FTC Request Puts Nielsen-Arbitron Merger on Ice

CEO Confident, but Observers Worry About Monopoly

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The Federal Trade Commission today asked for additional information from Nielsen and Arbitron regarding their proposed merger, the companies said. The request could indicate regulatory complications that will prolong the closing of the merger.

Nielsen withdrew and modified its original notification to the FTC last month hoping to forestall a so-called "second request" for information. After the companies comply with its request, the FTC will have 30 days to make a decision. It's unclear how long the companies will need to get the necessary information.

Nielsen agreed to pay Arbitron $131 million, more than 10% of the proposed $1.26 billion purchase price, should the deal not get anti-trust approval -- an unusually high regulatory breakup fee. But Nielsen CEO David Calhoun has expressed confidence the deal will be approved, despite his company's dominance of U.S. TV ratings and Arbitron's similar dominance in radio ratings, saying they have little overlap.

However, some industry executives, who spoke not for attribution, believe the combined companies could monopolize the still nascent market for cross-platform measurement that put TV, radio, digital, print, outdoor and other media on a common metric.

Arbitron's Portable People Meter data collection system is the only service besides Nielsen accredited by the Media Rating Council to measure TV or radio audiences by person rather than on a household basis, so it can measure demographics used as currency in media deals. That makes it the logical partner for firms such as online ratings provider comScore to compete with Nielsen on cross-platform measurement.

ComScore, which declined to comment, joined Arbitron in such a project last year with ESPN, and it appears unlikely such collaboration would continue after a merger unless required to do so by regulators. Nielsen declined to comment on that.

Another burgeoning Nielsen competitor, Rentrak, which uses set-top box data to measure TV audiences, was also in talks with Arbitron over a cross-media measurement tie-up prior to the merger announcement, according to people familiar with the matter. Rentrak and Arbitron executives declined to comment.

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