One of the unsuccessful bidders for a Dublin radio licence has threatened legal action over the decision to allow the winners of the competition to sell out to Scottish Radio Holdings (SRH).
The Broadcasting Commission has given provisional approval for the sale of Dublin Country 106.8 FM to SRH.
It is insisting the station remain a country music station under its new ownership.
It is also insisting that all debts to creditors and staff are met in full by SRH. A final decision on approval of the sale will not be taken by the commission until October 14th.
The station is believed to be losing tens of thousands of euros per week.
The consideration to be paid by SRH is believed to be about half the investment made by the principals behind Dublin Country, which is thought to have been about €1.5 million.
The purchase will allow SRH break into the local radio market. It already owns a string of local radio stations in Scotland. It also owns Today FM and a number of Irish regional newspapers.
The licence was awarded to Dublin Country early last year and the station came on air in October. It failed to build up a significant audience and recently reduced its staff from 30 to 15.
The largest shareholder in the station is Mr Paul Coulson of Yeoman International and the Ardagh group. Mr David Harvey, the presenter of Crimeline on RTÉ, also had a significant shareholding.
Musician Mr Paddy Cole and radio presenter Mr Pascal Mooney are also involved.
Mr Simon Maher of Phantom FM, which failed to win the licence won by Dublin Country, has said it has taken legal advice and will take court action against the sale to SRH if it must.
"We feel that this sale is particularly unfair in the light of the intense competition for this special-interest licence and the many promises of performance made by Country, which have failed to materialise."
Mr Maher said that, as the station is losing money, SRH is buying a licence rather than a viable radio station. He said he fears the station will in time become a mainstream commercial station.
"The commission's policy is very clear on the sale of a station within two years of a licence being granted."
If the policy is not enforced, then the entire competition process is worthless, he said.
In October 2001, after the licence was granted to Dublin Country, the commission adopted a policy whereby it would not look favourably upon ownership changes within a two-year period after a licence is granted.
In this instance, the commission was faced with the choice of either accepting the sale or allowing Dublin Country go into liquidation.
Mr Maher said the licence should have been returned to the commission and a new competition held.
Phantom FM, an alternative and Irish rock music station, has been broadcasting illegally for a number of years. It has twice sought licences. While seeking a licence it abstains from illegal broadcasting.
Since failing in last year's competition, it has resumed illegal broadcasting.
