1050606--3/12/2010--SALEM_COMMUNICATIONS_CORP

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CERTAIN FACTORS AFFECTING SALEM We may choose not to pursue potentially more profitable business opportunities outside of our Christian, conservative news talk and family-themed formats, or not to broadcast programming that violates our programming standards, either of which may have a material adverse effect on our business. We may be adversely affected by a continued deterioration in economic conditions. We must respond to the rapid changes in technology, services and standards of our industry in order to remain competitive. The accounting treatment of goodwill and indefinite-lived intangible assets could cause future losses due to asset impairment . We may be unable to integrate the operations and management of acquired stations or businesses, which could have a material adverse effect on our business and operating results. If we are unable to implement our cluster strategy, we may not realize anticipated operating efficiencies. The restrictions on ownership of multiple stations in each market may prevent us from implementing our cluster strategy. Government regulation of the broadcasting industry by the FTC, DOJ and FCC may limit our ability to acquire or dispose of radio stations and enter into certain agreements. We may be adversely affected by statutes dealing with indecency. If we fail to maintain our broadcast licenses with the FCC, we would be prevented from operating affected radio stations. Our advertising revenues in certain markets are ratings sensitive and subject to decline based on agency projections. Capital requirements necessary to implement acquisitions could pose risks. If we are unable to execute our acquisition strategy successfully, our business may not continue to grow. Our business is dependent upon the performance of key employees, on-air talent and program hosts. If we are not able to obtain financing or generate sufficient cash flows from operations, we may be unable to fund future acquisitions. If we cannot attract the anticipated listener, programmer and advertiser base for our newly acquired radio stations, we may not recoup associated operating costs or achieve profitability for these radio stations. If we do not maintain or increase our block programming revenues, our business and operating results may be adversely affected. If we are unable to maintain or grow our advertising revenues, our business and operating results may be adversely affected. A sustained economic downturn in key Salem markets could negatively impact our ability to generate revenues. Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations. Acts of war and terrorism may reduce our revenue and have other negative effects on our business. We are controlled by a few controlling stockholders. Our broadcasts often rely on content owned by third parties; obtaining such content could be costly and require us to enter into disadvantageous license or royalty arrangements. Proposed legislation requires radio broadcasters to pay royalties to record labels and recording artists. We may be unable to increase or maintain our Internet advertising revenues, which could have a material adverse effect on our business and operating results. If we are unable to protect our domain names, our reputation and brands could be adversely affected. We have substantial debt and have the ability to incur additional debt. The principal and interest payment obligations of such debt may restrict our future operations and impair our ability to meet our obligations under the notes. The agreements governing our various debt obligations impose restrictions on our business and adversely affect our ability to undertake certain corporate actions. To service our indebtedness, we will require a significant amount of cash. However, our ability to generate cash depends on many factors beyond our control.

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