The networks may be crying foul over ratings delays, and Nielsen’s business is under assault from all sides, but that’s not stopping CEO and former GE man David Calhoun from making some money for KKR, Blackstone and Carlyle Group. Nielsen’s financials have been a relative secret since it was taken private in an $12 billion deal in 2006, but Fortune squeezes out some data:
Nielsen looks to be on track to achieve ownership’s first-year goal of raising operating income by at least 20%. Calhoun has cut costs (by, for instance, outsourcing tech operations) and acquired new, higher-growth businesses. On a pro forma basis, revenues for the nine months ended Sept. 30 were $3.4 billion, up 11% from 2006, while operating income increased 19% to $196 million. If Calhoun can keep it up, he’ll double the profits of the company within five years of its changing hands. And thanks to the magic of leverage, the $4 billion in equity that the company’s owners invested could double or triple in value.
Bonus for Calhoun: A payout of up to $100 million if he can hit targets over the five years. One hitch: Nielsen and its partners are on the hook for a staggering $700 million in annual interest payments, so Fortune speculates that Calhoun may want to parcel up the company to raise some cash. One option: Selling off its trade publication and conference business (Hollywood Reporter, Billboard, etc). But the company says that isnt’ happening.
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