More than 50 local commercial radio stations face a “real possibility” of going out of business unless regulation is eased, a government-commissioned report warned yesterday. John Myers, the former chief executive of GMG Radio, said existing regulation should be replaced by a “local impact test . . . which must provide evidence of local consumers’ satisfaction with the content provided by their local radio station”.

The report, which was commissioned by Lord Carter as part of his Digital Britain review, also recommended strengthening regulation on local news provision and allowing small local stations in the same area to merge. It is likely to be adopted by the Government.

— Gannett, the US owner of The Herald in Glasgow and other Newsquest regional titles in the UK, showed there has been no let up in the dire state of the advertising market. It said advertising was down 38.7 per cent in the first three months of the year – in line with rivals. The figures came amid rumours that Gannett might yet offload its UK titles, although talk of a consortium led by Peter Sands, a former editor of the The Northern Echo, making a bid is wide of the mark.

One fashionable idea is that an investor could buy Newsquest or another regional group and sell or license out individual titles to local businessmen. The theory is that a private investor might be willing to invest in a paper that would give a healthy return, say 10 per cent. That would be better than you could get in the bank – but would be lower than is demanded by a publicly held newspaper publisher. A nice theory but too complex – and too optimistic to pull off. Guaranteeing 10 per cent in this market is tough.

— Five may want to merge with Channel 4, but there are few other takers for the broadcaster. One minister tried to interest BSkyB, which is 39.1 per cent owned by News Corporation, parent company of The Times. Sky declined.

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