Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8b
ACTION ITEM
Date of Meeting
October 24, 2023
DATE : September 7, 2023
TO: Stephen P. Metruck, Executive Director
FROM: Jeffrey Wolf, Director, Aviation Commercial Management
Geoffrey Foster, Interim Sr. Manager, Aviation Commercial Management
Jason Berg, Property Manager
SUBJECT: Airport Network Programming Service Agreement Amendment for Extension
Amount of this request:
$ 0
ACTION REQUESTED
Request Commission authorization for the Executive Director, or his designee pursuant to the
Delegation of Authority, to execute an amendment to the Airport Network Programming Service
Agreement incorporating up to three (3), six (6)-month extension option periods allowing for
continued television programming in the airport terminal gate hold areas for the traveling
public’s entertainment.
EXECUTIVE SUMMARY
In January 2019, AC Holdings, Inc dba CNN Airport Network entered into a 5-year agreement with
the Port of Seattle (Port) to provide in-terminal content services (television programming) in
designated gate hold areas at Seattle-Tacoma International Airport (SEA). This agreement was
then assigned to Travel Content, LLC dba ReachTV (ReachTV) through a Conditional Consent to
Assignment on March 31, 2021, as CNN Airport Network was exiting this line of business across
all airports they served. ReachTV is a Minority-owned Business Enterprise (MBE) that also
contracts with local telecommunications contractors certified as a Disadvantaged Business
Enterprise (DBE) and an Airport Concessionaire Disadvantaged Business Enterprise (ACDBE) to
manage the on-site daily operations.
The current agreement is set to expire on December 31, 2023, and does not contain a holdover
provision or additional options to extend. Adding limited options to extend to the current
agreement would allow for continued television programming in the gate hold areas while work
continues on the future of the in-terminal content services program. The current revenue
structure will remain in place during any extension period with a Minimum Annual Guarantee
(MAG) of $150,000.
COMMISSION AGENDA – Action Item No. 8b Page 2 of 4
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
ReachTV currently provides 24 hours a day television programming service in 33 designated gate
hold areas at SEA. Their programming consists of a mix of national news, sporting events (local,
regional and national broadcasts), business news, entertainment, as well as short local
documentary spots. The Port currently has control of up to six, one-minute segments per
available hour during the day (“Local Spots”), with content provided by our External Relations
team.
This extension would ensure the Port continues this service to the traveling public at the airport
beyond the original agreement expiration date, as well as continue a revenue stream for the Port.
This service contributes to the Port’s Century Agenda goal of advancing the region as a leading
tourism destination and business gateway by continuously improving the customer experience
at SEA.
DETAILS
This authorization would enable the execution of an amendment adding three, 6-month
extensions to the existing agreement at the current revenue levels. The maximum this agreement
would extend is June 30, 2025. This extension would allow the Port to continue work on the
future of the in-terminal content services while maintaining customer service levels through gate
lobby entertainment and sporting events.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Allow the agreement to expire on December 31, 2023.
Cost Implications: $50,000 plus reduced revenue
Pros:
(1) Provides Port an opportunity to manage in-terminal content directly.
Cons:
(1) Loss of $150,000 in annual revenue.
(2) Approximately $50,000 expenditure to purchase replacement TVs in designated gate
hold areas where existing ReachTV-owned TVs will be removed.
(3) Extended period where traveling public will be without any in-terminal content,
including sports broadcasts, which will decrease the customer experience at SEA.
This is not the recommended alternative.
Alternative 2 – Issue an RFP for In-Terminal Content Services without extending current
agreement.
Cost Implications: $0
Pros:
(1) Opportunity to find alternatives to programming of in-terminal content services.
COMMISSION AGENDA – Action Item No. 8b Page 3 of 4
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) Time to solicit and award a new agreement will extend beyond current agreement,
resulting in period of no in-terminal content services.
(2) Uncertain revenue stream levels due to changing market conditions in airport terminal
content services
This is not the recommended alternative.
Alternative 3 – Amend current agreement to allow for up to three (3), six (6)-month extension
periods.
Cost Implications: $0
Pros:
(1) Continued revenue stream to the Port at current levels.
(2) Continuation of in-terminal content services, including sports broadcasts, for the
traveling public’s entertainment which enhances the customer experience at SEA.
(3) Allow time to further develop future in-terminal content services program.
Cons:
(1) Port not able to fully manage in-terminal content in-house.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
There are no costs to the Port for this Amendment. All costs will be incurred by the provider.
Financial Analysis and Summary
Project cost for analysis
Business Unit (BU)
Effect on business performance
(NOI after depreciation)
annual revenue. There would be a total of $225,000 in
revenue over the three (3), six (6)-month extension
IRR/NPV (if relevant)
CPE Impact
Future Revenues and Expenses (Total cost of ownership)
The total MAG revenue for this lease is $150,000. Each 6-month extension would generate
$75,000 each period for a total MAG revenue, spanning all extension periods, of $225,000.
COMMISSION AGENDA – Action Item No. 8b Page 4 of 4
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS TO THIS REQUEST
(1) Draft Amendment
(2) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None