Arbitron's New Chief Not Bullish On Acquisitions
"I'm not a big believer in transformative mergers," he said. "I think a lot of them destroy value rather than create value." Speaking at an investor event last week, Kerr said he has "never been shy" about share repurchases, if there is no better way to deploy resources. But he is not making any predictions as he settles into his new post. Arbitron does have significant free cash flow to use.
In 2005, under Kerr, Meredith reached an agreement to acquire several magazines, including Family Circle, from Gruner + Jahr for $350 million. Kerr also oversaw the 2002 purchase of the American Baby group of magazines for $115 million. And the 1999 acquisition of the Atlanta CBS station, which he had already expanded.
Kerr was Meredith CEO from 1998 to 2006; he joined Arbitron last week when CEO Michael Skarzynski resigned after making a false statement to Congress. Kerr was a board member of the radio ratings company.
Also at the investor gathering, Arbitron CFO Sean Creamer said the company is evolving "from a pure research company to a more technology-focused business services company. By definition, that moves us into an area where acquisition opportunities are probably more significant than they have been in the past."
"It is our job to at least evaluate what's out there," he said, although "we don't believe we need to do acquisitions."
Separately, Creamer said the overwhelming amount of Arbitron's revenue from radio measurement comes from the broadcasters. About 85% is from the programmers, with advertisers providing 15%. Total company revenues last year were $369 million.
"Now ultimately, the advertisers would say they pay for it all at the end of the day," Creamer said. "But in terms of how that revenue works for us, that's the split."
Creamer noted that the 85/15 split is largely the same for Nielsen and other measurement services.