EDITORIAL Clear Channel Communications, the notorious national media conglomerate that has been monopolizing (and dumbing down) radio for years, is poised to take over the contract to rebuild the city’s bus shelters. The deal gives the company, which also dominates the local billboard market, the right to sell ads on the shelters for 15 years. It’s worth a lot of money — and it’s not at all clear that the city is getting its fair share. That’s because Clear Channel refuses to open its books and allow the public to see what sort of profits it expects to rake in through the program.
Keeping that information secret is probably illegal under the city’s Sunshine Ordinance. It’s certainly bad public policy. The supervisors should block this deal until the financial figures come to light.
The bus shelter program is a classic example of the city using a private partnership to provide a service that ought to be paid for with tax money. The deal requires the vendor to build and maintain shelters at more than 1,000 bus stops, something the city, which hasn’t been aggressive about raising new revenue, can’t afford to do. In exchange, the vendor gets to sell ads all over the shelters, turning Muni stops across the city into commercial marketing devices.
It’s too late to stop that train altogether (although Proposition K would slow it down a bit). Clear Channel has won, in a competitive bidding process, the right to negotiate a final contract with Muni. But the deal will have to go before the supervisors eventually, and when it does they should demand that Clear Channel release its financial projections.
That’s already the intent of city law. The Sunshine Ordinance, passed by the voters in 1999 as Proposition G, includes language specifically tailored to this kind of circumstance. Section 67.32 states, in part, "The city shall give no subsidy in money, tax abatements, land, or services to any private entity unless that entity agrees in writing to provide the city with financial projections (including profit and loss figures), and annual audited financial statements for the project thereafter, for the project upon which the subsidy is based and all such projections and financial statements shall be public records that must be disclosed."
It’s pretty hard to argue that allowing Clear Channel to build advertising structures on city land, as a part of the city’s bus system, with millions of captive customers who are city transit users, is anything but a subsidy within the meaning of Prop. G. City Attorney Dennis Herrera should look into that, and if necessary the supervisors should ask for a specific opinion on whether the city can legally do any business with Clear Channel on this deal before the company releases its finances. The Sunshine Ordinance Task Force should hold a hearing on the deal and advise the mayor and supervisors on whether it complies with the Sunshine Ordinance.
But lawyers can wriggle around words like subsidy, and even if Herrera and the Clear Channel legal team come up with some strange argument allowing the contract to move forward, the supervisors should have none of it. If a giant media monolith wants an exclusive right to sell ads on city property, then the city ought to know how much money is involved so that city officials, in full view of the public, can determine if the contract is a good deal. Clear Channel argues that it’s a private company, and that’s true — but the contract is exclusive, so there are no competitive issues. And if Clear Channel doesn’t want to comply with the city’s sunshine requirements, Muni should put the contract back out to bid and find someone who does.