Last week’s column was the longest I’ve written to date as I attempted to explain the circumstances behind the Cumulus lawsuit against Nielsen. I offered my expectation of a possible outcome. Although I’ve worked for both companies at different times in my career, I have no inside information.
As you might expect, more is going on in the lawsuit, and some expensive lawyers have added more billable hours on both sides. This week, let’s look at some of the other moving parts.
Cumulus wants an expedited hearing on the merits of the case because going without national Nielsen Audio data (Nationwide) will hurt Westwood One. Nielsen is in no hurry. Cumulus’ attorneys sent a letter to Judge Jeannette Vargas of the U.S. District Court for the Southern District of New York on October 21.
Judge Vargas has been on the bench for just over a year (a Biden appointee), but you may have heard of her. She was the judge in the Drake-Kendrick Lamar feud when the latter released a “diss track” accusing Drake of being a “certified pedophile.” Drake sued Universal Music Group, and Judge Vargas ruled in favor of UMG, dismissing Drake’s suit.
The letter described a meeting with Nielsen’s lawyers where no agreement was reached with respect to discovery. It wasn’t surprising that Cumulus would like greater discovery and Nielsen would prefer less. Per a footnote in the letter, Cumulus had three attorneys present while Nielsen sent four. Seven attorneys in one conference room always make for a fun time, and I hope the pastries were good. The two sides didn’t agree, so the judge will decide.
Cumulus wants a preliminary injunction that would:
· Stop Nielsen from tying the sale of national data to local market data
· Force Nielsen to continue selling Nationwide to Westwood One under the current contract
· Prohibit Nielsen from retaliating against Cumulus in connection with this suit
In the meantime, Cumulus filed an “expert declaration” from Dr. Harold Furchgott-Roth. If that name sounds familiar, he was an FCC commissioner from 1997 until 2001, appointed by President Clinton as a Republican. Typically, the FCC has three members of one party and two of the other, with the balance dependent on the party of the President. He holds a Ph.D. in Economics from Stanford, one of those ACC schools on the wrong coast, and an undergraduate degree from MIT.
I’m old enough to remember a Green Acres episode where Eb said he was attending MIT, which in that case was Middle Indiana Tonsorial, a barber school taught by mail. Dr. Furchgott-Roth’s curriculum vitae was included, and while his expert declaration was 16 pages, his CV ran to 30 pages.
To save you the effort, I read the document. He was asked to give his expert opinion on three relevant questions:
· Are the markets for local and national radio data separate markets?
· Does Nielsen have market power in both markets?
· Is Nielsen’s new “tying” policy anti-competitive?
As you may have expected, his analysis suggested that, based on the information he was given and was able to find, Nielsen has market power in both markets. For national market data, he states, “Nielsen…has a 100% market share in the market for provision of national radio ratings data.”
On the local side, his analysis stated that even in the five markets with both Nielsen and Eastlan, “Nielsen accounts for the vast majority of the revenue associated with the provision of local radio ratings data. There is strong evidence that Nielsen has market power over local radio ratings data.”
Dr. Furchgott-Roth concluded that:
· Nielsen’s Initial Tying Policy Harms Competition for Local Radio Ratings Data
· Nielsen’s Alternative, De Facto Tying Policy Harms Competition for Local Radio Ratings Data
Reading the declaration brought a smile to my face. When I was a Ph.D. student at Michigan State in the ‘80s, I wrote a few policy papers for classes, and law journals were a great source of background. If you’ve ever read a law journal article, you know that sometimes there is more material in the footnotes than in the text itself, so I always checked the footnotes for leads to other good sources.
At the bottom of page 11 of the declaration, footnote 28 cited a column published in Barrett Media last November by yours truly, which makes Barrett Media and me part of the Cumulus-Nielsen case, albeit an infinitesimally small part. While I’m often surprised when I find out who reads my weekly output, this was a shock. I don’t think Jason is shocked by much of anything, but this was probably a first for him as well.
Nielsen has told the court that they intend to bring on an expert, and when that document is filed with the court, I’ll give you a synopsis. However, if Nielsen’s expert doesn’t cite Barrett Media or me, I’ll be greatly disappointed.
Let’s meet again next week.
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