Associated Newspapers' £3m a year payments to TfL revealed

Associated has paid annual sums in the region of £3m, around 5% of its revenue in the year to 3 October 2011, for the right to distribute Metro at London bus and Underground stations, newly published figures have revealed.

Metro: Associated have paid TfL around £3m a year for distribution rights
Metro: Associated have paid TfL around £3m a year for distribution rights

Mayor of London Boris Johnson, in a written response to questions from London Assembly member Mike Tuffrey, said that Associated Newspapers had paid Transport for London £12.568m since the beginning of the 2008/9 financial year.

Since April 2005, TfL's revenues from the Metro contract have amounted to £20.85m. The Mayor said all of the revenue had been reinvested in public transport.

In addition to the revenue, TfL has its own dedicated page in each Metro publication, which the Mayor said reached an average audience of 330,000 London commuters every weekday.

Media agency sources suggest a full-page ad in the London edition of the Metro can cost around £10,000 to £12,000 a day, putting the value of the TfL page at around £2.75m every year.

TfL is coming under increasing pressure to be more transparent over its commercial and sponsorship deals Yesterday (20 February) a London Assembly report criticised its handling of the Emirates-sponsored cable car across the Thames, and the Barclays-sponsored cycle-hire scheme.

TfL's revenue from the Associated contract was £2.93m in the 2008/9 financial year and £3.16m in 2009/10, according to the Mayor's written response.

Payments rose to £3.92m in 2010/11 after Associated Newspapers' contract to distribute Metro was renewed for a further seven-and-a-half years in 2010. At the time it was understood that there was no serious opposition to the Associated Newspapers bid.

However, this year's payments may not be as high as 2010/11 – in the period 1 April 2011 to 19 January 2012, they stood at £2.55m.

In Associated Newspaper's parent group Daily Mail & General Trust's full-year results for the year ended 2 October 2011, DMGT stated that Metro's revenues increased by more than £10m, equivalent to 14%, year on year.

This would suggest revenues at Metro were more than £71m in the year to 2 October 2010 and more than £81m in the year to 2 October, meaning the circa £3m payments to TfL are less than 5% of all revenue.

Metro's revenues come from advertisers paying to reach not just its London readership, but also its large distribution across the UK, which incurs additional costs for Associated.

A spokesperson for Metro said: "Metro's agreement with TfL is subject to commercial contract, and, as such, we are unable to comment or provide further details.

"With regard to Metro's revenue, it is DMGT policy not to break down revenue for each of the businesses, so we are unable to comment further on this matter."

The mayor was asked how much revenue has been earned as a result of TfL's contract with Associated Newspapers, but in his answer, the Mayor said that although the contract was awarded in March 1999, only records from 2005 were available.

Follow Maisie McCabe on Twitter @MaisieMcCabe

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