Another somewhat negative article on the state of the outdoor sign business. Of course, by the time things get better, the share prices will already have moved up probably.


http://www.ajc.com/business/sign-of-the-...


Sign of the times: Vacant billboards
Outdoor advertising firms see big drop-off during recession


By Russell Grantham


The Atlanta Journal-Constitution


Call them signs of the times: “Rent Me” messages have popped up on many of the billboards around the state, advertising tough times in yet another old-line industry. A billboard is shown along I-85 South near Highway 74, Senoia Road and exit 61 last week. It is expressing the sentiment of the whole billboard industry.

The worst drop-off in advertising in decades is forcing billboard operators from industry giants to mom-and-pop owners to cut both their rates and expenses to stem mounting losses from vacant billboards.


In some cases that has meant cutting staff, closing down billboards in less profitable locations and delaying plans to switch to high-tech digital displays.

For some billboard companies, “it can be a make or break time,” said Toon van Beeck, a New Jersey-based industry analyst.

Much like newspapers, broadcasters, magazines and other traditional media, outdoor advertising companies have been hit by the one-two punch of the recession plus advertisers’ continued migration to online media.

Laura Martin, an industry analyst with Soleil Securities in New York, said that for such companies, it’s the worst economy in 30 years.

She expects billboard companies’ revenues to drop about 15 percent this year as they deal with vacancy rates approaching 30 percent for the big 14-by-48-foot billboards along highways.


Breaking even at best

For Robert Allen, the vacancy rate could soon approach 50 percent.

Allen owns four billboards on I-85 near Newnan. He’s seeking a new tenant for one of his signs because the local restaurant that had been renting it didn’t renew its contract in July.

A second billboard will go dark at the end of this month, he said. “The reason you see some of the empty ones right now is because the restaurants are taking a big hit,” he said.

With the loss of the second customer and the cost of insuring his nearly 100-foot-tall signs, which cost about $200,000 each to install, he’ll barely be breaking even, he said.

At least he’s doing better than some of the largest companies in the business, which are reporting huge losses.

The parent company of San Antonio-based Clear Channel Communications, the nation’s largest billboard operator and radio broadcaster, reported a $3.7 billion loss in the second quarter after writing off $4 billion worth of billboard permits, radio station licenses and goodwill from acquisitions. Clear Channel’s billboard and radio businesses both saw revenue declines of 20 percent or more compared to a year earlier.