Clear Channel Outdoor Holdings Stock

Clear Channel Outdoor Holdings, Inc. operates as an out-of-home advertising company worldwide.

With more than 325,000 print and digital displays in 19 countries as part of the company's continuing operations at December 31, 2023, it provides customized advertising solutions via its asset portfolio of roadside billboards, urban street furniture, airport advertising displays and other displays. By leveraging the scale, reach and flexibility of its diverse portfolio of assets, the company connects advertisers with millions of consumers every month. The company is at the forefront of driving innovation in the out-of-home advertising industry, and its dynamic advertising platform is broadening the pool of advertisers using its medium through the expansion of digital displays and the integration of data analytics and programmatic capabilities that deliver measurable campaigns that are simpler to buy.

Strategy

The company focuses on driving incremental demand for its out-of-home portfolio by differentiating itself from its competition. The key elements of the company's strategy include accelerating its digital transformation; growing its digital footprint; enhancing its RADAR Offering; building on its programmatic presence; digitalizing its operations; prioritizing customer-centricity; and optimizing its portfolio

Segments

The company operates through four business segments: America (which consists of the company's U.S. operations excluding airports); Airports (which includes revenue from the U.S. and Caribbean airports); Europe-North (which consists of operations in the U.K., the Nordics and several other countries throughout northern and central Europe); and Europe-South (which consists of operations in Spain and, prior to their sales in 2023, Switzerland, Italy and France).

America and Airports

The company is one of the largest out-of-home advertising companies in the U.S., with presence in 84 Designated Market Areas (DMAs), including 43 of the top 50 U.S. markets, as of December 31, 2023.

The company's America segment had 49,574 displays across 28 U.S. DMAs as of December 31, 2023, with its presence concentrated primarily in larger markets. The majority of the company's revenue is generated from large-format billboards that are generally located along major expressways, primary commuting routes and main intersections, and its footprint is protected by certain barriers to entry for traditional large-format roadside advertising, its operational expertise and the strong working relationships required with landlords and local governments.

The company's Airports segment had 12,879 displays across nearly 200 commercial and private airports in the U.S. and the Caribbean as of December 31, 2023, making it the largest airport advertising specialist in the U.S. The company's airport advertising contracts generally include exclusivity provisions, with the company having an exclusive right to sell advertising within a specific airport. The company's Airports segment generated 15% of its revenue from continuing operations in 2023.

Sources of Revenue

America

Billboards: The company's America billboard inventory is available in both printed and digital formats and includes the following sub-categories:

Bulletins, which are most commonly 14 feet high by 48 feet wide, are the largest and among the most impactful standard-sized out-of-home media formats. They are generally located along major expressways, primary commuting routes and main intersections that are highly visible and heavily trafficked. The company's customers may contract for individual bulletins or a network of bulletins, meaning their advertisements are rotated within the network to increase the reach of the campaign. The duration of the company's customer contracts for traditional bulletin displays are typically 12 weeks or longer.

Posters, which can vary in size but are commonly approximately 11 feet high by 23 feet wide, are often used as a full market coverage medium for reach and frequency, while junior posters, which are approximately 5 feet high by 11 feet wide, are often used for their proximity to retail outlets where they can stimulate sales. Posters are generally located in commercial areas on primary and secondary routes near point-of-purchase locations, and advertising on these displays is generally purchased in four-week periods. Premiere Panels, which use one or more poster panels but with vinyl advertising stretched over the panels similar to bulletins, are innovative hybrids between bulletins and posters that the company developed to provide its customers with an alternative for their targeted marketing campaigns, combining the creative impact of bulletins with the additional reach and frequency of posters.

Spectaculars are large, elaborate, customized display structures that are designed to gain maximum attention with eye-catching special effects, such as video, multi-dimensional lettering and figures, mechanical devices, moving parts and other embellishments. Customer contracts for these displays, which are located in New York City's Times Square and Las Vegas, typically have terms of at least one year. A wallscape is a display that drapes over, or is suspended from, the sides of buildings or other structures. Custom-designed for long-term exposure, wallscapes often become landmarks in a city. The majority of the company's wallscapes are located in Los Angeles and New York City's Times Square, and advertising on these displays is generally purchased for extended periods.

Street Furniture Displays: The company's America street furniture displays, which are available in both printed and digital formats, include advertising surfaces on bus shelters, information kiosks, newsracks and other public structures and are primarily located in major metropolitan areas and along major commuting routes. Advertising on these displays is generally purchased in four-week periods and is often sold as part of a network package that includes multiple displays.

Other: In the majority of its markets, the company's local creative and operations staff can perform the full range of activities required to create and/or install advertising copy, including creating the advertising copy design and layout, coordinating its printing and installing the copy on displays. The remainder of the revenue from the company's America segment consists largely of fees related to these activities, including vinyl or poster orders, production, embellishments and installation services. Other revenue also includes revenue from transit displays, which are advertising surfaces within the common areas of rail stations and on various types of vehicles, including on the interior and exterior sides of buses, trains and trams, as well as other non-advertising revenue.

Airports

The company's Airports segment provides advertising opportunities around and within U.S. and Caribbean airports. Airport advertising displays, which allow advertisers to target travelers with their message at key touchpoints throughout the passenger journey, are available in printed, digital and experiential formats and include a variety of solutions, including custom exhibits and interactive displays. The duration of the company's customer contracts generally range from four weeks to one year, although some are longer. As of December 31, 2023, the company's Airports segment had 12,879 displays, including 2,453 digital displays.

Operations

The company generally outsources the fabrication and manufacturing of advertising structures to third parties and regularly seek competitive bids. For digital displays, the company uses a number of vetted domestic suppliers for LED and LCD products.

Printed advertising copy, which is oftentimes supplied by the advertiser or a third party, is primarily printed with computer-generated graphics on a single sheet of vinyl or polyethylene material. The company's operational process also includes conducting visual inspections of its inventory for display defects and taking necessary corrective action within a reasonable period of time.

America

The majority of the advertising structures on which the company's billboards are located require various permits, which are granted for the right to build, maintain and operate an advertising structure as long as the structure is used in compliance with state and local laws and regulations. Permits are typically granted by the state and/or local government and are typically transferable or renewable for a minimal fee or no fee. The company typically owns the physical structures on which its customers' advertising copy is displayed. The company manages the construction of its structures centrally and erect them on sites it either leases or owns or for which it has acquired permanent easements or executed long-term management agreements. The site lease terms generally range from 1 to 20 years, with options to renew in many cases. The company is also generally responsible for the construction and maintenance of street furniture structures.

Airports

The company's rights to place displays around and within airports and to sell advertising on such displays are generally awarded by public transit authorities in competitive bidding processes or may be negotiated with private transit operators. These contracts generally have terms ranging from 5 to 10 years and may contain renewal options.

Europe-North

The company operates in countries throughout Europe where out-of-home advertising is an urban medium: its portfolio focuses on densely populated metropolitan areas, and street furniture displays are its largest source of advertising revenue. Located at the heart of cities and close to the point-of-sale, street furniture displays have a location advantage, which advertisers leverage to drive foot traffic to their retail locations and influence purchasing decisions. The majority of the company's customers are advertisers targeting national or regional audiences whose business generally is placed with it through media or advertising agencies.

The company's Europe-North segment includes 12 countries - the U.K., Sweden, Belgium, Norway, Finland, the Netherlands, Denmark, Ireland, Poland, Estonia, Latvia and Lithuania - and had 256,846 displays as of December 31, 2023, including 15,256 digital displays. This segment generated 29% of the company's revenue from continuing operations in 2023.

Digital displays accounted for 55% of the company's Europe-North revenue during 2023.

Product Descriptions

Street Furniture Displays: The company's Europe street furniture displays, which are available in both printed and digital formats, include advertising surfaces on bus shelters, freestanding units, various types of kiosks, telephone boxes and other public structures. The company's printed street furniture is sold to customers as either network packages of multiple street furniture displays or by individual unit, with contract terms generally ranging from one to two weeks.

Retail Displays: The company's Europe retail displays, which are available in both printed and digital formats, are mainly standalone advertising structures in retail outlets, such as malls and supermarkets. The terms of the company's customer contracts for these displays generally range from one to two weeks.

Transit Displays: The company's Europe transit displays, which are available in both printed and digital formats, consist of advertising surfaces on various types of vehicles or within transit systems, including on the interior and exterior sides of buses, trains, trams and within the common areas of rail stations and airports. The terms of the company's customer contracts for these displays generally range from one week to one year, although some are longer.

Billboards: The company's Europe billboards vary in size across its networks, with the majority being similar in size to the posters used in its America segment. The company's Europe billboard inventory is primarily comprised of classic and premium billboards and is available in both printed and digital formats. The company's customers may contract for individual billboards or a network of billboards, and contract terms typically range from one to two weeks, although terms of up to one year are also available in certain circumstances.

Classic billboards are available in a variety of formats across the company's European markets and generally are located in commercial areas on primary and secondary routes near point-of-purchase locations, facilitating advertising campaigns with greater breadth of demographic targeting than those displayed on premium billboards.

Premium billboards, which are typically larger in format, generally are located along major expressways and motorways, primary commuting routes and main intersections that are highly visible and heavily trafficked, as well as iconic city center locations.

Other: The remaining revenue from the company's Europe-North segment consists primarily of advertising revenue from other small displays, production revenue and non-advertising revenue from the following sources:

Sales of Street Furniture Equipment and Cleaning And Maintenance Services: In several of its European markets, the company sells equipment or provides cleaning and maintenance services as part of street furniture contracts with municipalities.

Operation of Public Bike Programs: The company also has public bicycle rental programs that provide bicycles for rent to the general public in several municipalities. In exchange for operating these bike rental programs, the company generally derives revenue from advertising rights to the bikes, bike stations, additional street furniture displays and/or a share of rental income from the local municipalities.

Operations

The company generally outsources the design and manufacturing of advertising structures to third parties and regularly seek competitive bids. The company uses a wide range of suppliers located in many of its markets, although much of its inventory is manufactured in China and the U.K. For digital displays, specialist suppliers are used to supply the LCD or LED technology, and there may be additional factors, such as electrical supply and network connectivity, involved during design and construction.

Media or advertising agencies often provide the company's customers creative services to design and produce advertising copy, which is delivered to it either in digital format or in the traditional format of physical printed advertisements. Digital advertisements are received by the company's content management system and then distributed to its digital displays, which are linked through centralized computer systems to simultaneously and rapidly change messages throughout the course of a day. Paper and vinyl printed advertisements are shipped to centralized warehouses operated by the company or third parties. The copy is then sorted and delivered to sites where it is installed on the company's displays by its own employees or subcontractors who also clean and maintain the sites. The decision to use the company's own employees or subcontractors is made on a market-by-market basis taking into consideration the mix of products in the market and local labor costs.

The company generally builds its portfolios of advertising locations by entering into long-term contracts with landlords, such as municipalities, private individuals and shopping malls. Upfront investment and ongoing maintenance costs vary across contracts.

The company's rights to place street furniture in the public domain and to sell advertising on such street furniture are governed by contracts awarded by municipal and transit authorities, which typically provide for terms ranging up to 15 years. Municipal contracts typically require the company to provide the municipality with a broad range of metropolitan amenities, such as bus shelters with or without advertising panels, information kiosks, public wastebaskets and space for the municipality to display maps or other public information. In exchange for providing such metropolitan amenities and display space, the company is authorized to sell advertising on certain sections of the structures it erects in the public domain. The company pays the municipality or transit authority a fee or revenue share that is either a fixed amount or a percentage of the revenue derived from the displays and are typically required to pay minimum guaranteed amounts.

The company's rights to place displays in retail locations and to sell advertising on them generally are awarded by retail outlet operators such as large retailers or mall operators, either through private tenders or bilateral negotiations. These contracts generally have terms ranging from three to ten years.

Similar to street furniture, the company's rights to place transit displays on vehicles or within transit systems and to sell advertising on them generally are awarded by public transit authorities in competitive bidding processes or are negotiated with private transit operators. These contracts generally have terms ranging from two to five years.

The company leases the majority of its billboard sites from private landowners, typically for terms ranging up to 15 years.

Other

The company also has operations in Latin America, including in Mexico, Brazil, Chile and Peru, and in Singapore. Most of the company's revenue from these operations is generated from the sale of advertising on billboards and street furniture displays, and as of December 31, 2023, this portfolio included 6,625 displays, including 1,223 digital displays. The company's Latin America and Singapore businesses generated 4% of its revenue from continuing operations in 2023.

Seasonality

The company typically experiences its weakest financial performance in the first quarter of the calendar year, which is generally offset during the remainder of the year as its business typically experiences its strongest performance in the second and fourth quarters of the calendar year (year ended December 31, 2023).

History

The company was incorporated in 1995. The company was formerly known as Eller Media Company and changed its name to Clear Channel Outdoor Holdings, Inc. in 2005.