TTC inks an advertising deal—cue station naming rights bonanza (or not)
The TTC got its advertising deal. On Wednesday, the cash-strapped transit agency approved a 12-year, $342-million contract with Pattison Outdoor Advertising that could see your local subway stop renamed Pizza Pizza station, or something to the effect. The deal is supposedly part of the TTC’s plan to work its way out of the budgetary hole it’s found itself in—but given that the added revenue will work out to roughly one per cent of the agency’s $1.5-billion operating budget, it seems the transit commission may have sold its soul for a ham sandwich (or perhaps a slice of Pizza Pizza?).
The National Post has the details:
The 12-year, $324-million contract with Pattison Outdoor Advertising guarantees about $11-million more revenue for the Toronto Transit Commission in its first year than the current contract.
It also puts Pattison in charge of brokering any “new initiatives,” such as 3D LCD screens, digital screens on the sides of buses and subway station or line naming rights.
Regarding naming rights, Vince Rodo, general secretary of the TTC, used the example of a transit station in Philadelphia that was “brought to you by Verizon” as a possible model. He estimated sponsoring a station could net the TTC single-digit millions, plus station improvements.
Attempts to sell naming rights for subway stations have also been floated in major cities across the world. But New York transit blogger Benjamin Kabak notes that most American cities have found the practice relatively ineffective at bringing in significant revenues (although a successful experiment in pre-recession Dubai apparently had some success). Philadelphia managed to sell naming rights to AT&T for $600,000 per year at one station, while New York City inked a deal with Barclays for $200,000. Boston’s transit department put a slew of stations on the block for sponsorship in an attempt to fill a budget hole of its own, but received no offers.
One obvious problem is that corporate sponsors don’t necessarily want to be associated with beleaguered transit agencies that many view as dirty and only marginally safe. Marketing executives tend to want to associate their brands with positive experiences, and TTC travel—especially these days—tends not to fit that bill.
TTC Chair Karen Stintz suggested that the TTC might look at Dundas Station as a potential prototype for corporate sponsorship, in a deal that would include naming rights for (likely) Ryerson University. But that’s really more of a public-public relationship than a public-private one.