The out of home advertising industry is in an uproar this week with one of the major players resigning from industry body, Out of Home Media South Africa (OHMSA), the DA accusing the Johannesburg Property Company of entering into illegal lease agreements relating to banned billboard sites and an Eastern Cape out of home company calling foul over an irregular tender process.
Continental Outdoor Media, an Africa-wide operation, confirmed this week that it had resigned its membership Out of Home Media South Africa, of which it is a founder member. “We find our interests are not necessarily aligned to that of OHMSA,” Barry Sayer, CEO of Continental Outdoor Media, told TheMediaOnline.
Asked what kind of message Continental’s resignation sends to other out of home companies, with Continental being one of the biggest players in Africa, Sayer said his primary concern was to “shareholders, our staff, customers and landlords”.
“We find more and more that toeing the OHMSA very democratic majority line is sometimes in conflict with those primary stakeholder interests. Clearly we need to choose and have done that,” Sayer said.
He added that Continental Outdoor Media had always dealt with the legal issues the industry faces. “We always have and believe a lot of the legal issues swirling around the industry are unnecessary and often unwise, especially when in conflict with our largest landlords,” he said.
Continental Outdoor’s position comes in the wake of a statement by the Democratic Alliance, about Johannesburg Property Company (JPC) and the ANC-led City of Johannesburg, in which it claims that Council is flouting its own laws by extending lease agreements with “at least three companies that are worth R190-million”.
The media statement from DA councilor, Christo Botes, said the lease agreements had extended the life of “illegal and banned billboards”.
“This comes after the previous Member of the Mayoral Committee and now Executive Mayor of Johannesburg, Councillor Parks Tau, informed Council at a meeting earlier in the year that the council intends to fund the city’s liquidity crisis with the sale of council-owned properties and with rental income from outdoor advertising companies,” the statement said.
Botes said that executive Mayor of Johannesburg, Parks Tau, “informed Council at a meeting earlier in the year that the council intends to fund the city’s liquidity crisis with the sale of council-owned properties and with rental income from outdoor advertising companies”.
Botes said reports “highlighted at least 200 illegal billboards in the city. The officials informed councillors at these meetings that the city did not have the funds or the capacity to enforce the by-laws. However, while there are no funds to enforce the by-laws, the Council seems to be very happy to derive continuous income from the illegal billboards,” said the statement.
All potential and existing advertising sites on Council property have to be put out to tender, according to the Municipal Finance Management Act, and “prior to entering into or extending current lease agreements”.
In the meantime, The Star newspaper quotes a source at the JPC saying it is “invoking “emergency and exceptional circumstances” to allow the council to deviate from the tender process. The JPC would not elaborate on what these circumstances were”. [http://www.iol.co.za/business/business-news/city-of-joburg-flouting-own-outdoor-advertising-by-laws-1.1089126]
In the Eastern Cape, Tractor Outdoor have put out a statement that it did not tender for a municipal contract to put up advertising gantries on council land, as reported in a story in The Herald. [http://www.peherald.com/news/article/1817]
Bruce Jefferies, director of Tractor Outdoor Eastern Cape, told The Herald “the reason Tractor did not participate in the tender is due to the fact that it was seriously flawed, the least of which was that it was only for one year”.
Jefferies’s statement was the result of the court ordering Century Media – the company awarded the controversial Nelson Mandela Bay gantries tender – to take the material down and Century Media’s decision to sue the municipality for around R30-million in losses.
The Herald reported that Century Media director Marius Gerber said municipal communications director Roland Williams “had not informed his company about possible problems in erecting the gantries, so setting it up for failure”.
Jefferies said Tractor “made an informed business decision by not tendering as the capital costs involved for such a project would not and could not be recouped in one year. In the opinion of Tractor, the tender should never have been issued to marketing the format that it was and should never have been awarded”.
Jefferies said that Gerber, “being a director of an established national outdoor media company, would have been aware of the fact that the by-laws that were replaced in Port Elizabeth did not allow gantry structures, and would have been well aware of the fact that provincial roads are governed by certain unique by-laws as well”.
“It is also disappointing that Century Media, a national outdoor signage operator that is a signatory to OHMSA’s (Out of Home Media South Africa) code of conduct, took advantage of the 2010 World Cup and an obviously flawed tender to erect illegal structures in a well-managed signage market that has brought the name of the industry into disrepute,” the statement said. [http://www.peherald.com/news/article/1846]
OHMSA CEO, Melissa Moore, was discussing the moves with her Exco at the time of publishing and said she would release a statement later.