King of area billboards finds itself up for sale Penn Advertising denies connection to tobacco fallout

August 30, 1996|By Greg Schneider | Greg Schneider,SUN STAFF

Penn Advertising, which controls about 70 percent of the billboard market in the Baltimore metropolitan area, is for sale.

While the action comes at a time when a traditional staple of

outdoor advertising -- tobacco -- is under fire from the president and other politicians, a Penn spokesman said there is no connection between the political climate and the sale.

Corporate officials had little to say about the offering of the family-owned company. Based in York, Pa., Penn has been in the Baltimore market about seven years.

"Other than the fact that it is for sale, we have no other comment," said John Finlayson, vice president of finance and administration for Susquehanna Pfaltzgraff, the owner of Penn Advertising.

Susquehanna Pfaltzgraff, in turn, is owned by the Appell family and is headed by Louis Appell Jr.

Appell declined to comment on the decision to sell. His family has produced Pfaltzgraff dinnerware for decades and also owns numerous radio stations.

The approximately 37 local Penn employees learned Aug. 21 that their company was going up for sale, said Michael Johnson, spokesman for the Maryland division. It leases about 1,000 billboards in the Baltimore area.

Each of the company's 10 divisions -- scattered from Buffalo, N.Y., to Baltimore -- is preparing a sales book to explain operations to a broker or potential buyer, Johnson said.

"It is still at a preliminary stage," he said, adding that he does not know of an asking price.

Industry analysts say the market is ripe for smaller billboard companies such as Penn to be swallowed by giants such as Outdoor Systems and 3M Media.

"Within a year or two, you won't have to take off your shoes to count the number of viable players in outdoor advertising," said Bishop Cheen of First Union Capital Corp. in Charlotte, N.C.

"Demand is up" for billboard space, Cheen said, "and there are a fixed number of structures, so it creates this kind of consolidation whirlwind."

Whole new industries are using outdoor advertising, such as computers, financial services and home security, making stalwart clients such as alcohol, automobile and tobacco companies less vital to billboard companies, he said.

In metropolitan Baltimore, Penn Advertising has seen tobacco drop from about 18 percent of its business to about 13 percent, said company spokesman Johnson.

The company has been locked in a court battle over a 1994 City Council vote that made Baltimore the first city in the nation to ban outdoor advertising for tobacco products.

Penn's challenge to the ban has been bouncing through the court system ever since, and Johnson said yesterday that the case has no bearing on the effort to sell the company.

Pub Date: 8/30/96

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