In a statement yesterday, CBS Outdoor announced that it would terminate its ad-sales contract with the London Underground on March 31^st 2012, if no new agreement can be reached with Transport for London. The partnership was to have run until 2015.

The reason: the contract, as it is, is not profitable.

CBS accuses the transport operator and its affiliate, Infracos, of significant delays in carrying out certain infrastructure work, which prevents it from deploying and operating its advertising sites. The statement cites: "massively delayed Public Private Partnership construction projects undertaken by London Underground’s Infracos" and that as a result, CBS failed to “gain the access and approvals and to have the information necessary to complete its upgrade work in a timely fashion and within budget".

For CBS, these delays constitute an “adverse event under the contract” which can justify a renegotiation, or, by default, termination: “changes implemented by London Underground have resulted in an adverse event under the contract, requiring that London Underground negotiate new terms reflecting the massive cost over-runs suffered by CBS".

The company has taken its claim to the High Court in order to validate its position and to obtain damages.

CBS Outdoor won the London Underground contract in 2006, estimated at the time to be worth £1 Billion. Since then, it has invested significantly in the upgrade of the ad-site inventory, including a large digital deployment (20+ Digital Escalator Runs, 100+ LD Screens (1.2m × 1.8m) in the corridors, and 100+ XTP screens on the platforms).