3:23pm PT by Ashley Cullins
Weather Channel Owner Sues Nielsen Over $475K Monthly Ratings Fee
The Weather Channel's owner says Nielsen is engaging in "predatory pricing" because of its monopoly on ratings services.
CF Entertainment on Friday sued The Nielsen Company for breach of contract and unfair competition and unjust enrichment. CF, which is owned by Byron Allen's Media Group, claims it's being overcharged by more than $400,000 per month.
"Nielsen’s stranglehold on viewership data and the fact that it supplies the only currency accepted by advertisers gives it lopsided leverage when entering into ratings agreements with broadcasters such as CF Entertainment," writes attorney Sean Berkowitz in the complaint, which is posted in full below. "Nielsen knows that its ratings information is essential to a network’s ability to recover revenue from advertisers, because advertisers only pay based Nielsen’s upon proof of performance. If a network cannot provide proof of performance in the form of Nielsen ratings data, the network cannot earn and receive any revenue for its advertisements."
According to the complaint, which was filed in Illinois federal court, CF in 2017 amended its longstanding deal with Nielsen and agreed to pay $41,667 per month in exchange for ratings services for any cable networks it owned or acquired. The amendment was designed to avoid piecemeal renegotiations each time the company acquired a new network, and specifies that any newly acquired channel could receive Nielsen services for that rate for up to four years.
Then, in 2018, CF acquired The Weather Channel and it claims Nielsen refused to honor that fee structure.
"Instead, without any basis in the operative contract, Nielsen demanded that CF Entertainment pay a monthly fee that was more than ten times the fee set forth in the 2017 amendment — a sum that would result in over $30 million in illicit gain for Nielsen, and far greater, catastrophic economic damage to CF Entertainment’s business," writes attorney Berkowitz.
CF argues the move amounts to extortion because it and companies like it "cannot survive without Nielsen’s ratings services, as television advertising is sold based on viewership as measured by Nielsen."
After its acquisition of The Weather Channel, CF says Nielsen required an amendment to their deal that saw the company pay $475,000 a month for that network's ratings. Also on Friday, according to the complaint, CF wired Nielsen $2.375 million to cover late payments that had accrued.
"That payment, like each one it has made to Nielsen since April 2018, was effectively a ransom that CF Entertainment had to make to keep The Weather Channel on air," writes Berkowitz. "CF Entertainment will not be held hostage any longer, and it will no longer sit idly by and accede to Nielsen’s extortionist conduct."
CF is asking the court for a declaration that Nielsen must provide its services for the agreed-upon $41,667 per month rate and that the 2018 amendment is void as an unconscionable contract. It's also seeking a refund of fees and an order preventing Nielsen from terminating its services while the litigation is pending.
In response to a request for comment, a Nielsen spokesperson told THR, "We do not comment on pending litigation."