Insider is watching a Wisconsin legal dispute (Koepp Realty vs. Clear Channel Outdoor) over the automatic renewal terms in an out of home advertising ad contract.  Robert Koepp, a Waukesha county realtor signed a billboard contract with a predecessor to Clear Channel Outdoor.  The monthly rate was $250/month with an automatic renewal every 3 years  and a price increase of 5%/year since 1997.   Clear Channel Outdoor is trying to void the contract.  It contends the current monthly rate for the board is 90% below market.  Koepp has sued to keep the contract in place.  We’ll do a legal analysis on this case when a decision is reached.

Insider’s take:  Be careful about unilateral automatic evergreen renewals in billboard ad contracts.  A 5%/year increase in ad rates probably sounded great  to Clear Channel Outdoor’s predecessor in 1997 but it’s left Clear Channel Outdoor with a billboard priced way under market.

Insider likes to have a clause which says that at the ad contract expiry, the contract renews for consecutive 30 day terms unless either party gives 30 days notice of cancellation in writing.  This allows you to cancel an ad contract which is below market while being able to keep a good advertising client if discussions are prolonged.  It also guarantees you a 30 day remarketing period if a client cancels.

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