TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager/Chief Executive Officer
SUBJECT: Transit Shelter Advertising Contract
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider approving the award of a transit shelter advertising contract to Intersection Media, LLC for a base period of two (2) years with three (3) one-year options for a minimum annual guarantee of $4.3 million in total advertising revenue for the five year period.
Staff Contact:
Ramakrishna Pochiraju, Executive Director of Planning & Engineering
Body
STRATEGIC IMPORTANCE:
Goal - Convenient and Reliable Service
Initiative - Financial Efficiency and Revenue Maximization
This contract's advertising revenue would help offset the costs of owning and maintain bus shelters following the expiration of the Clear Channel Outdoor Advertising contract on March 31, 2023.
BUDGETARY/FISCAL IMPACT:
The proposed award to Intersection Media, LLC will be a revenue generating contract with a base period of two (2) years with three (3), one-year options to extend for a total of up to five (5) years. Revenue generated by awarding this contract can be used to offset transit shelter operating and maintenance costs:
* An estimated Minimum Annual Guarantee (MAG) of $700,000 in advertising revenue for year one (1); and $825,000 for year two (2) for the District.
* An estimated $4.3 million total for all five years of the contract for the District.
* A 65% monthly advertising revenue share for the District.
* Every year, the District will receive greater of the MAG or a Revenue Share.
These revenues are based on the 232 transit shelters that currently have static advertising in them. The MAG does not assume additional digital inventory, but there is an opportunity to add digital advertising through this contract.
The advertising revenues in this contract would cover a portion of the expenses in the District's transit shelter maintenance contract. For...
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