Cumulus, Nielsen Agree Ratings Fight Appeal Should Proceed Despite Chapter 11 Filing.

Ahead of key hearing set for federal appeals court, Cumulus Media and Nielsen have weighed in on whether the radio group’s pending Chapter 11 case involving should pause their closely watched ratings antitrust fight.

The Second Circuit itself raised the issue last month, after acknowledging that Cumulus filed for bankruptcy protection. It directed both sides to explain whether the automatic bankruptcy stay applies to the appeal. Their response is clear. Both companies agree the appeal should move forward.

Cumulus and Nielsen are battling over whether a preliminary injunction issued by a lower court in January should be allowed to remain in place while the larger antitrust case is heard. If it is upheld by the Second Circuit, it would prevent Nielsen from tying its national and local ratings products together for the foreseeable future.

Nielsen argues the bankruptcy stay does not apply because the appeal concerns the preliminary injunction that Cumulus itself sought against Nielsen — not Nielsen’s later counterclaims against Cumulus. The ratings company says its counterclaims remain paused in district court, but the appeal itself should proceed because Nielsen is only seeking to overturn the injunction.

Nielsen also uses the filing to sharpen its argument that Cumulus’ bankruptcy undercuts claims of irreparable harm caused by its policy. They tell the court that Cumulus has secured confirmation of a restructuring plan that will allow it to emerge from Chapter 11 “on substantially stronger financial footing” with a deleveraged balance sheet and reduced debt service obligations.

Nielsen argues those developments undermine the rationale that emergency relief is needed by a preliminary injunction. “Far from presenting a reason to stay this appeal, Cumulus’s bankruptcy is a reason to vacate the injunction,” they tell the court.

But Cumulus argues the opposite, saying that allowing the appeal to proceed is essential to preventing further financial damage as the company restructures. “Proceeding with this appeal will greatly assist — rather than detract — from restructuring efforts,” Cumulus writes.

The broadcaster again links Nielsen’s policies directly to its bankruptcy filing, saying Nielsen’s “anticompetitive conduct” is a “contributing cause” of the bankruptcy. Cumulus also argues the injunction is critical because it cannot function competitively while the antitrust case is heard without access to national ratings for Westwood One advertising sales.

The broadcaster also warns that the threat of losing ratings remains even after its expected exit from bankruptcy reorganization in the coming weeks. More broadly, Cumulus argues the radio industry is being harmed by the ratings policies, adding that Nielsen’s conduct is “a direct contributing cause of Cumulus’s bankruptcy.”

The filings come as the Second Circuit prepares to hear arguments today (May 7) over whether to uphold or vacate the preliminary injunction issued earlier this year by District Judge Jeannette Vargas.

That injunction blocked Nielsen from enforcing its Network Policy, which requires broadcasters to purchase local ratings data in order to access its national ratings product. Cumulus argues the policy is illegal tying and violates antitrust laws. Nielsen maintains the dispute is fundamentally about pricing and contract negotiations, not antitrust law.