Toronto Star sells Transit TV to firm actually in this business
January 17, 2008 by Dave Haynes
I always thought one of the stranger ownership situations out there was the Toronto Star, Canada’s biggest local daily newspaper, owning Transit TV, a screen network in metro bus systems in cities dotted across the U.S.
Then again, Torstar has long owned the Harlequin romance publishing empire – those little historical romance novels with Fabios ravishing enchanted women on the covers. That thing, however, was and is a cash cow. Transit screens, not so much.
So it was not terribly surprising to see a little piece in my paper this morning about the sale.
Torstar strikes deal to sell Transit TV unit to IdeaCast Inc, read the headline from a Canadian Press story.
TORONTO – Torstar Corp. (TSX:TS.B), a major publisher that owns Canada’s largest circulation daily paper, has struck a deal to sell its Transit Television Network unit in the United States to IdeaCast Inc., a Chicago-based provider of custom television content and advertising to health clubs.
Financial terms of the transaction, announced late Wednesday, were not revealed.
The deal, which also involves a strategic advertising relationship between Transit TV and IdeaCast, comes after Torstar launched a strategic review of its wholly owned Transit TV operations last year.
If the sale goes ahead in the second quarter as planned, the Toronto multimedia company would acquire a stake in IdeaCast, which plans to expand the transit TV network across the United States.
Transit TV is North America’s biggest transit-based digital adverting network operator. The company has installed and operates digital ad technology on the transit systems in Los Angeles, Chicago, Atlanta, Milwaukee, and Orlando, Fla.
Transit TV provides advertising on 8,500 television screens and is seen by more than 500 million riders a year on nearly 4,000 vehicles.
“The IdeaCast relationship provides Transit TV with access to an experienced and highly respected digital advertising sales team, it allows Transit TV to reduce its operating expenses, and it provides Torstar with the potential to participate more broadly in one of the fastest growing segments in media today: digital out-of-home advertising,” said Robert Prichard, president and CEO of Torstar.
This on the surface looks like a smart move all the way around. IdeaCast gets an established player and technology acumen (putting PCs and screens on things that move all day isn’t easy) in a segment that would seem to have a fair amount of growth potential. Torstar gets out of something that wasn’t even installed in their own market but keeps its hand in digital out-of-home, with health clubs being a much better fit for the kind of content and advertising they develop and sell.