Why does Lamar have higher margins than OUTFRONT or Clear Channel Outdoor?  Cheaper leases.  Look at this analysis, prepared and sponsored by SignValue.  Lamar’s billboards are more rural and Lamar isn’t as concentrated in airport and transit deals which have high minimum payment thresholds.  In addition, Lamar owns the land under one-seventh of its billboards.  The result is that Lamar’s lease costs are only half as high as its competitors when measured as a percent of revenue.  Lamar’s lease costs were 17% of revenues during 2024, versus 39% at OUTFRONT and 37% at Clear Channel Outdoor.

Interesting to see that Lamar’s cashflow advantage is based entirely on cheaper leases.   SignValue analyzed non-lease expenses (direct expense plus G&A expense plus corporate overhead) as a percentage of revenue and found that Lamar’s non-lease expenses are 38% of revenue versus 37% of revenue at OUTFRONT and 33% of revenue at Clear channel Outdoor.  So, Lamar’s cashflow margin is higher because of cheap leases, not because it operates more efficiently in other areas of the business.  You will note that OUTFRONT includes corporate expenses in G&A expense but that doesn’t impact the accuracy of the analysis.

If you have questions, contact one of our consultants for a confidential consultation at info@signvalue.com or (480) 657-8400.

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