Billboard Monthly

August, 1st 2012

There Is Still Time To Attend The Billboard Boot Camp On August 11th And 12th

This is the two-day immersion weekend in which you learn how to identify, evaluate, negotiate, ground lease, obtain permits for, construct, rent ad space on and operate billboard signs – both in a classroom setting and in the field. You learn all the tricks, shortcuts and insider secrets that the pros know. And it’s taught by Frank Rolfe, who built from scratch the largest privately-owned billboard company in Dallas/Ft. Worth.

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How To Buy An Abandoned Billboard Sign

You see them frequently along the highway – dilapidated billboards of both wooden and steel construction. Giant orphans. Sometimes they’re covered in graffiti, and other times they are just rusted hulks with the faces falling off and weeds growing up the pole. So how does something as valuable as a billboard get in this condition?

They all have their own story

There are 1001 reasons that a billboard becomes abandoned. The most common themes are the death of the sign owner, the bankruptcy of the sign owner, some type of blockage that rendered the sign useless, a ground rent that was too high to pay, the inability to rent the ad faces, and the loss of the permit. When you first become interested in an abandoned billboard, one of the first things you do is put your CSI hat on and start reconstructing exactly what happened. Because that can give you a glimpse into the reality the sign’s true potential.

Some things you can fix, and some you can’t

With every abandoned sign, the first question should be “what happened here and how can I keep it from happening again?” If the sign became abandoned because the permit is invalid, then you can’t fix that. If the sign became abandoned because they built a bridge overpass and blocked the view, you can’t fix that, either. But there are other problems that can be remedied. For example, the former owner may have been lousy at renting the ad space. Or the heirs were fools when they abandoned their interest in the sign when they inherited it. Of all the abandoned signs in the U.S., probably only about 10% are due to problems that you can’t fix – but you need to make sure that you are not looking at one of those 10% signs.

Step 1: Find out who owns the sign

Abandoned billboards often have no identifying marks. But sometimes they will still have a “shield” on them – the name of the sign company that owns it. Other times, they’ll have the old state license plate nailed to one of the poles. See if you can find the owner of the sign. But if you can’t, then contact the landowner – they’ll probably be able to tell you the whole sordid story of how the sign came to be there and why the owner abandoned it. In many cases the landowner will claim that they own the sign as abandoned property, or that they seized it for non-payment of land rent. The goal is to find the person who can give you an arguable Bill of Sale for the sign structure. That’s who you need to be negotiating with.

Step 2: Negotiate a price to buy the sign, contingent upon a new ground lease

When you locate the person that claims to own the sign, you need to basically tell them the following:

“I’m pretty new to the sign business, and I know it’s not worth much, but how much would you want for the old, abandoned, dilapidated sign?”

The key to this question is that you have set several ideas in motion with the seller. Since you claim to be new to the sign business, they think that you might be a sucker who does not know how worthless the sign is, so it interests them. But at the same time, you have set their expectations that you know that it’s not worth much. Normally, they will throw out a price. And about 75% of the time, the price is reasonable. The worst buyers are ones who tell the seller:

“I’m a fast-growing billboard owner, and I’m interested in acquiring your billboard to add to my portfolio”.This sets the wrong precedent in the mind of the owner. They think that you a are a rich guy who must know something they don’t about the sign, and the price will reflect that logic – probably a multiple of the price from the earlier example.

Once you have agreed to a price, one key piece of the puzzle is to sign a contract under which you can buy the sign at that price contingent upon signing up a suitable ground lease. You can never buy an abandoned sign without first having a right to keep the sign on the property and operate it. But, at the same time, you don’t want to get the ground lease renegotiated until you know that you 100% have the right to own the sign – otherwise you might be wasting your time.

Step 3: Negotiate a new ground lease

It doesn’t matter what the prior owner of the sign was paying the landowner. All that’s important is what you can negotiate going forward. Talk to the landowner and see what it would take to put the sign back in action. A typical landowner will forgive all the past rent owed, and choose a new amount going forward that is pretty low – they know the sign already failed once, and don’t feel they have much negotiating strength. If they are adamant that they want something for the old rent that was never paid, you can sometimes offer a low lump sum, such as $1,000. Before you contact the landowner, have a price in mind based on doing market comps of the other sign’s revenues and what you think you can rent the ad space for. While you always want a long ground lease, this is one case in which you can settle for a shorter term, since you will have a very small investment in the sign. At the same time, strive to get at least 5 to 10 years, with the option to extend. And make sure that the ground lease is contingent upon getting all necessary permits for the sign. As always, the ground lease must be in writing.

Step 4: Fix the permit, or have an argument as to why it’s legal

Abandoned signs often fall into a very grey issue on legality. The sign was probably built in conformance with the law, but has a pretty shady past since that time. Some abandoned signs, through complete luck, are still 100% in line with the permits. Others require only an easy fix, such as paying up some old permit fees. But others are 100% illegal. I would never buy a 100% illegal sign unless you have a reasonable argument as to why it might be legal. Maybe you can argue that the sign never was abandoned because it had the old copy up on it, or that it didn’t need a permit because it was built before the Highway Beautification Act. But you need some reasonable story that you can respond with if you ever get a call from the state or city inspector. Most of the time, even in the grey area, the inspector will let it pass because they know that the sign is not worth fighting over. It also helps that you have very little investment in the sign so, worst case, you can abandon it again.

Step 5: Close the transaction and rent the ad space

Once you have everything in place, you should close the transaction, relying on the fact that your ground lease gives you the right to walk away if you can’t get the ad space rented. Now the focus is 100% on getting the sign leased. I don’t have the room to write the entire 10-step process to renting ad space on a billboard, but it’s a pretty good assumption that, if you proactively use that process, you will get it rented. I’ve never bought an abandoned billboard that I could not rent the ad space on.


Buying abandoned billboards is a great way to add inventory to your portfolio. When you see those abandoned signs along the highway, don’t just sit there, do something. Some of the most profitable signs I’ve ever had – based on return on equity – were abandoned signs. 100%+ annual returns are fairly common with these projects (my record was a 1,000% per year return on a sign near Plano, Texas), so they are definitely worth working on.

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Memo From Frank

Australia recently announced that outdoor advertising was the only form of advertising that showed higher revenues over the past year, advancing over 10%. So the growth in U.S. billboard ad revenues is apparently part of a global phenomenon. So why are billboard sales increasing when everything else is declining? The answer is simple: the internet. Back in the old days, billboards were the weak sibling of television, radio, newspapers and magazines. But all that’s changed. The internet has destroyed the audience numbers for those other types of media, and only billboards have increased market share, since there’s even more people on the road today, and the commutes are longer. I, myself, no longer subscribe to the daily newspaper or Wall Street Journal because I can get all my news free on line. But when I drive a car, I can’t elect any other options out my windshield other than billboards and the highway in front of me. When they invented the internet, I’m sure that nobody ever envisioned the way that it would impact the advertising industry. If they had, they’d have probably shorted the stock in all the traditional media companies and bought billboard stock instead.

A Billboard Tale

Did you know that early, wooden billboards had another role with law enforcement – they used to hide behind them to issue speeding tickets. Because the old signs were low to the ground and had numerous poles to block visibility, police would often hide their cars behind them and set up speed traps in that manner. In the Peterson Automotive Museum in Los Angeles, there is a wooden billboard as part of the diorama on a 1940’s car, with the police hiding behind it, as they would have back then. So maybe the invention of the monopole also served to reduce such speed traps on the highway system.

A Billboard Tip

If you a build a website for your billboard company, don’t show a list of locations – either on a map or on a spreadsheet format. Why? Because it will allow the landowner to immediately see how large or small your operation is. Build a website that looks professional and discusses the industry, but leave off the location map. I recently looked at a website that showed that they only had three signs. That’s a deal killer with landowners who want assurance that you know what you’re are doing and can pay the rent. When you get up to 100+ signs, then it’s O.K. to show the inventory. But leave it off otherwise.

The Market Report

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