Radio giant Clear Channel and ratings service Arbitron are in a contract standoff that has all the appearances of getting quite nasty.
   Two weeks ago, Clear Channel announced that it would not renew some of its existing contracts with radio’s longtime official scorekeeper.
   Now Clear Channel, owner of some 1,170 radio stations in the U.S.--about a tenth of the total-- is threatening to pull all of its stations in 99 markets and some of its stations in another 31 out of Arbitron.
   The companies are currently negotiating new contracts for those markets, which represent 14 percent of Arbitron’s total sales.
    Clear Channel, which accounts for 20 percent of radio’s total revenue, is asking for reduced rates and additional market data from Arbitron as conditions of a new contract. 
   Neither side is being especially talkative on the matter.
    "We had a number of contracts that did expire at the end of 2000. We have not renewed, and we are very much still in negotiation. We’ll see how it goes," says Randy Palmer, vice president of investor relations at Clear Channel Communications.
   To say that Arbitron would like Clear Channel to stay would be an understatement.
    Recently spun off from its parent Ceridian Corp., Arbitron began trading on the New York Stock Exchange just last week. 
    Losing its single biggest client, one that represents 22 percent of its total sales, would not please investors.
   "We can still be a viable company without them," Arbitron chief executive Stephen Morris said in a conference call last week.
   Arbitron estimates that the contracts currently in negotiation are worth about $14 million, but outside estimates range as high as $30 million. Arbitron had revenues of $207 million last year.
   "If Arbitron loses a major client like that, it could very well affect the stock price. So they’ll fight tooth and nail to come to some kind of a compromise, whether it’s offering a huge discount or sliding scale, or free services on something else they have," says one senior media buyer at a prominent New York agency.
   "It could put Arbitron in a big hole. If Clear Channel leaves, who’s to stop some of the other companies from doing the same thing?"
    Still, this buyer, at least, believes that a resolution will come along somehow or other.
   "I think it’s more of a negotiating ploy—Clear Channel is looking to bring the rates down. They both need each other."
   Even if they do need each other, it would seem that Arbitron needs Clear Channel more than the other way around.
    If Clear Channel does not renew the contracts, Clear Channel stations would still be measured by Arbitron. Clear Channel would lose the right to quote Arbitron’s numbers, or to use them to sell advertising.
   Still, Clear Channel would likely be able to use Arbitron’s data indirectly. Media agencies, for example, would be able to access the numbers and pass them on to potential advertisers.
    That might make it inconvenient for Clear Channel to sell ads but certainly not impossible.
    "Could it hurt Clear Channel? Possibly. Agencies could say they’ll only deal with properties that are measured. But I don’t think it will go that far," says the New York buyer.
   Clear Channel’s Palmer says the company would "look for alternative methods in terms of measuring the data" if the company does not renew the Arbitron contracts.
   Clear Channel has other contracts with Arbitron that will not be up for some time.
   Most recently, Arbitron announced that Clear Channel has extended a contract for stations in 68 markets through the Winter 2001 survey, which will be released in the second half of this year.
    Clear Channel also has contracts for stations in an additional 88 markets, the longest of which will come due in 2005. It is unclear whether Clear Channel intends to renew any or all of those contracts.

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