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SOAI had more billboards than any other company in its
market area of northwest Indiana, despite the fact that it faced
substantial outdoor advertising competition from Whiteco, 3M
National, Bik/Odeguard, and various individuals in 1981 and 1982.
Neither SOAI nor Whiteco had a monopoly in the local market area.
SOAI had a diversified customer base and was not dependent
on any one lease for more than a small portion of its business.
Petitioner did not identify any specific sign location that SOAI
lost during the years at issue, although an attrition rate of 0.5
to 1 percent per year was standard in the outdoor advertising
industry. SOAI's value is attributable to its lease contracts
associated with its outdoor advertising structures, and its
income was derived primarily from advertising contracts for the
use of outdoor signs.
The billboards on which the outdoor advertising industry
sells advertising space are typically constructed from wood or
steel and are generally located on leased property. The
billboard space is rented to the advertiser for a specific time
period. Each billboard is covered either with a "posted" paper
or hand-painted advertising messages supplied by the advertiser
or an advertising agency.
The Outdoor Advertising Association of America, which is a
national trade association representing the outdoor advertising
industry, suggests standards for billboards. Types of billboards
include permanent paints (paints), rotary bulletins, posters, and
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Last modified: May 25, 2011