Arbitron: Spinoff Plan Increases Flexibility


The Arbitron Co. president Steve Morris said last week that he is confident that its proposed spinoff from parent Ceridian Corp. "will increase our flexibility to respond to the needs of a fast-changing [media-research] marketplace."

With Ceridian breaking into two independent, publicly traded companies, he said, Arbitron will now have its own stock and its own board of directors, which can make decisions no longer measured for impact on Ceridian's financial results.

Ceridian is involved in payroll services, as well as "large-scale transaction-processing, money-movement and regulatory-compliance services," the company said.

Morris, who will be CEO of the Arbitron spinoff, said the ratings firm will continue to pursue its "Portable People Meter" plans, as well as future strategic alliances.

"We are very much planning to proceed with the Portable People Meter," he said. "How fast we go is very much a function of industry support-not just radio, but television and cable, as well."

Arbitron plans to test the PPM in the Philadelphia DMA starting late this year. As part of its recent alliance with Nielsen Media Research, the latter will contribute financial support and its research expertise to that test, the companies have said.

Arbitron, the major radio-ratings firm, will also continue to be involved in measuring Internet audiences, according to chief financial officer Bill Walsh. The company reported 1999 revenues of $215 million, primarily generated by its radio-ratings reports.

Morris said discussions between the two companies had been going on for "the good part of a year," exploring options ranging from the spinoff idea, to the initial-public-offering approach, to the sale of assets.

Morris dismissed speculation that Arbitron might become an acquisition target, saying that it is not looking to become "acquisition bait." He felt that the company would be strong enough "to be the acquirer, not the acquiree." In any case, he added, "We can't talk to anybody about acquisition" until at least June-six months after the spinoff is to become official.

"The media business is consolidating, and so is media research," Morris said-an allusion to Scarborough Research being an Arbitron division and other research firms being part of Nielsen and its parent, VNU NV.

But Morris stressed that it would be foolish to sell to a media company involved in radio, TV or cable, since Arbitron measures those media and "the buying community would be uneasy about that."

Ceridian and Arbitron said in their announcements that the "reverse-spinoff transaction" was contingent on getting a favorable tax ruling from the Internal Revenue Service, which Morris expected around November.