Yesterday we discussed recessions and out of home.  Here’s what Lamar CEO Sean Reilly said at the May 2022 JP Morgan conference when an investor asked about how recessions impact Lamar:

“I’ve managed through a lot of recessions…In a garden variety recession we are not as cyclical as people think.  We’ve never been down more than 2% on the top.  and we’ve never been down in successive years in a garden variety recession.  Now there’s a couple reasons for that.   We have the lowest CPM in all of advertising.  So if somebody does sense that their world is slowing down and they need to cut back, they cut back on ad spend that costs them a lot more.  So they typically cut back on TV…some digital stuff…The other thing is the term of our contracts.  The average length of our contracts is 4 months.

That wasn’t the case in the great recession.  That was a deep and dark time.  When we normally manage through a recession we hold the line on rate and we suffer a little bit in occupancy.  Occupancy comes back faster than rate.  During the great recession it was a disaster.  We lost control of rate.  We lost control of occupancy.  We had customers going out of business.  We were crawled up under our desk in a fetal position…it took 5 years for us to get our average rate per panel back.  Contrast that with going through covid…the world shut down.  We had customers shut down.  They wanted to call up and cancel.  We just said we won’t send you a bill.  And they said that’s fine.  And then when they opened their doors a couple of months later we reinstituted billing.  So when we came out of covid we didn’t lose any rate.”

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