has yet to be announced - will "better serve the future interests of the listener and the company". And former LNR group programming director John Simons believes: "It is the most sensible thing that could happen."

ITN, as the major shareholder, could have another agenda - offloading the company to the highest bidder.

Five years ago LNR's losses exceeded £3 million. This year that deficit is expected to be around £1 million. They are losses which ITN, currently rethinking its 24-hour news channel and facing severe cutbacks in revenue from its TV news contracts, could do without.

Classic FM parent GWR is also said to be considering selling its 20 per cent stake in LNR as part of a review of non-core assets.

By switching frequencies - putting the commercially attractive station (LBC) on the commercially attractive wavelength (FM) - ITN has enhanced its value at a stroke. Industry sources value LNR at anything between £15 million and £30 million. But major investment in editorial and advertising will be required to prevent even more listeners departing in confusion.

The question remains: are ITN and its fellow shareholders prepared to stump up the cash, or have they just gift-wrapped the stations ready for a rival radio group to take up the challenge?