It’s the gift that keeps on giving for this column. Cumulus sues Nielsen on antitrust grounds over Nielsen’s Network Policy. Nielsen countersues. Cumulus wins an injunction against Nielsen in the Southern District of New York federal court.
Nielsen appeals to the U.S. Second Circuit Court of Appeals and gets a temporary stay against the injunction. Then, to make things more interesting, Cumulus files for bankruptcy (again) and partially blames it on Nielsen. Sounds like a legal drama on HBO!
On May 7, the two sides went before a panel of judges at the appeals court in New York to argue the merits of their sides. Nielsen wants a permanent end to the injunction, while Cumulus wants the court to uphold it. Cumulus’ access to Nationwide ends when the next data set is released sometime around Labor Day, so time is of the essence.
Here’s the best part: you can listen to it! To paraphrase the old 1010 WINS slogan, “Give us 41 minutes and we’ll give you lawyers arguing for Nielsen and Cumulus!” Not as catchy as “Give us 22 minutes, we’ll give you the world,” but you get the point.
Pre-Game Analysis: What Each Side Is Arguing
The production quality isn’t stellar, and the arguments are esoteric when the attorneys offer their interpretations of Supreme Court and lower court decisions in relevant cases. However, I was impressed with the judges’ questions. Considering most of us in the radio business have no idea how Nielsen structures their policies and their deals, the judges made some good queries.
These days, the biggest ratings come from sports, so let’s use a sports-based angle starting with the pre-game analysis. On May 5, Attorney Katie Wellington of Hogan Lovells filed a letter with the court on behalf of Cumulus. A couple of points stood out.
The letter stated, “The radio broadcast industry is in freefall…” — and I’m certain that line was not run past Mike Hulvey at the RAB ahead of time. One reason given for the “freefall” was that due to Nielsen’s high prices, it left “broadcast companies with less money to spend on content creation that benefits listeners.”
The letter noted steps Cumulus took prior to filing their most recent bankruptcy. Cumulus took “extensive measures to address costs, including selling non-core assets, renegotiating vendor agreements, and curtailing non-essential capital expenditures.” And some good people were let go as well, but somehow, that didn’t end up in the letter.
Further, post-bankruptcy, Cumulus still expects to lose money in 2027 ($15.7 million) but should eke out a profit of $14.4 million in 2028.
For Team Nielsen, Tom Dupree from Gibson, Dunn & Crutcher filed his letter on May 5, saying Cumulus has not suffered irreparable harm and the injunction should be vacated. If Cumulus wants to sue on antitrust grounds and wins, Cumulus can collect damages from Nielsen.
The Oral Arguments: Nielsen Makes Its Case
Dupree opened on behalf of Nielsen, arguing that the court should “vacate the injunction” of the lower court. He gave three reasons:
- The theory of “constructive tying” that the lower court used was flawed
- Cumulus didn’t prove “irreparable harm”
- The injunction “fails the specificity argument of Rule 65”
And no, you aren’t the only one who thinks Rule 65 may have been a band from long ago. We have UB40, Blink-182, Haircut 100, and of course, U2 — so why not Rule 65?
Without getting into the minutiae of case precedents — along with my usual warning that I’m not an attorney — during questioning, Dupree made a point that the Supreme Court has said “that sellers are free to charge whatever price they want absent conditioning or predatory pricing.” Later, Dupree made the case that the post-bankruptcy Cumulus, “like a butterfly emerging from the cocoon,” will be a profitable company “able to pay the price.”
Wellington’s arguments to the court centered around the exorbitantly high price Nielsen wants for a standalone version of Nationwide — specifically ten times what Cumulus currently pays. While Nielsen argued that Cumulus has not negotiated further since that offer was put on the table (after several back-and-forth offers), Cumulus evidently felt the price was so out of line that the only recourse was the legal system.
The Monopoly Question and What Comes Next
Dupree had an opportunity to counter Wellington’s argument. He said that Nielsen is not a monopolist with respect to Nationwide. Even though it’s the only supplier of national radio data. The reasoning was that in lower court testimony, Mike Gould of Eastlan said they could have a national product available in a year. For $5 million. That led Dupree to state, “There is no barrier to entry,” one of the tests of monopolistic power. What was not said was whether agencies that buy network radio would accept a challenger to Nielsen’s Nationwide.
As someone who worked for a ratings company that went under (Birch/Scarborough in 1991), it’s my view that the marketplace has room for 1½ suppliers. Agencies want one source of data for any medium to eliminate confusion and get on with their primary work. One supplier can make a lot of money while the number two company struggles and eventually gives up. Another example was the demise of Arbitron television in the early ’90s. If Cumulus shut out Nielsen and brought in Eastlan for all their markets — including national data — there is no guarantee that buyers would accept or use it. Meanwhile, my assumption is that a large part of Westwood One’s lineup would not appear in Nationwide. That would be a serious issue.
What’s next? The Court of Appeals should decide soon, and you’ll see it in Barrett Media as well as the other trades. But if you have a spare 41 minutes, listen for yourself at https://ww3.ca2.uscourts.gov/audio/26-88.mp3
To paraphrase another slogan, “They argue, you decide.”
Let’s meet again next week.
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