Yes, revenue-sharing arrangements are possible in cell tower leasing, although they are less common than traditional lease agreements. Revenue-sharing agreements are typically structured to provide property owners with a share of the revenue generated by the cell tower or wireless infrastructure on their property, in addition to or in lieu of fixed lease payments. Here are some key points to consider regarding revenue-sharing arrangements in cell tower leasing:
- Shared Revenue Models: Revenue-sharing agreements can take various forms, including:
- Percentage of Gross Revenue: Property owners receive a percentage of the gross revenue generated by the cell tower or wireless infrastructure on their property. This can include revenue from multiple carriers colocating on the tower.
- Percentage of Net Revenue: Property owners receive a percentage of the net revenue, which deducts certain expenses (e.g., maintenance, utilities) from the gross revenue before sharing.
- Shared Rent from Colocating Carriers: Property owners receive a portion of the rent paid by additional wireless carriers that colocate on the tower. This is common when multiple carriers share the same infrastructure.
- Negotiation: The terms of revenue-sharing agreements are typically negotiable between the property owner and the cell tower company or wireless carrier. Negotiations may involve determining the percentage of revenue to be shared and the specific revenue sources included in the arrangement.
- Complexity: Revenue-sharing arrangements can be more complex than traditional lease agreements, as they require ongoing tracking and reporting of revenue, which may involve auditing and verification processes.
- Risks and Benefits: Property owners have the potential to earn higher income from revenue-sharing agreements, particularly if the cell tower site attracts multiple carriers. However, there is also the risk that revenue may fluctuate based on carrier activity, changes in technology, or other factors.
- Lease Term: Revenue-sharing agreements typically have a specified lease term, and the terms and conditions should be clearly defined in the lease agreement.
- Legal and Financial Review: Given the complexity of revenue-sharing arrangements, it is advisable for property owners to seek legal and financial advice before entering into such agreements. Legal and financial professionals experienced in cell tower leasing can help negotiate favorable terms and ensure that the contract aligns with the property owner’s interests.
- Market Conditions: The potential for revenue-sharing may depend on market conditions and the demand for wireless infrastructure in your area. High-demand locations with multiple carriers seeking to colocate on the same tower may present more opportunities for revenue sharing.
Revenue-sharing agreements can provide property owners with the potential for increased income from their cell tower sites, particularly in areas with high demand for wireless services. However, they can also be more complex and require ongoing oversight and financial management. Property owners should carefully evaluate the terms and consider their long-term financial goals when exploring revenue-sharing options.
