927720--3/16/2006--SPANISH_BROADCASTING_SYSTEM

related topics

{capital, credit, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

{stock, price, share}

{control, financial, internal}

{regulation, government, change}

{product, market, service}

{condition, economic, financial}

{operation, international, foreign}

{personnel, key, retain}

{customer, product, revenue}

{stock, price, operating}

We will require a significant amount of cash to service our debt and to make cash dividend payments under our Series B Preferred Stock. Our ability to generate cash depends on many factors, some of which are beyond our control. Any acceleration of our debt or event of default would harm our business and financial condition. Despite our current significant level of debt, we and our subsidiaries may still be able to incur substantially more debt, which, if increased, could further intensify the risks associated with our substantial leverage. The terms of our existing debt and our preferred stock impose or will impose restrictions on us that may adversely affect our business. We may not have the funds or the ability to raise the funds necessary to repurchase our Series B preferred stock if holders exercise their repurchase right, or to finance the change of control offer required by our Series B preferred stock and the indenture that would govern our Exchange Notes, if issued. We may not have the funds or the ability to obtain additional financing for working capital, capital expenditures, any business strategy or other general corporate purposes. We have experienced net losses in the past and, to the extent that we experience net losses in the future, our ability to raise capital and the market price of our common stock may be adversely affected. We compete for advertising revenue with other broadcast stations, as well as other media, many operators of which have greater resources than we do. Cancellations or reductions in advertising could adversely affect our net revenues. A large portion of our net revenue and operating income currently comes from our New York, Los Angeles and Miami markets. We may be unable to effectively integrate our acquisition of our television operation. The success of our television operation depends upon our ability to attract viewers and advertisers to our broadcast television operation. Because our full-power television station relies on must carry rights to obtain cable carriage, new laws or regulations that eliminate or limit the scope of our cable carriage rights could have a material adverse impact on our television operation. Our growth depends on successfully executing our acquisition strategy. Loss of any of our key personnel could adversely affect our business. Ra l Alarc n, Jr., our Chairman of the Board of Directors, Chief Executive Officer and President, has majority voting control and this control may discourage or influence certain types of transactions, including an actual or potential change of control such as a merger or sale. We must be able to respond to rapidly changing technology, services and standards which characterize our industry in order to remain competitive. Our business depends on maintaining our FCC licenses, which we may be unable to maintain. The FCC has begun more vigorous enforcement of its indecency rules against the broadcast industry, which could have a material adverse effect on our business. We may face regulatory review for additional acquisitions and divestitures in our existing markets and, potentially, acquisitions in new markets. The market price of our shares of Class A common stock may fluctuate significantly. Current or future sales by existing stockholders could depress the market price of our Class A common stock. Our failure to comply with the Sarbanes-Oxley Act of 2002 could cause a loss of confidence in the reliability of our financial statements and could have a material adverse effect on our business and the price of our Class A common stock.

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927720--3/16/2006--SPANISH_BROADCASTING_SYSTEM_INC