Back in December, Skarzynski gave sworn testimony in front of House Oversight Committee about PPM and now sources are saying "the resignation was related to Skarzynski's testimony, and subcommittee staff members [are] reviewing the transcript."
It's not good news when a Congressional subcommittee decides to make you the target of an investigation.
Arbitron's press release said: Mr. Skarzynski and the Company’s Board together determined that he had violated a Company policy in a matter entirely unrelated to the financial performance of the Company. Accordingly, Mr. Skarzynski has submitted his resignation to the Company.
According to Tom Taylor, Skarzynski had no special background in radio or research, but he’d been a CEO at four companies. Now this 53-year-old is succeeded by 68-year-old Arbitron Director Bill Kerr.
So why is Skarzynski gone?
One reason is probaby the massive and sweeping change he instituted in experienced personnel. Fact is that you can only go so deep in eliminating long-term employees at any level in any company before you risk completely losing the corporate memory. Ask any of the radio groups accused of being among The Consolidators if this is true.
Another is likely that fact that minority and ethnic stations have been highly vocal in their distrust of the new system and the results they've seen for their stations. Whether the results are a matter of a new ratings system reflecting actual listening levels, the fault of uncooperative respondents or the result of a badly flawed system that just does not work is still unknown.
Third reason might be that Arbitron has been achingly slow in getting Media Rating Council accredidation for ratings in markets it surveys. The most recent round of market submissions to MRC resulted in a slapdown of all but one of the markets. STL, for example, is still not accredited and the results published here each month are considered only guesstimates.
Reason #4: Arbitron is a business that could generate hundreds of million of dollars a year in profits and charges radio stations accordingly. Over the past year, it looks like many radio stations are looking for alternative sources of radio audience estimates and dropping their subscriptions to their Arbitron service. CEO's get fired when the profits go down. Rating report subscriptions are Arbitron's bread and butter.
But wait, there's one more! PPM may have actually placed the company at serious legal peril (and this is not Skarzynski's fault, but he was at the helm when the ship hit the shoals). A boat-load of very smart and very highly-paid air talents have been dismissed from their employment because their ratings in the new PPM system were less than they were under the old diary way.
This has cost a lot of stations and a lot of companies a lot of money in contract settlements, not to mention a lot of discomfort and embarassment to the displaced AT's.
If PPM is found to be significantly flawed, those AT's are going to be in court and then the stations they're going after for satisfaction are going to go after Arbitron for recompense.
S**t may roll downhill but lawsuits defy gravity. It's gonna be a very interesting Spring!
(Info gathered from various trades, emails, social media and press releases.)
UPDATE from the New York Times...
A single imprecise sentence uttered during hours of Congressional testimony prompted the resignation of the chief executive of Arbitron, Michael Skarzynski, on Monday.
The misleading statement came during testimony that Mr. Skarzynski gave on Dec. 2. He was defending the company’s Portable People Meter radio-ratings system, which uses electronic meters that measure radio-listening habits. It had come under fire — and received Congressional attention — because several minority broadcasters contended that the system undercounted minority listeners and hurt Hispanic and urban broadcasters.
The faulty piece of the testimony came during an extended question-and-answer period.
“As a matter of fact, two Saturdays ago, I spent the afternoon with one of our local market coaches in Prince Georges County here in Maryland and worked with the panelists, this particular household, to help them through the process,” Mr. Skarzynski told officials, in response to a question about how he was making changes. But, in fact, he had not been present, Arbitron executives said on a conference call and in a securities filing on Tuesday.
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