The Billboard Insider Podcast
00:06:51 · Jim Johnsen
[00:06:51] S1: Well, I do believe hiring the right experts to get the job done is a great investment. I I think with with good advice, you'll ultimately maximize on the way out. And without advice, there's a tendency to either drive into a ditch or or make a bunch of mistakes or leave some money on the table. So first off, hire a good banker. You hire a banker not to, quote, unquote, find you a buyer. Mhmm. Really? In in my in my humble opinion, you hire a banker to make a market for you because we we believe here at Johnsen Fretty that by making a market for your for your company or for your... The assets within your company that you're gonna have the best possible outcome. So, Dave, beyond hiring good banker advice and hiring good legal advice and finding good tax advice when you're going to sell your company, I'd say the other thing that I've seen over the last thirty years that people do not well or improperly or or don't give enough thought to is just not cleaning the house before going to market. So what do I mean by that? I mean, you know, whether it's renewing the leases that should be renewed that you sort of just let dangle out there or failing to achieve an industrial strength permanent easement when, you know, there's certain elements, whether it be view shed or access or what have you in an easement or even just something as simple as not having all your invoices in place for the last couple years ready to demonstrate and to verify the revenue that you produced or failing to paint your structures over a series of years. I I could go on and on, but I I think you get get the drift, Dave. I mean, if if there's one piece of advice that I'd I'd lend to anybody who's thinking of selling, really spend some time cleaning the house first.
00:08:33 · Dave Westburg, Jim Johnsen
[00:08:33] S0: And I think, Jim, a good investment banker knows both sides. I think of when we did business, you were in the middle. You were able to say, you know, you may have some room here, but, you know, they really want this. So you're gonna really have to do this. And you understood us, and... But you also understood the other side when we bought the signs in Indy, and you were able to sort of be the middleman communicating, making sure that there were no misunderstandings as to which... What each party wanted in the transaction. [00:09:01] S1: Yeah. You're absolutely right, Dave. And and maybe I... You know, I've done our industry of investment bankers and and brokers a disservice by not mentioning that. But you're you're absolutely right. Part of a a good banker is being a shuttle diplomacist. [00:09:15] S0: Yes.
00:09:15 · Dave Westburg, Jim Johnsen
[00:09:15] S0: Yes. [00:09:15] S1: That's certainly an aspect of it. Certainly, you've you've gotta take the heat from both sides. Both sides want to shout at the other side, and it's best if they shout at the banker who then goes back and Yeah. And rephrases it or who who repackages it in a way that's digestible for the other... The counterparty. So there's certainly some of that. And then, you know, the other thing that is hard to put a value on and hard to estimate, but I know it's there, is when a seller hires an investment banker and then an investment banker approaches the market and begins to engage buyers, there's a level of trust there that the buyer is taking away from that banker being in the transaction. Because while a seller may sell its assets and go off to the beach in one transaction, the the banker's gotta make its mark in the industry for the next twenty, thirty, fifty years, whatever, and as a result, has a reputation to uphold. And and I think buyers take some level of trust in the fact that, they're not gonna get snookered in a transaction if a banker's involved. [00:10:12] S0: Mhmm. You touched on the out of home debt markets. I'd like to talk about the out of home capital markets. Let's start with debt. My sense is there there have never been so many providers as there are right now. What's your take? [00:10:24] S1: I think you're right about that, Dave. I think short of one period in history, which I really loved, which was, like, sort of 1990 to 1995 back when Chase Manhattan Bank would lend somebody 10,000,000. Or
00:10:24 · Jim Johnsen, Dave Westburg
[00:10:24] S1: I think you're right about that, Dave. I think short of one period in history, which I really loved, which was, like, sort of 1990 to 1995 back when Chase Manhattan Bank would lend somebody 10,000,000. Or [00:10:37] S0: State Street. They were in. [00:10:39] S1: State Street Bank, Bank of New England, Boston Bank, Union Bank of California [00:10:45] S0: Yes. [00:10:45] S1: Etcetera, etcetera, etcetera. So that was a really sort of a vibrant period for media lending. And I would venture a guess that most of those guys have vacated media lending, number one, because their balance sheets got larger. And as a result, they couldn't justify doing $10,000,000 deals any longer. And then number two, let's not forget that a a vast swath of the media industry has been wiped out or or dramatically negatively impaired, right, whether we're talking about linear television or radio or newspaper or publishing and and so forth. So it is true that it's now sort of a... You've got a healthy sort of, stable of outdoor lenders. A good portion of the media lending business has been wiped out. I'd love to hear your thoughts on that, Dave, because you're... You've you've spent a a good part of your career in me.
00:10:45 · Jim Johnsen, Dave Westburg
[00:10:45] S1: Etcetera, etcetera, etcetera. So that was a really sort of a vibrant period for media lending. And I would venture a guess that most of those guys have vacated media lending, number one, because their balance sheets got larger. And as a result, they couldn't justify doing $10,000,000 deals any longer. And then number two, let's not forget that a a vast swath of the media industry has been wiped out or or dramatically negatively impaired, right, whether we're talking about linear television or radio or newspaper or publishing and and so forth. So it is true that it's now sort of a... You've got a healthy sort of, stable of outdoor lenders. A good portion of the media lending business has been wiped out. I'd love to hear your thoughts on that, Dave, because you're... You've you've spent a a good part of your career in me. [00:11:34] S0: I can think of at least... You know, there are there are leasing companies like JCDecaux, still very active. There are private finance firms, couple private... You know, my Billboard Loans company, Chris Stark, Stark Capital, active in the loans of, you know, 1,000,000, 2,000,000, and less. Above about 3,000,000, you have some players like Verde and Alaris Financial. And my read is it's been good times. Bank balance sheets are strong. There's a lot of community and local banks that are lending. They'll flee the market if we have another recession just like they fled the market in 2009, but the... It's quite a, it's quite a good market right now in terms of lenders.
00:11:34 · Dave Westburg, Jim Johnsen
[00:11:34] S0: I can think of at least... You know, there are there are leasing companies like JCDecaux, still very active. There are private finance firms, couple private... You know, my Billboard Loans company, Chris Stark, Stark Capital, active in the loans of, you know, 1,000,000, 2,000,000, and less. Above about 3,000,000, you have some players like Verde and Alaris Financial. And my read is it's been good times. Bank balance sheets are strong. There's a lot of community and local banks that are lending. They'll flee the market if we have another recession just like they fled the market in 2009, but the... It's quite a, it's quite a good market right now in terms of lenders. [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.