SPANISH BROADCASTING SYSTEM INC (Form: 10-Q, Received: 05/10/2005 16:38:12)

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, 2005

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

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, 2005, 40,277,805 shares of Class A common stock, par value $.0001 per share, 24,503,500 shares of Class B common stock, par value $.0001 per share and 380,000 shares of Series C convertible preferred stock, $.002 par value per share, which are convertible into 7,600,000 shares of Class A common stock, were outstanding.

SPANISH BROADCASTING SYSTEM, INC.

INDEX


		Page

PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements — Unaudited
	Unaudited Condensed Consolidated Balance Sheets as of December 31, 2004 and March 31, 2005		2
	Unaudited Condensed Consolidated Statements of Operations for the Three-Months Ended March 31, 2004 and 2005		3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three-Months Ended March 31, 2004 and 2005		4
	Notes to Unaudited Condensed Consolidated Financial Statements		5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		21
ITEM 4.	Controls and Procedures		22

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings		22
ITEM 5.	Other Information		24
ITEM 6.	Exhibits and Reports on Form 8-K		25

PART I. — FINANCIAL INFORMATION


Item 1.	*Financial Statements — Unaudited*

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets


			December 31,			March 31,
			2004			2005

			(In thousands,
			except share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	132,032		$	161,924
	Net receivables			32,622			23,811
	Prepaid expenses and other current assets			2,520			2,216
	Assets held for sale			65,004			64,559

		Total current assets		232,178			252,510
Property and equipment, net				22,178			22,254
FCC licenses				710,410			710,410
Goodwill				32,806			32,806
Other intangible assets, net				1,400			1,391
Deferred financing costs, net				10,073			9,738
Other assets				678			886

			$	1,009,723		$	1,029,995

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of the senior credit facilities term loan due 2009		$	123,750		$	123,438
	Current portion of other long-term debt			3,154			3,112
	Deposit on sales of stations			—			20,036
	Accounts payable and accrued expenses			24,225			19,614
	Accrued interest			5,428			13,397
	Deferred commitment fee			525			506

		Total current liabilities		157,082			180,103
9 ⁵ / 8 % senior subordinated notes, due 2009, net				326,476			326,807
Other long-term debt, less current portion				567			549
Deferred income taxes				127,055			123,981
Other long-term liabilities				993			966

		Total liabilities		612,173			632,406

Cumulative exchangeable redeemable preferred stock:
	10 ³ / 4 % Series B cumulative exchangeable redeemable preferred stock, $0.01 par value, liquidation value $1,000 per share. Authorized 280,000 shares, 83,054 shares issued and outstanding at December 31, 2004 and 85,286 shares issued and outstanding at March 31, 2005			84,914			87,196

Stockholders’ equity:
	Series C preferred stock, $0.002 par value and liquidation value. Authorized 600,000 shares; issued and outstanding 380,000 shares			1			1
	Class A common stock, 0.0001 par value. Authorized 100,000,000 shares; 40,197,805 shares issued and outstanding at December 31, 2004 and 40,207,805 shares issued and outstanding at March 31, 2005			4			4
	Class B common stock, 0.0001 par value. Authorized 50,000,000 shares; 24,583,500 shares issued and outstanding at December 31, 2004 and 24,573,500 shares issued and outstanding at March 31, 2005			2			2
	Additional paid-in capital			520,450			520,450
	Accumulated deficit			(207,821	)		(210,064	)

		Total stockholders’ equity		312,636			310,393

			$	1,009,723		$	1,029,995

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,

				2004			2005

				(In thousands, except per
				share data)
Net revenue				$	29,232		$	35,339

Operating expenses:
		Engineering and programming			7,412			7,865
		Selling, general and administrative			10,917			15,318
		Corporate expenses			3,228			3,701
		Depreciation and amortization			822			830

			Total operating expenses		22,379			27,714

			Operating income from continuing operations		6,853			7,625

Other (expense) income:
		Interest expense, net			(10,238	)		(10,170	)
		Other, net			175			7

			Loss from continuing operations before income taxes and discontinued operations		(3,210	)		(2,538	)
Income tax expense (benefit)					(3,948	)		(2,579	)

			Income from continuing operations before discontinued operations		738			41
Income (loss) on discontinued operations, net of tax					10,940			(2	)

			Net income	$	11,678		$	39
Dividends on preferred stock					(2,054	)		(2,282	)

Net income (loss) applicable to common stockholders				$	9,624		$	(2,243	)

Basic and diluted income (loss) per common share:
		Net loss per common share before discontinued operations:		$	(0.02	)	$	(0.03	)
		Net income per common share from discontinued operations:		$	0.17		$	—

		Net income (loss) per common share:		$	0.15		$	(0.03	)

Weighted average common shares outstanding:
	Basic				64,693			72,381

	Diluted				65,359			72,381

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
					March 31,

					2004			2005

					(In thousands)
Cash flows from operating activities:
	Net income				$	11,678		$	39
	Adjustments to reconcile net income to net cash provided by operating activities:
		(Income) loss from discontinued operations, net of tax				(10,940	)		2
		Gain on disposal of fixed assets				—			(9	)
		Depreciation and amortization				822			830
		Net barter expense				46			257
		Reduction of trade doubtful accounts				(232	)		(107	)
		Amortization of debt discount				294			331
		Amortization of deferred financing costs				493			499
		Decrease in deferred income taxes				(4,012	)		(2,623	)
		Amortization of deferred commitment fee				(19	)		(19	)
		Changes in operating assets and liabilities:
			Decrease in trade receivables			3,861			8,812
			Decrease in other current assets			267			304
			Increase in other assets			(577	)		(208	)
			Decrease in accounts payable and accrued expenses			(3,537	)		(4,925	)
			Increase in deferred commitment fee			300			—
			Increase in accrued interest			7,115			7,969

				Net cash provided by continuing operations		5,559			11,152
				Net cash provided by (used in) discontinued operations		908			(3	)

				Net cash provided by operating activities		6,467			11,149

Cash flows from investing activities:
	Proceeds from sale of radio stations, net of closing costs					23,730			—
	Deposit on sale of stations					—			20,036
	Additions to property and equipment					(682	)		(894	)

				Net cash provided by investing activities		23,048			19,142

Cash flows from financing activities:
	Repayments of other long-term debt					(55	)		(87	)
	Increase in deferred financing costs					(140	)		—
	Increase in deferred offering costs					(430	)		—
	Repayment of senior credit facilities					(312	)		(312	)

				Net cash used in financing activities		(937	)		(399	)

				Net increase in cash and cash equivalents		28,578			29,892
Cash and cash equivalents at beginning of period						45,609			132,032

Cash and cash equivalents at end of period						74,187			161,924

Supplemental cash flows information:
	Interest paid during the period					2,479			1,945

	Income taxes paid during the period					323			1,649

	Noncash investing and financing activities:
		Accrual of preferred stock as payment of preferred stock dividend			$	1,366		$	1,910

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, 2004 and March 31, 2005, and for the three-month periods ended March 31, 2004 and 2005 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, 2004 included in the Company’s fiscal year end 2004 Annual Report on Form 10-K.

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, 2005 is 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

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

unaudited financial information for the parent and its guarantor and non-guarantor subsidiaries is as follows (in thousands):


		As of December 31, 2004

							Non
					Guarantor		Guarantor
Condensed Consolidating Balance Sheet		Parent			Subsidiaries		Subsidiaries			Eliminations			Total

Cash and cash equivalents		$	110,374			18,647		3,011			—			132,032
Net receivables			—			30,974		1,648			—			32,622
Other current assets			992			1,069		459			—			2,520
Assets held for sale			—			1,107		63,897			—			65,004

	Total current assets		111,366			51,797		69,015			—			232,178
Property and equipment, net			1,334			14,177		6,667			—			22,178
Intangible assets, net			1,962			9,249		733,405			—			744,616
Deferred financing costs, net			10,073			—		—			—			10,073
Investment in subsidiaries and intercompany			738,151			342,518		(644,000	)		(436,669	)		—
Other assets			37			640		1			—			678

		$	862,923			418,381		165,088			(436,669	)		1,009,723

Current portion of long-term debt		$	123,750			70		3,084			—			126,904
Accounts payable and accrued expenses			8,206			11,542		4,477			—			24,225
Accrued interest			5,423			5		—			—			5,428
Deferred commitment fee			525			—		—			—			525

	Current liabilities		137,904			11,617		7,561			—			157,082
Long-term debt			326,476			567		—			—			327,043
Other debt			993			—		—			—			993
Deferred income taxes			—			—		127,055			—			127,055

	Total liabilities		465,373			12,184		134,616			—			612,173

Series B preferred stock			84,914			—		—			—			84,914

Series C preferred stock			1			—		—			—			1
Common stock			6			—		1			(1	)		6
Additional paid-in capital			520,450			—		94,691			(94,691	)		520,450
Accumulated deficit			(207,821	)		406,197		(64,220	)		(341,977	)		(207,821	)

	Stockholders’ equity		312,636			406,197		30,472			(436,669	)		312,636

		$	862,923			418,381		165,088			(436,669	)		1,009,723

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)


		As of March 31, 2005

							Non
					Guarantor		Guarantor
Condensed Consolidating Balance Sheet		Parent			Subsidiaries		Subsidiaries			Eliminations			Total

Cash and cash equivalents		$	137,178			22,109		2,637			—			161,924
Net receivables			—			22,614		1,197			—			23,811
Other current assets			909			865		442			—			2,216
Assets held for sale			—			1,114		63,445			—			64,559

	Total current assets		138,087			46,702		67,721			—			252,510
Property and equipment, net			1,441			14,065		6,748			—			22,254
Intangible assets, net			1,962			9,240		733,405			—			744,607
Deferred financing costs, net			9,738			—		—			—			9,738
Investment in subsidiaries and intercompany			736,374			357,483		(644,493	)		(449,364	)		—
Other assets			254			628		4			—			886

		$	887,856			428,118		163,385			(449,364	)		1,029,995

Current portion of long-term debt		$	123,438			71		3,041			—			126,550
Deposit on sales of stations			20,036			—		—			—			20,036
Accounts payable and accrued expenses			5,117			10,087		4,410			—			19,614
Accrued interest			13,397			—		—			—			13,397
Deferred commitment fee			506			—		—			—			506

	Current liabilities		162,494			10,158		7,451			—			180,103
Long-term debt			326,807			549		—			—			327,356
Other debt			966			—		—			—			966
Deferred income taxes			—			—		123,981			—			123,981

	Total liabilities		490,267			10,707		131,432			—			632,406

Series B preferred stock			87,196			—		—			—			87,196

Series C preferred stock			1			—		—			—			1
Common stock			6			—		1			(1	)		6
Additional paid-in capital			520,450			—		94,691			(94,691	)		520,450
Accumulated deficit			(210,064	)		417,411		(62,739	)		(354,672	)		(210,064	)

	Stockholders’ equity		310,393			417,411		31,953			(449,364	)		310,393

		$	887,856			428,118		163,385			(449,364	)		1,029,995

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)


		For the Three Months Ended March 31, 2004

							Non
					Guarantor		Guarantor
Condensed Consolidating Statement of Operations		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 income of subsidiaries			(20,727	)		—		—			20,727			—
Income tax (benefit) expense			(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
Dividends on preferred stock			(2,054	)		—		—			—			(2,054	)

	Net (loss) income applicable to common stockholders		9,624			22,057		(1,330	)		(20,727	)		9,624


		For the Three Months Ended March 31, 2005

								Non
					Guarantor			Guarantor
Condensed Consolidating Statement of Operations		Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Net revenue		$	—			33,075			2,264			—			35,339
Station operating expenses			—			21,199			1,984			—			23,183
Corporate expenses			3,701			—			120			(120	)		3,701
Depreciation and amortization			103			596			131			—			830

	Operating income from continuing operations		(3,804	)		11,280			29			120			7,625
Interest expense, net			(8,857	)		—			(1,313	)		—			(10,170	)
Other income (expense), net			5			(64	)		186			(120	)		7
Equity in net income of subsidiaries			(12,695	)		—			—			12,695			—
Income tax (benefit) expense			—			—			(2,579	)		—			(2,579	)
Discontinued operations, net of tax			—			(2	)		_—			—			(2	)

	Net income	$	39			11,214			1,481			(12,695	)		39
Dividends on preferred stock			(2,282	)		—			—			—			(2,282	)

	Net (loss) income applicable to common stockholders		(2,243	)		11,214			1,481			(12,695	)		(2,243	)

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)


	For the Three Months Ended March 31, 2004

							Non
				Guarantor			Guarantor
Condensed Consolidating Statement of Cash Flows	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	)


	For the Three Months Ended March 31, 2005

							Non
				Guarantor			Guarantor
Condensed Consolidating Statement of Cash Flows	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Cash flows from operating activities	$	5,677			6,084			(612	)		—			11,149

Cash flows from investing activities	$	21,603			(472	)		(212	)		(1,777	)		19,142

Cash flows from financing activities	$	(476	)		(2,150	)		450			1,777			(399	)


3.	New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R), which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123). SFAS No. 123R requires companies to expense the grant-date fair value of stock options and other equity-based compensation issued to employees. The Company is required to adopt the provisions of SFAS No. 123R on January 1, 2006. The Company is evaluating the requirements of SFAS No. 123R and has not yet determined the method of adoption or the effect of adopting SFAS No. 123R, and has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS No. 123 in Note 5 (d).


4.	Assets Held for Sale

On August 17, 2004, the Company entered into an asset purchase agreement with Styles Media Group, LLC (“Styles Media Group”), to sell the assets of radio stations KZAB-FM and KZBA-FM, serving the Los Angeles, California market, for a cash purchase price of $120.0 million. In connection with this agreement, Styles Media Group made a non-refundable $6.0 million deposit on the purchase price. On February 18, 2005, Styles Media Group exercised its right under the agreement to extend the closing date until March 31, 2005, by releasing the deposit to the Company from escrow.

On March 30, 2005, the Company entered into an amendment to the asset purchase agreement with Styles Media Group. In connection with this amendment, Styles Media Group made an additional $14.0 million non-refundable deposit on the purchase price and the Company agreed to extend the closing date from March 31, 2005 to the later date of July 31, 2005 or five days following the grant of the FCC Final Order. Although the Company expects the sale of the Los Angeles stations to be completed, there can be no assurance that such sale will be completed.

On August 17, 2004, Spanish Broadcasting System SouthWest, Inc. entered into a time brokerage agreement with Styles Media Group pursuant to which Styles Media Group was permitted to begin broadcasting its programming on radio stations KZAB-FM and KZBA-FM beginning on September 20, 2004. The time brokerage agreement will terminate upon the closing under, or termination of, the asset purchase agreement.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

The Company determined that, since it was not eliminating all significant revenues and expenses generated in this market, the pending sale of these stations did not meet the criteria to classify the stations’ operations as discontinued operations. However, the Company reclassified the stations’ assets as held for sale. On March 31, 2005, the Company had assets held for sale consisting of $63.5 million of intangible assets and $1.1 million of property and equipment for radio stations KZAB-FM and KZBA-FM.

Pursuant to the credit agreement governing our senior secured credit facilities, the net cash proceeds received from these sales, when and if completed, must be offered to the noteholders to repay our borrowings under the senior secured credit facilities. Therefore, the Company has reclassified the senior secured credit facilities balance from long-term debt to current debt.

If, prior to the closing of the proposed asset sale, the existing senior secured credit facilities are replaced with the new senior secured credit facilities described in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources”, the Company intends to use the net cash proceeds received from the asset sale to repay certain amounts under the new senior secured credit facilities. If the proposed asset sale does not close, the Company will be unable to use the anticipated proceeds from such sale to reduce its debt.


5.	Stockholders’ Equity


*(a)*	*Series C Preferred Stock*

On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with Infinity Media Corporation (“Infinity”), Infinity Broadcasting Corporation of San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly-owned subsidiary of the Company (“SBS Bay Area”), the Company issued to Infinity (i) an aggregate of 380,000 shares of Series C convertible preferred stock, $0.002 par value per share (the “Series C preferred stock”), each of which is convertible at the option of the holder into twenty fully paid and non-assessable shares of the Company’s Class A common stock; and (ii) a warrant to purchase an additional 190,000 shares of Series C preferred stock, exercisable at any time from December 23, 2004 until December 23, 2008, at an exercise price of $300.00 per share (the “Warrant”).

Under the terms of the certificate of designation governing the Series C preferred stock, the holder of Series C preferred stock has the right to convert each share of Series C preferred stock into twenty fully paid and nonassessable shares of the Company’s Class A common stock. The shares of Series C preferred stock issued at the closing of the merger are convertible into 7,600,000 shares of our Class A common stock, subject to adjustment, and the Series C preferred stock issuable upon exercise of the Warrant is convertible into an additional 3,800,000 shares of the Company’s Class A common stock, subject to adjustment.

In connection with the closing of the merger transaction, we also entered into a registration rights agreement with Infinity, pursuant to which, following a period of one year (or earlier if we take certain actions), Infinity may instruct us to file up to three registration statements, on a best efforts basis, with the Securities and Exchange Commission (SEC) providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock.

The Company is required to pay holders of Series C preferred stock dividends on parity with the Company’s Class A common stock and Class B common stock, and each other class or series of capital stock the Company creates after December 23, 2004.


*(b)*	*Class A and B Common Stock*

The rights of the holders of shares of Class A common stock and Class B common stock are identical except for voting rights and conversion provisions. The Class A common stock is entitled to one vote per share

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

and the Class B common stock is entitled to ten votes per share. Holders of each class of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The holders of each class have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. Each class of common stock is subordinate to the Company’s 10 ³ / 4 % Series B cumulative exchangeable redeemable preferred stock, par value $0.01 per share and liquidation preference of $1,000 per share (the “Series B preferred stock”) and on parity with the Series C preferred stock with respect to dividend rights and rights on liquidation, winding up and dissolution of the Company.


*(c)*	*Warrants*

In connection with the purchase of KXOL-FM and the merger agreement with Infinity, as discussed in Note 6 (a), the Company has warrants outstanding to ultimately purchase an aggregate of 4,500,000 shares of the Company’s Class A common stock. The following table summarizes information about these warrants which are outstanding as of March 31, 2005:


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

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
December 23, 2004		3,800,000	(see Note 5(a))		December 23, 2008

		4,500,000


*(d)*	*Stock Option Plans*

In September 1999, the Company adopted an employee incentive stock option plan (the “1999 ISO Plan”) and a non-employee director stock option plan (the “1999 NQ Plan”). Options granted under the 1999 ISO Plan will vest according to terms to be determined by the compensation committee of the Company’s board of directors, and will have a contractual life of up to 10 years from date of grant. Options granted under the 1999 NQ Plan will vest 20% upon grant and 20% each year for the first four years from grant. All options granted under the 1999 ISO Plan and the 1999 NQ Plan vest immediately upon a change in control of the Company, as defined. A total of 3,000,000 shares and 300,000 shares of Class A common stock have been reserved for issuance under the 1999 ISO Plan and the 1999 NQ Plan, respectively. Additionally, on November 2, 1999, the Company granted a stock option to purchase 250,000 shares of Class A common stock to a former director. These options vested immediately, and expire 10 years from the date of grant.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

A summary of the status of the Company’s stock options, as of December 31, 2004 and March 31, 2005, and changes during the fiscal year ended December 31, 2004 and three-months period ended March 31, 2005, is presented below (in thousands, except per share data):


					Weighted
					Average
					Exercise
		Shares			Price

Outstanding at December 31, 2003			2,351		$	13.05
	Granted		993			10.12
	Exercised		(89	)		6.53
	Forfeited		(242	)		12.99

Outstanding at December 31, 2004			3,013		$	12.28

	Granted		80			10.78
	Exercised		—			—
	Forfeited		(60	)		20.00

Outstanding at March 31, 2005			3,033		$	12.09

The following table summarizes information about stock options outstanding and exercisable at March 31, 2005 (in thousands, except per share data):


			Weighted
			Average
			Remaining		Weighted				Weighted
			Contractual		Average				Average
	Number		Life		Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		(Years)		Price		Exercisable		Price

$ 0 – 4.99		100		5.7	$	4.81		100	$	4.81
5 – 9.99		1,624		7.9		9.05		994		8.68
10 – 14.99		486		5.2		10.52		296		10.32
15 – 19.99		18		7.1		15.48		18		15.48
20 – 24.99		805		4.1		20.00		805		20.00

		3,033		6.4	$	12.09		2,213	$	12.90

The Company applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its stock option plans. 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 per share weighted average fair value of stock options granted to employees during the three-month periods ended March 31, 2004 and 2005 was $10.39 and $10.78, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions at:


	March 31,			March 31,
	2004			2005

Expected life		7 years			5 years
Dividends		None			None
Risk-free interest rate		3.33	%		4.18	%
Expected volatility		78	%		72	%

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

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
		March 31,

		2004			2005

Net income (loss) applicable to common stockholders:
As reported		$	9,624			(2,243	)
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of tax			(1,784	)		(742	)

Pro forma net income (loss)		$	7,840			(2,985	)

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

	Pro forma: Basic and Diluted	$	0.12			(0.04	)


6.	Litigation

From time to time the Company is involved in litigation incidental to the conduct of its 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 the Company’s business, operating results or financial position.

As the owner, lessee, or operator of various real properties and facilities, the Company is subject to various federal, state, and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material adverse effect on the Company’s business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require the Company to make significant expenditures of funds.

In connection with the sale of WXLX-AM in 1997, the Company 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-AM was sold, the Company retained potential exposure to possible environmental liabilities relating to the transmitter site (the “Transmitter Property”).

On December 4, 2002, the New Jersey Meadowlands Commission (“NJMC”) filed a Verified Complaint in condemnation in the Superior Court of New Jersey, Bergen County, against Frank F. Viola, Thomas C. Viola Trust and Louis Viola Company (the “Property Owners”) to acquire the Transmitter Property. The Transmitter Property is one of a number of sites that the NJMC is acquiring for a redevelopment project. Many of these sites (owned both publicly and privately) were used for landfill operations including the Transmitter Property. The Company was named as a defendant in the litigation by virtue of its interest of record in the Transmitter Property as a former leaseholder prior to the aforementioned lease assignment.

The litigation has been settled and concluded by the entry on August 31, 2004 of an Amended Order for Final Judgment (“Final Order”). The Final Order provided for the compensation to be paid to the Property Owners, and for waiver of claims for landfill closure costs against the Property Owners. While the Final Order reserved the NJMC’s claims for environmental remediation against the other parties, including the Company, a Settlement Agreement entered in the Court record further stipulated that the NJMC’s redeveloper would agree to indemnify and insure (under policies expiring on December 31, 2021 and providing coverage in the

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

amount of $50.0 million) such other parties (including the Company) against claims for remediation of environmental contamination. The Company was named as an insured on the aforementioned policy. On September 30, 2004, the Company entered into an Indemnity Agreement with the Property Owners.

On June 14, 2000, an action was filed in the Eleventh Judicial Circuit (the “Court”) in and for Miami-Dade County, Florida by Jose Antonio Hurtado against the Company, alleging that he was entitled to a commission related to an acquisition made by the Company. 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, which the Company accrued for during the quarter ended December 31, 2003. Mr. Hurtado also filed an application for attorneys’ fees, which the Company opposed on grounds that there was no contractual or statutory basis for such an award. The Company filed a motion for judgment notwithstanding the verdict, which was heard on February 6, 2004. On March 12, 2004, the Court denied the Company’s 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 Circuit Court of Appeals, challenging the order granting a new trial, and on April 8, 2004, the Company filed a notice of cross-appeal, challenging the denial of the Company’s motion for judgment notwithstanding the verdict. On August 27, 2004, Mr. Hurtado filed his initial brief, and on January 10, 2005, the Company filed a combined response brief and initial brief on the Company’s cross-appeal. On March 7, 2005, Mr. Hurtado filed his reply brief and the Company’s reply brief was due 20 days thereafter. At March 31, 2005, the Company had accrued $1.8 million, plus interest related to this contingency. The Third Circuit Court of Appeals set the matter for oral argument on April 13, 2005. Subsequently, on May 5, 2005, the Third District Court of Appeals ruled that judgment should be entered in favor of the Company. If no motion for rehearing is filed by Mr. Hurtado by May 19, 2005, this case will be closed. However, if a motion for rehearing is filed, the Company will need to await a ruling on that motion.

On November 28, 2001, a complaint was filed against the Company in the United States District Court for the Southern District of New York (the “Southern District of New York”) and was amended on April 19, 2002. The amended complaint alleges that the named plaintiff, Mitchell Wolf, purchased shares of the Company’s Class A common stock pursuant to the October 27, 1999 prospectus and registration statement relating to its initial public offering which closed on November 2, 1999. The complaint was brought on behalf of Mr. Wolf and an alleged class of similarly situated purchasers, against the Company, eight underwriters and/or their successors-in-interest who led or otherwise participated in the Company’s initial public offering, two members of the senior management team, one of whom is the Company’s Chairman of the Board, and an additional director, referred to collectively as the individual defendants. To date, the complaint, while served upon the Company, has not been served upon the individual defendants, and no counsel has appeared for them.

This case is one of more than 300 similar cases brought by similar counsel against more than 300 issuers, 40 underwriter defendants, and 1,000 individuals alleging, in general, violations of federal securities laws in connection with initial public offerings, in particular, failing to disclose that the underwriter defendants allegedly solicited and received additional, excessive and undisclosed commissions from certain investors in exchange for which they allocated to those investors material portions of the restricted shares issued in connection with each offering. All of these cases, including the one involving the Company, have been assigned for consolidated pretrial purposes to one judge of the Southern District of New York. One of the claims against the individual defendants, specifically the Section 10b-5 claim, has been dismissed.

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

principal components of the settlement include: 1) a release of all claims against the issuer defendants and their directors, officers and certain other related parties arising out of the alleged wrongful conduct in the amended complaint; 2) the assignment to the plaintiffs of certain of the issuer defendants’ potential claims against the underwriter defendants; and 3) a guarantee by the insurers to the plaintiffs of the difference between $1.0 billion and any lesser amount recovered by the plaintiffs against the underwriter defendants. The payments will be charged to each issuer defendant’s insurance policy on a pro rata basis.

On February 15, 2005, the Southern District of New York granted preliminary approval to the proposed settlement agreement, subject to a narrowing of the proposed bar on underwriter and non-settling defendant claims against the issuer defendants to cover only contribution claims. The Court directed the parties to submit revised settlement documents consistent with its Opinion and scheduled a conference for March 18, 2005 in order to (a) make final determinations as to the form, substance and program of notice, and (b) schedule a Rule 23 fairness hearing. Pursuant to the Court’s request, on May 2, 2005 the parties submitted an Amendment to Stipulation and Agreement of Settlement with Defendant Issuers and Individuals (the “Amendment”). The Board of Directors of the Company approved the Amendment on May 4, 2005. It is anticipated that the Amendment will soon receive approval from all the non-bankrupt issuers. The Company does not have sufficient information to assess its potential exposure to liability, if any, and no amounts have been accrued in the consolidated financial statements.

On December 5, 2003, Amigo Broadcasting, L.P. (“Amigo”) filed an original petition and application for temporary injunction in the District Court of Travis County, Texas (the “Court”), against the Company, Raul Bernal (“Bernal”) and Joaquin Garza (“Garza”), two former employees of the Company. Amigo filed a first and second amended petition and application for temporary injunction on June 25, 2004 and February 18, 2005, respectively. The second amended petition alleged that the Company (1) misappropriated Amigo’s proprietary interests by broadcasting the characters and concepts portrayed by the Bernal and Garza radio show (the “Property”), (2) wrongfully converted the Property for the Company’s own use and benefit, (3) induced Bernal and Garza to breach their employment agreements with Amigo, (4) used and continued to use Amigo’s confidential information and property with the intention of diverting profits from Amigo and of inducing Amigo’s potential customers to do business with the Company and its syndicators, (5) invaded Amigo’s privacy by misappropriating the name and likeness of Bernal and Garza, and (6) committed violations of the Lanham Act by diluting and infringing on Amigo’s trademarks. Based on these claims, Amigo seeks damages in excess of $3.0 million.

On December 5, 2003, the Court issued a temporary injunction against all of the defendants and scheduled a hearing before the Court on December 17, 2003. The temporary injunction dissolved by its terms on December 1, 2004. On December 17, 2003, the parties entered into a settlement agreement, whereby the Court entered an Order on Consent of the settling parties, permitting Bernal and Garza’s radio show to be broadcast on the Company’s radio stations. In addition, the Company agreed that it would not broadcast the Bernal and Garza radio show in certain prohibited markets and that the Company would not distribute certain promotional materials that were developed by Amigo. On January 5, 2004, the Company answered the remaining claims asserted by Amigo for damages. The parties have exchanged some written discovery and are in the process of scheduling depositions. The case was scheduled for a jury trial on May 23, 2005. However, on March 18, 2005, the case was removed to the United States District Court for the Western District of Texas. The Company does not have sufficient information to assess its potential exposure to liability, if any, and no amounts have been accrued in the consolidated financial statements.


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 radio stations KZAB-FM and KZBA-FM, serving the Los Angeles, California market, we will own and operate 20 radio stations in markets that reach approximately 49% of the U.S. Hispanic population. Our stations are located in six of the top-ten Hispanic markets of Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco. Los Angeles and New York have the largest and second largest Hispanic populations, and are the largest and second largest radio markets in the United States in terms of advertising revenue, respectively. Our top three markets, based on net revenues, 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. 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 our competitive position include management experience, our 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 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. Our most significant operating expenses 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, including vendors.

Comparison Analysis of the Operating Results for the Three Months Ended March 31, 2004 and 2005

The following summary table presents a comparison of our results of operations for the three-month periods ended March 31, 2004 and 2005. Various fluctuations illustrated in the table are discussed below. This section should be read in conjunction with our consolidated financial statements and notes.


			Three Months Ended
			March 31,						Change

			2004			2005			$			%

			(In thousands)
Net revenue			$	29,232		$	35,339		$	6,107			21	%
	Engineering and programming expense			7,412			7,865			453			6	%
	Selling, general and administrative expense			10,917			15,318			4,401			40	%
	Corporate expenses			3,228			3,701			473			15	%
	Depreciation and amortization			822			830			8			1	%

		Operating income from continuing operations		6,853			7,625			772			11	%
	Interest expense, net			(10,238	)		(10,170	)		68			(1	)%
	Other (expense) income, net			175			7			(168	)		(96	)%
	Income tax (benefit) expense			(3,948	)		(2,579	)		1,369			(35	)%
	Income (loss) from discontinued operations, net			10,940			(2	)		(10,942	)		(100	)%

		Net income	$	11,678			39		$	(11,639	)		(100	)%

Net Revenue. The increase in net revenue was due to the double-digit growth in our Los Angeles, New York and Miami markets primarily from local and barter revenue.

Engineering and Programming Expenses. The increase in engineering and programming expenses was mainly caused by (a) the investments made in our Los Angeles programming department, (b) compensation, (c) music license fees, and (d) our new start-up station in San Francisco, KRZZ-FM.

Selling, General and Administrative Expenses. The increase in selling, general and administrative expenses was mainly caused by the increases in (a) compensation and benefits due to additional personnel in various markets, (b) barter expense due to the increase in barter sales and related marketing costs, (c) professional fees related to our compliance with the Sarbanes-Oxley Act of 2002, (d) local commissions due to the increase in revenue, and (e) all related expenses of our new start-up station in San Francisco, KRZZ-FM.

Corporate Expenses. The increase in corporate expenses resulted mainly from an increase in legal and professional fees and other expenses related to new business development projects.

Operating Income from Continuing Operations. The increase in operating income from continuing operations was primarily attributed to the increase in net revenues, offset by increases in engineering and programming, selling, general and administrative expenses and corporate expenses.

Income Taxes. The decrease in income tax benefit was due primarily to a decrease in loss from continuing operations before income taxes and discontinued operations, as well as a decrease in the estimated income tax rate. Our effective book tax rate has been impacted by the adoption of SFAS No. 142, “Goodwill and Other Intangible Assets” (SFAS No. 142). 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 effective book tax rate is impacted by 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 sale of our KPTI-FM station serving the San Francisco, California market, all met the criteria, in accordance with SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of”, to classify their respective operations as discontinued operations. Consequently, these stations’ results from operations for the fiscal year ended 2004 were classified as discontinued operations. The decrease in discontinued operations, net of taxes, was primarily attributable to the $11.6 million gain recognized on the sale of our San Antonio KLEY-FM and KSAH-AM stations, net of closing costs and taxes, respectively.

Net Income. The decrease in net income was primarily due to the income from discontinued operations related to the sale of stations in the prior year.

Liquidity and Capital Resources

Our primary sources of liquidity are cash on hand, cash provided by operations and, to the extent necessary, undrawn commitments that are available under a $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 each 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 $132.0 million and $161.9 million as of December 31, 2004 and March 31, 2005, respectively.

The following summary table presents a comparison of our capital resources for the three-month periods ended March 31, 2004 and 2005, 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

		2004			2005			$

		(In thousands)
Capital expenditures		$	682		$	894			212

Net cash flows provided by operating activities		$	6,467		$	11,149			4,682
Net cash flows provided by investing activities			23,048			19,142			(3,906	)
Net cash flows used in financing activities			(937	)		(399	)		538

	Net increase in cash and cash equivalents	$	28,578		$	29,892

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 received from customers.

Net Cash Flows Provided by Investing Activities. Changes in our net cash flows from investing activities were primarily a result of (a) deposits totaling $20.0 million received for the pending sale of our Los Angeles stations KZAB-FM and KZBA-FM, offset by capital expenditures for 2005 and (b) proceeds of $23.7 million we received in 2004 for the sale of radio stations KLEY-FM and KSAH-AM, offset by capital expenditures.

Net Cash Flows Used In Financing Activities. Changes in our net cash flows from financing activities were primarily a result of the 2004 additional offering costs related to our Series B preferred stock and financing costs.

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 credit agreement governing our senior secured credit facilities, 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 strategies; 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 and, if available, will obtain financing by issuing debt or stock.

We are required to maintain financial covenant ratios under the credit agreement governing 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 governing our senior secured credit facilities requiring compliance with these financial covenants states that the calculations must be based on Generally Accepted Accounting Principles in the United States of America. We are in compliance with all covenants under our senior secured credit facilities and all other debt instruments as of March 31, 2005 and expect to be in compliance in the foreseeable future.

new proposed credit facilities will provide for an aggregate of $400.0 million in funded term loans (consisting of a $300.0 million first lien credit facility and a $100.0 million second lien credit facility), plus a $25.0 million revolving loan facility.

Our intentions are that funds available under the new proposed credit facilities will be used to repay amounts outstanding under our existing senior secured credit facilities and to retire all of our outstanding 9 ⁵ / 8 % senior subordinated notes due 2009. We expect the new senior secured credit facilities to close during the second quarter of 2005 and expect to redeem the 9 ⁵ / 8 % senior subordinated notes due 2009 within 30 to 45 days after closing the new senior secured credit facilities.

There can be no assurance that we will be able to complete this refinancing. If we are successful in our refinancing efforts, we will incur a loss on extinguishment of debt totaling approximately $32.9 million related to call premiums, discount write-offs and deferred financing costs write-offs.

On August 17, 2004, we entered into an asset purchase agreement with Styles Media Group, to sell the assets of radio stations KZAB-FM and KZBA-FM, serving the Los Angeles, California market, for a cash purchase price of $120.0 million. In connection with this agreement, Styles Media Group made a non-refundable $6.0 million deposit on the purchase price, which was held in escrow as of December 31, 2004. On February 18, 2005, Styles Media Group exercised its right under the agreement to extend the closing date until March 31, 2005, by releasing the deposit from escrow to us.

On March 30, 2005, we entered into an amendment to the asset purchase agreement with Styles Media Group. In connection with this amendment, Styles Media Group made an additional $14.0 million deposit on the purchase price and we agreed to extend the closing date from March 31, 2005 to the later date of July 31, 2005 or within five days following the grant of the FCC Final Order. Although we expect the sale of the Los Angeles stations to be completed, there can be no assurance that such sale will be completed.

We determined, that since we were not eliminating all significant revenues and expenses generated in this market, the pending sales of these stations did not meet the criteria to classify the stations’ operations as discontinued operations. However, we reclassified the stations’ assets as held for sale. On March 31, 2005, we had assets held for sale consisting of $63.5 million of intangible assets and $1.1 million of property and equipment for radio stations KZAB-FM and KZBA-FM.

Pursuant to the credit agreement governing our senior secured credit facilities, the net cash proceeds received from these sales, when and if completed, must be offered to the noteholders to repay our borrowings under the senior secured credit facilities. Therefore, we have reclassified the senior secured credit facilities balance from long-term debt to current debt.

If, prior to the closing of the proposed asset sale, the existing senior secured credit facilities are replaced with the new senior secured credit facilities described above, we intend to use the net cash proceeds received from the asset sale to repay certain amounts under the new senior secured credit facilities. If the proposed asset sale does not close, we will be unable to use the anticipated proceeds from such sale to reduce our debt.

We continuously evaluate opportunities to make strategic acquisitions, 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. Except as discussed above, we currently have no other written understandings, letters of intent or contracts to acquire 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 necessary and available, can be obtained on favorable terms for future acquisitions.

During the three months ended March 31, 2005, we entered into various contractual obligations related to employee agreements and other agreements. We expect our unrecorded obligations to increase by approximately $0.7 million, $2.3 million, $0.7 million, and $0.2 million for the fiscal years ended 2005, 2006, 2007 and 2008, respectively, from what was previously disclosed in our 2004 Annual Report on Form 10-K.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R), which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123). SFAS No. 123R requires companies to expense the grant-date fair value of stock options and other equity-based compensation issued to employees. We are required to adopt the provisions of SFAS No. 123R on January 1, 2006. We are evaluating the requirements of SFAS No. 123R and we have not yet determined the method of adoption or the effect of adopting SFAS No. 123R, and we have not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS No. 123 in Note 5(d).

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 health;

	•	We will require a significant amount of cash to service our debt and to make cash dividend payments under our Series B preferred stock;

	•	Our ability to generate cash depends on many factors, some of which are beyond our control;

	•	We may not have the funds or the ability to raise the funds necessary to repurchase our Series B preferred stock if holders exercise their repurchase right, or to finance the change of control offer required by our Series B preferred stock and the indenture that would govern our 10 ³ / 4 % subordinated exchange notes due 2013, if issued;

	•	Any acceleration of our debt or event of default would harm our business and financial condition;

	•	Despite our current significant level of debt, we and our subsidiaries may still be able to incur substantially more debt, which, if increased, could further intensify the risks associated with our substantial leverage;

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

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

	•	We may not complete the proposed sale of our Los Angeles stations;

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


	•	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 growth depends on successfully executing our acquisition strategy;

	•	We are a holding company and depend entirely upon cash flow from our subsidiaries to meet our obligations;

	•	Raúl Alarcón, Jr., our Chairman of the Board of Directors, Chief Executive Officer and President, has majority voting control and this control may discourage or influence certain types of transactions, including an actual or potential change of control such as a merger or sale;

	•	We 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;

	•	Cancellations or reductions in advertising could adversely affect our net revenues;

	•	The FCC has begun more vigorous enforcement of its indecency rules against the broadcast industry, which could have a material adverse effect on our business;

	•	We may face regulatory review for additional acquisitions and divestitures in our existing markets and, potentially, acquisitions in new markets;

	•	Any failure by us to comply with the Sarbanes-Oxley Act of 2002 could cause a loss of confidence in the reliability of our financial statements and could have a material adverse effect on our business and the price of our Class A common stock;

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

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

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

	•	Current or future sales by existing 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-month periods ended March 31, 2004 and 2005, 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. Our primary exposure is variable rates of interest 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, 2005, all of our debt, other than our $123.4 million senior secured credit facility term loan, had fixed interest rates. If variable interest rates average 10% higher in 2005 than they did during 2004, our variable interest expense would increase by approximately $0.6 million, compared to approximately $6.0 million for the fiscal year ended

December 31, 2004. If interest rates average 10% lower in 2005 than they did during 2004, our interest income from cash and investment balances would decrease by approximately $0.1 million, compared to approximately $0.8 million for the fiscal year ended December 31, 2004. 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, 2004. There has been no material change in our market risk position since December 31, 2004.


Item 4.	*Controls and Procedures*

Evaluation Of Disclosure Controls And Procedures. Our principal executive and financial officers have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) of the Exchange Act of 1934 (the “Exchange Act”) to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes In Internal Control Over Financial Reporting. There has been no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2005 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*

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.

As the owner, lessee, or operator of various real properties and facilities, we are subject to various federal, state, and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require us to make significant expenditures of funds.

In connection with the 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-AM was sold, we retained potential exposure to possible environmental liabilities relating to the transmitter site (the “Transmitter Property”).

On December 4, 2002, the New Jersey Meadowlands Commission (“NJMC”) filed a Verified Complaint in condemnation in the Superior Court of New Jersey, Bergen County, against Frank F. Viola, Thomas C. Viola Trust and Louis Viola Company (the “Property Owners”) to acquire the Transmitter Property. The Transmitter Property is one of a number of sites that the NJMC is acquiring for a redevelopment project. Many of these sites (owned both publicly and privately) were used for landfill operations including the Transmitter Property. We were named as a defendant in the litigation by virtue of our interest of record in the Transmitter Property as a former leaseholder prior to the aforementioned lease assignment.

Settlement Agreement entered in the Court record further stipulated that the NJMC’s redeveloper would agree to indemnify and insure (under policies expiring on December 31, 2021 and providing coverage in the amount of $50.0 million) such other parties (including us) against claims for remediation of environmental contamination. We were named as an insured on the aforementioned policy. On September 30, 2004, we entered into an Indemnity Agreement with the Property Owners.

On June 14, 2000, an action was filed in the Eleventh Judicial Circuit (the “Court”) 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, which we accrued for during the quarter ended December 31, 2003. Mr. Hurtado also filed an application for attorneys’ fees, which we opposed on grounds that there was 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 Circuit Court of Appeals, 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. On August 27, 2004, Mr. Hurtado filed his initial brief, and on January 10, 2005, we filed a combined response brief and initial brief on our cross-appeal. On March 7, 2005, Mr. Hurtado filed his reply brief and our reply brief was due 20 days thereafter. At March 31, 2005, we had accrued $1.8 million, plus interst related to this contingency. The Third Circuit Court of Appeals set the matter for oral argument on April 13, 2005. Subsequently, on May 5, 2005, the Third District Court of Appeals ruled that judgment should be entered in our favor. If no motion for rehearing is filed by Mr. Hurtado by May 19, 2005, this case will be closed. However, if a motion for rehearing is filed, we will need to await a ruling on that motion.

On November 28, 2001, a complaint was filed against us in the United States District Court for the Southern District of New York (the “Southern District of New York”) and was amended on April 19, 2002. The amended complaint alleges that the named plaintiff, Mitchell Wolf, purchased shares of our Class A common stock pursuant to the October 27, 1999 prospectus and registration statement relating to our initial public offering which closed on November 2, 1999. The complaint was brought on behalf of Mr. Wolf and an alleged class of similarly situated purchasers, against us, eight underwriters and/or their successors-in-interest who led or otherwise participated in our initial public offering, two members of our senior management team, one of whom is our Chairman of the Board, and an additional director, referred to collectively as the individual defendants. To date, the complaint, while served upon us, has not been served upon the individual defendants, and no counsel has appeared for them.

This case is one of more than 300 similar cases brought by similar counsel against more than 300 issuers, 40 underwriter defendants, and 1,000 individuals alleging, in general, violations of federal securities laws in connection with initial public offerings, in particular, failing to disclose that the underwriter defendants allegedly solicited and received additional, excessive and undisclosed commissions from certain investors in exchange for which they allocated to those investors material portions of the restricted shares issued in connection with each offering. All of these cases, including the one involving us, have been assigned for consolidated pretrial purposes to one judge of the Southern District of New York. One of the claims against the individual defendants, specifically the Section 10b-5 claim, has been dismissed.

In June of 2003, after lengthy negotiations, a settlement proposal was embodied in a memorandum of understanding among the investors in the plaintiff class, the issuer defendants and the issuer defendants’ insurance carriers. On July 23, 2003, our Board of Directors approved both the memorandum of understanding and an agreement between the issuer defendants and the insurers. As of March 1, 2004, the overwhelming majority of non-bankrupt issuer defendants have approved the settlement proposal. The principal components of the settlement include: 1) a release of all claims against the issuer defendants and their directors, officers and certain other related parties arising out of the alleged wrongful conduct in the amended complaint; 2) the assignment to the plaintiffs of certain of the issuer defendants’ potential claims against the underwriter defendants; and 3) a guarantee by the insurers to the plaintiffs of the difference between $1.0 billion and any lesser amount recovered by the plaintiffs against the underwriter defendants. The payments will be charged to each issuer defendant’s insurance policy on a pro rata basis.

On February 15, 2005, the Southern District of New York granted preliminary approval to the proposed settlement agreement, subject to a narrowing of the proposed bar on underwriter and non-settling defendant claims against the issuer defendants to cover only contribution claims. The Court directed the parties to submit revised settlement documents consistent with its Opinion and scheduled a conference for March 18, 2005 in order to (a) make final determinations as to the form, substance and program of notice, and (b) schedule a Rule 23 fairness hearing. Pursuant to the Court’s request, on May 2, 2005 the parties submitted an Amendment to Stipulation and Agreement of Settlement with Defendant Issuers and Individuals (the “Amendment”). Our Board of Directors approved the Amendment on May 4, 2005. It is anticipated that the Amendment will soon receive unanimous approval from all the non-bankrupt issuers. We do not have sufficient information to assess our potential exposure to liability, if any, and no amounts have been accrued in the consolidated financial statements.

On December 5, 2003, Amigo Broadcasting, L.P. (“Amigo”) filed an original petition and application for temporary injunction in the District Court of Travis County, Texas (the “Court”), against us, Raul Bernal (“Bernal”) and Joaquin Garza (“Garza”), two of our former employees. Amigo filed a first and second amended petition and application for temporary injunction on June 25, 2004 and February 18, 2005, respectively. The second amended petition alleged that we (1) misappropriated Amigo’s proprietary interests by broadcasting the characters and concepts portrayed by the Bernal and Garza radio show (the “Property”), (2) wrongfully converted the Property to our own use and benefit, (3) induced Bernal and Garza to breach their employment agreements with Amigo, (4) used and continue to use Amigo’s confidential information and property with the intention of diverting profits from Amigo and of inducing Amigo’s potential customers to do business with us and our syndicators, (5) invaded Amigo’s privacy by misappropriating the name and likeness of Bernal and Garza, and (6) committed violations of the Lanham Act by diluting and infringing on Amigo’s trademarks. Based on these claims, Amigo seeks damages in excess of $3.0 million.

On December 5, 2003, the Court issued a temporary injunction against all of the defendants and scheduled a hearing before the Court on December 17, 2003. The temporary injunction dissolved by its terms on December 1, 2004. On December 17, 2003, the parties entered into a settlement agreement, whereby the Court entered an Order on Consent of the settling parties, permitting Bernal and Garza’s radio show to be broadcast on our radio stations. In addition, we agreed that we would not broadcast the Bernal and Garza radio show in certain prohibited markets and that we would not distribute certain promotional materials that were developed by Amigo. On January 5, 2004, we answered the remaining claims asserted by Amigo for damages. The parties have exchanged some written discovery and are in the process of scheduling depositions. The case was scheduled for a jury trial on May 23, 2005. However, on March 18, 2005, the case was removed to the United States District Court for the Western District of Texas. We do not have sufficient information to assess our potential exposure to liability, if any, and no amounts have been accrued in the consolidated financial statements.


Item 5.	*Other Information*

We intend to enter into new senior secured credit facilities with affiliates of Lehman Brothers Inc., Merrill Lynch and Wachovia Securities. Lehman Brothers Inc. will act as sole lead arranger. The proposed new proposed credit facilities will provide for an aggregate of $400.0 million in funded term loans (consisting of a $300.0 million first lien credit facility and a $100.0 million second lien credit facility), plus a $25.0 million revolving loan facility.

On May 4, 2005, Raúl Alarcón, Jr., our Chairman of the Board of Directors, Chief Executive Officer and President, owning shares of common stock having approximately 80% of the combined voting power of our outstanding shares of common stock, authorized by resolution amendments to our Amended and Restated By-Laws effective as of May 4, 2005, to (i) create the office of Chief Operating Officer and assign certain of the duties formerly exercised by the President to the Chief Operating Officer, (ii) redefine the duties of the President, (iii) formalized the creation of the office of Executive Vice-President, and (iv) make ministerial changes reflecting the amendments noted above.

On May 4, 2005, our Board of Directors appointed Marko Radlovic to Executive Vice President and Chief Operating Officer (“COO”). In his capacity as COO, Mr. Radlovic will be responsible for all of our operational divisions, including sales, programming, administration, promotions and marketing. Prior to his appointment as COO, Mr. Radlovic was our Chief Revenue Officer from December 2003 until May 2005, Vice President/ General Manager for our Los Angeles radio cluster from January 2002 until November 2003, and previously served as Vice President of Sales for the Los Angeles cluster. Prior to joining us, Mr. Radlovic was Market Manager for CUMULUS Media in Southern California from January 2001 until August 2001 and was Vice President/ General Manager for AM/ FM Inc. in Los Angeles from October 1998 to October 2000.


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 Exhibit 3.2 of the Company’s 1999 Registration Statement).

3.3	—	Amended and Restated By-Laws of the Company.

3.4	—	Certificate of Elimination of 14 1 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 Exhibit 3.1 of the Company’s 1999 Registration Statement).

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 (the “1994 Registration Statement”).

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 (the “1999 Current Report”)).
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 (the “2001 Form S-3”).
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).
4.11	—	Certificate of Elimination of 14 1 ¹ / 4 % of 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 filed November 14, 2003).
4.12	—	Certificate of Designation Setting Forth the Voting Power, Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of the Series C Convertible Preferred Stock of the Company (“Certificate of Designation of Series C Preferred Stock”) (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 8-K filed on December 27, 2004).
4.13	—	Certificate of Correction to Certificate of Designation of Series C Preferred Stock of the Company dated January 7, 2005 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 16, 2005).
10.1	—	Nonqualified Stock Option Agreement dated as of March 15, 2005 between the Company and Jason Shrinsky.
10.2	—	Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and Joseph A. García.
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 reports on Form 8-K during the three months ended March 31, 2005:

(i) a current report on Form 8-K filed on March 10, 2005 to report that on March 10, 2005 the Company issued a press release announcing its fourth quarter fiscal year 2004 financial results;

(ii) a current report on Form 8-K filed on April 5, 2005 to report that on March 30, 2005 the Company entered into an amendment to the asset purchase agreement for the sale of radio stations KZAB-FM and KZBA-FM, dated as of August 17, 2004; and

(iii) a current report on Form 8-K filed on May 5, 2005 to report that on May 5, 2005 the Company issued a press release announcing its first quarter fiscal year 2005 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. GARCÍA



	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, 2005

(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 Exhibit 3.2 of the Company’s 1999 Registration Statement).

3.3	—	Amended and Restated By-Laws of the Company.

3.4	—	Certificate of Elimination of 14 1 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 Exhibit 3.1 of the Company’s 1999 Registration Statement).

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 (the “1994 Registration Statement”).

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 (the “1999 Current Report”)).

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 (the “2001 Form S-3”).

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).

4.11	—	Certificate of Elimination of 14 1 ¹ / 4 % of 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 filed November 14, 2003).

4.12	—	Certificate of Designation Setting Forth the Voting Power, Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of the Series C Convertible Preferred Stock of the Company (“Certificate of Designation of Series C Preferred Stock”) (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 8-K filed on December 27, 2004).



4.13	—	Certificate of Correction to Certificate of Designation of Series C Preferred Stock of the Company dated January 7, 2005 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 16, 2005).

10.1	—	Nonqualified Stock Option Agreement dated as of March 15, 2005 between the Company and Jason Shrinsky.

10.2	—	Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and Joseph A. García.

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.

EXHIBIT 3.3

AMENDED & RESTATED BYLAWS

SPANISH BROADCASTING SYSTEM, INC.
(hereinafter called the "Corporation")

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE. The registered office of the Corporation shall be in the City of Dover, County of Kent, State of Delaware.

SECTION 2. OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

SECTION 2. ANNUAL MEETINGS. The Annual Meetings of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect by a plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the Annual Meeting stating the place, date and hour of the meeting shall

be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.

SECTION 3. SPECIAL MEETINGS. Unless otherwise prescribed by law, or by the Certificate of Incorporation, Special Meetings of Stockholders, for any purpose or purposes, may be called by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer or (iii) the President, and shall be called by any such officer at the request in writing of a majority of the members of the Board of Directors or upon the affirmative vote, verified in writing, of the holders of fifty-one percent (51%) of the outstanding shares entitled to vote. Written notice of a Special Meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting.

SECTION 4. QUORUM. Except as otherwise provided by law or by the Corporation's Certificate of Incorporation, as amended (the "Certificate of Incorporation") the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

SECTION 5. VOTING. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each holder of Class A Common Stock represented at a meeting of stockholders shall be entitled to cast one vote for each share of Class A Common Stock entitled to vote thereat held by such stockholder. Each holder of Class B Common Stock represented at a meeting of stockholders shall be entitled to cast ten votes for each share of Class B Common Stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.

SECTION 6. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Such written consent shall be deemed effective upon receipt by the Secretary of the Corporation of a copy of such written consent executed by each stockholder of record by facsimile, telex, telegram or cable. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

SECTION 7. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meetings arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.

SECTION 8. STOCK LEDGER. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 7 of this Article II or the books of the Corporation, or, to vote in person or by proxy at any meeting of stockholders.

ARTICLE III

DIRECTORS

SECTION 1. NUMBER AND ELECTION OF DIRECTORS. The Board of Directors shall consist of not less than three and not more than nine members (at least two of which shall be independent directors), as such number shall be established from time to time by resolution of the Board of Directors. Except as provided in Section 2 of this Article, directors shall be elected by a majority of the votes cast at Annual Meetings of Stockholders, and each director so elected shall hold office until the next Annual Meeting and until his successor is duly elected and qualified, or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders.

SECTION 2. REMOVAL AND VACANCIES. At any time, the stockholders may remove any director or the entire Board of Directors and elect directors to fill the vacancies created by such removal, unless otherwise provided by law. A director may be so removed, with or without cause, at any time.

In the event that a vacancy is created on the Board of Directors at any time, if not filled by the Board of Directors, the stockholders shall meet or act by consent as promptly as practicable, and in any event within twenty (20) days of the occurrence of such vacancy, for the purpose of electing a new director.

SECTION 3. DUTIES AND POWERS. The business, operations and affairs of the Corporation shall be managed by the Board of Directors; provided, however, that the Board of Directors may delegate such management responsibilities to such officer(s) as it may appoint to the extent permitted by the Certificate of Incorporation, these Bylaws and the laws of the State of Delaware.

SECTION 4. MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Any one or more members of the Board of Directors, or the stockholders, acting by a majority vote, may call a meeting of the Board of Directors or require action by consent for the Directors, including a meeting by written consent, at any time. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

SECTION 5. QUORUM. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

SECTION 6. ACTIONS OF BOARD. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Such written consent shall be deemed effective upon receipt by the Secretary of the Corporation of a copy of such written consent by facsimile, telex, telegram or cable executed by each director.

SECTION 7. MEETINGS BY MEANS OF CONFERENCE TELEPHONE. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, members of the Board of Directors of the Corporation, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting.

SECTION 8. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Each committee shall keep regular minutes and report to the Board of Directors when required.

SECTION 9. COMPENSATION. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may, in the case of non-employee directors, receive such compensation as the Board of Directors determines for attendance at each meeting of the Board of Directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

SECTION 10. INTERESTED DIRECTORS. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for

this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a majority vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

ARTICLE IV

OFFICERS

SECTION 1. GENERAL. The officers of the Corporation shall be elected by the Board of Directors and shall be a Chairman of the Board, a Chief Executive Officer, a President, a Chief Operating Officer, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose one or more Executive Vice-Presidents, Vice-Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of

Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

SECTION 2. ELECTION. The Board of Directors at its first meeting held after each Annual Meeting of Stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed in accordance with the terms of the employment agreement with such officer, and if no such agreement exists, then at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

SECTION 3. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer or any Vice-President, as the case may be, and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

SECTION 4. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the Board shall preside at all meetings of the stockholders and of the Board of Directors. Except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all Contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors.

SECTION 5. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the chief executive officer of the Corporation. He shall have general and active management responsibility for the business of the Corporation and shall be responsible for carrying out the orders and resolutions of the Board of Directors of the Corporation. In addition, he shall have such powers and perform such duties as are prescribed by the Board of Directors. Subject to the control and direction of the Board of Directors, the Chief Executive Officer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. In general, he shall make reports to the Board of Directors and stockholder and shall perform any and all other duties incident to the office of Chief Executive Officer, as herein defined, and all such other duties as from time to time may be assigned to him by the Board of Directors. During the absence or disability of the Chairman of the Board, the Chief Executive Officer shall exercise all the powers and discharge all the duties of the Chairman of the Board (providing that the Chief Executive Officer is a member of the Board of Directors).

SECTION 6. PRESIDENT. The President shall have general supervision of the affairs of the Corporation, shall sign or countersign all certificates, contracts or other instruments of the Corporation as authorized by the Board of Directors, shall make reports to the Board of Directors and stockholders and shall perform any and all other duties as are incident to the office of President or are properly assigned to him by the Board of Directors or

the Chief Executive Officer. During the absence or disability of the Chief Executive Officer, the President shall exercise all the powers and discharge all the duties of the Chief Executive Officer. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws, the Board of Directors or the Chief Executive Officer.

SECTION 7. CHIEF OPERATING OFFICER. The Chief Operating Officer shall perform such duties and have such powers as the Board of Directors, the Chief Executive Officer or the President may prescribe. If there is no Chief Executive Officer, then at the request of the President or in his absence or in the event of the President's inability or refusal to act, the Chief Operating Officer shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. If there is no Chief Executive Officer, President, Chief Operating Officer or Vice-President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

SECTION 8. EXECUTIVE VICE-PRESIDENTS; VICE-PRESIDENTS. Each Executive Vice- President and/or Vice-President shall perform such duties and have such powers as the Board of Directors, the Chief Executive Officer, the President or the Chief Operating Officer may prescribe. If there is no Chief Executive Officer or President, then at the request of the Chief Operating Officer or in his absence or in the event of the Chief Operating Officer's inability or refusal to act, the Executive Vice-President or the Vice-President, as the case may be, or the Executive Vice-Presidents or the Vice-Presidents, as the case may be, if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the

President. If there is no Chief Executive Officer, President, Chief Operating Officer, Executive Vice-President or Vice-President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

SECTION 9. SECRETARY. The Secretary shall attend all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the Board of Directors and for standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the Chief Executive Officer may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

SECTION 10. TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of

receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his possession or under his control belonging to the Corporation.

SECTION 11. ASSISTANT SECRETARIES. Except as may be otherwise provided in these Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, any Vice-President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

SECTION 12. ASSISTANT TREASURERS. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, any Vice-President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and

when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his possession or under his control belonging to the Corporation.

SECTION 13. OTHER OFFICERS. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

STOCK

SECTION 1. FORM OF CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed, in the name of the Corporation (i) by the Chairman of the Board of Directors, the Chief Executive Officer, the President or a Vice-President and (ii) by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation.

SECTION 2. SIGNATURES. Where a certificate is countersigned by
(i) a transfer agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such

certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

SECTION 3. LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

SECTION 4. TRANSFERS. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued.

SECTION 5. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than

ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

SECTION 6. BENEFICIAL OWNERS. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VI

NOTICES

SECTION 1. NOTICES. Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by facsimile, telex, telegram or cable.

SECTION 2. WAIVERS OF NOTICE. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VII

GENERAL PROVISIONS

SECTION 1. DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

SECTION 2. DISBURSEMENTS. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

SECTION 4. CORPORATE SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

SECTION 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of

this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

SECTION 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS
BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees) actually and reasonably

incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

SECTION 3. AUTHORIZATION OF INDEMNIFICATION. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director officer, employee or agent of the Corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding described in Sections 1 and 2 of this Article VIII, or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

SECTION 4. GOOD FAITH DEFINED. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe that his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be.

SECTION 5. INDEMNIFICATION BY A COURT. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth

in Section 1 or 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director, officer, employee or agent seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director, officer, employee or agent seeking indemnification shall also be entitled to be paid the expenses of prosecuting such application.

SECTION 6. EXPENSES PAYABLE IN ADVANCE. Expenses (including attorneys' fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VIII.

SECTION 7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which an individual seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed

to preclude the indemnification of any person who is not specified in Section 1 or 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware or otherwise.

SECTION 8. INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII.

SECTION 9. CERTAIN DEFINITIONS. For purposes of this Article VIII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan and references to "serving at the request of the Corporation" shall

include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonable believed to be in the interests of the participants and the beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VIII.

SECTION 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

SECTION 11. LIMITATION ON INDEMNIFICATION. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 hereof) , the Corporation shall not be obligated to indemnify any director, officer, employee or agent in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

SECTION 12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

ARTICLE IX

AMENDMENTS

SECTION 1. These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such meeting of stockholders or Board of Directors, as the case may be. All such amendments must be approved by either the holders of a majority of the outstanding capital stock entitled to vote thereon or by a majority of the entire Board of Directors then in office.

SECTION 2. ENTIRE BOARD OF DIRECTORS. As used in this Article IX and in these Bylaws generally, the term "entire Board of Directors" means the total number of directors which the Corporation would have if there were no vacancies.

Exhibit 10.1

March 15, 2005

Jason Shrinsky
7792 Trieste Place
Delray Beach, FL 33446

Dear Jason Shrinsky:

Pursuant to the terms and conditions of the Spanish Broadcasting System, Inc. 1999 Stock Option Plan for NonEmployee Directors (the “Plan”), you have been granted a Nonqualified Stock Option to purchase 50,000 shares (the “Option”) of Class A common stock as outlined below.


Granted To:	Jason Shrinsky

Grant Date:	March 7, 2005

Options Granted:	50,000

Option Price per Share:	$10.79	Total Cost to Exercise:	$539,500.00

Expiration Date:	March 7, 2015, unless terminated earlier.

Vesting Schedule:	20% immediately, 20% each year as follows:

	10,000 on 03/07/2005
	10,000 on 03/07/2006
	10,000 on 03/07/2007
	10,000 on 03/07/2008
	10,000 on 03/07/2009

Transferability:	Not transferable except in accordance with the Plan.


	Spanish Broadcasting System, Inc.

	By:	/s/ Joseph A. García
		Joseph A. García

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/ Jason Shrinsky	Date:	3/17/05
	Jason Shrinsky


SBS TOWER		2601 SOUTH BAYSHORE DRIVE, PENTHOUSE II COCONUT GROVE, FLORIDA 33133		TEL (305) 441-6901		FAX (305) 446-5148

Exhibit 10.2

March 15, 2005

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

Dear Joseph A. García:

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 25,000 shares (the “Option”) of Class A common stock as outlined below.


Granted To:	Joseph A. García

Grant Date:	March 7, 2005

Options Granted:	25,000

Option Price per Share:	$10.79	Total Cost to Exercise:	$269,750.00

Expiration Date:	March 7, 2015, unless terminated earlier.

Vesting Schedule:	50% immediately, 50% first yr as follows:

	12,500 on 03/07/2005
	12,500 on 03/07/2006

Transferability:	Not transferable except in accordance with the Plan.


	Spanish Broadcasting System, Inc.

	By:	/s/ Raúl Alarcón, Jr.
		Raúl Alarcón, Jr.


Signature:	/s/ Joseph A. García	Date:	3/15/05
	Joseph A. García


SBS TOWER		2601 SOUTH BAYSHORE DRIVE, PENTHOUSE II COCONUT GROVE, FLORIDA 33133		TEL (305) 441-6901		FAX (305) 446-5148

Exhibit 31(i).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)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f)) for the registrant and 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) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) 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

(d) 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 registrant’s board of directors (or persons performing the equivalent function):

(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, 2005


		/s/ Raúl Alarcón, Jr.

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

Exhibit 31(i).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, 2005


		/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 quarterly period ended March 31, 2005 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 (15 U.S.C. 78m or 78o(d)); 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.

		Name:		Raúl Alarcón, Jr.
		Title:		Chairman of the Board of Directors, President and Chief Executive Officer
		Date:		May 10, 2005

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 quarterly period ended March 31, 2005 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 (15 U.S.C. 78m or 78o(d)); 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

		Name:		Joseph A. García
		Title:		Chief Financial Officer, Executive Vice President and Secretary
		Date:		May 10, 2005