**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        D.C. 20549**

**FORM        10-Q**

| [X] | QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                  ACT                  OF 1934 |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| [   ] | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                  ACT                  OF 1934 |
|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

**SALEM        COMMUNICATIONS CORPORATION**

| **DELAWARE**(STATE                  OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                                              |   | **77-0121400**(I.R.S.                  EMPLOYER IDENTIFICATION NUMBER) |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|
|                                                                                                                                     |   |                                                                   |
| **4880                  SANTA ROSA ROAD CAMARILLO, CALIFORNIA**(ADDRESS                  OF PRINCIPALEXECUTIVE                  OFFICES) |   | **93012**(                  ZIP CODE)                                  |

**REGISTRANT’S        TELEPHONE NUMBER, INCLUDING AREA CODE: (805) 987-0400**

|  Yes                  [X ]   |    No  [   ] |
|---------------------------------------------|------------------------------------------------------|

|  Large                  accelerated filer                  [   ]       |  Accelerated                  filer  [X ]    |  Non-accelerated                  filer  [   ] |
|--------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|------------------------------------------------------------------------------|

| Class                  A                                 |   | Outstanding                  at November 5, 2007 |
|----------------------------------------------------------|--------|--------------------------------------------------|
| Common                  Stock, $0.01 par value per share |   | 18,115,092                  shares               |

| Class                  B                                 |   | Outstanding                  at November 5, 2007 |
|----------------------------------------------------------|--------|--------------------------------------------------|
| Common                  Stock, $0.01 par value per share |   | 5,553,696                  shares                |

----

**SALEM        COMMUNICATIONS CORPORATION**

**INDEX**

|                                                                                                                                                                                                                                                 |   | PAGE                  NO. |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                                 |   |                      |   |
| COVER                  PAGE                                                                                                                                                                                                                          |   |                      |   |
| INDEX                                                                                                                                                                                                                                                |   |                      |   |
| PART                  I - FINANCIAL INFORMATION                                                                                                                                                                                                      |   |                      |   |
| Item 1.   Financial                  Statements                                                                                                                                                                                  |   |                      | 2      |   |
| Item 2.   Management’s                  Discussion and Analysis of Financial Condition               and                  Results of Operations |   |                      | 19     |   |
| Item 3.   Quantitative                  and Qualitative Disclosures About Market Risk                                                                                                                                            |   |                      | 30     |   |
| Item 4.   Controls                  and Procedures                                                                                                                                                                               |   |                      | 32     |   |
| PART                  II - OTHER INFORMATION                                                                                                                                                                                                         |   |                      | 32     |   |
| Item 1.    Legal                  Proceedings                                                                                                                                                                               |   |                      | 32     |   |
| Item                  1A. Risk Factors                                                                                                                                                                                                               |   |                      | 32     |   |
| Item 2.   Unregistered                  Sales of Equity Securities and Use of Proceeds                                                                                                                                           |   |                      | 33     |   |
| Item 3.   Defaults                  Upon Senior Securities                                                                                                                                                                       |   |                      | 33     |   |
| Item 4.   Submission                  of Matters to a Vote of Security Holders                                                                                                                                                   |   |                      | 33     |   |
| Item 5.   Other                  Information                                                                                                                                                                                     |   |                      | 33     |   |
| Item 6.   Exhibits                                                                                                                                                                                                               |   |                      | 33     |   |
| SIGNATURES                                                                                                                                                                                                                                           |   |                      | 44     |   |
| EXHIBIT                  INDEX                                                                                                                                                                                                                       |   |                      | 45     |   |

----

**FORWARD–LOOKING        STATEMENTS**

----

**PART        I - FINANCIAL        INFORMATION**

**SALEM        COMMUNICATIONS        CORPORATION**

**ITEM        1. FINANCIAL STATEMENTS        (UNAUDITED)**

----

**SALEM                  COMMUNICATIONS CORPORATION**

**CONDENSED                  CONSOLIDATED BALANCE SHEETS**

***(Dollars                  in thousands, except share data)***

|                                                                                                                                                                                                                                                                                                                                                      | December                            31, 2006  | **September                            30,****2007**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                      | (Note                            1)                | **(Unaudited)**                                            |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                |
| Current                            assets:                                                                                                                                                                                                                                                                                                                |                                               |                                                       |   |   |   |   |   |   |   |
| Cash                            and cash equivalents                                                                                                                                                                                                                                                                                                      |                                               |                                                       |   | $ | 710 |   |   |   | **$** | **673** |   |
| Trade                            accounts receivable (net of allowance for doubtful accounts                            of $7,606 in                            2006 and $7,617 in 2007)                                                                                                                                                                  |                                               |                                                       |   |   | 31,984 |   |   |   | ** ** | **31,359** |   |
| Other                            receivables                                                                                                                                                                                                                                                                                                              |                                               |                                                       |   |   | 551 |   |   |   | ** ** | **380** |   |
| Prepaid                            expenses                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 2,330 |   |   |   | ** ** | **2,584** |   |
| Income                            tax receivable                                                                                                                                                                                                                                                                                                          |                                               |                                                       |   |   | — |   |   |   | ** ** | **38** |   |
| Deferred                            income taxes                                                                                                                                                                                                                                                                                                          |                                               |                                                       |   |   | 5,020 |   |   |   | ** ** | **5,125** |   |
| Total                            current assets                                                                                                                                                                                                                                                                                                           |                                               |                                                       |   |   | 40,595 |   |   |   | ** ** | **40,159** |   |
| Property,                            plant and equipment (net of accumulated depreciation                            of $74,766 in 2006                            and $81,112 in 2007)                                                                                                                                                                   |                                               |                                                       |   |   | 128,713 |   |   |   | ** ** | **130,894** |   |
| Broadcast                            licenses                                                                                                                                                                                                                                                                                                             |                                               |                                                       |   |   | 476,544 |   |   |   | ** ** | **472,463** |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                  |                                               |                                                       |   |   | 20,606 |   |   |   | ** ** | **20,498** |   |
| Other                            indefinite-lived intangible assets                                                                                                                                                                                                                                                                                       |                                               |                                                       |   |   | 2,892 |   |   |   | ** ** | **2,892** |   |
| Amortizable                            intangible assets (net of accumulated amortization of                            $10,846 in 2006 and                            $13,181 in 2007)                                                                                                                                                                   |                                               |                                                       |   |   | 8,368 |   |   |   | ** ** | **6,771** |   |
| Bond                            issue costs                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 593 |   |   |   | ** ** | **481** |   |
| Bank                            loan fees                                                                                                                                                                                                                                                                                                                 |                                               |                                                       |   |   | 2,996 |   |   |   | ** ** | **2,237** |   |
| Fair                            value of interest rate swap agreements                                                                                                                                                                                                                                                                                    |                                               |                                                       |   |   | 1,290 |   |   |   | ** ** | **451** |   |
| Other                            assets                                                                                                                                                                                                                                                                                                                   |                                               |                                                       |   |   | 3,667 |   |   |   | ** ** | **4,545** |   |
| Total                            assets                                                                                                                                                                                                                                                                                                                   |                                               |                                                       |   | $ | 686,264 |   |   |   | **$** | **681,391** |   |
| **LIABILITIES                            AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                 |
| Current                            liabilities:                                                                                                                                                                                                                                                                                                           |
| Accounts                            payable                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   | $ | 3,421 |   |   |   | **$** | **1,546** |   |
| Accrued                            expenses                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 6,446 |   |   |   | ** ** | **5,636** |   |
| Accrued                            compensation and related expenses                                                                                                                                                                                                                                                                                      |                                               |                                                       |   |   | 7,033 |   |   |   | ** ** | **7,506** |   |
| Accrued                            interest                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 4,275 |   |   |   | ** ** | **3,829** |   |
| Deferred                            revenue                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 4,050 |   |   |   | ** ** | **4,732** |   |
| Current                            portion of long-term debt and capital lease obligations                                                                                                                                                                                                                                                                |                                               |                                                       |   |   | 2,048 |   |   |   | ** ** | **3,696** |   |
| Income                            taxes payable                                                                                                                                                                                                                                                                                                           |                                               |                                                       |   |   | 22 |   |   |   | ** ** | **—** |   |
| Total                            current liabilities                                                                                                                                                                                                                                                                                                      |                                               |                                                       |   |   | 27,295 |   |   |   | ** ** | **26,945** |   |
| Long-term                            debt and capital lease obligations, less current portion                                                                                                                                                                                                                                                             |                                               |                                                       |   |   | 358,978 |   |   |   | ** ** | **350,457** |   |
| Deferred                            income taxes                                                                                                                                                                                                                                                                                                          |                                               |                                                       |   |   | 53,935 |   |   |   | ** ** | **61,611** |   |
| Deferred                            revenue                                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 7,063 |   |   |   | ** ** | **7,358** |   |
| Other                            liabilities                                                                                                                                                                                                                                                                                                              |                                               |                                                       |   |   | 1,277 |   |   |   | ** ** | **1,302** |   |
| Total                            liabilities                                                                                                                                                                                                                                                                                                              |                                               |                                                       |   |   | 448,548 |   |   |   | ** ** | **447,673** |   |
| Commitments                            and contingencies                                                                                                                                                                                                                                                                                                  |
| Stockholders’                            equity:                                                                                                                                                                                                                                                                                                    |
| Class A                            common stock, $0.01 par value; authorized 80,000,000                            shares; 20,424,242                            issued and 18,293,824 outstanding at December 31, 2006                            and 20,432,742                            issued and 18,115,092 outstanding at September 30, 2007 |                                               |                                                       |   |   | 204 |   |   |   | ** ** | **204** |   |
| Class B                            common stock, $0.01 par value; authorized 20,000,000                            shares; 5,553,696                            issued and outstanding shares at December 31, 2006 and                            September 30,                            2007                                                      |                                               |                                                       |   |   | 56 |   |   |   | ** ** | **56** |   |
| Additional                            paid-in capital                                                                                                                                                                                                                                                                                                     |                                               |                                                       |   |   | 221,466 |   |   |   | ** ** | **224,013** |   |
| Retained                            earnings                                                                                                                                                                                                                                                                                                              |                                               |                                                       |   |   | 47,433 |   |   |   | ** ** | **43,350** |   |
| Treasury                            stock, at cost (2,130,418 shares at December 31, 2006                            and 2,317,650 at                            September 30, 2007)                                                                                                                                                                      |                                               |                                                       |   |   | (32,218 | ) |   |   | ** ** | **(34,006** | **)** |
| Accumulated                            other comprehensive income                                                                                                                                                                                                                                                                                         |                                               |                                                       |   |   | 775 |   |   |   | ** ** | **101** |   |
| Total                            stockholders’ equity                                                                                                                                                                                                                                                                                               |                                               |                                                       |   |   | 237,716 |   |   |   | ** ** | **233,718** |   |
| Total                            liabilities and stockholders’ equity                                                                                                                                                                                                                                                                               |                                               |                                                       |   | $ | 686,264 |   |   |   | **$** | **681,391** |   |
| See                            accompanying notes                                                                                                                                                                                                                                                                                                         |

----

**SALEM                  COMMUNICATIONS CORPORATION**

**CONDENSED          CONSOLIDATED STATEMENTS OF OPERATIONS**

***(Dollars          in thousands, except share and per share data)***

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **Three                    Months Ended** |       |   | **Nine                    Months Ended** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|--------|------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **September                    30,**      |       |   | **September                    30,**     |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2006                                      |       |   | **2007**                                 |       |   | 2006 |   |   | **2007** |   |
| Net                    broadcasting revenue                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                         | 52,509     |   |                                     | **$**      | **51,888** |   |   | $ | 154,664 |   |   | **$** | **155,978** |   |
| Non-broadcast                    revenue                                                                                                                                                                                                                                                                                                                                                                                               |   |                                      | 5,402      |   |                                     | ** ** | **6,208** |   |   |   | 13,338 |   |   | ** ** | **18,250** |   |
| Total                    revenue                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                      | 57,911     |   |                                     | ** ** | **58,096** |   |   |   | 168,002 |   |   | ** ** | **174,228** |   |
| Operating                    expenses:                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                      |       |   |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Broadcasting                    operating expenses, exclusive of depreciation and amortization                    shown below                    (including $202 and $311 for the quarter ended September 30,                    2006 and                    2007, respectively, and $816 and $927 for the nine months ended                    September                    30, 2006 and 2007, respectively, paid to related parties) |   |                                      | 31,821     |   |                                     | ** ** | **32,719** |   |   |   | 97,013 |   |   | ** ** | **98,831** |   |
| Non-broadcast                    operating expenses, exclusive of depreciation and amortization                    shown                    below                                                                                                                                                                                                                                                                                      |   |                                      | 5,311      |   |                                     | ** ** | **5,820** |   |   |   | 12,570 |   |   | ** ** | **16,743** |   |
| Corporate                    expenses, exclusive of depreciation and amortization shown below                    (including $47 and $192 for the quarter ended September 30, 2006                    and 2007,                    respectively, and $197 and $337 for the nine months ended September                    30,                    2006 and 2007, respectively, paid to related parties)                                  |   |                                      | 5,637      |   |                                     | ** ** | **5,425** |   |   |   | 18,333 |   |   | ** ** | **16,735** |   |
| Depreciation                    (including $261 and $181 for the quarter ended September 30 2006                    and 2007,                    respectively, and $486 and $470 for the nine months ended September                    30,                    2006 and 2007, respectively for non-broadcast businesses)                                                                                                               |   |                                      | 3,198      |   |                                     | ** ** | **2,973** |   |   |   | 9,056 |   |   | ** ** | **8,987** |   |
| Amortization                    (including $632 and $721 for the quarter ended September 30 2006                    and 2007,                    respectively, and $1,474 and $2,207 for the nine months ended                    September                    30, 2006 and 2007, respectively for non-broadcast                    businesses)                                                                                        |   |                                      | 759        |   |                                     | ** ** | **748** |   |   |   | 2,062 |   |   | ** ** | **2,334** |   |
| (Gain)                    loss on disposal of assets                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      | 167        |   |                                     | ** ** | **309** |   |   |   | (18,872 | ) |   | ** ** | **(2,326** | **)** |
| Total                    operating expenses                                                                                                                                                                                                                                                                                                                                                                                            |   |                                      | 46,893     |   |                                     | ** ** | **47,994** |   |   |   | 120,162 |   |   | ** ** | **141,304** |   |
| Operating                    income from continuing operations                                                                                                                                                                                                                                                                                                                                                                         |   |                                      | 11,018     |   |                                     | ** ** | **10,102** |   |   |   | 47,840 |   |   | ** ** | **32,924** |   |
| Other                    income (expense):                                                                                                                                                                                                                                                                                                                                                                                             |   |                                      |       |   |                                     |       |   |   |   |
| Interest                    income                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                      | 68         |   |                                     | ** ** | **52** |   |   |   | 114 |   |   | ** ** | **160** |   |
| Interest                    expense                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                      | (6,490     | )      |                                     | ** ** | **(6,375** | **)** |   |   | (19,857 | ) |   | ** ** | **(19,137** | **)** |
| Loss                    on early redemption of long-term debt                                                                                                                                                                                                                                                                                                                                                                          |   |                                      | (3,625     | )      |                                     | ** ** | **—** |   |   |   | (3,625 | ) |   | ** ** | **—** |   |
| Other                    income (expense), net                                                                                                                                                                                                                                                                                                                                                                                         |   |                                      | (120       | )      |                                     | ** ** | **83** |   |   |   | (466 | ) |   | ** ** | **230** |   |
| Income                    from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                               |   |                                      | 851        |   |                                     | ** ** | **3,862** |   |   |   | 24,006 |   |   | ** ** | **14,177** |   |
| Provision                    for income taxes                                                                                                                                                                                                                                                                                                                                                                                          |   |                                      | 200        |   |                                     | ** ** | **1,764** |   |   |   | 9,378 |   |   | ** ** | **6,190** |   |
| Income                    from continuing operations                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      | 651        |   |                                     | ** ** | **2,098** |   |   |   | 14,628 |   |   | ** ** | **7,987** |   |
| Income                    from discontinued operations, net of tax                                                                                                                                                                                                                                                                                                                                                                     |   |                                      | 802        |   |                                     | ** ** | **—** |   |   |   | 1,106 |   |   | ** ** | **—** |   |
| Net                    income                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                         | 1,453      |   |                                     | **$**      | **2,098** |   |   | $ | 15,734 |   |   | **$** | **7,987** |   |
| Other                    comprehensive income (loss), net of tax                                                                                                                                                                                                                                                                                                                                                                       |   |                                      | (1,468     | )      |                                     | ** ** | **(1,498** | **)** |   |   | 462 |   |   | ** ** | **(674** | **)** |
| Comprehensive                    income (loss)                                                                                                                                                                                                                                                                                                                                                                                         |   | $                                         | (15        | )      |                                     | **$**      | **600** |   |   | $ | 16,196 |   |   | **$** | **7,313** |   |
| Basic                    earnings per share from continuing operations                                                                                                                                                                                                                                                                                                                                                                 |   | $                                         | 0.03       |   |                                     | **$**      | **0.09** |   |   | $ | 0.60 |   |   | **$** | **0.34** |   |
| Income                    per share from discontinued operations                                                                                                                                                                                                                                                                                                                                                                       |   |                                      | 0.03       |   |                                     | ** ** | **—** |   |   |   | 0.05 |   |   | ** ** | **—** |   |
| Basic                    earnings per share                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                         | 0.06       |   |                                     | **$**      | **0.09** |   |   | $ | 0.65 |   |   | **$** | **0.34** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      |       |   |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Diluted                    earnings per share from continuing operations                                                                                                                                                                                                                                                                                                                                                               |   | $                                         | 0.03       |   |                                     | **$**      | **0.09** |   |   | $ | 0.60 |   |   | **$** | **0.34** |   |
| Income                    per share from discontinued operations                                                                                                                                                                                                                                                                                                                                                                       |   |                                      | 0.03       |   |                                     | ** ** | **—** |   |   |   | 0.05 |   |   | ** ** | **—** |   |
| Diluted                    earnings per share                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                         | 0.06       |   |                                     | **$**      | **0.09** |   |   | $ | 0.65 |   |   | **$** | **0.34** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      |       |   |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Basic                    weighted average shares outstanding                                                                                                                                                                                                                                                                                                                                                                           |   |                                      | 23,983,085 |   |                                     | ** ** | **23,772,647** |   |   |   | 24,338,649 |   |   | ** ** | **23,823,757** |   |
| Diluted                    weighted average shares outstanding                                                                                                                                                                                                                                                                                                                                                                         |   |                                      | 23,990,729 |   |                                     | ** ** | **23,776,449** |   |   |   | 24,347,388 |   |   | ** ** | **23,828,495** |   |
| See                    accompanying notes                                                                                                                                                                                                                                                                                                                                                                                              |   |

----

**SALEM      COMMUNICATIONS CORPORATION**

**CONDENSED        CONSOLIDATED STATEMENTS OF CASH FLOWS**

***(Dollars        in thousands)***

**(Unaudited)**

|                                                                                                                                                        |                                                                 |                                                       |        | **Nine                  Months Ended September 30,** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|------------------------------------------------------------|-------------|------------------------------------------------------|-------------|
|                                                                                                                                                        |                                                                 |                                                       |        | 2006                                                 |        |   | **2007** |   |
| **OPERATING                  ACTIVITIES**                                                                                                                   |                                                                 |                                                       |        |                                                 |        |   |   |   |
| Income                  from continuing operations                                                                                                          |                                                                 | $                                                          | 14,628      |                                                 |        | **$** | **7,987** |   |
| Adjustments                  to reconcile income from continuing operations to net cash provided                  by                  operating activities: |                                                                 |                                                       |        |                                                 |        |   |   |   |
|                                                                                                                                                        | Non-cash                  stock-based compensation                   |                                                       |        | 3,546                                                |        |   |   | **2,515** |   |
|                                                                                                                                                        | Loss                  on early redemption of debt                    |                                                       |        | 3,625                                                |        |   |   | **—** |   |
|                                                                                                                                                        | Depreciation                  and amortization                       |                                                       |        | 11,118                                               |        |   |   | **11,321** |   |
|                                                                                                                                                        | Amortization                  of bond issue costs and bank loan fees |                                                       |        | 1,069                                                |        |   |   | **871** |   |
|                                                                                                                                                        | Amortization                  and accretion of financing items       |                                                       |        | (214)                                                |        |   |   | **82** |   |
|                                                                                                                                                        | Provision                  for bad debts                             |                                                       |        | 2,572                                                |        |   |   | **1,875** |   |
|                                                                                                                                                        | Deferred                  income taxes                               |                                                       |        | 9,816                                                |        |   |   | **5,960** |   |
|                                                                                                                                                        | (Gain)                  loss on disposal of assets                   |                                                       |        | (18,872)                                             |        |   |   | **(2,326)** |   |
|                                                                                                                                                        | Changes                  in operating assets and liabilities:        |
|                                                                                                                                                        |                                                                 | Accounts                  receivable                       |        |                                                 | (2,557)     |   |   |   | **(1,117)** |   |
|                                                                                                                                                        |                                                                 | Prepaid                  expenses and other current assets |        |                                                 | (251)       |   |   |   | **(254)** |   |
|                                                                                                                                                        |                                                                 | Accounts                  payable and accrued expenses     |        |                                                 | 4,323       |   |   |   | **(1,829)** |   |
|                                                                                                                                                        |                                                                 | Deferred                  revenue                          |        |                                                 | 378         |   |   |   | **977** |   |
|                                                                                                                                                        |                                                                 | Other                  liabilities                         |        |                                                 | (174)       |   |   |   | **127** |   |
|                                                                                                                                                        |                                                                 | Income                  taxes payable                      |        |                                                 | **—** |   |   |   | **(22)** |   |
| Net                  cash provided by continuing operating activities                                                                                       |                                                                 |                                                       | 29,007      |                                                 |        |   | **26,167** |   |
| **INVESTING                  ACTIVITIES**                                                                                                                   |
| Capital                  expenditures                                                                                                                       |                                                                 |                                                       | (16,129)    |                                                 |        |   | **(11,959)** |   |
| Purchases                  of broadcast assets                                                                                                              |                                                                 |                                                       | (19,229)    |                                                 |        |   | **—** |   |
| Purchase                  of non-broadcast businesses                                                                                                       |                                                                 |                                                       | (11,246)    |                                                 |        |   | **(962)** |   |
| Proceeds                  from the disposal of property, plant and equipment                                                                                |                                                                 |                                                       | 2,208       |                                                 |        |   | **7,963** |   |
| Other                                                                                                                                                       |                                                                 |                                                       | (1,519)     |                                                 |        |   | **(747)** |   |
| Net                  cash used in investing activities of continuing operations                                                                             |                                                                 |                                                       | (45,915)    |                                                 |        |   | **(5,705)** |   |
| **FINANCING                  ACTIVITIES**                                                                                                                   |
| Proceeds                  from borrowings under credit facilities                                                                                           |                                                                 |                                                       | 153,000     |                                                 |        |   | **20,500** |   |
| Payments                  of long-term debt and notes payable                                                                                               |                                                                 |                                                       | (15,878)    |                                                 |        |   | **(29,624)** |   |
| Net                  borrowings and repayment on Swingline credit facility                                                                                  |                                                                 |                                                       | 599         |                                                 |        |   | **1,145** |   |
| Repurchase                  of Class A common stock                                                                                                         |                                                                 |                                                       | (20,679)    |                                                 |        |   | **(1,788)** |   |
| Payment                  of bond premium                                                                                                                    |                                                                 |                                                       | (4,231)     |                                                 |        |   | **—** |   |
| Payments                  to redeem 9% notes                                                                                                                |                                                                 |                                                       | (94,031)    |                                                 |        |   | **—** |   |
| Payment                  of dividend on common stock                                                                                                        |                                                                 |                                                       | (14,609)    |                                                 |        |   | **(10,010)** |   |
| Proceeds                  from exercise of stock options                                                                                                    |                                                                 |                                                       | 95          |                                                 |        |   | **30** |   |
| Tax                  benefit related to stock options exercised                                                                                             |                                                                 |                                                       | 1           |                                                 |        |   | **1** |   |
| Payments                  on capital lease obligations                                                                                                      |                                                                 |                                                       | (17)        |                                                 |        |   | **(24)** |   |
| Payments                  of costs related to bank credit facility and debt                  financing                                                      |                                                                 |                                                       | (273)       |                                                 |        |   | **—** |   |
| Book                  overdraft                                                                                                                             |                                                                 |                                                       | **—** |                                                 |        |   | **(729)** |   |
| Net                  cash provided by (used in) financing activities                                                                                        |                                                                 |                                                       | 3,977       |                                                 |        |   | **(20,499)** |   |
| **CASH                  FLOWS OF DISCONTINUED OPERATIONS**                                                                                                  |                                                                 |                                                       |        |                                                 |        |   |   |   |
|   Operating                  cash flows                                                                                                           |                                                                 |                                                       | (2,336)     |                                                 |        |   | **—** |   |
|   Investing                  cash flows                                                                                                           |                                                                 |                                                       | 11,778      |                                                 |        |   | **—** |   |
|           Total                  cash inflow from discontinued operations                            |                                                                 |                                                       | 9,442       |                                                 |        |   | **—** |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                                       |                                                                 |                                                       | (3,489)     |                                                 |        |   | **(37)** |   |
| Cash                  and cash equivalents at beginning of year                                                                                             |                                                                 |                                                       | 3,979       |                                                 |        |   | **710** |   |
| Cash                  and cash equivalents at end of period                                                                                                 |                                                                 | $                                                          | 490         |                                                 |        | **$** | **673** |   |
| **Supplemental                  disclosures of cash flow information:**                                                                                     |                                                                 |                                                       |        |                                                 |        |   |   |   |
|                                                                                                                                                        | Cash                  paid during the period for                     |                                                       |        |                                                 |        |   |
|                                                                                                                                                        |                                                                 | Interest                                                   |        | $                                                    | 19,012      |   |   | **$** | **18,691** |   |
|                                                                                                                                                        |                                                                 | Income                  taxes                              |        | $                                                    | 199         |   |   | **$** | **293** |   |
| **Non-cash                  investing and financing activities:**                                                                                           |                                                                 |                                                       |        |                                                 |        |   |   |   |
|    Assets** **acquired                  through capital lease obligations                                                               |                                                                 | $                                                          | **—** |                                                 |        | $ | **800** |   |

----

**SALEM          COMMUNICATIONS CORPORATION**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE          1. BASIS OF PRESENTATION**

**NOTE          2. RECLASSIFICATIONS**

**NOTE          3. ACQUISITIONS AND OTHER SIGNIFICANT TRANSACTIONS**

|                                            |   | Amount                                      |   |
|-------------------------------------------------|--------|---------------------------------------------|--------|
|                                            |   | *(Dollars                    in thousands)* |   |
| **Asset**                                       |   |                                        |   |
| Property                    and equipment       |   | $                                           | 130    |   |
| Domain                    and brand names       |   |                                        | 337    |   |
| Subscriber                    list              |   |                                        | 151    |   |
| Customer                    lists and contracts |   |                                        | 32     |   |
| Goodwill                                        |   |                                        | 21     |   |
|                                            |   | $                                           | 671    |   |

**Other          Pending Transactions:**

----

**   Discontinued          Operations:**

|                                                                     |   |                                                                             |   |                                                                                 |
|--------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|
|                                                                     |   | Three                    Months Ended September                    30, 2006 |   | Nine                      Months Ended September                      30, 2006  |
|                                                                     |   | *(Dollars                    in thousands)*                                      |
| Operating                    loss                                        |   | $                                                                                | (114)  |                                                                                 |   | $ | (274) |
| Gain                    on sale or exchange of radio stations            |   |                                                                             | 1,387  |                                                                                 |   |   | 2,043 |
| Gain                    from discontinued operations before income taxes |   |                                                                             | 1,273  |                                                                                 |   |   | 1,769 |
| Provision                    for income taxes                            |   |                                                                             | 471    |                                                                                 |   |   | 663 |
| Income                    from discontinued operations, net of tax       |   | $                                                                                | 802    |                                                                                 |   | $ | 1,106 |
|                                                                     |   |                                                                             |   |                                                                                 |   |   |   |

**NOTE          4. STOCK-BASED COMPENSATION**

----

|                                                                                                                     |   | **Three                      Months Ended**       |   |   | **Nine                      Months Ended** |       |
|--------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|--------|--------------------------------------------|------------|
|                                                                                                                     |   | **September                      30,**            |   |   | **September                      30,**     |       |
|                                                                                                                     |   | 2006                                              |   |   | **2007**                                   |       |   | 2006 |   |   | **2007** |   |
|                                                                                                                     |   | ***(Dollars                      in thousands)*** |   |
| Stock                      option compensation expense included in corporate expenses                                    |   | $                                                 | 671    |   |                                       | **$**      | **643** |   |   | $ | 2,845 |   |   | **$** | **1,741** |   |
| Restricted                      stock units compensation expense included in corporate                      expenses     |   |                                              | 22     |   |                                       | ** ** | **15** |   |   |   | 66 |   |   | ** ** | **47** |   |
| Stock                      option compensation expense included in broadcast operating                      expenses     |   |                                              | 211    |   |                                       |       | **180** |   |   |   | 584 |   |   | ** ** | **617** |   |
| Stock                      option compensation expense included in non-broadcast operating                      expenses |   |                                              | 22     |   |                                       | ** ** | **43** |   |   |   | 51 |   |   | ** ** | **110** |   |
|  Total                      stock-based compensation expense                                                        |   | $                                                 | 926    |   |                                       | **$**      | **881** |   |   | $ | 3,546 |   |   | **$** | **2,515** |   |
| Tax                      benefit from stock-based compensation expense                                                   |   |                                              | (361   | )      |                                       | ** ** | **(385** | **)** |   |   | (1,406 | ) |   | ** ** | **(1,108** | **)** |
| Total                      stock-based compensation expense net of tax benefit                                           |   | $                                                 | 565    |   |                                       | **$**      | **496** |   |   | $ | 2,140 |   |   | **$** | **1,407** |   |

*Stock            option and restricted stock grants*

|                                            |   | **Three                        Months Ended** |                                                |   | **Nine                        Months Ended** |       |
|-------------------------------------------------|--------|-----------------------------------------------|-----------------------------------------------------|--------|----------------------------------------------|------------|
|                                            |   | **September                        30,**      |                                                |   | **September                        30,**     |       |
|                                            |   | 2006                                          |                                                |   | **2007**                                     |       |   | 2006 |   |   | **2007** |   |
| Expected                        volatility      |   |                                          | 53.90                                               | %      |                                         | ** ** | **46.44** | **%** |   |   | 52.55 | % |   | ** ** | **44.76** | **%** |
| Expected                        dividends       |   |                                          | 0.0                                                 | %      |                                         | ** ** | **0.0** | **%** |   |   | 0.0 | % |   | ** ** | **0.0** | **%** |
| Expected                        term (in years) |   |                                          | 6                        -                        9 |   |                                         | ** ** | **6                        - 9** |   |   |   | 6–                        9 |   |   | ** ** | **6                        - 9** |   |
| Risk-free                        interest rate  |   |                                          | 4.80                                                | %      |                                         | ** ** | **4.16** | **%** |   |   | 4.93 | % |   | ** ** | **4.48** | **%** |

----

| Options                                                    |   | Shares     |          |   | Weighted                          Average Exercise Price |       | Weighted                          Average Remaining Contractual Term |   | Weighted                          Average Grant Date Fair Value |   |   | Aggregate                          Intrinsic Value |   |
|------------------------------------------------------------|--------|------------|---------------|--------|----------------------------------------------------------|------------|----------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|
| Outstanding                          at January 1, 2006    |   |       | 1,924,269     |   |                                                     | $          | 23.82                                                                |   |                                                            |   |   |                                               |   | $ | — |   |
| Granted                                                    |   |       | 361,950       |   |                                                     |       | 13.39                                                                |   |                                                            |   | $      | 7.47                                               |   |   |   | — |   |
| Exercised                                                  |   |       | (8,250        | )      |                                                     |       | 11.58                                                                |   |                                                            |   |   |                                               |   |   |   | 8,605 |   |
| Forfeited                          or expired              |   |       | (118,905      | )      |                                                     |       | 22.20                                                                |   |                                                            |   |   |                                               |   |   |   | — |   |
| Outstanding                          at September 30, 2006 |   |       | 2,159,064     |   |                                                     |       | 22.19                                                                |   | 4.8                          years                              |   |   |                                               |   |   |   | — |   |
| Exercisable                          at September 30, 2006 |   |       | 1,309,337     |   |                                                     |       | 25.25                                                                |   | 3.3                          years                              |   |   |                                               |   |   |   | — |   |
|                                                       |   |       |          |   |                                                     |       |                                                                 |   |                                                            |   |   |                                               |   |   |   |   |   |
| Outstanding                          at January 1, 2007    |   | ** ** | **2,146,564** |   |                                                     | **$**      | **22.30**                                                            |   |                                                            |   |   |                                               |   |   | **$** | — |   |
| Granted                                                    |   | ** ** | **393,900**   |   |                                                     | ** ** | **11.79**                                                            |   |                                                            |   | **$**  | **8.10**                                           |   |   |   | — |   |
| Exercised                                                  |   | ** ** | **(2,500**    | **)**  |                                                     | ** ** | **11.81**                                                            |   |                                                            |   |   |                                               |   |   | ** ** | **4,219** |   |
| Forfeited                          or expired              |   | ** ** | **(106,790**  | **)**  |                                                     | ** ** | **19.59**                                                            |   |                                                            |   |   |                                               |   |   |   | — |   |
| Outstanding                          at September 30, 2007 |   | ** ** | **2,431,174** |   |                                                     | **$**      | **20.73**                                                            |   | **4.5                          years**                          |   |   |                                               |   |   | ** ** | — |   |
| Exercisable                          at September 30, 2007 |   | ** ** | **1,436,762** |   |                                                     | **$**      | **24.32**                                                            |   | **2.8                          years**                          |   |   |                                               |   |   | ** ** | — |   |

| Restricted                          Stock Units           |   | Shares |    |   | Weighted                          Average Grant Date Fair Value |   |
|-----------------------------------------------------------|--------|--------|---------|--------|-----------------------------------------------------------------|--------|
| Non-Vested                          at January 1, 2006    |   |   | 5,000   |   |                                                            | $      | 17.90 |   |
| Granted                                                   |   |   | 6,000   |   |                                                            |   | 11.15 |   |
| Vested                                                    |   |   | (5,000  | )      |                                                            |   | 17.90 |   |
| Forfeited                                                 |   |   | — |   |                                                            |   | — |   |
| Non-Vested                          at September 30, 2006 |   |   | 6,000   |   |                                                            | $      | 11.15 |   |
|                                                      |   |   |    |   |                                                            |   |   |   |
| Non-Vested                          at January 1, 2007    |   |   | 6,000   |   |                                                            | $      | 11.15 |   |
| Granted                                                   |   |   | 5,000   |   |                                                            |   | 10.15 |   |
| Vested                                                    |   |   | (6,000  | )      |                                                            |   | 11.15 |   |
| Forfeited                                                 |   |   | — |   |                                                            |   | — |   |
| Non-Vested                          at September 30, 2007 |   |   | 5,000   |   |                                                            | $      | 10.15 |   |

**NOTE                5. OTHER COMPREHENSIVE INCOME (LOSS)**

|                                                       |   | **Three                          Months Ended**       |   |   | **Nine                          Months Ended** |       |
|------------------------------------------------------------|--------|-------------------------------------------------------|--------|--------|------------------------------------------------|------------|
|                                                       |   | **September                          30,**            |   |   | **September                          30,**     |       |
|                                                       |   | 2006                                                  |   |   | **2007**                                       |       |   | 2006 |   |   | **2007** |   |
|                                                       |   | ***(Dollars                          in thousands)*** |   |
| Mark-to-market                          gain (loss)        |   | $                                                     | (2,551 | )      |                                           | **$**      | **(2,496** | **)** |   | $ | 770 |   |   | **$** | **(1,123** | **)** |
| Less                          tax provision (benefit)      |   |                                                  | (1,083 | )      |                                           | ** ** | **(998** | **)** |   |   | 308 |   |   | ** ** | **(449** | **)** |
| Other                          comprehensive income (loss) |   | $                                                     | (1,468 | )      |                                           | **$**      | **(1,498** | **)** |   | $ | 462 |   |   | **$** | **(674** | **)** |

----

**NOTE                6. RECENT ACCOUNTING                PRONOUNCEMENTS**

***Statement                of Financial Accounting Standards No. 157***

***Statement                of Financial Accounting Standards No. 159***

**NOTE                7. EQUITY                TRANSACTIONS**

**NOTE                8. NOTES PAYABLE AND                LONG-TERM DEBT**

|                                                                       |   | December                          31, 2006        |    |   | **September                          30, 2007** |       |
|----------------------------------------------------------------------------|--------|---------------------------------------------------|---------|--------|-------------------------------------------------|------------|
|                                                                       |   | *(Dollars                          in thousands)* |    |
| Term                          loans under credit facility                  |   | $                                                 | 238,125 |   |                                            | **$**      | **236,100** |   |
| Revolving                          line of credit under credit facility    |   |                                              | 19,100  |   |                                            | ** ** | **12,000** |   |
| Swingline                          credit facility                         |   |                                              | 1,241   |   |                                            | ** ** | **2,387** |   |
| 73⁄4%                          Senior Subordinated Notes due 2010       |   |                                              | 100,000 |   |                                            | ** ** | **100,000** |   |
| Fair                          market value of interest rate swap agreement |   |                                              | — |   |                                            | ** ** | **284** |   |
| Seller                          financed note to acquire Townhall.com      |   |                                              | 2,444   |   |                                            | ** ** | **2,526** |   |
| Capital                          leases and other loans                    |   |                                              | 116     |   |                                            | ** ** | **856** |   |
|                                                                       |   |                                              | 361,026 |   |                                            | ** ** | **354,153** |   |
| Less                          current portion                              |   |                                              | 2,048   |   |                                            | ** ** | **3,696** |   |
|                                                                       |   | $                                                 | 358,978 |   |                                            | **$**      | **350,457** |   |

----

**Maturities      of Long-Term Debt**

| Twelve                Months Ended September 30, |   | Amount                                  |        |
|--------------------------------------------------|--------|-----------------------------------------|-------------|
|                                             |   | *(Dollars                in thousands)* |        |
| 2008                                             |   | **$**                                   | **3,696**   |   |
| 2009                                             |   | ** **                              | **18,088**  |   |
| 2010                                             |   | ** **                              | **231,335** |   |
| 2011                                             |   | ** **                              | **100,024** |   |
| 2012                                             |   | ** **                              | **30**      |   |
| Thereafter                                       |   | ** **                              | **696**     |   |
|                                             |   | ** **                              | **353,869** |   |
| Fair                value of interest rate swap  |   | ** **                              | **284**     |   |
|                                             |   | **$**                                   | **354,153** |   |

**NOTE      9. AMORTIZABLE INTANGIBLE      ASSETS**

|                                               |   | **As                of September 30, 2007** |   |
|----------------------------------------------------|--------|---------------------------------------------|--------|
|                                               |   |                                        |   |   | Accumulated |   |   |   |   |
|                                               |   | Cost                                        |   |   | Amortization |   |   | **Net** |   |
|                                               |   | *(Dollars                in thousands)*     |   |
|                                               |   |                                        |   |
| Customer                lists and contracts        |   | $                                           | 10,588 |   |   | $ | (7,292 | ) |   | **$** | **3,296** |   |
| Domain                and brand names              |   |                                        | 4,906  |   |   |   | (2,262 | ) |   | ** ** | **2,644** |   |
| Favorable                and assigned leases       |   |                                        | 1,581  |   |   |   | (1,209 | ) |   | ** ** | **372** |   |
| Other                amortizable intangible assets |   |                                        | 2,877  |   |   |   | (2,418 | ) |   | ** ** | **459** |   |
|                                               |   | $                                           | 19,952 |   |   | $ | (13,181 | ) |   | **$** | **6,771** |   |

|                                               |   | **As                of December 31, 2006** |   |
|----------------------------------------------------|--------|--------------------------------------------|--------|
|                                               |   |                                       |   |   | Accumulated |   |   |   |   |
|                                               |   | Cost                                       |   |   | Amortization |   |   | Net |   |
|                                               |   | *(Dollars                in thousands)*    |   |
|                                               |   |                                       |   |
| Customer                lists and contracts        |   | $                                          | 10,404 |   |   | $ | (6,030 | ) |   | $ | 4,374 |   |
| Domain                and brand names              |   |                                       | 4,487  |   |   |   | (1,533 | ) |   |   | 2,954 |   |
| Favorable                and assigned leases       |   |                                       | 1,581  |   |   |   | (1,144 | ) |   |   | 437 |   |
| Other                amortizable intangible assets |   |                                       | 2,742  |   |   |   | (2,139 | ) |   |   | 603 |   |
|                                               |   | $                                          | 19,214 |   |   | $ | (10,846 | ) |   | $ | 8,368 |   |

| **Year                Ending**                      |   |   | **Amortization                Expense** |   |
|-----------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                |   |   | *(Dollars                in thousands)* |   |
| 2007                (October 1 – December 31) |   |   | $                                       | 700    |   |
| 2008                                                |   |   |                                    | 2,667  |   |
| 2009                                                |   |   |                                    | 1,417  |   |
| 2010                                                |   |   |                                    | 933    |   |
| 2011                                                |   |   |                                    | 369    |   |
| Thereafter                                          |   |   |                                    | 685    |   |
| Total                                               |   |   | $                                       | 6,771  |   |

----

**NOTE      10. BASIC AND DILUTED EARNINGS PER SHARE**

**NOTE      11. DERIVATIVE      INSTRUMENTS**

----

**Interest      Rate Caps**

**NOTE      12. INCOME      TAXES**

**NOTE      13. COMMITMENTS AND      CONTINGENCIES**

----

**NOTE        14. SEGMENT DATA**

|                                                                                                                                              |   | **Radio                  Broadcasting**   |   |   | **Non-broadcast** |    |   | **Corporate** |   |    | **Consolidated** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|-------------------|---------|--------|---------------|--------|---------|------------------|--------|
|                                                                                                                                              |   |                                      |   |   |              |    |   |          |   |    |             |   |
|                                                                                                                                              |   | *(Dollars                  in thousands)* |   |
| **Three                  Months Ended September 30, 2006**                                                                                        |   |                                      |   |   |              |    |   |          |   |    |             |   |
| Net                  revenue                                                                                                                      |   | $                                         | 52,509 |   |              | $       | 5,402  |          |   | $       | —          |   |   | $ | 57,911 |   |
| Operating                  expenses                                                                                                               |   |                                      | 31,821 |   |              |    | 5,311  |          |   |    | 5,637            |   |   |   | 42,769 |   |
| Operating                  income (loss before depreciation, amortization and (gain) loss                  on disposal                  of assets |   |                                      | 20,688 |   |              |    | 91     |          |   |    | (5,637           | )      |   |   | 15,142 |   |
| Depreciation                                                                                                                                      |   |                                      | 2,640  |   |              |    | 261    |          |   |    | 297              |   |   |   | 3,198 |   |
| Amortization                                                                                                                                      |   |                                      | 122    |   |              |    | 632    |          |   |    | 5                |   |   |   | 759 |   |
| Operating                  income (loss) before income taxes                                                                                      |   |  $                                   | 17,926 |   |              |  $ | (802   | )             |   |  $ | (5,939           | )      |   |  $ | 11,185 |   |

| **Three                  Months Ended September 30, 2007**                                                                                         |   |    |   |   |   |    |   |   |   |    |    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|---------|--------|
| Net                  revenue                                                                                                                       |   | $       | 51,888 |   |   | $       | 6,208  |   |   | $       | — |   |   | **$** | **58,096** |   |
| Operating                  expenses                                                                                                                |   |    | 32,719 |   |   |    | 5,820  |   |   |    | 5,425   |   |   | ** ** | **43,964** |   |
| Operating                  income (loss) before depreciation, amortization and (gain) loss                  on                  disposal of assets |   |    | 19,169 |   |   |    | 388    |   |   |    | (5,425  | )      |   | ** ** | **14,132** |   |
| Depreciation                                                                                                                                       |   |    | 2,511  |   |   |    | 181    |   |   |    | 281     |   |   | ** ** | **2,973** |   |
| Amortization                                                                                                                                       |   |    | 23     |   |   |    | 721    |   |   |    | 4       |   |   | ** ** | **748** |   |
| Operating                  income (loss) before income taxes                                                                                       |   |  $ | 16,635 |   |   |  $ | (514   | )      |   |  $ | (5,710  | )      |   | ** $** | **10,411** |   |

|                                                                                                                                               |   | **Radio                  Broadcasting**   |    |   | **Non-broadcast** |    |   | **Corporate** |   |    | **Consolidated** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|--------|-------------------|---------|--------|---------------|--------|---------|------------------|--------|
|                                                                                                                                               |   |                                      |    |   |              |    |   |          |   |    |             |   |
|                                                                                                                                               |   | *(Dollars                  in thousands)* |    |
| **Nine                  Months Ended September 30, 2006**                                                                                          |   |                                      |    |   |              |    |   |          |   |    |             |   |
| Net                  revenue                                                                                                                       |   | $                                         | 154,664 |   |              | $       | 13,338 |          |   | $       | —          |   |   | $ | 168,002 |   |
| Operating                  expenses                                                                                                                |   |                                      | 97,013  |   |              |    | 12,570 |          |   |    | 18,333           |   |   |   | 127,916 |   |
| Operating                  income (loss) before depreciation, amortization and (gain) loss                  on                  disposal of assets |   |                                      | 57,651  |   |              |    | 768    |          |   |    | (18,333          | )      |   |   | 40,086 |   |
| Depreciation                                                                                                                                       |   |                                      | 7,690   |   |              |    | 486    |          |   |    | 880              |   |   |   | 9,056 |   |
| Amortization                                                                                                                                       |   |                                      | 574     |   |              |    | 1,474  |          |   |    | 14               |   |   |   | 2,062 |   |
| Operating                  income (loss) before income taxes                                                                                       |   |  $                                   | 49,387  |   |              |  $ | (1,192 | )             |   |  $ | (19,227          | )      |   |  $ | 28,968 |   |

| **Nine                  Months Ended September 30, 2007**                                                                                          |   |    |    |   |   |    |   |   |   |    |    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|---------|--------|
| Net                  revenue                                                                                                                       |   | $       | 155,978 |   |   | $       | 18,250 |   |   | $       | — |   |   | **$** | **174,228** |   |
| Operating                  expenses                                                                                                                |   |    | 98,831  |   |   |    | 16,743 |   |   |    | 16,735  |   |   | ** ** | **132,309** |   |
| Operating                  income (loss) before depreciation, amortization and (gain) loss                  on                  disposal of assets |   |    | 57,147  |   |   |    | 1,507  |   |   |    | (16,735 | )      |   | ** ** | **41,919** |   |
| Depreciation                                                                                                                                       |   |    | 7,673   |   |   |    | 470    |   |   |    | 844     |   |   | ** ** | **8,987** |   |
| Amortization                                                                                                                                       |   |    | 113     |   |   |    | 2,207  |   |   |    | 14      |   |   | ** ** | **2,334** |   |
| Operating                  income (loss) before income taxes                                                                                       |   |  $ | 49,361  |   |   |  $ | (1,170 | )      |   |  $ | (17,593 | )      |   | ** $** | **30,598** |   |

----

**NOTE        14. SEGMENT DATA (CONTINUED)**

|                                                      |   | **Radio                  Broadcasting**   |    |   | **Non-broadcast** |   |   | **Corporate** |   |   | **Consolidated** |   |
|-----------------------------------------------------------|--------|-------------------------------------------|---------|--------|-------------------|--------|--------|---------------|--------|--------|------------------|--------|
|                                                      |   |                                      |    |   |              |   |   |          |   |   |             |   |
|                                                      |   | *(Dollars                  in thousands)* |    |
| **December                  31, 2006**                    |   |                                      |    |   |              |   |   |          |   |   |             |   |
| Total                  property, plant and equipment, net |   | $                                         | 115,604 |   |              | $      | 2,830  |          |   | $      | 10,279           |   |   | $ | 128,713 |   |
| Goodwill                                                  |   |                                      | 5,011   |   |              |   | 15,587 |          |   |   | 8                |   |   |   | 20,606 |   |
| **September                  30, 2007**                   |   |                                      |    |   |              |   |   |          |   |   |             |   |   |   |   |   |
| Total                  property, plant and equipment, net |   | $                                         | 115,875 |   |              | $      | 4,897  |          |   | $      | 10,122           |   |   | **$** | **130,894** |   |
| Goodwill                                                  |   |                                      | 4,857   |   |              |   | 15,633 |          |   |   | 8                |   |   | ** ** | **20,498** |   |

| ***Reconciliation                  of operating income from continuing operations before depreciation,                  amortization, and (gain) loss on disposal of assets to income from                  continuing operations before income taxes:*** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                |   | **Three                  Months Ended** |   |   | **Nine                  months Ended** |   |
|                                                                                                                                                                                                                                                                |   | **September                  30,** |   |   | **September                  30,** |   |
|                                                                                                                                                                                                                                                                |   | 2006 |   |   | **2007** |   |   | 2006 |   |   | **2007** |   |
|                                                                                                                                                                                                                                                                |   | *(Dollars                  in thousands)* |   |
| Operating                  income before depreciation, amortization, and gain (loss) on disposal                  of                  assets                                                                                                                        |   | $ | 15,142 |   |   | **$** | **14,132** |   |   | $ | 40,086 |   |   | **$** | **41,919** |   |
| Depreciation                  expense                                                                                                                                                                                                                               |   |   | (3,198 | ) |   | ** ** | **(2,973** | **)** |   |   | (9,056 | ) |   | ** ** | **(8,987** | **)** |
| Amortization                  expense                                                                                                                                                                                                                               |   |   | (759 | ) |   | ** ** | **(748** | **)** |   |   | (2,062 | ) |   | ** ** | **(2,334** | **)** |
| Interest                  income                                                                                                                                                                                                                                    |   |   | 68 |   |   | ** ** | **52** |   |   |   | 114 |   |   | ** ** | **160** |   |
| Gain                  (loss) on disposal of assets                                                                                                                                                                                                                  |   |   | (167 | ) |   | ** ** | **(309** | **)** |   |   | 18,872 |   |   | ** ** | **2,326** |   |
| Interest                  expense                                                                                                                                                                                                                                   |   |   | (6,490 | ) |   | ** ** | **(6,375** | **)** |   |   | (19,857 | ) |   | ** ** | **(19,137** | **)** |
| Loss                  on early redemption of long-term debt                                                                                                                                                                                                         |   |   | (3,625 | ) |   |   | — |   |   |   | (3,625 | ) |   |   | — |   |
| Other                  income (expense), net                                                                                                                                                                                                                        |   |   | (120 | ) |   | ** ** | **83** |   |   |   | (466 | ) |   | ** ** | **230** |   |
| Income                  from continuing operations before income taxes                                                                                                                                                                                              |   | $ | 851 |   |   | **$** | **3,862** |   |   | $ | 24,006 |   |   | **$** | **14,177** |   |

**NOTE      15. CONDENSED      CONSOLIDATING FINANCIAL STATEMENTS**

----

**NOTE      15. CONDENSED      CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)**

**SALEM      COMMUNICATIONS CORPORATION**

**CONDENSED      CONSOLIDATING BALANCE SHEET**

**(Unaudited)**

***(Dollars      in thousands)***

|                                                    |   | As                of September 30, 2007 |
|---------------------------------------------------------|--------|-----------------------------------------|
|                                                    |   |                                    |   |   |   |   |   |   |   |   | Issuer                and |
|                                                    |   |                                    |   |   |   |   |   |   |   |   | Guarantor |
|                                                    |   | Guarantors                              |   |   | Subsidiaries |
|                                                    |   | Parent                                  |   |   | AcquisitionCo |   |   | Other                  Media |   |   | Salem                Holding |   |   | Adjustments |   |   | Salem                Consolidated |
| Current                assets:                          |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents           |   | $                                       | — |   |   | $ | 95 |   |   | $ | 255 |   |   | $ | 323 |   |   | $ | — |   |   | $ | 673 |
| Trade                accounts receivable, net      |   |                                    | — |   |   |   | 3,002 |   |   |   | 772 |   |   |   | 27,682 |   |   |   | (97 | ) |   |   | 31,359 |
| Other                receivables                        |   |                                    | — |   |   |   | 8 |   |   |   | 5 |   |   |   | 367 |   |   |   | — |   |   |   | 380 |
| Prepaid                expenses                    |   |                                    | — |   |   |   | 83 |   |   |   | 260 |   |   |   | 2,241 |   |   |   | — |   |   |   | 2,584 |
| Income                tax receivable                    |   |                                    | — |   |   |   | 7 |   |   |   | (3 | ) |   |   | 34 |   |   |   | — |   |   |   | 38 |
| Deferred                income taxes               |   |                                    | — |   |   |   | 362 |   |   |   | 142 |   |   |   | 4,621 |   |   |   | — |   |   |   | 5,125 |
| Total                current assets                |   |                                    | — |   |   |   | 3,557 |   |   |   | 1,431 |   |   |   | 35,268 |   |   |   | (97 | ) |   |   | 40,159 |
| Investment                in subsidiaries               |   |                                    | 226,266 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (226,266 | ) |   |   | — |
| Property,                plant and equipment, net  |   |                                    | — |   |   |   | 8,232 |   |   |   | 576 |   |   |   | 122,086 |   |   |   | — |   |   |   | 130,894 |
| Broadcast                licenses                  |   |                                    | — |   |   |   | 94,473 |   |   |   | — |   |   |   | 377,990 |   |   |   | — |   |   |   | 472,463 |
| Goodwill                                           |   |                                    | — |   |   |   | 10,281 |   |   |   | 2,575 |   |   |   | 7,642 |   |   |   | — |   |   |   | 20,498 |
| Other                indefinite-lived intangible assets |   |                                    | — |   |   |   | — |   |   |   | 2,892 |   |   |   | — |   |   |   | — |   |   |   | 2,892 |
| Amortizable                intangible assets, net  |   |                                    | — |   |   |   | 4,276 |   |   |   | 1,106 |   |   |   | 1,389 |   |   |   | — |   |   |   | 6,771 |
| Bond                issue costs                    |   |                                    | — |   |   |   | — |   |   |   | — |   |   |   | 481 |   |   |   | — |   |   |   | 481 |
| Bank                loan fees                      |   |                                    | — |   |   |   | — |   |   |   | — |   |   |   | 2,237 |   |   |   | — |   |   |   | 2,237 |
| FV                of interest rate swap                 |   |                                    | — |   |   |   | — |   |   |   | — |   |   |   | 451 |   |   |   | — |   |   |   | 451 |
| Intercompany                receivables            |   |                                    | 99,944 |   |   |   | 10,845 |   |   |   | — |   |   |   | 114,768 |   |   |   | (225,557 | ) |   |   | — |
| Other                assets                        |   |                                    | — |   |   |   | 60 |   |   |   | 30 |   |   |   | 4,455 |   |   |   | — |   |   |   | 4,545 |
| Total                assets                        |   | $                                       | 326,210 |   |   | $ | 131,724 |   |   | $ | 8,610 |   |   | $ | 666,767 |   |   | $ | (451,920 | ) |   | $ | 681,391 |

----

**NOTE      15. CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)**

**SALEM      COMMUNICATIONS CORPORATION**

**CONDENSED      CONSOLIDATING BALANCE SHEET**

**(Unaudited)**

***(Dollars      in thousands)***

|                                                                  |   | As                of September 30, 2007 |    |
|-----------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                  |   |                                    |    |   |   |   |   |   |   |   | Issuer                and |   |
|                                                                  |   |                                    |    |   |   |   |   |   |   |   | Guarantor |   |
|                                                                  |   | Guarantors                              |    |   | Subsidiaries |   |
|                                                                  |   |                                    |    |   |   |   |   | Other |   |   |   |   |   |   |   |   | Salem |   |
|                                                                  |   | Parent                                  |    |   | AcquisitionCo |   |   | Media |   |   | Salem                Holding |   |   | Adjustments |   |   | Consolidated |   |
| Current                liabilities:                              |   |                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                payable                                  |   | $                                       | — |   |   | $ | (48 | ) |   | $ | 46 |   |   | $ | 1,548 |   |   | $ | — |   |   | $ | 1,546 |   |
| Accrued                expenses                                  |   |                                    | — |   |   |   | 476 |   |   |   | 410 |   |   |   | 4,914 |   |   |   | (164 | ) |   |   | 5,636 |   |
| Accrued                compensation and related expenses         |   |                                    | — |   |   |   | 895 |   |   |   | 186 |   |   |   | 6,425 |   |   |   | — |   |   |   | 7,506 |   |
| Accrued                interest                                       |   |                                    | — |   |   |   | — |   |   |   | — |   |   |   | 3,829 |   |   |   | — |   |   |   | 3,829 |   |
| Deferred                revenue                                  |   |                                    | — |   |   |   | — |   |   |   | 4,171 |   |   |   | 561 |   |   |   | — |   |   |   | 4,732 |   |
| Current                maturities of long-term debt                   |   |                                    | — |   |   |   | 1,242 |   |   |   | — |   |   |   | 2,454 |   |   |   | — |   |   |   | 3,696 |   |
| Total                current liabilities                         |   |                                    | — |   |   |   | 2,565 |   |   |   | 4,813 |   |   |   | 19,731 |   |   |   | (164 | ) |   |   | 26,945 |   |
| Intercompany                payables                             |   |                                    | 91,413  |   |   |   | 107,685 |   |   |   | 15,728 |   |   |   | 10,664 |   |   |   | (225,490 | ) |   |   | — |   |
| Long-term                debt                                         |   |                                    | — |   |   |   | 1,325 |   |   |   | — |   |   |   | 348,848 |   |   |   | — |   |   |   | 350,173 |   |
| Fair                value of interest rate swap                       |   |                                    | — |   |   |   | — |   |   |   | — |   |   |   | 284 |   |   |   | — |   |   |   | 284 |   |
| Deferred                income taxes                             |   |                                    | 1,079   |   |   |   | 13,134 |   |   |   | (9,876 | ) |   |   | 57,274 |   |   |   | — |   |   |   | 61,611 |   |
| Deferred                revenue                                  |   |                                    | — |   |   |   | 492 |   |   |   | (1,518 | ) |   |   | 8,384 |   |   |   | — |   |   |   | 7,358 |   |
| Other                liabilities                                 |   |                                    | — |   |   |   | 19 |   |   |   | — |   |   |   | 1,283 |   |   |   | — |   |   |   | 1,302 |   |
| Stockholders’                equity                        |   |                                    | 233,718 |   |   |   | 6,504 |   |   |   | (537 | ) |   |   | 220,299 |   |   |   | (226,266 | ) |   |   | 233,718 |   |
| Total                liabilities and stockholders’ equity  |   | $                                       | 326,210 |   |   | $ | 131,724 |   |   | $ | 8,610 |   |   | $ | 666,767 |   |   | $ | (451,920 | ) |   | $ | 681,391 |   |

----

**NOTE      15. CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)**

**SALEM      COMMUNICATIONS CORPORATION**

**CONDENSED      CONSOLIDATING STATEMENT OF OPERATIONS**

**(Unaudited)**

***(Dollars      in thousands)***

|                                                                |   | Nine                months Ended September 30, 2007 |    |
|---------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                |   |                                                |    |   |   |   |   |   |   |   | Issuer                and |   |
|                                                                |   |                                                |    |   |   |   |   |   |   |   | Guarantor |   |
|                                                                |   | Guarantors                                          |    |   | Subsidiaries |   |
|                                                                |   |                                                |    |   |   |   |   | Other |   |   |   |   |   |   |   |   | Salem |   |
|                                                                |   | Parent                                              |    |   | AcquisitionCo |   |   | Media |   |   | Salem                Holding |   |   | Adjustments |   |   | Consolidated |   |
| Net                broadcasting revenue                        |   | $                                                   | — |   |   | $ | 8,549 |   |   | $ | — |   |   | $ | 149,399 |   |   | $ | (1,970 | ) |   | $ | 155,978 |   |
| Non-broadcast  revenue                               |   |                                                | — |   |   |   | 9,678 |   |   |   | 5,241 |   |   |   | 4,048 |   |   |   | (717 | ) |   |   | 18,250 |   |
| Total                revenue                                   |   |                                                | — |   |   |   | 18,227 |   |   |   | 5,241 |   |   |   | 153,447 |   |   |   | (2,687 | ) |   |   | 174,228 |   |
| Operating                expenses:                             |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Broadcasting                operating expenses                 |   |                                                | — |   |   |   | 5,850 |   |   |   | — |   |   |   | 92,892 |   |   |   | 89 |   |   |   | 98,831 |   |
| Non-broadcast  operating                expenses     |   |                                                | — |   |   |   | 9,397 |   |   |   | 6,249 |   |   |   | 3,117 |   |   |   | (2,020 | ) |   |   | 16,743 |   |
| Corporate                expenses                              |   |                                                | — |   |   |   | 1,020 |   |   |   | — |   |   |   | 16,471 |   |   |   | (756 | ) |   |   | 16,735 |   |
| Depreciation                                                        |   |                                                | — |   |   |   | 747 |   |   |   | 116 |   |   |   | 8,124 |   |   |   | — |   |   |   | 8,987 |   |
| Amortization                                                        |   |                                                | — |   |   |   | 1,254 |   |   |   | 348 |   |   |   | 732 |   |   |   | — |   |   |   | 2,334 |   |
| Gain                (loss) on disposal of assets               |   |                                                | — |   |   |   | 2 |   |   |   | — |   |   |   | (2,328 | ) |   |   | — |   |   |   | (2,326 | ) |
| Total                operating expenses                        |   |                                                | — |   |   |   | 18,270 |   |   |   | 6,713 |   |   |   | 119,008 |   |   |   | (2,687 | ) |   |   | 141,304 |   |
| Operating                income (loss)                              |   |                                                | — |   |   |   | (43 | ) |   |   | (1,472 | ) |   |   | 34,439 |   |   | ­— |   |   |   | 32,924 |   |
| Other                income (expense):                         |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                in earnings of consolidated subsidiaries, net |   |                                                | 8,525   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (8,525 | ) |   |   | — |   |
| Interest                income                                 |   |                                                | 5,886   |   |   |   | 12 |   |   |   | — |   |   |   | 10,163 |   |   |   | (15,901 | ) |   |   | 160 |   |
| Interest                expense                                |   |                                                | (6,812  | ) |   |   | (7,487 | ) |   |   | (1,221 | ) |   |   | (19,518 | ) |   |   | 15,901 |   |   |   | (19,137 | ) |
| Other                income, net                               |   |                                                | — |   |   |   | — |   |   |   | — |   |   |   | 230 |   |   |   | — |   |   |   | 230 |   |
| Income                (loss) before income taxes               |   |                                                | 7,599   |   |   |   | (7,518 | ) |   |   | (2,693 | ) |   |   | 25,314 |   |   |   | (8,525 | ) |   |   | 14,177 |   |
| Provision                (benefit) for income taxes            |   |                                                | (388    | ) |   |   | (2,318 | ) |   |   | (896 | ) |   |   | 9,792 |   |   |   | — |   |   |   | 6,190 |   |
| Net                income (loss)                                    |   | $                                                   | 7,987   |   |   | $ | (5,200 | ) |   | $ | (1,797 | ) |   | $ | 15,522 |   |   | $ | (8,525 | ) |   | $ | 7,987 |   |
| Other                comprehensive loss                             |   |                                                | (674    | ) |   |   | — |   |   |   | — |   |   |   | (674 | ) |   |   | 674 |   |   |   | (674 | ) |
| Comprehensive                income (loss)                          |   | $                                                   | 7,313   |   |   | $ | (5,200 | ) |   | $ | (1,797 | ) |   | $ | 14,848 |   |   | $ | (7,851 | ) |   | $ | 7,313 |   |

**NOTE      16. SUBSEQUENT      EVENTS**

----

**ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS**

**GENERAL**

*Any information        found on our website is not a part of, or incorporated by reference into,        this        or any other report of the Company filed with, or furnished to, the        SEC.*

**OVERVIEW**

| ·   | the                  sale of block program time, both to national and local program                  producers, |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | the                  sale of advertising time on our radio stations, both to national                  and local                  advertisers, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                  sale of advertising time on our national radio                  network. |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | audience                  share, |
|--------------------|----------------------------------|

| ·   | how                  well our stations perform for our                  clients, |
|--------------------|----------------------------------------------------------------------------------|

| ·   | the                  size of the market, |
|--------------------|------------------------------------------|

| ·   | the                  general economic conditions in each market,                  and |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | supply                  and demand on both a local and national                  level. |
|--------------------|-----------------------------------------------------------------------------------------|

----

----

**SAME          STATION          DEFINITION**

**RESULTS          OF          OPERATIONS**

|                                                                     |   | **Three                    Months Ended**       |   |   |     |       |       | **Nine                    months Ended** |   |   |   |   |
|--------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|----------|------------|------------|------------------------------------------|--------|--------|--------|--------|
|                                                                     |   | **September                    30,**            |   |   |     |       |       | **September                    30,**     |   |   |   |   |
|                                                                     |   | 2006                                            |   |   | **2007** |       |       | %                    Change              |   |   | 2006   |   |   | **2007** |   |   | %                    Change |   |
|                                                                     |   | ***(Dollars                    in thousands)*** |   |
| Net                    broadcasting revenue                              |   | $                                               | 52,509 |   |     | **$**      | **51,888** |                                     |   |   | (1.2   | %)     |   | $ | 154,664 |   |   | **$** | **155,978** |   |   |   | 0.8 | % |
| Non-broadcast                    revenue                                 |   |                                            | 5,402  |   |     | ** ** | **6,208**  |                                     |   |   | 14.9   | %      |   |   | 13,338 |   |   | ** ** | **18,250** |   |   |   | 36.8 | % |
| Total                    revenue                                         |   |                                            | 57,911 |   |     | ** ** | **58,096** |                                     |   |   | 0.3    | %      |   |   | 168,002 |   |   | ** ** | **174,228** |   |   |   | 3.7 | % |
| Operating                    expenses:                                   |   |                                            |   |   |     |       |       |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Broadcasting                    operating expenses                       |   |                                            | 31,821 |   |     | ** ** | **32,719** |                                     |   |   | 2.8    | %      |   |   | 97,013 |   |   | ** ** | **98,831** |   |   |   | 1.9 | % |
| Non-broadcast                    operating expenses                      |   |                                            | 5,311  |   |     | ** ** | **5,820**  |                                     |   |   | 9.6    | %      |   |   | 12,570 |   |   | ** ** | **16,743** |   |   |   | 33.2 | % |
| Corporate                    expenses                                    |   |                                            | 5,637  |   |     | ** ** | **5,425**  |                                     |   |   | (3.8   | %)     |   |   | 18,333 |   |   | ** ** | **16,735** |   |   |   | (8.7 | %) |
| Depreciation                                                             |   |                                            | 3,198  |   |     | ** ** | **2,973**  |                                     |   |   | (7.0   | %)     |   |   | 9,056 |   |   | ** ** | **8,987** |   |   |   | (0.8 | %) |
| Amortization                                                             |   |                                            | 759    |   |     | ** ** | **748**    |                                     |   |   | (1.4   | %)     |   |   | 2,062 |   |   | ** ** | **2,334** |   |   |   | 13.2 | % |
| (Gain)                    loss on disposal of assets                     |   |                                            | 167    |   |     | ** ** | **309**    |                                     |   |   | 85.0   | %      |   |   | (18,872 | ) |   | ** ** | **(2,326** | **)** |   |   | (87.7 | %) |
| Total                    operating expenses                              |   |                                            | 46,893 |   |     | ** ** | **47,994** |                                     |   |   | 2.3    | %      |   |   | 120,162 |   |   | ** ** | **141,304** |   |   |   | 17.6 | % |
| Operating                    income from continuing operations           |   |                                            | 11,018 |   |     | ** ** | **10,102** |                                     |   |   | (8.3   | %)     |   |   | 47,840 |   |   | ** ** | **32,924** |   |   |   | (31.2 | %) |
| Other                    income (expense):                               |   |                                            |   |   |     |       |       |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                    income                                       |   |                                            | 68     |   |     | ** ** | **52**     |                                     |   |   | (23.5  | %)     |   |   | 114 |   |   | ** ** | **160** |   |   |   | 40.4 | % |
| Interest                    expense                                      |   |                                            | (6,490 | )      |     | ** ** | **(6,375** | **)**                                    |   |   | (1.8   | %)     |   |   | (19,857 | ) |   | ** ** | **(19,137** | **)** |   |   | (3.6 | %) |
| Loss                    on early redemption of long-term debt            |   |                                            | (3,625 | )      |     |       | —    |                                     |   |   | (100.0 | %)     |   |   | (3,625 | ) |   |   | — |   |   |   | (100.0 | %) |
| Other                    income (expense), net                           |   |                                            | (120   | )      |     | ** ** | **83**     |                                     |   |   | (169.2 | %)     |   |   | (466 | ) |   | ** ** | **230** |   |   |   | (149.4 | %) |
| Income                    from continuing operations before income taxes |   |                                            | 851    |   |     | ** ** | **3,862**  |                                     |   |   | 353.8  | %      |   |   | 24,006 |   |   | ** ** | **14,177** |   |   |   | (40.9 | %) |
| Provision                    for income taxes                            |   |                                            | 200    |   |     | ** ** | **1,764**  |                                     |   |   | 782.0  | %      |   |   | 9,378 |   |   | ** ** | **6,190** |   |   |   | (34.0 | %) |
| Income                    from continuing operations                     |   |                                            | 651    |   |     | ** ** | **2,098**  |                                     |   |   | 222.3  | %      |   |   | 14,628 |   |   | ** ** | **7,987** |   |   |   | (45.4 | %) |
| Income                    from discontinued operations, net of tax       |   |                                            | 802    |   |     |       | —    |                                     |   |   | (100.0 | %)     |   |   | 1,106 |   |   | ** ** | **—** |   |   |   | (100.0 | %) |
| Net                    income                                            |   | $                                               | 1,453  |   |     | **$**      | **2,098**  |                                     |   |   | 44.4   | %      |   | $ | 15,734 |   |   | **$** | **7,987** |   |   |   | (49.2 | %) |

----

|                                                                     |   | **Three                    Months Ended** |        |   | **Nine                    months Ended** |       |
|--------------------------------------------------------------------------|--------|-------------------------------------------|-------------|--------|------------------------------------------|------------|
|                                                                     |   | **September                    30,**      |        |   | **September                    30,**     |       |
|                                                                     |   | 2006                                      |        |   | **2007**                                 |       |   | 2006 |   |   | **2007** |   |
| Net                    broadcasting revenue                              |   |                                      | 91          | %      |                                     | ** ** | **89** | **%** |   |   | 92 | % |   | ** ** | **90** | **%** |
| Non-broadcast                    revenue                                 |   |                                      | 9           | %      |                                     | ** ** | **11** | **%** |   |   | 8 | % |   | ** ** | **10** | **%** |
| Total                    revenue                                         |   |                                      | 100         | %      |                                     | ** ** | **100** | **%** |   |   | 100 | % |   | ** ** | **100** | **%** |
| Operating                    expenses:                                   |   |                                      |        |   |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Broadcasting                    operating expenses                       |   |                                      | 55          | %      |                                     | ** ** | **56** | **%** |   |   | 58 | % |   | ** ** | **57** | **%** |
| Non-broadcast                    operating expenses                      |   |                                      | 9           | %      |                                     | ** ** | **10** | **%** |   |   | 7 | % |   | ** ** | **9** | **%** |
| Corporate                    expenses                                    |   |                                      | 10          | %      |                                     | ** ** | **9** | **%** |   |   | 11 | % |   | ** ** | **10** | **%** |
| Depreciation                                                             |   |                                      | 6           | %      |                                     | ** ** | **5** | **%** |   |   | 6 | % |   | ** ** | **5** | **%** |
| Amortization                                                             |   |                                      | 1           | %      |                                     | ** ** | **1** | **%** |   |   | 1 | % |   | ** ** | **1** | **%** |
| (Gain)                    loss on disposal of assets                     |   |                                      | —     | %      |                                     | ** ** | **1** | **%** |   |   | (11 | )% |   | ** ** | **(1** | **)%** |
| Total                    operating expenses                              |   |                                      | 81          | %      |                                     | ** ** | **82** | **%** |   |   | 72 | % |   | ** ** | **81** | **%** |
| Operating                    income from continuing operations           |   |                                      | 19          | %      |                                     | ** ** | **18** | **%** |   |   | 28 | % |   | ** ** | **19** | **%** |
| Other                    income (expense):                               |   |                                      |        |   |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Interest                    income                                       |   |                                      | —     | %      |                                     | ** ** | **—** | **%** |   | ** ** | **—** | **%** |   | ** ** | **—** | **%** |
| Interest                    expense                                      |   |                                      | (11         | )%     |                                     | ** ** | **(11** | **)%** |   |   | (12 | )% |   | ** ** | **(11** | **)%** |
| Loss                    on early redemption of long-term debt            |   |                                      | (6          | )%     |                                     |       | — | % |   |   | (2 | )% |   |   | — | % |
| Other                    expense, net                                    |   | ** **                                | **—** | **%**  |                                     | ** ** | **—** | **%** |   | ** ** | **—** | **%** |   | ** ** | **—** | **%** |
| Income                    from continuing operations before income taxes |   |                                      | 2           | %      |                                     | ** ** | **7** | **%** |   |   | 14 | % |   | ** ** | **8** | **%** |
| Provision                    for income taxes                            |   |                                      | 1           | %      |                                     | ** ** | **3** | **%** |   |   | 6 | % |   | ** ** | **4** | **%** |
| Income                    from continuing operations                     |   |                                      | 1           | %      |                                     | ** ** | **4** | **%** |   |   | 8 | % |   | ** ** | **4** | **%** |
| Discontinued                    operations, net of tax                   |   |                                      | 1           | %      |                                     | ** ** | **—** | **%** |   | ** ** | **1** | **%** |   | ** ** | **—** | **%** |
| Net                    income                                            |   |                                      | 2           | %      |                                     | ** ** | **4** | **%** |   |   | 9 | % |   | ** ** | **4** | **%** |

***Three          months ended September 30, 2007 compared to three months ended September          30,          2006***

*      NET          BROADCASTING REVENUE.*

*NON-BROADCAST          REVENUE. *

*BROADCASTING          OPERATING EXPENSES. *

----

*CORPORATE          EXPENSES*

*DEPRECIATION.          *

*AMORTIZATION.          *

*LOSS          ON DISPOSAL OF ASSETS.*

*OTHER          INCOME (EXPENSE). *

*PROVISION          FOR INCOME TAXES.*

*      INCOME          FROM DISCONTINUED OPERATIONS, NET OF          TAX.*

*NET          INCOME.*

***Nine          months ended September 30, 2007 compared to nine months ended September          30,          2006***

*      NET          BROADCASTING REVENUE.*

----

*NON-BROADCAST            REVENUE. *

*BROADCASTING            OPERATING EXPENSES. *

*NON-BROADCAST            OPERATING EXPENSES. *

*CORPORATE            EXPENSES.*

*DEPRECIATION.            *

*AMORTIZATION.            *

*GAIN            ON DISPOSAL OF ASSETS.*

----

*OTHER                INCOME (EXPENSE). *

*PROVISION              FOR INCOME              TAXES.*

*INCOME              FROM DISCONTINUED OPERATIONS, NET OF TAX.*

*NET              INCOME.*

**NON-GAAP              FINANCIAL              MEASURES**

***Three              months ended              September 30, 2007 compared to the three months ended September 30,              2006***

*STATION              OPERATING INCOME.*

----

***Nine              months ended September              30, 2007 compared to the nine months ended September 30,              2006***

*STATION                OPERATING INCOME. *

|                                                                        |   | **Three                            Months Ended September 30,** |   |   | **Nine                            Months Ended September 30,** |       |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|--------|----------------------------------------------------------------|------------|
|                                                                        |   | 2006                                                            |   |   | **2007**                                                       |       |   | 2006 |   |   | **2007** |   |
|                                                                        |   | *(Dollars                            in thousands)*             |   |
| Station                            operating income                         |   | $                                                               | 20,688 |   |                                                           | **$**      | **19,169** |   |   | $ | 57,651 |   |   | **$** | **57,147** |   |
| Plus                            non-broadcast  revenue            |   |                                                            | 5,402  |   |                                                           | ** ** | **6,208** |   |   |   | 13,338 |   |   | ** ** | **18,250** |   |
| Less                            non-broadcast  operating expenses |   |                                                            | (5,311 | )      |                                                           | ** ** | **(5,820** | **)** |   |   | (12,570 | ) |   | ** ** | **(16,743** | **)** |
| Less                            depreciation and amortization               |   |                                                            | (3,957 | )      |                                                           | ** ** | **(3,721** | **)** |   |   | (11,118 | ) |   | ** ** | **(11,321** | **)** |
| Plus                            gain (loss) on disposal of assets           |   |                                                            | (167   | )      |                                                           | ** ** | **(309** | **)** |   |   | 18,872 |   |   | ** ** | **2,326** |   |
| Less                            corporate expenses                          |   |                                                            | (5,637 | )      |                                                           | ** ** | **(5,425** | **)** |   |   | (18,333 | ) |   | ** ** | **(16,735** | **)** |
| Operating                            income                                 |   | $                                                               | 11,018 |   |                                                           | **$**      | **10,102** |   |   | $ | 47,840 |   |   | **$** | **32,924** |   |

**CRITICAL                  ACCOUNTING POLICIES,                  JUDGMENTS AND ESTIMATES**

***Accounting                    for acquisitions                    and upgrades of radio station and network                    assets***

----

***Allowance                      for doubtful                      accounts***

***Intangible                        assets***

***Income                        Taxes***

***Valuation                        allowance                        (deferred taxes)***

***Long-term                        debt and debt                        covenant compliance***

----

***Derivative                          Instruments and Hedging Activities***

***Stock-Based                          Compensation***

**LIQUIDITY                          AND CAPITAL RESOURCES**

**Cash                          Flows **

*Cash                          Flows from Operating Activities*

*Cash                          Flows from Investing Activities*

----

*Cash                            Flows from Financing Activities*

**Credit                            Facilities**

----

*Swingline                              Credit Facility.*

*73⁄4%                              Notes.*

***Summary                              of long-term debt                              obligations***

|                                                                                       |  December                                          31, 2006 |                                                              |  **September                                          30, 2007** |   |
|--------------------------------------------------------------------------------------------|------------------------------------------------------------------|-------------------------------------------------------------------|-----------------------------------------------------------------------|--------|
|                                                                                       |                                                             | *(Dollars                                          in thousands)* |                                                                  |
| Term                                          loans under credit facility                  |                                                             | $                                                                 | 238,125                                                               |   |   | **$** | **236,100** |   |
| Revolving                                          line of credit under credit facility    |                                                             |                                                              | 19,100                                                                |   |   | ** ** | **12,000** |   |
| Swingline                                          credit facility                         |                                                             |                                                              | 1,241                                                                 |   |   | ** ** | **2,387** |   |
| 73⁄4%                                          senior subordinated notes due 2010       |                                                             |                                                              | 100,000                                                               |   |   | ** ** | **100,000** |   |
| Fair                                          market value of interest rate swap agreement |                                                             | ** **                                                        | **—**                                                           |   |   | ** ** | **284** |   |
| Seller                                          financed note to acquire Townhall.com      |                                                             |                                                              | 2,444                                                                 |   |   | ** ** | **2,526** |   |
| Capital                                          leases and other loans                    |                                                             |                                                              | 116                                                                   |   |   | ** ** | **856** |   |
|                                                                                       |                                                             |                                                              | 361,026                                                               |   |   | ** ** | **354,153** |   |
| Less                                          current portion                              |                                                             |                                                              | (2,048                                                                | )      |   | ** ** | **(3,696** | **)** |
|                                                                                       |                                                             | $                                                                 | 358,978                                                               |   |   | **$** | **350,457** |   |

----

| ·   | Outstanding                borrowings of $236.1 million on term loans and $12.0 million on our                revolver with interest payments due at LIBOR plus 1.25% to 1.75%                or at                prime rate plus 0.25% to 0.75%, depending on our Total Leverage                Ratio; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $100                million senior subordinated notes with semi-annual interest payments                at 7                3⁄4%; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Commitment                fee of 0.375% on the unused portion of our credit                facilities. |
|--------------------|--------------------------------------------------------------------------------------------------------|

**OFF      BALANCE SHEET ARRANGEMENTS**

**ITEM      3. QUANTITATIVE AND      QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**DERIVATIVE      INSTRUMENTS**

----

**Interest          Rate Caps**

**MARKET            RISK**

----

**ITEM              4. CONTROLS AND              PROCEDURES**

**PART              II - OTHER INFORMATION**

**ITEM              1. LEGAL              PROCEEDINGS**

**ITEM              1A.  RISK FACTORS**

**ITEM              2. UNREGISTERED SALES OF              EQUITY SECURITIES AND USE OF PROCEEDS**

|                                                        |   |                                       |        |   |                                      |   |        | **Total                        Number of**    |   |       | **Maximum                        Approximate**    |   |
|-------------------------------------------------------------|--------|--------------------------------------------|-------------|--------|-------------------------------------------|--------|-------------|-----------------------------------------------|--------|------------|---------------------------------------------------|--------|
|                                                        |   |                                       |        |   |                                      |   |        | **Shares                        Purchased**   |   |       | **Dollar                        Value of Shares** |   |
|                                                        |   | **Total                        Number of** |        |   |                                      |   |        | **as                        Part of**         |   |       | **That                        May Yet Be**        |   |
|                                                        |   | **of                        Shares**       |        |   | **Average                        Price**  |   |        | **Publicly                        Announced** |   |       | **Purchased                        Under The**    |   |
| **Period**                                                  |   | **Purchased**                              |        |   | **Paid                        Per Share** |   |        | **Plans                        or Programs**  |   |       | **Plans                        or Programs**      |   |
| Jul.                        1, 2007 – Jul. 31, 2007   |   | ** **                                 | **—** |   |                                      | **$**  | **—** |                                          |   | ** ** | **—**                                       |   |   |  $ | 17,781,997 |   |
| Aug.                        1, 2007 – Aug. 31, 2007   |   |                                       | 112,267     |   |                                      |   | 9.20        |                                          |   |       | 112,267                                           |   |   |   | 16,748,750 |   |
| Sept.                        1, 2007 – Sept. 30, 2007 |   |                                       | 74,965      |   |                                      |   | 10.07       |                                          |   |       | 74,965                                            |   |   |   | 15,993,903 |   |
|    Total                                     |   |                                       | 187,232     |   |                                      |   |        |                                          |   |       | 187,232                                           |   |   |   |   |   |

**ITEM              3. DEFAULTS UPON SENIOR              SECURITIES**

**ITEM              4. SUBMISSION OF MATTERS              TO A VOTE OF SECURITY HOLDERS**

**ITEM              5. OTHER              INFORMATION**

**ITEM              6.              EXHIBITS**

----

|                                                  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       | **Incorporated                              by Reference**    |
|-------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------|
| **Exhibit                              Number ** | ** ** | ** Exhibit                              Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** | **  Form**                                                         | ** ** | ** File                            No.** | ** ** | **Date                            of First Filing ** | ** ** | ** Exhibit                            Number** | ** ** | ** Filed                            Herewith** |
|                                                  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |                                                                         |   |   |   |   |   |   |   |   |
| 3.01                                             |       | Amended                            and Restated Certificate of Incorporation of Salem Communications                            Corporation, a Delaware corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       | **8-K**                                                                 |   |  **333-41733-29** |   | **04/14/99**  |   | **3.1**  |   |   |
| 3.02.01                                          |       | Bylaws                            of Salem Communications Coporation, a Delaware Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |       | ** 8-K**                                                                |   | ** 331-41733-29** |   | **04/14/99**  |   | ** 3.2** |   |   |
| 3.02.02                                          |       | Amended                            and Restated Bylaws of Salem Communications Corporation,                            a Delaware                            Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       | ** 8-K**                                                                |   | **000-26497**  |   |  **06/26/07** |   | **3.1**  |   |   |
| 3.03                                             |       | Certificate                            of Incorporation of Salem Communications Holding                            Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       | ** 8-K**                                                                |   | **000-26497**  |   |  **09/08/00** |   |  **2.01** |   |   |
| 3.04.01                                          |       |  Bylaws                            of Salem Communications Holding Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       | ** 8-K**                                                                |   | **000-26497**  |   | ** 09/08/00** |   | ** 2.02** |   |   |
| 3.04.02                                          |       |  Amended                            and Restated Bylaws of Salem Communications Holding Corporation,                            a                            Delaware Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |  **10-Q**                                                               |   | **000-26497**  |   |  **08/09/07** |   |  **3.04.01** |   |   |
| 3.05                                             |       |  Certificate                            of Incorporation of Salem Communications Acquisition                            Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |  **8-K**                                                                |   |  **000-26497** |   | ** 09/08/00** |   |  **2.03** |   |   |
| 3.06                                             |       |  Bylaws                            of Salem Communications Acquisition Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       | ** 8-K**                                                                |   |  **000-26497** |   |  **09/08/00** |   | ** 2.04** |   |   |
| 3.07                                                  |       | Certificate                              of Incorporation of SCA License Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |  **8-K**                                                                |   |  **000-26497** |   |  **09/08/00** |   |  **2.05** |   |   |
| 3.08                                                  |       | Bylaws                              of SCA License Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       | **8-K**                                                                      |   | **000-26497** |   | **09/08/00** |   | **2.06** |   |   |
| 4.01                                                  |       | Specimen                              of Class A common stock certificate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |  **S-1/A**                                                              |   |  **333-76649**  |   | **Declared                              Effective****06/30/99** |   |  **4.09** |   |   |
| 4.02                                                  |       | Fifth                              Amended and Restated Credit Agreement, dated as of                              September 25, 2003, by                              and among Salem Communications Corporation, Salem Communications                              Holding                              Corporation, General Electric Capital Corporation,                              as Syndication Agent,                              Suntrust Bank, as Syndication Agent, Fleet National                              Bank, as Documentation                              Agent, ING (U.S.) Capital, LLC, as Documentation Agent,                              The Bank of New                              York, as Administrative Agent, and the Lenders party                              thereto.                                                                                                               |       |       **10-Q**                                 |   |       **000-26497** |   |       **11/06/03** |   |       **4.09** |   |   |
| 4.03                                                  |       | Second                              Amended and Restated Parent Security Agreement dated                              as of June 15, 2001,                              by and among Salem Communications Corporation, a Delaware                              corporation,                              Salem Communications Holding Corporation, a Delaware                              corporation, and The                              Bank of New York, as Administrative Agent.                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |     **10-Q**                                             |   |     **000-26497** |   |     **08/14/01** |   |     **4.24.02** |   |   |
| 4.04                                                  |       | Amendment                              #1, dated as of May 19, 2004, to the Fifth Amended                              and Restated Credit                              Agreement, dated as of September 25, 2003, by and among                              Salem                              Communications Corporation, Salem Communications Holding                              Corporation,                              General Electric Capital Corporation, as Syndication                              Agent, Suntrust Bank,                              as Syndication Agent, Fleet National Bank, as Documentation                              Agent, ING                              (U.S.) Capital, LLC, as Documentation Agent, The Bank                              of New York, as                              Administrative Agent, and the Lenders party thereto.                                   |       |      **10-Q**                                       |   |      **000-26497** |   |      **08/06/04** |   |      **4.11** |   |   |
| 4.05                                                  |       | Amendment                              #2, dated as of July 7, 2005, to the Fifth Amended                              and Restated Credit                              Agreement, dated as of September 25, 2003, by and among                              Salem                              Communications Corporation, Salem Communications Holding                              Corporation, General                              Electric                              Capital Corporation, as Syndication Agent, Suntrust                              Bank, as Syndication                              Agent, Fleet National Bank, as Documentation Agent,                              ING (U.S.) Capital,                              LLC, as Documentation Agent, The Bank of New York,                              as Administrative                              Agent, and the Lenders party thereto. |       |       **8-K**                                  |   |       **000-26497** |   |       **07/13/05** |   |       **4.12** |   |   |
| 4.06                                                  |       | Indenture                              between Salem Communications Holding Corporation, a                              Delaware corporation,                              certain named guarantors and The Bank of New York,                              as Trustee, dated as of                              June 25, 2001, relating to the 9% Series A and Series                              B Senior                              Subordinated Notes due 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |    **10-Q**                                         |   |    **000-26497** |   |    **08/14/01** |   |    **4.10.03**  |   |   |
| 4.07                                                  |       | Form                              of 9% Senior Subordinated Notes (filed as part of exhibit                              4.06).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |  **10-Q**                                                               |   |  **000-26497** |   |  **08/14/01** |   |   |   |   |
| 4.08                                                  |       | Form                              of Note Guarantee (filed as part of exhibit 4.06).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |  **10-Q**                                                               |   |  **000-26497** |   |  **08/14/01** |   |   |   |   |
| 4.09                                                  |       | Registration                              Rights Agreement dated as of June 25, 2001, by and                              among Salem                              Communications Holding Corporation, the guarantors                              and initial purchasers                              named therein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |   **10-Q**                                                         |   |   **000-26497** |   |   **08/14/01** |   |   **4.28** |   |   |
| 4.10                                                  |       | Indenture,                              dated as of December 23, 2002, relating to the 73⁄4% Senior Subordinated                              Notes due 2010 by and among Salem Holding, the Company                              and The Bank of New                              York, as trustee, with form of Note incorporated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |    **8-K**                                                    |   |    **000-26497** |   |    **12/23/02** |   |    **4.1** |   |   |
| 4.11                                                  |       | Form                              of 73⁄4% Senior Subordinated Notes (filed as part of exhibit                              4.10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |  **8-K**                                                                |   |  **000-26497** |   |  **12/23/02** |   |   |   |   |
| 4.12                                                  |       | Form                              of Note Guarantee (filed as part of exhibit 4.10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |  **8-K**                                                                |   |  **000-26497** |   |  **12/23/02** |   |   |   |   |
| 4.13                                                  |       | Supplemental                              Indenture No. 1 to the 73⁄4% Senior Subordinated Notes, dated as of December                              23, 2002, between Salem Communications Corporation                              and its guarantors, and                              Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   **10-K**                                                         |   |   **000-26497** |   |   **03/31/03** |   |   **4.22** |   |   |
| 4.14                                                  |       | Supplemental                              Indenture No. 1 to the 9% Senior Subordinated Notes,                              dated as of December                              16, 2002, between Salem Communications Corporation                              and its guarantors, and                              Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   **10-K**                                                         |   |   **000-26497** |   |   **03/31/03** |   |   **4.23** |   |   |
| 4.15                                                  |       | Supplemental                              Indenture No. 2 to the 73⁄4% Senior Subordinated Notes, dated as of June 12,                              2003, between Salem Communications Corporation and                              its guarantors, and                              Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |       |   **10-Q**                                                         |   |   **000-26497** |   |   **08/06/03** |   |   **4.24** |   |   |
| 4.16                                                  |       | Supplemental                              Indenture No. 2 to the 9% Senior Subordinated Notes,                              dated as of June 12,                              2003, between Salem Communications Corporation and                              its guarantors, and                              Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |   **10-Q**                                                         |   |   **000-26497** |   |   **08/06/03** |   |   **4.25** |   |   |
| 4.17                                                  |       | Consent                              No. 2, dated as of July 23, 2003, under the Fourth                              Amended and Restated                              Credit Agreement between Salem Communications Corporation                              and its                              guarantors, and The Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |   **10-Q**                                                         |   |   **000-26497** |   |   **08/06/03** |   |   **4.26** |   |   |
| 4.18                                                  |       | Amendment                              #3, dated as of June 9, 2006, to the Fifth Amended                              and Restated Credit                              Agreement, dated as of September 25, 2003, by and among                              Salem                              Communications Corporation, Salem Communications Holding                              Corporation, General                              Electric                              Capital Corporation, as Syndication Agent, Suntrust                              Bank, as Syndication                              Agent, Fleet National Bank, as Documentation Agent,                              ING (U.S.) Capital,                              LLC, as Documentation Agent, The Bank of New York,                              as Administrative                              Agent, and the Lenders party thereto. |       |        **8-K**                            |   |        **000-26497** |   |        **06/15/06** |   |        **4.13** |   |   |
| 4.19                                                  |       | Amendment                              #4, dated as of October 24, 2007, to the Fifth Amended                              and Restated Credit                              Agreement, dated as of September 25, 2003, by and among                              Salem                              Communications Corporation, Salem Communications Holding                              Corporation, General Electric Capital Corporation, as Syndication                              Agent, SunTrust Bank, as Syndication Agent, Fleet National                              Bank, as                              Documentation Agent, ING (U.S.) Capital, LLC, as Documentation                              Agent, The                              Bank of New York, as Administrative Agent, and the                              Lenders party                              thereto.                     |       | **8-K**                                                                      | ** ** | **000-26497**  | ** ** | **10/30/07** | ** ** | **4.19** |   |   |
| 10.01.01                                              |       | Employment                              Agreement, dated July 1, 2004, between Salem Communications                              Holding                              Corporation and Edward G. Atsinger III.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   **10-Q**                                                         |   |   **000-26497** |   |   **08/06/04** |   |   **10.01.01** |   |   |
| 10.01.02                                              |       | Employment                              Agreement, dated July 1, 2007, between Salem Communications                              Holding                              Corporation and Edward G. Atsinger III.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   **8-K**                                                          |   |   **000-26497** |   |   **06/26/07** |   |   **10.2** |   |   |
| 10.02.01                                              |       | Employment                              Agreement, dated July 1, 2004, between Salem Communications                              Holding                              Corporation and Stuart W. Epperson.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |       |  **10-Q**                                                               |   |  **000-26497** |   |  **08/06/04** |   |  **10.02.01** |   |   |
| 10.02.02                                              |       | Employment                              Agreement, dated July 1, 2007, between Salem Communications                              Holding                              Corporation and Stuart W. Epperson.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |       |   **8-K**                                                          |   |   **000-26497** |   |   **06/26/07** |   |   **10.1** |   |   |
| 10.03.01                                              |       | Employment                              Agreement, dated July 1, 2007, between Salem Communications                              Holding                              Corporation and Eric H. Halvorson.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |   **8-K**                                                          |   |   **000-26497** |   |   **06/26/07** |   |   **10.3** |   |   |
| 10.04.01                                              |       | Employment                              Agreement, effective as of September 1, 2005, between                              Salem Communications                              Holding Corporation and Joe D. Davis                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |   **8-K/A**                                                        |   |   **000-26497** |   |   **05/25/05** |   |   **99.1** |   |   |
| 10.04.02                                              |       | Employment                              Agreement, effective as of July 1, 2007, between Salem                              Communications                              Holding Corporation and Joe D. Davis                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |       |   **8-K**                                                          |   |   **000-26497** |   |   **06/26/07** |   |   **10.4** |   |   |
| 10.05.01                                              |       | Employment                              Agreement, effective as of September 1, 2005, between                              Salem Communications                              Holding Corporation and David A.R. Evans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |   **8-K**                                                          |   |   **000-26497** |   |   **09/27/05** |   |   **99.1** |   |   |
| 10.06.01                                              |       | Antenna/tower/studio                              lease between Common Ground Broadcasting, Inc. (KKMS-AM/Eagan,                              Minnesota)                              and Messrs. Atsinger and Epperson expiring in 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.04** |   |   |   |   |
| 10.06.03                                              |       | Antenna/tower                              lease (KFAX-FM/Hayward, California) and Salem Broadcasting                              Company, a                              partnership consisting of Messrs. Atsinger and Epperson,                              expiring in                              2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.06** |   |   |   |   |
| 10.06.04                                              |       | Antenna/tower                              lease between Inspiration Media, Inc. (KGNW-AM/Seattle,                              Washington) and                              Messrs. Atsinger and Epperson expiring in 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.08** |   |   |   |   |
| 10.06.05                                              |       | Antenna/tower                              lease between Inspiration Media, Inc. (KLFE-AM/Seattle,                              Washington) and                              The Atsinger Family Trust and Stuart W. Epperson Revocable                              Living Trust                              expiring in 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |    **S-4**                                                    |   |    **333-41733-29** |   |    **01/29/98** |   |    **10.05.09** |   |   |   |   |
| 10.06..06                                             |       | Antenna/tower/studio                              lease between Pennsylvania Media Associates, Inc.                              (WNTP-AM/WFIL-AM/Philadelphia, Pennsylvania) and The                              Atsinger Family Trust                              and Stuart W. Epperson Revocable Living Trust expiring                              2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |    **S-4**                                                    |   |    **333-41733-29** |   |    **01/29/98** |   |    **10.05.11.02** |   |   |   |   |
| 10.06.07                                              |       | Antenna/tower                              lease between New Inspiration Broadcasting Co., Inc.:                              as successor in                              interest to Radio 1210, Inc. (KPRZ-AM/San Marcos, California)                              and The                              Atsinger Family Trust expiring in 2028.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   **S-4**                                                     |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.12** |   |   |   |   |
| 10.06.08                                              |       | Antenna/tower                              lease between Salem Media of Texas, Inc. and Atsinger                              Family                              Trust/Epperson Family Limited Partnership (KSLR-AM/San                              Antonio,                              Texas).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |   **10-K**                                                         |   |   **000-26497** |   |   **03/30/00** |   |   **10.05.13** |   |   |   |   |
| 10.06.09                                              |       | Antenna/tower                              lease between Salem Media of Colorado, Inc. (KNUS-AM/Denver-Boulder,                              Colorado) and Messrs. Atsinger and Epperson expiring                              2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.15** |   |   |   |   |
| 10.06.10                                              |       | Antenna/tower                              lease between Salem Media of Colorado, Inc. and Atsinger                              Family                              Trust/Epperson Family Limited Partnership (KRKS-AM/KBJD-AM/Denver,                              Colorado) expiring 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   **10-K**                                                         |   |   **000-26497** |   |   **03/30/00** |   |   **10.05.16** |   |   |   |   |
| 10.06.11                                              |       | Antenna/tower                              lease between Salem Media of Oregon, Inc. (KPDQ-AM/FM/Portland,                              Oregon),                              and Messrs. Atsinger and Epperson expiring 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.17.02** |   |   |   |   |
| 10.06.12                                              |       | Antenna/tower                              lease between Salem Media of Pennsylvania, Inc.                              (WORD-FM/WPIT-AM/Pittsburgh, Pennsylvania) and The                              Atsinger Family Trust                              and Stuart W. Epperson Revocable Living Trust expiring                              2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |    **S-4**                                                    |   |    **333-41733-29** |   |    **01/29/98** |   |    **10.05.18** |   |   |   |   |
| 10.06.13                                              |       | Antenna/tower                              lease between Salem Media of Texas, Inc. (KSLR-AM/San                              Antonio, Texas) and                              Epperson-Atsinger 1983 Family Trust expiring 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |   **S-4**                                                          |   |  **333-41733-29** |   |   **01/29/98** |   |   **10.05.19** |   |   |   |   |
| 10.06.14                                              |       | Antenna/tower                              lease between South Texas Broadcasting, Inc. (KNTH-AM/Houston-Galveston,                              Texas) and Atsinger Family Trust and Stuart W. Epperson                              Revocable Living                              Trust expiring 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |   **S-4**                                                          |   |   **333-41733-29** |   |   **01/29/98** |   |   **10.05.20** |   |   |   |   |
| 10.06.15                                              |       | Antenna/tower                              lease between New Inspiration Broadcasting Co., Inc.                              successor in interest                              to Vista Broadcasting, Inc. (KFIA-AM/Sacramento, California)                              and The                              Atsinger Family Trust and Stuart W. Epperson Revocable                              Living Trust                              expiring 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |    **S-4**                                                    |   |    **333-41733-29** |   |    **10/29/98** |   |    **10.05.21** |   |   |   |   |
| 10.06.17                                              |       | Antenna/tower                              lease between Inspiration Media of Texas, Inc. (KTEK-AM/Alvin,                              Texas) and                              the Atsinger Family Trust and The Stuart W. Epperson                              Revocable Living                              Trust expiring 2018.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |   **10-K                              405**                        |   |   **000-26497** |   |   **03/31/99** |   |   **10.05.23** |   |   |   |   |
| 10.06.18                                              |       | Studio                              building lease between Salem Radio Properties, Inc.                              and Thomas H. Moffit                              Jr.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |  **10-K**                                                               |   |  **000-26497** |   |  **03/31/06** |   |  **10.05.24** |   |   |   |   |
| 10.06.19                                              |       | Antenna/tower                              lease between Pennsylvania Media Associates Inc. (WTLN-AM/                              Orlando,                              Florida) and Atsinger Family Trust and Stuart W. Epperson,                              revocable                              living trust expiring 2045.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |   **10-K**                                                    |   |   **000-26497** |   |   **3/16/07** |   |   **10.05.25** |   |   |   |   |
| 10.07.01                                              |       | Asset                              Purchase Agreement, dated August 18, 2006, by and between                              Caron                              Broadcasting, Inc. and Chesapeake-Portsmouth Broadcasting                              Corporation                              (WJGR-AM, Jacksonville, Florida, and WZNZ-AM, Jacksonville,                              Florida)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |  **10-Q**                                                               |   |  **000-26497** |   |  **11/09/06** |   |  **10.06.02**  |   |   |   |   |
| 10.07.02                                              |       | Asset                              Purchase Agreement, dated September 14, 2006, by and                              between Caron                              Broadcasting, Inc. and Chesapeake-Portsmouth Broadcasting                              Corporation                              (WZAZ-AM, Jacksonville, Florida)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |  **10-Q**                                                               |   |  **000-26497** |   |  **11/09/06** |   |  **10.06.03** |   |   |   |   |
| 10.07.03                                              |       | Local                              Programming and Marketing Agreement, dated September                              14, 2006, by and                              between Caron Broadcasting, Inc. and Chesapeake-Portsmouth                              Broadcasting                              Corporation (WJGR-AM, Jacksonville, Florida,and WZNZ-AM,                              Jacksonville,                              Florida)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |  **10-Q**                                                               |   |  **000-26497** |   |  **11/09/06** |   |  **10.06.04** |   |   |   |   |
| 10.07.04                                              |       | Local                              Programming and Marketing Agreement, dated September                              14, 2006, by and                              between Caron Broadcasting, Inc. and Chesapeake-Portsmouth                              Broadcasting                              Corporation (WZAZ-AM, Jacksonville, Florida)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |  **10-Q**                                                               |   |  **000-26497** |   |  **11/09/06** |   |  **10.06.05** |   |   |   |   |
| 10.08.01                                              |       | Amended                              and Restated 1999 Stock Incentive Plan (incorporated                              by reference to                              previously filed Appendix B).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |  **DEF                              14A**                               |   |  **000-26497** |   |  **04/29/03**  |   |  **Appendix                              B** |   |   |   |   |
| 10.08.02                                              |       | Form                              of stock option grant for Amended and Restated 1999                              Stock Incentive                              Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |  **10-K**                                                               |   |  **000-26497** |   |  **03/16/05** |   |  **10.08.02** |   |   |   |   |
| 10.08.03                                              |       | Form                              of restricted stock option grant for Amended and Restated                              1999 Stock                              Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |  **10-Q**                                                               |   |  **000-26497** |   |  **11/09/05** |   |  **10.01** |   |   |   |   |
| 10.08.04                                              |       | Amended                              and Restated 1999 Stock Incentive Plan as amended and                              restated through May                              18, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |  **DEF                              14A**                               |   |  **000-26497** |   |  **04/18/05** |   |  **Proposal                              No. 2** |   |   |   |   |
| 10.09                                                 |       | Management                              Services Agreement by and among Salem and Salem Communications                              Holding                              Corporation, dated August 25, 2000 (incorporated by                              reference to                              previously filed exhibit 10.11). (7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |  **10-Q**                                                               |   |  **000-26497** |   |  **05/15/01** |   |  **10.11** |   |   |   |   |
| 31.1                                                  |       | Certification                              of Edward G. Atsinger III Pursuant to Rules 13a-14(a)                              and 15d-14(a) under                              the Exchange Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       | **-**                                                                        |   | **-** |   | **-** |   | **-** |   | **X** |   |   |
| 31.2                                                  |       | Certification                              of Evan D. Masyr Pursuant to Rules 13a-14(a) and 15d-14(a)                              under the                              Exchange Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       | **-**                                                                        |   | **-** |   | **-** |   | **-** |   | **X** |   |   |
| 32.1                                                  |       | Certification                              of Edward G. Atsinger III Pursuant to 18 U.S.C. Section                              1350.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |       | **-**                                                                        |   | **-** |   | **-** |   | **-** |   | **X** |   |   |
| 32.2                                                  |       | Certification                              of Evan D. Masyr                              Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |       | **-**                                                                        |   | **-** |   | **-** |   | **-** |   | **X** |   |   |

----

**SIGNATURES**

|                                        |   | SALEM                            COMMUNICATIONS CORPORATION                  |   |   |
|---------------------------------------------|--------|------------------------------------------------------------------------------|--------|--------|
| November                            8, 2007 |   |                                                                         |   |   |
|                                        |   | By:                            /s/ EDWARD G. ATSINGER III                    |   |   |
|                                        |   | Edward                            G. Atsinger III                            |   |   |
|                                        |   | Chief                            Executive Officer                           |   |   |
|                                        |   | (Principal                            Executive Officer)                     |   |   |
|                                        |   |                                                                         |   |   |
|                                        |   |                                                                         |   |   |
| November                            8, 2007 |   |                                                                         |   |   |
|                                        |   | By:                            /s/ EVAN D. MASYR                             |   |   |
|                                        |   | Evan                            D. Masyr                                     |   |   |
|                                        |   | Senior                            Vice President and Chief Financial Officer |   |   |
|                                        |   | (Principal                            Financial Officer)                     |   |   |

----

**EXHIBIT                  INDEX**

| **Exhibit****Number** |   | **Description                            of Exhibits**                                                                                                                                     |
|-----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                       |
| 31.1                  |   | Certification                            of Edward G. Atsinger III Pursuant to Rules 13a-14(a)                            and 15d-14(a) under                            the Exchange Act. |
|                  |   |                                                                                                                                                                                       |
| 31.2                  |   | Certification                            of Evan D. Masyr Pursuant to Rules 13a-14(a) and 15d-14(a)                            under the                            Exchange Act.          |
|                  |   |                                                                                                                                                                                       |
| 32.1                  |   | Certification                            of Edward G. Atsinger III Pursuant to 18 U.S.C. Section                            1350.                                                          |
|                  |   |                                                                                                                                                                                       |
| 32.2                  |   | Certification                            of  Evan D. Masyr Pursuant to 18 U.S.C. Section                            1350.                                                        |

----

**EXHIBIT                  31.1**

| 1.     | I                            have reviewed this quarterly report on Form 10-Q of Salem                            Communications                            Corporation;                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 2.     | Based                            on my knowledge, this report does not contain any untrue                            statement of a                            material fact or omit to state a material fact necessary                            to make the                            statements made, in light of the circumstances under                            which such statements                            were made, not misleading with respect to the period                            covered by this                            report;       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 3.     | Based                            on my knowledge, the financial statements, and other                            financial information                            included in this report, fairly present in all material                            respects the                            financial condition, results of operations and cash flows                            of the                            registrant as of, and for, the periods presented in this                            report;                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 4.     | The                            registrant’s other certifying officers and I are responsible for                            establishing and maintaining disclosure controls and                            procedures (as                            defined in Exchange Act Rules 13a-15(e) and 15d-15(e))                            and internal                            control over financial reporting (as defined in Exchange                            Act Rules                            13a-15(f) and 15d-15(f)) for the registrant and have: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Designed                            such disclosure controls and procedures, or caused such                            disclosure                            controls and procedures to be designed under our supervision,                            to ensure                            that material information relating to the registrant,                            including its                            consolidated subsidiaries, is made known to us by others                            within those                            entities, particularly during the period in which this                            report is being                            prepared; |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Designed                            such internal control over financial reporting, or caused                            such internal                            control over financial reporting to be designed under                            our supervision, to                            provide reasonable assurance regarding the reliability                            of financial                            reporting and the preparation of financial statements                            for external                            purposes in accordance with generally accepted accounting                            principles;                                   |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Evaluated                            the effectiveness of the registrant’s disclosure controls and procedures                            and presented in this report our conclusions about the                            effectiveness of                            the disclosure controls and procedures, as of the end                            of the period                            covered by this report based on such evaluation; and                                                                                                                                                                                                                             |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Disclosed                            in this report any change in the registrant’s internal control over                            financial reporting that occurred during the registrant’s most recent                            fiscal quarter (the registrant’s fourth fiscal quarter in the case of an                            annual report) that has materially affected, or is reasonably                            likely to                            materially affect, the registrant’s internal control over financial                            reporting; and                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 5.     | The                            registrant’s other certifying officers and I have disclosed, based                            on our                            most recent evaluation of internal control over financial                            reporting, to                            the registrant’s auditors and the audit committee of registrant’s board of                            directors (or persons performing the equivalent                            functions):                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | all                            significant deficiencies and material weaknesses in the                            design or                            operation of internal control over financial reporting                            which are                            reasonably likely to adversely affect the registrant’s ability to record,                            process, summarize and report financial information;                            and                                                                                                                                                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | any                            fraud, whether or not material, that involves management                            or other                            employees who have a significant role in the registrant’s internal control                            over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Date:                            November 8, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | By:                            /s/ EDWARD G. ATSINGER III                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Edward                          G. Atsinger III                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Chief                          Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |

----

**EXHIBIT                  31.2**

| 1.     | I                            have reviewed this quarterly report on Form 10-Q of Salem                            Communications                            Corporation;                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 2.     | Based                            on my knowledge, this report does not contain any untrue                            statement of a                            material fact or omit to state a material fact necessary                            to make the                            statements made, in light of the circumstances under                            which such statements                            were made, not misleading with respect to the period                            covered by this                            report;       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 3.     | Based                            on my knowledge, the financial statements, and other                            financial information                            included in this report, fairly present in all material                            respects the                            financial condition, results of operations and cash flows                            of the                            registrant as of, and for, the periods presented in this                            report;                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 4.     | The                            registrant’s other certifying officers and I are responsible for                            establishing and maintaining disclosure controls and                            procedures (as                            defined in Exchange Act Rules 13a-15(e) and 15d-15(e))                            and internal                            control over financial reporting (as defined in Exchange                            Act Rules                            13a-15(f) and 15d-15(f)) for the registrant and have: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Designed                            such disclosure controls and procedures, or caused such                            disclosure                            controls and procedures to be designed under our supervision,                            to ensure                            that material information relating to the registrant,                            including its                            consolidated subsidiaries, is made known to us by others                            within those                            entities, particularly during the period in which this                            report is being                            prepared; |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Designed                            such internal control over financial reporting, or caused                            such internal                            control over financial reporting to be designed under                            our supervision, to                            provide reasonable assurance regarding the reliability                            of financial                            reporting and the preparation of financial statements                            for external                            purposes in accordance with generally accepted accounting                            principles;                                   |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Evaluated                            the effectiveness of the registrant’s disclosure controls and procedures                            and presented in this report our conclusions about the                            effectiveness of                            the disclosure controls and procedures, as of the end                            of the period                            covered by this report based on such evaluation; and                                                                                                                                                                                                                             |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Disclosed                            in this report any change in the registrant’s internal control over                            financial reporting that occurred during the registrant’s most recent                            fiscal quarter (the registrant’s fourth fiscal quarter in the case of an                            annual report) that has materially affected, or is reasonably                            likely to                            materially affect, the registrant’s internal control over financial                            reporting; and                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| 5.     | The                            registrant’s other certifying officers and I have disclosed, based                            on our                            most recent evaluation of internal control over financial                            reporting, to                            the registrant’s auditors and the audit committee of registrant’s board of                            directors (or persons performing the equivalent                            functions):                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | all                            significant deficiencies and material weaknesses in the                            design or                            operation of internal control over financial reporting                            which are                            reasonably likely to adversely affect the registrant’s ability to record,                            process, summarize and report financial information;                            and                                                                                                                                                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | any                            fraud, whether or not material, that involves management                            or other                            employees who have a significant role in the registrant’s internal control                            over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Date:                            November 8, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | By:                            /s/ EVAN D. MASYR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Evan                            D. Masyr                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Senior                            Vice President and Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |

----

**EXHIBIT                  32.1**

**CERTIFICATION                  PURSUANT TO**

**18                  U.S.C. SECTION 1350,**

**AS                  ADOPTED PURSUANT TO**

**SECTION                  906 OF THE SARBANES-OXLEY ACT OF 2002**

| ·   | the                            Quarterly Report of the Company on Form 10-Q for the                            period ended                            September 30, 2007 (the “Report”) fully complies with the requirements of                            Section 13(a) or Section 15(d) of the Securities Exchange                            Act of 1934;                            and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                            information contained in the Report fairly presents,                            in all material                            respects, the financial condition and results of operations                            of the                            Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Dated:                            November 8, 2007 |                                                      |   |
|--------|----------------------------------------------------|-----------------------------------------------------------|--------|
|   |                                               | By:                            /s/ EDWARD G. ATSINGER III |   |
|   |                                               | Edward                            G. Atsinger III         |   |
|   |                                               | Chief                            Executive Officer        |   |

----

**EXHIBIT                  32.2**

**CERTIFICATION                  PURSUANT TO**

**18                  U.S.C. SECTION 1350,**

**AS                  ADOPTED PURSUANT TO**

**SECTION                  906 OF THE SARBANES-OXLEY ACT OF 2002**

| ·   | the                            Quarterly Report of the Company on Form 10-Q for the                            period ended                            September 30, 2007 (the “Report”) fully complies with the requirements of                            Section 13(a) or Section 15(d) of the Securities Exchange                            Act of 1934;                            and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                            information contained in the Report fairly presents,                            in all material                            respects, the financial condition and results of operations                            of the                            Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Dated:                            November 8, 2007 |                                                                         |   |
|--------|----------------------------------------------------|------------------------------------------------------------------------------|--------|
|   |                                               | By:                            /s/  EVAN D. MASYR                  |   |
|   |                                               | Evan                            D. Masyr                                     |   |
|   |                                               | Senior                            Vice President and Chief Financial Officer |   |
|   |                                               |                                                                         |   |