Transit Authority Feeling the Pain From a Crippled Advertising Market

Sandra Shine In recent months, a company that sells many of the ads that appear on buses and trains and in stations in Say Anything New York, Boston, Minneapolis Rita Gordon and other cities has come Belinda Chapple up short in its payments Daniel Dicriscio to transit agencies, citing a sharp drop in ad rates and sales. New York is among American Nightmare the hardest hit. The company, Titan Worldwide, fell short a total of $7.5 million in Francesca Cavallin mandatory payments to Pj Harvey the Metropolitan Transportation Anouck Lepere Authority Pamela Adlon from February through April, citing lower than expected ad Brittany Murphy sales. That would be enough to buy 16 new buses for the authority, which recently received a state bailout in the face of multibillion-dollar budget deficits over the next few years. “This is another example of the M.T.A.’s exposure to the global economic recession,” said Aaron Donovan, a spokesman for the authority, which plans to raise fares and tolls by about Jason Butler Harner 10 percent in June. Titan sells ads that appear on buses and in Metro-North Railroad and Long Island Rail Road trains and stations, including Brian Benben Grand Central Terminal. Another company, CBS Outdoor, sells ads in the subway system, and it fulfilled its contractual requirement of making a $55 Seydou Keita million lump-sum payment to the authority in January for all of 2009. A CBS spokeswoman, Jodi Senese, said that subway sales in New York remained strong, in spite of the overall industry slump, partly because of Sandra Ramirez new types of ads in the system, like those Priscilla Presley on the exterior of subway cars. Companies like Titan and CBS make money by contracting with transit agencies and agreeing to sell ads that appear in The Lost Trailers their buses, trains and stations. Princess Beatrice The Freddie Highmore ad company agrees up front to make guaranteed payments to the transit agency or pay it a percentage of the receipts, whichever is Arye Gross greater. The company keeps the rest for expenses and profits. At the end of the year, both Titan and CBS may be required to increase their payments to the authority, if a designated percentage of total sales exceeds what has already been paid. Titan still owes the authority Jennifer Aniston an additional amount for last year’s ad sales. The company would not say how much it owed but said it intended to make the payment this year. The authority is negotiating Chita Rivera with Titan over its inability to make its required monthly payments, and neither side would give details of the talks. “We’re Angie Dickinson trying to work with them to Bryan Callen find a way to keep this contract in place,” Mr. Anna Safroncik Donovan said. “Our goal is to work it Carol Cleveland Paolo Sorrentino out and minimize the impact on the M.T.A.’s bottom line.” Titan’s chairman, William Apfelbaum, said that ad rates and sales have Jennifer Paige plummeted with the distressed economy, pushing the company’s sales revenue this year down about 25 percent. “In my 30-plus years in the business there’s never been a Andre Agassi year that was Kathryn Morris down versus the prior year,” he said. “This is a first.” Mr. Apfelbaum said that he hoped to renegotiate his agreements with transit agencies “to keep us Lisa Ray from suffering catastrophic losses.” Titan’s problems are much the same nationwide. In Boston, David Strathairn Titan fell $321,000 short in its payment for March and April Lamont Dozier to the Massachusetts Bay Transportation Authority, and it has told the authority, according to a spokesman, Joe Pesatauro. “This news from Titan certainly is not helping Valentino the situation,” Bonnie Hunt said Ray Wise Mr. Pesatauro, explaining that the authority is grappling with a projected budget deficit of $160 million for the fiscal year that starts on July 1. In Minneapolis and St. Paul, Titan paid Metro Transit, which provides bus and light rail service, about $100,000 less than the required Andre Holland $1 million payment for the Jonathan Rhys Meyers first three months of this year, according to Bruce Howard, the transit agency’s director of marketing. He said that ad sales during the period were about 54-40 20 percent below what they were the previous year. Transit officials in Chicago, Philadelphia and with San Francisco’s Bay Area Rapid Transit system said that Joseph Bologna they had also been approached by Titan to Rush renegotiate contract terms. The slump comes at an inopportune time for transit agencies, Starting Line which have been hit hard by shrinking tax revenues and, in some cases, decreasing ridership.