CBS Outdoor to take TfL to court over London Underground losses

The court action is scheduled for March next year.

CBS Outdoor won the tender to sell advertising on poster and panel sites across the London Underground estate in 2006 and the deal is expected to continue until 2015.

Terms of the deal dictate a rising fee to be paid annually, but CBS Outdoor is expected to argue that due to the advertising slowdown, it has found it increasingly difficult to profit from the contract.

The London Underground estate covers an estimated 33,000 poster sites across 275 stations, with the addition of an estimated 88,000 panels in Underground train carriages.

Publicly available figures indicate that in the year to April 2010, net advertising revenue from the London Underground contract were £71m, while CBS Outdoor paid £71.5m to TfL.

CBS Outdoor has also had to bear the burden of a multimillion-pound launch of digital panels on the London Underground network and the introduction of projected advertising images through its Alive technology on London Underground platforms.

A TfL spokesperson said: "There is a dispute between London Underground and CBS Outdoor about the calculation of the revenues due to be paid by CBS Outdoor under its contract for advertising on the Tube network.

"London Underground is defending the claim brought by CBS Outdoor and is pursuing a counter claim. Both are scheduled to be heard in the High Court in March 2012."

CBS Outdoor declined to comment on the scheduled court action.

This article was first published on mediaweek.co.uk