Subcommittee forwards SFMTA’s Titan Outdoor advertising contract to full Board after scrutiny over letters of credit and naming rights

The Budget & Finance Subcommittee on June 10 advanced a resolution that would authorize the San Francisco Municipal Transportation Agency to enter a five‑year transit‑advertising contract with Titan Outdoor that carries a $22,102,525 minimum guarantee over the contract term. Chair John Avalos opened the discussion after Clerk read the item and MTA representatives described the negotiated deal.

MTA staff said the contract was negotiated in a difficult advertising market and now includes a $4,000,000 prepayment for the first year and language requiring Titan to provide a letter of credit (LC) by October 1 to cover the first‑year minimum guarantee. “We feel comfortable that we’ve negotiated the best contract we can, given the current environment,” MTA representative Judson True said during his presentation.

Budget analyst Mark Rose told supervisors that only two proposers ultimately were responsive (Titan and CBS Outdoor) and recommended strengthened financial protections. Rose noted Titan’s prior RFP bid levels were higher and cited press reports of missed payments and renegotiation efforts elsewhere, concluding the Board should treat approval as a policy decision and consider requiring letters of credit for the final four years of the agreement to better secure the full $22.1 million guarantee.

Titan’s executive vice president and general counsel, Scott Goldsmith, addressed those concerns directly. He said industry advertising revenues had declined sharply and that Titan had negotiated revenue‑share adjustments with multiple transit authorities rather than trigger letters of credit, but that Titan prepaid the first year’s MAG and agreed to provide an annual LC by October. “We prepaid the minimum for the first year. That’s $4,000,000 and that money came across and it’s in the SFMTA account right now,” Goldsmith said.

CBS Outdoor representatives in public comment pressed the subcommittee to treat prepayment and an LC as different protections, arguing a prepaid sum could be vulnerable in a contractor bankruptcy and urging the city attorney to evaluate the legal equivalence. Anthony Leonis of CBS told the committee that “a prepayment of the minimum annual guarantee is simply the prepayment of a future obligation that is being held by the city” and warned that in insolvency the money could be subject to recapture.

Supervisors focused also on a permissive contract clause that would allow Titan to propose corporate naming‑rights programs for stations and other assets. MTA staff acknowledged the clause is in the contract as a potential future revenue source but said any concrete naming‑rights plan would be subject to public review; staff offered to change contract language so that any naming‑rights amendment would return to the Board for approval.

After questions and public comment, Supervisor Dufty moved to forward the item to the full Board without recommendation; the committee agreed to forward the resolution and requested the MTA return with revised language addressing naming rights prior to the full Board hearing.

The committee did not adopt a substitute motion to withhold the item; no formal roll‑call vote was recorded in the transcript notes provided. The full Board will consider the contract and any amended language on naming rights at its next hearing.