Signvalue’s Carson Frost had these comments on Insider’s post on out of home management agreements:

Great Article! We’ve done a couple of deals this year that involved management agreements at the time of sale. From our experience, we’ve seen management agreements as short as a year to as long as 10 years. Managing companies will want longer terms and will usually require their branded ribbon to be placed on the sign during the term of the agreement.

For operators who are contemplating a management agreement for their assets its very important for them to clearly define the termination date. We’ve seen management agreements similar to some land leases that require the owner to inform the manager of their intent to terminate the agreement within a specific window of time. If the manager is not informed within said window, the agreement automatically renews. If you are thinking of selling your assets at any time, make sure there is a clean break for the advertising contracts and commissions. if the buyer is not your manager, they will want to acquire ad contracts and not have to worry about paying extended commissions to the management company.

For operators who are contemplating managing the assets of another owner it’s a good idea to have a handle on the owner’s motivation to sell going into the agreement. When possible, include a Right of First Refusal to buy the assets at any time during the agreement. If the assets under management have longterm ad contracts at termination clearly define how those commissions are handled going forward as well as provide the owner a list of all advertisers in which the manager is owed a commission following the agreement.

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