Nielsen Holdings NV (NLSN), seeking to form a company able to measure audiences across TV, radio, the Web and mobile, is negotiating concessions with the U.S. Federal Trade Commission that would permit its $1.26 billion acquisition of Arbitron Inc. (ARB), two people with knowledge of the talks said.
The discussion centers on a requirement for the combined company to license measurement technology to ComScore Inc. (SCOR), in addition to researchers, television networks and other parties, said the people, who asked not to be identified because the conversations weren’t public. A consent order could become public within the month after Nielsen said Aug. 30 it agreed to extend the review period into September, without setting a specific date.
While the situation remains fluid, the talks are a positive sign for Nielsen, one of the people said. An agreement would be a win for the company, whose ratings help set rates for $70 billion in U.S. television advertising.
Nielsen is seeking to overcome objections from the FTC, competitors including ComScore and TV networks such as Walt Disney Co. (DIS)’s ESPN.
“Regarding the regulatory process in the Arbitron acquisition, Nielsen has nothing new to report,” the company said in an e-mail. “The regulatory process is ongoing and we continue to be confident in the outcome.”
Peter Kaplan, a spokesman for the FTC in Washington, Kim Myers, a spokeswoman for Arbitron, and Amy Phillips, an ESPN spokeswoman, declined to comment on the talks about a proposed licensing agreement. Andrew Lipsman, a ComScore spokesman, didn’t immediately respond to e-mail and phone messages yesterday after regular business hours seeking comment on the talks.
Under the proposal, ComScore would continue to have access to technology from Arbitron that it uses to measure audiences for ESPN across radio, television, PCs, smartphones and tablets, one of the people said. ESPN, the biggest sports TV network, said in June that it’s using the combined measurement technology to track viewers who use both its cable channels and WatchESPN app.
Nielsen, based in New York, rose 0.8 percent to $34.83 yesterday in New York. Its shares have climbed 14 percent this year. Arbitron, based in Columbia, Maryland, was unchanged at $47.21 yesterday and is up 1.1 percent for 2013. Nielsen is offering $48 a share for Arbitron.
ComScore, based in Reston, Virginia, fell 1.2 percent to $28.98 yesterday. The stock has more than doubled this year.
The Obama administration has stepped up antitrust enforcement with lawsuits against AMR Corp.’s merger with US Airways Group Inc. (LCC) and Anheuser-Busch InBev NV (ABI)’s takeover of Grupo Modelo SAB. These lawsuits indicate regulators could challenge more deals between conglomerates in concentrated markets.
The FTC investigators are concerned that the transaction could limit access to the audience measurement technology across platforms that Nielsen would control as a result of the merger, one of the people said. Under antitrust law, it can be illegal if a dominant firm that controls a tool or material considered “essential” to competing in a given market withholds it from competitors.
Nielsen says it controls about 80 percent of the TV ratings industry and Arbitron accounts for about 90 percent of radio measurement, which would give the combined firm a dominant position for both.
Nielsen, which announced its acquisition of Arbitron in December, is seeking to offer advertisers a unified system of measuring audiences across multiple forms of media, making it easier for them to make ad-buying decisions whether on TV, radio or the Web.
The company, which once relied on handwritten diaries by TV viewers, now mostly measures audiences through electronic-metering devices installed in panelists’ homes. Arbitron uses a similar system for radio listeners.
“Nielsen is getting better by the day in measuring streaming, and I think we’re closer and closer to our goal of getting every single eyeball measured,” Moonves said on a July conference call. “All this technology and all this measurement only is going to be helpful for us because everything is going to be counted, and we’re going to get paid in full.”
Buyout firms Blackstone Group LP (BX), Thomas H. Lee Partners LP, Carlyle Group LP (CG) and KKR & Co. (KKR) are among Nielsen’s five largest investors, according to data compiled by Bloomberg. Capital Group Cos. is its biggest shareholder, the data show.