In May of 2009, I wrote an entry about an advertising company owing the MTA $7.5M. Flash forward to 2010 where a report in the New York Daily News exposes how the same company, Titan Outdoor Holdings (albeit under the name Titan Worldwide in 2009) now owes the cash strapped transit agency $18M. Pete Donohue of the New York Daily News has more in this report:
The MTA says it would need to find $18 million to avoid subway service cuts. Maybe it should look at its own ad company.
Titan Outdoor Holdings has stiffed the MTA out of about $18 million, coming in short with its monthly payments for nearly a year and engaging in some questionable accounting, an internal Metropolitan Transportation Authority audit revealed.
The MTA could recoup the money by cashing a multimillion-dollar letter of credit Titan posted. But officials fear the move would bankrupt the company – meaning even less ad revenue for the authority, according to the audit.
“We’re exploring all of our options,” MTA spokesman Jeremy Soffin said.
Titan sells and manages ad space in buses and commuter trains. To win the decade-long contract, Titan promised the MTA 72% of gross revenues – the highest in the industry – or $5.4million a month, whichever is greater.
Click here for the complete report.
As you can read in the report, the New York Daily News is quick to harp on how the amount owed would cover the projected subway service cuts that are planned for later this year. While on paper, it seems the easy solution would be to collect on the money & erase the planned cuts, they should be fair & explain that the situation is not that cut & dry.
While I feel this company should be punished for its failure to pay, the MTA has to balance the costs of potentially bankrupting this company along with its potential to score a more friendlier advertising deal. As far as cuts go, even if they received the $18M tomorrow, eliminating the service cuts due to this happening would be a band-aid solution. These are not the kind of solutions they need now & the New York Daily News & its readers need to understand that.
xoxo Transit Blogger