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MTA staff reiterates its backing of CBS for advertising contract

September 18, 2012|By Joe Flint
  • CBS has placed ads on billboards around Los Angeles noting how much the company contributes to the local economy.
CBS has placed ads on billboards around Los Angeles noting how much the company… (CBS )

The Los Angeles Metropolitan Transportation Agency has reiterated its support for CBS' bid to renew its contract to sell advertising on county buses and trains.

In a report to the MTA board of directors released Monday that will be officially presented Thursday, the staff favored CBS Outdoor over Titan, a rival outdoor advertising company that also sought the rights.

This is the second time the MTA staff has backed CBS. In July, it approved CBS' bid of $110 million for a five-year contract. However, Titan, which bid $117 million, has appealed that ruling to the MTA board.

One strike against Titan was its recent history of landing contracts with local transit authorities and then renegotiating for a lower fee. Titan restructured its deals with the cities of San Francisco, Boston and Minneapolis. It also defaulted on its New York City contract, which is now held by CBS.

"CBS has not renegotiated any contracts, and has honored the original terms of all of its agreements and made all payments on time to every transit agency with which it had a contract," the MTA staff report said.

The report noted that in 2009 CBS asked to reduce what it is currently paying the MTA but that request was declined and CBS continued to meet the agreed upon terms.

Titan, however, told transit agencies with which it had deals that it would not be able to honor the minimum annual guarantee.

CBS has been very concerned about losing its contract to Titan. The company has placed ads on billboards all around town noting how much it contributes to the local economy. In an interview last week, CBS CEO Leslie Moonves noted that "we keep a lot of production in Los Angeles," and added that it would be "wrong" to award the deal to Titan unless the city wants to "urge a company like us to leave and to do production out of state."

A final decision from the MTA board on the contract is expected next week.

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CBS in nasty fight for MTA contract

Follow Joe Flint on Twitter @JBFlint

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