Op-ed: Is Metro's digital sign scheme worth it? We have the numbers!
November 7, 2023

Metro’s Transportation Communication Network (TCN) Project is the definition of Fool’s Gold. Purported to generate anywhere from $300M-$500M over a 15-20-year time span, this ploy by the outdoor advertising industry to litter our streets with more blight will have a minimal impact in generating meaningful revenue for Los Angeles’ complicated public transportation needs. Let’s dig into the figures:

  • While the city has projected substantial revenue, ranging from $15 – $25 million annually over a twenty-year period, our analysis reveals that this outcome is unlikely.
  • For the fiscal year 2023-24, the city’s budget stands at $13.5 billion.
  • LACMTA also operates with a substantial annual budget, which for the fiscal year 2023-24 stands at $9 billion.
  • Each year, the City & Metro are expected to receive approximately 0.0559% and 0.0839% of their respective budgets, which for the City equates to approximately $7,550,000 and for LACMTA approximately $7,550,000 annually, based off the of stated 50/50 split.
  • The impact of dividing $151 million equally over 15 districts in Los Angeles over a 20-year period is quite minimal, amounting to approximately $503,333 annually per district.
  • We scrutinized the program’s revenue potential, considering factors such as the number of billboards, actual advertising rates from industry leaders, occupancy rates, operating costs, and the loss in revenue due to the removal of 125 static billboards on LACMTA properties. Our best estimate suggests that the expected revenue is unlikely to align with the city’s optimistic projections
  • We also drew insights from previous cases in Chicago and Denver. These cities experienced market disruption due to an influx of digital billboards, resulting in decreased rates, lower occupancy, and reduced revenue for both operators and the cities.
  • Who bears the brunt of the revenue lost from the removal of 125 static signs on LACTMA property That is not clear, and would also skew these financial projections considerably
  • Finally, this is being positioned so only one vendor (AllVision) has an opportunity to bid on this impactful project. Shouldn’t the City demand a competitive and transparent bid process for this significant undertaking?

We encourage you to review this independent financial analysis carefully for yourself and see that it is not adding up. We look forward to the opportunity to provide further insights into this effort to spread blight though our city under the guise of public transportation expansion.