Indianapolis Business Journal reported yesterday on a deal that took place in Speedway. Apparently, the City needed a quarter-acre of land to install a new roundabout. The land owner had already sold the land to Speedway.
Clear Channel, though, had a lease on the property for a billboard they had on it. When the City offered Clear Channel $165,000 for the board, Clear Channel refused. After taking the company to court, the City and Clear Channel were ordered to accept a $189,000 transaction.
From the IBJ article:
"It's much less than what they had reuested in their counteroffer," said Scott Harris, executive director of the (Speedway redevelopment) commission, who declined to divulge the exact amount of Clear Channel's offer."
I guess maybe I just don't understand the economics of the advertising industry. I know they can deal in big money. Money beyond my comprehension. Almost $200,000 for a lone billboard, though, just seems horribly steep.
Think about what you can buy for that kind of money. I own a decent little 3-bedroom home in Indianapolis on about .7 acres. Two car garage. Shed. Central air. I spent half that. And, in today's housing environment, I would pay less, I'm sure.
I could take $100,000 around this town and probably have my choice of a half-dozen or more decent little bars for sale. Make it $150,000 and I might have a serious choice to make from a ton of options.
So what in the world makes a billboard in Speedway worth $189,000? Not the land, I remind you, just the board itself. Are they really that kind of revenue generating machines?
I'm obviously in the wrong business.