Byron Allen sues Nielsen alleging fraud over measurement failures

Byron Allen’s media companies filed suit Wednesday against Nielsen, alleging the measurement company committed fraud by claiming it could accurately measure their TV networks when it really couldn’t. The complaint, filed in Cook County Circuit Court in Chicago, claims Allen’s networks—including The Weather Channel and several high-definition TV networks—were given false assurances about measurement accuracy starting in 2017 from a team that included former Nielsen CEO Mitch Barns. Nielsen declined to comment. “Nielsen knew that, based on the limitations of its panel system and the fragmentation of television viewership, it could not reliably rate smaller networks,” the complaint said. “Nielsen concealed this highly material fact.” Allen’s holdings include Allen Media Group, which owns 27 network affiliate stations in 21 U.S. markets; Entertainment Studios Networks, with 12 24-hour high-definition TV channels serving 220 million cable subscribers; and Weather Group. The HDTV networks added Nielsen service in 2017 upon receiving assurances that their audiences were big enough to be measured accurately, but they weren’t, according to the complaint. The Weather Channel, acquired by Allen in 2018, also subscribed to Nielsen. The Weather Channel once “had a sufficiently large viewership such that Nielsen could reliably rate the network,” according to the complaint. But audience erosion caused by “the rise of streaming” changed things. “Unbeknownst to the plaintiffs until very recently, this erosion has led to Nielsen not being able to reliably rate even The Weather Channel,” the complaint says. “For example, by 2021, the sample error was over 50% for most of the timeslots reported by Nielsen for The Weather Channel. In other words, more often than not, Nielsen could not report data for the Weather Channel that had a minimum degree of reliability.” Ad Age A-List 2022 Best agencies of the year, ranked Top production companies to know about Definitive rankings of advertisers and agencies The complaint said Nielsen received “millions in fees per year to provide fundamentally unreliable and flawed services” based on “false representations, half-truths and concealment.”More news: Nielsen miscount costs TV networks at least $350 million, trade group says Allen’s companies “recently discovered Nielsen’s fraudulent practices when the COVID-19 pandemic exposed Nielsen and its panel system as fundamentally flawed and completely unreliable,” the complaint continued. “As of April 2021, over 79% of all cable network individual half hour ratings had a sample error (or ‘Relative Error’) of over 50%,” the complaint said. “That means that Nielsen’s ratings could be reporting less than half of the actual television viewership for the vast majority of all of its ratings in 2021.” It cites the Media Rating Council (referred to in the complaint as the “Media Rights Council”) as having found Nielsen undercounted audiences during the pandemic, and the subsequent decision by the independent industry organization to suspend Nielsen’s accreditation for national TV measurement.Also read: Nielsen faces bigger competitor as Innovid buys TVSquared The complaint notes a discrepancy in numbers even for the most widely watched program so far this year—the 2022 Super Bowl—in which Nielsen reported that 167 million people watched the game for at least one minute. A subsequent custom survey of 6,600 people conducted by the University of Chicago, on which Nielsen collaborated according to the NFL, found “an estimated 208 million-plus people watched the game,” which was 25% higher. Nielsen CEO David Kenny told investors last year that MRC accreditation was not required in the company’s contracts with networks. But Allen’s suit seeks a “reformation” in its Nielsen contract, allowed under Illinois law when “a variation exists between the parties’ agreement and the writing.”Don’t miss the latest news. Sign up for Ad Age newsletters here. Allen’s agreement with Nielsen included as “a necessary and fundamental term that Nielsen’s ratings system would be accredited by the MRC,” the complaint said. It seeks changes to the written contract to provide for paying a lower rate “based on the value of Nielsen’s services without MRC accreditation.” The suit also seeks unspecified damages from lost revenue.

Byron Allen sues Nielsen alleging fraud over measurement failures

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