1050606--3/31/2006--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 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 Must Respond To The Rapid Changes In Technology, Services And Standards Of Our Industry In Order To Remain Competitive If We Are Unable To Execute Our Acquisition Strategy Successfully, Our Business May Not Continue To Grow 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 Capital Requirements Necessary to Implement Acquisitions Could Pose Risks The Accounting Treatment Of Goodwill And FCC Licenses Could Cause Future Losses Due To Asset Impairment Because Of Our Holding Company Structure, We Depend On Our Subsidiaries For Cash Flow, And Our Access To This Cash Flow Is Restricted Our Business is Dependent Upon the Performance of Key Employees, On-Air Talent and Program Hosts We May Be Adversely Affected By New Statutes Dealing With Indecency If We Are Not Able To Obtain Financing Or Generate Sufficient Cash Flows From Operations, We May Be Unable To Fund Future Acquisitions Our Substantial Indebtedness And Our Ability To Incur More Indebtedness Could Adversely Affect Our Financial Condition To Service Our Indebtedness And Other Obligations, We Will Require A Significant Amount Of Cash. Our Ability To Generate Cash Depends On Many Factors Beyond Our Control 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 Broadcasting 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 Our Controlling Stockholders May Cause Us To Act, Or Refrain From Acting, In A Way That Minority Stockholders Do Not Believe Is In Their Best Interest If We Fail To Maintain Our Licenses With The FCC, We Would Be Prevented From Operating Affected Radio Stations Covenant Restrictions Under Salem Holding s Credit Facility And Its Indentures Governing Its Outstanding Senior Subordinated Notes May Limit Our Ability To Operate Our Business We May be Adversely Affected by a General Deterioration in Economic Conditions 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

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1050606--3/31/2006--SALEM_COMMUNICATIONS_CORP_/DE/