Media mogul Byron Allen sues Nielsen for breach of contract

CF Entertainment said ratings provider Nielsen engaged in "predatory pricing"

NEW YORK, NY – DECEMBER 10: Byron Allen attends “The Bloomberg 50” Celebration at Cipriani 25 Broadway on December 10, 2018 in New York City. (Photo by Noam Galai/Getty Images for Bloomberg Businessweek)

Byron Allen with his media company filed suit Friday against The Nielsen Company.

Entertainment Studios (parent company of theGrio), the media group founded and owned by the comedian-turned-businessman, filed the lawsuit in an Illinois court, accusing the ratings firm of “predatory pricing,” as reported by The Hollywood Reporter. Allen’s company, which owns The Weather Channel, made the lawsuit under CF Entertainment Inc., the original name of his media and entertainment company.

CF Entertainment in 2017 signed a contract with Nielsen agreeing to pay $41,667 a month in exchange for ratings numbers for its current and future cable networks. After CF Entertainment acquired The Weather Channel in 2018, Nielsen required an amendment to the contract and upped the price to more than over $475,000 a month.

Allen argues the change effectively broke the contract.

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The official complaint cites breach of contract and unfair competition and unjust enrichment on the part of Nielsen. CF’s attorney, Sean Berkowitz, issued a statement that the ratings company has a monopoly on the ratings system and stood to make $30 million in illicit gain as a result of “predatory pricing.”

“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,” Berkowitz said in the official complaint. “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.”

The CF Entertainment had to wire $2.375 million, according to the court filing, to Nielsen over accrued late fees accumulated as a result of additional charges. Berkowitz referred to this payment as “effectively a ransom that CF Entertainment had to make to keep The Weather Channel on air.”

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CF Entertainment is seeking a declaration from the court to void Nielsen’s 2018 amendment for the $475,000 monthly charge and provide ratings services at the agreed upon price of $41,667 per month.

Allen recently saw his $20 billion racial bias lawsuit against Comcast thrown out by the U.S. Supreme Court. He accused the cable giant of refusing to carry his entertainment channels because he is Black, but the justices sent the case back to a lower court, claiming that Allen had to prove that race was the sole reason for the decision.