Billboard Insider received a comment on Andy Goodman’s December 23, 2025 article entitled Not All Billboard Locations Are Created Equal, namely:

Had a question on this comment in Andy’s article—How is this possible?  Meaning, how can a city entity opt to give exclusive rights to one company without other companies being given a chance?  Is this done through a bidding process or what experiences have you seen this play out? The reader was asking about the following observation from Andy’s article: “In many cases, municipalities choose to work with only one outdoor advertising company, granting that company exclusive rights to develop signage on specific city-owned sites.”

The most prominent deal along the lines described by Andy is the one Chicago entered with a major outdoor operator (which shall remain nameless here, but you know them well) about a decade ago. We didn’t work on the matter, but understand that Chicago entered a long term agreement with the operator to allow dozens of oversize digitals on city-owned land. Chicago and the operator shared the lucrative profits  from the billboards, which would have otherwise been prohibited under the City’s Code.

I did represent some operators in Houston that used the Chicago template in an attempt to enter a similar arrangement for digital billboards in Houston, where they have always been prohibited. Like in Chicago, Houston would have required millions of dollars in upfront and annual fees from the successful bidder to erect and operate digital billboards on city-owned property. Alas, politics intervened as it ofter does, and the mutually beneficial opportunities for both Houston and the operators fell through.

There’s a few common dominators on these deals. First, they are a combination of contractual and regulatory agreements. An operator is not compelled by law to participate, but if he chooses to do so, a binding contract will be executed along with an ordinance incorporating those agreed upon terms. Which leads to the second feature almost always present in these types of deals, which is that only a small number of operators will enjoy the finances or assets required to participate in such an arrangement. Specifically, a city will typically impose millions in up front and periodic charges, and/or it will require the successful bidder to remove several existing static billboards in exchange for permission to erect and operate one digital display. The practical consequence, therefore, is that only those competitors with the money and assets to bid for the city’s proposal will be successful.

I haven’t seen any cases containing challenges to a city’s ordinance or contract allowing billboards to be operated on city-owned property, where the previous regulations prohibited the billboards on private property. Granted, cities and other governmental entities often pass ordinances containing exemptions for signs or the land underneath them owned by the city. However, all ordinances in theory are supposed to advance the “health, safety, and welfare” of the city to pass constitutional muster. This relatively low bar requirement is typically satisfied by demonstrating the sign ordinance is justified by concerns over aesthetics, property values, and driver distraction. The obvious challenge to such exemptions for city-owned property, therefore, is these types of concerns purportedly justifying the legislative enactment apply equally (if at all) whether the land is owned by the city or a private land owner.

I suspect as municipalities continue to suffer financial shortfalls, due to the constant pressure to lower taxes coupled with increased operating expenses, they will look more seriously at these types of opportunities to raise revenue. This financial reality affords the billboard operator opportunities to develop sites which might otherwise be prohibited as well.

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