The two parties’ current agreement is set to expire on Monday, September 30
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| Paramount (Credit: Getty Images) |
Paramount Global is considering potentially dropping its partnership with Nielsen as the two parties continue talks about renewing their current contract ahead of a deadline this coming Monday.
“Disengaging from Nielsen is not our first choice, and we remain hopeful for a resolution,” Paramount advertising president John Halley wrote in a letter to media agencies, according to Variety. “We are asking for your partnership as we navigate this situation.”
Halley argued that Nielsen is “insisting on substantial price increases across all their products, including linear measurement, despite the changing economic landscape of our industry” and that the costs as a percentage of Paramount’s ad revenue have “quintupled.”
“In certain instances, Nielsen’s fees already exceed the total advertising revenue of the network being measured,” Halley added. “This has led us to conclude that the model, as proposed, is not workable, and that the cost structure requires re-engineering.”
The outlet noted that Paramount would rely on rival audience measurement firm VideoAmp in the event a deal is not reached. Representatives for Paramount declined to comment.
The move would come as CBS is gearing up to launch its first Sunday football game this weekend, as well as the vice presidential debate moderated by CBS News on Oct. 1 — the first day that Paramount would be without Nielsen in the event a deal isn’t reached.
A Nielsen spokesperson told TheWrap that it hopes to reach a new deal and continue to partner with Paramount, but emphasized that all of its other customers and the industry at large would continue to have full access to its data, even if a new deal is not reached by the deadline. Nielsen has a deal in place with every other legacy media company.
Advertisers largely depend on the firm’s data, including the Streaming Top 10 and The Gauge, in order to help determine their spending on commercials as audiences shift from linear TV to streaming — though the scope of that data currently remains limited as that transition is ongoing. Over the past six months, the firm has launched new capabilities in order to expand its measurement data around audience and out-of-home viewing.
The negotiations with Nielsen coincide with belt-tightening at Paramount, as the media giant has said it will cut 15% of its U.S. workforce in order to help generate $500 million in annual run-rate cost savings. Areas impacted thus far have included Paramount+’s communications and content strategy teams, Paramount Television Studios and Paramount Advertising. Additional impacted areas include marketing, finance, legal, technology and other support functions.
David Ellison’s Skydance Media is set to merge with the studio in the first half of 2025 after acquiring controlling shareholder Shari Redstone’s National Amusements. Following the $8 billion deal’s close, Oracle co-founder and David’s father Larry Ellison will own 77.5% of National Amusements through a trust and series of corporations. The remainder of NAI will be owned by RedBird Capital Partners founder Gerry Cardinale’s RB Tentpole LP, which will control 22.5% if the deal goes through. David Ellison would then serve as Paramount’s chairman and CEO.
In connection with the $500 million in cuts, Paramount expects to incur a restructuring charge of $300-$400 million in the third quarter, with a cash impact that will occur over the next several quarters.
In addition to the cuts, Paramount has hired bankers to help the company with possible asset sales. TheWrap exclusively reported that Paramount sold the ComicBook and PopCulture websites to Nashville-based Savage Ventures for an undisclosed amount. Four individuals familiar with the plans of the company’s co-CEOs previously told TheWrap that other possible assets that could be put up for sale include Pluto TV, BET, VH1 and the Paramount lot itself, which would be leased back for the studio’s use. The company is also in “active discussions” about potential strategic partnerships and joint ventures with other streamers.
Paramount shares have fallen 14% in the past year and 26% year-to-date.
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Originally published: September 27, 2024.
H/T: Special thanks to @916786wc for the news!
