Cumulus contract with Arbitron runs through mid 2016

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CumulusArbitron is very secretive about its contracts with radio companies and has language in those contracts which makes the clients keep details under wraps as well. However, RBR-TVBR has been able to glean a few tidbits of information from the SEC 10-K filings of Arbitron and the client it finds most troublesome, Cumulus Media.


Cumulus, you’ll recall, dropped Arbitron service in all of its diary markets and recruited Nielsen to launch a new radio measurement service. After two years Nielsen dropped the experiment in December 2010, but Cumulus Media continued without radio ratings outside Arbitron’s PPM markets, where the former CMP stations, already managed by Cumulus Media, were rolled into the company in 2011. Cumulus also acquired Citadel Broadcasting in 2011, and with it Citadel’s Arbitron contract(s) covering both PPM and diary service.

The Cumulus filing with the SEC reveals that it is contractually obligated to pay $84.3 million to Arbitron from January 2012 through June 2016. That’s a combined obligation for an unspecified number of contracts by subsidiaries of Cumulus, so there’s no way to tell how much of that is for PPM and how much for diary service, nor how much is attributable to the contract(s) assumed from Citadel. Nor is there any indication when the diary contract comes up for renewal – just that the furthest out expiration date for any of the contracts is June 2016.

To put that financial obligation in perspective, that $84.3 million over four and a half years is not much more than Clear Channel paid Arbitron in 2011 alone. Arbitron told the SEC that Clear Channel, as its largest customer, accounted for about 19% of its 2011 revenues of $422.3 million. That works out to around $80.2 million.

RBR-TVBR observation: It will be interesting to watch as Arbitron puts the screws to Cumulus Media, both directly and indirectly. One thing to remember is that Cumulus CEO Lew Dickey grew up in the radio business and he and his brothers used to own a research company. They clearly don’t think much of Arbitron’s diary ratings and don’t want to spend any money on it.

2 COMMENTS

  1. Disturbing indeed that the Arbitron ratings have eliminated non-paying members of a metro area from the current ratings. Arbitron has cut off their right foot, as those advertisers who can’t get a straight rating will abandon the Arbitron. What good is a rating without including the strongest members of a market? IE: current Albuquerque ratings eliminate the dominant Cumulus stations. Useless.

  2. Deletion of non-subscribing stations illustrates how few subscribers has in many markets. Arbitron’s new corporate motto should be: “In Clear Channel, Cumulus, and CBS do we trust”….

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