NEWS20 October 2009

Arbitron silent on status of New York PPM settlement

Government North America

US— Arbitron is tight-lipped on whether it will face renewed legal action from New York Attorney General Andrew Cuomo, having apparently failed to secure Media Rating Council (MRC) accreditation for its radio ratings services in the New York market.

Cuomo set 15 October as the deadline for receiving MRC approval for its portable people meter-based (PPM) measurement system, which has been dogged by criticism that it under-represents and thus undercounts audiences for ethnic minority broadcasters – charges Arbitron has consistently denied.

The New York AG sued Arbitron last year under consumer protection and civil rights laws, accusing the firm of false advertising and deceptive business practices for claiming that the system was valid, fair and representative. The case was settled in January with Arbitron agreeing a set of minimum standards to adhere to.

On the list was a requirement that Arbitron “take all reasonable efforts in good faith to obtain and retain accreditation for the New York market from the MRC”. However, the final condition of the settlement stated that: “If Arbitron has not obtained accreditation from the MRC by October 15, 2009 and has failed to meet any of the minimum standards… the Attorney General reserves the right to rescind the order and reinstitute litigation against Arbitron.”

The deadline passed last week with no news of MRC accreditation and no comment from either Arbitron or Cuomo’s office as to whether Arbitron has fulfilled all other conditions of the settlement or whether the issue will soon be back before the courts, despite repeated requests for information from Research.

Speaking today on a conference call to announce its third-quarter results, Arbitron declined to give a direct answer to an analyst who wanted to know if the company had been in communication with Cuomo’s office since last week.

In earlier prepared remarks CEO Michael Skarzynski said: “Arbitron believes that we have operated in good faith and taken all reasonable measures to achieve the quantitative and qualitative metrics set forth in [the] settlement agreement.”

For the three months ended 30 September, Arbitron’s revenue was down 4.3% to $98.1m, for which it cited the loss of Cumulus and Clear Channel contracts to Nielsen’s rival ratings service, Spanish-language broadcaster Univision’s refusal to subscribe to the PPM and other recessionary pressures.

Both operating income and net income were down 19% to $24.7m and $13.7m respectively.