On Friday, Media mogul Byron Allen and his company CF Entertainment filed a formal lawsuit against ratings provider The Nielsen Company for reportedly having “predatory pricing,” according to The Hollywood Reporter.
THR reports CF Entertainment has sued Nielsen “for breach of contract and unfair competition and unjust enrichment.” The media company claims that Nielsen is extorting it over ratings and “can’t do business with advertisers without that information.”
CF’s Attorney Sean Berkowitz filed a formal complaint detailing the accusations stating:
“Nielsen’s stranglehold on viewership data and the fact that it supplies the only currency accepted by advertisers gives it lopsided leverage when entering into ratings agreements with broadcasters such as CF Entertainment. Nielsen knows that its ratings information is essential to a network’s ability to recover revenue from advertisers, because advertisers only pay based Nielsen’s upon proof of performance. If a network cannot provide proof of performance in the form of Nielsen ratings data, the network cannot earn and receive any revenue for its advertisements.”
The complaint was filed in 2017– in Illinois federal court — and claimed that CF Entertainment amended its deal with Nielsen and committed to pay the ratings provider $41,667 per month in exchange for services for any cable networks it owned or acquired, as reported by Black Enterprise.
After the media company acquired The Weather Channel in 2018, Nielsen then required an amendment to their contract and increased the price to over $475,000 a month.
According to Allen, the additional charge effectively broke their original contract.
“That payment, like each one it has made to Nielsen since April 2018, was effectively a ransom that CF Entertainment had to make to keep The Weather Channel on air,” Berkowitz wrote in the lawsuit. “CF Entertainment will not be held hostage any longer, and it will no longer sit idly by and accede to Nielsen’s extortionist conduct.”
CF Entertainment is now seeking a declaration from the court to nullify Nielsen’s 2018 amendment for the $475,000 monthly charge and have ratings services provided at the original agreed-upon price.
