At the IBO Conference, Richard Rothfelder, Chris Rothfelder and Mike Falick had an engaging discussion about aspects of billboard law focused around their new book. Continuing that conversation, here are more excerpts from that discussion as they consider some of the key legal issues facing the OOH industry.
First Amendment & Content Restrictions
Can billboard operators refuse to run certain advertisements?
Mike Falick: If you are a private company on private land, you can tell an advertiser you don’t want to run their ad. It is a different situation if you are a public company running an ad on public land — First Amendment issues come into play there. Marijuana ads, for example, can be banned outright without running afoul of constitutional protections.
Eminent Domain and Condemnation
What is the current state of billboard condemnation law in Texas?
Chris Rothfelder: The landmark Texas case is Clear Channel versus TxDOT, which established that billboards have compensable value — the government has to pay for taking them, not just the land they sit on. The fight then becomes over how much. The government often argues it only has to pay salvage value of the structure. We argue for the billboard’s full income-producing value.
Walk us through the three appraisal approaches used in condemnation cases.
Chris Rothfelder: The cost approach is straightforward for billboards — what would it cost to replicate that sign today, adjusted for its age and condition. The sales comparison approach rarely works for billboards because there simply aren’t comparable sales in the market. People don’t publicize what they pay for permits or leases, so there’s no price-per-square-foot benchmark like you’d use for commercial real estate. That leaves the income approach, which is the one that comes up most often for billboards. You look at the lease revenue the sign generates and capitalize it. What’s striking is how dramatically values vary by geography: a digital billboard in Texas might be valued at $500,000 to $750,000, while a comparable sign in Florida — similar traffic counts, similar roadway — might be worth $50 million. It depends entirely on the local market.
What does the condemnation process look like from start to finish?
Chris Rothfelder: It’s broadly similar across states. You receive notice that the government intends to take your property. There’s a negotiation period where you try to settle on value and avoid litigation. If that fails, the case goes to commissioners appointed by the court. If you’re unhappy with their award, you can appeal to the trial court, and from there up through the appellate system. The process is designed to at least attempt to resolve the dispute without full litigation, but if the government’s offer is low, you have every right to fight it through the courts.
Interested in learning more? You can purchase a copy of Rothfelder & Falick on Billboard Law through this LINK on the Billboard Insider web site.
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