<PAGE>

                                        

                                   FORM 10-QSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                                        

/x/  Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1996 or

/ /  Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition period from        to
                                                    -------   --------

                         Commission file number 0-20065
                                        
                          PREMIERE RADIO NETWORKS, INC.
        (Exact name of small business issuer as specified in its charter)
                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)
                                        
                  IRS Employer Identification No.:  95-4083971
     15260 Ventura Boulevard, Suite 500, Los Angeles, California  91403-5339
          (Address of principal executive offices, including ZIP code)
                                        
                                  (818)377-5300
              (Registrant's telephone number, including area code)
                                        
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to the filing
requirements for at least the past 90 days.

               Yes  /x/            No   / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date (net of treasury shares):

Class                                   Number of Shares Outstanding
-----                                   ----------------------------
Common Stock, $0.01 par value           At November 12, 1996: 3,583,675
Class A Common Stock, $0.01 par value   At November 12, 1996: 3,853,820
     

Transitional Small Business disclosure format (check one):  Yes  / /     No /X/

<PAGE>
                            PREMIERE RADIO NETWORKS, INC.


                              September 30, 1996



                                     INDEX



PART I-  FINANCIAL INFORMATION                                        
                                                                 Page Number
                                                                 -----------
Item 1. Condensed Consolidated Financial Statements
                         
Index                                                                      2

Condensed Consolidated Balance Sheets at September 30, 1996 (Unaudited)
     and December 31, 1995                                                 3

Condensed Consolidated Income Statements for the Three Months and Nine
     Months Ended September 30, 1996 and 1995 (Unaudited)                  4

Condensed Consolidated Statements of Cash Flows for the Nine Months
     Ended September 30, 1996 and 1995 (Unaudited)                         5

Notes to Condensed Consolidated Financial Statements                     6 - 8


Item 2. Management's Discussion and Analysis of Financial Condition 
      and Results of Operations                                          9 - 14


PART II- OTHER INFORMATION


Item 1. Legal Proceedings                                               14 - 15

Item 4. Submission of Matters to a Vote of Security Holders             15 - 16

Item 6. Exhibits and Reports on Form 8-K                                  17

Signature Page                                                            18


                                       2

<PAGE>

                                   PREMIERE RADIO NETWORKS, INC.

                               CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                  
                                             September 30,         December 31,
                                                1996                   1995
                                             -------------        -------------
                                             (Unaudited)

ASSETS
Current assets:
   Cash and cash equivalents  . . . . . . .   $27,965,007           $ 5,432,088
   Accounts receivable, net   . . . . . . .     5,608,925             4,086,623
   Notes receivable from officer/employees.        21,700               282,279
   Recoverable income taxes . . . . . . . .        --                   250,952
   Deferred income taxes  . . . . . . . . .       549,000               549,000
   Prepaid expenses and other assets  . . .       939,301             1,375,805
                                              -----------           -----------
        Total current assets  . . . . . . .    35,083,933            11,976,747
   

Notes receivable from officer/employees . .       656,938               845,000
Property and equipment, net . . . . . . . .     2,091,124             1,797,337
Acquired program library and program 
networks, net . . . . . . . . . . . . . . .     1,451,166             1,699,971
Intellectual property, net  . . . . . . . .     5,512,363             4,858,749
Debt issuance costs, net  . . . . . . . . .     2,098,320             2,143,729
Other assets  . . . . . . . . . . . . . . .       680,930               711,968
                                              -----------           -----------
     Total assets . . . . . . . . . . . . .   $47,574,774           $24,033,501
                                              -----------           -----------
                                              -----------           -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses  .   $   893,310           $ 1,729,919
   Accrued payroll, bonuses and retirement
   plan contribution  . . . . . . . . . . .       573,646               905,468
   Income taxes payable . . . . . . . . . .       542,829                25,022
   Deferred revenue . . . . . . . . . . . .        --                    83,326
   Current portion of notes payable . . . .       495,897               400,000
                                              -----------           -----------
        Total current liabilities . . . . .     2,505,682             3,143,735

Notes payable, less current portion . . . .       100,107             1,467,455
Due to related party  . . . . . . . . . . .       120,000               120,000

Stockholders' equity
   Common stock . . . . . . . . . . . . . .        35,779                36,417
   Class A common stock . . . . . . . . . .        40,364                  --
   Additional paid-in-capital . . . . . . .    34,228,358            11,752,595
   Retained earnings  . . . . . . . . . . .    10,544,484             7,513,299
                                              -----------           -----------
     Total stockholders' equity . . . . . .    44,848,985            19,302,311
                                              -----------           -----------
     Total liabilities and stockholders'
      equity . . . . . . . . . . . . .  . .   $47,574,774           $24,033,501
                                              -----------           -----------
                                              -----------           -----------
See accompanying notes to unaudited condensed consolidated financial statements.


                                       3
<PAGE>
                           PREMIERE RADIO NETWORKS, INC.

                         CONDENSED CONSOLIDATED INCOME STATEMENTS
                                          
                                      (UNAUDITED)
                                                                  
                                                                  
<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED           NINE MONTHS ENDED
                                               SEPTEMBER 30,               SEPTEMBER 30,
                                            ------------------           -----------------
                                         1996            1995           1996            1995
                                         ----            ----           ----            ----
<S>                                     <C>           <C>            <C>             <C>
Revenue:
 Gross revenue . . . . . . . . . . . .  $7,068,986    $5,650,577     $19,143,100     $15,013,802
 Less:  agency commissions . . . . . .     855,580       618,556       2,356,901       1,708,793
                                        ----------    ----------     -----------     -----------
Net operating revenue  . . . . . . . .   6,213,406     5,032,021      16,786,199      13,305,009
Operating expenses:
 Production, programming and
 promotions. . . . . . . . . . . . . .   1,672,230     1,506,122       5,055,347       4,066,939
 Selling, general and  administrative.   2,852,870     2,492,965       7,616,210       6,228,034
                                        ----------    ----------     -----------     -----------
  Total operating expenses . . . . . .   4,525,100     3,999,087      12,671,557      10,294,973
                                        ----------    ----------     -----------     -----------
Operating income . . . . . . . . . . .   1,688,306     1,032,934       4,114,642       3,010,036

Other income and expenses:
 Gain on sale of radio station . . . .      --             --              --            387,423
 Interest income (expense), net. . . .     424,883        69,556         958,434          39,900
 Other (loss) income, net. . . . . . .      (5,981)       21,545          (2,891)         28,722
                                        ----------    ----------     -----------     -----------
Income before income taxes . . . . . .   2,107,208     1,124,035       5,070,185       3,466,081
Provision for income taxes . . . . . .     848,000       459,000       2,039,000       1,415,000
                                        ----------    ----------     -----------     -----------
 Net income. . . . . . . . . . . . . .  $1,259,208    $  665,035      $3,031,185      $2,051,081
                                        ----------    ----------     -----------     -----------
                                        ----------    ----------     -----------     -----------
Earnings per share . . . . . . . . . .       $0.14         $0.10           $0.34           $0.41

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       4


<PAGE>

                                   PREMIERE RADIO NETWORKS, INC.

                                     CONDENSED CONSOLIDATED
                                    STATEMENTS OF CASH FLOWS 

                                           (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED
                                                                       SEPTEMBER 30
                                                                     -----------------
                                                                    1996           1995
                                                                    ----           ----
<S>                                                                <C>           <C>
OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,031,185    $2,051,081
Adjustments to reconcile net income to net cash
     provided by operating activities:
     Gain on sale of radio station assets . . . . . . . . . . .      --          (387,423)
     Loss (gain) on sale of fixed assets. . . . . . . . . . . .        1,091      (12,636)
     Depreciation and amortization  . . . . . . . . . . . . . .    1,265,308       833,739
      (Decrease) increase in allowance for doubtful accounts. .      (35,000)        3,000
      Changes in operating assets and liabilities:
       Accounts receivable  . . . . . . . . . . . . . . . . . .   (1,487,302)     (529,384)
       Income taxes . . . . . . . . . . . . . . . . . . . . . .      768,759      (134,050)
       Prepaid expenses and other current assets  . . . . . . .      574,784      (751,858)
       Notes receivable from officer/employees. . . . . . . . .      198,641          6,672
       Other assets   . . . . . . . . . . . . . . . . . . . . .       77,527         96,616
       Accounts payable and accrued liabilities . . . . . . . .   (1,146,680)       150,248
       Deferred income  . . . . . . . . . . . . . . . . . . . .      (83,326)      (383,128)
       Other  . . . . . . . . . . . . . . . . . . . . . . . . .      --             102,807
                                                                 -----------     ----------
Net cash provided by operating activities . . . . . . . . . . .    3,164,987      1,045,684

INVESTING ACTIVITIES
Acquisition of property and equipment . . . . . . . . . . . . .    (837,083)      (455,670)
Acquisition of intangible assets. . . . . . . . . . . . . . . .    (830,474)    (2,369,392)
Net proceeds from sale of radio station assets  . . . . . . . .      --          5,239,929
Net proceeds from sale of property and equipment  . . . . . . .      20,000         88,366
                                                                 -----------     ----------
Net cash (used in) provided by investing activities . . . . . .  (1,647,557)     2,503,233

FINANCING ACTIVITIES
Repayment of note payable to officer  . . . . . . . . . . . . .      --           (750,000)
Repayment of borrowings   . . . . . . . . . . . . . . . . . . .  (1,500,000)    (2,862,500)
Increase in debt and equity placement costs . . . . . . . . . .      --           (361,690)
Net proceeds from issuance of common stock and Class be 
 warrants   . . . . . . . . . . . . . . . . . . . . . . . . . .      --          3,860,877
Net proceeds from issuance of Class A common stock  . . . . . .  22,031,304         --
Exercise of stock options . . . . . . . . . . . . . . . . . . .     484,185        832,671
                                                                 -----------     ----------
Net cash provided by financing activities . . . . . . . . . . .  21,015,489        719,358
                                                                 -----------     ----------
Increase in cash and cash equivalents . . . . . . . . . . . . .  22,532,919      4,268,275
Cash and cash equivalents at beginning of period  . . . . . . .   5,432,088      2,371,314
                                                                 -----------     ----------
Cash and cash equivalents at end of period. . . . . . . . . . . $27,965,007     $6,639,589
                                                                 -----------     ----------
                                                                 -----------     ----------
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       5
                                        
<PAGE>
                        PREMIERE RADIO NETWORKS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                        
                                   (UNAUDITED)
                                        

NOTE 1.  BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements of Premiere
Radio Networks, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions to Form 10-QSB and Article 10 of Regulation
S-B.  Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of the Company's management,
all adjustments (consisting only of normal, recurring adjustments) considered
necessary for a fair presentation have been included.  Operating results for the
three-month and nine-month periods ended September 30, 1996 are not necessarily
indicative of the results that may  be expected for the year ended December 31,
1996.

     It is suggested that the accompanying unaudited condensed consolidated
financial statements be read in conjunction with the consolidated financial
statements and notes included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995.

NOTE 2.  EARNINGS PER SHARE

     Earnings per share are based upon the combined weighted average number of
shares outstanding during each interim period which include, where appropriate,
the assumed exercise of dilutive stock options and warrants to purchase common
stock.  In computing earnings per share for the three months and nine months
ended September 30, 1996 and 1995, the Company utilized the modified treasury
stock method which assumes the exercise of all outstanding options and warrants
to purchase common stock, and the use of the assumed proceeds thereof to
purchase up to a maximum of 20% of the then outstanding common stock of the
Company.  Excess proceeds, if any, derived from the assumed purchase of such
shares are assumed to be utilized to first reduce the outstanding balances of
notes payable and second for investment in short term, cash equivalent
marketable securities.  

     As a result, for purposes of determining earnings per share for the three
months ended September 30, 1996 and 1995, net income is adjusted for the
hypothetical reduction in interest expense ($8,012 and $26,861, respectively),
and for hypothetical interest income related to the assumed investment in
marketable securities ($45,734 and $34,708, respectively), such adjustments
having been made net of applicable income taxes.  For purposes of determining
earnings per share for the nine months ended September 30, 1996 and 1995, net
income is adjusted for the hypothetical reduction in interest expense ($24,035
and $80,584, respectively), and for hypothetical interest income related to the
assumed investment in marketable securities ($137,203 and $104,125,
respectively), such adjustments having been made net of applicable income taxes.


                                       6


<PAGE>

                        PREMIERE RADIO NETWORKS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                        
                                   (UNAUDITED)


                                        

NOTE 2.  EARNINGS PER SHARE (CONTINUED)
     
     Earnings  per share for the three months ended September 30, 1996 and 1995
are based upon  9,701,431 and 6,963,408 weighted average number of shares
outstanding, respectively, and 9,413,755 and 5,499,780 weighted average number
of shares outstanding for the nine months ended September 30, 1996 and 1995, 
respectively.  (See Note 3, "Stockholders' Equity--Stock Offering and Stock
Dividend")

NOTE 3.  STOCKHOLDERS' EQUITY--STOCK OFFERING AND STOCK DIVIDEND

     On January 25, 1996 the Company completed the sale of 1,500,000 shares of
Class A Common Stock (of which 1,360,000 shares were sold by the Company, and
140,000 shares by certain management shareholders of the Company which the
management shareholders had obtained through exchanging 140,000 shares of Common
Stock for 140,000 shares of Class A Common Stock) at $18.25 per share pursuant
to a public offering (the "Offering") and received net proceeds of approximately
$22,031,000 (net of underwriting discounts, commissions and expenses).  In
connection with the Offering, the Company paid Archon Communications Inc.
("Archon")  fees of $200,000.

     On March 13, 1996 the Company declared a one-for-two stock dividend,
effected in the form of a three-for-two stock split, of Class A Common Stock
which was paid on April 1, 1996 to all holders of the Company's Common Stock and
Class A Common Stock on the March 22, 1996 record date for such dividend (the
"Class A Dividend").  Per share earnings in each of the foregoing interim
periods have been adjusted to reflect the Class A Dividend.


NOTE 4.  ACQUISITIONS

     On March 20, 1995, the Company entered into a joint venture agreement with
Marketing Research Partners, Inc. ("MRPI") to nationally syndicate Newstrack, a
research service jointly developed by the Company and MRPI (the "Newstrack Joint
Venture").  The Newstrack Joint Venture commenced operations on or about
September 1, 1995 with the Company holding a 75% interest and MRPI holding a 25%
interest.  Effective September 3, 1996, the Company acquired the remaining 25%
minority interest from MRPI for $303,188. The acquisition of the 25% minority
interest in the Newstrack Joint Venture has been accounted for by the Company as
a purchase.

     On September 27, 1996 the Company acquired substantially all of the assets
of Philadelphia 


                                       7


<PAGE>

                        PREMIERE RADIO NETWORKS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                        
                                   (UNAUDITED)
                                        

Music Works, Inc. (herein, "PMW") from Andrew Mark, President of the Company's
BRG/Music Works Division, for total consideration of $635,000, consisting of
$435,000 in cash and $200,000 in a 6.5% interest, two-year promissory note. 
Further, additional consideration of up to $700,000 may be payable depending
upon the audience levels delivered by PMW.  The assets of PMW acquired by the
Company consist principally of intellectual properties and other intangibles,
including a library of over 6,000 jingles, third-party radio station affiliate
broadcast contracts, and copyrights.  The Company did not assume any pre-
acquisition accounts payable or other obligations of PMW, except for certain
commitments under real property and equipment leases. The acquisition of PMW was
accounted for by the Company as a purchase.


     On September 27, 1996 the Company amended and restated an August 29, 1995
agreement pursuant to which it entered into future commitments to acquire
licenses to three (3) production music libraries from Canary Productions, Inc.
("Canary"), which is wholly-owned by Andrew Mark.  Under the amended and
restated agreement, the Company has entered into future commitments to acquire
one (1) additional production music library (i.e., four (4) production music
libraries in total) from Canary.  The licenses to the production music libraries
will be acquired by the Company, one each year during the next four years, for a
purchase price that will be based upon a formula of a multiple of earnings of
each such library.

     On October 1, 1996, the Company consummated an agreement pursuant to which
it acquired substantially all of the assets of Cutler Productions, Inc. and SJM
Productions, Inc. (collectively, "Cutler") for consideration consisting of
$8,500,000 cash.  The assets of Cutler that were acquired by the Company consist
principally of intellectual properties and other intangibles, including third-
party radio station affiliate broadcast contracts, a library of programs and
program rights, and copyrights.  The Company did not assume any pre-acquisition
accounts payable or other obligations of Cutler, except for certain commitments
under real property and equipment leases.  The acquisition of Cutler will be
accounted for by the Company as a purchase, and was financed entirely through
existing working capital of the Company.  Also, Ronald Cutler, a 100%
shareholder of Cutler prior to the above transaction, will be employed by the
Company as President of the Company's Cutler Productions Division under a three
(3) year employment contract.  In connection with the acquisition of Cutler, the
Company will pay a $100,000 fee to Archon.


                                       8

<PAGE>


                          PREMIERE RADIO NETWORKS, INC.

ITEM 2.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION

     The Company is an independent creator, producer and distributor of
innovative comedy, entertainment and music related programs, and a supplier of
research and other services for the radio industry.   Founded in 1987, the
Company's wide array of syndicated programs and research and other services are
utilized by more than 5,000 independently owned radio station affiliates located
in virtually every major market in the United States.

     The Company presently produces and distributes 37 syndicated programs and
services which it distributes to radio station affiliates in exchange for
commercial broadcast time.  The group of radio stations which contracts with the
Company to broadcast a particular program or utilize one of its services
constitutes a "radio network."  The Company derives a significant portion of its
revenues from selling the commercial broadcast time on its radio networks to
advertisers desiring national coverage.  The Company also derives a portion of
its revenues by acting as an exclusive sales representative for third-party
network radio program and service producers and distributors.

     This discussion should be read in conjunction with the financial
statements, related notes and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1995.

     As a result of the Company's growth in its representation of third-party
program producers and service providers and the impact of prior acquisitions, 
period-to-period results of operations may not be comparable, and the results of
operations for the three months and nine months ended September 30, 1996 may not
be indicative of results of operations for any future period. 
     
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS
AND NINE MONTHS ENDED SEPTEMBER 30, 1995

     OPERATING REVENUES.  Gross revenues for the three months ended September
30, 1996 and 1995 were $7.1 million and $5.7 million, respectively, representing
an increase of  $1.4  million, or 25%.  Net operating revenues increased $1.2
million, or 24% from $5.0 million for the three months ended September 30, 1995,
to $6.2 million for the three months  ended September 30, 1996. These increases
are principally due to increased gross advertising revenues related to network
programs and services offset, in part, by lower promotions and other revenues. 
The increased advertising revenues resulted from the growth in established
programming, the launch and acquisition of new programming, and the continued
growth in the Company's Mediabase research services.

     Gross revenues for the nine months ended September 30, 1996 and 1995 were
$19.1 million  and $15.0 million, respectively, representing an increase of 
$4.1 million,  or 28%.  Net operating 


                                       9

<PAGE>
                          PREMIERE RADIO NETWORKS, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (CONTINUED)

revenues increased $3.5 million, or 26% from $13.3 million for the nine 
months ended September 30, 1995, to $16.8 million for the nine months  ended 
September 30, 1996. These increases are principally due to increased gross 
advertising revenues related to the growth in established programming, the 
launch and acquisition of new programming, and the continued growth in the 
Company's Mediabase research services. 

     PRODUCTION, PROGRAMMING AND PROMOTIONS EXPENSES.  Production, 
programming and promotions expenses for the three months ended September 30, 
1996 and 1995 were $1.7 million and $1.5 million, respectively, representing 
an increase of $0.2 million or 11%.  The increase in production, programming 
and promotions expenses in absolute dollars was principally due to increased 
costs associated with the production of new programs and services, production 
costs associated with the operations of the Company's Broadcast Results Group 
("BRG") division which was acquired in September 1995, and increased program 
distribution costs associated with the expansion of the Company's radio 
station affiliates, which were offset, in part, by decreased costs of 
promotions.  As a percentage of net operating revenues, production, 
programming and promotions  expenses decreased approximately 3% to 27% for 
the three months ended September 30, 1996 as compared to 30% for the three 
months ended September 30, 1995.  The decreased production, programming and 
promotions expenses as a percentage of net operating revenues was principally 
due to the effects of higher overall net revenues, and the nature of fixed 
and variable components of production, programming and promotions expenses.
                                        
     Production, programming and promotions expenses for the nine months 
ended September 30, 1996 and 1995 were $5.1 million and $4.1 million, 
respectively, representing an increase of $1.0 million or 24%.  The increase 
in production, programming and promotions expenses in absolute dollars was 
principally due to increased costs associated with the production of new 
programs and services, production costs associated with the operations of the 
Company's Broadcast Results Group ("BRG") division which was acquired in 
September 1995, and increased program distribution costs associated with the 
expansion of the Company's radio station affiliates, which were offset, in 
part, by decreased costs of promotions.  As a percentage of net operating 
revenues, production, programming and promotions expenses decreased 
approximately 1% to 30% for the nine months ended September 30, 1996 as 
compared to 31% for the nine months ended September 30, 1995.  The decreased 
production, programming and promotions expenses as a percentage of net 
operating revenues was principally due the effects of higher overall net 
revenues, and the nature of fixed and variable components of productions, 
programming and promotions expenses.
                                        
     As the Company expands its programming and services, the Company's 
income may,  from time to time, be adversely affected because the initial 
expenses associated with such new programming and services are typically 
expensed in the quarter in which incurred.




                                       10

<PAGE>
                          PREMIERE RADIO NETWORKS, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (CONTINUED)


                                             
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses for the three months ended September 30, 1996 and 
1995 were $2.9 million and $2.5 million, respectively, representing an 
increase of $0.4 million, or 14%. As a percentage of net operating revenues, 
selling, general and administrative expenses were 46% and 50% during the 
three months ended September 30, 1996 and 1995, respectively,  representing a 
decrease as a percentage of net operating revenues of approximately 4%.  The 
increase in selling, general and administrative expenses in absolute dollars 
is principally due to the Company's expansion of its sales and marketing 
efforts related to the launch of new programs and services, and increased 
amortization expenses resulting from acquisitions of additional intellectual 
properties and other intangible assets.  The decreased selling, general and 
administrative expenses as a percentage of net operating revenues was 
principally due to the effects of higher overall net revenues and the nature 
of fixed and semi-variable components of selling, general and administrative 
expenses.


     Selling, general and administrative expenses for the nine months ended 
September 30, 1996 and 1995 were $7.6 million and $6.2 million, respectively, 
representing an increase of $1.4 million, or 22%. As a percentage of net 
operating revenues, selling, general and administrative expenses were 45% and 
47% for the nine months ended September 30, 1996 and 1995, respectively, 
representing a decrease of approximately 2%.  The increase in selling, 
general and administrative expenses in absolute dollars is principally due to 
expenses associated with the operations of BRG which the Company acquired 
during the third quarter of 1995, the Company's expansion of its sales and 
marketing efforts related to the launch of new programs and services, and 
increased amortization expenses resulting from acquisitions of additional 
intellectual properties and other intangible assets. The decreased selling, 
general and administrative expenses as a percentage of net operating revenues 
was principally due to the effects of higher overall net revenues and the 
nature of fixed and semi-variable components of selling, general and 
administrative expenses.
                                        
     OPERATING INCOME.  Operating income for the three months ended September 
30, 1996 was $1.7 million, an increase of $0.7 million, or 63%, over the same 
three-month period in 1995. Operating income for the nine months ended 
September 30, 1996 was $4.1 million, an increase of $1.1 million, or 37%, 
over the same nine-month period in 1995. The increased operating income was 
principally due to increased net advertising revenues resulting from the 
growth in established programming, the launch or acquisition of new 
programming, and the continued growth in the Company's Mediabase research 
services.

     OTHER INCOME.  Other income (net) for the three months ended September 
30, 1996 was $0.4 million, an increase of $0.3 million as compared



                                       11


<PAGE>
                          PREMIERE RADIO NETWORKS, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (CONTINUED)

     to the same period in 1995. Other income for the nine months ended 
September 30, 1996 was $1.0 million, an increase of $0.6 million as compared 
to the same period in 1995.  Other income for the three months and nine 
months ended September 30, 1996 included increased interest income (net) of 
$0.3 million and $0.9 million, respectively, attributable to the Company's 
investment of the net proceeds derived from the Offering in short-term, cash 
equivalent marketable securities, lower overall outstanding indebtedness, and 
the waiver of certain commitment fees payable to Archon Communications, Inc.  
Other income for the nine months ended September 30, 1995 included a one-time 
gain on the sale of the Company's Denver, Colorado radio station KZDG-FM 
("KZDG") of $0.4 million. See "Liquidity and Capital Resources."

     INCOME TAXES.  The provision for income taxes for the three months ended 
September 30, 1996 and 1995 was $0.8 million and $0.5 million, respectively. 
The provision for income taxes for the nine months ended September 30, 1996 
and 1995 was $2.0 million and $1.4 million, respectively. The estimated 
effective tax rate utilized by the Company for the three months and nine 
months ended September 30, 1996 was 40.2%, while the estimated effective tax 
rate for the three months and nine months ended September 30, 1995 was 40.8%. 

     NET INCOME AND EARNINGS PER SHARE. Net income for the three months ended 
September 30, 1996 and 1995 was $1.3 million, or $0.14 per share, and $0.7 
million, or $0.10 per share, respectively.  Net income for the nine months 
ended September 30, 1996 and 1995 was $3.0 million, or $0.34 per share, and 
$2.1 million, or $0.41 per share, respectively. The increased net income for 
the three months and nine months ended September 30, 1996 was principally due 
to increased operating income and interest income earned on the Company's 
investments in short-term, cash equivalent marketable securities.  Earnings 
per share, which includes the dilutive effects of stock options and warrants 
to purchase Common Stock and Class A Common Stock, are based upon 9,701,431 
and 6,963,408 weighted average shares for the three months ended September 
30, 1996 and 1995, respectively.  Earnings per share for the nine months 
ended September 30, 1996 and 1995 are based upon 9,413,755 and 5,499,780 
weighted average shares, respectively.
                                        
     On March 13, 1996 the Company declared a one-for-two stock dividend, 
effected in the form of a three-for-two stock split, of Class A Common Stock 
which was paid on April 1, 1996 to all holders of the Company's Common Stock 
and Class A Common Stock on the March 22, 1996 record date for such dividend 
(the "Class A Dividend").  Per share earnings in each of the foregoing 
interim periods have been adjusted to reflect the Class A Dividend.
                                        
LIQUIDITY AND CAPITAL RESOURCES
                                        
     Historically, the Company has financed its cash flow requirements 
through cash flows generated from operations and financing activities. 
                                        



                                       12

<PAGE>

                          PREMIERE RADIO NETWORKS, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (CONTINUED)


     Net cash provided by  operating activities for the nine  months ended 
September 30, 1996 and 1995 was $3.2 million and $1.0 million, respectively. 
The increased cash flows from operations during the 1996 interim period was 
principally due to increased operating income, lower prepaid expenses and 
lower other current assets offset, in part, by increased accounts receivable 
associated with the Company's revenue growth, and decreased accounts payable 
and accrued expenses.

     Net cash (used in) provided by investing activities for the nine months 
ended September 30, 1996 and 1995 was $(1.6) million and $2.5 million, 
respectively. The decrease in net cash (used in) provided by investing 
activities during the 1996 interim period is primarily attributable to the 
proceeds generated from the sale of KZDG during the nine months ended 
September 30, 1995.

     Net cash provided by financing activities for the nine months ended 
September 30, 1996 and 1995 were $21.0 million  and $0.7 million, 
respectively. Net cash provided by financing activities during the 1996 
interim period increased principally due to proceeds generated from the sale 
of Class A Common Stock in connection with the Offering.
                                        
     The Company's working capital at September 30, 1996 was $32.6 million as 
compared to $8.8 million at December 31, 1995. This increase in working 
capital was primarily attributable to an increase in cash and cash 
equivalents resulting from the sale of Class A Common Stock in connection 
with the Offering. 
                                        
     On July 28, 1995, the Company, Archon and certain management 
stockholders entered into a Commitment Agreement pursuant to which  Archon 
agreed to purchase up to $10.8 million principal amount of debentures (the 
"Debentures") and 1,080,000 Class A Warrants upon the Company's call at any 
time until October 28, 1996, including 707,000 Class A Warrants which are 
issuable to Archon whether or not the Company exercises its call rights with 
respect to the Debentures.  The Company has recorded, as debt issuance costs, 
the value of the 707,000 Class A Warrants issuable to Archon whether or not 
the Debentures are issued as well as certain legal, professional and other 
costs directly related to the Debentures.  The Company's option to call on 
Archon to purchase all of the Debentures expired on October 28, 1996. Because 
the Company did not exercise its call option, the Company will write-off the 
unamortized debt issuance costs related to the 707,000 Class A Warrants and 
other unamortized debt issuance costs resulting in a one-time earnings charge 
during the fourth quarter of 1996 of  approximately $2.0 million.  
                                        
     In connection with Archon's commitment to purchase the Debentures, 
Archon had charged the Company a facility fee payable to Archon of 0.3% of 
the unused commitment for each quarter during which the commitment is 
outstanding ($32,400 per quarter, assuming none of the commitment is called). 
The Company had not paid this commitment fee since January 1996.  Effective 
July 1, 1996, 


                                       13

<PAGE>

                          PREMIERE RADIO NETWORKS, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS 
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (CONTINUED)

Archon agreed to waive the commitment fees (including any accrued, but unpaid 
commitment fees).  Accordingly, included in results of operations for the 
three months ended September 30, 1996 is a reduction in interest expense of 
$64,800 relating to commitment fees accrued to Archon from January 1, 1996.
                                         
     In connection with the acquisition of BRG, the Company issued a 
non-interest bearing note in the face amount of $412,500 due in January 1997. 
 In connection with the acquisition of Philadelphia Music Works, Inc. 
("PMW"), the Company issued a 6.5% note payable in the face amount of 
$200,000 which is due in quarterly installments through September 1998.  In 
addition, the Company has entered into a commitment, as amended and restated, 
to acquire the licenses for four production music libraries from an affiliate 
of BRG and PMW for a purchase price that will be based on a specified formula.
                                        
     On January 25, 1996, the Company completed the sale of 2,250,000 shares 
of its Class A Common Stock (of which 2,040,000 shares were sold by the 
Company, and 210,000 shares by certain management shareholders of the Company 
which the management shareholders had obtained through exchanging 210,000 
shares of Common Stock for 210,000 shares of Class A Common Stock) at $12.17 
per share (as adjusted for the effects of  the Class A Dividend) pursuant to 
the Offering and received net proceeds (net of underwriting discounts, 
commissions and expenses) of approximately $22.0 million.
                                        
     Management believes that its available cash together with operating 
revenues will be sufficient to fund the Company's working capital 
requirements through December 31, 1996.
                                        
SEASONALITY
                                        
     Although not readily detectible because of the impact of acquisitions, 
the Company's revenues have historically been highest in the second and third 
quarters and lowest in the first and fourth quarters. Other than sales 
commissions paid to the Company's sales personnel, costs do not vary 
significantly with respect to the seasonal fluctuation of revenues. 
                                        
                                        
                           PART II.  OTHER INFORMATION
                                        
ITEM 1.  LEGAL PROCEEDINGS

     From time to time, the Company may be a party to various legal actions and
complaints arising 

                                        14


<PAGE>

                          PREMIERE RADIO NETWORKS, INC.

                                OTHER INFORMATION
                                        
                                   (CONTINUED)

in the ordinary course of business. In the opinion of the Company's 
management, the litigation in which it currently is a party is not material 
to the financial condition or results of operations of the Company. 

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

     The Company held its annual meeting of stockholders on August 13, 1996
("Annual Meeting").  A brief description of each matter voted upon at the Annual
Meeting, and the number of votes cast for, against or withheld, as well as the
number of abstentions and broker non-votes, as to each such matter, including a
separate tabulation with respect to each nominated director follows.

     The stockholders voted on a proposal to elect eight directors to serve for
the ensuing year.  The vote with respect to each such nominee follows.


                                                            Voting
                                                            Authority    Broker
Nominee(s):         Affirmative    Negative  Abstentions    Withheld  Non-Votes
-----------         -----------    --------  -----------    --------- ---------
Stephen C. Lehman    2,293,728       - 0 -       - 0 -         735       - 0 -
Kraig T. Kitchin     2,293,728       - 0 -       - 0 -         735       - 0 -
Harold S. Wrobel     2,293,728       - 0 -       - 0 -         735       - 0 -
David J. Evans       2,293,728       - 0 -       - 0 -         735       - 0 -
Robert M. Fell       2,293,728       - 0 -       - 0 -         735       - 0 -
Andrew Schuon        2,293,728       - 0 -       - 0 -         735       - 0 -
David E. Salzman     2,293,728       - 0 -       - 0 -         735       - 0 -
Kenin M. Spivak      2,293,728       - 0 -       - 0 -         735       - 0 -

    The stockholders voted on a proposal to amend the Certificate of
Incorporation of the Company to provide that (a) each share of Common Stock,
$0.01 par value per share ("Common Stock"), shall be entitled to ten (10) votes
per share and each share of Class A Common Stock, $0.01 par value per share
("Class A Common Stock"), shall be entitled to one vote per share, (b) each
share of Common Stock shall be convertible into one share of Class A Common
Stock at the option of the holder thereof, (c) that the Company may not treat
the Common Stock and Class A Common Stock differently (except for voting rights)
in any merger, reorganization, recapitalization or similar transaction or
support a tender offer which attempts to do so and (d) the authorized number of
shares of Common Stock and Class A Common Stock be increased to 14,000,000 and
20,000,000 shares, respectively.  The vote with respect to this proposal was as
follows:


                                       15

<PAGE>
 
                             PREMIERE RADIO NETWORKS, INC.

                                 OTHER INFORMATION
                                        
                                   (CONTINUED)
                                        
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)

     Affirmative votes         2,182,447
     Negative votes              111,066
     Votes withheld                  -0-
     Abstentions                     950
     Broker non-votes                -0-

     The stockholders voted on a proposal to ratify the appointment of Ernst &
Young LLP to serve as the Company's independent accountants and auditors for the
fiscal year ending December 31, 1996.  The vote with respect to this proposal
was as follows:

     Affirmative votes          2,293,898
     Negative votes                   420
     Votes withheld                   -0-
     Abstentions                      145
     Broker non-votes                 -0-

     The stockholders voted on a proposal to approve an amendment to the
Company's 1992 Stock Option Plan ("1992 Plan") to increase the number of shares
of Common Stock subject to the 1992 Plan from 525,000 to 547,207 shares.  The
vote with respect to this proposal was as follows:

     Affirmative votes          2,280,805
     Negative votes                13,293
     Votes withheld                   -0-
     Abstentions                      365
     Broker non-votes                 -0-

     The stockholders voted on a proposal to approve an amendment to the
Company's 1995 Stock Option Plan ("1995 Plan") to increase the number of shares
of Class A Common Stock subject to the 1995 Plan from 461,887 to 1,113,887
shares.  The vote with respect to this proposal was as follows:

     Affirmative votes          2,219,524
     Negative votes                74,514
     Votes withheld                   -0-
     Abstentions                      365
     Broker non-votes                 -0-



                                       16

<PAGE>

                        PREMIERE RADIO NETWORKS, INC.

ITEM 6(A).  EXHIBITS

     11. Computation of Per Share Earnings*

ITEM 6(B).  REPORTS ON FORM 8-K

     None.




----------------------
*  Exhibit has been filed herewith.


                                       17

<PAGE>

                       PREMIERE RADIO NETWORKS, INC.

Signature(s)


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




                   PREMIERE RADIO NETWORKS, INC. (REGISTRANT)
                                        




   By     /s/ Stephen C. Lehman                         Date: November 12, 1996
     -----------------------------                      -----------------------
           Stephen C. Lehman
           Chairman of the Board, President
           and Chief Executive Officer


   By:     /s/ Daniel M. Yukelson                       Date: November 12, 1996
     -----------------------------                      -----------------------
           Daniel M. Yukelson
           Vice President/Finance and
           Chief Financial Officer, and Secretary
           (Principal Financial and Accounting Officer)


                                       18