Byron Allen, the longtime comedian turned media conglomerate CEO, has sued Nielsen, the ratings agency, for alleged fraudulent misrepresentation and fraud by concealment.
In a lawsuit obtained by Deadline, Allen and his Allen Media Group — which boasts media companies such as Weather Group, Entertainment Studios Network (ESN) and CF Entertainment — claim that the way Nielsen has measured television viewing for years was unreliable for ESN given their limited distribution.
The ratings agency which uses a panel system of recruiting and tracking household viewers is said to have known that the measurement was unreliable but concealed the fact to drum up business from Allen Media Group, 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“This lawsuit is about Nielsen’s outdated, unreliable and broken television ratings service, and the resulting harm suffered by media companies who rely on Nielsen to sell ad time,” the complaint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.
In a changing landscape of digital streaming platforms, Nielsen has been under pressure for years to update the way it gathers data and to expand its measurement metrics. 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 suspension occurs 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 underway, however, and Nielsen has promised to start rolling out an enhanced set of measurement tools dubbed Nielsen One by the end of 2022.
Allen says there is an unfair threshold for networks to get rated, in particular places like Comedy.TV, Recipe.TV, and MyDestination.TV, which is found at the end of the dial and not rated by Nielsen for years, are the networks listed in his lawsuit.
Allen says that networks must pay Nielsen “millions of dollars,” and after agreeing to pony up, personally 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.
The civil lawsuit, filed in Circuit Court of Cook County, IL, seeks a jury trial. It also focuses on damages and recouping fees it paid Nielsen for work with Entertainment Studios seven networks (the aforementioned three above, also 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.”
Much of the viewers captured for Nielsen was for many of the primetime slots. Advertisers condition payments for commercials on the number of viewers who watch commercials. Nielsen’s failure to capture viewership on the ESN Networks damaged Allen Media Group’s 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.”
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.”