cell site lease – Steel In The Air https://www.steelintheair.com Since 2004, Steel in the Air has served over 3,000 clients, reviewed over 10,000 cellular leases and tracked over 2,000 lease buyout offers. We represent private landowners, corporate property owners and public entities in lease negotiations against wireless carriers and tower companies. We also consult on cell site and cell tower valuation and brokerage. Our cell tower and cell site database has grown to encompass over 285,000 cell site locations nationwide. Thu, 11 Jan 2024 18:09:37 +0000 en-US hourly 1 https://www.steelintheair.com/wp-content/uploads/2021/03/cropped-logo-2-32x32.png cell site lease – Steel In The Air https://www.steelintheair.com 32 32 Weird Revenue Sharing Clause https://www.steelintheair.com/blog/weird-revenue-sharing-clause/ https://www.steelintheair.com/blog/weird-revenue-sharing-clause/#comments Wed, 11 Apr 2018 14:41:35 +0000 https://www.steelintheair.com/Blog/?p=1895

One of our clients received a proposal from a tower company that included a revenue share clause. Generally, revenue shares are not proposed by wireless carriers and even less so by tower companies. However, because our client is a governmental entity, I assume the tower company figured it would be better to put a revenue share out for discussion instead of waiting for it to be added. 

However, this particular revenue share being proposed is a bit odd. For tenants added in the first 5 years of the lease, the landowner will get $150/mo. per tenant. For tenants added after year 5, the rate drops to $75/mo. For tenants other than AT&T, Verizon, Sprint, or T-Mobile, the rate is $50/mo. no matter when they are added.

There are a number of issues with this proposed revenue share language. First, we generally advise landowners not to accept fixed-rate revenue shares; instead, they should look for a % of revenue. A revenue share is intended to give the landowner participation in the revenue and often comes with a lower base lease rate to accommodate the future upside. A fixed revenue share though does not tie the landowner’s upside to that of the tower company- instead, it limits it no matter how much the tower company is getting for the lease. Furthermore, the reduction here from $150/mo. to $75/mo. after year 5 is ridiculous and serves no benefit other than to take advantage of lesser informed landowners. Even worse is the $50/mo. for any other tenant – which could include tenants that will pay more than traditional cellular tenants and would exclude future entities that enter the business regardless of how much they pay. From the tower company standpoint, having a fixed rate revenue share is much simpler from an accounting standpoint and much more profitable. 

This particular proposal won’t be accepted by the landowner- who will and can counter with a % based revenue share given the fact that they own pretty much everything around this location. However, in other situations, the landowner may have to accept these types of terms especially if there are other readily available options. The key of course if trying to figure out whether your property is unique or not. If you need help, please contact the experts at Steel in the Air.

For those of you in the industry- have you seen other revenue share proposals that are innovative or outright ridiculous?

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