Hartsfield-Jackson International Airport– after years of legal challenges and inexplicable delays– is finally rebidding its controversial and money-losing advertising contract. The spotlight is now on Atlanta Mayor Kasim Reed, who controls the vendor money pot at the airport, and how ethical the city’s bidding process will be.

 

Four companies have thrown their hats into the ring to be pre-qualified as bidders at the world’s busiest airport: Clear Channel Outdoor Advertising, Corey Airport Services, JCDecaux and Titan.

 

It was over three years ago when the city agreed to a $3.9 million settlement with Atlanta businessman Billy Corey and his company Corey Airport Services over a long running lawsuit alleging bid-rigging. Reed, who earlier vowed to appeal a federal jury’s award of a whopping $17.5 million in damages to Corey, said in the April 29, 2011 Atlanta Journal-Constitution that the settlement “was the right thing to do.” The city admitted no liability or wrongdoing in denying an airport advertising contract bid to Corey. However, journalists and watchdog groups well remember the 2010 federal court ruling which declared that the city had participated in “an evil” conspiracy against Corey with the winning bidder Clear Channel and its minority partner, businesswoman Barbara Fouch.

 

It was in 2002 when Corey lost out during airport contract bidding. Two years later, Corey filed his federal lawsuit against the airport and originally named then-Mayor Shirley Franklin and more than a dozen other city officials as defendants.

 

After the Corey settlement, Clear Channel has continued to operate the advertising contract on a month-to-month basis to this day— and this is as interesting as it is unfair.

 

In an Oct. 23, 2010 letter to the editor, Clear Channel Vice President Tony Alwin Sr. wrote that an Atlanta Journal Constitution article published a few days earlier titled “Airport Out Millions in Unpaid Ad Space” was misleading.  Yet nothing could be further from the truth.

 

The fact is that Clear Channel and its minority partner Fouch enjoyed a sweetheart deal at the airport for nearly 30 years – a deal that, according to Fouch, was rooted in her good friendship with the late Mayor Maynard Jackson who brought her “outside” partner Clear Channel to Atlanta.

 

Court documents reveal that Clear Channel has never had to make a minimum annual guarantee (MAG) payment to the city, which is a standard requirement in almost all other airport advertising concession contracts, and has paid a below market percentage of the advertising revenue to the city for 30-plus years.  No one will ever know the exact amount of money the city has lost over this period, but it could well be in the tens of millions of dollars.

 

Leading companies throughout the world covet the opportunity to advertise to high income business travelers, and the fact that the world’s busiest airport has such low advertising occupancy rates and revenues is telling.

 

Also telling is that Alwin claimed in his letter to the editor that Clear Channel doesn’t run airport ads that it doesn’t pay for. That’s not the case, as the Atlanta newspaper discovered.

 

Advertising space at the airport has one sole purpose for the city and the concessionaire, and that is to generate revenue.  When an advertising contract expires, the standard industry practice is to remove the ad and replace it with “filler copy” which promotes non-profit charitable and/or educational organizations. This writer has discovered that Clear Channel has instead chosen to keep select ads up for years after the contracts expired– with no revenue ever being paid to the city for those ads. This is not “common industry practice.”

 

Clear Channel’s sorry performance at Hartsfield-Jackson Atlanta International Airport, when compared with advertising revenues at other major airports around the country, is the result of deliberate decisions by Clear Channel management.  As a comparison, Chicago’s O’Hare airport has served 507,666,000 passengers over a recent seven-year period and received $67,108,000 in advertising revenue from Clear Channel, while during this same period Atlanta’s airport served 600,866,000 passengers and only received $39,244,000 in advertising revenue from Clear Channel.

 

Why Atlanta’s mayor, City Council and Department of Aviation have chosen to ignore this fact and look the other way for 30-plus years is shameful. Common Cause Georgia, the Fulton County Taxpayers Foundation and others have alleged that contracting problems continue because of  “pay to play” political donations by airport vendors to city politicians.

 

What lies ahead for Atlanta? The media, watchdog groups, taxpayers and even the attorney general will be watching to see if the mayor continues with the Clear Channel sweetheart advertising deal or opt for contracting fairness and reform.

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