Arbitron announced that it has renewed its ratings contract with its largest customer, Clear Channel Radio, through 2016. That, along with the recent deal with PPM holdout Univision, has prompted Arbitron to update its guidance to Wall Street.
Arbitron now says it expects 2011 revenues to rise 6-8% from 2010 levels. That’s an improvement over the current First Call analysts’ consensus of 5%, so Arbitron’s stock price is likely to get a boost on Thursday. With 2010 almost in the books, the ratings company says revenue gains will be at the lower end of its previously announced range of 2-6% growth from 2009 revenues of $385 million.
Clear Channel accounted for approximately 19% of Arbitron’s revenues in 2009, making it far and away the company’s largest radio ratings subscriber.
“In today’s competitive media environment, advertisers and agencies increasingly demand accurate and timely data to inform their buying decisions. Arbitron’s PPM and diary ratings validate the great power of our medium and our platforms – and help us demonstrate every day how well we deliver on radio’s unique ability to engage audiences,” said Clear Channel Radio President and CEO John Hogan in a statement distributed by Arbitron.
“Arbitron’s PPM and diary ratings are an integral part of the radio buy-sell process for both terrestrial and digital outlets. We’re gratified that Clear Channel Radio, our largest client, has ensured its continued access to Arbitron services by renewing our partnership on this long term basis,” said Arbitron President and CEO Bill Kerr. “Going forward Arbitron and Clear Channel will be working closely with other radio groups in an industry-wide advocacy program to further promote the value of radio as the ultimate audio-powered and community-driven medium,” he added.
Clear Channel’s contract with Arbitron actually had another year to run, until December 31, 2011, but the parties struck a new deal running from January 1, 2011 through December 31, 2016.
Under the terms and conditions of the new agreements, Arbitron will provide its diary-based Radio Market Reports, Maximi$er Data, Scarborough consumer data and Arbitron qualitative data, and related services and software to Clear Channel for the term of the new agreements. It will also provide its PPM Market Report Service, including the PPM Analysis Tool software, and PPM Weeklies reports. In addition, Arbitron will provide its Tapscan services and software to Clear Channel through December 31, 2012.
Also on Wednesday (12/8), Premiere Radio Networks, Katz Media Group, and Clear Channel Traffic, affiliates of Clear Channel, all entered into new contracts to receive Arbitron’s services.
The aggregate amount of all payments to be made by Clear Channel for the services during the term of the agreements currently is expected to be approximately $538.2 million, based on the radio stations currently owned by Clear Channel. Divided by six, that works out to an average of $89.7 million per year. It compares to $73.2 million as the 19% attributable to Clear Channel from Arbitron’s 2009 revenues.