Last Updated Jul 8, 2009 4:17 PM EDT
But the company has become even more dependent on its scorched earth legal strategy this year as it pursues a policy of refusing to lower prices for its boards. Benchmark, an analyst firm, issued this note to investors:
Lamar's heavy $3 billion debt load could make it sensitive to shrinking cash flow...US Outdoor Advertising spending may fall more than overall advertising spending in 2009, possibly at a double-digit rate...At the same time, Lamar's billboard empire is either in stasis or shrinking as it hordes cash rather than acquire new sites and as municipalities nip away at billboards they don't like. Benchmark:
... Lamar's strategy to hold prices firm at the cost of occupancy may result in bulletin occupancy bottoming out near 60%."
In response to shrinking revenues and debt related pressure, Lamar announced a spending freeze for 2009 and slashed capital expenditures from roughly $200 million in 2008 to only $35 million in 2009. This includes practically halting the rollout of digital billboards, which were expected to offset the maturing of traditional billboards and pave the way for future growth.So you can see why Lamar's lawyers are litigating in every village and burg across the land. Here's a roundup of recent dustups:
Albany, N.Y.: Lamar Advertising filed a lawsuit against the city of Albany claiming the sign ordinance is unconstitutional. Both sides are trying to work out a settlement in the case. The advertising company originally applied to install as many as 13 LED billboards, but the new sign ordinance allows only 8 of those electronic billboards within the city limits.
Pittsburgh: Alice Mitinger, a lawyer with expertise in zoning issues who had been appointed to the Zoning Board of Adjustment by the late Mayor Bob O'Connor, was informed by the administration this week that she would not be named to another term. Ms. Mitinger wrote an opinion supporting a 2008 ruling, which was upheld yesterday, that denied a permit for Lamar Advertising to erect an electronic billboard on the transportation center.
Pittsburgh: An Allegheny County judge ruled this week that Lamar Advertising cannot complete a partially built electronic billboard on the Grant Street Transportation Center, Downtown.
... Lamar appealed the three-member zoning board's 1-1 decision. One member recused himself due to a conflict of interest.
Macedon, N.Y.: At their meeting this week, Macedon trustees are expected to vote on whether to allow a digital billboard to be erected on village property near Gravino Park on Route 31 in exchange for about 2 acres of land.
If the incentive zoning application is approved, Palmiere and Reitano plan to hire Lamar Advertising Co. to build and maintain the 253-square-foot digital billboard in front of the plant.
Columbia, S.C.: Lamar Advertising, a national billboard and sign company, has coaxed Lexington County and the City of Columbia into changing their ordinances to permit digital billboards. But Richland County has fought to keep them out, enacting a moratorium in 2001 on putting up more billboards in Richland, including digital signs.
But during last year's County Council elections, some council members "reassessed" their opinion of the signs after talking with Lamar, says Councilwoman Kit Smith, and the advertiser might finally have the votes it needs.
Murfreesboro, Tenn.: A Murfreesboro judge ruled in favor of the Murfreesboro Board of Zoning Appeals defense in denying a permit for a billboard using TV-type images. Advertisement
"Lamar Advertising cannot now complain that the Murfreesboro Board of Zoning Appeals has revoked their permit to build a sign structure when they knowingly failed to submit plans to the City that included the digital sign face specifications," Judge Royce Taylor wrote in his ruling he signed today.