Nielsen Being Taken Private By Existing Investor

After years of being on the market, Nielsen Holdings PLC, the parent company of TV ratings giant Nielsen Media Research, is reportedly being sold to a number of private equity players rather than merging with a strategic partner.

Ironically, Elliott Management Corp., a long-time investor in Nielsen who called for a sale of the company in 2018, is said to be leading the $15 billion deal. Shares in NLSN soared 30.5% on March 14 to $22.85 from Friday’s close of $17.51 after The Wall Street Journal reported the talks.

After trying to auction the company in 2018, in 2019 Nielsen was said to have started contacting buyers to bid on pieces of the company (In addition to the TV business it has a consumer products division and some other services). This process was apparently unsuccessful and Elliott Management must have felt the company would be better off as a private company given its poor stock performance.

The price tag is a surprise as investors have been fairly bearish on the company, with the stock sinking from over $44 five years ago to as low as $13.85 in 2020 and more recently trading in the $17-$18/share range. In addition, of 13 analysts covering the stock, only 1 has a buy rating.

At the company’s Q4 investor presentation held on 02/28, management tried to jazz up investors by announcing a $1 billion share repurchase plan and “advancing our Nielsen One product roadmap,” which is a ratings service designed to capture traditional TV viewing, streaming, connected TVs and digital channels.

Although their slide presentation went on to say, “Nielsen is and will be the currency of choice as the industry moves to cross-media measurement,” that remains to be seen as some of the major media companies are now testing alternative platforms to Nielsen.

Ratings clients have been asking for years for Nielsen to provide a more accurate product, only to have Nielsen admit that their ability to forecast ratings accurately had diminished during the COVID-19 pandemic due in part to being unable to recruit enough new panel members.

Some of the major media companies were livid about the continuous flow of data they believed to be inaccurate and began exploring competitors. I wrote back in January that Nielsen is seeing serious competition with Warner Media saying that it had chosen Comscore, iSpot and VideoAmp as possible alternatives to Nielsen, something which would have been unheard of just five years ago when Nielsen had an almost complete lock on the market.

The almost monopolistic situation was sustained due in part to inertia on the part of the big advertising agencies. They had been buying TV ads for decades based on metrics which everyone knew were not 100% accurate. However, Nielsen was considered to be the only game in town.

But times have changed. With a continued shift of viewing to streaming (where ad pods are smaller) and more and more people recording programs on their DVR and then skipping through the commercials, consumer behavior is rapidly changing.

Tivo even came out with a new set-top box recently with a SkipMode function that you can set to automatic and it will just zip past the commercials as you watch the show recorded on your DVR.