Three things about Lamar Advertising which Billboard Insider learned from reading the Lamar Advertising 2022 10k.
Local, local, local.
“Local advertising constituted approximately 78% of our outdoor net revenues for the year ended December 31, 2022 which management believes is higher than the industry average.” True indeed. OUTFRONT gets 55% of revenue from local businesses. Clear Channel Outdoor gets 60% of revenue from local businesses. A dependence on local means that Lamar won’t fall as far or as fast in a recession. It’s also why Lamar came back fastest from covid.
Lamar loves land.
Lamar owns the land under one-eighth of its billboard structures. It owns land under 10,500 of its 83,000 sites. Easements explain why Lamar’s leases costs are only 18% of revenues versus 34% of revenues for OUTFRONT. The company is not cash constrained and thinks billboard easements are a great investment because revenue increases fall to the bottom line. Lamar CEO Sean Reilly told Billboard Insider in 2019: “Lamar is not capital constrained. We have a very strong balance sheet and we’re always looking to deploy capital…and purchasing easements is one way we do that.” Billboard Insider guesses that Link Media Outdoor thinks the same way. Outfront, not so much (it’s sophisticated urban landlords prob wouldn’t sell easements) and Clear Channel not at all due to capital constraints.
Lamar’s Leases are shorter than you might think.
“Approximately 75% of our leases will expire or be subject to renewal in the next five years, 15% will be subject to renewal or expire in 6-10 years and 10% thereafter.” The percent of leases expiring within 5 years is higher for Lamar (75%) than for OUTFRONT (70%). This is surprising when you consider that Lamar’s leases are in more rural areas with less sophisticated landlords.
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Well done to lamar for keeping local sales so high. especially compared to the big 3 over here which rely heavily on national campaigns more so. very rarely see a local ad on and clear channel jcdecaux or global site in the UK.