APPENDIX A
SMG BACKGROUND INFORMATION
1.0 GROUP DETAILS
1.0.1 SMG originated from the ITV franchise,
Scottish Television, which acquired Caledonian Publishing (The
Herald and Evening Times) in 1996, Grampian Television in 1997,
Pearl & Dean and Primesight in 1999 and Ginger Media Group
(including Virgin Radio) in 2000. SMG also has a minority interest
in the national Channel 3 breakfast-time broadcaster, GMTV, in
Scottish Radio Holdings plc, the principal commercial radio operator
in Scotland and in Heart of Midlothian plc, the Scottish Premier
League football club.
1.0.2 The Group employs over 1,800 staff
at its main operations in Glasgow, London, Aberdeen and Edinburgh.
1.0.3 SMG's market capitalisation is £745
million (as at 7/2/01). A FTSE 250 company, the Group is one of
Scotland's top 10 listed businesses.
1.0.4 We believe strongly in investing in
our businesses to enhance the quality of our products for the
benefit of our viewers, listeners and readers. Our track record
in this area, embracing new technology and improving our existing
products and services is well-documented.
1.0.5 We are also strongly committed to
the promotion of and preservation of regional media that satisfy
the needs and aspirations of local viewers, listeners and readers
in addition to those of local and national advertisers.
1.1 Investment in Infrastructure
— We are currently constructing a new
printing facility for our publishing division at a cost of £38
million, due for completion in 2002. This will enable increased
pagination and the introduction of more colour in our newspapers,
producing a higher quality product for our readers.
— The new state-of-the-art extension
to our Glasgow headquarters, recently built to accommodate editorial
and advertising staff within our publishing division, cost over
£25 million. In 1999, we opened new premises in a central
London location to house our London-based outdoor and cinema advertising
businesses in addition to the London offices of our newspaper
and television broadcasting operations.
— We are also currently upgrading our
studios and offices in Golden Square, London, the home of Virgin
Radio, at a cost of almost £2 million.
1.2 Investment in Technology
1.2.1 Over three years we will have invested
over £15 million in our television facilities. A digital/computerised
news facility was designed, built and implemented in our Glasgow
studios, along with desk-top editing for journalists, creating
one of the most advanced newsrooms in Europe. A new digital outside
broadcast unit cost £1.5 million and the upgrading of Grampian
Television's existing technical facilities in Aberdeen, Dundee
and Inverness amounted to £5 million. This year we are further
upgrading our studio facilities in Glasgow with widescreen technology
at a cost of £1.5 million.
1.2.2 SMG Radio continues to be at the forefront
of investment in new technology, particularly in new broadcasting
platforms eg digital radio, Internet broadcasting and other broadband
media.
1.3 New Product Development
1.3.1 Sunday Herald—launched in 1999,
now the third biggest-selling Sunday broadsheet in Scotland, the
most competitive newspaper market in the UK. Best European Sunday
Newspaper of the Year 2000.
1.3.2 S1—a suite of web sites aimed
at the Scottish market, the first of which, s1jobs.com, was launched
in January 2001 and is already Scotland's leading recruitment
web site.
1.3.3 S2—the first pan-Scotland digital
television service, launched in April 1999, currently available
in 400,000 Scottish homes.
1.3.4 The Groove—a new London digital
radio service, based on a classic soul music format.
1.3.5 South & West Yorkshire Radio Licence—our
application for this licence was lodged earlier this month.
1.4 Content
1.4.1 Our investment programme is evidence
of our commitment to the provision of a wide range of high-quality
content, delivering the highest standard of information and entertainment
to our viewers, listeners and readers.
1.4.2 Furthermore we are totally committed
to preserving the editorial integrity of our media. Whilst the
editorial impartiality of our television and radio stations is
protected by law, our newspapers have an equally strong reputation
for fairness, accuracy and the balanced nature of their coverage.
February 2001
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