Max Drachman is a outdoor advertising industry investment banker with Kalil and Co. We interviewed Drachman about about trends in the outdoor advertising M&A market. Max, have you closed any transactions since the last time we checked in with you in early September? Yes, we have closed four more deals […]
Billboard Investing
Accounting for a 10 Year Digital Sign Life In A Land Lease.
Most billboard companies fail to account for sign replacement expenses in their projections. This is not a big issues with static boards which last 40 years. It matters however, with digital signs because they have a useful life of 100,000 hours or 11.5 years. If you exclude replacement costs you […]
Annual Lease Inflators Impact Billboard Values
The quickest way to destroy the value of a billboard is to agree to a bad lease with a high fixed minimum lease inflator. Inflation has averaged 2%/year for the past 10 years. Outdoor revenues have grown at approximately 1.8%/year for the past 10 years. If you agree to an […]
Billboard Construction Costs
How much does it cost to construct a 14 by 48, two-sided, illuminated, 40 foot above ground billboard? My rule of thumb is $30,000 for wood structure, $60,000 for a steel monopole structure, and $350,000 for a digital billboard. The 2015 Billboard Structures Valuation Guides put out by the Departments […]
4 Tips For Dealing With Site Locators.
There are firms which obtain billboard permits and land leases and sell them for a fee. Most are legitimate but there are unscrupulous developers who will try to take advantage of you especially if you are new to the business. A billboard site seller has no skin in the game. […]
Outdoor Advertising Company Valuations January 2015
The rule of thumb is that an outdoor advertising company is worth 4-6 times gross revenue. My company has been involved in 18 sales of small, mostly rural billboard companies. The sales multiples varied from 3.2 times revenues to 13 times revenues. The median sales price was 4.9 times […]
Stock Analyst Skeptical about Lamar
Here’s an interesting Seeking Alpha article on Lamar and the billboard industry. The article mentions two reasons why I like the billboard industry: (1) Barriers to entry caused by the need to get a sign permit. (2) The low cost of outdoor versus other forms of local media. Outdoor has […]
Why you need billboard insurance
An interesting TV news report about a storm with 60 mile an hour winds which toppled a billboard in Mercer County, Kentucky. If your boards are in a high wind area you need to make sure you’re insured from storm damage or you need to retrofit your boards to make […]
Public Outdoor Company Valuations
CBS Outdoor is going public at an expected enterprise value of 3.6 times revenue or 11.5 times cashflow. Lamar is setting the industry standard with an enterprise value of 5.5 times revenue or 12.8 times cashflow. Clear Channel Outdoor is the industry laggard with an enterprise value of 2.66 times […]
A Digital Billboard Home Run
I’m skeptical about digital signs due to the high upfront costs but here’s a real life success story from one of my clients. This one-sided 10X24 digital sign cost $135,000 to construct. It’s on a road leading to costco. The sign generates revenue of $4,560/month which works out to $570 […]
