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Committee advances SFMTA advertising contract extension after revenue briefing
Summary
The Budget and Finance Committee moved a five-year extension of the SFMTA's transit advertising contract with Intersection Media to the full Board after staff and the Budget Analyst described revenue-sharing and past performance; questions focused on how much the contractor exceeded the minimum guarantee.
The Budget and Finance Committee forwarded to the full Board a resolution from the San Francisco Municipal Transportation Agency to extend its transit-advertising contract with Intersection Media for a five-year term beginning July 2019 on substantially the same terms.
Gail Stein of SFMTA told supervisors the proposed extension would keep the contract's existing structure, including a minimum annual guarantee and a 65% revenue share to the city. She said the contractor has exceeded the minimum guarantee in each of the first four years and that revenue spikes occurred in years with major events. Budget Analyst Sevin Campbell confirmed the contractor paid approximately $1.5 million above minimum guaranteed revenues over the first five years and presented the BLA's recommendation to approve the extension and associated administrative and marketing fees.
Supervisors asked whether eliminating vehicle "wraps" would be permitted under the contract; SFMTA staff said removing wraps would require renegotiating the minimum guarantee and likely would reduce guaranteed revenues. Supervisor Katie Tang asked for the record a specific quantification of how much the guarantee had been exceeded; staff and the BLA provided the above figures from contract records and the BLA report.
The committee moved the item to the full Board with a positive recommendation and no recorded objection in committee. The full Board will review the item on the Board agenda per the clerk's schedule.
