Regional Rail Cars Defect Could Cost SEPTA More Than $500,000 in Ad Revenue

Board to vote on measure that could be up to $575,000 to ad agency

SEPTA's governing body is looking to pay back $250,000 and possibly more to an advertising agency since ads haven’t been rolling on Regional Rail trains thanks to the Silverliner V rail car problems.

The SEPTA Board, which will vote next week on the giveback, could wind up paying back another $375,000 before all the train cars are back on track. SEPTA officials have said all the cars will be back in service by November.

SEPTA pulled the rail cars due to cracks in beams that found over the July 4 weekend. The car shortage immediately caused changed Regional Rail schedules and commuter scrambles.

In the process, the rail car debacle also caused problems for one of the transit agency's biggest contractors as the Silverliner V’s being sidelined made it impossible for SEPTA to fulfill its monthly arrangement with ad agency Intersection (formerly Titan). The deal allows Intersection to sell advertisements at SEPTA stations and on SEPTA vehicles, said SEPTA spokesman Andrew Busch.

SEPTA and Intersection agreed to a nine-year advertising contract in April 2014 that guaranteed SEPTA a minimum of $150 million over that time, said Busch.

Without the fleet of 120 rail cars, SEPTA can’t deliver as many places to advertise.

SEPTA’s board is set to vote on a measure at their Thursday, Sept. 22, meeting that would pay Intersection $125,000 per month for July and August for the lost ad space. If approved, the agency would also lose $125,000 for each additional month the train cars remain sidelined.

"With the contract's full minimum annual guarantee reinstated at such time that 100-percent of the fleet is fully restored to revenue service," says the board measure.

The train cars aren’t expected to all be repaired and back on the tracks before mid-November.

The nine-year ad deal delivers around $1.34 million a month to SEPTA. With the agency set to give up $125,000 over five months, the agency now must find a way to get around losing around 9 percent of its monthly ad revenue.

The agency was still trying to figure out the total costs of the Silverliner V defects, said Busch.

Intersection’s Philadelphia office didn’t immediately return’s call and email for comment.

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