One of the most consequential legal battles in recent radio history is now on ice, and when, or if, it ever resumes is far from certain. A federal judge has stayed the entire Cumulus Media antitrust lawsuit against Nielsen following Cumulus’s filing for Chapter 11 bankruptcy.
US District Judge Jeannette A. Vargas issued the order one week after news broke about Cumulus’s prepackaged proceedings in the Southern District of Texas.
Nielsen’s counterclaims against Cumulus are stayed by operation of the Bankruptcy Code’s automatic stay, which kicks in after a Chapter 11 filing and halts actions against the debtor. Judge Vargas separately exercised her discretion to stay Cumulus’s own antitrust claims against Nielsen; a step the Bankruptcy Code does not strictly require, but one Cumulus consented to in the interest of avoiding duplication of effort.
The underlying dispute dates to October, when Cumulus filed an antitrust complaint challenging Nielsen’s practice of conditioning the sale of national radio ratings data on customers also purchasing local ratings data. After a three-day evidentiary hearing in December, Judge Vargas granted Cumulus a preliminary injunction, finding Cumulus had shown a substantial likelihood of success on its claims.
Nielsen persuaded the Second Circuit to stay that injunction pending appeal; a proceeding that remains active and is explicitly carved out from the bankruptcy stay.
Nielsen filed its counterclaims in February, alleging breach of contract and unfair competition based on a single email in which Cumulus Chief Insights Officer Pierre Bouvard allegedly shared Nielsen ratings data with Eastlan Ratings. Cumulus moved to dismiss those counterclaims on March 4, the same day it filed for bankruptcy, calling them “transparent attempts to retaliate” and “scorched-earth tactics” designed to discourage Nielsen’s customers and rivals from mounting legal challenges to its market position.
Whether the antitrust fight resumes at all remains an open question.
The bankruptcy filing lists Nielsen as a creditor with a disputed claim of approximately $3.8 million, and the antitrust claims now represent an asset of the bankruptcy estate, meaning any eventual recovery would flow to Cumulus’s incoming creditor-owners rather than its current shareholders, who are being wiped out entirely under the reorganization plan.
The lenders taking control of Cumulus will ultimately decide whether and how aggressively to pursue the case once the stay lifts, a decision that will fall to an entirely new board. Every current Cumulus director is deemed to have resigned upon the plan’s effective date, as the broadcaster goes private.
The case will remain dormant in New York while Cumulus works through its reorganization before Judge Alfredo R. Perez in Houston, for which there is no current timeline. Judge Vargas ordered the parties to submit a joint status letter by June 9, with updates every ninety days thereafter.
