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Companies Owned by Byron Allen Sue Nielsen for “Fraud”

Byron Allen
(Image credit: Byron Allen)

CHICAGO, Ill.—Several companies and networks owned by Byron Allen have filed a civil suit against Nielsen alleging that its “outdated and unreliable” ratings significantly undercounted audiences, particularly for smaller networks, and that Nielsen's inaccurate audience measurement cost media companies “billions of dollars.” 

“Based on Nielsen’s false representations, half-truths, and concealment, Nielsen received millions in fees per year to provide fundamentally unreliable and flawed services,” from networks owned by Allen, the suit alleges. 

The Civil lawsuit was filed by Byron Allen’s CF Entertainment, Inc., Entertainment Studios Networks, Inc., Weather Group, LLC, and Weather Group Television, LLC. in Circuit Court Of Cook County, Illinois, County Department, Law Division.

The lawsuit argues that “Nielsen’s panel system [for audience measurement] may have worked decades ago when there were a handful of networks that could be viewed only over the air on a television set. With changes in the television industry, viewers now have hundreds of channels to choose from. They can watch video by subscribing with distributors, such as satellite or cable providers, or stream over the Internet through services and apps that can be viewed on Smart TVs, computers, cell phones and tablets.”

This audience fragmentation makes Nielsen’s ratings for smaller networks particularly unreliable, the suit said, citing widespread industry criticism of Nielsen’s ratings during the pandemic by the MRC, the VAB and a number of media companies. 

Moreover Nielsen’s position as a “monopoly” provider of industry-wide currency for ad sales allowed it to delay reforms, the suit claims. 

“Nielsen has known about the problems for years but has not invested to make its ratings system reliable and up-to-date,” the suit said. 

“This monopoly position allowed Nielsen to dominate the market without developing new and improved ratings services to keep up with the rapidly changing market for  television networks and programming,” the suit alleges. 

“Nielsen knew that, based on the limitations of its panel system and the increased  fragmentation of television viewership, it could not reliably rate smaller networks,” the suit said.

Nielsen “concealed this highly material fact from Entertainment Studios” in “2017 when Nielsen caused Entertainment Studios to pay Nielsen to rate the networks,” owned by Allen’s Entertainment Studios. “Nielsen also made false promises and told half-truths to obtain millions in fees to rate The Weather Channel,” which is also owned by Allen. 

“Plaintiffs are not alone,” the suit claimed. “Many other media companies have been led astray and have paid millions of dollars to Nielsen in exchange for unreliable and flawed services. It is estimated that Nielsen caused these media companies billions of dollars in damages.”

The suit also claims that “Nielsen’s inability to reliably rate Entertainment Studios’ networks was well known within Nielsen. On information and belief, Nielsen employs teams of statisticians who keep track internally of statistical data that can affect the accuracy and reliability of Nielsen’s data. Through these internal reviews, Nielsen knew that its ratings services were unreliable, especially for networks like those owned by Entertainment Studios. Nielsen knew that,  when distribution for a network is limited in the number of subscribers, the sample errors in  Nielsen’s reports increase dramatically making the service fundamentally unreliable.”

The suit did not list a specific amount for damages. 

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.