The Billboard Insider Podcast
00:12:11 · Jim Johnsen, Dave Westburg
[00:12:11] S1: Yeah. I I would agree with you, Dave. And and as part of our practice, we do valuations and appraisals in conjunction with guys trying to close bank loans. And so we see across the country a whole bunch of regional and local banks that are jumping in. And I'd say primarily because of the relationship. Good entrepreneurs will build relationships with local bankers and develop those over time and cultivate those and and keep those valuable, keep keep them close to their heart. And those lenders will, you know, take the time to learn the outdoor business well enough to lend to one, two, three, five customers. They'll never have a portfolio of of Billboard loans, but they'll, you know, they'll they'll view those as as pretty interesting to the bank, if you will. [00:12:55] S0: What about private equity? You know, I I know because I know who subscribes to Billboard Insider, And I would say there has been a steady increase in the number of private equity players who subscribe to Billboard Insider, and and it seems like there's been... Private equity is very interested in out of home right now. [00:13:13] S1: I would say that's very true, Dave, and it's been true for a period of time, at least at least from our perspective. I I I can't count a week that we don't get three or four calls from private equity groups saying, hey. We've done we've done a white paper on the out of home business, or we've we've studied out of home business, or we bought some Lamar stock, and that worked out well. So how do we get into this in a deeper way? [00:13:35] S0: Yep.
00:13:35 · Dave Westburg, Jim Johnsen
[00:13:35] S0: Yep. [00:13:36] S1: And so the interest is really, really strong. The dilemma for the private equity business is how do they get scale? [00:13:41] S0: Mhmm. [00:13:42] S1: And getting scale in the out of home business, unless you're prepared to put in the time and the hard work, is very difficult. [00:13:49] S0: Yes. [00:13:49] S1: There's just there's only... There's just so many Adams out there, right, [00:13:53] S0: Right. [00:13:53] S1: That size and that and and then, you know, sort of the size of companies drops off pretty quickly. And most of these private equity guys these days wanna write a $50,000,000 check, a $100,000,000 check, and and upwards. And for them to, you know, justify writing a $50,000,000 check, they need a pretty sizable company in the out of home business. [00:14:13] S0: And And there's only so many. There's just only so many. [00:14:16] S1: Exactly. Exactly. So that's the rub. But having said that, and I I would... You know, I'd love to hear more about the guys that are subscribing to Billboard Insider. But we have seen of late several several groups coming down market. [00:14:30] S0: Yes. [00:14:30] S1: Meaning meaning instead of requiring 10,000,000 of EBITDA, they're, you know, they're interested in companies that are doing 1 to 2,000,000 of EBITDA. Mhmm. So
00:14:30 · Jim Johnsen, Dave Westburg
[00:14:30] S1: Meaning meaning instead of requiring 10,000,000 of EBITDA, they're, you know, they're interested in companies that are doing 1 to 2,000,000 of EBITDA. Mhmm. So [00:14:39] S0: If you sell out of home advertising, you need the ultimate out of home sales guide. This book gives you the tools you need to sell out of home effectively. Wish I had the book earlier in my career, says Paul Sarah of Badger Consulting. Good stuff. Comments, Keystone Outdoor's Lisa De Feliz. This gives an owner or sales manager a nice reference tool, adds Chris Kalbeck of the IBO USA. Purchase your copy of the ultimate out of home sales guide at billboardinsider.combackslashpublications. Jim, Billboard Insider gets a lot of traffic from some passive income websites. In the conversation, I'll get an email or a phone call. It goes... Someone will say this. Hey. I've been reading about the billboard industry. What a great business is is. I'd like to add billboards to my investments as a passive income strategy. How do you react to that? [00:15:27] S1: I would tell them to go out and buy some Clear Channel bonds. [00:15:33] S0: Couldn't agree more. Buy Clear Channel. Buy Lamar stock. That's your passive income. [00:15:38] S1: Yeah. Ex... Exactly. I've I've I've come across way too many people that said, wow. That's the the simplest business in the world over the last thirty years or so that I've been doing this. And I I like to say it... It's simple for the for for the very educated. [00:15:55] S0: Yes.
00:15:55 · Dave Westburg, Jim Johnsen
[00:15:55] S0: Yes. [00:15:55] S1: Yes. Whether you're talking about renegotiating leases or putting out... Know, developing marketing collateral or going door to door and selling outdoor or developing new sites or whatever, it's it's... You know, I've I've been I've been hanging around with guys that are really good at that for the last thirty years, and there's not a day that goes by that I don't learn something. [00:16:15] S0: So You know, Jim, billboards don't run them. So a billboard doesn't sell itself. Vinyl doesn't put itself up automatically. Lights don't stay on forever. And, if you think you can be across the country and manage a plant, it just... That's insanity. It does not work that way. [00:16:33] S1: The the the other quote I heard that I really love on that front, Dave, is nobody ever wakes up in the morning thinking today I'm gonna go buy a billboard. Yeah. Meaning meaning customers don't just show up on your front doorstep. [00:16:46] S0: You just [00:16:46] S1: gotta go find them. [00:16:47] S0: You're right. [00:16:48] S1: Yeah.
00:16:48 · Jim Johnsen, Dave Westburg
[00:16:48] S1: Yeah. [00:16:48] S0: You're right. I can't think of someone that took a passive income strategy that thrived. I cannot think of anyone. Either they got into it and they realized the billboard wasn't selling itself. They had to sell. Or they got... Bought something that they should never have bought. They didn't understand. They overpaid, and it wasn't a deal it was. Or they weren't able to... Because the billboards were so far away from their their home, they weren't able to to pay attention to them like they were supposed to. I can't think of anyone that's remotely passive income approach to billboards and thrived. [00:17:23] S1: You know, Dave, the the closest the closest analogy to that is probably Landmark Dividend. [00:17:29] S0: Yes. [00:17:30] S1: And and even they had had challenges from what I understand. [00:17:33] S0: So Yes. You're right. [00:17:34] S1: No. I I couldn't agree with you more. [00:17:36] S0: Yeah. Well, let me ask you about some of the major out of home companies. I'd love to get your thoughts, for instance, on Lamar. What do you think of Lamar? What's going on there? [00:17:44] S1: May may be common knowledge or may may not be common knowledge, but I I do believe that Ross is is being groomed to to be the next CEO of of Lamar. [00:17:54] S0: Mhmm. [00:17:54] S1: Ross Reilly. [00:17:56] S0: Yes.
00:17:56 · Dave Westburg, Jim Johnsen
[00:17:56] S0: Yes. [00:17:56] S1: Heretofore, my interactions with him have all been super favorable. He's a... You know, he's just a a business friendly guy, likes to think outside the box, smart, affable, well liked within the Lamar organization, and I think I think it's a great pick. [00:18:11] S0: Jim, was he evolved in the Lamar SPAC that just never got legs? [00:18:16] S1: I believe he was. [00:18:17] S0: And and what... By the way, what's your take on the SPAC? Did... They just could not find find acquisition targets? Because they form it. It was a great to do, and then they unwound it. They just sort of seemed to say, well, couldn't find anything. Couldn't find any use for the money. [00:18:30] S1: Yeah. So we were engaged by a a big Wall Street firm to help them explore us back in the outdoor business, Dave. [00:18:38] S0: Yes. Yes. [00:18:39] S1: And and after eighteen months worth of work, we all came to the conclusion that you... It was just impossible to get scale. To to to really, have a successful SPAC, from what I understand, you need to put at least 400 to $500,000,000 to work out out the door day one. [00:18:57] S0: And Wow. [00:18:57] S1: And and everybody says, well, you can do that through one transaction or you can do that for... Through five transactions. Well, you and I know what it's like to try to close five transactions simultaneously without one of them going off the rails and taking rest rest off the rails. Right? [00:19:10] S0: Right. Right.