MBTA signs lucrative ad contract

Could collect $136m with no out-of-pocket cost

THE MBTA’S OVERSIGHT BOARD approved a new advertising contract on Monday that is expected to generate at least $136 million over the next five years with no cash outlay required by the transit authority.

The contract with Outfront Media calls for the New York City company to install about 640 video screens throughout the transit system over the next two years, bringing the total number of screens to about 700. Outfront is also required to pay for two T employees to help speed up the installation process.

Under terms of the contract, Outfront will solicit ads for the video screens and split the revenue with the MBTA, giving the transit agency 70 percent of the ad dollars and keeping 30 percent. Under the T’s previous advertising contract, the T received 63 percent of the ad revenue and had to pay the cost of the video screens and their installation out of its proceeds.

“This is a transformational contract,” said Gerard Polcari, the T’s director of procurement. “The T is putting up no capital here.”

Three companies bid on the advertising contract, which lasts five years with options for two, five-year extensions. The T’s Fiscal Management and Control Board approved the contract with Outfront by a 4-0 vote.

T officials said they also began the bidding process for a company to manage the MBTA’s parking lots, which include 40,000 spaces at 108 facilities. The existing contract with LAZ Parking Ltd. is a fee-for-service contract that pays LAZ just over $9 million a year to operate the facilities.

Brian Shortsleeve, the T’s chief administrator, said the new contract will more closely align the contractor’s incentives with the MBTA goals of increasing revenues, cutting costs, and improving customer service.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The decision to put the parking contract out to bid came after the discovery that a large sum of parking revenue apparently disappeared on LAZ’s watch. The parking losses are currently being investigated by Attorney General Maura Healey’s office.