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Why OOH deals are antitrust catnip
by Brent Baer, Publisher, OOH Today
Imagine a world where giant concreted steel frames and city contracts matter more than algorithms.
That’s OOH land.
Here’s why regulators salivate at OOH M&A deals:
*Local markets are king. A billboard in Boise isn’t substitutable by one in Boise’s neighboring county. So merging two billboard firms in the same city can eliminate real competition.
*High barriers to entry. Permits, municipal contracts, lease rights, zoning — these act like a moat around incumbents.
*Few major players, many eyeballs. The big three (Lamar, OUTFRONT, Clear Channel, etc.) are already established in most major metropolitan areas. There’s limited room for new entrants.
Put that together and you get a standard formula: “this transaction might substantially lessen competition” — and regulators love that language.
avoid getting flagged—or to satisfy the flaggers elegantly
Antitrust “moves” (not illegal, but clever) in OOH M&A
Here’s where the magic is legal but subtle. It’s not cheating the rules; it’s designing deals to avoid getting flagged—or to satisfy the flaggers elegantly.
- Pick your battlefields (narrow market definition)
Want to escape scrutiny? Define the market narrowly: “billboards in Westside City,” not “OOH in Metro.” Or argue that digital vs. static are separate markets. The narrower you go, the fewer overlaps you have. Regulators push back, but this is the first line of defense. - Divest, divest, divest (overlap cleanup)
This is the old classic. If the merged firm would dominate in, say, “Billboards in Uptown City,” you carve out and sell those to a third party. Most billboard/transit deals survive because the parties are willing to part with problematic assets. - Asset swaps and cherry-picks
Instead of buying your competitor’s entire footprint, you cherry-pick markets where your footprint is weak (so the overlap is light), or swap assets so you don’t overpower a local market. - Hold-separate / trustees/firewalls until divestiture
Until regulators approve or a buyer is found, you ring-fence operations (a trustee runs the overlapping assets, no integration). That soothes fears you’ll gobble up the competition on day one. - Friendly contracts and non-compete carving
Some municipal or lease agreements have transfer restrictions or first refusal rights. Careful drafting or prior consent from regulators helps avoid these clauses being held anticompetitive. - Efficiencies defense + PR spin
Expect the merger brief to brag: “We’ll roll out better digital panels faster, save costs, improve service to advertisers.” Not all claims will persuade—but if you can show synergy benefits tied to the deal (not achievable alone), that helps. Additionally, you receive press releases stating that the merger is beneficial for advertisers, local businesses, and others. - Cross-border carveouts
If regulatory risk is higher in one jurisdiction, consider spinning off or divesting that region. OUTFRONT did precisely that in Canada when they sold their Canadian business to Bell Media — effectively reducing cross-border regulatory exposure. Outfront Media Investor Relations+1
no private whispering
The “boss quotes” (and dramatic flair) from OOH leaders
(Yes, they sometimes play the PR game.) These are real quotes pulled from press releases and SEC filings — no private whispering.
- CCO on divesting Spanish OOH operations:
“This agreement to sell our business in Spain … sharpened our focus on growing our America and Airports segments,” said Scott Wells, CEO of Clear Channel Outdoor Holdings. PR Newswire
He’s essentially saying: “We’re slimming down, refocusing where it matters — don’t read too much into this.”
- On OUTFRONT’s leadership change:
“Nick brings a perfect balance of marketing strategy, business acumen, and expertise in ad tech and digital innovation … he could immediately step in as Interim CEO to spearhead an ambitious set of initiatives.” — Michael Dominguez, Chair of OUTFRONT’s board, speaking about Nick Brien’s appointment. PR Newswire - (Less glamorous, but telling) In Lamar’s earlier acquisition of Vivid, DOJ documentation notes that Lamar’s original proposal would force them to sell some assets in Wisconsin and Illinois to avoid elimination of competition. The DOJ’s press release approving the “restructured” deal mentions precisely that. Department of Justice
- On restraining Clear Channel’s investment in Lamar during a prior merger:
In Clear Channel/AMFM’s joint structure, the DOJ insisted that any divestiture of Clear Channel’s portion in Lamar must not go to a party already in OOH without DOJ approval—i.e., avoiding the transfer of power to another major player. Federal Register
These quotes are not exactly Battle of the Titans speeches — but they carry subtext: “We’re doing this smartly, we’re forward-looking, and yes, we’re managing regulatory risk.”
The game’s afoot
“The game’s afoot! / Follow your spirit; and upon this charge / Cry ‘God for Harry! England and Saint George!'”.
Witty but profound: how the game plays out
Let me paint the typical theatrical sequence in a billboard deal:
- Board room euphoria
CFO: “We acquire MetroCitySigns Co. for $200M; our footprint now dominates East Side.”
CEO (with slight evil grin): “We’re going to be unbeatable — until someone sues us.” - Counsel steps in
“Whoa, slow down. Let’s run a local market overlap analysis and draft a divestiture package.” - Regulatory dance
- Merger file is submitted to DOJ/FTC under HSR.
- Parties (via counsel) try to persuade regulators that market definition is narrow, overlaps minimally, and efficiencies are substantial.
- DOJ may object or signal required changes.
- Parties negotiate: “Okay, we’ll sell X, Y, Z assets, run them separately until a buyer is found.”
- Public messaging
Press release: “The merger gives scale; better for advertisers; local presence remains strong.” The CEO is quoted praising staff, emphasizing growth, minimizing divestitures as “routine cleanup.” - Divestiture/closing
If all goes well, the deal closes after the required assets are removed. If not, regulators may block the deal or file a lawsuit.
If any step fails (e.g., unwillingness to divest), the deal is at risk and the game’s afoot.
Regulators will pounce
Pitfalls & gotchas (where this can blow up in your face)
- Underestimating bottleneck assets: Even if billboard counts balance, if one firm controls all transit shelters or high-impact sites (airport, stadiums) in a city, that’s a red flag.
- Contractual non-compete or transfer restrictions: Sometimes, the fine print in concession agreements or municipal contracts has clauses restraining transfers or competition. If overlooked, regulators will pounce.
- Integration too soon: If the merging parties start coordinating pricing, operations, or sales across overlapping markets before divestiture, that can be a violation. That’s why hold-separates matter.
- Bad divestiture buyers: If your “divest to FriendCo” buyer doesn’t look credible (say, it’s a shadow affiliate), regulators will reject the remedy.
- Overclaiming synergies: If your efficiency claims aren’t well-documented or clearly merger-specific, you’ll be shot down.
- Cross-jurisdiction surprises: A deal cleared in the U.S. might hit a snag in Canada, the EU, or elsewhere if the footprint stretches globally or there’s cross-border exposure.
The OOH sector is structurally susceptible to antitrust scrutiny because the markets are local and site-based. The standard, lawful path for industry consolidation is predictable: define the market narrowly, identify overlaps, propose divestitures or carve-outs, use hold-separates if necessary, and obtain regulatory approval.
The DOJ and foreign agencies have historically required divestitures in multiple Lamar and Clear Channel-related matters. OUTFRONT’s recent Canadian divestiture demonstrates that cross-border strategy and regulatory planning remain essential.
If you advise or run an OOH firm, plan deals with antitrust risk management baked into the transaction timeline — that’s how major players legitimately grow without triggering blocked transactions. Justia Law+4Department of Justice+4Department of Justice+4
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