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Thursday, Mar 28, 2024

Turning Down Digital Billboards

Recently, the Valley Industry and Commerce Association (VICA) added its voice to the propaganda campaign surrounding digital billboards with an opinion piece in the Nov. 12 issue, “Talking Big on Billboards,” riddled with factual errors and faulty reasoning. The piece urged the City Council to take “swift action to reject” an imminent appellate court ruling that is expected to invalidate a 2006 settlement agreement and force CBS Outdoor and Clear Channel Outdoor to take down their digital signs in the city. According to VICA, if these digital signs – which have been the subject of frequent community outrage – are not saved, the city and local businesses will lose out on “hundreds of thousands of dollars” and the business community will lose “faith” that the city stands behind its contracts. VICA even suggested that the ruling would hurt homeowners since CBS Outdoor and Clear Channel Outdoor would no longer be required to remove 80 percent of their billboards. Huh? The well-documented truth is to the contrary. The 2006 settlement agreement was ill-conceived from the start. The illegal agreement handed these two corporations extremely lucrative and special rights to convert over 25 percent of their signs to digital even though the city’s zoning laws, meant to protect residents and neighborhoods, clearly prohibited such conversions. In exchange for the special rights, these two corporations were required to remove a mere 3 percent – not 80 percent –of their existing billboards over six years. And the corporations were allowed to choose the size and location of the removed signs as well as the digital conversions, all without a public review process. Since 2007, CBS Outdoor and Clear Channel Outdoor have converted about 100 billboards to digital between them and have kept the estimated $100 million in yearly revenues generated to themselves. The agreement never required the corporations to share a dime with the city. Does anyone still wonder why the public has been so outraged? After years of paralysis, finally there is hope. An appellate court is poised to affirm a prior ruling that the settlement agreement is “poisonous” and illegal, and to order the digital signs be shut down. Panicked at the prospect of losing their $100 million annual annuity, CBS Outdoor and Clear Channel Outdoor are reportedly walking the council halls offering to share $25 million of the profits if the city acts quickly to circumvent the court proceeding. Putting aside the questionable legality of trying to make money off of these illegal signs, it does not take a rocket scientist to figure out that the city’s negotiating position will be substantially better after the ruling is final and the digitals are ordered removed. It is disappointing that VICA waded into this mess. CBS Outdoor and Clear Channel Outdoor are not the victims here. These two corporations have benefited from the illegal agreement for years and recouped their investment many times over. The “faith” of the business community is not at stake. What is at stake is a chance to finally put the embarrassment of the settlement agreement behind us. Once the court ruling is final, the slate will be wiped clean, and the city will have an opportunity, should it so desire, to develop a comprehensive approach on digital signs that is consistent with zoning laws, that provides revenues to the city, that evaluates the potential environmental impact of the signs and that gives an opportunity for the citizens of Los Angeles to be heard on this important issue. If there were ever a time for the City Council to wait and see, that time is now. Philip R. Recht is partner in charge of the Los Angeles office of Mayer Brown LLP. He represents Summit Media, a Santa Monica outdoor advertising company that is the plaintiff in the lawsuit at issue. This story was updated on Dec. 13, 2012, to correct a production error in the original version.

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