The contract is for 10 years with an expansion option and covers advertising, sponsorships, marketing and naming rights for the world's fourth-largest airport. JC Decaux was competing against Clear Channel Outdoor in the bid. The road to this win was lengthy. Last September, participants believed the awarding of the contract was a "few weeks away," as Advertising Age reported in its AirWorld series.
Los Angeles International, or LAX, was the last of the world's largest airports without an advertising program. Airports are considered a key venue for reaching affluent demographics and business travelers. JC Decaux has a deal with the Port Authority of New York and New Jersey, which allows it to sell advertising in LaGuardia International Airport, John F. Kennedy International Airport and Newark Liberty International Airport.
JC Decaux is also heavy in international airports and what it calls U.S. "gateway airports" that service international travelers, such as Miami, Houston and now Los Angeles.
Earnings report due
The win comes a day before JC Decaux is set to report second-quarter earnings. Analysts who cover JC Decaux, a publicly traded French company, told Reuters they estimated the deal to be worth 23 to 30 million euros ($25.45 million to $30.06 million) a year -- or 1% to 1.5% of the company's current annual revenue.
A remaining technicality: The Los Angeles City Council will need to approve the deal, something that's expected to happen in October.