Four Misconceptions Landowners Have About Out of Home Companies

Andy Goodman, Age Advertising

Today out of home development expert Andy Goodman talks about 4 misconceptions landowners have about out of home.

I’m not getting a fair share of revenues

Landowners ask me “How can I avoid having the billboard company package my billboard with a number of other properties and not give me the full revenue share?”  Most of the property owners know about revenue share and minimum annual guarantee.  They believe their billboards aren’t getting a fair share of revenue from a multi-board contract.  I explain to the property owner that if their location is exceptional the billboard company will sell the location as a premium one-off location, such as a permed location, which will garner a much higher revenue.  But it they sell the billboard in a package there’s not much you can do.

I’m being cheated

Most property owners think that the billboard companies are trying to cheat them.  In a situation where the billboard company is proposing a new location, I tell the property owner that if you think the billboard company is trying to cheat you, you might as well put the location out to bid.  If you think that you’re going to get cheated pick up the phone and call 3-4 billboard companies. My belief and experience is that you’re going to find that all the offers are going to come in pretty close together.

I get to own the structure at the end of the lease

Sometimes property owners tell me they are negotiating a new lease or have an existing lease with a billboard company and that they own the structure at the end of the day. What I tell them is if that’s your end game to own the billboard let’s not even talk to the billboard companies about this. You as the property owner should permit and build the location on your own and put the billboard out to bid once its built. If the property owner has an existing billboard and tells me they own the structure at the end of the Lease, I ask to see a copy of the Lease. Once I’ve read the agreement I can give them a better evaluation of who owns the billboard. My experience is 99% of the time the billboard company owns the billboard.

I can do what I want regardless of the lease term or zoning status of the billboard

Landlords pick up the phone and call various billboard companies explaining they want to talk about replacing the existing billboard company. There are a few deal points to take into consideration;

  • Did the billboard lease role into a new lease and the landlord forgot to give appropriate notice
  • The existing billboard is legal nonconforming and cannot be rebuilt if the existing billboard is removed
  • The existing billboard company is given advanced notice at which point they lease property and begin the permitting process on either side of the existing billboard. Once the billboard is removed from the original location the original billboard company has permitted a new location, builds the new billboard and spaces out the original location.

These are only a few possible scenarios that could work against the property owner.

You can reach Andy at andygoodman.age@gmail.com, 310-721-8422.

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