In 2017, CF Entertainment signed a contract with The Nielsen Co. agreeing to pay $41,667 a month in exchange for rating numbers for its current and future cable networks. After CF Entertainment, which was the original name of Allen‘s media company, acquired The Weather Channel in 2018, Nielsen required an amendment to the contract and increased the price to more than $475,000 a month. Allen states that the change effectively broke the 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,” CF Entertainment’s attorney Sean Berkowitz writes 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.”
The Weather Channel is saying that Nielsen is engaging in “predatory pricing” because of its monopoly on ratings services. CF Entertainment filed the lawsuit last week accusing Nielsen of breach of contract and unfair competition and unjust enrichment. They are claiming they are being overcharged by more than $400,000 per month.
“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,” the complaint states. “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.”
CF Entertainment is asking the court for a declaration that Nielsen must provide the original agreed-upon $41,667 per month rate for its service and that the 2018 amendment is void as an unconscionable contract. It is also asking for a refund of fees and an order preventing Nielsen from terminating its services while this litigation is ongoing.