Spanish Broadcasting System (SBS) will be heading to arbitration with Arbitron in a few days over its refusal to pay for Portable People Meter (PPM) data, which SBS claims is flawed, and whether it is also contractually required to have its stations encode for PPM. But it is no longer under a court order to keep encoding, so its stations have shut off their encoders.
A state court judge in New York on Tuesday dissolved her temporary restraining order that had required SBS to encode for PPM. SBS engineers quickly pulled the plug on encoding in New York, Los Angeles, Chicago, San Francisco and Miami.
“Arbitron was notified of the decision by the Supreme Court of the State of New York lifting the Temporary Restraining Order (TRO) that required SBS to continue encoding its signal in its PPM markets,” said a statement that Arbitron sent to RBR-TVBR. “We respect the Court’s decision but are disappointed and believe that the radio industry is best served when all broadcasters in a market are encoding their signal. SBS remains a valued client and we intend to continue to engage with them in an ongoing dialogue in order to achieve resolution.”
A Supreme Court is a trial level court in New York.
At SBS there was jubilation and a claim of victory.
“The Court’s reversal of its earlier TRO is a significant victory for SBS, which ceased encoding its broadcasts based on a loss of confidence in Arbitron’s PPM methodology and its belief that the methodology undercounts minority audiences to the detriment of the minority radio broadcasters,” SBS said in a statement sent to RBR-TVBR.
“Critical to the Court’s reversal was its finding that Arbitron failed to demonstrate that it would suffer ‘permanent and irreparable harm.’ In her 10-page order, the Honorable Shirley Kornreich specifically noted Arbitron’s failure to show proof that SBS’s failure to encode would devalue the ratings that Arbitron provides to other subscribers or cause any meaningful damage to Arbitron’s credibility. The Court’s Order notes that Arbitron has numerous contracts that expire at different times across 300 different markets – a fact which undercut Arbitron’s assertion that SBS’s pulling of its encoders could, by itself, have a material impact. ‘Arbitron’s characterization of its business as one in which the loss of any one client will cause irreparable harm has not been established and is not plausible,’ the order states,” said SBS in its assessment of the action.
“I am glad that Justice Kornreich considered our argument and ruled in our favor,” said Frank Flores, SBS’s Chief Revenue Officer.
Arbitron and SBS had recently agreed to take their dispute to arbitration. That process should begin shortly.
To summarize the dispute, SBS had claimed that the methodology used by Arbitron for PPM is faulty and violates the terms of its contract. After SBS stopped paying for PPM, Arbitron suspended delivery of PPM data to SBS in December. Arbitron then filed suit after learning in early February that SBS stations had stopped encoding. Encoding resumed a few days later after Arbitron obtained the TRO, but has now ceased again pending the outcome of arbitration or negotiations between the two companies.