Bus ads fail to boost Muni budget
By: Mike Aldax
April 28, 2009
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| A sign of the times: The Municipal Transportation Agency’s proposed advertising contract with Titan Outdoor LLC has been greatly reduced due to the recession. (Cindy Chew/The Examiner) |
SAN FRANCISCO — What looked like a bright spot in Muni’s budget woes has turned dim.
The cash-strapped transit agency expected to double the amount it currently receives for advertising on buses and city-owned parking garages, but that plan failed due to the recession, spokesman Judson True said.
The contract for the advertising space with CBS Outdoor expires June 30.
Earlier this year, the San Francisco Municipal Transportation Agency came close to reaching a new contract with Titan Outdoor LLC that could have provided $290 million in revenue over 20 years, with the first five years of the deal bringing in between $7.1 million and $8.75 million annually.
The deal would have been a shot in the arm to the MTA’s ailing operating budget, which is expected to be $129 million in the red next fiscal year, which begins July 1.
Then, Titan Outdoor withdrew its offer, True said. Now, the MTA is proposing to revise its deal with the company for just $22.1 million over five years, with annual revenues ranging from $4 million to $4.8 million.
“The advertising market is all but collapsed,” True said. “The five-year term represents our hope that the advertising market will improve, and that we can increase this revenue stream when it does.”
The revised Titan Outdoors contract is still more lucrative than the agency’s current contract with CBS Outdoors, which provides the MTA with around $3.3 million annually, True said. The agency is expecting $13.8 million total in advertising revenues next fiscal year, which includes another contract for the ads appearing on transit shelters, he said.
To offset its deficit, the MTA is considering significant fare hikes and a long list of service cuts. The proposed budget for next year includes a 50-cent increase in base adult fares, a hike in the monthly Fast Pass cost, an increase to parking meter rates and other new charges.
On Thursday, the MTA’s board of directors will vote to approve the new advertising contract with Titan Outdoor. The contract — which will allow Titan to wrap up to 20 vehicles at any one time, excluding the cable cars and historic street cars — also requires approval by the Board of Supervisors.
