Nextel and Sprint – Cell Tower Lease Renegotiations
At Cell Tower Attorney, we have assisted many landowners throughout the country in connection with the renegotiation of existing cell tower leases. Recently, we have received phone calls from landowners with Nextel or Sprint PCS leases on their property who have been by approached by a third-party company named Blackdot on behalf of Nextel or Sprint. Through a phone call or letter, Blackdot informs the landowner that as a result of the merger between the two companies, the cell tower lease needs to be renegotiated and if it is not, the lease may be terminated.
The letters and/or phone calls from Blackdot typically offer the following:
- A substantial reduction of the monthly rent (by more than 50%) along with a short, guaranteed term of the lease (approximately 3 years).
- An upfront payment of 5 years of rent in exchange for the right to use the site for 15 years with no further obligation.
Most leaseholders are understandably confused by these offers. While neither of these options seems attractive when compared to their existing lease, the Blackdot representatives convey a sense of urgency that the landowner must make a decision or risk losing the site entirely. Additionally, landowners do not know the right questions to ask when considering these offers. Even if the right questions are asked, the Blackdot representatives may have no more experience than the landowner regarding cell tower leases and may be simply reading from a pre-printed script. Even worse, they may be conveying false information. Finally, Blackdot often uses these situations as opportunities to renegotiate various other terms and conditions of the existing cell tower lease that are seemingly unrelated to the objective of eliminating redundancies. When the lease amendment is finally completed, the landowner is stuck with a new lease that looks substantially different from what was originally negotiated.
Undoubtedly, Sprint and Nextel are going to terminate some cell sites that overlap or create “redundancies” in their networks. In fact, one of the stated goals of the merger between Sprint and Nextel was to reduce operating expenses thereby increasing profits. As the monthly rents of existing cell sites is one of the largest operating expenses associated with operating cellular networks, eliminating redundant or unnecessary cell sites is a major area of focus for the combined company. Recent estimates show that over 5,000 tower and cell sites will be terminated in the near future.
With this in mind, how does a leaseholder know whether or not they should negotiate with Blackdot and if so, what terms or modifications should be included in the associated lease amendment? What are the rights and obligations of Sprint under the existing lease?
With the assistance of our related company, Steel in the Air, we can assist you in determining whether in fact your cell site is redundant with another Sprint or Nextel site and whether or there is a likelihood that your site may be terminated. Once this determination is made, we can assist you in negotiating favorable terms and conditions of the lease amendment. Specifically, we can assist you in negotiating a Sprint Nextel Blackdot Lease that:
- appropriately limits Sprint’s additional rights under the amendment..
- protects your rights under the Amendment as well as the existing Lease by narrowly defining the obligations of the parties and contingencies.
- protects you and your property from further liability and the likelihood of unanticipated circumstances or uses occurring on the property.
We are available to provide comments to the proposed amendment and discuss with you any additional concerns or questions that are specific to you or your property. Alternatively, if you prefer, we can negotiate on your behalf directly with Blackdot to finalize all aspects of the Sprint Nextel Blackdot Lease.
If you have been approached by Blackdot, please consider contact us for assistance in your lease negotiation.
*** If you are looking for Sprint Nextel's website, please visit www.sprint.com. We are not affiliated in any way with Sprint Nextel.***