In the fall of 1983, I started my doctoral program at Michigan State. That first term, we were required to take a First Amendment class. We reviewed important Supreme Court cases starting with the basics, like Marbury v. Madison, and on to key ones like Times v. Sullivan, Schenck, and Brandenburg v. Ohio. You can probably list some major Supreme Court decisions in history. Does anyone think The Nielsen Company (US), LLC v. Cumulus New Media Holdings Inc. will join the list?
If you haven’t been following this case, here’s a bullet point summary:
- Nielsen and Cumulus couldn’t come to an agreement on a new contract for both local and Nationwide data (Cumulus owns Westwood One). Nielsen’s new “Network Policy” requires subscribers to take all local markets where they operate in order to subscribe to Nationwide. Cumulus didn’t want local data for all its local markets, citing ROI issues.
- Cumulus filed an antitrust lawsuit against Nielsen in federal court last October, citing the “Network Policy.”
- The judge ruled in Cumulus’ favor. She felt Cumulus had a good chance of winning the case under the “tying” restriction in the Sherman Antitrust Act. She ordered Nielsen to offer a more reasonable price to Cumulus for a standalone Nationwide.
- Nielsen appealed to the U.S. Second Circuit Court of Appeals. After a hearing with a three-judge panel, the company lost.
- Nielsen requested an en banc hearing (all the judges of that court). The Second Circuit denied the motion.
- The lower court ordered Nielsen to work out a deal with Cumulus or face penalties.
- Nielsen appealed to the U.S. Supreme Court. If you want to read Nielsen’s petition for a writ of certiorari, here’s the link:
Some disclosures: As I always note, I’m not an attorney, but I have written policy papers, albeit many years ago.
Next, I have the distinction of being let go by both companies (Nielsen in 2015, and Cumulus during COVID in 2020). I’m no fan of either one, as I think Nielsen doesn’t give a damn about the radio industry beyond its bottom line, while Cumulus’ strategy reminds me of a yard sale. “What will you give me for this nice, shiny, mid-sized market cluster?”
Whose Side Am I On?
Throughout this imbroglio, I’ve sided with Cumulus — not so much on antitrust grounds, which requires a level of scholarship I don’t possess. My reasoning is that the radio industry has enough problems, and a public spat over a business negotiation is not a good look.
Nielsen and its private equity owners have revealed their true colors. If you’re part of the radio industry, they don’t care about you. The company wants your money, full stop. Nielsen has decided it’s better to spend major bucks on expensive lawyers than to make a deal with Cumulus. Six lawyers from Gibson, Dunn & Crutcher LLP were listed on Nielsen’s petition. If you want to bring a case to the Supreme Court, you don’t call Morgan and Morgan.
How much money is in dispute here? In the earlier court documents, the dollar amounts were redacted. On page 10 of the new petition, Nielsen says: “Because it would cost Cumulus $1.2 million more to buy standalone Nationwide from Nielsen plus local data from Eastlan than to buy Nielsen’s bundle, the panel concluded, Cumulus had ‘no choice at all.'”
That’s it. This case has the potential to go to the Supreme Court over $1.2 million a year. Could these two have found some common ground and saved what is undoubtedly far more in legal fees? Of course they could have, but both chose to play “chicken.” Nationwide is a requirement for network radio sales, and Westwood One is one of the two biggest national networks (along with iHeart’s Premiere). Nielsen has a monopoly on national audio audience measurement with Nationwide. Meanwhile, per Cumulus’ financial statements, Westwood’s revenue has been on a steady decline, prompting a desire to cut costs. If Westwood can’t access the data (and the network no longer can), the situation becomes more desperate. Nielsen is squeezing Cumulus in order to win.
Time to Push Nielsen Aside
Isn’t Nielsen supposed to be a champion of our business? Isn’t the mantra that if radio does better, Nielsen does better? If Nielsen Audio were a standalone company, that would be an article of faith. However, Nielsen is far more interested in video, whether national or local TV, cable, or streaming. It has video competition but appears to be winning. The audio division makes money with almost no competition. Keep costs to a minimum so the private equity folks look smart.
My assumption is that the decisions are coming from the top of the Nielsen food chain. I still know people who work for Nielsen Audio, many of whom are holdovers from the Arbitron days. They’re good people, and while there have been numerous tough negotiations with clients over the years, this reaction is out of line. If I were a betting man, I’d bet that Nielsen Audio leadership would not have taken this path. My belief is that they do care about the industry and want it to grow and succeed.
It’s time to end this charade. Whatever you think of Cumulus after two bankruptcies, numerous station sales, and lots of layoffs is up to you. But even if Cumulus is a lousy operator, it’s our lousy operator, and certainly not the first one. Nielsen is showing that the company doesn’t give a damn about radio, except for how much money can be pulled from it. It’s time to push Nielsen Audio to the side.
How about starting with small stuff? Trade press should stop publishing the Nielsen topline results. Most aren’t complete anyway. The client advisory group should demand more from the company, with deadlines, or quit the council.
For some time, I’ve advocated for a group to work on an alternative service with a methodology that avoids Nielsen’s patents and intellectual property — something smaller to give buyers and sellers a clear picture of a market. Limit the minute detail programmers love but could probably live without. Of course, it would cost less. Perhaps that’s Eastlan, because the company already exists, or maybe something entirely new.
Commercial radio in the U.S. is hurting. Our measurement company doesn’t care. It’s time to do something about it.
Let’s meet again next week.
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