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The following is an excerpt from a 10-K SEC Filing, filed by CUMULUS MEDIA INC on 4/15/1999.
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CUMULUS MEDIA INC - 10-K - 19990415 - BUSINESS

ITEM 1. BUSINESS

CERTAIN DEFINITIONS

We use the term "local marketing agreement" ("LMA") in various places in this report. A typical LMA is an agreement under which a Federal Communications Commission ("FCC") licensee of a radio station makes available, for a fee, air time on its station to a party. Such party provides programming to be broadcast during such airtime and collects revenues from advertising it sells for broadcast during such programming.

A station's or station group's "power ratio" is defined as such station's or station group's revenue market share divided by its audience market share.

"MSA" is defined as Metro Survey Area, as listed in the Arbitron Radio Metro and Television Market Population Estimates 1996-1997. For example, "MSA 100-268" would mean the 100th largest market through the 268th largest market, as listed in the Arbitron Radio Metro and Television Market Population Estimate.

Unless otherwise indicated:

- we obtained market ranking by radio advertising revenue, radio market advertising revenue and radio market advertising data from BIA's MasterAccess ("BIA") compiled by BIA Research, Inc.;

- we obtained total industry listener and revenue levels from the Radio Advertising Bureau ("RAB");

- we derived all audience share data and audience rankings, including ranking by population, except where otherwise stated to the contrary, from surveys of people ages 12 and over ("Adults 12+"), listening Monday through Sunday, 6 a.m. to 12 midnight, and based on the Spring 1998 Arbitron Market Report pertaining to each market, as reported by BIA; and

- we obtained revenue share data in each market presented from BIA as adjusted for market information available to and known by the Company.

The terms "Broadcast Cash Flow" and "EBITDA before non-cash stock compensation expense" are used in various places in this document.

Broadcast Cash Flow consists of:

- operating income (loss) before

-- depreciation,

-- amortization,

-- non-cash stock compensation expense and

-- corporate general and administrative expense.

EBITDA, before non-cash stock compensation expense, consists of:

- operating income (loss) before

-- depreciation,

-- amortization and

-- non-cash stock compensation expense.

EBITDA, before non-cash stock compensation expense, as defined by the Company, may not be comparable to similarly titled measures used by other companies. Although Broadcast Cash Flow and EBITDA, before non-cash stock compensation expense, are not measures of performance calculated in accordance with generally accepted accounting principles ("GAAP"), we believe that they are useful to an investor in evaluating the Company because they are measures widely used in the broadcast industry to

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evaluate a radio company's operating performance. However, Broadcast Cash Flow and EBITDA, before non-cash stock compensation expense, should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP, or as measures of liquidity or profitability.

COMPANY OVERVIEW

Cumulus Media Inc. ("Cumulus" or the "Company") is a radio broadcasting company focused on acquiring, operating and developing radio stations in demographically attractive and fast growing mid-size radio markets in the U.S. (primarily MSA 100-268), and as of March 19, 1999 owns and operates 180 stations in 39 U.S. markets. We also provide sales and marketing services under LMAs (pending FCC approval of acquisition) to 33 stations in 13 U.S. markets. Upon consummation of certain pending acquisitions, we will be one of the three largest radio broadcasting companies based on number of stations, and among the twelve largest in the U.S. based on net revenues. Upon consummation of certain pending acquisitions, we will own and operate a total of 221 radio stations (153 FM and 68 AM) in 42 U.S. markets. In 38 markets, we will rank first or second in terms of revenue share and/or audience share.

Relative to the 100 largest markets in the U.S., we believe that the mid-size markets (MSA 100-268) represent attractive operating environments and generally are characterized by:

- faster real growth in the population and the economy;

- a greater reliance on radio advertising as evidenced by the greater percentage of total media revenues captured by radio than the national average;

- rising advertising revenues as the larger national and regional retailers expand into these markets; and

- lower historical susceptibility to economic downturns.

We believe that the attractive operating characteristics of mid-size markets together with the relaxation of FCC ownership limits, create significant opportunities to form groups of radio stations within markets and regions that will enable us to achieve revenue growth, product improvement and cost efficiencies. As a result, we believe that we can grow revenues at rates equal to or better than larger market growth rates and generate Broadcast Cash Flow margins that are comparable to the higher margins that in the past have generally been achieved only in the top 100 markets. We believe that mid-size radio markets provide an excellent opportunity to acquire attractive properties at favorable purchase prices due to the size and fragmented nature of ownership in these markets and to the greater attention historically given to the larger markets by radio station acquirers. According to BIA, there are approximately 1,656 FM and 1,035 AM stations in the 169 U.S. radio markets ranked MSA 100-268. These 2,691 stations are owned by approximately 990 different operators. In addition, there are nearly 4,700 stations in unranked markets owned by approximately 2,500 operators.

BUSINESS STRATEGY

Our operating strategy has the following principal components:

- ASSEMBLE LEADING STATION GROUPS. In each market, we have acquired stations with diverse programming formats and FCC licenses that have full signal coverage in the market area. In each market, we seek to assemble a group or "cluster" of stations that immediately following acquisition will rank first or second with the near term potential to rank first in the market in terms of revenue and/or audience share.

- DEVELOP EACH STATION AS A UNIQUE ENTERPRISE. While each station in a market shares a common infrastructure of support personnel and systems and in many cases studio and office space, each station is programmed and merchandised as a separate entity with its own brand identity, programming and inventory of radio time slots for advertisers. Each station targets a unique demographically defined audience of listeners. Each station has its own program director, sales manager and sales organization.

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- POSITION STATION CLUSTER TO COMPETE WITH PRINT AND TELEVISION. While each station is generally sold independently, we also have the flexibility to present the entire cluster. This affords major advertisers the opportunity to target demographic segments comparable to newspapers and television with greater cost effectiveness. By offering this new flexibility, we are able to compete for a share of the relatively larger advertising budgets spent on newspaper and television.

- LIVE ON-AIR TALENT AND RESEARCH TO SUPPORT PROGRAMMING. We use audience research and music testing to refine each station's programming content to match the preferences of the stations target demographic audience. We also seek to enrich the listener experience by increasing both the quality and quantity of local programming with live on-air personalities. In addition, we have secured the services of the Associated Press to provide each of our stations with the news resources to keep our listeners informed as well as entertained. We believe this strategy is the essence of successful radio and maximizes the number of listeners for each station.

- EMPLOY INTERNET-BASED MANAGEMENT INFORMATION SYSTEMS. We have implemented a proprietary set of computer applications using Internet software standards to monitor daily sales performance, inventory and pricing levels by station and by market. This system allows our managers to track performance in near real-time comparing actual to historical and planned levels as an early warning system for markets which stray off plan and to insure optimal inventory and pricing levels. We also employ this same platform as the basis for a company-wide information system that allows our managers in each market to share their best ideas about programming, sales and promotions.

ACQUISITION HISTORY

We completed the following acquisitions of radio stations for cash during the year ended December 31, 1998. The respective purchase price listed below for each transaction includes certain acquisition related costs paid in 1998 and 1997, and are rounded to the nearest thousand:

                    MARKETS AND STATIONS                         ACQUISITION DATE     PURCHASE PRICE
                    --------------------                         ----------------     --------------
COLUMBUS, GEORGIA
  M & M Partners
  (WVRK-FM, WGSY-FM, WPNX-AM and WMLF-AM)...................    January 6, 1998          $ 13,241
  Minority Radio Associates
  (WAGH-FM).................................................    March 17, 1998           $  2,054
  Smiths
  (WBFA-FM).................................................    November 1, 1998         $  1,800
TALLAHASSEE, FLORIDA
  Tally Radio, L.C
  (WWLD-FM).................................................    January 16, 1998         $  1,200
  HVS Partners
  (WBZE-FM, WHBT-AM and WHBX-FM)............................    January 16, 1998         $ 15,650
TOLEDO, OHIO
  Venice Broadcasting Corp.
  (WXKR-FM).................................................    January 27, 1998         $  5,009
SALISBURY, MARYLAND
  Connor Broadcasting Corporation
  (WSBY-FM and WJDY-AM).....................................    February 11, 1998        $  1,361
  WWFG-FM and WOSC-FM
  (WOSC-FM and WWFG-FM).....................................    July 7, 1998             $  7,564
ANN ARBOR, MICHIGAN
  Arbor Radio LP
  (WIQB-FM, WQKL-FM, WTKA-AM and WDEO-AM)...................    March 2, 1998            $ 15,356

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                    MARKETS AND STATIONS                         ACQUISITION DATE     PURCHASE PRICE
                    --------------------                         ----------------     --------------
MYRTLE BEACH, SOUTH CAROLINA
  Carolina Broadcasting, Inc.
  (WJXY-AM and WJXY-FM).....................................    March 16, 1998           $  2,405
  Seacoast Radio Company, LLC
  WDAI-FM
  Sunny Broadcasters, Inc.
  (WSNY-FM).................................................    March 25, 1998           $  8,229
  WSEA Inc.
  (WSEA-FM).................................................    July 31, 1998            $  1,346
FLORENCE, SOUTH CAROLINA
  Forjay Broadcasting Corporation
  (WYNN-FM and WYNN-AM).....................................    March 23, 1998           $  4,601
  GHB Broadcasting
  (WHSC-AM and WHSC-FM).....................................    May 1, 1998              $    705
AMARILLO, TEXAS
  Heritage Communications
  (KZRK-AM and KZRK-FM).....................................    April 1, 1998            $  1,032
  West Jewel Management
  (KARX-FM).................................................    April 8, 1998            $    928
  Wiskes-Abaris Communications
  (KQIZ-FM).................................................    April 30, 1998           $  3,207
  Westwind Broadcasting
  (KPUR-FM and KPUR-AM).....................................    June 9, 1998             $    829
AUGUSTA, GEORGIA
  Savannah Valley Broadcasting Radio Properties
  (WBBQ-AM and WBBQ-FM).....................................    April 1, 1998            $ 10,206
  WLOV P&T Broadcasting
  (WLOV-FM and WLOV-AM).....................................    August 14, 1998          $    533
ABILENE, TEXAS
  IQ Radio, Inc.
  (KHXS-FM).................................................    April 7, 1998            $    385
  Big Country Broadcasting
  (KBCY-FM and KCDD-FM).....................................    April 15, 1998           $  2,048
  Esprit Communications Co.
  (KFQX-FM).................................................    August 14, 1998          $  1,695
BEAUMONT, TEXAS
  Beaumont Skywave, Inc.
  (KTCX-FM).................................................    May 15, 1998             $  3,804
  Ninety-Four Point One, Inc.
  (KAYD-FM, KAYD-AM, KQXY-FM and KQHN-AM)...................    May 15, 1998             $ 11,646
DUBUQUE, IOWA
  KIKR, Inc.
  (KIKR-FM).................................................    June 3, 1998             $  1,350
  Communications Properties, Inc.
  (KLYV-FM, KXGE-FM, WJOD-FM and WDBQ-AM)...................    September 15, 1998       $  6,120
ODESSA-MIDLAND, TEXAS
  New Frontier Communications, Inc.
  (KBAT-FM, KODM-FM, KNFM-FM, KGEE-FM and KMND-AM)..........    July 2, 1998             $ 15,083

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                    MARKETS AND STATIONS                         ACQUISITION DATE     PURCHASE PRICE
                    --------------------                         ----------------     --------------
CHATTANOOGA, TENNESSEE
  Republic Corporation
  (WUSY-FM).................................................    July 2, 1998             $ 20,640
  Chattanooga Broadcasting Group
  (WLMX-FM, WLMX-AM and WZST-FM)............................    July 31, 1998            $  5,500
MONTGOMERY, ALABAMA
  Republic Corporation
  (WMSP-AM, WNZZ-AM, WMXS-FM and WLWI-FM)...................    July 2, 1998             $ 20,724
MARION -- CARBONDALE, ILLINOIS
  Clearly Superior Radio Properties, LLC
  (WDDD-FM, WDDD-AM, WFRX-AM, WTAO-FM, WVZA-FM and
  WQUL-FM)..................................................    July 2, 1998             $ 12,795
SAVANNAH, GEORGIA
  Lewis Broadcasting
  (WJCL)....................................................    July 6, 1998             $  7,520
  Savannah Communications, L.P.
  (WIXV-FM, WSGF-FM and WBMQ-AM)............................    July 31, 1998            $  5,268
  Ocmulgee Broadcasting Co., Inc.
  (WEAS-FM and WEAS-AM).....................................    September 24, 1998       $  5,206
  Phoenix Broadcast Partners
  (WZAT-FM).................................................    September 30, 1998       $  3,518
GRAND JUNCTION, COLORADO
  Jan-Di Broadcasting, Inc.
  (KBKL-FM, KEKB-FM and KMXY-FM)............................    July 8, 1998             $  6,344
BANGOR, MAINE
  Castle Broadcasting, L.P.
  (WQCB-FM and WBZN-FM).....................................    July 10, 1998            $  6,672
MONROE, MICHIGAN
  Lesnick Communications, Inc.
  (WTWR-FM).................................................    July 23, 1998            $  3,393
LAKE CHARLES, LOUISIANA
  Louisiana Media Interests, Inc.
  (KKGB-FM, KBIU-FM, KYKZ-FM and KXZZ-AM)...................    July 24, 1998            $ 16,392
KALAMAZOO, MICHIGAN
  Crystal Radio Group, Inc.
  (WKFR-FM, WRKR-FM and WKMI-AM)............................    July 31, 1998            $ 14,180
BISMARCK, NORTH DAKOTA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
  and Hometown Wireless, Inc.
  (KBYZ-FM, KACL-FM, KKCT-FM and KLXX-AM)...................    August 14, 1998          $  7,539
NEW ULM -- SPRINGFIELD -- MARSHALL, MINNESOTA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting,
  Inc.,and Hometown Wireless, Inc.
  (KNUJ-FM, KNUJ-AM and KNSG-FM)............................    August 14, 1998          $  5,460
WASECA, MINNESOTA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
  and Hometown Wireless, Inc.
  (KOWO-AM and KRUE-FM).....................................    August 14, 1998          $  2,488

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                    MARKETS AND STATIONS                         ACQUISITION DATE     PURCHASE PRICE
                    --------------------                         ----------------     --------------
OWATONNA, MINNESOTA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
  and Hometown Wireless, Inc.
  (KRFO-FM and KRFO-AM).....................................    August 14, 1998          $  2,488
MANKATO, MINNESOTA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
  and Hometown Wireless, Inc.
  (KXLP-FM, KYSM-AM and KYSM-FM)............................    August 14, 1998          $ 11,153
MASON CITY, IOWA
  JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
  Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
  and Hometown Wireless, Inc.
  (KCHA-FM, KGLO-AM, KIAI-FM and KLKK-FM)...................    August 14, 1998          $ 11,404
FARIBAULT, MINNESOTA
  Radio Ingstad Minnesota, Inc., Radio Albert Lea, Inc., and
  KRCH of Minnesota
  (KRCH-FM, KWEB-AM, KMFX-F and KMFX-AM)....................    August 14, 1998          $  4,197
ROCHESTER, MINNESOTA
  Radio Ingstad Minnesota, Inc., Radio Albert Lea, Inc., and
  KRCH of Minnesota
  (KRCH-FM, KWEB-AM, KMFX-FM and KMFX-AM)...................    August 14, 1998          $  6,242
TOPEKA, KANSAS
  Midland Broadcasters, Inc.
  (KMAJ-FM, KMAJ-AM, KDVV-FM and KTOP-AM)...................    September 30, 1998       $ 11,111
GREEN BAY, WISCONSIN
  American Communications Company
  (KJLW-FM).................................................    October 2, 1998          $  2,606
  Brillion Radio Company
  (WEZR-FM).................................................    November 2, 1998         $  2,115
AUGUSTA-WATERVILLE, MAINE
  Tryon-Seacoast, Inc.
  (WABK-FM, WKCG-FM, WIGY-FM, WCME-FM and WFAU-AM)..........    October 16, 1998         $  4,340
ALBANY, GEORGIA
  K-Country, Inc.
  (WEGC-FM and WJAD-FM).....................................    October 26, 1998         $  1,911
TUPELO, MISSISSIPPI
  Charisma Communications
  (WESE-FM, WWZD-FM, WTUP-AM and WNRX-AM)...................    December 29, 1998        $  3,425
                                                                                         --------
                                                                TOTAL                    $344,018
                                                                                         ========

During the twelve months ended December 31, 1998, the Company operated the following stations under local marketing agreements ("LMA"):

                    MARKET AND STATIONS                         LMA EFFECTIVE DATE
                    -------------------                         ------------------
GREEN BAY, WISCONSIN
  American Communications Co.
  (WJLW-FM).................................................    February 15, 1998

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                    MARKET AND STATIONS                         LMA EFFECTIVE DATE
                    -------------------                         ------------------
  Brillion Radio Company
  (WEZR-FM).................................................    February 15, 1998
AUGUSTA, GEORGIA
  Savannah Valley Broadcasting Radio Properties
  (WBBQ-AM and WBBQ-FM).....................................    September 4, 1997
SALISBURY, MARYLAND
  WWFG-FM and WOSC-FM
  (WWFG-FM and WOSC-FM).....................................    February 1, 1998
TALLAHASSEE, FLORIDA
  HVS Partners
  (WHBX-FM, WBZE-FM and WHBT-AM)............................    August 18, 1997
  Tally Radio, L.C
  (WWLD-FM).................................................    August 18, 1997
  Tallahassee Broadcasting, Inc.
  (WGLF-FM).................................................    August 18, 1997
ABILENE, TEXAS
  Big Country Broadcasting
  (KBCY-FM and KCDD-FM).....................................    November 1, 1997
  IQ Radio, Inc.
  (KHXS-FM).................................................    November 1, 1997
  Esprit Communications
  (KFQX-FM).................................................    April 1, 1998
AMARILLO, TEXAS
  Westwind
  (KPUR-FM and KPUR-AM).....................................    January 1, 1998
  Heritage Communications
  (KZRK-FM and KZRK-AM).....................................    January 1, 1998
  West Jewel
  (KARX-FM).................................................    January 1, 1998
  Wiskes-Abaris
  (KQIZ-FM).................................................    February 15, 1998
ODESSA-MIDLAND, TEXAS
  New Frontier Communications, Inc.
  (KGEE-FM, KODM-FM, KNFM-FM, KMND-AM and KBAT-FM)..........    January 1, 1998
MARION CARBONDALE, ILLINOIS
  Clearly Superior Radio Properties
  (WDDD-FM, WDDD-AM, WTAO-FM, WVZA-FM, WQUL-FM and
  WFRX-AM)..................................................    January 1, 1998
COLUMBUS, GEORGIA
  Minority Associates
  (WAGH-FM).................................................    January 1, 1998
  Solar Broadcasting Company, Inc.
  (WSTH-FM and WDAK-AM).....................................    December 17, 1998
SAVANNAH, GEORGIA
  Savannah Communications, L.P.
  (WBMQ-AM, WIXV-FM and WSGF-FM)............................    January 1, 1998
  WJCL-FM
  (WJCL-FM).................................................    January 1, 1998
  Phoenix Broadcast Partners, Inc.
  (WZAT-FM).................................................    March 16, 1998

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                    MARKET AND STATIONS                         LMA EFFECTIVE DATE
                    -------------------                         ------------------
BEAUMONT, TEXAS
  Beaumont Skywave, Inc.
  (KTCX-FM).................................................    February 15, 1998
MYRTLE BEACH, SOUTH CAROLINA
  Carolina Broadcasting, Inc.
  (WXJY-FM).................................................    March 16, 1998
FLORENCE, SOUTH CAROLINA
  Clarendon County Broadcasting
  (WHLZ-FM and WYMB-AM).....................................    March 18, 1998
  Pamplico Broadcasting, L.P.
  (WBZF-FM, WMXT-FM and WWFN-FM)............................    March 16, 1998
MONTGOMERY, ALABAMA
  Republic Corporation
  (WMSP-AM, WNZZ-AM, WMXS-FM and WLWI-FM)...................    February 11, 1998
  McDonald Media Group, Inc.
  (WHHY-AM, WJCC-FM and WXFX-FM)............................    August 17, 1998
CHATTANOOGA, TENNESSEE
  Republic Corporation
  (WUSY-FM).................................................    February 11, 1998
  Marson Broadcasting, Inc.
  (WKXJ-FM).................................................    July 1, 1998
AUGUSTA, GEORGIA
  P&T Broadcasting, Inc.
  (WLOV-AM and WLOV-FM).....................................    April 1, 1998
  Estate of George G. Weiss
  (WZNY-FM).................................................    December 14, 1998
DUBUQUE, IOWA
  KIKR, INC.
  (KIKR-FM).................................................    April 1, 1998
ALBANY, GEORGIA
  Brooks Broadcasting Co.
  (WKAK-FM, WEGC-FM, WALG-AM and WJAD-FM)...................    April 1, 1998
  Albany Broadcasting Co.
  (WGPC-FM and WGPC-AM).....................................    June 1, 1998
  Williams Communications Systems, Inc.
  (WQVE-FM).................................................    July 2, 1998
MONROE, MICHIGAN
  Lesnick Communications, Inc.
  (WTWR-FM).................................................    April 1, 1998
FLORENCE, SOUTH CAROLINA
  Nautical Broadcasting
  (WCMG-FM).................................................    April 1, 1998
MYRTLE BEACH, SOUTH CAROLINA
  Blue Dolphin of South Carolina, Inc.
  (WSEA-FM).................................................    April 1, 1998
COLUMBUS -- STARKVILLE, MISSISSIPPI
  Charisma Communications
  (WSSO-AM, WMXU-FM, WSMS-FM, WKOR-FM, WKOR-AM and
  WMSU-FM)..................................................    September 30, 1998

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                    MARKET AND STATIONS                         LMA EFFECTIVE DATE
                    -------------------                         ------------------
TUPELO, MISSISSIPPI
  Charisma Communications
  (WESE-FM, WTUP-AM, WNRX-AM and WWZD-FM)...................    September 30, 1998

The statement of operations for the twelve months ended December 31, 1998 includes the revenue and broadcast operating expenses of these radio stations and any related fees associated with the LMA from the effective date of the LMA through the earlier of (i) the date of acquisition of such station by the Company; or (ii) December 31, 1998.

In December of 1998 the Company formed Cumulus Wireless Services, Inc. ("Wireless Services") a wholly owned subsidiary of Cumulus Broadcasting Inc. to develop additional revenue and cash flow from its broadcast towers. For the year ended December 31, 1998 Wireless Services did not report any net revenue, net income, or cash flow.

INDUSTRY OVERVIEW

Revenues for radio stations are generated primarily from the sale of advertising time to local and national spot advertisers and national network advertisers. The growth in total radio advertising revenue tends to be fairly stable. With the exception of 1991, when total radio advertising revenue fell by approximately 3.1% compared to the prior year, advertising revenue has generally risen in each of the past 16 years faster than both inflation and the gross national product. According to the RAB's Radio Marketing Guide and Fact Book for Advertisers 1998, each week radio reaches approximately 96% of all Americans over the age of 12. More than 60% of all radio listening is done outside the home and car radio reaches four out of five adults each week. The average listener spends approximately three hours and 24 minutes per day listening to radio. The highest portion of radio listenership occurs during the morning, particularly between the time a listener wakes up and the time the listener reaches work. This "morning drive time" period reaches more than 80% of people over 12 years of age, and as a result, radio advertising sold during this period achieves premium advertising rates.

Radio is considered an efficient, cost-effective means of reaching specifically identified demographic groups. Stations are typically classified by their on-air format such as country, adult contemporary, oldies or news/talk. A station's format and style of presentation enables it to target specific segments of listeners sharing certain demographic features. By capturing a specific share of a market's radio listening audience, with particular concentration in a targeted demographic, a station is able to market its broadcasting time to advertisers seeking to reach a specific audience. Advertisers and stations use data published by audience measuring services, such as Arbitron, to estimate how many people within particular geographical markets and demographics listen to specific stations.

The number of advertisements that can be broadcast without jeopardizing listening levels, and the resulting ratings, is limited in part by the format of a particular station and the local competitive environment. Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year.

A station's local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. To generate national advertising sales, a station usually will engage a firm that specializes in soliciting radio-advertising sales on a national level. National sales representatives obtain advertising principally from advertising agencies located outside the station's market and receive commissions based on the revenue from the advertising they obtain.

GENERATION OF REVENUE

Virtually all of our revenue is generated from the sale of local, regional and national advertising for broadcast on our radio stations. Approximately 89% of our net broadcasting revenues were generated from the

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sale of local and regional advertising in each of 1998 and 1997. Additionally, broadcasting revenues are generated from the sale of national advertising. Our advertisers include companies in the following industries:

- Automotive                        - Telecommunications                - Movies
- Retail                            - Fast Food                         - Entertainment
- Healthcare                        - Beverage                          - Services

SALES AND MARKETING

Each station's local sales staff solicits advertising either directly from the local advertiser or indirectly through an advertising agency. Cumulus employs a tiered commission structure to focus our individual sales staffs on new business development. Consistent with our operating strategy of dedicated sales forces for each of our stations; we have increased the number of sales persons per station. We believe that we can outperform the traditional growth rates of our markets by: (i) expanding our customer base to include advertisers who have historically not advertised or used other media such as newspaper and television; (ii) expanding the sales organization to acquire and support an expanded base of customers; (iii) providing more in-depth training to all sales personnel; and (iv) providing a higher level of service to all advertisers. We support our strategy of building local direct accounts by employing personnel in each of our markets to produce custom commercials that respond to the needs of our advertisers. In addition, in-house production provides advertisers greater flexibility in changing their commercial messages with minimal lead-time.

Our national sales are made by firms specializing in radio advertising sales on the national level in exchange for a commission that is based on our net revenue from the advertising obtained. Regional sales, which we define as sales in regions surrounding our markets to buyers that advertise in our markets, are generally made by our local sales staff and market managers. Whereas we seek to grow our local sales through larger and more customer-focused sales staffs, we seek to grow our national and regional sales by offering to key national and regional advertisers groups of stations within specific markets and regions that make our stations more attractive.

The number of advertisements that can be broadcast without jeopardizing listening levels and the resulting ratings is limited in part by the format of a particular station. We estimate the optimal number of advertisements available for sale depending on the programming format of a particular station. Each of our stations has a general target level of on-air inventory that it makes available for advertising. This target level of inventory for sale may be different at different times of the day but tends to remain stable over time. Our stations strive to maximize revenue by managing their on-air inventory of advertising time and adjusting prices up or down based on supply and demand. We seek to broaden our base of advertisers in each of our markets by providing a wide array of audience demographic segments across our cluster of stations, thereby providing each of our potential advertisers with an effective means of reaching a targeted demographic group. Our selling and pricing activity is based on demand for our radio stations' on-air inventory and, in general, we respond to this demand by varying prices rather than by varying our target inventory level for a particular station. Most changes in revenue are explained by demand-driven pricing changes rather than by changes in the available inventory. Advertising rates charged by radio stations are based primarily on:

- a station's share of audiences generally, and in the demographic groups targeted by advertisers (as measured by ratings surveys);

- the supply of and demand for radio advertising time generally and for time targeted at particular demographic groups; and

- certain additional qualitative factors. Rates are generally highest during morning and afternoon commuting hours.

A station's listenership is reflected in ratings surveys that estimate the number of listeners tuned to the station and the time they spend listening. Each station's ratings are used by its advertisers and advertising representatives to consider advertising with the station and are used by the Company to chart audience growth, set advertising rates and adjust programming. The radio broadcasting industry's principal ratings service is

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Arbitron, which publishes periodic ratings surveys for significant domestic radio markets. These surveys are our primary source of ratings data.

COMPETITION

The radio broadcasting industry is highly competitive. The success of each of our stations depends largely upon its audience ratings and its share of the overall advertising revenue within its market. Our audience ratings and advertising revenue are subject to change, and any adverse change in a particular market affecting advertising expenditures or an adverse change in the relative market positions of the stations located in a particular market could have a material adverse effect on the revenue of our radio stations located in that market. There can be no assurance that any one or all of our stations will be able to maintain or increase current audience ratings or advertising revenue market share.

Our stations compete for listeners and advertising revenue directly with other radio stations within their respective markets, as well as with other advertising media as discussed below. Radio stations compete for listeners primarily on the basis of program content that appeals to a particular demographic group. By building a strong listener base consisting of specific demographic groups in each of our markets, we are able to attract advertisers seeking to reach those listeners. Companies that operate radio stations must be alert to the possibility of another station changing its format to compete directly for listeners and advertisers. Another station's decision to convert to a format similar to that of one of our radio stations in the same geographic area or to launch an aggressive promotional campaign may result in lower ratings and advertising revenue, increased promotion and other expenses and, consequently, lower Broadcast Cash Flow for the Company.

Factors that are material to a radio station's competitive position include the station's audience rank in its market, transmitter power, assigned frequency, audience characteristics, local program acceptance and the quality of its sales and programming personnel. We attempt to improve our competitive position in each market by researching listener response to programming, implementing advertising campaigns aimed at the demographic groups targeted by our stations; managing our sales efforts to attract a larger share of advertising dollars for each station individually; and recruiting and training quality sales and programming personnel for each station. However, we compete with some organizations that have substantially greater financial or other resources than we do.

The Telecommunications Act of 1996 (the "Telecom Act") permits common ownership and operation of multiple radio stations in the same city or market. These groups of stations within a market are called "clusters." Factors that are material to a cluster's competitive position include the factors mentioned above relating to each station, the over all quality of the cluster's management, and the degree to which the cluster operates, by ownership or under LMA, the maximum number of stations allowed by the Telecom Act. Although 76% of Cumulus's clusters are completed to the maximum allowed by the Telecom Act and we are working to complete the other clusters, there can be no assurance that we can acquire the needed stations. In station acquisition we compete with companies with substantially greater resources.

Although the radio broadcasting industry is highly competitive, and competition is enhanced to some extent by changes in existing radio station formats and upgrades of power, among other actions, certain regulatory limitations on entry exist. The operation of a radio broadcast station requires a license from the FCC, and the number of radio stations that an entity can operate in a given market is limited by regulatory and technical restrictions on operating additional stations in that market, as well as by the FCC's multiple ownership rules regulating the number of stations that may be owned and controlled by a single entity. The FCC's multiple ownership rules have changed significantly as a result of the Telecom Act. For a discussion of FCC regulation and the provisions of the Telecom Act, see "Federal Regulation of Radio Broadcasting."

Our stations also compete directly for advertising revenue with other media, especially newspapers, broadcast television, and cable television. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite and by digital audio broadcasting. Digital audio broadcasting may deliver by satellite to nationwide and regional audiences, multi-channel, multi-format, digital radio services with sound quality equivalent to compact discs. The delivery of information through the

13

presently unregulated Internet also could create a new form of competition. The radio broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as television broadcasting, cable television, audio tapes and compact discs. A growing population and greater availability of radios, particularly car and portable radios, have contributed to this growth.

There can be no assurance, however, that the development or introduction in the future of any new media technology will not have an adverse effect on the radio broadcasting industry.

The FCC has recently authorized spectrum for the use of a new technology, satellite digital audio radio services, to deliver audio programming. The FCC has also authorized two companies to provide digital audio radio service. Digital audio radio services may provide a medium for the delivery by satellite or terrestrial means of multiple new audio programming formats to local and national audiences. It is not known at this time whether this digital technology also may be used in the future by existing radio broadcast stations either on existing or alternate broadcasting frequencies.

We cannot predict what other matters might be considered in the future by the FCC, nor can we assess in advance what impact, if any, the implementation of any of these proposals or changes might have on our business. See "Federal Regulation of Radio Broadcasting."

EMPLOYEES

At December 31, 1998, we employed approximately 1,900 people. No employees are covered by collective bargaining agreements, and we consider our relations with our employees to be satisfactory.

We employ several on-air personalities with large loyal audiences in their respective markets. On occasion, we enter into employment agreements with these personalities to protect our interests in those relationships that we believe to be valuable. The loss of one of these personalities could result in a short-term loss of audience share, but we do not believe that any such loss would have a material adverse effect on our financial condition or results of operations, taken as a whole.

FEDERAL REGULATION OF RADIO BROADCASTING

Introduction. The ownership, operation and sale of broadcast stations, including those licensed to the Company, are subject to the jurisdiction of the FCC, which acts under authority derived from the Communications Act of 1934, as amended (the "Communications Act"). The Communications Act was amended in 1996 by the Telecommunications Act of 1996 (the "Telecom Act") to make changes in several broadcast laws. Among other things, the FCC grants permits and licenses to construct and operate radio stations; assigns frequency bands for broadcasting; determines whether to approve changes in ownership or control of station licenses; regulates equipment used by stations and the operating power and other technical parameters of stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; regulates the content of some forms of radio broadcasting programming; and has the power to impose penalties for violations of its rules under the Communications Act.

The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short-term" (less than the maximum term) license renewal or, for particularly egregious violations, the denial of a license renewal application, the revocation of a license or the denial of FCC consent to acquire additional broadcast properties. Please refer to the Communications Act, FCC rules and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations.

License Grant and Renewal. Radio broadcast licenses are granted and renewed for maximum terms of eight years. Licenses may be renewed through an application to the FCC. The Communications Act requires that the FCC grant the renewal of a station's license if the FCC finds that, during the preceding term of the license, the station has served the public interest, convenience and necessity, that there have been no serious

14

violations by the licensee of the Communications Act or the rules and regulations of the FCC, and that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse.

Petitions to deny license renewal applications can be filed by interested parties, including members of the public. Such petitions may raise various issues before the FCC. The FCC is required to hold hearings on renewal applications if the FCC is unable to determine that renewal of a license would serve the public interest, convenience and necessity, or if a petition to deny raises a "substantial and material question of fact" as to whether the grant of the renewal application would be patently inconsistent with the public interest, convenience and necessity. Also, during certain periods when a renewal application is pending, the transferability of the applicant's license is restricted. We are not currently aware of any facts that would prevent the timely renewal of our licenses to operate our radio stations, although there can be no assurance that our licenses will be renewed.

The FCC classifies each AM and FM station. An AM station operates on a clear channel, a regional channel or a local channel. A clear channel is one on which certain dominant AM stations are assigned to serve wide areas. Clear channel AM stations are classified as one of the following:

- Class A stations, which operate on an unlimited time basis and are designated to render primary and secondary service over an extended area;

- Class B stations, which operate on an unlimited time basis and are designed to render service only over a primary service area;

- Class C stations operate on a local channel and are designed to render service only over a primary service area that may be reduced as a consequence of interference; and

- Class D stations, which operate either during daytime hours only, during limited times only or on an unlimited time basis with low nighttime power.

A regional channel is one on which Class B and Class D AM stations may operate and serve primarily a principal center of population and the rural areas contiguous to it. A local channel is one on which AM stations operate on an unlimited time basis and serve primarily a community and the suburban and rural areas immediately contiguous to that community.

The area served by AM stations is determined by a combination of frequency, transmitter power and antenna orientation. Directional antenna arrays are often used to avoid or reduce interference to stations in certain locations. AM stations are often required to reduce power or change directional pattern at night in order to avoid interference to other licensees. To determine the effective service area of an AM station, its power, its operating frequency, its antenna patterns and its day/night operating modes are required.

The area served by FM stations is determined by a combination of transmitter power and antenna height, with stations divided into classes according to their anticipated service area. Antenna systems are typically non-directional and power is the same, day and night.

Class C FM stations operate at 100 kilowatts of power with up to 1,968 feet of antenna elevation above average terrain. They are the most powerful FM stations, providing service to a large area, typically a substantial portion of a state. Class B FM stations operate at up to 50 kilowatts of power with up to 500 feet of antenna elevation. These stations typically serve large metropolitan areas as well as their associated suburbs. Class A FM stations operate at 6 kilowatts with up to 328 feet of antenna elevation, and serve smaller cities and towns or suburbs of larger cities.

The minimum and maximum facilities requirements for a FM station are determined by its class. FM class designations depend upon the geographic zone in which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1 and C.

The following table sets forth the market, call letters, FCC license classification, antenna elevation above average terrain (for FM stations only), power and frequency of each of the stations owned or operated by the

15

Company, assuming the consummation of the pending acquisitions, and the date on which each station's FCC license expires.

                                                                                                        HEIGHT         POWER
                                                                                                         ABOVE          (IN
                                                                                                        AVERAGE     KILOWATTS)
                                                                               EXPIRATION       FCC     TERRAIN    -------------
        MARKET              STATIONS        CITY OF LICENSE     FREQUENCY   DATE OF LICENSE    CLASS   (IN FEET)    DAY    NIGHT
        ------              --------        ---------------     ---------   ---------------    -----   ---------    ---    -----
MIDWEST REGION
Ann Arbor, MI..........  WIQB       FM     Ann Arbor, MI          102.9      October 1, 2004    B         499       49.0    49.0
                         WQKL       FM     Ann Arbor, MI          107.1      October 1, 2004    A         289        3.0     3.0
                         WTKA       AM     Ann Arbor, MI           1050      October 1, 2004    B        N.A.       10.0     0.5
                         WDEO       AM     Saline, MI              1290      October 1, 2004    B        N.A.        0.5     0.0
Appleton Oshkosh/Green
Bay, WI................  WUSW       FM     Oshkosh, WI             96.7     December 1, 2004    A         328        6.0     6.0
                         WVBO       FM     Oshkosh, WI            103.9     December 1, 2004    C3        318       25.0    25.0
                         WOGB       FM     Kaukauna, WI           103.1     December 1, 2004    C3        879       25.0    25.0
                         WNAM       AM     Neenah Menasha, WI      1280     December 1, 2004    B        N.A.       20.0     5.0
                         WOSH       AM     Oshkosh, WI             1490     December 1, 2004    C        N.A.        1.0     1.0
                         WJLW       FM     Allouez, WI            106.7     December 1, 2004    C3        509       25.0    25.0
                         WEZR       FM     Brillion, WI           107.5     December 1, 2004    A         328        6.0     6.0
Dubuque, IA............  KLYV       FM     Dubuque, IA            105.3     February 1, 2005    C2        331       50.0    50.0
                         KXGE       FM     Dubuque, IA            102.3     February 1, 2005    A         410        1.7     1.7
                         WDBQ       FM     Galena, IL             107.5     February 1, 2005    A         328        3.0     3.0
                         WDBQ       AM     Dubuque, IA             1490     February 1, 2005    C        N.A.        1.0     1.0
                         WJOD       FM     Asbury, IA             103.3     February 1, 2005    C3        643        6.6     6.6
Bismarck, ND...........  KBYZ       FM     Bismarck, ND            96.5        April 1, 2005    C        1001      100.0   100.0
                         KACL       FM     Bismarck, ND            98.7        April 1, 2005    C        1093      100.0   100.0
                         KKCT       FM     Bismarck, ND            97.5        April 1, 2005    C1        830      100.0   100.0
                         KLXX       AM     Bismarck, ND            1270        April 1, 2005    B        N.A.        1.0     0.3
                         KSSS       FM     Bismarck, ND           101.5        April 1, 2005    C         988      100.0   100.0
                         KBMR       AM     Bismarck, ND            1130        April 1, 2005    B        N.A.       10.0     0.0
Kalamazoo, MI..........  WKFR       FM     Battle Creek, MI       103.3      October 1, 2004    B         482       50.0    50.0
                         WRKR       FM     Portage, MI            107.7      October 1, 2004    B         489       50.0    50.0
                         WKMI       AM     Kalamazoo, MI           1360      October 1, 2004    B        N.A.        5.0     1.0
Faribault, MN..........  KDHL       AM     Faribault, MN            920        April 1, 2005    B        N.A.        5.0     5.0
                         KQCL       FM     Faribault, MN           95.9        April 1, 2005    A         328        3.0     3.0
                         KQPR       FM     Albert Lea, MN          96.1        April 1, 2005    A         328        6.0     6.0
                         KNFX       AM     Austin, MN               970        April 1, 2005    B        N.A.        5.0     0.5
Owatonna-Waseca, MN....  KRFO       AM     Owatonna, MN            1390        April 1, 2005    B        N.A.        0.5     0.1
                         KRFO       FM     Owatonna, MN           104.9        April 1, 2005    A         174        4.7     4.7
                         KOWO       AM     Waseca, MN              1170        April 1, 2005    B        N.A.        1.0     0.0
                         KRUE       FM     Waseca, MN              92.1        April 1, 2005    C3        285       25.0    25.0
Mankato, MN............  KXLP       FM     New Ulm, MN             93.1        April 1, 2005    C1        489      100.0   100.0
                         KYSM       AM     Mankato, MN             1230        April 1, 2005    C        N.A.        1.0     1.0
                         KYSM       FM     Mankato, MN            103.5        April 1, 2005    C1        541      100.0   100.0
Marion-Carbondale,
IL.....................  WDDD       FM     Marion, IL             107.3     December 1, 2004    B         492       50.0    50.0
                         WDDD       AM     Johnston City, IL        810     December 1, 2004    B        N.A.        0.3     0.3
                         WFRX       AM     West Frankfort, IL      1300     December 1, 2004    B        N.A.        1.0     0.1
                         WTAO       FM     Murphysboro, IL        105.1     December 1, 2004    B1        308       25.0    25.0
                         WVZA       FM     Herrin, IL              92.7     December 1, 2004    B1        328       25.0    25.0
                         WQUL       FM     West Frankfort, IL      97.7     December 1, 2004    A         433        3.5     3.5
Mason City, IA.........  KCHA       FM     Charles City, IA        95.9     February 1, 2005    A         299        3.0     3.0
                         KGLO       AM     Mason City, IA          1300     February 1, 2005    B        N.A.        5.0     5.0
                         KIAI       FM     Mason City, IA          93.9     February 1, 2005    C1        791      100.0   100.0
                         KLKK       FM     Clear Lake, IA         103.1     February 1, 2005    A         308        6.0     6.0
                         KCHA       AM     Charles City, IA        1580     February 1, 2005    B        N.A.        0.5     0.0
                         KCZE       FM     New Hampton, IA         95.1     February 1, 2005    A         338        5.5     5.5
                         KWMM       FM     Osage, IA              103.7     February 1, 2005    A         154        6.0     6.0
New Ulm-Springfield-
Marshall, MN...........  KNUJ       AM     New Ulm, MN              860        April 1, 2005    B        N.A.        1.0     0.1
                         KNUJ       FM     Sleepy Eye, MN         107.3        April 1, 2005    A         400        1.9     1.9
                         KNSG       FM     Springfield, MN         94.7        April 1, 2005    C2        472       50.0    50.0

16

                                                                                                        HEIGHT         POWER
                                                                                                         ABOVE          (IN
                                                                                                        AVERAGE     KILOWATTS)
                                                                               EXPIRATION       FCC     TERRAIN    -------------
        MARKET              STATIONS        CITY OF LICENSE     FREQUENCY   DATE OF LICENSE    CLASS   (IN FEET)    DAY    NIGHT
        ------              --------        ---------------     ---------   ---------------    -----   ---------    ---    -----
Rochester, MN..........  KRCH       FM     Rochester, MN          101.7        April 1, 2005    C2        554       39.0    39.0
                         KWEB       AM     Rochester, MN           1270        April 1, 2005    B        N.A.        5.0     1.0
                         KMFX       FM     Lake City, MN          102.5        April 1, 2005    C3        528        9.4     9.4
                         KMFX       AM     Wabasha, MN             1190        April 1, 2005    B        N.A.        1.0     0.0
Toledo, OH.............  WKKO       FM     Toledo, OH              99.9      October 1, 2003    B         499       50.0    50.0
                         WRQN       FM     Bowling Green, OH       93.5      October 1, 2003    A         397        4.1     4.1
                         WTOD       AM     Toledo, OH              1560      October 1, 2003    B        N.A.        5.0     0.0
                         WWWM       FM     Sylvania, OH           105.5      October 1, 2003    A         390        4.3     4.3
                         WLQR       AM     Toledo, OH              1470      October 1, 2003    B        N.A.        1.0     1.0
                         WXKR       FM     Port Clinton, OH        94.5      October 1, 2003    B         630       30.0    30.0
                         WTWR       FM     Monroe, MI              98.3      October 1, 2004    A         466        1.4     1.4
                         WBUZ       FM     Delta, OH              106.5      October 1, 2003    A         328        3.0     3.0
                         WJZE       FM     Oak Harbor, OH          97.3      October 1, 2003    A         407        1.6     1.6
SOUTHEAST REGION
Albany, GA.............  WNUQ       FM     Albany, GA             101.7        April 1, 2004    A         299        3.0     3.0
                         WEGC       FM     Sasser, GA             107.7        April 1, 2004    C3        328       25.0    25.0
                         WALG       AM     Albany, GA              1590        April 1, 2004    B        N.A.        5.0     1.0
                         WJAD       FM     Leesburg, GA           103.5        April 1, 2004    C3        463       12.5    12.5
                         WKAK       FM     Albany, GA             104.5        April 1, 2004    C1        981       98.0    98.0
                         WGPC       AM     Albany, GA              1450        April 1, 2004    C        N.A.        1.0     1.0
                         WQVE       FM     Camilla, GA            105.5        April 1, 2004    A         276        6.0     6.0
Augusta, GA............  WEKL       FM     Augusta, GA            102.3        April 1, 2004    A         666        1.5     1.5
                         WRXR       FM     Aiken, SC               96.3        April 1, 2004    C2        889       15.0    15.0
                         WUUS       FM     Martinez, GA           107.7        April 1, 2004    C2        577       24.5    24.5
                         WGUS       AM     N. Augusta, SC          1380        April 1, 2004    B        N.A.        4.0     0.1
                         WBBQ       FM     Augusta, GA            104.3        April 1, 2004    C        1001      100.0   100.0
                         WBBQ       AM     Augusta, GA             1340        April 1, 2004    C        N.A.        1.0     1.0
                         WXKT       FM     Washington, GA         100.1        April 1, 2004    A         322        2.4     2.4
                         WLOV       AM     Washington, GA          1370        April 1, 2004    B        N.A.        1.0     0.0
                         WZNY       FM     Augusta, GA            105.7        April 1, 2004    C        1168      100.0   100.0
Chattanooga, TN........  WUSY       FM     Cleveland, TN          100.7        April 1, 2005    C        1191      100.0   100.0
                         WKXJ       FM     South Pittsburgh,       97.3        April 1, 2005    C2        856       16.0    16.0
                         WLMX       FM     Rossville, GA          105.5        April 1, 2004    A         646        1.6     1.6
Chattanooga, TN........  WLMX       AM     Rossville, GA            980        April 1, 2004    B        N.A.        0.5     0.1
                         WLOV       FM     Signal Mountain,        98.1        April 1, 2005    A         794        1.0     1.0
Columbus, GA...........  WVRK       FM     Columbus, GA           102.9        April 1, 2004    C        1519      100.0   100.0
                         WGSY       FM     Phenix City, GA        100.1        April 1, 2004    A         328        6.0     6.0
                         WMLF       AM     Columbus, GA            1270        April 1, 2004    B        N.A.        5.0     0.2
                         WPNX       AM     Phenix City, GA         1460        April 1, 2004    B        N.A.        4.0     0.1
                         WAGH       FM     Ft. Mitchell, GA        98.3        April 1, 2004    A         328        6.0     6.0
                         WSTH       FM     Alexander City, AL     106.1        April 1, 2004    C1        981       81.0    81.0
                         WDAK       AM     Columbus, GA             540        April 1, 2004    B        N.A.        5.0     0.5
                         WBFA       FM     Smiths, AL             101.3        April 1, 2004    A         328        6.0     6.0
Columbus-Starkville,
MS.....................  WSSO       AM     Starkville, MS          1230         June 1, 2004    C        N.A.        1.0     1.0
                         WMXU       FM     Starkville, MS         106.1         June 1, 2004    C2        502       40.0    40.0
                         WSMS       FM     Artesia, MA             99.9         June 1, 2004    C2        312       50.0    50.0
                         WKOR       FM     Columbus, MS            94.9         June 1, 2004    C2        492       50.0    50.0
                         WKOR       AM     Starkville, MS           980         June 1, 2004    B        N.A.        1.0     0.0
                         WJWF       FM     Columbus, MS            1400         June 1, 2004    C        N.A.        1.0     1.0
                         WMBC       FM     Columbus, MA           103.1         June 1, 2004    C2        755       22.0    22.0
Fayetteville, AR.......  KFAY       FM     Bentonville, AR         98.3         June 1, 2004    C1        617      100.0   100.0
                         KFAY       AM     Farmington, AR          1030         June 1, 2004    B        N.A.       10.0     1.0
                         KKEG       FM     Fayetteville, AR        92.1         June 1, 2004    C3        548        7.6     7.6
                         KAMO       FM     Rogers, AR              94.3         June 1, 2004    C2        692       25.1    25.1
                         KMCK       FM     Siloam Springs, AR     105.7         June 1, 2004    C1        476      100.0   100.0
                         KZRA       AM     Springdale, AR          1590         June 1, 2004    B        N.A.        2.5     0.1
Florence, SC...........  WYNN       FM     Florence, SC           106.3     December 1, 2003    A         325        6.0     6.0
                         WYNN       AM     Florence, SC             540     December 1, 2003    B        N.A.        0.3     0.2

17

                                                                                                        HEIGHT         POWER
                                                                                                         ABOVE          (IN
                                                                                                        AVERAGE     KILOWATTS)
                                                                               EXPIRATION       FCC     TERRAIN    -------------
        MARKET              STATIONS        CITY OF LICENSE     FREQUENCY   DATE OF LICENSE    CLASS   (IN FEET)    DAY    NIGHT
        ------              --------        ---------------     ---------   ---------------    -----   ---------    ---    -----
                         WHLZ       FM     Manning, SC             92.5     December 1, 2003    C          1171     98.0    98.0
                         WYMB       AM     Manning, SC              920     December 1, 2003    B          N.A.      2.3     1.0
                         WCMG       FM     Latta, SC               94.3     December 1, 2003    C3          502     10.5    10.5
                         WHSC       AM     Hartsville, SC          1450     December 1, 2003    C          N.A.      1.0     1.0
                         WHSC       FM     Hartsville, SC          98.5     December 1, 2003    A           328      3.0     3.0
                         WBZF       FM     Marion, SC             100.5     December 1, 2003    C3          354     21.5    21.5
                         WMXT       FM     Pamplico, SC           102.1     December 1, 2003    C2          479     50.0    50.0
                         WWFN       FM     Lake City, SC          100.1     December 1, 2003    A           433      3.3     3.3
Fort Smith, AR.........  KLSZ       FM     Van Buren, AR          102.7         June 1, 2004    C3          476     12.0    12.0
                         KOMS       FM     Poteau, OK             107.3         June 1, 2005    C          1811    100.0   100.0
Laurel-Hattiesburg,
MS.....................  WEEZ       FM     Heidelberg, MS          99.3         June 1, 2004    C2          492     50.0    50.0
                         WFOR       AM     Hattiesburg, MS         1400         June 1, 2004    C          N.A.      1.0     1.0
                         WHER       FM     Hattiesburg, MS        103.7         June 1, 2004    C          1057    100.0   100.0
Montgomery, AL.........  WMSP       AM     Montgomery, AL           740        April 1, 2004    B          N.A.     10.0     0.0
                         WNZZ       AM     Montgomery, AL           950        April 1, 2004    B          N.A.      1.0     0.4
                         WMXS       FM     Montgomery, AL         103.3        April 1, 2004    C          1096    100.0   100.0
                         WLWI       FM     Montgomery, AL          92.3        April 1, 2004    C          1096    100.0   100.0
                         WHHY       FM     Montgomery, AL         101.9        April 1, 2004    C          1096    100.0   100.0
                         WHHY       AM     Montgomery, AL          1440        April 1, 2004    B          N.A.      5.0     1.0
                         WXFX       FM     Prattville, AL          95.1        April 1, 2004    C2          476     50.0    50.0
Myrtle Beach, SC.......  WSYN       FM     Georgetown, SC         106.5     December 1, 2003    C2          492     50.0    50.0
                         WDAI       FM     Pawley's Island,        98.5     December 1, 2003    A           328      6.0     6.0
                         WJXY       FM     Conway, SC              93.9     December 1, 2003    A           420      3.7     3.7
                         WXJY       FM     Georgetown, SC          93.7     December 1, 2003    A           328      6.0     6.0
                         WJXY       AM     Conway, SC              1050     December 1, 2003    B          N.A.      5.0     0.5
                         WSEA       FM     Atlantic Beach, SC     100.3     December 1, 2003    A           476      2.6     2.6
Muscle Shoals, AL......  WLAY       FM     Muscle Shoals, AL      105.5        April 1, 2004    A           742      1.1     1.1
                         WLAY       AM     Muscle Shoals, AL       1450        April 1, 2004    C          N.A.      1.0     1.0
                         WKGL       FM     Russellville, AL        97.7        April 1, 2004    A           430      3.5     3.5
Pensacola, FL..........  WWRO       FM     Pensacola, FL          100.7     February 1, 2004    C          1555    100.0   100.0
                         WCOA       AM     Pensacola, FL           1370     February 1, 2004    B          N.A.      5.0     5.0
Salisbury -- Ocean
City, MD...............  WLVW       FM     Salisbury, MD          105.5      October 1, 2003    A           384      2.1     2.1
                         WLBW       FM     Fenwick Island, DE      92.1       August 1, 2006    A           308      6.0     6.0
Salisbury -- Ocean
City, MD...............  WQHQ       FM     Salisbury, MD          104.7      October 1, 2003    B           610     33.0    33.0
                         WTGM       AM     Salisbury, MD            960      October 1, 2003    B          N.A.      5.0     5.0
                         WOSC       FM     Bethany Beach, DE       95.9      October 1, 2003    B1          377     18.8    18.8
                         WWFG       FM     Ocean City, MD          99.9      October 1, 2003    B           315     50.0    50.0
                         WSBY       FM     Salisbury, MD           98.9      October 1, 2003    A           325      6.0     6.0
                         WJDY       AM     Salisbury, MD           1470      October 1, 2003    B          N.A.      5.0     0.0
Savannah, GA...........  WJCL       FM     Savannah, GA            96.5        April 1, 2004    C          1161    100.0   100.0
                         WIXV       FM     Savannah, GA            95.5        April 1, 2004    C1          856    100.0   100.0
                         WSIS       FM     Springfield, GA        103.9        April 1, 2004    A           328      6.0     6.0
                         WBMQ       AM     Savannah, GA             630        April 1, 2004    B          N.A.      5.0     5.0
                         WEAS       FM     Savannah, GA            93.1        April 1, 2004    C1          981     97.0    97.0
                         WJLG       AM     Savannah, GA             900        April 1, 2004    B          N.A.      4.4     0.2
                         WZAT       FM     Savannah, GA           102.1        April 1, 2004    C          1306    100.0   100.0
Tallahassee, FL........  WHBX       FM     Tallahassee, FL         96.1     February 1, 2004    C2          479     37.0    37.0
                         WBZE       FM     Tallahassee, FL         98.9     February 1, 2004    C1          604    100.0   100.0
                         WHBT       AM     Tallahassee, FL         1410     February 1, 2004    B          N.A.      5.0     0.0
                         WWLD       FM     Tallahassee, FL        106.1     February 1, 2004    A           328      6.0     6.0
                         WGLF       FM     Tallahassee, FL        104.1     February 1, 2004    C          1394     90.0    90.0
Tupelo, MS.............  WESE       FM     Baldwyn, MS             92.5         June 1, 2004    A           328      5.4     5.4
                         WTUP       AM     Tupelo, MS              1490         June 1, 2004    C          N.A.      1.0     1.0
                         WNRX       AM     Tupelo, MS              1060         June 1, 2004    B          N.A.      9.6     0.0
                         WWZD       FM     New Albany, MS         106.7         June 1, 2004    C2          656     28.0    28.0
Wilmington, NC.........  WWQQ       FM     Wilmington, NC         101.3     December 1, 2003    C2          545     40.0    40.0
                         WQSL       FM     Jacksonville, NC        92.3     December 1, 2003    C2          725     22.7    22.7

18

                                                                                                        HEIGHT         POWER
                                                                                                         ABOVE          (IN
                                                                                                        AVERAGE     KILOWATTS)
                                                                               EXPIRATION       FCC     TERRAIN    -------------
        MARKET              STATIONS        CITY OF LICENSE     FREQUENCY   DATE OF LICENSE    CLASS   (IN FEET)    DAY    NIGHT
        ------              --------        ---------------     ---------   ---------------    -----   ---------    ---    -----
                         WXQR       FM     Jacksonville, NC       105.5     December 1, 2003     C2        794      19.0    19.0
                         WAAV       FM     Leland, NC              94.1     December 1, 2003     A         148       5.0     5.0
                         WAAV       AM     Leland, NC               980     December 1, 2003     B        N.A.       5.0     5.0
SOUTHWEST REGION
Abilene, TX............  KCDD       FM     Hamlin, TX             103.7       August 1, 2005     C1        745     100.0   100.0
                         KBCY       FM     Tye, TX                 99.7       August 1, 2005     C         984      98.0    98.0
                         KFQX       FM     Abilene, TX            106.3       August 1, 2005     C2        492      50.0    50.0
                         KHXS       FM     Merkel, TX             102.7       August 1, 2005     C1       1148      66.0    66.0
Amarillo, TX...........  KZRK       FM     Canyon, TX             107.9       August 1, 2005     C1        476     100.0   100.0
                         KZRK       AM     Canyon, TX              1550       August 1, 2005     B        N.A.       1.0     0.2
                         KARX       FM     Claude, TX              95.7       August 1, 2005     C1        390     100.0   100.0
                         KPUR       AM     Amarillo, TX            1440       August 1, 2005     B        N.A.       5.0     1.0
                         KPUR       FM     Canyon, TX             107.1       August 1, 2005     A         315       6.0     6.0
                         KQIZ       FM     Amarillo, TX            93.1       August 1, 2005     C1        699     100.0   100.0
Beaumont -- Port
Arthur, TX.............  KAYD       FM     Beaumont, TX            97.5       August 1, 2005     C        1200     100.0   100.0
                         KQXY       FM     Beaumont, TX            94.1       August 1, 2005     C        1099     100.0   100.0
                         KQHN       AM     Nederland, TX           1510       August 1, 2005     B        N.A.       5.0     0.0
                         KIKR       AM     Beaumont, TX            1450       August 1, 2005     C        N.A.       1.0     1.0
                         KTCX       FM     Beaumont, TX           102.5       August 1, 2005     C2        492      50.0    50.0
Grand Junction, CO.....  KBKL       FM     Grand Junction, CO     107.9        April 1, 2005     C        1460     100.0   100.0
                         KEKB       FM     Fruita, CO              99.9        April 1, 2005     C        1542      79.0    79.0
                         KMXY       FM     Grand Junction, CO     104.3        April 1, 2005     C        1460     100.0   100.0
                         KKNN       FM     Delta, CO               95.1        April 1, 2005     C        1424     100.0   100.0
                         KEXO       AM     Grand Junction, CO      1230        April 1, 2005     C        N.A.       1.0     1.0
                         KQIL       AM     Grand Junction, CO      1340        April 1, 2005     C        N.A.       1.0     1.0
Lake Charles, LA.......  KKGB       FM     Sulphur, LA            101.3         June 1, 2004     C3        289      25.0    25.0
                         KBIU       FM     Lake Charles, LA       103.7         June 1, 2004     C1        469     100.0   100.0
                         KYKZ       FM     Lake Charles, LA        96.1         June 1, 2004     C        1204      97.0    97.0
                         KXZZ       AM     Lake Charles, LA        1580         June 1, 2004     B        N.A.       1.0     1.0
Odessa-Midland, TX.....  KBAT       FM     Midland, TX             93.3       August 1, 2005     C1        440     100.0   100.0
                         KODM       FM     Odessa, TX              97.9       August 1, 2005     C1       1000     100.0   100.0
                         KNFM       FM     Midland, TX             92.3       August 1, 2005     C         984     100.0   100.0
                         KGEE       FM     Monahans, TX            99.9       August 1, 2005     C1        574      98.0    98.0
Odessa -- Midland, TX    KMND       AM     Midland, TX             1510       August 1, 2005     B        N.A.       2.4     0.0
                         KRIL       AM     Odessa, TX              1410       August 1, 2005     B        N.A.       1.0     1.0
Topeka, KS.............  KDVV       FM     Topeka, KS             100.3       August 1, 2005     C         984     100.0   100.0
                         KMAJ       FM     Topeka, KS             107.7       August 1, 2005     C         988     100.0   100.0
                         KMAJ       AM     Topeka, KS              1440       August 1, 2005     B        N.A.       5.0     1.0
                         KTOP       AM     Topeka, KS              1490       August 1, 2005     C        N.A.       1.0     1.0
Wichita Falls, TX......  KLUR       FM     Wichita Falls, TX       99.9       August 1, 2005     C1        830     100.0   100.0
                         KQXC       FM     Wichita Falls, TX      102.5       August 1, 2005     A         312       4.5     4.5
                         KYYI       FM     Burkburnett, TX        104.7       August 1, 2005     C        1017     100.0   100.0
                         KOLI       FM     Electra, TX             94.9       August 1, 2005     C2        492      50.0    50.0
NORTHEAST REGION
Augusta-Waterville,
ME.....................  WABK       FM     Gardiner, ME           104.3        April 1, 2006     B         371      50.0    50.0
                         WKCG       FM     Augusta, ME            101.3        April 1, 2006     B         322      50.0    50.0
                         WIGY       FM     Madison, ME             97.5        April 1, 2006     A         328       6.0     6.0
                                           Boothbay Harbor,
                         WCME       FM     ME                      96.7        April 1, 2006     B1        417      15.5    15.5
                         WFAU       AM     Gardiner, ME            1280        April 1, 2006     B        N.A.       5.0     5.0
                         WTOS       FM     Skowhegan, ME          105.1        April 1, 2006     C         243      50.0    50.0
                         WCTB       FM     Fairfield, ME           93.5        April 1, 2006     C3        499      10.5    10.5
                         WSKW       AM     Skowhegan, ME           1160        April 1, 2006     B        N.A.      10.0     7.3
Bangor, ME.............  WQCB       FM     Brewer, ME             106.5        April 1, 2006     C        1079      98.0    98.0
                         WBZN       FM     Old Town, ME           107.3        April 1, 2006     C2        436      50.0    50.0
                         WWMJ       FM     Ellsworth, ME           95.7        April 1, 2006     B        1030      11.5    11.5
                         WEZQ       FM     Bangor, ME              92.9        April 1, 2006     B         787      20.0    20.0
                         WDEA       AM     Ellsworth, ME           1370        April 1, 2006     B         5.0       5.0     5.0

19

Regulatory Approvals. The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast license without the prior approval of the FCC. In determining whether to grant or renew a broadcast license or permit it to be assigned or transferred, the FCC considers a number of factors pertaining to the licensee, including compliance with various rules limiting common ownership of media properties, financial qualifications of the licensee, the "character" of the licensee and those persons holding "attributable" interests, and compliance with the Communications Act's limitation on non-U.S. ownership, as well as compliance with other FCC rules and policies, including programming and filing requirements.

Once a station purchase agreement has been signed, an application for FCC consent to assignment of license or transfer of control (depending upon whether the underlying transaction is an asset purchase or stock acquisition) is filed with the FCC. The FCC publishes a notice assigning a file number to the application and advising the public that the application has been "accepted for filing." This notice begins a 30-day statutory waiting period, which provides the opportunity for third parties to file formal petitions to deny the transaction. Informal objections may be filed any time prior to the grant of an application.

Once the 30-day public notice period ends, the staff generally will complete its processing, assuming that no petitions or informal objections were received and that the application is otherwise consistent with FCC rules and acceptable to the staff. The staff often grants the application by delegated authority approximately 10 to 15 days after the public notice period ends. At this point, the parties are legally authorized to close the purchase, although the FCC action is not legally a "final order," and is subject to petitions seeking staff reconsideration or full FCC review of the staff action by the FCC on its own motion.

If no such reconsideration or review is sought or undertaken within 40 days after the grant of application, the grant becomes final by operation of law and generally is no longer subject to administrative or judicial review, although such action can nevertheless be set aside in rare circumstances.

The pendency of a license renewal application will alter the above timetables, because the FCC will not issue an unconditional assignment grant if the station's license renewal is pending.

Ownership Matters. Under the Communications Act, the Company is restricted to having no more than one-fourth of its stock owned or voted by non-U.S. persons, foreign governments or non-U.S. corporations. The Company will be required to take appropriate steps to monitor the citizenship of its shareholders, such as through representative samplings on a periodic basis, to provide a reasonable basis for certifying compliance with the foreign ownership restrictions of the Communications Act.

The Communications Act and FCC rules also generally restrict the common ownership, operation or control of radio broadcast stations serving the same local market, of a radio broadcast station and a television broadcast station serving the same local market, and of a radio broadcast station and a daily newspaper serving the same local market. Under these cross-ownership rules, absent waivers, we would not be permitted to acquire any daily newspaper or television broadcast station (other than low power television) in a local market where we then owned any radio broadcast station. The FCC's rules provide for the liberal grant of a waiver of the rule prohibiting common ownership of radio and television stations in the same geographic market in the top 25 television markets if certain conditions are satisfied. The Telecom Act directed the FCC to extend this waiver policy to stations in the top 50 television markets, although the FCC has not yet implemented this change. For purposes of these rules, a "market" is defined by reference to the signal coverage(s) of the station(s) involved.

The Telecom Act and the FCC's broadcast multiple ownership rules restrict the number of radio stations one person or entity may own, operate or control on a local level. These limits are:

- in a market with 45 or more commercial radio signals, an entity may own up to eight commercial radio stations, not more than five of which are in the same service (FM or AM);

- in a market with between 30 and 44 (inclusive) commercial radio signals, an entity may own up to seven commercial radio stations, not more than four of which are in the same service;

20

- in a market with between 15 and 29 (inclusive) commercial radio signals, an entity may own up to six commercial radio stations, not more than four of which are in the same service; and

- in a market with 14 or fewer commercial radio signals, an entity may own up to five commercial radio stations, not more than three of which are in the same service, except that an entity may not own more than 50% of the stations in such market

None of these multiple ownership rules requires any change in the Company's current ownership of radio broadcast stations or precludes consummation of the pending acquisitions, except that petitions to deny or informal objections have been filed against the acquisition of stations in the Grand Junction, Colorado; Tallahassee, Florida; Columbus-Starkville, Mississippi; and Augusta, Georgia markets alleging that such acquisitions would result in undue market concentration. These FCC rules and policies will limit the number of additional stations, which the Company may acquire in the future in certain of its markets. In addition, where acquisitions would result in certain local radio advertising revenue concentration thresholds being met the FCC staff has a policy of reviewing applications for proposed radio station acquisitions with respect to local market concentration concerns, and specifically invites public comment on such applications. Such policy may help trigger petitions to deny and informal objections against FCC applications for certain pending acquisitions and future acquisitions.

Because of these multiple and cross-ownership rules, a purchaser of voting stock of the Company which acquires an "attributable" interest in the Company may violate the FCC's rules if it also has an attributable or a non-attributable interest in other television or radio stations, or in daily newspapers, depending on the number and location of those radio or television stations or daily newspapers. Such a purchaser also may be restricted in the companies in which it may invest, to the extent that these investments give rise to an attributable interest. If an attributable shareholder of the Company violates any of these ownership rules, we may be unable to obtain from the FCC one or more authorizations needed to conduct our radio station business and may be unable to obtain FCC consents for certain future acquisitions.

The FCC generally applies its television/radio/newspaper cross-ownership rules and its broadcast multiple ownership rules by considering the "attributable," or cognizable interests held by a person or entity. A person or entity can have an interest in a radio station, television station or daily newspaper by being an officer, director, partner or shareholder of a company that owns that station or newspaper. Whether that interest is subject to the FCC's ownership rules is determined by the FCC's attribution rules. If an interest is attributable, the FCC treats the person or entity who holds that interest as the "owner" of the radio station, television station or daily newspaper in question, and therefore subject to the FCC's ownership rules.

With respect to a corporation, officers, directors and persons or entities that directly or indirectly can vote 5% or more of the corporation's stock (10% or more of such stock in the case of insurance companies, investment companies, bank trust departments and certain other "passive investors" that hold such stock for investment purposes only) generally are attributed with ownership of the radio stations, television stations and daily newspapers the corporation owns.

With respect to a partnership, the interest of a general partner is attributable, as is the interest of any limited partner who is "materially involved" in the media-related activities of the partnership. Debt instruments, nonvoting stock, options and warrants for voting stock that have not yet been exercised, limited partnership interests where the limited partner is not "materially involved" in the media-related activities of the partnership and where the limited partnership agreement expressly "insulates" the limited partner from such material involvement, and minority (under 5%) voting stock, generally do not subject their holders to attribution. However, the FCC is currently reviewing its rules on attribution of broadcast interests, and it may adopt stricter criteria. See "Proposed Changes" below.

In addition, the FCC has a "cross-interest" policy that under certain circumstances could prohibit a person or entity with an attributable interest in a broadcast station or daily newspaper from having a "meaningful" nonattributable interest in another broadcast station or daily newspaper in the same local market. Among other things, "meaningful" interests could include significant equity interests (including non-voting stock and otherwise "insulated" limited partnership interests) and significant employment positions.

21

This policy may limit the permissible investments a purchaser of the Company's voting stock may make or hold. It also may limit the Company's ability to acquire stations in the same local market in which any of the Company's non-attributable investors has an attributable media interest.

Programming and Operation. The Communications Act requires broadcasters to serve the "public interest." Broadcasters are required to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Complaints from listeners concerning a station's programming will be considered by the FCC when it evaluates the licensee's renewal application, but such complaints may be filed and considered at any time.

Stations also must pay regulatory and application fees to the FCC and follow various FCC rules that regulate, among other things, political advertising, the broadcast of obscene or indecent programming, sponsorship identification and technical operations (including limits on radio frequency radiation). In 1998, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FCC's rules requiring licensees to develop and implement programs designed to promote equal employment opportunities were unconstitutional. Subsequently, the FCC suspended its requirement that licensees submit reports to the FCC. The broadcast of contests and lotteries is regulated by FCC rules.

Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short-term" (less than the maximum term) renewal or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license.

The FCC rules also require applicants for new broadcast stations, renewals of broadcast licenses or modifications of existing licenses to inform the FCC at the time of filing such applications whether a new or existing broadcast facility would expose people to radio frequency radiation in excess of certain guidelines. The Company anticipates that compliance with these radio frequency radiation guidelines will not have a material effect on its business.

Local Marketing Agreements. Over the past six years, a number of radio stations, including certain of the Company's stations, have entered into what are commonly referred to as "local marketing agreements" or "time brokerage agreements." In a typical LMA, the licensee of a station makes available, for a fee, airtime on its station to a party, which supplies programming to be broadcast during that airtime, and collects revenues from advertising aired during such programming. LMAs are subject to compliance with the antitrust laws and the FCC's rules and policies, including the requirement that the licensee of each station maintain independent control over the programming and other operations of its own station. The FCC has held that such agreements do not violate the Communications Act as long as the licensee of the station that is being substantially programmed by another entity maintains complete responsibility for, and control over, operations of its broadcast stations and otherwise ensures compliance with applicable FCC rules and policies.

A station that brokers substantial time on another station in its market or engages in an LMA with a station in the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC's ownership rules, discussed above. As a result, a broadcast station may not enter into an LMA that allows it to program more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the FCC's local multiple ownership rules. FCC rules also prohibit a station from simulcasting more than 25% of its programming on another station in the same broadcast service (i.e., AM-AM or FM-FM) where the two stations serve substantially the same geographic area, whether the licensee owns the stations or owns one and programs the other through an LMA arrangement.

Proposed Changes. In December 1994, the FCC initiated a proceeding to solicit comment on whether it should revise its radio and television ownership "attribution" rules by, among other proposals:

- raising the basic benchmark for attributing ownership in a corporate licensee from 5% to 10% of the licensee's voting stock;

- increasing from 10% to 20% of the licensee's voting stock the attribution benchmark for "passive investors" in corporate licensees;

22

- restricting the availability of the attribution exemption when a single party controls more than 50% of the voting stock of a corporate licensee; and

- considering joint sales agreements, debt and non-voting stock interests to be attributable under certain circumstances.

The FCC has made no decision in these matters. At this time, no determination can be made as to what effect, if any, this proposed rulemaking will have on the Company.

From time to time Congress and the FCC have considered, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership and profitability of the Company's radio stations, result in the loss of audience share and advertising revenues for the Company's radio stations, and affect the ability of the Company to acquire additional radio stations or finance such acquisitions. Such matters include:

- the FCC's rules and regulations relating to political broadcasting; technical and frequency allocation matters;

- proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages on radio;

- changes in the FCC's cross-interest, multiple ownership and cross-ownership policies;

- changes to broadcast technical requirements; proposals to allow telephone or cable television companies to deliver audio and video programming to the home through existing phone lines; and

- proposals to limit the tax deductibility of advertising expenses by certain types of advertisers.

In February, 1999 the FCC proposed rules to authorize the operation of two new classes of low power FM radio stations; a 1,000-watt service and a 100-watt service. The FCC also requested comment on whether a third 1 to 10-watt service should be established, and whether any or all of such classes of new low power FM stations should be limited to non-commercial operations. While the Company cannot predict whether such rules will ultimately be adopted, such new low power stations, if permitted to be established, may compete with the Company's stations for advertising and other revenues and may cause interference with the Company's broadcast signals.

The FCC, on April 2, 1997, awarded two licenses for the provision of digital audio radio services. Under rules adopted for this service, licensees must begin construction of their space stations within one year, begin operating within four years, and be operating their entire system within six years. The Company cannot predict whether the service will be subscription-based or advertiser-supported. Digital technology also may be used in the future by terrestrial radio broadcast stations either on existing or alternate broadcasting frequencies, and the FCC has stated that it will consider making changes to its rules to permit AM and FM radio stations to offer digital audio broadcasting following industry analysis of technical standards and has invited and received comments on a petition requesting the FCC to initiate a rule making with respect to digital audio broadcasting. In addition, the FCC has authorized an additional 100 kHz of bandwidth for the AM band and on March 17, 1997, adopted an allotment plan for the expanded band which identified the 88 AM radio stations selected to move into the band. At the end of a five-year transition period, those licensees will be required to return to the FCC either the license for their existing AM band station or the license for the expanded AM band station.

In November, 1998 the FCC proposed rules that would require broadcast licensees to inform women and members of minority groups of job vacancies.

The Company cannot predict whether any of the foregoing proposed changes will be adopted or what other matters might be considered in the future, nor can it judge in advance what impact, if any, the implementation of any of these proposals or changes might have on its business.

The foregoing is a brief summary of certain provisions of the Communications Act, the Telecom Act and specific FCC rules and policies. This description does not purport to be comprehensive and reference should

23

be made to the Communications Act, the FCC's rules and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of radio broadcast stations.

Antitrust and Market Concentration Considerations. The Department of Justice, which evaluates transactions to determine whether those transactions should be challenged under the federal antitrust laws, has been active recently in its review of radio station acquisitions, particularly where an operator proposes to acquire additional stations in its existing markets or multiple stations in new markets. The Department of Justice has opened investigations with respect to the Company's pending acquisitions in Grand Junction, Colorado; and Tallahassee, Florida areas, which potentially affect the acquisition of up to an additional four stations in the aggregate. The Department of Justice has issued civil investigation demands to the Company and to other parties to those pending acquisitions and to the Company and the other party to an LMA with respect to three stations in the Montgomery, Alabama area, seeking additional information regarding market concentration issues. The Department of Justice has also informally requested that the Company supply certain information regarding the acquisition of additional two stations in the Augusta-Waterville, Maine area, and additional two stations in the Columbus, Georgia area. There can be no assurance that one or more of these pending acquisitions will not be the subject of an enforcement action by the Department of Justice or the Federal Trade Commission or that other pending acquisitions will not be the subject of investigation or action by the Department of Justice or the FCC. In addition, the FCC staff has stated publicly that it is currently reviewing proposed acquisitions with respect to local radio market concentration if publicly available sources indicate that, following such acquisitions, one party would receive 50% or more of the radio advertising revenues in such local radio market, or that any two parties would together receive 70% or more of such revenues, notwithstanding that the proposed acquisitions would comply with the station ownership limits in the Telecom Act and the FCC's multiple-ownership rule.

The FCC places a specific notation on the public notices with respect to proposed radio station acquisitions that it believes may raise local market concentration concerns inviting public comment on such matters. The FCC has placed such specific notations on the public notices with respect to the Company's pending acquisitions in the Tallahassee, Florida, Augusta-Waterville, Maine, and the Columbus, Georgia areas. FCC approval of a number of pending radio station acquisitions by various parties, including acquisitions by the Company in several markets has been delayed while this review is taking place. The FCC has issued a Notice of Inquiry, which, among other things, seeks public comment on these issues. There can be no assurance that the Department of Justice, the Federal Trade Commission or the FCC will not prohibit or require the restructuring of future acquisitions, including one or more of the pending acquisitions.

Competitors have also filed petitions or informal objections before the FCC on market concentration grounds in four markets (Grand Junction, Colorado; Columbus-Starkville, Mississippi; Tallahassee, Florida; and Augusta Georgia), and all such petitions or objections must be resolved before FCC approval can be obtained and the acquisitions consummated. The purchase agreements with respect to the proposed acquisitions permit either party to terminate such agreement if the acquisition has not been consummated by a certain date. While we have not been notified of the intent of any other party to a proposed acquisition to terminate a purchase agreement due to delays resulting from the failure of the FCC to approve a proposed acquisition, there can be no assurance that one or more agreements will not be terminated in the future.

For an acquisition meeting certain size thresholds, the Hart-Scott Rodino Act (the "HSR Act") and the rules promulgated thereunder require the parties to file Notification and Report Forms with the Federal Trade Commission and the Department of Justice and to observe specified waiting period requirements before consummating the transaction. If the agencies determine that the transaction does not raise significant antitrust issues, then they will either terminate the waiting period or allow it to expire after the initial thirty days. On the other hand, if either of the agencies determines that the transaction requires a more detailed investigation, then at the conclusion of the initial thirty-day period, it will issue a formal request for additional information ("Second Request").

During the initial thirty-day period after the filing, the agencies decide which of them will investigate the acquisition, which in the case of radio broadcasting has generally been the Department of Justice. The

24

issuance of a Second Request extends the waiting period until the twentieth calendar day after the date of substantial compliance by all parties to the acquisition.

Thereafter, such waiting period may only be extended by court order or with the consent of the parties. In practice, complying with a Second Request can take a significant amount of time. In addition, if the investigating agency raises substantive issues in connection with a proposed transaction, then the parties frequently engage in lengthy discussions or negotiations with the investigating agency concerning possible means of addressing those issues, including, but not limited to, persuading the agency that the proposed acquisition would not violate the antitrust laws, restructuring the proposed acquisition, divestiture of other assets of one or more parties, or abandonment of the transaction. Such discussions and negotiations can be time-consuming, and the parties may agree to delay consummation of the acquisition during their pendency.

At any time before or after the consummation of a proposed acquisition, the Department of Justice or the Federal Trade Commission could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition or seeking divestiture of the business acquired or other assets of the Company. Acquisitions that are not required to be reported under the HSR Act also may be investigated by the Department of Justice or the Federal Trade Commission under the antitrust laws before or after consummation. The Department of Justice can issue Civil Investigative Demands to require the production of documents and/or the testimony of witness, and may sue to enforce such demands in federal court.

The Department of Justice thus far has issued Civil Investigative Demands to the Company and to sellers of stations proposed to be acquired by the Company in three markets (Grand Junction, Colorado; Tallahassee, Florida; and Montgomery, Alabama), and has informally requested information with respect to pending acquisitions in two other markets; Augusta-Waterville, Maine and Columbus, Georgia; and there can be no assurance that additional demands will not be issued for other pending acquisitions or future acquisitions. In addition, private parties may under certain circumstances bring legal action to challenge an acquisition under the antitrust laws.

As part of its increased scrutiny of radio station acquisitions, the Department of Justice has stated publicly that it believes that commencement of operations under LMAs, joint sale agreements and other similar agreements customarily entered into in connection with radio station ownership transfers prior to the expiration of the waiting period under the HSR Act could violate the HSR Act. In connection with acquisitions subject to the waiting period under the HSR Act, the Company will not commence operation of any affected station to be acquired under an LMA or similar agreement until the waiting period has expired or been terminated.

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