Arbitron clarified to RBR/TVBR that the $69 million figure under the company’s new diary market contract with Clear Channel Radio is for the entire three-year term of the diary market contract, not the annual amount. The story in yesterday’s RBR Daily Epaper was thus incorrect in stating that Clear Channel will be paying more to Arbitron under the new contract. It will pay less for its diary service.
Why is this so complicated? The Portable People Meter (PPM) roll-out has Arbitron’s largest customer, Clear Channel, and other station groups with both Top 50 and 51+ markets operating under two or more contracts. Clear Channel-owned Inside Radio stated that its parent company paid about $60 million to Arbitron last year for diary service and another $6 million or so for PPM. That is in line with the $66.4 million that we calculated from Arbitron’s 10-K filing with the SEC.
However, Clear Channel’s Top 50 markets are covered by a separate contract. Many of them were still paying for diary service in 2008 and some will still have diary service through part of 2010. So, if you divide $69 million by three, $23 million, that still doesn’t cover all of the payments that Arbitron will receive from Clear Channel for diary service in 2009 and 2010.
Meanwhile, payments under the Top 50 contract will be going up as more and more markets transition from diaries to the more expensive PPM service.
Will Clear Channel still account for 18% of Arbitron’s total revenues in 2009? We likely won’t have the answer to that question until Arbitron files its next 10-K around March of next year.
RBR/TVBR observation: Here’s one thing you can count on. After the bare-knuckles bargaining by Clear Channel, you can bet that other groups are going to hang tough for price concessions as their diary contracts come up for renewal this year. After all, none of them are expecting to see their same station revenues go up in 2009.