SPANISH BROADCASTING SYSTEM INC (Form: 10-Q, Received: 05/10/2004 15:56:45)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended March 31, 2004

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to

Commission file number 33-82114

(SBS LOGO)

Spanish Broadcasting System, Inc.

(Exact name of registrant as specified in its charter)


Delaware		13-3827791
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2601 South Bayshore Drive, PH II Coconut Grove, Florida 33133 (Address of principal executive offices) (Zip Code)

(305) 441-6901

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 6, 2004, 39,600,355 shares of Class A common stock, par value $.0001 per share, and 25,105,150 shares of Class B common stock, par value $.0001 per share, were outstanding.

SPANISH BROADCASTING SYSTEM, INC.

INDEX


		Page


PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements — Unaudited		3
	Unaudited Condensed Consolidated Balance Sheets as of December 31, 2003 and March 31, 2004		3
	Unaudited Condensed Consolidated Statements of Operations for the Three-Months Ended March 31, 2003 and 2004		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three-Months Ended March 31, 2003 and 2004		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		20
ITEM 4.	Controls and Procedures		20

PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings		21
ITEM 5.	Other Information		22
ITEM 6.	Exhibits and Reports on Form 8-K		22
Stock Option Agreement - Garcia
Investment Stock Option Agreement - Garcia
Amendment to Asset Purchase Agreement
Time Brokerage Agreement
Sec 302 Chief Executive Officer Certification
Sec 302 Chief Financial Officer Certification
Sec 906 Chief Executive Officer Certification
Sec 906 Chief Financial Officer Certification

PART I. — FINANCIAL INFORMATION

Item 1. Financial Statements — Unaudited

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


			December 31, 2003			March 31, 2004


			(In thousands, except share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	45,609		$	74,187
	Net receivables			25,567			21,364
	Other current assets			3,482			3,188
	Assets held for sale			25,906			13,993

		Total current assets		100,564			112,732
Property and equipment, net				24,558			24,425
Intangible assets, net				705,251			705,244
Deferred financing costs, net				11,461			11,108
Other assets				448			1,025

			$	842,282		$	854,534

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of the senior credit facilities term loan due 2009		$	1,250		$	1,250
	Current portion of other long-term debt			227			232
	Accounts payable and accrued expenses			18,822			16,525
	Accrued interest			6,370			13,485
	Deposit on the sale of a station			1,500			1,500
	Deferred commitment fee			—			281

		Total current liabilities		28,169			33,273
Senior credit facilities term loan due 2009, less current portion				123,750			123,438
9 5/8% senior subordinated notes due 2009, net				325,246			325,540
Other long-term debt, less current portion				3,721			3,661
Deferred income taxes				68,354			64,332

		Total liabilities		549,240			550,244

Cumulative exchangeable redeemable preferred stock:
	10 3/4 Series B cumulative exchangeable redeemable preferred stock, $0.01 par value. Authorized 280,000 shares, 75,000 issued and outstanding at December 31, 2003 and 76,702 issued and outstanding at March 31, 2004			76,366			78,420

Stockholders’ equity:
	Class A common stock, $0.0001 par value. Authorized 100,000,000 shares; 37,087,355 shares issued and outstanding at December 31, 2003, 39,587,355 shares issued and outstanding at March 31, 2004			3			3
	Class B common stock, $0.0001 par value. Authorized 50,000,000 shares; 27,605,150 shares issued and outstanding at December 31, 2003, 25,105,150 shares issued and outstanding at March 31, 2004			3			3
	Additional paid-in capital			443,961			443,531
	Accumulated deficit			(227,291	)		(217,667	)

		Total stockholders’ equity		216,676			225,870

			$	842,282		$	854,534

See accompanying notes to the unaudited condensed consolidated financial statements.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



				Three Months Ended

				March 31, 2003			March 31, 2004


				(In thousands, except per share data)
Gross revenue				$	32,052		$	33,520
Less agency commissions					4,129			4,288

			Net revenue		27,923			29,232

Operating expenses:
	Engineering				918			1,088
	Programming				5,236			6,324
	Stock-based programming				343			—
	Selling				7,636			7,384
	General and administrative				3,335			3,533
	Corporate expenses				4,489			3,228
	Depreciation and amortization				708			822

		Total operating expenses			22,665			22,379

		Operating income from continuing operations			5,258			6,853

Other (expense) income:
	Interest expense, net				(8,629	)		(10,238	)
	Other, net				26			175

		Loss from continuing operations before income taxes and discontinued operations			(3,345	)		(3,210	)
Income tax (benefit) expense					(2,448	)		(3,948	)

		(Loss) income from continuing operations before discontinued operations			(897	)		738
Income on discontinued operations, net of tax					96			10,940

			Net (loss) income	$	(801	)	$	11,678

Dividends on preferred stock					—			(2,054	)

Net (loss) income applicable to common stockholders				$	(801	)	$	9,624

Basic and diluted loss per common share:
Net loss per common share before discontinued operations:
	Basic and Diluted			$	(0.01	)	$	(0.02	)
Net income per common share for discontinued operations:
	Basic and Diluted			$	—		$	0.17
Net (loss) income per common share:

	Basic and Diluted			$	(0.01	)	$	0.15

Weighted average common shares outstanding:
	Basic				64,682			64,693

	Diluted				64,682			65,359

See accompanying notes to the unaudited condensed consolidated financial statements.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


					Three Months Ended			Three Months Ended
					March 31, 2003			March 31, 2004


					(In thousands)
Cash flows from operating activities:
	Net (loss) income				$	(801	)	$	11,678
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
		Income from discontinued operations				(96	)		(10,940	)
		Stock-based programming expense				343			—
		Depreciation and amortization				707			822
		Net barter (income) expense				(41	)		46
		Reduction of allowance for doubtful accounts				(138	)		(232	)
		Amortization of debt discount				261			294
		Amortization of deferred financing costs				321			493
		Deferred income taxes				(2,576	)		(4,012	)
		Amortization of deferred commitment fee				(176	)		(19	)
		Changes in operating assets and liabilities, net of acquisitions:
			Decrease in receivables			4,579			3,861
			Decrease in other current assets			143			267
			Increase in other assets			(1,102	)		(577	)
			Increase (decrease) in accounts payable and accrued expenses			456			(3,537	)
			Increase in accrued interest			8,150			7,115
			Increase in deferred commitment fee			—			300

				Net cash provided by continuing operations		10,030			5,559
				Net cash provided by discontinued operations		53			908

				Net cash provided by operating activities		10,083			6,467

Cash flows from investing activities:
	Proceeds from a sale of radio stations, net of closing cost					—			23,730
	Advances on purchase price of radio stations					(15,150	)		—
	Additions to property and equipment					(1,233	)		(682	)
	Additions to property and equipment of discontinued operations					(2	)		—

				Net cash (used in) provided by investing activities		(16,385	)		23,048

Cash flows from financing activities:
	Increase in deferred offering costs					—			(430	)
	Increase in deferred financing costs					—			(140	)
	Repayment of senior credit facilities					—			(312	)
	Repayment of other long-term debt					(50	)		(55	)

				Net cash used in financing activities		(50	)		(937	)

Net (decrease) increase in cash and cash equivalents						(6,352	)		28,578
Cash and cash equivalents at beginning of period						71,430			45,609

Cash and cash equivalents at end of period					$	65,078		$	74,187

Supplemental cash flow information:
	Interest paid				$	142		$	2,479

	Income taxes paid				$	187		$	323

See accompanying notes to the unaudited condensed consolidated financial statements.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.	Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements as of December 31, 2003 and March 31, 2004, and for the three-month periods ended March 31, 2003 and 2004 do not contain all disclosures required by generally accepted accounting principles. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company as of and for the fiscal year ended December 31, 2003 included in the Company’s fiscal year 2003 Annual Report on Form 10-K.

Effective December 30, 2002, the Company changed its year-end from a broadcast calendar 52-53-week fiscal year ending on the last Sunday in December to a calendar year ending on December 31. Pursuant to Securities and Exchange Commission Financial Reporting Release No. 35, such change was not deemed a change in fiscal year for financial reporting purposes and the Company was not required to file a separate transition report or to report separate financial information for the two-day period of December 30 and 31, 2002. Financial results for December 30 and 31, 2002 are included in the Company’s financial results for the three-month period ended March 31, 2003.

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are all of a normal and recurring nature, necessary for a fair presentation of the results of the interim periods. The results of operations for the three-month period ended March 31, 2004 are not necessarily indicative of the results for a full year.


2.	Financial Information for Parent, Guarantor and Non-Guarantor Subsidiaries

Certain of the Company’s subsidiaries (collectively, the “Subsidiary Guarantors”) have guaranteed the Company’s 9 5/8% senior subordinated notes due 2009 on a joint and several basis. The Company has not included separate financial statements of the Subsidiary Guarantors because (i) all of the Subsidiary Guarantors are wholly owned subsidiaries of the Company, and (ii) the guarantees issued by the Subsidiary Guarantors are full and unconditional. The Company has not included separate parent-only financial statements since the parent (Spanish Broadcasting System, Inc., a Delaware corporation) is a holding company with no independent assets or operations other than its investments in its subsidiaries. All Federal Communications Commission (FCC) licenses are held by special purpose subsidiaries formed solely for the purpose of holding each respective FCC license and/or non-guarantor subsidiaries. All of the special purpose subsidiaries are non-guarantors of the 9 5/8% senior subordinated notes due 2009. Condensed consolidating unaudited financial information for the parent and its guarantor and non-guarantor subsidiaries is as follows (in thousands):

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2003


									Non
						Guarantors			Guarantors
			Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Cash and cash equivalents			$	24,503			18,340			2,766			—			45,609
Net receivables				—			23,917			1,650			—			25,567
Other current assets				2,379			760			343			—			3,482
Assets held for sale				—			2,879			23,027			—			25,906

	Total current assets			26,882			45,896			27,786			—			100,564
Property and equipment, net				1,453			15,987			7,118			—			24,558
Intangible assets, net				—			9,019			696,232			—			705,251
Deferred financing costs, net				11,461			—			—			—			11,461
Investment in subsidiaries and intercompany				780,105			267,978			(688,878	)		(359,205	)		—
Other assets				300			147			1			—			448

			$	820,201			339,027			42,259			(359,205	)		842,282

Current portion of long-term debt			$	1,250			66			161			—			1,477
Accounts payable and accrued expenses				6,371			7,769			4,682			—			18,822
Accrued interest				6,370			—			—			—			6,370
Deposit on the sale of station				1,500			—			—			—			1,500

	Current liabilities			15,491			7,835			4,843			—			28,169
Long-term debt				448,996			637			3,084			—			452,717
Deferred income taxes				62,672			(6,995	)		12,677			—			68,354

		Total liabilities		527,159			1,477			20,604			—			549,240

Preferred stock				76,366			—			—			—			76,366
Common stock				6			—			1			(1	)		6
Additional paid-in capital				443,961			—			94,691			(94,691	)		443,961
(Accumulated deficit) retained earnings				(227,291	)		337,550			(73,037	)		(264,513	)		(227,291	)

	Stockholders’ equity			216,676			337,550			21,655			(359,205	)		216,676

			$	820,201			339,027			42,259			(359,205	)		842,282

CONDENSED CONSOLIDATING BALANCE SHEET

As of March 31, 2004


								Non
					Guarantors			Guarantors
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Cash and cash equivalents		$	57,897			14,466			1,824			—			74,187
Net receivables			—			20,156			1,208			—			21,364
Other current assets			1,040			1,812			336			—			3,188
Assets held for sale			—			1,761			12,232			—			13,993

	Total current assets		58,937			38,195			15,600			—			112,732
Property and equipment, net			1,385			16,007			7,033			—			24,425
Intangible assets, net			—			9,012			696,232			—			705,244
Deferred financing costs, net			11,108			—			—			—			11,108
Investment in subsidiaries and intercompany			760,630			298,587			(679,285	)		(379,932	)		—
Other assets			255			769			1			—			1,025

		$	832,315			362,570			39,581			(379,932	)		854,534

Current portion of long-term debt		$	1,250			67			165			—			1,482
Accounts payable and accrued expenses			3,860			8,276			4,389			—			16,525
Accrued interest			13,480			5			—			—			13,485
Deposit on the sale of station			1,500			—			—			—			1,500
Deferred commitment fee			281			—			—			—			281

	Total current liabilities		20,371			8,348			4,554			—			33,273
Long-term debt			448,978			620			3,041			—			452,639
Deferred income taxes			58,676			(6,005	)		11,661			—			64,332

	Total liabilities		528,025			2,963			19,256			—			550,244

Preferred Stock			78,420			—			—			—			78,420
Common stock			6			—			1			(1	)		6
Additional paid-in capital			443,531			—			94,691			(94,691	)		443,531
(Accumulated deficit) retained earnings			(217,667	)		359,607			(74,367	)		(285,240	)		(217,667	)

	Stockholders’ equity		225,870			359,607			20,325			(379,932	)		225,870

		$	832,315			362,570			39,581			(379,932	)		854,534

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended March 31, 2003


							Non
					Guarantors		Guarantors
		Parent			Subsidiaries		Subsidiaries			Eliminations			Total

Net revenue		$	—			25,490		2,433			—			27,923
Station operating expenses			—			15,493		1,975			—			17,468
Corporate expenses			4,489			—		120			(120	)		4,489
Depreciation and amortization			92			491		125			—			708

	Operating income from continuing operations		(4,581	)		9,506		213			120			5,258
Interest (expense) income, net			(8,308	)		1,019		(1,340	)		—			(8,629	)
Other income (expense), net			—			146		—			(120	)		26
Equity in net earnings of subsidiaries			(9,511	)				—			9,511			—
Income tax expense (benefit)			(2,577	)		82		47			—			(2,448	)
Discontinued operations, net of tax			—			96		—			—			96

	Net (loss) income	$	(801	)		10,685		(1,174	)		(9,511	)		(801	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended March 31, 2004


							Non
					Guarantors		Guarantors
		Parent			Subsidiaries		Subsidiaries			Eliminations			Total

Net revenue		$	—			26,788		2,444			—			29,232
Station operating expenses			—			16,175		2,154			—			18,329
Corporate expenses			3,228			—		120			(120	)		3,228
Depreciation and amortization			96			603		123			—			822

	Operating income from continuing operations		(3,324	)		10,010		47			120			6,853
Interest (expense) income, net			(9,914	)		1,006		(1,330	)		—			(10,238	)
Other income (expense), net			177			121		(3	)		(120	)		175
Equity in net earnings of subsidiaries			(20,727	)		—		—			20,727			—
Income tax expense (benefit)			(4,012	)		20		44			—			(3,948	)
Discontinued operations, net of tax			—			10,940		—			—			10,940

	Net (loss) income	$	11,678			22,057		(1,330	)		(20,727	)		11,678

Dividend on preferred stock			(2,054	)		—		—			—			(2,054	)
	Net (loss) income applicable to common stockholders	$	9,624			22,057		(1,330	)		(20,727	)		9,624

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2003


							Non
				Guarantors			Guarantors
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Cash flows from operating activities	$	(4,537	)		14,066			554			—			10,083

Cash flows from investing activities	$	4,182			(1,174	)		(5	)		(19,388	)		(16,385	)

Cash flows from financing activities	$	—			(19,399	)		(39	)		19,388			(50	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2004


							Non
				Guarantors			Guarantors
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Cash flows from operating activities	$	(5,898	)		14,432			(2,067	)		—			6,467

Cash flows from investing activities	$	40,174			(1,818	)		24,894			(40,202	)		23,048

Cash flows from financing activities	$	(882	)		(16,172	)		(24,085	)		40,202			(937	)


3.	New Accounting Pronouncements

In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure” (SFAS No. 148). SFAS No. 148 amends the transition and disclosure provisions of SFAS No. 123 “Accounting for Stock-Based Compensation.” Among other items, SFAS No. 148 allows companies adopting SFAS No. 123 to utilize one of three alternative transition methods, one of which was a “prospective method”, as defined, that was only available if adopted during 2003. To date, we have not adopted SFAS No. 123 utilizing any of the transition methods of SFAS No. 148. On March 31, 2004, the FASB issued an exposure draft on a proposed statement, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The proposed statement would eliminate the ability to account for share-based compensation transactions using Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and generally would require instead that such transactions be accounted for using a fair-value-based method. The proposed statement is effective for awards granted, modified, or settled in fiscal years beginning after December 15, 2004, for public entities that used the fair-value based method of accounting under the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation for recognition or pro forma disclosure purposes. The Company is currently evaluating the impact the proposed statement may have on its consolidated financial position, cash flows and results of operations.

In May 2003, FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (SFAS No. 150), effective for financial instruments entered into or modified after May 31, 2003, and otherwise effective at the beginning of the first interim period beginning after June 15, 2003. This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a freestanding financial instrument that is within its scope as a liability (or an asset in some circumstances) when that financial instrument embodies an obligation of the issuer. The adoption of SFAS No. 150 did not have an impact on our consolidated financial statements.

In December 2003, FASB issued a revised Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51” (FIN 46R). FIN 46R requires the consolidation of entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. Currently, entities are generally consolidated by an enterprise when it has a controlling financial interest through ownership of a majority voting interest in the entity. The provisions of FIN 46R are generally effective for existing (prior to February 1, 2003) variable interest relationships of a public entity no later than the end of the first reporting period that ends after March 15, 2004. However, prior to the required application of this interpretation, a public entity that is not a small business issuer shall apply FIN 46R to those entities that are considered to be special-purpose entities no later than the end of the first reporting period that ends after December 15, 2003. The adoption of FIN 46R did not have an impact on our consolidated financial statements.


4.	Sale of Stations and/or Discontinued Operations

On September 18, 2003, the Company entered into an asset purchase agreement with Border Media Partners, LLC to sell the assets of radio stations KLEY-FM and KSAH-AM, serving the San Antonio, Texas market, for a cash purchase price of $24.4 million. On January 30, 2004, the Company completed the sale of the assets of these radio stations KLEY-FM and KSAH-AM consisting of $11.2 million of intangible assets, net, and $0.6 million of property and equipment. The Company recognized a gain of approximately $11.3 million, net of closing costs and taxes on the sale.

On October 2, 2003, the Company entered into an asset purchase agreement with 3 Point Media — San Francisco, LLC (Three Point Media) to sell the assets of radio station KPTI-FM, serving the San Francisco, California market, for a cash purchase price of $30.0 million. In connection with this agreement, Three Point Media made a $1.5 million deposit on the purchase price. On February 3, 2004, the Company terminated the agreement; however, on April 15, 2004, the Company reinstated the agreement and entered into an amendment to the asset purchase agreement and a time brokerage agreement. In connection with this amendment, Three Point Media made an additional $0.5 million deposit on the purchase price. The Company intends to sell the assets of radio station KPTI-FM; however, there cannot be any assurance that the sale will be completed.

The Company determined that the pending sales and/or sales of these stations met the criteria in accordance with SFAS No. 144 to classify the stations’ respective assets as held for sale and their respective operations as discontinued operations. The results of operations in the current year and prior year period of these stations have been classified as discontinued operations in the condensed consolidated statements of operations. On March 31, 2004, the Company had assets held for sale consisting of $13.7 million of intangible assets, net, and $0.3 million of property and equipment for radio station KPTI-FM.


5.	Stock Options and Warrants

The Company accounts for its stock option plans in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, under which compensation expense is recorded to the extent that the market price on the grant date of the underlying stock exceeds the exercise price. No stock-based employee compensation cost is reflected in net income (loss), as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The fair value of each option granted to employees is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions at:


	March 31, 2003		March 31, 2004

Expected life		7 years		7 years
Dividends		None		None
Risk-free interest rate		3.35%		3.33%
Expected volatility		86%		78%

Had compensation expense for the Company’s plans been determined consistent with SFAS No. 123, the Company’s net income (loss) applicable to common stockholders and net income (loss) per common share would have been adjusted to pro forma amounts indicated below (in thousands, except per share data):


		Three-Months Ended			Three-Months Ended
		March 31, 2003			March 31, 2004

Net (loss) income applicable to common stockholders:
As reported		$	(801	)	$	9,624
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of tax			(1,020	)		(1,786	)

Pro forma net (loss) income		$	(1,821	)	$	7,838

Net (loss) income per common share:
	As reported: Basic and Diluted	$	(0.01	)	$	0.15
	Pro forma: Basic and Diluted	$	(0.03	)	$	0.12

In connection with the purchase of KXOL-FM serving the Los Angeles, California market, the Company issued warrants to purchase an aggregate of 2,700,000 shares of the Company’s Class A common stock. The following table summarizes information about these warrants:


	Number of Shares of
	Class A
	Common Stock		Per Share		Warrant Expiration
Warrant Date of Issue	Underlying Warrants		Exercise Price		Date

February 8, 2002		2,000,000	$	10.50		February 8, 2005
March 31, 2003		100,000	$	6.14		March 31, 2006
April 30, 2003		100,000	$	7.67		April 30, 2006
May 31, 2003		100,000	$	7.55		May 31, 2006
June 30, 2003		100,000	$	8.08		June 30, 2006
July 31, 2003		100,000	$	8.17		July 31, 2006
August 31, 2003		100,000	$	7.74		August 31, 2006
September 30, 2003		100,000	$	8.49		September 30, 2006

		2,700,000


6.	Litigation

From time to time we are involved in litigation incidental to the conduct of our business, such as contractual matters and employee-related matters. In the opinion of management, such litigation is not likely to have a material adverse effect on our business, operating results, or financial position.

On June 14, 2000, an action was filed in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida by Jose Antonio Hurtado against us, alleging that he was entitled to a commission related to an acquisition made by us. The case was tried before a jury during the week of December 1, 2003 and Mr. Hurtado was awarded the sum of $1.8 million, plus interest. Mr. Hurtado also filed an application for attorneys’ fees, which we opposed on grounds that there is no contractual or statutory basis for such an award. We filed a motion for judgment notwithstanding the verdict, which was heard on February 6, 2004. On March 12, 2004, the Court denied our motion for judgment notwithstanding the verdict and, upon its own motion, the Court granted a new trial. On April 7, 2004, Mr. Hurtado filed a notice of appeal with the Third District Court of Appeal, challenging the order granting a new trial, and on April 8, 2004, we filed a notice of cross-appeal, challenging the denial of our motion for judgment notwithstanding the verdict. The appeal is sitting with the Third District Court of Appeal, pending the filing of appellate briefs and oral argument. We have accrued for the $1.8 million award, plus interest, at December 31, 2003 and have recorded the amount in other expense (income), net, in the consolidated statement of operations in the fourth quarter of the fiscal year ended December 31, 2003.

In connection with our sale of WXLX-AM in 1997, we assigned the lease of the transmitter for WXLX in Lyndhurst, New Jersey, to the purchaser of the station. The transmitter is located on a former landfill which ceased operations in the late 1960’s. Although WXLX has been sold, we retain potential exposure to possible environmental liabilities relating to the transmitter site (the “Transmitter Property”). On September 12, 2002, the landlords of the property, Frank F. Viola, Thomas C. Viola Trust and Louis Viola Company, received a notice from the New Jersey Meadowlands Commission indicating that it was planning to redevelop the lands which include the Transmitter Property and offering compensation to the landlords for the purchase of the Transmitter Property. The Meadowlands Commission also initially indicated that it would not seek reimbursement from the landlords for the costs of landfill closure or for the remediation of environmental conditions that resulted from the operation of the landfill. The landlords assert that, in any condemnation proceedings, the Meadowlands Commission should be legally bound by its prior statements, foregoing landfill related claims. The landlords did not accept the initial offer of the Meadowlands Commission. On December 4, 2002, the Meadowlands Commission filed a condemnation proceeding in the Superior Court of New Jersey, Bergen County, against the landlords, and named us as an additional defendant. The principal parties to the condemnation proceeding recently negotiated a settlement of the compensation to be paid to the property owner and have petitioned the Court for approval of the settlement and for entry of an Order of Final Judgment. That motion is scheduled to be heard on May 14, 2004. In the proposed Order, the Meadowlands Commission does not reserve claims for reimbursement for landfill closure related costs. While it does reserve its rights to assert independently (even subsequent to the conclusion of the condemnation proceedings), claims concerning the remediation of any contamination unrelated to the landfill operations, the Meadowlands Commission’s investigations thus far have disclosed no such contamination and, to date, no claims have been made against the landlords or us relating to the environmental condition of the Transmitter Property.


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

Overview

We are the largest Hispanic-controlled radio broadcasting company in the United States. After giving effect to the proposed sale of our San Francisco station, we will own and operate 24 radio stations in five of the top-ten Hispanic markets in the United States, including Los Angeles, New York, Puerto Rico, Miami and Chicago. Our radio stations are located in markets that reach approximately 45% of the U.S. Hispanic population. As part of our operating business, we also operate LaMusica.com, a bilingual Spanish-English Internet website providing content related to Latin music, entertainment, news and culture.

The success of each of our radio stations depends significantly upon its audience ratings and share of the overall advertising revenue within its market. The radio broadcasting industry is a highly competitive business, but some barriers to entry do exist. Each of our radio stations competes with both Spanish-language and English-language radio stations in its market as well as with other advertising media such as newspapers, broadcast television, cable television, the Internet, magazines, outdoor advertising, transit advertising and direct mail marketing. Factors which are material to competitive position include management experience, the radio station’s rank in its market, signal strength and frequency, and audience demographics, including the nature of the Spanish-language market targeted by a particular station. Our top three markets, based on net revenue, are New York, Los Angeles and Miami. A significant decline in net revenue or station operating income from our stations in any of these markets could have a material adverse effect on our financial position and results of operations.

Our primary source of revenue is the sale of advertising time on our radio stations to local and national advertisers. Our revenue is affected primarily by the advertising rates that our radio stations are able to charge, as well as the overall demand for radio advertising time in each respective market. Seasonal net broadcasting revenue fluctuations are common in the radio broadcasting industry and are due to fluctuations in advertising expenditures by local and national advertisers. Typically, for the radio broadcasting industry, the first calendar quarter generally produces the lowest revenue.

The performance of a radio station group is customarily measured by its ability to generate station operating income and Adjusted EBITDA. Our most significant operating expenses, for purposes of the

computation of station operating income and Adjusted EBITDA, are compensation expenses, programming expenses, and advertising and promotional expenses. Our senior management strives to control these expenses as well as other expenses by working closely with local station management and others.

The term “station operating income” (our former broadcast cash flow or “BCF”) is defined as Generally Accepted Accounting Principles (GAAP) operating income from continuing operations, excluding corporate expenses and depreciation and amortization. Station operating income replaces our former BCF as one of the metrics used by management to assess the performance of our radio stations. Although it is calculated in the same manner as BCF, management believes that using the term “station operating income” provides a more accurate description of the performance measure. The term “station operating income margin” consists of station operating income divided by net revenue.

EBITDA consists of earnings before interest expenses, interest income, income taxes, depreciation and amortization of assets and discontinued operations. We calculate our EBITDA differently. Our “EBITDA” is EBITDA as defined above but excluding other income or expense, or alternatively, GAAP operating income from continuing operations before depreciation and amortization. To distinguish our calculation of EBITDA from other possible meanings of EBITDA, for periods ending after March 31, 2003 and going forward we changed references to “EBITDA” in our financial reports to the term “Adjusted EBITDA.” Although our “Adjusted EBITDA” and what we formerly referred to as our “EBITDA” are calculated in the same manner, management believes “Adjusted EBITDA” is a more accurate description and represents another metric used by management to assess the performance of the stations and Company, as a whole.

“Station operating income,” “station operating income margin,” and “Adjusted EBITDA” are non-GAAP financial measures as defined by the Securities and Exchange Commission’s Regulation G. These non-GAAP financial measures should not be construed as superior to GAAP financial measures. The GAAP financial measure most directly comparable to each non-GAAP financial measure and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included below. Although station operating income, station operating income margin and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating an investment in our securities because they are measures widely used in the broadcast industry to evaluate a radio company’s operating performance and are used by management for internal budgeting purposes and to evaluate the performance of our radio stations. However, station operating income, station operating income margin and Adjusted EBITDA should not be considered in isolation or as substitutes for operating income, net income (loss), cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP, or as measures of liquidity or profitability. Also, because they are not calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies.

Fluctuation Analysis of the Operating Results for the Three Months Ended March 31, 2004 Compared to the Three Months Ended March 31, 2003 and Non-GAAP Measures Reconciliation.

The following summary table presents a comparison of our results of operations for the three-months ended March 31, 2003 and 2004 with respect to certain of our key financial measures, as well as a reconciliation of the difference between each Non-GAAP financial measure and the comparable GAAP financial measure. The changes illustrated in the table are discussed below. This section should be read in conjunction with the unaudited condensed consolidated financial statements and notes.



		Three Months
		Ended March 31,						Change

		2003			2004			$


		(In thousands)
Net revenue		$	27,923		$	29,232			1,309
Station operating expenses (Engineering, Programming, Selling and G & A expenses)			17,468			18,329			861

	Station operating income (formerly broadcast cash flow)		10,455			10,903			448
Corporate expenses			4,489			3,228			(1,261	)

	Adjusted EBITDA		5,966			7,675			1,709
Depreciation and amortization			708			822			114

Operating income from continuing operations			5,258			6,853			1,595
Interest expense, net			(8,629	)		(10,238	)		(1,609	)
Other income, net			26			175			149
Income tax expense (benefit)			(2,448	)		(3,948	)		(1,500	)
Discontinued operations, net			96			10,940			10,844

	Net income (loss)	$	(801	)	$	11,678			12,479

Station operating income margin			37.4	%		37.3	%

Net Revenue. The increase in net revenue was due to the double-digit growth in our Miami and Chicago markets primarily in local and network revenue. In addition, the start-up stations KZAB-FM and KZBA-FM in Los Angeles, which began operating on March 1, 2003, generated an increase in net revenue of approximately $1.0 million. Offsetting these increases was a decrease in the New York market mainly in national and local revenue.

Station Operating Expenses. The increase in station operating expenses was primarily due to the investments made in our Los Angeles and New York programming departments. Other expenses that increased were audience research costs and insurance due to higher premiums. These increases were offset by decreases in: (a) local and national commissions due to lower commission structures (b) stock-based programming expense related to the warrants issued in connection with the KXOL-FM asset purchase agreement and (c) advertising and promotional expenses due to a decrease in promotional events and less advertising in our core markets.

Station Operating Income. The increase in station operating income was due to the increase in net revenue offset by the increase in station operating expenses. Station operating income margin remained flat due to the proportional increases in net revenue and station operating expenses.

Corporate Expenses. The decrease in corporate expenses resulted mainly from the decrease in legal and professional fees related to various lawsuits and other legal matters.

Adjusted EBITDA. The increase in Adjusted EBITDA was primarily attributed to the increase in station operating income and decrease in corporate expenses.

Depreciation and Amortization. The increase in depreciation and amortization was due to the acquisition of property and equipment in our Chicago, Los Angeles and New York markets.

Operating Income from Continuing Operations. The increase in operating income from continuing operations was primarily attributed to the increase in Adjusted EBITDA.

Interest Expense, Net. The increase in interest expense, net, was due to interest incurred on the new $125.0 million senior secured credit facility term loan that was entered into on October 30, 2003 and a decrease in interest income resulting from a general decline in interest rates and our average cash balances.

Income Taxes. The income tax benefit was a result of applying our estimated effective tax rate for the full year of 125% to our pre-tax loss from continuing operations. The increase in income tax benefit was due to an increase in our estimated effective book tax rate, over the prior year, primarily due to the additional tax amortization of FCC licenses as a result of our acquisition of KXOL-FM in October 2003. Our effective book tax rate was impacted by the adoption of SFAS No. 142 on December 31, 2001. As a result of adopting SFAS No. 142, the reversal of our deferred tax liabilities related to our intangible assets could no longer be assured over our net operating loss carryforward period. Therefore, our estimated effective book tax rate reflects a full valuation allowance on our deferred tax assets.

Discontinued Operations, Net of Taxes. We determined that the sale of our KLEY-FM and KSAH-AM stations serving the San Antonio, Texas market, and the pending sale of our KPTI-FM station serving the San Francisco, California market, all met the criteria in accordance with SFAS No. 144 to classify their respective operations as discontinued operations. Consequently, these stations’ results from operations for the three months ended March 31, 2003 and 2004 have been classified as discontinued operations. The increase in discontinued operations, net of taxes was a result of the $11.3 million gain recognized on the sale of our KLEY-FM and KSAH-AM stations, net of closing costs and taxes on the sale.

Net Income. The increase in net income was primarily due to the increase in discontinued operations, net of taxes, related to an $11.3 million gain on the sale of radio stations KLEY-FM and KSAH-AM.

Liquidity and Capital Resources

Our primary source of liquidity is cash on hand and cash provided by operations and, to the extent necessary, undrawn commitments that are available under a five-year $10.0 million revolving credit facility. Our ability to raise funds by increasing our indebtedness is limited by the terms of the indentures governing our senior subordinated notes, the certificates of designations governing our preferred stock and the credit agreement governing our senior secured credit facilities. Additionally, the indentures, certificates of designations and credit agreement place restrictions on us with respect to the sale of assets, liens, investments, dividends, debt repayments, capital expenditures, transactions with affiliates and consolidations and mergers, among other things. We had cash and cash equivalents of $45.6 million and $74.2 million as of December 31, 2003 and March 31, 2004, respectively.

The following summary table presents a comparison of our capital resources for the three months ended March 31, 2003 and 2004, with respect to certain of our key measures affecting our liquidity. The changes set forth in the table are discussed below. This section should be read in conjunction with the unaudited condensed consolidated financial statements and notes.



	Three Months
	Ended March 31,						Change

	2003			2004			$
*In thousands*

Capital expenditures	$	1,235		$	682			(553	)

Net cash flows provided by operating activities	$	10,083		$	6,467			(3,616	)
Net cash flows provided by (used in) investing activities		(16,385	)		23,048			39,433
Net cash flows used in financing activities		(50	)		(937	)		(887	)

Net (decrease) increase in cash and cash equivalents	$	(6,352	)	$	28,578

Net Cash Flows Provided By Operating Activities. Changes in our net cash flows from operating activities were primarily a result of the increase in cash paid to vendors, suppliers and employees and for interest, causing the decrease in working capital balances.

Net Cash Flows Provided By (Used In) Investing Activities. Changes in our net cash flows from investing activities were primarily a result of the proceeds received from the sale of radio stations KLEY-FM and KSAH-AM in January 2004, and a deposit made in March 2003 for the acquisition of KXOL-FM, which was completed in October 2003.

Net Cash Flows (Used in) Financing Activities. Changes in our net cash flows from financing activities were primarily a result of the additional offering costs related to our 10 3/4% Series B cumulative exchangeable redeemable preferred stock and financing costs related to our $135.0 million senior secured credit facilities, and the principal payment made on the senior secured credit facility term loan during the three months period ended March 31, 2004.

Management believes that cash from operating activities, together with cash on hand, should be sufficient to permit us to meet our operating obligations in the foreseeable future, including required interest and quarterly principal payments pursuant to the senior secured credit facilities agreement, interest payment requirements under our 9 5/8% senior subordinated notes due 2009 and capital expenditures, excluding the acquisitions of FCC licenses. Assumptions (none of which can be assured), which underlie management’s beliefs, include the following:

• the economic conditions within the radio broadcasting industry and economic conditions in general will not deteriorate in any material respect;

• we will continue to successfully implement our business strategy; and

• we will not incur any material unforeseen liabilities, including environmental liabilities.

Our strategy is to primarily utilize cash flows from operations to meet our capital needs and contractual obligations. However, we also have bank borrowings available to meet our capital needs and contractual obligations and, when appropriate, will obtain financing by issuing debt or stock.

We are required to maintain financial covenant ratios under our senior secured credit facilities as follows: (i) Consolidated EBITDA minimum, (ii) Consolidated Fixed Charge Coverage Ratio, (iii) Consolidated Leverage Ratio, (iv) Consolidated Interest Coverage Ratio and (v) Consolidated Senior Secured Debt Ratio, all as defined in the credit agreement solely for the purpose of determining compliance with the covenants. The credit agreement requiring compliance with these financial covenants states that the calculations must be based on generally accepted accounting principles promulgated by the Financial Accounting Standards Board. We are in compliance with all covenants under our senior secured credit facilities and all other debt instruments as of March 31, 2004 and expect to be in compliance in the foreseeable future.

On October 2, 2003, we entered into an asset purchase agreement with 3 Point Media — San Francisco, LLC (“Three Point Media”) to sell the assets of radio station KPTI-FM, serving the San Francisco, California market, for a cash purchase price of $30.0 million. In connection with this agreement, Three Point Media made a $1.5 million deposit on the purchase price. On February 3, 2004, we terminated the agreement; however, on April 15, 2004, we reinstated the agreement and entered into an amendment to the asset purchase agreement and a time brokerage agreement. In connection with this amendment, Three Point Media made an additional $0.5 million deposit on the purchase price. We intend to sell the assets of radio station KPTI-FM; however, there cannot be any assurance that the sale will be completed. Pursuant to the credit agreement governing our senior secured credit facilities, a portion (approximately $25.0 million) of the proceeds received from the sale of KPTI-FM, when and if completed, must be offered to the noteholders to repay a portion of our borrowings under the senior secured credit facilities.

We continuously review opportunities to acquire additional radio stations and sell non-core radio stations, primarily in the largest Hispanic markets in the United States. We engage in discussions regarding potential acquisitions from time to time in the ordinary course of business. We currently have no written understandings, letters of intent or contracts to acquire radio stations or other companies. We anticipate that any future

acquisitions would be financed through funds generated from permitted debt financing, equity financing, operations, asset sales or a combination of these sources. However, there can be no assurance that financing from any of these sources, if available, can be obtained on favorable terms for future acquisitions.

During the three months ended March 31, 2004, we entered into various contractual obligations related to production services agreements, syndication agreements and employee agreements. We expect unrecorded obligations to increase by approximately $5.1 million, $4.9 million, $5.1 million, $4.4 million, $4.6 million and $0.7 million for the fiscal years ended 2004, 2005, 2006, 2007, 2008 and 2009.

New Accounting Pronouncements

Disclosure Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not based on historical facts, but rather reflect our current expectations concerning future results and events. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals are, or may be, forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. Factors that could cause actual results to differ from those expressed in forward-looking statements include, but are not limited to:

• Our substantial amount of debt could adversely affect our financial condition and prevent us from fulfilling our obligations under our senior secured credit facilities and Series B preferred stock;

• We will require a significant amount of cash to service our debt and to make cash dividend payments under the Series B preferred stock after October 15, 2008;

• We may not have the funds to repay or the ability to refinance our senior secured credit facilities or 9 5/8% senior subordinated notes due 2009;

• Our ability to generate cash is affected by many factors 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. This could further intensify some of the risks described above;

• The terms of our debt restrict us from engaging in many activities and require us to satisfy various financial tests;

• The terms of our debt and Series B preferred stock impose or will impose restrictions on us that may adversely affect our business;

• The restrictions imposed by our debt may prevent us from paying cash dividends on the Series B preferred stock after October 15, 2008 and exchanging the Series B preferred stock for exchange notes;

• 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 the Series B preferred stock;

• We may not complete the pending sale of our San Francisco station;

• We have experienced net losses in the past and, to the extent that we experience net losses in the future, the market price of our common stock may be adversely affected which in turn may adversely affect our ability to raise capital;

• Our operating results could be adversely affected by a national or regional recession;

• A large portion of our net revenue and station operating income currently comes from our New York, Los Angeles and Miami markets;

• Loss of any key personnel could adversely affect our business;

• Our long-term growth depends upon successfully executing our acquisition strategy;

• Raúl Alarcón, Jr., 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 of SBS such as a merger or sale of SBS;

• We compete for advertising revenue with other radio groups as well as television and other media, many operators of which have greater resources than we do;

• We might face increased competition because of the merger of Univision Communications Inc. and Hispanic Broadcasting Corp.;

• We must be able to respond to rapidly changing technology, services and standards which characterize our industry for us to remain competitive;

• Our business depends on maintaining our FCC licenses and we cannot assure you that we will be able to maintain these licenses;

• We may face regulatory review for additional acquisitions;

• The market price of our shares of Class A common stock may fluctuate significantly; and

• Current or future sales by existing or future stockholders could depress the market price of our Class A common stock.

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances.


Item 3.	*Quantitative and Qualitative Disclosures About Market Risk*

We believe that inflation has not had a material impact on our results of operations for the three months ended March 31,2003 and 2004, respectively. However, there can be no assurance that inflation will not have an adverse impact on our future operating results and financial condition.

Our primary market risk is a change in interest rates associated with borrowings under our senior secured credit facilities. Advances under the senior secured credit facilities bear base rate or eurodollar rate interest (in each case subject to applicable margins), as applicable, which vary in accordance with prevailing economic conditions. Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. At March 31, 2004, all of our debt, other than our $124.7 million senior secured credit facility term loan, had fixed interest rates. If variable interest rates average 10% higher in 2004 than they did during 2003, our variable interest expense would increase by approximately $0.6 million, compared to a variable annualized estimated $5.5 million for 2003 measured as of December 31, 2003. If interest rates average 10% lower in 2004 than they did during 2003, our interest income from cash and investment balances would decrease by approximately $0.1 million, compared to a variable annualized estimated $0.5 million for 2003 measured as of December 31, 2003. These amounts are determined by considering the impact of the hypothetical interest rates on our variable-rate debt, cash equivalents and short-term investment balances at December 31, 2003. There has been no material change in our market risk position since December 31, 2003.


Item 4.	*Controls and Procedures*

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

As of the end of the quarterly period covered by this report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures were effective.

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION


Item 1.	*Legal Proceedings*


Item 5.	*Other Information*

On February 18, 2004, we commenced an offer to exchange registered shares of our 10 3/4% Series B cumulative exchangeable redeemable preferred stock, par value $.01 per share and liquidation preference of $1,000 per share (the “Series B Preferred Stock”) for any and all shares of our outstanding unregistered 10 3/4% Series A cumulative exchangeable redeemable preferred stock, par value $.01 per share and liquidation preference of $1,000 per share (the “Series A Preferred Stock”). Our registration statement on Form S-4, which registered the Series B Preferred Stock and the 10 3/4% subordinated exchange notes due 2013 that may be issued by us in exchange for the Series B Preferred Stock under certain circumstances, was declared effective by the Securities and Exchange Commission on February 13, 2004. The exchange offer expired at 5:00 p.m., eastern standard time, on March 26, 2004, with full participation in the exchange offer by all holders of our Series A Preferred Stock. On April 5, 2004, we completed the exchange offer and exchanged 76,702,083 shares of our Series B Preferred Stock for all of our then outstanding shares of Series A Preferred Stock.


Item 6.	*Exhibits and Reports on Form 8-K*

(a) Exhibits —


3.1		Third Amended and Restated Certificate of Incorporation of Spanish Broadcasting System, Inc. (the “Company”), dated September 29, 1999 (incorporated by reference to the Company’s 1999 Registration Statement on Form S-1 (Commission File No. 333-85499) (the “1999 Registration Statement”)) (Exhibit A to this exhibit is incorporated by reference to the Company’s Current Report on Form 8-K, dated March 25, 1996 (the “1996 Current Report”)).
3.2		Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999 (incorporated by reference to the Company’s 1999 Registration Statement).
3.3		Amended and Restated By-Laws of the Company (incorporated by reference to the Company’s 1999 Registration Statement).
3.4		Certificate of Elimination of 14 1/4% Senior Exchangeable Preferred Stock, Series A of the Company, dated October 28, 2003 (incorporated by reference to Exhibit 3.3 of the Company’s Quarterly Report on Form 10-Q, dated November 14, 2003 (the “11/14/03 Quarterly Report”)).
4.1		Article V of the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999 (incorporated by reference to the Company’s 1999 Registration Statement) (see Exhibit 3.1).
4.2		Certificate of Designations dated October 29, 2003 Setting Forth the Voting Power, Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of the 10 3/4% Series A Cumulative Exchangeable Redeemable Preferred Stock of Spanish Broadcasting System, Inc. (incorporated by reference to Exhibit 4.1 of the Company’s 11/14/03 Quarterly Report).
4.3		Certificate of Designations dated October 29, 2003 Setting Forth the Voting Power, Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of the 10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock of Spanish Broadcasting System, Inc. (incorporated by reference to Exhibit 4.2 of the Company’s 11/14/03 Quarterly Report).
4.4		Indenture dated June 29, 1994 among the Company, IBJ Schroder Bank & Trust Company, as Trustee, the Guarantors named therein and the Purchasers named therein (incorporated by reference to Exhibit 4.1 of the Company’s 1994 Registration Statement on Form S-4).
4.5		First Supplemental Indenture dated as of March 25, 1996 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the 1996 Current Report).


4.6		Second Supplemental Indenture dated as of March 1, 1997 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the 1996 Current Report).
4.7		Supplemental Indenture dated as of October 21, 1999 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Company’s 1999 Registration Statement).
4.8		Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009 with The Bank of New York as Trustee, dated November 2, 1999 (incorporated by reference to the Current Report on Form 8-K dated November 2, 1999).
4.9		Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009 with The Bank of New York as Trustee, dated June 8, 2001 (incorporated by reference to the Company’s Registration Statement on Form S-3, filed on June 25, 2001).
4.10		Form of stock certificate for the Class A common stock of the Company (incorporated by reference to the Company’s 1999 Registration Statement).
10.1		Nonqualified Stock Option Agreement dated March 3, 2004 between the Company and Joseph A. García.
10.2		Incentive Stock Option Agreement dated March 3, 2004 between the Company and Joseph A. García.
10.3		Amendment dated as of April 15, 2004 to the Asset Purchase Agreement dated as of October 2, 2003 by and among the Company, Spanish Broadcasting System-San Francisco, Inc., KPTI Licensing, Inc. and 3 Point Media-San Francisco, LLC.
10.4		Time Brokerage Agreement dated as of April 15, 2004, by and among the Company, Spanish Broadcasting System-San Francisco, Inc., KPTI Licensing, Inc. and 3 Point Media-San Francisco, LLC.
31.1		Chief Executive Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Chief Financial Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Chief Executive Officer’s Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Chief Financial Officer’s Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

The Company filed the following report on Form 8-K during the three months ended March 31, 2004:

(i) a current report on Form 8-K on March 4, 2004 to report that on March 4, 2004 the Company issued a press release announcing its fourth quarter and fiscal year 2003 financial results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SPANISH BROADCASTING SYSTEM, INC.

By: /s/ JOSEPH A. GARCIA

Joseph A. García

Executive Vice President, Chief Financial Officer

and Secretary (principal financial and

accounting officer and duly authorized

officer of the registrant)

Date: May 10, 2004

EXHIBIT 10.1

[Spanish Broadcasting System, inc. Logo]

March 3, 2004

Joseph A. Garcia
14021 SW 67 Ct.
Miami, FL 33158

Dear Joseph A. Garcia:

Pursuant to the terms and conditions of the Spanish Broadcasting System, Inc. 1999 Stock Option Plan (the "Plan") and/or your Employment Agreement, if applicable, you have been granted a Nonqualified Stock Option, to purchase 33,024 shares (the "Option") of Class A common stock as outlined below.

             Granted To:            Joseph A. Garcia

           Granted Date:            January 21, 2004

         Option Granted:            33,024

Option Price per Share: $11.78      Total Cost to Exercise:   $389,022.72

        Expiration Date:   January 21, 2014, unless terminated earlier.

       Vesting Schedule:   Special Vesting as follows:

                           10,000 on 01/21/2005
                           10,000 on 01/21/2006
                            1,512 on 01/21/2007
                            1,512 on 01/21/2008

        Transferability:    Not transferable except in accordance with the Plan.

                            Spanish Broadcasting System, Inc.

                            By: /s/ Joseph A. Garcia

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of a copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.

Signature: /s/ Joseph A. Garcia                       Date:   03/15/04
           --------------------
               Joseph A. Garcia

EXHIBIT 10.2

[Spanish Broadcasting System, inc. Logo]

March 3, 2004

Joseph A. Garcia
14021 SW 67 Ct.
Miami, FL 33158

Dear Joseph A. Garcia:

Pursuant to the terms and conditions of the Spanish Broadcasting System, Inc. 1999 Stock Option Plan (the "Plan") and/or your Employment Agreement, if applicable, you have been granted an Incentive Stock Option, subject to limitations set forth by the Internal Revenue Code of 1986, as amended from time to time, to purchase 16,976 shares (the "Option") of Class A common stock as outlined below.

             Granted To:            Joseph A. Garcia

           Granted Date:            January 21, 2004

         Option Granted:            16,976

Option Price per Share: $11.78      Total Cost to Exercise:   $199,977.28

        Expiration Date:   January 21, 2014, unless terminated earlier.

       Vesting Schedule:   Special Vesting as follows:

                           8,488 on 01/21/2007
                           8,488 on 01/21/2007

        Transferability:   Not transferable except in accordance with the Plan.

                                        Spanish Broadcasting System, Inc.

                                        By: /s/ Joseph A. Garcia

By my signature below, I hereby acknowledge receipt of this Option granted on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further acknowledge receipt of a copy of the Plan and agree to conform to all of the terms and conditions of the Option and the Plan.

Signature: /s/ Joseph A. Garcia                       Date:   03/15/04
           ----------------------
               Joseph A. Garcia

EXHIBIT 10.3

AMENDMENT TO ASSET PURCHASE AGREEMENT

This Amendment dated as of April 15, 2004, ("Amendment") to the Asset Purchase Agreement dated as of October 2, 2003 ("Agreement"), by and among Spanish Broadcasting System, Inc., Spanish Broadcasting System-San Francisco, Inc., and KPTI Licensing, Inc. (collectively, "SBS Entities") and 3 Point Media
- San Francisco, LLC ("Buyer").

WITNESSETH:

WHEREAS, pursuant to the terms and conditions of the Agreement, SBS Entities and Buyer failed to consummate the acquisition of Station KPTI-FM, Alameda, California ("Station"); and

WHEREAS, the SBS Entities are desirous of providing a further extension of time to Buyer for it to consummate the acquisition of Station; and

WHEREAS, the parties desire to enter into this Amendment to the Agreement on the terms and subject to the conditions set forth herein.

1. Section 2.5 is deleted in its entirety and replaced by the following understanding and agreements. Pursuant to the terms of Section 2.5(c) of the Agreement, Buyer delivered to the SBS Entities a cash advance of One Million Five Hundred Thousand Dollars ($1,500,000) ("Cash Advance"). Due to the failure to consummate the acquisition of Station pursuant to the Agreement, the SBS Entities have retained the Cash Advance. It is agreed that upon execution of this Amendment Buyer shall deliver to the SBS Entities an additional Cash Advance in the amount Five Hundred Thousand Dollars ($500,000.00) (collectively, "Cash Advances"). Should closing occur as set forth herein, the aggregate of the Cash Advances, to wit, Two Million Dollars ($2,000,000.00) will be credited against the total purchase price of Thirty Million Dollars ($30,000,000.00) to be delivered at Closing (as defined below).

2. Section 10 is deleted in its entirety and the parties hereby agree that in the event that the Agreement, as amended herein, is not consummated on or before September 30, 2004 ("Closing"), the Agreement, as amended, will automatically terminate without further liability of any party to the other, except that notwithstanding the foregoing the SBS Entities will retain the aggregate Two Million Dollar ($2,000,000.00) Cash Advances without recourse to Buyer, provided, however, that Five Hundred Thousand Dollars ($500,000) shall be returned to Buyer if the Agreement is not consummated on or before September 30, 2004, due to:

(a) the mutual written consent of the SBS Entities and Buyer;

(b) a material breach by any SBS Entity of any of its respective covenants, agreements, representations or warranties contained in this Agreement or if any of the representations or warranties of any SBS Entity contained in this Agreement shall have been inaccurate in any material respect when made, provided that Buyer is not then in material breach of this Agreement and the SBS Entities, as the case may be, have failed to cure such breach within thirty (30) days after receipt of written notice from Buyer

requesting such breach to be cured, and provided that the failure to cure such breach would result in the conditions contained in Section 8.1 not being satisfied;

(c) a final and non-appealable order, decree or ruling of any court of competent jurisdiction in the United States or other United States Governmental Body permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; or

(d) a Specified Event, pursuant to the provisions of
Section 11.12(b).

3. Section 8.8 is deleted in its entirety.

4. Buyer and the SBS Entities concurrent with the execution of this Amendment will enter into the Local Marketing Agreement attached hereto as Exhibit 1 and made a part hereof.

5. Except for the above, the Agreement remains in full force and effect without change.

6. This Amendment may be signed in counterpart originals, which collectively shall have the same legal effect as if all signatures had appeared on the same physical document. This Amendment may be signed and exchanged by facsimile transmission, with the same legal effect as if the signatures had appeared in original handwriting on the same physical document.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

SPANISH BROADCASTING SYSTEM, INC.

By: /s/ Raul Alarcon, Jr.
   ---------------------------------------
   Raul Alarcon, Jr.
   President and CEO

SPANISH BROADCASTING SYSTEM-SAN
FRANCISCO, INC.

By: /s/ Raul Alarcon, Jr.
   ---------------------------------------
    Raul Alarcon, Jr.
    President and CEO

KPTI LICENSING, INC.

By: /s/ Raul Alarcon, Jr.
  ---------------------------------------
    Raul Alarcon, Jr.
    President and CEO

3 POINT MEDIA - SAN FRANCISCO, LLC

By: /s/ Bruce Buzil
  ---------------------------------------
    Bruce Buzil
    Co-Manager

EXHIBIT 10.4

TIME BROKERAGE AGREEMENT

This Time Brokerage Agreement (the "Agreement") is entered into as of the 15th day of April, 2004, by and among KPTI LICENSING, INC., a Delaware corporation ("Licensee"), SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation ("SBS"), and SPANISH BROADCASTING SYSTEM - SAN FRANCISCO, INC., a Delaware corporation (together with SBS and Licensee, the "SBS Entities") and 3 POINT MEDIA - SAN FRANCISCO, LLC, an Illinois limited liability company ("Programmer").

WHEREAS, Licensee is the licensee of and owns and operates radio station KPTI(FM), FCC Facility ID No. 36029, Alameda, California (the "Station"), pursuant to licenses, permits, and authorizations issued to Licensee by the Federal Communications Commission (the "Commission" or "FCC").

WHEREAS, the SBS Entities and Programmer are parties to that certain Asset Purchase Agreement, dated as of October 2, 2003, as amended on April 14, 2004 (the "Asset Purchase Agreement"), whereby the SBS Entities have agreed to sell, and Programmer has agreed to buy, substantially all of the assets used in the operation of the Station on the terms and conditions set forth therein. All capitalized terms not defined herein shall have the meaning provided in the Asset Purchase Agreement.

WHEREAS, Licensee desires to provide air time on the Station to Programmer on terms and conditions that conform to Station policies and the FCC's rules, regulations and policies for time brokerage arrangements and as set forth herein.

WHEREAS, Programmer desires to use the air time to be made available by Licensee for the purpose of providing Programmer's programming to and for the Station in conformity with all rules, regulations, and policies of the FCC.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual promises set forth herein, Licensee and Programmer hereby agree as follows:

1. TIME SALE. Subject to the terms of this Agreement, and to applicable rules, regulations, and policies of the FCC, Licensee shall make available to Programmer all air time on the Station as may be requested by Programmer except for time reserved to or permitted to be used by Licensee in accordance with Sections 4 and 5. Licensee shall broadcast the programming, including commercial announcements, supplied by Programmer without interruption, deletion, or addition of any kind, subject to the terms of this Agreement and Licensee's obligations under the Communications Act of 1934, as amended, and the published rules, regulations, and policies of the Commission (collectively, the "Communications Act").

2. TERM. The term of this Agreement shall be from April 15, 2004, through October 15, 2004, unless earlier terminated pursuant to Paragraph 15 hereof. This Agreement may be renewed upon such terms and conditions as may be mutually agreeable to Programmer and Licensee.

3. HOURS OF PROGRAMMING. Subject to the exceptions set forth in Sections 4 and 5 below, Programmer shall supply, and Licensee shall transmit without modification, programming

for all periods of broadcast operations as may be requested by Programmer, as long as this Agreement remains in force. Programmer shall provide all such programming, produced at its own cost and expense.

4. RESERVATION OF TIME. Licensee specifically reserves for its own use up to three (3) hours per week of programming time (the "Reserved Time") during which it may broadcast programming of its choice to serve community needs. The Reserved Time shall be at a mutually agreeable time between the hours of 6:00 a.m. to 11:00 a.m. Sundays.

5. LICENSEE'S PROGRAMMING DISCRETION. Nothing herein shall be construed as limiting in any way the reasonable, good faith exercise by Licensee of its rights and obligations as the licensee of the Station to make the ultimate programming decisions for the Station. Licensee shall be responsible for ensuring that the Station's overall programming is responsive to community needs and in the public interest. Programmer's programming shall be broadcast in conformity with the regulations and restrictions set forth in Attachment 1, which are an integral part of this Agreement. Programmer agrees to abide by the standards set forth in Attachment 1 in its programming and operations. Licensee has the authority, in its sole discretion, to reject and refuse to transmit any programming produced or proposed by Programmer that, in the reasonable good faith judgment of Licensee, is contrary to the public interest. Licensee shall notify Programmer, unless such notice is impractical or impossible, at least one
(1) week in advance of any such refusal of Programmer's programming that Licensee deems necessary to serve the public interest. In the event of any such refusal, Programmer shall receive a pro-rated credit for the preempted time against the compensation required under Section 7 hereof and, in addition, shall be entitled to the cash value equivalent of any consideration received by the Licensee for the programming included in such period of preemption. Although the parties shall cooperate in the broadcast of emergency information over the Station, Licensee shall have the right to interrupt Programmer's programming in case of an emergency or for programming that, in the reasonable good faith judgment of Licensee, is of overriding public importance. In the event of any such interruption, except interruptions reasonably necessary to inform the public of a governmentally declared federal, state, or local emergency, Programmer shall receive a pro-rated credit for the preempted time against the compensation required under Section 7 hereof.

6. PROGRAMMER'S RIGHTS IN PROGRAMMING. All right, title and interest in and to the programming provided by Programmer, and the right to authorize the use of the programming in any manner and in any media whatsoever, shall be and remain vested at all times solely in Programmer. Programmer may use the network and syndicated programs of Licensee in accordance with appropriate Licensee contracts and agreements pertaining to such programming, but all right, title and interest in and to such programming shall be and remain vested at all times solely in Licensee.

7. COMPENSATION. In consideration of the broadcast time provided to Programmer pursuant to this Agreement, Programmer shall pay Licensee the fee set forth in Attachment 2 hereto.

8. EXPENSES.

a. Licensee shall be responsible for paying to appropriate third parties all direct and indirect capital, operating and maintenance costs of the Station, including but not limited to: (i)

rents and utilities at Licensee's studio, tower, and transmitter site facilities; (ii) insurance costs related to Licensee's assets and operations;
(iii) Licensee's telephone, delivery, and postal service; (iv) costs related to the operation and maintenance of Licensee's main studio and operation and maintenance of the equipment necessary for the operation of the Station in compliance with the rules, regulations, and policies of the FCC; (v) salaries, payroll taxes, insurance, and related costs of personnel employed by Licensee in connection with the operation of the Station; (vi) all costs and expenses related to the production and broadcast of the programming provided by Licensee; and (vii) all performing rights, licensing fees for music and other material contained in the programming provided by Licensee.

b. Programmer shall be responsible for all direct and indirect costs of the production and delivery of Programmer's programming, including but not limited to: (i) all costs for the power and utilities at any facilities owned by Programmer and used by Programmer in the production of programming; (ii) insurance costs related to Programmer's equipment and assets used in its business operations; (iii) costs related to the maintenance of the studio and equipment owned by Programmer and used for the production and delivery of Programmer's programming; (iv) salaries, payroll taxes, insurance, and related costs of personnel employed by Programmer in connection with production and delivery of the programming, Programmer's promotion of that programming, and the sale of advertising in that programming; and (v) all performing rights, licensing fees for music and other material contained in the programming provided by Programmer.

9. ACCOUNTS RECEIVABLE.

a. On and after the Effective Date, during the term of this Agreement, all revenue from broadcasts on the Station (except for revenue from broadcasts of the Licensee's programming during the Reserved Time) shall belong to Programmer and Programmer shall be responsible for all traffic, billing and collection functions with respect to such revenue.

b. All cash accounts receivable for broadcasts on the Station, which occur prior to the Effective Date (the "Accounts Receivable") shall belong to Licensee and Licensee shall be responsible for all billing and collection functions with respect to such Accounts Receivable.

10. USE OF FACILITIES. During the term of this Agreement, Programmer shall have the right to use the studio equipment and premises of the Station (collectively, the "Studio Facilities") for producing the programming and related functions (including the sale of advertising). Programmer may, at its own expense, install any additional studio equipment reasonably necessary for producing the programming and related functions. Programmer shall replace all spare parts belonging to Licensee that Programmer may use during the term of this Agreement and shall reimburse Licensee for any and all damages to the facilities caused by Programmer, ordinary wear and tear excepted, except to the extent that such damage is reimbursed by policies of insurance. Programmer shall maintain its own business liability insurance and hazard insurance in commercially reasonable amounts. Programmer also shall have the right to use the call letters of the Station in correspondence and in promotion related to the programming provided by Programmer, provided, however, that, during the term hereof, any use of the Station's call letters as part of letterhead or in any other preprinted form such as, but not limited

to, checks, invoices or business cards, shall indicate that Programmer provides programming services for the Station. Programmer acknowledges that it has no authority to bind Licensee, the Station or any affiliate thereof to any agreement, contract, obligation or understanding of any nature whatsoever. Programmer shall have no right to mortgage, pledge or otherwise encumber the assets of Licensee.

11. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PROGRAMMER. Programmer represents and warrants to, and covenants with, Licensee that:

a. This Agreement has been duly executed and delivered by Programmer, and is valid, binding and enforceable against Programmer in accordance with its terms. Programmer has full right, power, authority and legal capacity to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

b. The programming provided by Programmer for broadcast on the Station shall comply in all material respects with the Communications Act, and with the programming standards established by Licensee as set forth in Attachment 1 hereto.

c. Programmer shall obtain, at its own cost and expense, music licenses for the music in the programs it provides for broadcast. The performing rights to all music contained in its programming shall be licensed by BMI, ASCAP, or SESAC or shall be in the public domain. The Programmer shall keep all the payment of all such accounts current.

d. Programmer shall cooperate with Licensee in making time available in programming supplied to the Station by Programmer for broadcasting proper station identification announcements as required by FCC rules and regulations.

e. Neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in the breach of any term, condition or provision of, or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any property or assets of Programmer pursuant to, the certificate of formation and the limited liability company operating agreement of Programmer, any agreement or other instrument to which Programmer is a party or by which any part of its property is bound, or violate any law, regulation, judgment or order binding upon Programmer.

f. Programmer shall promptly pay any and all expenses or obligations of any kind or nature relating to the provision of programming when such expenses become due.

g. Programmer shall forward to Licensee any letter from a member of the general public addressing the Station's programming or documentation which comes into its custody which is required to be included in the Station's public file or which is reasonably requested by Licensee.

h. No representation or warranty made by Programmer in this Agreement, contains any untrue statement of a material fact or omits a material fact necessary in order to make such statements or information not misleading in any material respect.

12. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF LICENSEE. The SBS Entities represent and warrant to, and covenant with, Programmer that:

a. This Agreement has been duly executed and delivered by the SBS Entities, and is valid, binding and enforceable against Licensee in accordance with its terms. The SBS Entities have full right, power, authority and legal capacity to enter into and perform their obligations under this Agreement and to consummate the transactions contemplated hereby.

b. No consent, license, approval or authorization of or exemption by, or filing, restriction or declaration with, any governmental authority bureau, agency or regulatory authority, other than the filing of this Agreement with the FCC, is required in connection with the execution, delivery or performance of this Agreement and to consummate the transactions contemplated hereby.

c. Neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in the breach of any term, condition or provision of, or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the SBS Entities pursuant to, the articles of incorporation or bylaws of the SBS Entities, any agreement or other instrument to which SBS Entities are party or by which any part of their property is bound, or violate any law, regulation, judgment or order binding upon the SBS Entities.

d. The Licensee shall ensure that the Station's overall programming is responsive to community needs and the public interest. Licensee shall prepare the quarterly listings of significant community issues and responsive programming.

e. The Station's facilities and equipment shall be operated in accordance with good engineering standards of the radio broadcast industry, with all applicable laws and regulations and broadcast to the full power and height authorized for it by the FCC. During the term of this Agreement, Licensee shall maintain the transmission facility and the broadcast output with the same quality, normal wear and tear excepted, to broadcast to the same power and height as Licensee is presently authorized by the FCC. Any maintenance work, other than emergency repairs, which prevent the operation of the Station at full power and maximum facility, shall not be scheduled without giving at least forty-eight (48) hours notice to Programmer, unless Programmer waives such notice.

f. Licensee shall employ such management and staff-level employees to direct the day-to-day operations of the Station as may be necessary to fully comply with the provisions of the Communications Act regarding main studio staffing and such additional personnel as shall be necessary to enable the Licensee to perform its obligations under this Agreement. All such employees will report to and be accountable solely to Licensee. Licensee shall notify Programmer prior to making any changes in management personnel.

g. Licensee shall maintain a main studio (as defined by the rules and regulations of the FCC). Licensee shall maintain an appropriate public inspection file at the main studio and shall, from time to time, place such documents in that file as may be required by present or future FCC rules and regulations.

h. On and after the Effective Date, during the term of this Agreement, the SBS Entities shall not enter into any contract or agreement for the cash or non-cash sale of time on the Station. The SBS Entities acknowledge that they have no authority to bind Programmer or any affiliate thereof to any agreement, contract, obligation or understanding of any nature whatsoever. The SBS Entities shall have no right to mortgage, pledge or otherwise encumber the assets of Programmer.

i. Licensee, at the election of Programmer on or before the Effective Date, shall change the call sign of the Station to a call sign designated by Programmer. Licensee shall use commercially reasonable efforts to prepare, file and prosecute any filings with the FCC that may be required, necessary or desirable to effectuate such call sign change on or before the Effective Date.

j. No representation or warranty made by any of the SBS Entities in this Agreement, contains any untrue statement of a material fact or omits a material fact necessary in order to make such statements or information not misleading in any material respect.

13. POLITICAL TIME. Licensee shall retain responsibility to comply with the FCC's political programming rules. Programmer shall cooperate with Licensee to assist Licensee in complying with the FCC's political programming rules. Licensee shall promptly supply to Programmer, and Programmer shall promptly supply to Licensee, such information, including all inquiries concerning the broadcast of political advertising, as may be necessary to comply with FCC rules and policies, including the lowest unit rate, equal opportunities, reasonable access, political file and related requirements of federal law. Licensee, in consultation with Programmer, shall develop a statement which discloses its political broadcasting policies to political candidates, and Programmer shall follow those policies and rates in the sale of political programming and advertising.

14. INDEMNIFICATION.

a. Programmer shall indemnify, defend, and hold harmless Licensee from and against any Claim (as defined herein) arising out of (i) programming exclusively provided by Programmer, and (ii) any inaccuracy or breach of any representations, warranties, covenants, or obligations of Programmer under this Agreement, and (iii) Programmer's use of the facilities of Licensee.

b. Licensee shall indemnify, defend, and hold harmless Programmer from and against any Claim arising out of (i) programming exclusively provided by Licensee, and (ii) any inaccuracy or breach of any representations, warranties, covenants, or obligations of Licensee under this Agreement.

c. As used in this Section 14, the term "Claim" shall include (i) all liabilities; (ii) all losses, damages (including, without limitation, consequential damages), judgments, awards, penalties and settlements; (iii) all demands, claims, suits, actions, causes of action, proceedings and assessments, whether or not ultimately determined to be valid; and (iv) all costs and expenses (including, without limitation, interest (including prejudgment interest in any litigated or arbitrated

matter), court costs and fees and expenses of attorneys and expert witnesses) of investigating, defending or asserting any of the foregoing or of enforcing this Agreement.

d. The indemnification obligations of this Section 14 shall survive any termination of this Agreement and shall continue until the expiration of all applicable statutes of limitations and the conclusion and payment of all judgments which may be rendered in all litigation which may be commenced prior to such expiration.

e. Any party seeking indemnification hereunder (the "Indemnified Party") shall give promptly to the party obligated to provide indemnification to such Indemnified Party (the "Indemnitor") a written notice (a "Claim Notice") describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known or estimable) the amount or the method of computation of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based. The failure of any Indemnified Party to give the Claim Notice promptly as required by this Section 14e shall not affect such Indemnified Party's rights under this Section 14 except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnitor.

f. After the giving of any Claim Notice pursuant hereto, the amount of indemnification to which an Indemnified Party shall be entitled under this Section 14 shall be determined: (i) by the written agreement between the Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified Party and the Indemnitor shall agree in writing. The judgment or decree of a court shall be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined. The Indemnified Party shall have the burden of proof in establishing the amount of losses and expenses suffered by it.

g. In order for a party to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim or demand made by any third Person against the Indemnified Party, such Indemnified Party must notify the Indemnitor in writing, and in reasonable detail, of the third Person claim promptly after receipt by such Indemnified Party of written notice of the third Person claim. Thereafter, the Indemnified Party shall promptly deliver to the Indemnitor copies of all notices and documents (including court papers) received by the Indemnified Party relating to the third Person claim. Notwithstanding the foregoing, should a party be physically served with a complaint with regard to a third Person claim, the Indemnified Party must notify the Indemnitor with a copy of the complaint within five (5) business days after receipt thereof and shall deliver to the Indemnitor within seven (7) business days after the receipt of such complaint copies of notices and documents (including court papers) physically served upon the Indemnified Party relating to the third Person claim. The failure of any Indemnified Party to give the Claim Notice promptly (or in five (5) business days in the case of service of a complaint upon the Indemnified Party) or to deliver copies of notices and documents as required by this Section 14g shall not affect such Indemnified Party's rights under this Section 14 except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnitor.

h. In the event of the initiation of any legal proceeding against the Indemnified Party by a third Person, the Indemnitor shall have the sole and absolute right after the receipt of notice, at its option and at its own expense, to be represented by counsel of its choice and to control, defend against, negotiate, settle or otherwise deal with any proceeding, claim, or demand which relates to any loss, liability or damage indemnified against hereunder; provided, however, that the Indemnified Party may participate in any such proceeding with counsel of its choice and at its expense. The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such legal proceeding, claim or demand. To the extent the Indemnitor elects not to defend such proceeding, claim or demand, and the Indemnified Party defends against or otherwise deals with any such proceeding, claim or demand, the Indemnified Party may retain counsel, reasonably acceptable to the Indemnitor, at the expense of the Indemnitor, and control the defense of such proceeding. Neither the Indemnitor nor the Indemnified Party may settle any such proceeding which settlement obligates the other party to pay money, to perform obligations or to admit liability without the consent of the other party, such consent not to be unreasonably withheld. After any final judgment or award shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the time in which to appeal therefrom has expired, or a settlement shall have been consummated, or the Indemnified Party and the Indemnitor shall arrive at a mutually binding agreement with respect to each separate matter alleged to be indemnified by the Indemnitor hereunder, the Indemnified Party shall forward to the Indemnitor notice of any sums due and owing by it with respect to such matter and the Indemnitor shall pay all of the sums so owing to the Indemnified Party by wire transfer, certified or bank cashier's check within thirty (30) days after the date of such notice.

i. In any case where an Indemnified Party recovers from third Persons any amount in respect of a matter with respect to which an Indemnitor has indemnified it pursuant to this Section 14, such Indemnified Party shall promptly pay over to the Indemnitor the amount so recovered (after deducting therefrom the full amount of the expenses incurred by it in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by the Indemnitor to or on behalf of the Indemnified Party in respect of such matter and (ii) any amount expended by the Indemnitor in pursuing or defending any claim arising out of such matter. All Loss and Expenses shall be computed net of any insurance proceeds (less any increase in premiums, reasonably attributable to such Loss, for the one-year period following such Loss) that reduce any damages that would otherwise be sustained.

15. TERMINATION; EFFECT OF TERMINATION.

a. The term of this Agreement is subject to the limitations that:

i. This Agreement may be terminated by mutual consent of the parties.

ii. Either party may terminate this Agreement if the terminating party is not then in material breach and the other party is in material breach under this Agreement and has failed to cure such breach within thirty (30) calendar days after receiving notice of breach from the terminating party.

iii. Either party may terminate this Agreement if the Asset Purchase Agreement is terminated in accordance with its terms and the terminating party is not then in material breach of this Agreement.

iv. This Agreement shall terminate automatically upon the occurrence of any of the following:

(1) This Agreement is declared invalid or illegal in whole or material part by an order or decree of the FCC or any other administrative agency or court of competent jurisdiction and such order or decree has become final and no longer subject to further administrative or judicial review;
(2) The assignment of the license of the Station from Licensee to Programmer (FCC File No. BALH-20031010ACK) is consummated by the parties.

iv. Programmer shall have the right at its sole option to terminate this Agreement if Licensee, pursuant to this Agreement, preempts or substitutes other programming for that supplied by Programmer during ten percent (10%) or more of the total hours of operation of the Station during any period of seven consecutive days.

b. In the event of termination hereunder, Licensee shall be under no further obligation to make available to Programmer any further broadcast time or broadcast transmission facilities, and Programmer shall have no further obligation to make any payments to Licensee hereunder. All unperformed agreements and contracts for advertising to be aired during Programmer's time shall automatically belong to Licensee, who shall have the right to perform such agreements and contracts and to collect and receive the money derived therefrom. Programmer shall remit to Licensee any money or consideration it shall have received as pre-payment for such unaired advertising. Programmer shall be entitled to all uncollected revenue for advertising already broadcast over the Station prior to such termination, and Licensee shall pay over to Programmer any sums received in respect of the same.

16. EXCLUSIVITY. Any air time not used by Programmer in accordance with Section 3 or by Licensee shall not be available for use by any other Person. During the term of this Agreement, Licensee agrees not to enter into any other time brokerage, program provision, local management, or similar agreement relating to the Station with any Person.

17. INSURANCE. Licensee will maintain in full force and effect throughout the term of this Agreement insurance with responsible and reputable insurance companies or associations covering such risks (including fire and other risks insured against by extended coverage, public liability insurance, insurance for claims against personal injury or death or property damage and such other insurance as may be required by law) and in such amounts and on such terms as is conventionally carried by broadcasters operating radio stations with facilities comparable to those of the Station. Any insurance proceeds received by Licensee in respect of damaged property will be used to repair or replace such property so that the operation of the Station conforms with this Agreement.

18. REGULATORY REQUIREMENTS. Licensee shall operate the Station in conformity with the Communications Act, FCC rules and requirements, and all other applicable federal, state, and

local rules. Notwithstanding anything to the contrary set forth in this Agreement, Licensee shall be solely responsible for the management, operation, and regulatory compliance of the Station, including, specifically, control over the Station's finances, personnel, and programming.

19. PAYOLA/PLUGOLA. Neither Programmer nor its agents, employees, consultants, or personnel shall accept any consideration, compensation, gift, or gratuity of any kind whatsoever, regardless of its value or form, including but not limited to, a commission, discount, bonus, material, supplies, or other merchandise, services, or labor (collectively "Consideration"), whether or not pursuant to written contracts or agreements between Programmer and merchants or advertisers, unless the payer is identified in the program for which Consideration was provided as having paid for or furnished such Consideration, in accordance with the Communications Act and FCC requirements.

20. NOTICES. All notices and other communications permitted or required hereunder shall be in writing and any payment, notice, or other communications shall be deemed given by (a) personal delivery, (b) U. S. certified mail, postage prepaid, with return receipt requested, or (c) a nationally recognized overnight carrier, in each case addressed as follows:

If to Programmer, to:

3 Point Media - San Francisco, LLC

980 North Michigan Avenue Suite 1880
Chicago, Illinois 60611 Attention: Bruce Buzil Tel: (312) 204-9900

With a copy (which shall not constitute notice) to:

Dow, Lohnes & Albertson, PLLC 1200 New Hampshire Avenue, N.W.

Washington, D.C. 20036

Telephone: (202) 776-2556 Facsimile: (202) 776-2526 Attention: Michael D. Basile

If to Licensee, to:

Spanish Broadcasting System, Inc.
2601 South Bayshore Drive PH II
Coconut Grove, FL 33133

Telephone: (305) 441-6901 Facsimile: (305) 441-2179 Attention: Raul Alarcon

With a copy to:

Kaye Scholer LLP
901 15th St., NW
Suite 1100
Washington, D.C. 20005 Telephone: (202) 682-3506 Facsimile: (202) 682-3580 Attention: Jason L. Shrinsky

or to such other person or address as any of the parties may specify to the others in writing from time to time. Notice shall be deemed to have been given upon actual receipt.

21. NO AGENCY. No agency relationship among the parties shall be expressed or implied by the terms of this Agreement, nor shall this Agreement be construed to create a joint venture or partnership among the parties. None of the parties shall hold itself out as an agent, partner, or joint venturer with any of the others. Programmer shall not perform or assume any obligation or liability of the SBS Entities. All contracts for the sale of airtime, purchase orders, agreements, sales materials, and similar documents produced or executed by Programmer shall be executed in the name of Programmer, and not on behalf of the Station or Licensee, and shall represent that Programmer is not the licensee of the Station.

22. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between the parties with respect to the subject matter hereof and there are no other agreements, representations, warranties, or understandings, oral or written, between them with respect to the subject matter hereof. No alteration, modification or change of this Agreement shall be valid unless by like written instrument signed by each party hereto.

23. FURTHER ASSURANCES. Each of the parties shall execute and deliver such additional documents and take such further actions as are reasonably necessary for the purposes of carrying out this Agreement.

24. BROKER. The parties agree to indemnify and hold each other harmless against any claims from any broker or finder based upon any agreement, arrangement, or understanding alleged to have been made by the indemnifying party.

25. ASSIGNMENT. None of the parties shall assign its rights or delegate its duties under this Agreement without the other parties' prior written consent, which consent shall not be unreasonably withheld or delayed, provided, however, that, upon notice to Licensee, Programmer may assign its rights and delegate its duties under this Agreement to any person or entity controlling, controlled by or under common control with Programmer. Any assignment or delegation by any of the parties in contravention of this Section 25 shall be null and void.

26. BINDING EFFECT. This Agreement shall be binding upon the parties hereto and their successors and permitted assigns.

27. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of Licensee or Programmer in exercising any right or power hereunder shall operate as a waiver thereof, nor shall

any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of Licensee and Programmer herein provided are cumulative and are not exclusive of any right or remedies which it may otherwise have.

28. FORCE MAJEURE. Any failure or impairment of facilities or any delay or interruption in broadcasting Programmer's programs, or failure at any time to furnish facilities, in whole or in part, for broadcasting, due to acts of God, strikes or threats thereof, or force majeure, shall not constitute a breach of this Agreement and Licensee will not be liable to Programmer with respect to facilities that failed or were impaired or not furnished as a result of such events.

29. SEVERABILITY. If any provision of this Agreement or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. In the event that the FCC raises a substantial and material question as to the validity of any provision of this Agreement, the parties hereto shall negotiate in good faith to revise any such provision of this Agreement with a view toward assuring compliance with all then existing FCC rules and policies which may be applicable, while attempting to preserve, as closely as possible, the intent of the parties as embodied in the provision of this Agreement which is to be so modified.

30. GOVERNING LAW. This Agreement and the transactions contemplated hereby shall be governed by and construed in accordance with the laws of the State of New York without reference to its choice of law rules. Each of the parties hereto irrevocably submits to the exclusive jurisdiction (subject to the immediately following sentence) of the United States District Court for the Northern District of Illinois for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of the parties hereto agrees, to the extent permitted under applicable laws and rules of procedure, to commence any action, suit or proceeding relating hereto either in the United States District Court for the Northern District of Illinois, or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Circuit Court of Cook County of the State of Illinois. Each of the parties hereto further agrees that service of any process, summons, notice or document by U.S. registered mail to such party's respective address set forth below shall be effective service of process for any action, suit or proceeding in either the United States District Court for the Northern District of Illinois or the Circuit Court of Cook County of the State of Illinois with respect to any matters to which it has submitted to jurisdiction in this Section 31. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the United States District Court for the Northern District of Illinois or (ii) the Circuit Court of Cook County of the State of Illinois, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, judgments, orders or decrees resulting from lawsuits or court actions brought in accordance with the foregoing provisions of this Section 31 may be appealed to or enforced in any court of competent jurisdiction.

31. HEADINGS. The headings contained in this Agreement are included for convenience only and no such heading shall in any way alter the meaning of any provision.

32. COUNTERPARTS. This Agreement may be signed in counterpart originals, which collectively shall have the same legal effect as if all signatures had appeared on the same physical document. This Agreement may be signed and exchanged by facsimile transmission, with the same legal effect as if the signatures had appeared in original handwriting on the same physical document.

33. AMENDMENT. This Agreement may be modified or amended only in writing and signed by the parties hereto.

34. CERTIFICATIONS. Programmer certifies that this Agreement complies with the Commission's multiple ownership rules, 47 C.F.R. ss. 73.3555, specifically including paragraphs (a), (c) and (d) thereof. Licensee certifies that it maintains, and shall continue to maintain during the term of this Agreement, ultimate control over the Station's facilities, including specific control over Station finances, personnel and programming.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Time Brokerage Agreement as of the date first above written.

KPTI LICENSING, INC.

By: /s/ Raul Alarcon, Jr.
    -----------------------------------
    Name: Raul Alarcon, Jr.
         ------------------------------
    Title: President and CEO
         ------------------------------

SPANISH BROADCASTING SYSTEM, INC.

By: /s/ Raul Alarcon, Jr.
    -----------------------------------
    Name: Raul Alarcon, Jr.
         ------------------------------
    Title: President and CEO
         ------------------------------

SPANISH BROADCASTING SYSTEM -
SAN FRANCISCO, INC.

By: /s/ Raul Alarcon, Jr.
    -----------------------------------
    Name: Raul Alarcon, Jr.
         ------------------------------
    Title: President and CEO
         ------------------------------

3 POINT MEDIA - SAN FRANCISCO, LLC

By: /s/ Bruce Buzil
    -----------------------------------
    Name: Bruce Buzil
         ------------------------------
    Title: Co-Manager
         ------------------------------

Exhibit 31.1

CERTIFICATION

I, Raúl Alarcón, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spanish Broadcasting System, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) disclosed in this report any change in the registrant’s internal control over financial reporting that occured during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004

/s/ Raúl Alarcón, Jr.

Name: Raúl Alarcón, Jr.

Title: Chairman of the Board of Directors,
Chief Executive Officer and President

Exhibit 31.2

CERTIFICATION

I, Joseph A. García, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spanish Broadcasting System, Inc;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004

/s/ Joseph A. García

Name: Joseph A. García

Title: Chief Financial Officer,
Executive Vice President and Secretary

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Spanish Broadcasting System, Inc. (the “Company”) for the period ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Raúl Alarcón, Jr., Chairman of the Board of Directors, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Raúl Alarcón, Jr.

Raúl Alarcón, Jr.

May 10, 2004 Chairman of the Board of Directors,
President and Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Spanish Broadcasting System, Inc. (the “Company”) for the period ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph A. García, Chief Financial Officer, Executive Vice President and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joseph A. García

Joseph A. García

May 10, 2004 Chief Financial Officer, Executive Vice President and Secretary

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	•	the economic conditions within the radio broadcasting industry and economic conditions in general will not deteriorate in any material respect;

	•	we will continue to successfully implement our business strategy; and

	•	we will not incur any material unforeseen liabilities, including environmental liabilities.


	•	Our substantial amount of debt could adversely affect our financial condition and prevent us from fulfilling our obligations under our senior secured credit facilities and Series B preferred stock;

	•	We will require a significant amount of cash to service our debt and to make cash dividend payments under the Series B preferred stock after October 15, 2008;

	•	We may not have the funds to repay or the ability to refinance our senior secured credit facilities or 9 5/8% senior subordinated notes due 2009;

	•	Our ability to generate cash is affected by many factors 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. This could further intensify some of the risks described above;

	•	The terms of our debt restrict us from engaging in many activities and require us to satisfy various financial tests;

	•	The terms of our debt and Series B preferred stock impose or will impose restrictions on us that may adversely affect our business;

	•	The restrictions imposed by our debt may prevent us from paying cash dividends on the Series B preferred stock after October 15, 2008 and exchanging the Series B preferred stock for exchange notes;

	•	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 the Series B preferred stock;

	•	We may not complete the pending sale of our San Francisco station;

	•	We have experienced net losses in the past and, to the extent that we experience net losses in the future, the market price of our common stock may be adversely affected which in turn may adversely affect our ability to raise capital;

	•	Our operating results could be adversely affected by a national or regional recession;

	•	A large portion of our net revenue and station operating income currently comes from our New York, Los Angeles and Miami markets;

	•	Loss of any key personnel could adversely affect our business;

	•	Our long-term growth depends upon successfully executing our acquisition strategy;

	•	Raúl Alarcón, Jr., 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 of SBS such as a merger or sale of SBS;


	•	We compete for advertising revenue with other radio groups as well as television and other media, many operators of which have greater resources than we do;

	•	We might face increased competition because of the merger of Univision Communications Inc. and Hispanic Broadcasting Corp.;

	•	We must be able to respond to rapidly changing technology, services and standards which characterize our industry for us to remain competitive;

	•	Our business depends on maintaining our FCC licenses and we cannot assure you that we will be able to maintain these licenses;

	•	We may face regulatory review for additional acquisitions;

	•	The market price of our shares of Class A common stock may fluctuate significantly; and

	•	Current or future sales by existing or future stockholders could depress the market price of our Class A common stock.



	Joseph A. García
	Executive Vice President, Chief Financial Officer
	and Secretary (principal financial and
	accounting officer and duly authorized
	officer of the registrant)



	/s/ Raúl Alarcón, Jr.
	Name:	Raúl Alarcón, Jr.
	Title:	Chairman of the Board of Directors, Chief Executive Officer and President



	/s/ Joseph A. García
	Name:	Joseph A. García
	Title:	Chief Financial Officer, Executive Vice President and Secretary



	/s/ Raúl Alarcón, Jr.
	Raúl Alarcón, Jr.
May 10, 2004	Chairman of the Board of Directors, President and Chief Executive Officer