Cumulus Must Respond To Nielsen’s Supreme Court Appeal.

Cumulus Media will have to weigh in on Nielsen’s bid for Supreme Court review after all. The justices have requested a response from the broadcaster in its ongoing ratings antitrust battle, reversing the practical effect of Cumulus’ earlier decision to sit out the appeal. The Supreme Court is giving Cumulus until Dec. 7 to explain why Nielsen’s challenge to a ruling blocking its national and local ratings sales policy should not be heard.

The development comes just weeks after Cumulus formally waived its right to respond to Nielsen’s petition unless the Supreme Court requested one. That request has now arrived, meaning the justices will have an opportunity to consider arguments from both sides before deciding whether to take the case.

The order is a potentially encouraging procedural development for Nielsen, although it doesn’t mean the Supreme Court has agreed to hear the dispute. The justices frequently reject petitions without requesting a response from the opposing party. Asking for one indicates that the court is not prepared to dispose of Nielsen’s petition without first hearing from Cumulus.

The request also changes the timetable. Nielsen’s petition had been distributed for the justices’ weekly conference next Monday, but the Dec. 7 response deadline means a decision on whether to hear the case is now likely to come until next month at the earliest.

Policy At Center Of Fight

Nielsen is asking the Supreme Court to review the Second Circuit’s July ruling upholding a preliminary injunction that blocked its policy tying access to complete Nationwide radio ratings to the purchase of local ratings. Cumulus filed the antitrust lawsuit after seeking to continue purchasing Nielsen’s national ratings for Westwood One while using rival Eastlan for local ratings in some markets.

The injunction prohibits Nielsen from conditioning access to its complete national ratings on purchases of local ratings. It also bars the company from charging commercially unreasonable prices for Nationwide ratings sold separately.

Nielsen argues that the appeals court improperly treated its discounted package of national and local ratings as an unlawful arrangement, even though customers had the option of purchasing Nationwide separately. It contends that the ruling could have consequences beyond radio by exposing ordinary bundled discounts to antitrust challenges.

After the Second Circuit upheld the injunction, Nielsen unsuccessfully sought rehearing before asking the Supreme Court to intervene.

Outside Groups Support Nielsen

Nielsen has attracted support from two outside groups urging Supreme Court to take the case. The Washington Legal Foundation argues that the Second Circuit’s ruling could threaten common bundled discounts across industries by treating package pricing as unlawful coercion.

A separate group of antitrust law and economics scholars, represented by the International Center for Law & Economics, contends that the decision leaves federal judges supervising business prices without clear economic standards.

The scholars point to the appeals court’s finding that Cumulus would have paid $1.2 million more to purchase Nielsen’s Nationwide ratings separately and obtain local ratings from Eastlan than it would have paid for Nielsen’s bundled offering. They argue that the difference establishes which option was cheaper, but doesn’t demonstrate that Nielsen unlawfully excluded competitors.

The Supreme Court proceedings are separate from an ongoing dispute over Nielsen’s compliance with the preliminary injunction. District Judge Jeannette Vargas rejected Nielsen’s proposed standalone Nationwide pricing as commercially unreasonable and ordered a revised offer under threat of $50,000 in daily penalties. Nielsen separately appealed that enforcement order, which the Second Circuit has stayed while the appeal proceeds.

For now, the original injunction remains in place. The Supreme Court’s latest action ensures that Cumulus will have an opportunity to defend the appeals court ruling before the justices decide whether Nielsen’s challenge warrants a full hearing.