TfL denies CBS can end £1bn Underground contract before Olympics

In a statement to Media Week, Richard Parry, TfL's London Underground director of strategy, refused to accept that CBS had any grounds to terminate the tube contract, believed to be the biggest outdoor advertising contract in the world, which was due to run until the end of 2015.

He said: "CBSO's claims that they want to terminate their contract due to delays to the LU upgrade programme are entirely spurious. TfL is engaged in discussions with CBSO regarding the terms of the LU advertising concession.  

"We do not accept that CBSO is entitled to issue a Termination notice and will be making it clear to CBSO that it must honour its obligations under the contract. LU will vigorously defend CBSO’s claims and will seek to recover any losses as a result of CBSO’s action."

Earlier this year, CBS Outdoor announced it was preparing to take TfL to court, in a bid to claw back millions of pounds of advertising revenue the media owner believes it has lost due to delays in construction, among other things.

Tensions have been mounting between CBS Outdoor and TfL following the partnership forged after a competitive pitch process in 2006.

Richard Sauer, executive vice president, general counsel of CBS Outdoor, told Media Week that changes in the operation of the London Underground since the contract was agreed constitute an "adverse event".

"They have made it more costly for us to implement the conversion of our digital advertising network across the estate," he said. "Our expectation was that we would be allowed to complete the implementation of the network within an approximate two year period... this has not been the case and there is a clause in the contract designed to cover such an event."

The London Underground train network will play an essential role in ferrying more than five million visitors and Olympic ticket holders to the Games next summer. It will be vital for TfL, London Mayor Boris Johnson and Prime Minister David Cameron’s coalition government, that this dispute is settled satisfactory, avoiding the prospect of no posters or digital display ads across the network.

This article was first published on mediaweek.co.uk