After a decade of legal challenges and delays, the Atlanta City Council on Monday rubberstamped approval of a lucrative airport advertising contract for one of Atlanta Mayor Kasim Reed’s favorite vendors: Clear Channel Outdoor Advertising. As Common Cause Georgia, the Fulton County Taxpayers Foundation and other critics have pointed out, the mayor usually gets what he wants when it comes to the vendor money pot at the airport.
Four companies originally threw their hats into the ring to be pre-qualified as bidders at the world’s busiest airport: Clear Channel, Corey Airport Services, JCDecaux and Titan. But then— presto!— the process was tailored so only one bid would come in: Clear Channel , which bid $12.6 million as the first-year minimum annual guarantee to the airport.
The other three firms threw in the towel.
Corey president Diane McIver wrote in a letter to the city’s procurement department that her firm would not submit a bid because it felt the required minimum bid of $10 million was unrealistic, and request for changes to other issues were also denied. The two other pre-qualified bidders also wrote saying the bid was unrealistic. JC Decaux declared that the terms “were such that it would not be possible for us to create an advertising program in line with international standards.”
It was over four years ago when the city agreed to a $3.9 million settlement with 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.
After the Corey settlement, Clear Channel continued to operate the advertising contract on a month-to-month basis to this week— and it now will continue to do so.
The fact is that Clear Channel and its minority partner Fouch (now deceased) enjoyed a sweetheart deal at the airport for nearly 30 years – a deal that, according to Fouch at the time, 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 Clear Channel Vice President Tony Alwin claimed in a 2010 Atlanta Constitution letter 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.
Other vendors who can’t be identified say that Atlanta’s mayor, City Council and Department of Aviation have chosen to simply look the other way from this mess. No wonder Common Cause Georgia, the Fulton County Taxpayers Foundation and others continue to allege that such contracting deals continue because of “pay to play” political donations by airport vendors to city politicians.
