Group pays $40m to advertise on Sydney's streets

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SYDNEY -- Media mogul Kerry Packer and advertising man John Singleton, in a consortium with French company JC Decaux, are the winners of a pitched battle for Sydney's streets. They won a 20-year street furniture contract by paying about $40 million to the city's 10 councils for the privilege of supply- ing public toilets, bus shelters, street kiosks, bins and bike racks at no cost.

Paying $40 million to be winners? The consortium is relying on advertising revenue estimated at about $200 million over the life of the contract to repay it for the outlay. The innovative deal was formulated by Sydney's lord mayor, Frank Sator, and general manager, Greg Maddock.

"Just think about it, $40 million worth of infrastructure paid for by a stream of advertising revenue plus any- thing else they can offer us upfront," said Mr. Maddock. One reported sweetener to the councils was the offer by Decaux to give $1 million worth of free global advertising publicizing the Sydney 2000 Olympic Games.

Close runner-up for the street furniture contract was a partnership between Tony O'Reilly's Australian Provincial Newspapers Ltd and the British More Group. The third short-listed bidder was Rupert Murdoch's News Ltd and the Wall Group from Germany.

Copyright December 1997, Crain Communications Inc.

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