The Billboard Insider Podcast
00:22:32 · Dave Westburg, Jim Johnsen
[00:22:32] S0: What what would you do about Clear Channel Europe? [00:22:35] S1: Oh, that's a great question. I mean, you know, my knee jerk is I'd sell it at at whatever the clearing price was. But I'm sure the lenders have something to say about that. [00:22:44] S0: They gotta clear at least 300,000,000 because they got... Don't they have a $300,000,000 European bond issue? So they gotta clear at least that much. [00:22:51] S1: Right. Right. [00:22:53] S0: But, Jim, I... I'll come at you with this and see what you think. My read is opportunity costs of Europe are immense. It's got very poor margins. It's been demanding 35, 40% of Clear Channel's total capital expenditures. So my... This is my take. It's the slacker kid that wants a big allowance. And, and and that's money they can't... They have great projects they could do here in The US. Acquisitions, tuck ins, switching to digital, taking advantage of radar, and they can't do because they're having to feed a low margin European operation.
00:23:27 · Jim Johnsen, Dave Westburg
[00:23:27] S1: So, Dave, I have not spent much time in the professional world outside The United States, so I'm probably too little knowledgeable to even say this. But my sense is, whether it's South America or it's Europe or it's Asia or whatever, my sense is that out of home advertising in other parts of the world is just different. It's just Mhmm. It's... It plays out differently. It's more agency than it is asset ownership. It's more, you know, more willingness to to work at lower margins. It's more municipally driven. It's just... But... And and the flip side of that is it's more nationally advertising driven as well. So you've got all of those dynamics. And so if... My guess is if you're trying to run a out of home company in Europe like you're trying to run an out of home company in The US, it's it's a bit of a a mistake right out of the gate. And I I think they probably have some of that dynamic going on even Mhmm. Though they... You know, had been running it for for a long period of time and and really had European roots. So Mhmm. You know, you would... One would think he would understand that. But, I mean, I I remember... Oh gosh. Now I'm trying to remember how this happened. It was either Eller Media or was it Clear Channel that bought Maiden Outdoor. Mhmm. And I remember sort of being brought in to do some of the diligence on Maiden, and the way they ran that business was just so impressive. I mean, it [00:24:48] S0: just Is that right? [00:24:49] S1: It was a well oiled machine that... They had a whole department dedicated to, to to responding to RFPs
00:24:49 · Jim Johnsen, Dave Westburg
[00:24:49] S1: It was a well oiled machine that... They had a whole department dedicated to, to to responding to RFPs [00:24:56] S0: Wow. [00:24:56] S1: Day in day in day out. And that's just that's just different than the way we do business here in The US. [00:25:01] S0: Wanna touch on Link Media. They seem to... They... Two years ago, they did a lot of acquisitions, then they spent a year sort of digesting. They seem to be back in the market. [00:25:11] S1: Very selectively. Yeah. They're they're they're being selective in terms of what they go after, in terms of what they rationalize. Scott's done a dynamite job running the... You know, taking over from Jim Mhmm. And has really, you know, positioned the company well. But I think they've been selective in terms of what they bought. I think, you know, I think they've also maybe implicitly thought that during this sort of fervish period of acquisitions where Lamar and OUTFRONT and others are swinging pretty hard at things that they might not have the ability to compete at the same level. And so they've sort of, you know, taken sort of taken sidelines or taken weaker positions on possible acquisitions. That, you know, that may change over the next couple of years. [00:25:55] S0: They're they're running it for the long term, and so they they can afford to sit out what they perceive as a hot market. And maybe they get involved if we hit a recession. They get back in in a big way. [00:26:06] S1: I think that's exactly right. It's, you know, slow and steady wins the race kind of philosophy, if you will.
00:26:06 · Jim Johnsen, Dave Westburg
[00:26:06] S1: I think that's exactly right. It's, you know, slow and steady wins the race kind of philosophy, if you will. [00:26:11] S0: What about Adams? They've been pretty quiet. [00:26:14] S1: Adams. First of all, I love Adams. I love Kevin Gleason. [00:26:20] S0: Yeah. [00:26:20] S1: I had the good fortune to meet Steve Adams back in the day several times. Yeah. What a what a gentleman he is. We actually did a... Believe it or not, back in the early nineteen nineties, we did a a recap two or three times with Adams where we had helped them refi out, call it, you know, a 100 to $120,000,000 of debt with Heller Financial. [00:26:41] S0: Wow.
00:26:41 · Dave Westburg, Jim Johnsen
[00:26:41] S0: Wow. [00:26:42] S1: So, you know, we go back a long ways with Adams, and we love the company. I mean, it... You know, its roots are twofold. Right? One is Creative Outdoor, which had a phenomenal, you know, plant across several markets and had great roots and was sort of known as as, you know, super premium builder and operator after advertising. So they've got that in their roots, then they've got... I think they've got Central Outdoor, which is Michigan based, which was also a great operator, albeit more of a 30 sheet player than a than a bulletin player. So, again, the the, you know, the underlying assets that Adams continues to own are dynamite assets. They would go off at a at a super premium price if they were ever to go to market. I don't think they will go to market, actually, anytime soon at least. But great great company. It's... You know, I... I'm good friends with Jorg Cities lock, so I I think the world of him. I I think for him, it'll be a bit of a learning experience having having run Canadian, you know, high profile, splashy, gigantic, spectacular types of assets in Toronto and other places in Canada and then also running Titan's operation in in Chicago for a while. It's just, you know, it's a different animal. [00:27:55] S0: Adams is a little more smaller market, local, that kind of thing. Yeah.
00:27:55 · Dave Westburg, Jim Johnsen
[00:27:55] S0: Adams is a little more smaller market, local, that kind of thing. Yeah. [00:27:59] S1: Very much so. Yeah. Very much so. Is wildly creative, and and I know Kevin values creativity up there as number one, two, or three. So I think from that perspective, we'll get along. And and and and, you know, it'll be it'll be really fun to watch Adams progress over the next few years as management changes and as company continues to grow. [00:28:22] S0: Jim, what out of home companies are people not paying attention to that they should? [00:28:26] S1: I'll put number one on the list, Orange Barrel. I think Orange Barrel is a phenomenal company that was hand built from scratch, and people would be shocked if they knew how large it was right now. Unfortunately, I'm not at liberty to say, but [00:28:40] S0: And quality assets. Iconic assets. [00:28:42] S1: Right? Super quality assets. You know, their reputation in the marketplace is stellar. Everybody loves them. Anybody who does business with them loves them from a customer side, from a landlord side, from a municipal side. They're... They are certainly a company to watch. And and having said that, I'd say New Tradition, albeit a little bit of a different culture, just more of a New York City culture than a Columbus, Ohio culture, but albeit still a great company, is another company to watch. The fact... The the way they were able to kinda sneak in there at the last minute, construct a dynamite deal on a lot of the Regency assets, which is phenomenal. What a what a great sort of life changing event for them on that one.