Firm with Habs ties may score on New York’s shared bikes
A Montreal company with ties to the Canadiens stands to make big bucks from Bixi’s success in New York City, The Gazette has learned.
Montreal-based USA Bike Share Sponsorship Inc. was hired to manage sponsorships for New York’s bikesharing system, which uses bikes developed by Montreal’s Public Bike System Co., Bixi’s operator.
USA Bike Share is an offshoot of Effix Inc., the exclusive advertising and sponsorship representative for the Montreal Canadiens.
Over five years, New York City’s two initial sponsors — Citibank and MasterCard — are paying $41 million and $6.5 million, respectively, to be the initial sponsors.
Montreal’s USA Bike Share would get a 10 per cent commission on sponsorships, with a maximum payout of $5.4 million, according to a four-page draft of the contract between USA Bike Share and the company operating New York’s system, a copy of which was obtained by The Gazette.
That would mean USA Bike Share would so far stand to collect $4.75 million — 10 per cent of the $47.5 million raised from Citibank and MasterCard.
In an interview, François Seigneur, president and owner of Effix and USA Bike Share Sponsorship, confirmed his company is managing the New York sponsorships and gets a cut of money collected. But he would not discuss financial details of the arrangement.
USA Bike Share was hired to manage New York sponsorships by Alta Bicycle Sharing, the company Bixi partners with on U.S. sales, Seigneur said. Alta runs New York’s system.
New Yorkers may be surprised to learn not all of the sponsorship money is actually going to finance the system. No mention of commissions was made when New York announced the sponsorships.
Officials at the New York bike-share service and New York’s department of transportation did not respond to requests for comment.
In Montreal, the city of Montreal gave Bixi loans and loan guarantees that could total up to $108 million. Bixi is now cash-strapped and the Quebec government may bail it out with a $5-million loan.
New York has said its bikeshare system will be operated at no cost to taxpayers. The system is to be financed through sponsorships and revenue from users. Profits are to be shared 50/50 between Alta and the city.
The five-year sponsorship services contract — dated May 2012, days before the Citi Bank sponsorship was announced — would give USA Bike Share exclusive rights to “manage ongoing relation- ships” with the two initial sponsors. If New York agrees, it could solicit future sponsors, the draft contract says.
Launched in May with almost 6,000 bikes, the New York City system is known as Citi Bike. Citi’s brand appears on all bikes, stations and membership keys. MasterCard’s logo is on station kiosks and on receipts.
The system is popular, with more than 80,000 members. New York users have taken more than 2 million rides.
“Bike share is an extraordinary product for sponsors — it’s green, it’s healthy, it answers many modern trends that companies want to associate themselves with,” Seigneur said.
“Companies associated with bike share get undeniable benefits. There’s also a lot of visibility. In New York, there are 5,500 to 5,600 bikes constantly travelling around the city.”
On the Canadiens website, Seigneur is listed as an ad- ministrator in charge of advertising and sponsorship. But Seigneur said his companies are separate, private firms not affiliated with the Canadiens.
USA Bike Share is in no way affiliated with Bixi, said Michel Philibert, interim chief executive of the Public Bike System Co., the city of Montreal-controlled firm that operates the Bixi systems and sells bike-sharing systems to other cities.
He said the PBSC was not involved in the New York sponsorship arrangement and he did not know anything about the deal.
However, Philibert said Effix does handle sponsorships for Montreal Bixis. He would not disclose the size of Effix’s commission.
In 2012, Bixi said it expected to collect $2.1 million that year from sponsorship deals.