(Bloomberg) — Media mogul Byron Allen claimed in a lawsuit that TV ratings company Nielsen Holdings Plc is providing “unreliable” counts of viewers, and he is seeking billions of dollars in damages.
Companies controlled by Allen, who has waged a long campaign to get major corporations to spend more on Black-owned programming, accused Nielsen of fraud and said the ratings service used to determine the price of running advertisements on TV is “outdated, unreliable and broken,” according to a lawsuit filed Wednesday in Chicago.
Nielsen misrepresented its ability to produce accurate ratings for Allen’s networks, even though the networks had limited distribution at the time, the lawsuit alleged. Allen Media Group, which he founded, owns Entertainment Studios Inc., The Weather Channel and dozens of network-affiliated stations. A similar suit was filed against Nielsen in 2020 over fees charged to the Weather Channel.
A spokesperson for Nielsen declined to comment on the lawsuit. Shares in the company fell 0.1% to $23.40 on Wednesday.
Nielsen, headquartered in New York, is in talks to be acquired by a consortium including private equity firm Brookfield Asset Management Inc. and activist firm Elliott Investment Management, Bloomberg News previously reported.
According to Allen’s lawsuit, Nielsen under-counted out-of-home viewers over a 16-month period that began in 2020, costing the industry more than $700 million in lost ad revenue. During NBC’s broadcast of the Super Bowl last month, Nielsen acknowledged failing to capture as many as 41 million viewers, the suit claimed.
“The industry has suffered billions of dollars in losses, and we can no longer afford these damages,” Allen said. “Nielsen needs to quickly address these issues. If not, I highly expect that Nielsen will soon face a $10 billion-plus class-action lawsuit.”
Thus far, Allen’s quest for more support of Black-owned media companies has made some impact. After pressure from Allen and Sean ‘Diddy’ Combs, General Motors Co. in 2021 vowed to double the amount it spends on advertising with businesses operated by diverse individuals. McDonald’s Corp. earlier this year refiled its bid to toss out Allen’s discrimination suit against the food chain.
“This case goes to the heart of the Nielsen television ratings system,” an attorney for Allen’s companies, Skip Miller, a partner in Miller Barondess LLP, said in a statement.
The case is CF Entertainment v. The Nielsen Company, 2022L002556, Circuit Court of Cook County, Illinois (Chicago).
(Adds comment from plaintiff’s attorney.)
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