Lamar Advertising acquires more Springfield billboards

by Jeremy Elwood

SBJ Reporter

jelwood@sbj.net

A multimillion-dollar deal between two national outdoor advertising companies is having an effect in the Springfield market.

Lamar Advertising Co. has finalized a deal to purchase all Springfield-area billboards owned by Denver-based Prime Outdoor Group LLC.

According to Lamar's Springfield Vice President Richard Rice, the Dec. 1 purchase adds approximately 170 new billboard faces to Lamar's Springfield-area portfolio. Lamar already controls about 250 billboard faces in Greene County.

The purchase also includes nearly 700 billboard faces in nine states. Prime Outdoor retains only its billboards in Pennsylvania.

Prime's Springfield billboards cover many of the major streets, including South Campbell and South Glenstone avenues.

According to figures from the Missouri Department of Transportation, there are almost 10,000 billboards in the state. Of those, Lamar now owns nearly half, said Bill May, executive director of Missouri Outdoor Advertising Association.

"This is a continuation of a trend that we've seen nationally now for quite some time, where smaller companies are being consolidated," May said. "I don't know if it's a good or a bad trend, but it is something that's going on in many industries, including radio and TV."

The purchase has been bad news for at least one Prime employee. Susan Reddick, Prime Outdoor's only Springfield account representative, said she lost her job following the deal. Reddick, who worked for Prime for more than two years after spending four years at Lamar, said she and other Prime advertising representatives across the country were not offered jobs with Lamar.

"Most of our employees are not staying on with Lamar," said Scott Andel, Prime's controllor, adding that the company employed 28.

Calls to Lamar's corporate offices in Louisiana were not returned.

Possible monopoly?

Though the Springfield-area holdings are minimal in the grand scheme, the bigger impact surrounds a possible monopoly, Reddick said. She considers Lamar a monopoly in southwest Missouri, and said that's not good for advertisers.

"Who it really hurts is the small guy," Reddick said. "Nobody besides the big (Branson) shows are going to have billboards going to Branson. In town, it's going to be the real estate people, the hospitals, the ones with big advertising budgets that can afford it. The little guys, the mom and pops, are going to be hurt, and they're going to be hurt bad. It's not helpful for advertisers to not have a choice for where to advertise."

Chris Brewer, a media buyer with Find-A-Sign, said rates could be affected by the deal.

"The availability for signs in the area is relatively low the demand has been good, so the consolidation in the market has slowed considerably," he said. "But (the purchase) could potentially mean an increase in rates because there's less competition."

Brewer added that while Lamar is the biggest outdoor advertising agency in the Springfield area, the second largest would probably be Missouri Neon.

Prime was doing good business in this area, Reddick said. But the company's investors were looking to sell because of a drop in business after the terrorist attacks of 9-11.

"We went through about 18 months of making payroll and paying our bills, but not enough return on investment for our other investors," she said. "This last year we had a fabulous year. All year I averaged between 78 (percent) to 85 percent occupied. So there was a big push to turn it around, and we did turn it around. We just did it about six months too late."

Though she is not happy to now be looking for other employment, Reddick said she understands that it's all part of the business.

"It's not sour grapes," she added. "I think there was inventory they needed that they did not have. (The purchase) completed what the Springfield office needed. Lamar's getting a heck of a product."

According to the public company's Web site, Baton Rouge, La.-based Lamar Advertising (Nasdaq: LAMR) operates 152 outdoor advertising companies in 43 states and Canada, including more than 149,000 billboards and more than 97,500 logo sign displays. At the close of business Dec. 15, its stock was trading at $42.74.

Before the sale, privately held Denver-based Prime Outdoor Group operated standard and tri-face billboards in 10 states, including Missouri and Illinois. Its inventories except for those in Pennsylvania will now be absorbed into the Lamar portfolio. The Pennsylvania billboards, according to Reddick, remain in Prime's control for the moment, though the company may be looking to sell those properties as well.