iHeartMedia 2001 Annual Report Download - page 26

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26
legal billboards for beautification in the past, using federal funding for transportation enhancement
programs, and may do so in the future.
States and local jurisdictions have, in some cases, passed additional regulations on the
construction, size, location and, in some instances, advertising content of outdoor advertising structures
adjacent to federally-aided highways and other thoroughfares. From time to time governmental
authorities order the removal of billboards by the exercise of eminent domain and certain jurisdictions
have also adopted amortization of billboards in varying forms. Amortization permits the billboard owner
to operate its billboard only as a non-conforming use for a specified period of time, after which it must
remove or otherwise conform its billboard to the applicable regulations at its own cost without any
compensation. Several municipalities within our existing markets have adopted amortization ordinances.
Restrictive regulations also limit our ability to rebuild or replace nonconforming billboards. We can give
no assurance that we will be successful in negotiating acceptable arrangements in circumstances in which
our billboards are subject to removal or amortization, and what effect, if any, such regulations may have
on our operations.
In addition, we are unable to predict what additional regulations may be imposed on outdoor
advertising in the future. The outdoor advertising industry is heavily regulated and at various times and in
various markets can be expected to be subject to varying degrees of regulatory pressure affecting the
operation of advertising displays. Legislation regulating the content of billboard advertisements and
additional billboard restrictions has been introduced in Congress from time to time in the past. Changes
in laws and regulations affecting outdoor advertising at any level of government, including laws of the
foreign jurisdictions in which we operate, could have a significant financial impact on us by requiring us
to make significant expenditures or otherwise limiting or restricting some of our operations
Changes in Restrictions on Outdoor Tobacco and Alcohol Advertising May Pose Risks
The outdoor advertising industry is subject to regulations related to outdoor tobacco advertising.
In addition, recent settlement agreements and potential legislation related to outdoor tobacco advertising
have and will likely continue to affect our outdoor advertising operations. Out-of-court settlements
between the major U.S. tobacco companies and all 50 states include a ban on the outdoor advertising of
tobacco products.
In addition to the above settlement agreements, state and local governments are also regulating
the outdoor advertising of alcohol and tobacco products. For example, several states and cities have laws
restricting tobacco billboard advertising near schools and other locations frequented by children. Some
cities have proposed even broader restrictions, including complete bans on outdoor tobacco advertising
on billboards, kiosks, and private business window displays. It is possible that state and local
governments may propose or pass similar ordinances to limit outdoor advertising of alcohol and other
products or services in the future. Legislation regulating tobacco and alcohol advertising has also been
introduced in a number of European countries in which we conduct business, and could have a similar
impact. Any significant reduction in alcohol related advertising due to content-related restrictions could
cause a reduction in our direct revenue from such advertisements and a simultaneous increase in the
available space on the existing inventory of billboards in the outdoor advertising industry.