One week ago, Gray Television was hours away from receiving the happy news from the U.S. Justice Department that it has approved its merger with Raycom Media, pending necessary divestitures Gray and Raycom had already committed to — a decision equaled on Thursday by the FCC.
It is now known that Gray was also making a final decision on its partner for TV viewership measurement data. Once that judgment was finalized by Gray’s C-Suite, a communiqué was sent to “valued media partners,” Gray handed the task to Comscore.
It’s the second big score for Nielsen‘s biggest competitive threat to its Watch segment — the financially successful side of a beleaguered company that has seen its stock battered in 2018.
On Tuesday (12/18), Comscore revealed that it now has an expanded deal with The E.W. Scripps Co. While three of its markets had previously been using Comscore data, all of the company’s TV stations will now count on Comscore to provide it audience estimates and ratings information.
Gray’s decision will most certainly impact Nielsen, which is also reportedly in tough negotiations with CBS Corporation a Nielsen spokesperson downplayed when contacted by RBR+TVBR. “We expect to arrive at a mutually beneficial agreement well in advance of December 31,” the Nielsen representative said via e-mail.
As word tricked out in the midday hours of Thursday, Nielsen shares started to slide. As of 2:22pm Eastern, NLSN was priced at $23.50, of 3.3% from Wednesday’s close.
That puts Nielsen back in dangerous territory, and close to lows seen in late July and early August, when a $21.75 closing price was registered for a stock that was $37.49 on January 29.
A new CEO hasn’t helped Nielsen’s shares. On December 3, David Kenny became CEO of Nielsen while also taking a seat on the company’s board. He succeeds the retiring Mitch Barns.
According to CNBC, the appointment of Kenny comes as the company “deals with pressure from activist investor Elliott Management.”
Meanwhile, a strategic review continues at Nielsen, which includes “a broad review of strategic alternatives for the entire company and its businesses” and could result in “a broad range of alternatives,” including continuing to operate as a public, independent company; a separation of either Nielsen’s Watch or Buy segments; or a sale of the entire company.
Weakness in the Watch segment is not something Nielsen investors may tolerate. Yet, that’s what has happened with Gray’s seemingly final decision to move forward with Comscore as its chief ratings data supplier.
Gray’s note to “valued media partners,” from VP/National Sales Becky Meyer, was obtained in full by RBR+TVBR. It is less than kind to Nielsen.
“After lengthy and careful consideration, Gray Television has concluded that it does not have sufficient confidence in the new methodology recently adopted by Nielsen Media Research to justify our continued reliance on Nielsen’s viewership measurement in our markets,” Meyer said. “Meanwhile, through our use of comScore systems in about two dozen markets over the past few years, we have seen data that appears to reflect more accurately consumer viewership of those stations across multiple platforms. Consequently, Gray will not renew its contract with Nielsen Media Company that expires on December 31. Instead, Gray intends to subscribe to comScore for all of its current television stations.”
She added that Raycom Media “will reach its own decision about its television stations.”
Further, a future return to Nielsen could happen down the road. Gray’s Meyer says it will “continue to monitor, and where possible, participate actively in advancements in viewership measurement as well as automated order processing.” Likewise, Gray will work directly with its stations and its media partners to ensure a smooth transition to comScore measurement systems, she added.
Nielsen Local Managing Director Jeff Wender declined to address Gray’s decision when contacted by RBR+TVBR. Rather, he spoke positively of how Nielsen is “transforming” how local TV is measured.
“We have implemented a series of enhancements over the past year, including retiring diaries and launching a local cross-platform planning solution to make the process of buying local TV and radio more efficient,” Wender said. “We continue to work closely with our clients across all local markets nationwide to ensure our measurement meets their needs and allows them to transact with confidence.”
Those clients no longer include Gray, with questions lingering about what companies, if any, may follow suit.