Q&A
New operating contract with Hornblower and revenue-sharing agreements
0:40:21
·
4 min
EDC officials discuss the new operating contract with Hornblower, including its impact on NYC Ferry operations and new revenue-sharing agreements.
- Hornblower's Chapter 11 restructuring had no impact on NYC Ferry operations or finances
- The new contract gives the city more control over policy decisions, fare setting, and service destinations
- Revenue-sharing agreements for advertising and concessions have been implemented, with EDC receiving a percentage of gross revenue from various sources
Amanda Farías
0:40:21
Great.
0:40:21
And can you provide an update on the RFP that should have started October 1 2023?
0:40:29
We know that the RFP was given to Hornblower, which filed for bankruptcy earlier this year as you mentioned in your testimony.
0:40:37
We've come to a conclusion on a rebrand and renaming of the the operations.
0:40:44
Are there have there been any challenges or problems with the new contract with city experiences and how has that if at all impacted any service?
James Wong
0:40:55
So the Hornblowers did go through a chapter 11 restructuring, which wrapped up in July of this year.
0:41:03
There was no impact to NYC Ferry operations or finances in connection with their restructuring.
0:41:10
I think one of the most important things to draw on as part of this is that through the reprocurement that we did pardon me, through the procurement that we did Gosh.
0:41:20
Last year, to that resulted in Hornblower getting the this contract.
0:41:25
We instituted a number of elements in that contract that really helped protect the city and ensure that all of the policy decisions remains with the city.
0:41:34
So fair setting, service destinations, the the schedules, the routes, how often places, ferries go places, all of that is retained of control within the city, and the fare box revenue, importantly, is also taken by the sea.
0:41:50
So we really have a lot more control, which means that through their restructuring, there was zero impact to any service that we had.
Amanda Farías
0:41:58
That's great.
0:41:59
Thank you for that.
0:42:00
Can you explain how concession and advertising advertising agreements are currently handled under the new terms of the RFP?
Franny Civitano
0:42:06
Yes.
0:42:07
I can.
0:42:08
So in our old contract, EDC didn't get any revenue from advertising or concessions.
0:42:14
And so that was a a really big thing we wanted to address in this new contract.
0:42:18
So Hornblower is able to and, you know, sells on our behalf, onboard, traditional kind of onboard advertising, which is the electronic screens, and also what we call activations.
0:42:31
So that's like when sleepy time tea wants to come in and give out tea to riders, you know, that that kind of thing.
0:42:39
Also, film and television and photoshoot revenue, if we ever did merchandising, things like that.
0:42:45
So EDC gets 33% of gross revenue from onboard advertising and activations, 1.9% gross from concessions, which is generally a very small margin endeavor anyway.
0:42:59
55% of film and television.
0:43:02
So we we are very pleased that so far, you know, we've we've generated well over $200,000 this year in in advertising, and we expect that program to grow
Amanda Farías
0:43:15
going forward.
0:43:15
That's great.
0:43:16
We've definitely seen different roles that rollouts of of advertising or partnerships.
0:43:22
Are those similar?
0:43:23
Like, for example, and I recently stated this is why it's top of mind.
0:43:27
Like, the teletubbies were on the ferry.
0:43:30
And so how does that work with what we're choosing to partner with in terms of maybe a sponsorship or an advertisement or maybe something that the city is working on locally and having that kind of partner on our ferry and promoting it on our social media.
Franny Civitano
0:43:46
Yeah.
0:43:47
I mean, we've seen a lot of really creative things.
0:43:49
I also just saw the beetlejuice thing.
0:43:51
Right.
Amanda Farías
0:43:52
Yes.
0:43:52
That was that was
Franny Civitano
0:43:52
the problem.
0:43:53
Having just seen that movie.
0:43:55
Yes.
0:43:55
So a lot of that is, 1, you know, how how can we get those brands to promote NYC Ferry?
0:44:03
Because bringing eyes to the system is also really important in helping, you know, encourage tourism, grow followers, things like that.
0:44:12
And so I think that they are looking at it a lot from how can this brand support NYSE Ferry as well.
0:44:19
And hopefully, it's a good interesting partnership that engages people.
0:44:24
We're also seeing, you know, Hornblower.
0:44:26
I think they have a workshop coming up or a seminar later this month that's specific to local business So they know that, you know, it's great to get the businesses that have the really big checks, but they also wanna support small businesses and advertising.
0:44:41
So there are discounted rates that local businesses can can use to do that and other ways that they will engage in support with those types.
0:44:52
So each
Amanda Farías
0:44:52
of the cross promotion opportunities are definitely attached to, like, some sort of advertising contract?
Franny Civitano
0:45:00
That's a question I don't know the answer to.
0:45:02
Okay.
0:45:02
I know we could get back to you on
Amanda Farías
0:45:04
that.
0:45:04
Sure.
James Wong
0:45:04
But I guess I'll just say, we are we a major priority through their program is to create a revenue stream.
0:45:11
There are occasionally times where there's sort of an in kind transfer, but primarily we are encouraging them to look at revenue generating opportunities.
