For the 25 years we’ve been around the out of home business there’s been a rule of thumb that out of home leases costs should be 20% or less of revenues. Lease costs may be more in urban areas for for high performing boards and higher for transit and street furniture contracts which are competitive bid Here are lease costs as a percentage of revenues for the public out of home companies for the first quarter of 2023 as computed by Paul Wright at Signvalue.
Lamar Advertising – 19.5%
Link Media Outdoor – 19.5%
Clear Channel Outdoor – 35.2%
OUTFRONT – 37.8%
What are your lease costs as a percent of revenues. Take our poll below.
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Additional questions for billboard owners:
What is the maximum lease cost as a percentage of revenue that a billboard company should pay before deciding to remove a billboard and abandoning a location.
What other factors in addition to lease cost should a billboard company use when deciding to remove a billboard such as :
1. Site availability
2. Permit available
3. Cost to rebuild
4. Current regulations state and local
5. Possibly of digital conversion
6. Current billboard being conforming or not.
7. Current and future area demand