View From City Road: Emap sidesteps with a whizzy bank

Apres lui, le deluge. Or so the merchant bankers must be hoping. Providing it survives any appeal, Mr Justice Schiemann's thumbs-up for the scheme under which Emap, with a little help from Schroders, will sidestep the radio ownership rules is a licence to print money for the whizziest bankers in town.

There will be much profitable fun to be had in setting up copycat schemes for other acquisitive media groups. Companies like the Daily Mail and General Trust have long been straining at the leash in their desire to buy strategic stakes in the radio sector ahead of any liberalisation of the tortuous radio ownership rules.

Previously they were hampered - or thought they were - by the ban on any single group owning more than six large licences or more than 15 per cent of the radio sector, and by rules stopping national newspaper owners from buying more than 20 per cent of radio groups.

The Trans World scheme is an open door to even the dopiest banker wanting to sidestep such constraints. Emap and Schroders will jointly own a company that will hold the licences. Since neither will control the holding company, neither will be deemed to control the licences.

Emap has managed to drive a coach and horses through the intention of the rules. Should the Government sit meekly by and allow the precedent to be set or should time be found to close the loophole?

While few would defend the current media ownership restrictions, the drawback in this half-baked approach to liberalisation is that it is plainly unfair. The Guardian would surely have bid against Emap for Trans World if it had thought itself able to do so. As it is, Emap managed to sneak round the door and is now off into the long grass making it difficult for anyone to mount a counter offer.

The case for Stephen Dorrell, the new Heritage Secretary, taking swift action to level the playing field again is overwhelming. Heritage has been reluctant to act until its review of media ownership is complete.

That may be a luxury it can now no longer afford. Radio ownership is of relatively parochial interest, but television is a much hotter potato. Although the court's decision relates to radio licences, it is based on the 1990 Broadcasting Act, which applies equally to television.

In Yorkshire Tyne-Tees, the north- eastern broadcaster in which both Granada and Pearson have stakes, the sector has a ready-made candidate for a variant of an Emap-style scheme.

Indeed, by looking to the letter rather than the spirit of the legislation, the ruling opens the door to all manner of legalistic schemes. It is even possible to imagine an attempt being made to avoid the terrestrial ownership bar on satellite owners such as News Corporation. Now that would really set the cat among the pigeons.