Here are four out of home stories Billboard Insider is watching in 2025.
A return of the M&A market.
Out of home acquisitions down in 2023 and 2024. Take a look at this chart prepared by Moorgate Partners which shows the acquisitions of Lamar, OUTFRONT and Clear Channel Outdoor.
Lamar used cash to pay down a term loan. OUTFRONT’s transit difficulties meant there was no cash to grow billboards. Clear Channel Outdoor’s interest expense is 76% of cashflow (EBITDA) which leaves little money for acqusitions. Out of home investment bankers say M&A activity is picking up. Lamar is signalling it is back in the market. OUTFRONT has reduced leverage with the Canada sale. Interest rates have declined by approx 100 basis points in the past year which makes it easier to finance an acquisition.
Whither place-based?
Place-based out of home is 46% below pre-covid due to troubles with cinema advertising and a slow return to the office. Cinema advertising is lagging because movie attendance is 35% below pre-covid levels. US office vacancy rates were 20% during the first half of 2024 – a 30 year high. Will place based ever recover or will this be like what the great recession did to the radio industry (e.g. one-third of revenues dissapeared and never returned to the market)?
What does Scenic America do with its cash?
Scenic America, the anti-billboard group, had $1.3 million in cash and investments at March 2024. We will be watching to see if the money goes into litigation or is used to fund a few more years of Mark Falzone’s $400,000 salary.
Who runs OUTFRONT Media?
OUTFRONT CEO Jeremy Male is retiring in 2025. We hope OUTFRONT selects an out of home operating veteran as opposed to a management consultant or ad agency exec as Male’s successor. OUTFRONT needs to do a better job controlling expenses and that’s the task from someone with an operating background.
What out of home stories do you think are worth watching in 2025? Email davewestburg@billboardinsider.com and we’ll run a followup post.
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