Nielsen spends about $1.26B to buy Arbitron


Arbitron and NielsenTwo ratings giants are becoming one, and for most American broadcasters, it will mean television and radio ratings will be coming from the same company. In general, it is an affirmation of the ongoing value of the radio business, and for Nielsen it is an opportunity to greatly expand its cross-media measuring capabilities.

The $48-per-share pricetag represents about a dime over and above Arbitron’s Tuesday 12/17/12 closing price, which was $38.04.

The combined revenues of the two companies for the 12 months ending 9/30/12 was $6B, and that came with an EBITDA of $1.7B.

Nielsen’s financing is in place and the deal has been approved by both of the company’s boards of directors.

“U.S. consumers spend almost 2 hours a day with radio. It is and will continue to be a vibrant and important advertising medium,” said Nielsen Chief Executive Officer David Calhoun. “Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”

“These integrated, innovative capabilities will enable broader measurement of consumer media behavior in more markets around the world,” said Steve Hasker, Nielsen President of Global Media Products and Advertiser Solutions. “We will also bring local clients greater visibility to empower more precise advertising placement and campaign effectiveness.”

“Radio reaches more than 92 percent of all American teens and adults because they love to listen to music, talk, news and information while at home, at work and in their cars,” said William T. Kerr, President and Chief Executive Officer of Arbitron. “By combining Nielsen’s global capabilities and scale with Arbitron’s unique radio measurement and listening information, advertisers and media clients will have better insights into consumer behavior and the return on marketing investments.”

RBR-TVBR observation: Kind of takes your breath away, doesn’t it? But in the end, we’d have to imagine that it will be more or less business as usual for radio stations, at least for the time being.

The thing to watch for is what kinds of new research products will come out of this marriage. That kind of thing won’t happen overnight, so it’s our guess that the full impact of this deal won’t be felt for some time.

Nielsen certainly gains by being the big box ratings store  for the entire United States. For radio, the big question is whether this will mean more investment in measuring the medium, or will Nielsen simply try to maintain Arbitron’s current level of service while it explores ways to combine the two companies’ capabilities and forge into new areas.

Although the promotion of Sean Creamer to the President/CEO office at Arbitron looked like a perfectly normal succession on the company’s executive level, it had to be a part of this plan – so we expect he will be around for awhile and already has plans in for folding Arbitron into Nielsen.