Nielsen is going private.
On Tuesday, the 99-year-old TV ratings giant announced an agreement to sell itself to a private equity consortium headed by Brookfield Business Partners and Evergreen Coast Capital Corp.
The PE consortium is buying Nielsen at $28 a share, bringing the deal price grand total to $16 billion.
But the dance to take Nielsen off the public market was already underway.
Nielsen and the consortium started up their deal-or-no-deal talks earlier this month, after which Nielsen rejected the group’s offer of a $9 billion buyout. Bumping the bid to $16 billion got the deal done.
With new owners, Nielsen’s future is no longer its own, and it’s not yet clear what the consortium is planning. In this case, however, past could be prologue.
Elliott Investment Management, an activist investor and Evergreen Coast Capital Corp. affiliate, has already had a seat on Nielsen’s board for several years. Elliott pushed Nielsen to sell its data analytics division NielsenIQ in 2018, splintering the two into separate companies.
Industry experts say history might repeat itself.
A private equity group is not swooping in as a “white knight” to save Nielsen by giving it a bunch of capital, Brian Handrigan, CEO of cross-media DMP Advocado told AdExchanger.
Although Nielsen does need to invest in innovation, it also needs to make money on the back of this acquisition in order to pay stockholders back at a 60% premium compared with Nielsen’s share price before the talks leaked. Not to mention the debt incurred.
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The consortium could take a page out of the PE playbook and continue chipping away at Nielsen’s core to create a “leaner, meaner Nielsen,” Handrigan said, with the goal of creating a more streamlined entity focused on its existing specialty, i.e., panel-based TV ratings.
But that plan would require a lot of additional investment that might not end up being worth it.
For example, the new owners could invest in continuing to build up Nielsen One, Nielsen’s cross-platform measurement solution, or possibly double down on reobtaining accreditation from the Media Rating Council, said Bharad Ramesh, GroupM’s executive director of research and investment analytics.
But the clock is ticking. Publishers have already been “diversifying time and resources away from Nielsen,” Ramesh said. “Nielsen One is great on paper – but it’s late.”
For that reason, the reinvention of Nielsen at this late stage is a dubious proposition, said John Hamilton, CEO of CTV performance measurement provider TVDataNow.
A PE consortium is unlikely to “embrace the sort of investment and approach needed to develop a new currency in streaming,” Hamilton said.
To make money on the deal, it’s more likely the new owners will ride on Nielsen’s “cash cow business” (see panel ratings) and “sell off [whatever] technology they can,” he said.
Not to mention this year’s upfronts are right around the corner, and many of the largest programmers, including NBCU, are already allowing marketers to transact on alternate measurement providers for the first time. To stay competitive, Nielsen would need to have a “clear message” about the status and capabilities of its unified platform ahead of the upfronts – and that’s unlikely to happen in a matter of weeks, Handrigan said.
Even if Nielsen is “sitting on a magic bean” with answers to cross-screen currency challenges, he added, there’s no telling whether a spiffed-up Nielsen One would do the trick.
At this point, when Nielsen claims that its cross-platform audience measurement capabilities are nearly ready for prime time, it sounds like the “boy who cried wolf,” Handrigan said.
And when push comes to shove, “trust lost quickly is regained very slowly,” he said. “I’m not sure that can be turned around with just an announcement.”
A “boost of momentum”
Nielsen’s future may be uncertain, but media experts agree that its acquisition is good news for the industry because it will create more competition.
Publishers and content providers have already been signing deals with alternate measurement providers to give marketers what they want, which is a faster, more transparent cross-platform currency.
Nielsen’s buyout is a “boost of momentum” in that direction, said Sean Cunningham, CEO of the Video Advertising Bureau and longtime Nielsen critic.
The deal is “emblematic of the value placed on measurement and currency” among performance-focused marketers, making it a “harbinger of full-funnel metrics coming front and center” to TV advertising, Cunningham told AdExchanger.
