D.C. Metro advertising agreement locks in 25% more revenue

Washington, D.C.'s Metro will dramatically expand its digital advertising network under a new contract that will provide an infusion of revenue to support rail and bus services for Metro riders. The ten-year contract for Metro’s advertising concession, awarded to OUTFRONT Media Inc., is valued at more than $336 million over the next decade.

In the deal, Metro locked in a 25-percent increase in guaranteed revenue that can be used to fund Metro service and keep fares affordable for customers over the next 10 years.

An additional 1,500 new digital screens will be installed within five years, expanding Metro’s digital network from 400 screens to 1,900 covering all Metrorail stations. Each digital screen generates up to four times the revenue of the static display it replaces.

The new agreement with OUTFRONT continues the firm’s relationship with Metro, and includes the ten-year base contract, plus two five-year options. With options included, the contract has an estimated value of $812 million over 20 years, including:

• $325 million guaranteed to Metro in the ten-year base contract, plus 70 percent of all revenue once each year’s guarantee is met
• $1.1 million investment in technology infrastructure to support a state-of-the-art digital screen network
• $10 million in capital funding for advertising assets, and 30 percent funding support for ongoing capital projects to provide:
• 1,500 new 65” LCD LiveBoards in the first five years of the contract
• 24 LCD ribbons at escalator banks
• Large-format LEDs in selected locations

Advertising is a significant and growing component of Metro’s (non-farebox) commercial revenues with revenue to Metro consistently exceeding the annual guarantee payments. These funds support operational expenses and help Metro stay within the legally mandated 3 percent annual subsidy growth rate.