Lamar Not Giving Up Despite LA’s New Rules

Gail Chiasson, North American Editor

Lamar Advertising is a bit stymied by last week’s ruling by Los Angeles City Council that effectively bans all new digital signs, off premise signs and super graphics, but Ray Baker, Lamar’s vice-president general manager in California isn’t giving up hope that the city will take a long, hard look at Lamar’s own offer to the city.

With knowledge that Los Angeles wants to greatly reduce the number of legal billboards – estimated at 8,000 – in the city, Lamar recently offered to remove 3,500 billboards of the approximate 4,000 it owns, in exchange for putting up 450 new ones, including 50 digital signs. The Louisiana-based company currently has no digital signs in Los Angeles although it has them in other California cities. (Several other companies do have digital signs in LA.)

Lamar was and is ready to put its new signs up in commercial areas and on city-owned property. In addition, it offered to contract with union labor to take down its old signs signs – which could generate dozens of jobs over five years, says Baker. And, he says, as the lessor, the city would benefit by about $6 million annually if 100 of its signs are relocated to city-owned property under a to-be-negotiated agreement.

“Our program would benefit the city by a large reduction in signs, and we would benefit by offering cutting-edge technology,”
Baker says. “It would be a win-win for everybody. We know that over time the city landscape has changed and traffic patterns have changed. We’d like to modernize and put our signs in commercial areas. I understand that people don’t want a digital signs next to a single family home. I wouldn’t want it either.

“What we are offering would make the city more attractive, and would give it a revenue stream for years. It would also offer safety and security messages for the community. In fact, several developers have asked for our signs and now we can’t accommodate them, for the time being, at least.”

Lamar wants to put up standard 14’ x 48’ signs which are standard and slightly larger than most of the 3,500 it has offered to get rid of under its offer.

Any change in the new ruling would require a new ordinance, but Lamar was expecting that anyway.

While several of LA’s 15 city councillors are sympathetic to Lamar’s offer, Baker is now in the process of lobbying the others as well as other influencers. In the meantime, he says, “I wish there were more studies available to help show the value of what the signage can offer a city.”

Earlier this month, Lamar corporate headquarters in Baton Rouge, Louisiana, reported net revenue of US$274.7 million for the second quarter, down 15.2% on the same period a year ago. There was a net loss of $11.8 million for Q2/09 compared to net income of $12.6 million for Q2/08. And adjusted EBITDA for Q2/09 was $121.5 million versus $149.8 million for Q2/08, an 18.9% decrease.

Capital expenditure on digital billboards and traditional billboards was way down for Q2/09 compared to Q2/08 in both cases.

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