Arbitron’s latest SEC filing tallies the legal costs for its battles over the Portable People Meter (PPM) and other matters. But it’s not all out of pocket.
The quarterly 10-Q filing reports that since the fourth quarter of 2008 Arbitron has spent approximately $9.1 million for legal costs in connection with securities law matters and “governmental interaction” relating to PPM. That would be the dealings with various state attorneys general, the FCC and the US Congress, leading to the PPM settlement announced in April.
There is a pending shareholder lawsuit, by the way, which indirectly relates to PPM. A union retirement fund claims the company and former CEO Steve Morris misled investors about the timetable for deploying PPM.
But while the legal bills have been flowing in, Arbitron was not unprepared. Like most large companies it has insurance policies to protect the company, its officers and directors. Arbitron reports that it has been reimbursed $5.6 million of the costs and expects to recover and additional $300K from its insurers.
More importantly, Arbitron wants to bring back customers who have quit subscribing to its ratings services, since that lost revenue continues to have an impact quarter after quarter. For the first half of 2010 the company says it lost $4.7 million in diary revenues from markets where Cumulus and Clear Channel switched to Nielsen’s sticker diary. And Univision’s refusal to subscribe to PPM except in Houston is having a big impact. Add that to the Cumulus/Clear Channel cutbacks and other former clients who are no longer subscribing to radio ratings and Arbitron puts the lost revenue at $7.5 million from customers who were buying its services in the first half of 2009 but not in the first half of 2010.
