The Chicago Transit Board at its monthly meeting today approved a contract authorizing Obie Media Corporation to sell advertising space on CTA property. The contract will provide the CTA a minimum revenue guarantee of $79.7 million over three years.
The full-service out-of-home advertising company based in Eugene, Oregon will sell, install, display and maintain advertising space in and upon CTA vehicles such as railcars and buses, at rail stations and on Transit Cards.
Chicago Transit Board Chairman Valerie B. Jarrett said, "After fare revenue, advertising generates one of the most significant sources of revenue that fund the operating expenses of the CTA. CTA's advertising revenue has been increasing yearly and we expect to continue to increase the revenue under this contract with Obie Media Corporation."
In addition to providing advertising services on CTA vehicles and property to national and international clients, Obie Media Corporation sales teams will target a variety of local businesses in the Chicagoland area. Obie's in-house support services such as a Graphic Arts Center and a Transit Production Center allows them to make transit advertising a reality for smaller businesses which might otherwise find advertising too costly.
The yearly guaranteed revenue to the CTA for 2001 is $21.9 million. Any revenue, over and above the minimum guarantee, the CTA will split with Obie with the CTA receiving 65% of those revenues. The minimum revenue guarantee for the base contract of three years with Obie Media Corporation will total $79.7 million. The Chicago Transit Authority may exercise the remaining two one-year options with a minimum guaranteed revenue to the CTA of $152.5 for five years.
"Advertising on public transportation is a unique way to reach hundreds of thousands of people every day. The CTA not only provides more than 1.5 million rides each day on our trains and buses, but millions of passers-by can view the ads as our trains and buses travel throughout the City of Chicago and the 38 suburbs served by the CTA. With the continuing increases in CTA ridership, transit advertising is one of the best advertising options for businesses to quickly reach a large and diverse audience," said CTA President Frank Kruesi.# # #