Vacations are a wonderful thing. Depending on your preferences, you may visit a part of the world that is new to you. We spent the last couple of weeks in Argentina and Chile. Buenos Aires and Santiago are cool cities, and if you ever have the opportunity, go see Patagonia in either country. We did the Chilean version (“another Pisco Sour, please”), and it was incredible. Vacations are also great for helping you disconnect from what’s happening. I kept up on the trades while away but couldn’t get all the details of Judge Jeannette A. Vargas’ decision in the Cumulus-Nielsen court battle.
Now that I’m back in Kentucky, the fog is settling in again. I read Judge Vargas’ Opinion and Order, Nielsen’s request for a stay including Rich Tunkel’s declaration, and Judge Vargas’ denial of that request. As a public service to Barrett Media readers, you can peruse my thoughts on numerous pages of legal filings and not have to read the proceedings yourself.
The bombshell landed just before the ball dropped in Times Square (we left the country on December 28). On December 30, Judge Vargas of the U.S. District Court for the Southern District of New York granted Cumulus a preliminary injunction against Nielsen.
Specifically, Nielsen is “restrained from enforcing its Network Policy.” It’s also enjoined and restrained from charging a commercially unreasonable rate for its Nationwide Report as a complete standalone product. Judge Vargas defined “reasonable” as “a rate that is equal to or lower than the highest annual 2026 rate Nielsen charges any broadcaster (whether network or local) for Nationwide.” She felt Cumulus stood a good chance of winning its case against Nielsen on antitrust grounds.
Nielsen requested a stay of the order, filing a letter on January 9 along with a declaration from Rich Tunkel. I know Rich, I’ve worked with him. I like him, and above all, I respect him. From what the trades reported, the highlight comment in his declaration to the court was that “it (Nielsen) may have to retire the Nationwide report similar to when Nielsen retired its other national data product, RADAR.”
Judge Vargas considered Nielsen’s request and, told Nielsen to pound sand on January 12th. She did give the company an “administrative stay” of four days, just long enough for Nielsen to appeal her decision to the U.S. Second Circuit Court of Appeals, which its lawyers did on January 15.
Being retired, aside from writing this column, advising a student radio station, and teaching at Western Kentucky University, I had time to read Judge Vargas’ 47-page decision. Rather than offer quotes, I have some other thoughts based on how the radio audience measurement business has changed.
Nielsen Audio is a very profitable business. I don’t know any figures, but that’s always been the case. Yet Nielsen does make a couple of reasonable points, although I understand that using “Nielsen” and “reasonable” in the same sentence will upset some readers.
My immediate reaction to Rich’s declaration about the possible retirement of Nationwide was “Bulls — t.” However, there is a scintilla of truth there. Nielsen must measure the entire country (a few parts of Alaska are exempted), including areas that aren’t already measured in the current 242 metros to produce Nationwide.
Decades ago, the diaries that went into “white counties” (counties that weren’t part of any metro) produced revenue from the County Coverage product. County Coverage (CC) still exists, but small-market stations, the subscribers back then, no longer buy it. Agencies have been the majority of CC clients for years. As we all know, agencies don’t pay very much for any ratings service. The agency dominance in that service is one reason why Nielsen sells County Coverage on a state-by-state basis.
Meanwhile, more small metros are taking a pass on Nielsen data. It’s not because they don’t want the information, but because station owners can’t justify the cost. My home market of Bowling Green, Kentucky, ranked 161, is reportedly down to one subscriber. The market may shut down if Nielsen can’t get owners to sign up. If Bowling Green goes away as a metro, Nielsen still has to place diaries there, though far fewer.
The 48 PPM markets aren’t going anywhere, especially now that PPM is being used for TV. You can thank PPM for the monster numbers for sports now that Nielsen TV no longer uses the pathetic visitor methodology to account for out-of-home viewing. Meanwhile, there are plenty of major radio markets that still use the diary. Examples include New Orleans, Oklahoma City, Buffalo, and Louisville, all of which are reasonably large, and those markets will continue.
If Nielsen shuts down enough markets, doesn’t receive much revenue from County Coverage, and still must place a greatly reduced number of diaries to ensure Nationwide has true nationwide coverage, you can see its point, sort of.
The court case centered around antitrust issues, specifically Nielsen’s tying policy. This means that if an owner wants to subscribe to Nationwide ratings, they must buy local data for every metro where the company operates stations. The other market for Nielsen data, agencies and advertisers, was a tangential concern. However, agencies are also Nielsen clients, and many want Nationwide as well. We all know that national business is in the toilet. Dollars are still spent nationally though, whether with Westwood One, Premiere, or other networks.
Would Nielsen seriously consider shutting down Nationwide, forcing agencies to put national dollars into other media because they can’t justify buys without data? Doing that could hurt radio and, concomitantly, shoot itself in the foot. Is that what Nielsen’s private equity overlords really want? I read it as, “Let’s threaten the industry with shutting down a service that helps funnel millions of dollars to radio because we can’t maintain the historically huge margins that the PE people would like to take even higher.”
If you agree with that statement, don’t blame Rich Tunkel. His predicament made me think of the title of an old Elton John album, “Don’t Shoot Me, I’m Only the Piano Player.” Rich is the head sales guy for Nielsen Audio. This stance is likely coming from much further up the food chain.
Last year, I wrote a series of columns describing my view of what the radio industry needs for audience measurement. I had no preference for a source, Nielsen or another company. Ideally there would be multiple companies, as competition generally lowers prices.
Regardless of how the Second Circuit Court of Appeals rules on Nielsen’s appeal of Judge Vargas’ decision, we’ve seen the first crack in a 60-year reign of radio audience measurement. Next week, I’ll offer more thoughts on how this might play out, as well as other aspects of this case.
Let’s meet again next week.
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