Mike Fitzgerald: “We’ll be the first place people look to advertise when they get out and about again.”

Insider is impressed by the the thoroughness with which Railroad Outdoor has responded to the coronavirus.  What else can you expect when one of the company’s owners is an MIT grad?  Insider talked with Railroad Outdoor co-owner Mike Fitzgerald.

Railroad Outdoor co-founder Mike Fitzgerald

Mike give us an overview of your plant.

We have a 250 face plant of all sizes in Metro Atlanta, Savannah and North Georgia.

Have you seen a coronavirus impact on revenue?

We’ve seen almost no renewals this month when we normally see well over half of our advertisers renew their contracts.  Many advertisers who are up for renewal are asking to holdover with a 30 day cancellation option at their current rate.  We are now recommending this to advertisers up for renewal instead of pressing them for a 6 or 12 month renewal.   We’ve also had several requests for early contract cancellations or rent deferrals.  Georgia only closed bar and restaurant dining rooms at noon on Tuesday with no statewide shelter in place order yet so we expect to see even more cancellation requests when that happens. I wonder if operators in states that were quicker to respond have seen more negative effects already?

What have you done in response to the coronavirus?

We posted PSA’s promoting the CDC’s COVID-19 recommendations on all our digitials as soon as the Georga Billboard Association (OAAG) asked us to do so.  Last week we made a big push to get slow payers and late payers to send in payments. This week we worked with our lender to get a 90 day deferral on loan payments. We’ll be putting the money that would have gone to the bank aside in case we need it. We put all capital projects and litigation work on hold until further notice. We are now focusing on prospecting for new business to try and fill the spots we expect to go vacant in the next three months.  We will be taking a hard look at our accounts receivable policies to allow more leeway to offer deferred payments on new business to try and fill all the empty space that we expect to have very soon.

What is your outlook for the medium term?

We expect to see occupancy and rate decline pretty quickly.  A lot of decisions will be made out of panic and fear and probably won’t make a lot of sense.  For instance we investigated the feasibility of disconnecting the lights on all of our signs. While we found it it would cut costs by 1% of gross income, it would do far more damage to the perceived value of our faces among prospective advertisers not to mention the harm to existing relationships.  Instead we’ve decided to step up our lighting maintenance and brush control programs to provide the best value possible during this tough period.  If folks take social distancing seriously, the medical crisis will pass relatively quickly if our healthcare system has time to respond with increased capacity, additional treatments and hopefully soon an effective vaccine.  The economic fall out might last much longer, but we know that Outdoor offers the absolute best advertising value for our local businesses, and we’ll be the first place they look to advertise when people get out and about again.

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