Clear Channel Outdoor CFO Brian Coleman was upbeat about the future at the Deutsche Bank 30th Annual Leverage Finance Conference last week. Some highlights from his remarks.
Advertisers who left out of home during covid are finding that their signs aren’t there
The fundamentals of the business are pretty sound…advertisers who had left the market during covid are coming back and finding that the signs aren’t there any more so I think it’s created demand for outdoor assets…
Digital Billboard Conversions
There’s still ample opportunity. There are still markets with very little digital penetration…Even in markets where there’s a high degree of digital penetration we think there’s opportunity…Atlanta and Milwaukee come to mind…
Trends in North America
Everything’s in a positively sloping direction…During covid local was stronger and national pulled back…national has come back…the southwest is one of our strong regions…
Airports
Airports pre-covid was probably 17-18% of the business. During covid that dropped dramatically as travel dropped…today we’re back in the 17-18% area…I wouldn’t say airports has fully come back. It’s come back a lot. I think the passenger reports are 90%…maybe skewed more to leisure than business…labor day was the first holiday weekend that surpassed 2019…
Why the Europe sale stalled?
We launched it about a year ago. But I’m sure everybody in this room can appreciate how different the world was in December of last year than it was a quarter later with the invasion of Ukraine with the capital markets kind of closing down, more recently with interest rates going up and recessionary pressure…I don’t think we’re unique in wanting to be cautious with an M&A process.
European sale proceeds will pay down European bonds
Where do cash proceeds go? We have a bond issue at CCIV which is the holding company that sits on top of the European assets…it will govern the use of proceeds…if the net sales proceeds are greater than $375 million once that debt is paid off you have greater flexibility…
Billboard Insider’s take: We hear that JCDecaux can’t buy Clear Channel Outdoor’s European assets due to antitrust issues. That leaves private equity backed financial buyers who usually pay less for assets than a strategic buyer because of a lack of operating synergies. Clear Channel Outdoor needs to sell Europe if it wants to become a REIT because many of the European assets aren’t REIT qualified.
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