Nielsen, Arbitron Executives Say Proposed Buyout Won’t Raise Antitrust Concerns
Nielsen and Arbitron executives told stock analysts they don’t expect the federal government to block for competitive reasons Nielsen’s proposed acquisition of Arbitron. Nielsen, the main provider of TV ratings data, agreed to buy Arbitron, which provides radio ratings, for about $1.25 billion in cash. “It really is as simple as Arbitron is in the radio business and we're in the TV world,” Nielsen CEO David Calhoun said during a teleconference Tuesday. “The overlaps -- you can barely find any.” He said the companies have studied the antitrust implications and “we feel good about it.” If the government blocks the transaction, Nielsen will owe Arbitron a 10 percent breakup fee.
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It’s unlikely the government will block the deal, but it may seek some concessions from the companies, said antitrust lawyer Glenn Manishin of Troutman Sanders. Manishin doesn’t represent either company and neither does Troutman Sanders. “Although Nielsen is not competing with Arbitron in radio ratings, its technology and expertise make it perhaps the most likely entrant,” he said. “What the merger could do would be to ensure one firm controls both markets by preventing the most likely entrant from competing with the other."
That’s a less compelling antitrust case than when an overlap between among products exists in a single market, Manishin said. “But the government, including under President [George W.] Bush, and even more so under President [Barack] Obama, has been looking at long-run issues like that, such as the effects of mergers on the innovation market.” Along those lines, the government could have concerns about a combined Nielsen-Arbitron dominating new markets such as ratings for Internet TV and radio, he said.
If there’s no overlap, as the companies insist, then the benefit of the acquisition to Nielsen’s shareholders is just a question of whether Nielsen paid a fair price compared to Arbitron’s independent prospects, Bernstein Research analyst Todd Juenger wrote investors. “The deal does face meaningful regulatory challenge."
Calhoun said the companies don’t plan to market cross-platform radio and TV ratings data to clients. “There is not I client I know of that’s actually looking for radio and TV cross-platform,” he said. “There is no market today and I'm not sure one will develop any time soon.” The companies had worked together in the past on developing such a single-source ratings service, which they called Project Apollo.