Byron Allen’s Allen Media Group Sues Nielsen For Fraud In Ratings Of Comedy.TV, Weather Channel & Other Networks

Byron Allen’s media companies — Weather Group, Entertainment Studios Networks (ESN) and CF Entertainment — have sued Nielsen, seeking billions of dollars in damages for alleged fraudulent misrepresentation and fraud by concealment.

The suit claims that the way Nielsen has historically measured television viewing for years — through its panel system of recruiting and tracking household viewers — was unreliable for Allen’s ESN networks given their limited distribution. It alleges the ratings agency knew the measurement was unreliable but concealed the fact to drum up business from Allen Media, which paid millions in fees.

Nielsen declined to comment on the suit.

“This lawsuit is about Nielsen’s outdated, unreliable and broken television ratings service, and the resulting harm suffered by media companies who rely on Nielsen to sell ad time,” the complaint explains.

Nielsen has been under pressure for years to update the way it gathers data and to expand its measurement metrics. Its troubles deepened during Covid when it had a hard time getting measurement equipment out to the field. The Media Rating Council suspended Nielsen’s accreditation for national TV ratings in September.

The suspension applied to Nielsen’s national television service, Local People Meters and Set Meter Markets. The MRC said such suspensions occur when a company is found to have “material standards non-compliance or operational issues that are deemed to have exerted an adverse effect on the service.” A review of the suspension is under way, however, and Nielsen has promised to start rolling out an enhanced set of measurement tools dubbed Nielsen One by the end of 2022.

The networks at issue in Allen’s suit, though, are not the major broadcast and cable outlets whose significant stakes in the $70 billion TV ad market are causing consternation. Instead, the networks, among them Comedy.TV, Recipe.TV and MyDestination.TV, are found at the end of the dial and in fact were not rated by Nielsen for years. Allen says there is an unfair threshold for networks to get rated, and therefore to charge more to advertisers: They must pay Nielsen “millions of dollars,” he claims. After agreeing to pony up in 2017 for the ESN channels, the suit says the data that resulted was far from the “best-in-class” insights promised by the measurement firm.

Allen’s civil lawsuit, filed in Circuit Court of Cook County, IL, seeks a jury trial. Referring to the MRC’s move, it asks for a “reformation of contract” — meaning a cheaper price for contracted Nielsen services that now don’t have the same stamp of approval from MRC.

But most of the suit focuses on damages and recouping fees it paid Nielsen for work with Entertainment Studios seven networks (Comedy.TV, Recipe.TV, MyDestination.TV, ES.TV, Pets.TV, Cars.TV and, later, JusticeCentral.TV). Initially these weren’t carried by big MVPDs so Allen didn’t see the point of engaging Nielsen for measurement.

“Nielsen’s sales representatives continued to press, however, and advocated for Entertainment Studios to pay Nielsen to rate these networks. Ultimately, Nielsen convinced Entertainment Studios to add the ESN Networks [saying] ESN Networks had attained sufficient distribution and viewership for Nielsen to reliably rate them.”

Nielsen began providing ratings reports for ESN Networks in 2017. “Entertainment Studios knew from its own internal data that it had viewership on its networks, especially during the prime advertising slots. It expected that Nielsen would capture this viewership in its reports, which should have allowed Entertainment Studios to generate substantial ad revenue. However, Nielsen did not capture these viewers for much of the reporting period and for many of the primetime slots. Because advertisers condition payments for commercials on the number of viewers who watch commercials, Nielsen’s failure to capture viewership on the ESN Networks damaged Entertainment Studios. When Entertainment Studios complained to Nielsen about its failures, Nielsen  dissembled, defending its panel model and boasting that it is the “gold standard” in the industry. Nielsen did not disclose what it already knew—that its ratings services were fundamentally unreliable.”

“Nielsen did not tell Entertainment Studios the truth – that, in reality, its ratings services were not reliable for networks like those owned by Entertainment Studios.”

Read full suit here.

The suit didn’t name the global dollar amount Allen is seeking. But in a separate statement, he said: “The industry has suffered billions of dollars in losses, and we can no longer afford these damages. Nielsen needs to quickly address these issues. If not, I highly expect that Nielsen will soon face a $10 billion-plus class-action lawsuit.”

Dade Hayes contributed to this story