While reporting on Q3 financial results, Arbitron CEO Michael Skarzynski also referred to what he called the “challenging political environment” that the company is dealing with in regard to its Portable People Meter (PPM). So, where do things stand with New York Attorney General Andrew Cuomo?
Skarzynski avoided making a direct reference to the October 15th deadline that just passed, instead suggesting that analysts review the SEC filing that Arbitron made back in January after coming to terms with the New York AG on a settlement of litigation over PPM.
“Arbitron believes that we have operated in good faith and that we have taken all reasonable measures to achieve the quantitative and qualitative metrics set forth in this settlement agreement. As always, our goal is to resolve these matters favorably for the benefit of our customers, the radio industry and our shareholders. However, because all of these matters are ongoing, we will not provide additional comment regarding these matters during the Q&A portion of this call,” Skarzynski told analysts. He assured them that any required disclosure of a material development would take place when it occurs.
He had earlier said that Arbitron remained committed to obtaining and maintaining Media Rating Council accreditation of PPM. To date, the service is only accredited in Houston and Riverside-San Bernardino. Under the settlement struck in January, Cuomo has the option to void the agreement and resume litigation against Arbitron if PPM was not accredited by the MRC for the New York market by October 15, 2009. That deadline has passed, but Cuomo’s office has not responded to an inquiry by RBR-TVBR about what will happen now.
Meanwhile, Cuomo is not the only government official scrutinizing PPM due to charges by some minority-focused broadcasters that it undercounts Black and Hispanic audiences. In addition to Cuomo and some other state AGs, Arbitron is dealing with inquiries by the FCC and various Members of Congress. Skarzynski said the company is always happy to discuss PPM and the initiatives underway to make it even better. Those inquiries, however, are costing the company money for lawyers and lobbyists and Arbitron is not able to project what the cost will be so long as the political furor continues.
Skarzynski, to our surprise, mentioned Nielsen by name in discussing the new competitor’s entry into 51 smaller diary markets with its new US radio ratings service. “In response, we are bolstering our core radio diary product, and we have been rolling out value-added services for our customers that we believe will showcase the value fo the Arbitron diary service,” the CEO said.
While Nielsen hasn’t recently announced any new radio group subscribers to its service, Arbitron is having some difficulties holding onto smaller market subscribers for another reason. The company acknowledged that the recession is making ratings contract renewals tougher in smaller markets.
RBR-TVBR observation: We said from the beginning that Cuomo and the other state AGs lacked jurisdiction over radio ratings, TV ratings, public opinion polling and such, because they are clearly protected by the First Amendment. So, we would expect him to lose in the long run, while costing Arbitron lots more money in the short run, should he decide to reactivate the litigation.
But, in the short run, portraying himself as champion of minority radio listeners and station owners would certainly help Cuomo in his bid to be elected Governor. Plus, he would be long gone by the time the case was tossed out of court.
The greater concern for Arbitron is the US Congress, particularly House Oversight and Government Reform Chair Edolphus Towns (D-NY). There are certainly First Amendment concerns there as well, but Congress would have some authority to impose new regulations on the broadcast ratings business.