The Billboard Insider Podcast
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.
00:19:10 · Dave Westburg, Jim Johnsen
[00:19:10] S0: Right. Right. [00:19:11] S1: So, you know, name... You know, you know, give give me the list of names that that would equate to a 4 to $500,000,000 transaction [00:19:20] S0: You're right. [00:19:20] S1: In a in a single in a single spin. It's just... Man, it's it's damn near impossible. [00:19:26] S0: Outfront Media. [00:19:27] S1: Love them. I I, you know, I I... From a forward thinking, progressive sales and marketing organization, I think they get it like like they've never gotten it before. They're not selling space anymore. They're selling a product with lots of sex appeal, and they're and they're putting lots of sex appeal on their sales and marketing. And I think, ultimately, that's gonna pay dividends for them. [00:19:50] S0: What's your take about how the MTA contract's rolling out? They seem to be getting close to finishing their build, and they also seem to be in a place where after needing being a net cash require, that MTA contract's gonna shortly be generating free cash flow for them. [00:20:07] S1: I'll tell you what. The product looks phenomenal. I'm in New York City often, and I'm riding the subways often. And the... I forget the name. The way they present the product with a three in one or the Mhmm. You know, sort of the the Burma Shave effect on the the screens looks dynamite. One thing they do right is station domination. [00:20:28] S0: Mhmm.
00:20:28 · Dave Westburg, Jim Johnsen
[00:20:28] S0: Mhmm. [00:20:28] S1: So, generally, they're trying to sell the entire environment to one advertiser at a time and making a gigantic splash inside instead of, you know, trying to sell 20 flips, so to speak. So I think they're doing that right. I think, ultimately, it's gonna pay off for him. But... Wow. I mean, talk about kicking off, you know, relatively shortly before COVID and then having a sale through COVID and having ridership down 90%. And ridership, from what I understand, is still, you know, down more than 50%. Mhmm. It's it's been a challenge. [00:21:01] S0: But revenues are coming back seems like before riders. It's been an interesting phenomenon. [00:21:05] S1: That is interesting. Yeah. No. That that that is very interesting, and maybe that's a testament to how good the product is. You know, just, you know, the c... CPM or or whatever is going up, but the advertising is there. [00:21:17] S0: Clear Channel Outdoor.
00:21:17 · Dave Westburg, Jim Johnsen
[00:21:17] S0: Clear Channel Outdoor. [00:21:18] S1: You know, as they used to say about the... About CBS, they're the Tiffany the Tiffany collection of assets. My god. When you when you look at the sort of the the legacy of the assets there all all the way back to Foster and Kleiser Mhmm. And, you know, the fact that in some cases, those imprints have changed four or five times, but the ass... They... But the asset is still just as good. It's just... It fascinates me. It fascinates me. They've they've had so many challenges for so long. I mean, they've, you know, they've sort of... It's the street vendor who who only has a couple things to sell every day. Right? Because it's... Their their capital constraints have been so deleterious to them that it's it's amazing that they've been able to sell through that. But, again, the assets are so darn good. I mean, the guys that... You know, when they spun off certain markets there and... When was it? 2018? [00:22:10] S0: Yes. [00:22:11] S1: '17? I mean, you know, whether whether you talk to Jim from Ashby Street or you talk to some of the Lamar guys or some of the other guys that bought some of the assets, they are... They were just in shock with how good the assets were and how much lift there was on the assets by applying some more capital and some more hard work to them. Mhmm. So [00:22:32] S0: What what would you do about Clear Channel Europe?