##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-27823
 
 Spanish Broadcasting System, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    13-3827791(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2601 South Bayshore Drive, PH II
Coconut Grove, Florida 33133  (Address of principal executive offices and zip code)  (305) 441-6901  None  None
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredClass A common stock, par value $0.0001 per share
    
    The NASDAQ Global Market
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ
   Documents Incorporated by Reference:




---



##### 



Table of Contents
 PagePART IItem 1. Business.
    
    
    1Item 1A. Risk Factors
    
    
    22Item 1B. Unresolved Staff Comments
    
    
    32Item 2. Properties
    
    
    32Item 3. Legal Proceedings
    
    
    34Item 4. [Removed and reserved]
    
    
    35PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    36Item 6. Selected Financial Data38Item 7. Managements Discussion and Analysis of Financial Condition and
Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    48Item 8. Financial Statements and Supplementary Data
    
    
    48Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    48Item 9A. Controls and Procedures
    
    
    48Item 9B. Other Information
    
    
    49PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    49Item 11. Executive Compensation
    
    
    50Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    50Item 13. Certain Relationships and Related Transactions, and Director
Independence
    
    
    50Item 14. Principal Accountant Fees and Services
    
    
    50PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    51Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




---



##### Table of Contents



Special Note Regarding Forward-Looking Statements
     See
Item 1A. Risk Factors




---



##### Table of Contents



PART I
 
 Item 1.
    
    Business
      Business Strategy
   1




---



##### Table of Contents



Hispanic Market Opportunity
  
    
    Hispanic Population Growth.The U.S. Hispanic population is the largest ethnic
minority group and the fastest growing consumer market and demographic group of the
U.S. population. Between 2000 and 2010, the Hispanic population increased by 39.8%,
compared to 5.5% for the non-Hispanic population. In 2010, Hispanics comprised 16.1% of
the countrys population and nearly one out of every six individuals living in the U.S.
is of Hispanic origin.
 
    
    Hispanic Buying Power.The U.S. Hispanic population accounted for an estimated
buying power of $1.04 trillion in 2010 and is estimated to grow to $1.48 trillion in
2015, an increase of 43.1%. Hispanic buying power increased by 107.5% between 2000 and
2010 and accounted for 9.3% of all U.S. buying power in 2010.
 
    
    Spanish Language Advertising Spending.In 2009, advertisers spent an estimated
$6.3 billion on Spanish-language media advertising, compared to $6.9 billion in 2008.
 Selig Center for
Economic Growth Terry College of Business The University of Georgia August 2010 Advertising
Age Hispanic Fact Pack Annual Guide to Hispanic Marketing and Media 2010 Edition
 Operating Strategy
  Format high-quality programming.
 Attract and retain strong local management teams.
 Utilize focused sales efforts and sales bundling.
  2




---



##### Table of Contents



Control broadcast station operating costs.
 Effective use of promotions and special events.
 Maintain strong community involvement.
 Expand branded content across multiple media platforms.
  3




---



##### Table of Contents



Recent Developments
 Engagement Letter
  NASDAQ Delisting Letter
    NASDAQ Audit Committee Compliance Letter
   
    
    until the earlier of our next annual shareholders meeting on August 11, 2010; or
 
    
    if the next annual shareholders meeting is held before February 8, 2010, no later than February 8, 2010.
   4




---



##### Table of Contents



Dividend Payment on the Series B Preferred Stock
    Lehman Hedge Settlement
  Operating Segments
  See Item 8. Financial Statements and Supplementary Data below
  5




---



##### Table of Contents



Radio Overview
  1
 Our Radio Markets20102010
    
    
    estimated
    
    
    2010
    
    
    2010 totalestimated
    
    
    % of total
    
    
    estimated
    
    
    estimatedHispanic
    
    
    Hispanic
    
    
    % of total
    
    
    market radio
    
    
    Number ofHispanic
    
    population
    
    
    population in
    
    
    U.S. Hispanic
    
    
    revenue
    
    
    stationsHispanic market rank (a)
    
    market
    
    (000)(a)
    
    
    market (a)
    
    
    population (a)
    
    
    ($mm)(b)
    
    
    we operate1
    
    Los Angeles
    
    
    8,107
    
    
    
    44
    %
    
    
    17
    %
    
    $
    741
    
    
    
    22
    
    New York
    
    
    4,588
    
    
    
    21
    %
    
    
    9
    %
    
    
    615
    
    
    
    2*
    
    Puerto Rico
    
    
    3,792
    
    
    
    100
    %
    
    
    100
    %
    
    
    72
    
    
    
    113
    
    Miami
    
    
    2,033
    
    
    
    45
    %
    
    
    4
    %
    
    
    249
    
    
    
    44
    
    Chicago
    
    
    1,985
    
    
    
    19
    %
    
    
    4
    %
    
    
    479
    
    
    
    16
    
    San Francisco
    
    
    1,570
    
    
    
    22
    %
    
    
    3
    %
    
    
    293
    
    
    
    1Total for our markets
    
    
    
    
    22,075
    
    
    
    33
    %
    
    
    42
    %
    
    $
    2,449
    
    
    
    21
 
 (a)
    
    Sources: Synovate 2010 Diversity Markets Report; U.S. Census Bureau Population Estimates for
Puerto Rico, February 2011.(b)
    
    Source: BIA Financial Network Inc.s Investing in Radio, 2010 Market Report.*
    
    Puerto Rico is not ranked by the Synovate 2010 Diversity Markets Report. Radio Station Portfolio
 BIA Financial Network, Inc.s 2010 Investing in Radio Market Report
4th Edition, Synovate 2010 Diversity Markets Report.
 Los Angeles .
 New York .
 Puerto Rico .
 Miami .
 
 1
    
    NTD: Confirm numbers in table are correct, as estimated
Hispanic population decreased in every market except New York.  6




---



##### Table of Contents



Chicago .
 San Francisco
 Radio Station Programming
  
    
    Spanish Tropical.The Spanish Tropical format primarily consists of salsa,
merengue, bachata, and reggaeton music. Salsa is dance music combining Latin Caribbean
rhythms with jazz originating from Puerto Rico, Cuba and the Dominican Republic, which
is popular with the Hispanics whom we target in New York, Miami and Puerto Rico.
Merengue music is up-tempo dance music originating in the Dominican Republic. Bachata
is a softer tempo dance music also originating in the Dominican Republic. Reggaeton is
a modern rhythmic dance genre that incorporates certain elements of hip-hop music.
 
    
    Regional Mexican.The Regional Mexican format consists of various types of
music played in different regions of Mexico such as ranchera, norteña, banda and
cumbia. Ranchera music, originating from Jalisco, Mexico, is a traditional folkloric
sound commonly referred to as mariachi music. Mariachi music features acoustical
instruments and is considered the music indigenous to Mexicans who live in country
towns. Norteña means northern, and is representative of Northern Mexico. Featuring an
accordion, norteña has a polka sound with a distinct Mexican flavor. Banda is a
regional format from the state of Sinalóa, Mexico and is popular in California. Banda
resembles up-tempo marching band music with synthesizers.
 
    
    Spanish Adult Contemporary.The Spanish Adult Contemporary format includes soft
romantic ballads and Spanish pop music as well as, international hits from Puerto Rico,
Mexico, Latin America and Spain.
 
    
    Spanish Oldies.The Spanish Oldies format includes a variety of Latin and
English classics, mainly from the 1960s, 1970s, and 1980s.
 
    
    Top 40.The Top 40 format consists of the most popular current Latin and
English chart hits.
 
    
    Latin Rhythmic.The Hispanic Urban (Hurban) format consists of reggaeton
with a mix of pop and tropical mixes. Reggaeton is dance music that originated in
Panama and Puerto Rico more than a decade ago and has evolved into a mix of Spanish-
and English-language dance hall, traditional reggae, Latin pop and Spanish hip-hop.
  7




---



##### Table of Contents



Target buyingFM
    
    
    
    demographicMarket
    
    station
    
    Format
    
    group by ageLos Angeles
    
    KLAX
    
    Regional Mexican
    
    18-49KXOL
    
    Latin Rhythmic
    
    18-34New York
    
    WSKQ
    
    Spanish Tropical
    
    18-49WPAT
    
    Spanish Adult Contemporary
    
    25-54Puerto Rio
    
    WMEG
    
    Top 40
    
    18-34WEGM
    
    Top 40
    
    18-34WRXD
    
    Spanish Tropical
    
    25-54WIOA
    
    Spanish Adult Contemporary
    
    18-49WIOB
    
    Spanish Adult Contemporary
    
    18-49WIOC
    
    Spanish Adult Contemporary
    
    18-49WZNT
    
    Spanish Tropical
    
    18-49WZMT
    
    Spanish Tropical
    
    18-49WZET
    
    Spanish Tropical
    
    18-49WODA
    
    Latin Rhythmic
    
    18-34WNOD
    
    Latin Rhythmic
    
    18-34Chicago
    
    WLEY
    
    Regional Mexican
    
    18-49Miami
    
    WXDJ
    
    Spanish Tropical
    
    18-49WCMQ
    
    Spanish Oldies
    
    25-54WRMA
    
    Spanish Adult Contemporary
    
    18-49WRZA
    
    Regional Mexican
    
    18-49San Francisco
    
    KRZZ
    
    Regional Mexican
    
    18-49
 On-Line Properties
   Television Overview and Programming
   8




---



##### Table of Contents



ProgrammingMarket
    
    Station ID
    
    Channel
    
    
    typeCharleston, South Carolina
    
    WHDC
    
    
    40.2
    
    
    Affiliation AgreementChicago, Illinois
    
    WOCK
    
    
    13
    
    
    Local Marketing AgreementDallas, Texas
    
    KODF
    
    
    26
    
    
    Affiliation AgreementFresno, California
    
    KSDI
    
    
    33.2
    
    
    Affiliation AgreementMiami, Florida
    
    WSBS
    
    
    22
    
    
    Owned & OperatedNew York, New York
    
    WRNN
    
    
    48.2
    
    
    Local Marketing AgreementOrlando, Florida
    
    WHDO
    
    
    38.2
    
    
    Affiliation AgreementPalm Springs, California
    
    KPLS
    
    
    19.2
    
    
    Affiliation AgreementPuerto Rico
    
    WMEI
    
    
    14.1
    
    
    Programming AgreementSalt Lake City, Utah
    
    WKBTU
    
    
    23
    
    
    Affiliation AgreementTampa, Florida
    
    WFHD
    
    
    63.2
    
    
    Affiliation AgreementWest Palm Beach, Florida
    
    WBWP
    
    
    57
    
    
    Affiliation AgreementDirecTV Más  Nationwide
    
    Satellite
    
    
    405
    
    
    Affiliation AgreementDirecTV  Puerto Rico
    
    Satellite
    
    
    169
    
    
    Affiliation AgreementAT&T U-Verse  Nationwide
    
    ADS/Cable
    
    
    3008
    
    
    Affiliation Agreement
    Advertising Revenue
    9




---



##### Table of Contents



Seasonality
  Competition
   10




---



##### Table of Contents




    
    management experience;
 
    
    talent and popularity of on-air personalities and television show hosts and actors;
 
    
    audience ratings and our broadcast stations rank in their markets;
 
    
    sales talent and experience;
 
    
    signal strength and frequency; and
 
    
    audience demographics, including the nature of the Spanish-language market
targeted by a particular station.
 Federal
Regulation of Radio and Television Broadcasting
  ®
 ®
   11




---



##### Table of Contents



Federal Regulation of Radio and Television Broadcasting
 Trademarks, Copyrights, and Licenses
  Antitrust
  Federal Regulation of Radio and Television Broadcasting
 General.
 
    
    assigns frequency bands for radio and television broadcasting;
 
    
    determines the particular frequencies, locations and operating power of radio
and television broadcast stations;
 
    
    issues, renews, revokes and modifies radio and television broadcast station
licenses;
 
    
    establishes technical requirements for certain transmitting equipment used by
radio and television broadcast stations;
  12




---



##### Table of Contents




    
    adopts and implements regulations and policies that directly or indirectly
affect the ownership, operation, program content and employment and business practices
of radio and television broadcast stations;
 
    
    has the power to impose penalties, including monetary forfeitures and license
revocations, for violations of its rules and the Communications Act; and
 
    
    regulates certain aspects of the operation of cable and Direct to Home (DTH)
satellite systems and certain other electronic media that compete with broadcast
stations.
  FCC Licenses.
  Date ofBroadcast
    
    
    
    Date of
    
    license
    
    Operationstation
    
    Market
    
    acquisition
    
    expiration
    
    frequency
    
    FCC class
    
    HAAT
    
    
    Power(In meters)
    
    
    (In kilowatts)KLAX-FM
    
    Los Angeles, CA
    
    2/24/1988
    
    12/1/2013
    
    97.9 MHz
    
    B
    
    
    184
    
    
    
    33.00KXOL-FM
    
    Los Angeles, CA
    
    10/30/2003
    
    12/1/2013
    
    96.3 MHz
    
    B
    
    
    398
    
    
    
    6.60WSKQ-FM
    
    New York, NY
    
    1/26/1989
    
    6/1/2006 (a)
    
    97.9 MHz
    
    B
    
    
    415
    
    
    
    6.00WPAT-FM
    
    New York, NY
    
    3/25/1996
    
    6/1/2014
    
    93.1 MHz
    
    B
    
    
    433
    
    
    
    5.40WMEG-FM
    
    Puerto Rico
    
    5/13/1999
    
    2/1/2012
    
    106.9 MHz
    
    B
    
    
    594
    
    
    
    25.00WEGM-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    95.1 MHz
    
    B
    
    
    600
    
    
    
    25.00WRXD-FM
    
    Puerto Rico
    
    12/1/1998
    
    2/1/2012
    
    96.5 MHz
    
    B
    
    
    852
    
    
    
    11.50WZET-FM
    
    Puerto Rico
    
    5/13/1999
    
    2/1/2012
    
    92.1 MHz
    
    A
    
    
    337
    
    
    
    3.00WIOA-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    99.9 MHz
    
    B
    
    
    560
    
    
    
    31.00WIOB-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    97.5 MHz
    
    B
    
    
    302
    
    
    
    50.00WIOC-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    105.1 MHz
    
    B
    
    
    (61
    )
    
    
    47.00WZNT-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    93.7 MHz
    
    B
    
    
    560
    
    
    
    28.00WZMT-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    93.3 MHz
    
    B1
    
    
    (69
    )
    
    
    14.50WODA-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    94.7 MHz
    
    B
    
    
    560
    
    
    
    31.00WNOD-FM
    
    Puerto Rico
    
    1/14/2000
    
    2/1/2012
    
    94.1 MHz
    
    B
    
    
    597
    
    
    
    25.00WLEY-FM
    
    Chicago, IL
    
    3/27/1997
    
    12/1/2012
    
    107.9 MHz
    
    B
    
    
    232
    
    
    
    21.00WXDJ-FM
    
    Miami, FL
    
    3/28/1997
    
    2/1/2012
    
    95.7 MHz
    
    C2
    
    
    167
    
    
    
    40.00WCMQ-FM
    
    Miami, FL
    
    12/22/1986
    
    2/1/2012
    
    92.3 MHz
    
    C2
    
    
    188
    
    
    
    31.00WRMA-FM
    
    Miami, FL
    
    3/28/1997
    
    2/1/2012
    
    106.7 MHz
    
    CO
    
    
    300
    
    
    
    100.00WRAZ-FM (b)
    
    Miami, FL
    
    1/1/2008
    
    2/1/2012
    
    106.3 MHz
    
    C2
    
    
    93
    
    
    
    50.00KRZZ-FM
    
    San Francisco, CA
    
    12/23/2004
    
    12/1/2013
    
    93.3 MHz
    
    B
    
    
    415
    
    
    
    6.00WSBS-DT
    
    Miami, FL (c)
    
    3/1/2006
    
    2/1/2013
    
    CH. 3
    
    DTV
    
    
    54
    
    
    
    1.00WSBS-CD
    
    Miami, FL
    
    3/1/2006
    
    2/1/2013
    
    CH. 50
    
    CA
    
    
    236
    
    
    
    150.00
  13




---



##### Table of Contents



(a)
    
    Application for renewal of license is pending. The FCC broadcasting license for WSKQ-FM
expired on June 1, 2006. A petition to deny the application for renewal was filed by several
parties who alleged, inter alia, that WSKQ-FM had broadcast indecent material during the
license term. An opposition pleading was submitted to the Commission categorically stating
that the allegations made did not raise sufficient questions to warrant non-renewal of the
license. The application remains pending and the station continues to operate under its
expired license until the FCC takes action on the renewal. In the great majority of cases,
radio broadcast licenses are renewed by the FCC even when petitions to deny are filed against
license renewal applications.(b)
    
    WRAZ-FM is operated pursuant to a local marketing agreement with South Broadcasting System,
Inc. See section entitled Related Party Transactions.(c)
    
    TV Station WSBS-DT is licensed to Key West and is part of the Miami DMA (designated market
area, as defined by Nielsen Media Research). License Grant and Renewal.Generally, the FCC renews broadcast licenses without a hearing upon a finding that:
 
    
    the station has served the public interest, convenience and necessity;
 
    
    there have been no serious violations by the licensee of the Communications Act
or FCC rules and regulations; and
 
    
    there have been no other violations by the licensee of the Communications Act
or FCC rules and regulations which, taken together, indicate a pattern of abuse.
     14




---



##### Table of Contents



Transfers and Assignments of License.
 
    
    the financial and legal qualifications of the prospective assignee or
transferee, including compliance with FCC restrictions on non-U.S. citizens or entity
ownership and control;
 
    
    compliance with FCC rules limiting the common ownership of attributable
interests in broadcast and newspaper properties;
 
    
    the history of compliance with FCC operating rules; and
 
    
    the character qualifications of the transferee or assignee and the individuals
or entities holding attributable interests in them.
  Alien Ownership.
 Ownership Attribution.
    15




---



##### Table of Contents



Multiple Ownership.
 Local Radio Ownership. ®
 
    
    In a radio market with 45 or more full-power commercial and noncommercial radio
stations, a party may own, operate or control up to eight commercial radio stations,
not more than five of which are in the same service (AM or FM).
 
    
    In a radio market with between 30 and 44 (inclusive) full-power commercial and
noncommercial radio stations, a party may own, operate or control up to seven
commercial radio stations, not more than four of which are in the same service (AM or
FM).
 
    
    In a radio market with between 15 and 29 (inclusive) full-power commercial and
noncommercial radio stations, a party may own, operate or control up to six commercial
radio stations, not more than four of which are in the same service (AM or FM).
 
    
    In a radio market with 14 or fewer full-power commercial and noncommercial
radio stations, a party may own, operate or control up to five commercial radio
stations, not more than three of which are in the same service (AM or FM), except that
a party may not own, operate, or control more than 50% of the radio stations in such
market.
 ® ® ® ®
 Local Television Ownership.
 Television National Audience Reach Limitation.
  16




---



##### Table of Contents



Radio-Television Cross-Ownership.
 Newspaper-Broadcast Cross-Ownership.
 Programming and Operations.
 Indecency and Profanity.
 Equal Employment Opportunities.
 Simulcasting.
 Time Brokerage and Joint Sales Agreements.
  17




---



##### Table of Contents



RF Radiation.
 Digital Audio Radio Satellite Service.
 Terrestrial Digital Radio.
 Low Power Radio Broadcast Service.
 Change of Community.
 Cable and Satellite Carriage of Television Broadcast Stations.
    18




---



##### Table of Contents



Digital Television Services.
 Childrens Television Programming.
 Sponsorship Identification.
 Proposed and Recent Changes
 
    
    changes to the license authorization and renewal process;
 
    
    proposals to increase regulatory fees or impose spectrum use or other fees on
FCC broadcasting licensees;
 
    
    changes to the FCCs equal employment opportunity regulations and other matters
relating to the involvement of minorities and women in the broadcasting industry;
 
    
    proposals to change rules relating to political broadcasting including
proposals to grant free air time to candidates, and other changes regarding program
content;
 
    
    proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;
 
    
    proposals to restrict or prohibit the advertising of on-line casinos or on-line sports-betting services;
 
    
    proposals to require broadcast stations to operate studios in the communities
to which they are licensed, which would require construction of new studios, to provide
staffing on a 24 hour per day basis, and to increase and/or quantify locally oriented
program content and diversity;
  19




---



##### Table of Contents




    
    technical and frequency allocation matters;
 
    
    changes in broadcast, multiple ownership, foreign ownership, cross-ownership
and ownership attribution policies;
 
    
    proposals to alter provisions of the tax laws affecting broadcast operations
and acquisitions;
 
    
    proposals to regulate or prohibit payments to stations by independent record
promoters, record labels and others for the inclusion of specific content in broadcast
programming; and
 
    
    proposals to require radio broadcasters to pay royalties to musicians and
record labels for the performance of music played on the stations.
 Environmental Matters
  Management and Personnel
   Available Information
 http://www.sec.gov
 www.spanishbroadcasting.com
   20




---



##### Table of Contents



Item 1A.
    
    Risk Factors
    Risks Related to our Indebtedness
 Our substantial amount of debt could adversely affect our financial health.
  
    
    a significant portion of our net cash flow from operations will be dedicated to
servicing our debt obligations and will not be available for operations, future
business opportunities or other purposes;
 
    
    our ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions, general corporate or other purposes will be
limited;
 
    
    our substantial debt could make us more vulnerable to downturns in our business
or in the general economy and increases in interest rates, limit our ability to
withstand competitive pressures and reduce our flexibility in responding to changing
business and economic conditions;
 
    
    our substantial debt could place us at a disadvantage compared to our
competitors who have less debt; and
 
    
    it may be difficult for us to satisfy our obligations relating to our Series B
preferred stock.
  We will require a significant amount of cash to service our debt and to make cash dividend payments
under our Series B preferred stock. Our ability to generate cash depends on many factors, some of
which are beyond our control.
   21




---



##### Table of Contents



Any acceleration of our debt or event of default would harm our business and financial condition.
  Despite our current significant level of debt, we and our subsidiaries may still be able to incur
substantially more debt, which, if incurred, could further intensify the risks associated with our
substantial leverage.
  The terms of our existing debt and our preferred stock impose or will impose restrictions on us
that may adversely affect our business
  
    
    incur additional debt, incur contingent obligations and issue additional preferred stock;
 
    
    redeem or repurchase securities ranking junior to our Series B preferred stock;
 
    
    create liens and encumbrances;
 
    
    pay dividends, distributions or make other specified restricted payments, and
restrict the ability of certain of our subsidiaries to pay dividends or make other
payments to us;
 
    
    sell assets;
 
    
    make certain capital expenditures, investments and acquisitions;
 
    
    change or add lines of business;
 
    
    enter into certain transactions with affiliates;
 
    
    enter into sale and leaseback transactions;
 
    
    issue capital stock or other equity interests;
 
    
    sell capital stock of our subsidiaries; and
 
    
    merge or consolidate with any other person, company or other entity or sell,
assign, transfer, lease, convey or otherwise dispose of all, or substantially all, of
our assets.
  22




---



##### Table of Contents



We may not have the funds or the ability to raise the funds necessary to repurchase our Series B
preferred stock if holders exercise their repurchase right, or to finance the change of control
offer required by our Series B preferred stock.
  We may not have the funds or the ability to obtain additional financing for working capital,
capital expenditures, any business strategy or other general corporate purposes.
   23




---



##### Table of Contents



A lowering of the ratings assigned to our debt securities by ratings agencies may further increase
our future borrowing costs and reduce our access to capital.
  Capital requirements necessary to implement strategic initiatives could pose risks.
  Risks Related to our Business
 If U.S. economic conditions deteriorate or do not improve, our results of operations may be
adversely affected
     We have experienced net losses in the past and, to the extent that we experience net losses in the
future, our ability to raise capital and the market price of our common stock may be adversely
affected.
   24




---



##### Table of Contents



We compete for advertising revenue with other broadcast stations, as well as other media, many
operators of which have greater resources than we do.
 ® ®
  A large portion of our net revenue and operating income currently comes from our New York, Los
Angeles, and Miami markets.
   Cancellations or reductions in advertising could adversely affect our net revenues.
  The success of our television operation depends upon our ability to attract viewers and advertisers
to our broadcast television operation.
    25




---



##### Table of Contents



Our growth depends on successfully executing our expansion strategy.
  
    
    the limits on our ability to acquire additional stations due to our substantial
level of debt;
 
    
    the need to raise additional financing, which may be limited by the terms of our
debt instruments and market conditions;
 
    
    the failure to increase our station operating income or yield other anticipated
benefits for future acquired stations;
 
    
    the need for required regulatory approvals, including FCC and antitrust
approvals;
 
    
    the challenges of managing any rapid growth; and
 
    
    the difficulties of programming newly acquired stations to attract listenership
or viewership.
   Our business is dependent upon the performance of key employees, on-air talent and program hosts.
   Increased programming and content costs may adversely affect our profits.
   26




---



##### Table of Contents



Piracy of our programming and other content, including digital and internet piracy, may decrease
revenue received from the exploitation of our programming and other content and adversely affect
our businesses and profitability.
  We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks
or natural disasters.
  Risks Related to Legislative and Regulatory Matters
 Changes in U.S. communications laws or other regulations may have an adverse effect on the
companys business.
     27




---



##### Table of Contents



The FCCs National Broadband Plan may result in a loss of spectrum for our stations and potentially
adversely impact our ability to compete.
  The failure or destruction of satellites and transmitter facilities that we depend upon to
distribute our programming could materially adversely affect our business and results of operation.
  Proposed legislation requires radio broadcasters to pay royalties to record labels and recording
artists.
   28




---



##### Table of Contents



We must be able to respond to rapidly changing technology, services and standards which
characterize our industry in order to remain competitive.
  
    
    audio programming by cable television operators, direct broadcast satellite
systems, personal communications and wireless systems, Internet content providers and
other digital audio broadcast formats;
 
    
    the Internet offers new, diverse and evolving forms of video and audio program
distribution;
    
    direct satellite broadcast television companies are supplying subscribers with
several high quality music channels;
 
    
    satellite digital audio radio technology has resulted in new satellite radio
services with multi-channel programming and enhanced sound quality;
 
    
    the introduction of in-band on-channel digital radio provides multi-channel,
multi-format digital radio services in the same bandwidth currently occupied by
traditional AM and FM radio services;
 
    
    the provision of video programming to cellular telephones, digital handheld
devices and gaming consoles; and
 
    
    low power FM radio, which could result in additional FM radio broadcast stations
in markets where we have stations.
  Impairment of our goodwill and other intangible assets deemed to have indefinite useful lives can
cause our net income or net loss to fluctuate significantly.
    The FCC has begun more vigorous enforcement of its indecency and other program content rules
against the broadcast industry, which could have a material adverse effect on our business.
   29




---



##### Table of Contents



Our operation of various real properties and station facilities could lead to environmental
liability and increased compliance costs.
  The market price of our shares of Class A common stock may fluctuate significantly.
  
    
    fluctuations in our financial results;
 
    
    general conditions or developments in the media broadcasting industry and other
media, and the national and regional economies;
 
    
    significant sales of our common stock into and/or in the marketplace;
 
    
    significant decreases in our stations audience ratings;
 
    
    inability to implement our expansion and operating strategy;
 
    
    a shortfall in revenue, gross margin, earnings or other financial results from
operations or changes in analysts expectations; and
 
    
    developments in our relationships with our customers and suppliers.
  The liquidity of our common stock could be adversely affected if we are delisted from the NASDAQ
Global Market.
    30




---



##### Table of Contents



Current or future sales by existing stockholders could depress the market price of our Class A
common stock.
  Our failure to comply with the Sarbanes-Oxley Act of 2002 could cause a loss of confidence in the
reliability of our financial statements and could have a material adverse effect on our business
and the price of our Class A common stock.
  Risks related to our Chairman, Chief Executive Officer, and Presidents Controlling Position
 Raúl Alarcón, Jr., the Chairman of our Board of Directors, Chief Executive Officer and President,
has majority voting control and this control may discourage or influence certain types of
transactions, including an actual or potential change of control such as a merger or sale.
   31




---



##### Table of Contents



We may be influenced by the Chairman of our Board of Directors, Chief Executive Officer and
President, whose interests may conflict with those of our other stockholders.
  
    
    influence the election of our Board of Directors;
 
    
    influence our management and policies; and
 
    
    influence the outcome of any corporate transaction or other matter submitted to
our stockholders for approval, including mergers, consolidations and the sale of all or
substantially all of our assets.
  Future common stock sales by Raúl Alarcón, Jr. could adversely affect the price of our Class A
common stock.
  
 Item 1B.
    
    Unresolved Staff Comments
  
 Item 2.
    
    Properties
   32




---



##### Table of Contents



Aggregate sizeof property in
    
    
    
    
    
    
    Leasesquare feet
    
    
    Owned or
    
    
    expirationLocation
    
    (approximate)(1)
    
    
    leased
    
    
    dateNew York, NY (2)
    
    
    12,100
    
    
    Owned
    
    
    N/ALos Angeles, CA (3)
    
    
    40,000
    
    
    Owned
    
    
    N/AMiami, FL (4)
    
    
    12,100
    
    
    Leased
    
    
    2012Miami, FL (5)
    
    
    70,000
    
    
    Owned
    
    
    N/AMiami, FL (6)
    
    
    15,000
    
    
    Leased
    
    
    2015Guaynabo, PR (7)
    
    
    29,000
    
    
    Owned
    
    
    N/A
 
 (1)
    
    Excludes properties less than 12,000 square feet.(2)
    
    Facility used for the offices and studios for our New York radio stations and certain
internet and television operations.(3)
    
    Facility used for the offices and studios for our Los Angeles radio stations and certain
internet and television operations.(4)
    
    Facility was used for the offices and studios of the Miami radio stations.(5)
    
    Facility is used as the principal site for our television, internet and Miami radio studios
production, operation, and sales offices.(6)
    
    Building includes corporate offices and sales space.(7)
    
    Facility is used for the offices, operations and studios of the Puerto Rico broadcast
stations.         33




---



##### Table of Contents



See Item 13. Certain Relationships and Related Transactions.
 
 Item 3.
    
    Legal Proceedings
  Wolf, et al., Litigation
      34




---



##### Table of Contents



sub judice
    sub judice
 
 Item 4.
    
    [Removed and reserved]
  35




---



##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 (a)
    
    Market Information
 Our Class A common stock is traded on the NASDAQ Global Market under the symbol SBSA.
The tables below show, for the quarters indicated, the reported high and low bid quotes
for our Class A common stock on the NASDAQ Global Market.
 2010
    
    
    2009High
    
    
    Low
    
    
    High
    
    
    LowFirst quarter
    
    $
    1.04
    
    
    
    0.60
    
    
    
    0.28
    
    
    
    0.08Second quarter
    
    
    2.20
    
    
    
    0.73
    
    
    
    0.39
    
    
    
    0.12Third quarter
    
    
    1.30
    
    
    
    0.70
    
    
    
    0.61
    
    
    
    0.16Fourth quarter
    
    
    0.88
    
    
    
    0.68
    
    
    
    1.04
    
    
    
    0.41
 (b)
    
    Record Holders
 As of March 16, 2011, there were approximately 117 record holders of our Class A common
stock, four record holders of our Class B common stock and one record holder of our Class
C preferred stock. These figures do not include an estimate of the indeterminate number
of beneficial holders whose shares may be held of record by brokerage firms and clearing
agencies. There is no established public trading market for our Class B common stock or
our Class C preferred stock. However, the Class B common stock is convertible to our
Class A common stock on a share-for-share basis, and each share of the Class C preferred
stock is convertible into 20 shares of Class A common stock.
 (c)
    
    Dividends
 We have not declared or paid any cash or stock dividends on any class of our common stock
in the last two fiscal years. We intend to retain future earnings for use in our business
and do not anticipate declaring or paying any cash or stock dividends on shares of our
Class A or Class B common stock in the near future. In addition, any determination to
declare and pay dividends will be made by our Board of Directors based upon our earnings,
financial position, capital requirements and other factors that our Board of Directors
deems relevant. Furthermore, our First Lien Credit Facility contains some restrictions on
our ability to pay dividends.
 Under the terms of our Series C preferred stock, we are required to pay dividends on
parity with our Class A common stock and Class B common stock and any other class or
series of capital stock we create after December 23, 2004.
 Under the terms of our Series B preferred stock, we are required to pay dividends at a
rate of 103/4% per year of the $1,000 liquidation preference per share of Series B
preferred stock. After October 15, 2008, we have been required to pay the dividends on
our Series B preferred stock in cash. On January 15, 2009, April 15, 2009 and April 15,
2010, the dividends were paid in cash.
 Under managements recommendation, our Board of Directors determined that based on, among
other things, the then current economic environment and future cash requirements of the
Company, it would not be prudent to declare or pay the July 15, 2009, October 15, 2009,
January 15, 2010, July 15, 2010, October 15, 2010 and January 15, 2011 cash dividends in
the aggregate amount of approximately $14.5 million. Our Board of Directors has not yet
determined whether to pay the scheduled April 15, 2011 dividend.
 Our ability to satisfy our obligations, including making the payments described above,
and to reduce our total indebtedness will depend upon our future operating performance
and on economic, financial, competitive, legislative, regulatory and other factors, many
of which may be beyond our control.
  36




---



##### Table of Contents



See Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations below.
 (d)
    
    Equity Compensation Plans
 Information called for by Item 5 is set forth under the heading Directors, Executive
Officers and Corporate Governance in Item 10 of this annual report and in our proxy
statement relating to the 2011 Annual Meeting of Stockholders, which information is
incorporated herein by this reference.
 (e)
    
    Recent Sales of Unregistered Securities
 We have not made any sales of unregistered securities for the period covered by this
annual report on Form 10-K.
 (f)
    
    Issuer Purchases of Equity Securities
 We did not repurchase any of our outstanding equity securities for the period covered by
this annual report on Form 10-K.
  37




---



##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
        38




---



##### Table of Contents



Fiscal Year Ended 2010 Compared to Fiscal Year Ended 2009
  2010
    
    
    2009(In thousands)Net revenueRadio
    
    $
    119,533
    
    
    
    123,602Television
    
    
    16,589
    
    
    
    15,787Consolidated
    
    $
    136,122
    
    
    
    139,389Engineering and programming expenses:Radio
    
    $
    22,791
    
    
    
    27,435Television
    
    
    17,170
    
    
    
    13,944Consolidated
    
    $
    39,961
    
    
    
    41,379Selling, general, and administrative:Radio
    
    $
    41,281
    
    
    
    41,766Television
    
    
    7,706
    
    
    
    8,263Consolidated
    
    $
    48,987
    
    
    
    50,029Corporate expenses
    
    $
    8,178
    
    
    
    9,686Depreciation and amortization:Radio
    
    $
    2,646
    
    
    
    3,111Television
    
    
    2,248
    
    
    
    2,202Corporate
    
    
    916
    
    
    
    949Consolidated
    
    $
    5,810
    
    
    
    6,262Loss (gain) on sale of assets, net:Radio
    
    $
    202
    
    
    
    (7
    )Television
    
    
    8
    
    
    
    15Corporate
    
    
    
    
    
    
    (22
    )Consolidated
    
    $
    210
    
    
    
    (14
    )Impairment of assets and restructuring costs:Radio
    
    $
    
    
    
    
    14,188Television
    
    
    43
    
    
    
    7,405Corporate
    
    
    2,981
    
    
    
    48Consolidated
    
    $
    3,024
    
    
    
    21,641Operating (loss) income:Radio
    
    $
    52,613
    
    
    
    37,109Television
    
    
    (10,586
    )
    
    
    (16,042
    )Corporate
    
    
    (12,075
    )
    
    
    (10,661
    )Consolidated
    
    $
    29,952
    
    
    
    10,406
  39




---



##### Table of Contents



2010
    
    
    2009(In thousands)Net revenue
    
    $
    136,122
    
    
    
    139,389Engineering and programming expenses
    
    
    39,961
    
    
    
    41,379Selling, general, and administrative expenses
    
    
    48,987
    
    
    
    50,029Corporate expenses
    
    
    8,178
    
    
    
    9,686Depreciation and amortization
    
    
    5,810
    
    
    
    6,262Loss (gain) on disposal of assets, net
    
    
    210
    
    
    
    (14
    )Impairment of assets and restructuring costs
    
    
    3,024
    
    
    
    21,641Operating income
    
    
    29,952
    
    
    
    10,406Interest expense, net
    
    
    (13,797
    )
    
    
    (26,869
    )Change in fair value of derivative instrument
    
    
    5,863
    
    
    
    5,790Other (expense) income, net
    
    
    
    
    
    
    (414
    )Income tax expense
    
    
    6,976
    
    
    
    2,691Net income (loss)
    
    $
    15,042
    
    
    
    (13,778
    )
 Net Revenue
  Engineering and Programming Expenses
  Selling, General, and Administrative Expenses
   40




---



##### Table of Contents



Corporate Expenses
  Impairment of Assets and Restructuring Costs
   Operating Income
 .
 Interest Expense, Net
   Change in Fair Value of Derivative Instrument
  Income Tax Expense
  Net Income (Loss)
  Liquidity and Capital Resources
   41




---



##### Table of Contents




    
    the demand for advertising within the broadcasting industry and economic conditions
in general will not deteriorate further in any material respect;
 
    
    we will continue to successfully implement our business strategy; and
 
    
    we will not incur any material unforeseen liabilities, including but not limited to
taxes, environmental liabilities, regulatory matters and legal judgments.
   2010
    
    
    2009
    
    
    Change(in thousands)Capital expenditures:Radio
    
    $
    753
    
    
    
    525
    
    
    
    228Television
    
    
    452
    
    
    
    380
    
    
    
    72Corporate
    
    
    332
    
    
    
    49
    
    
    
    283Consolidated
    
    $
    1,537
    
    
    
    954
    
    
    
    583Net cash flows provided by operating activities
    
    $
    24,284
    
    
    
    30,084
    
    
    
    (5,800
    )Net cash flows used in investing activities
    
    
    (1,537
    )
    
    
    (705
    )
    
    
    (832
    )Net cash flows used in financing activities
    
    
    (21,187
    )
    
    
    (8,651
    )
    
    
    (12,536
    )Net increase in cash and cash
equivalents
    
    $
    1,560
    
    
    
    20,728
    
    
    
    (19,168
    )
  42




---



##### Table of Contents



Capital Expenditures
  Net Cash Flows Provided by Operating Activities
  Net Cash Flows Used in Investing Activities
  Net Cash Flows Used in Financing Activities
  Recent Developments
 Engagement Letter
  NASDAQ Delisting Letter
    NASDAQ Audit Committee Compliance Letter
   43




---



##### Table of Contents




    
    until the earlier of our next annual shareholders meeting on August 11, 2010; or
    
    if the next annual shareholders meeting is held before February 8, 2010, no later
than February 8, 2010.
  Dividend Payment on the Series B Preferred Stock
    Lehman Hedge Settlement
  Off-Balance Sheet Arrangements
  Critical Accounting Policies
   44




---



##### Table of Contents



Accounting for Indefinite-Lived Intangible Assets and Goodwill
  Intangibles- Goodwill and Other Unit of Accounting for Purposes of Testing for
Impairment of Intangible Assets Not Subject to Amortization
     Market Revenue Projections.
 Market Revenue Share Projections.
  45




---



##### Table of Contents



Anticipated Operating Profit Margins.
 Risk Adjusted Discount Rates.
    Market 1
    
    
    8
    %Market 2
    
    
    33
    %Market 3
    
    
    10
    %Market 4
    
    
    36
    %Market 5
    
    
    3
    %Market 6
    
    
    7
    %Market 7
    
    
    9
    %
    46




---



##### Table of Contents



Accounting for Income Taxes
 Intangibles  Goodwill and Other
 Valuation of Accounts Receivable
  Revenue Recognition
  Contingencies and Litigations
   47




---



##### Table of Contents



New Accounting Standards
 IntangiblesGoodwill and Other (Topic 350): When to
Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying
Amounts, a consensus of the FASB Emerging Issues Task Force
 Impact of Inflation
  
 Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 8.
    
    Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A.
    
    Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Control and Procedures
  Managements Report on Internal Control over Financial Reporting
   48




---



##### Table of Contents



Attestation Report of the Registered Public Accounting Firm
  Changes in Internal Control over Financial Reporting
  Item 9B.
    
    Other Information
  
 PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
  Code of Ethics
  Board of Directors Nominating Procedure
   49




---



##### Table of Contents



Item 11.
    
    Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
   50




---



##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 1. Financial Statements
 The
following financial statements have been filed as required by
Item 8 of this report:
    
    Report of Independent Registered Public Accounting Firm;
    
    52
    
    Consolidated Balance Sheets as of December 31, 2010 and 2009;
    
    53
    
    Consolidated Statements of Operations for the years ended December 31, 2010 and 2009;
    
    54
    
    Consolidated Statements of Changes in Stockholders Deficit and Comprehensive Loss for the years ended December 31, 2010 and 2009;
    
    55
    
    Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009; and
    
    56
    
    Notes to Consolidated Financial Statements.
    
    572. Financial Statement ScheduleThe following financial statement schedule has been filed as required by Item 8 of this report:
    
    Financial Statement Schedule  Valuation and Qualifying Accounts.
    
    90
  51




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
     
  52




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIAIRIES
 
    2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    55,140
    
    
    
    53,580Receivables:Trade
    
    
    26,473
    
    
    
    25,649Barter
    
    
    500
    
    
    
    39826,973
    
    
    
    26,047Less allowance for doubtful accounts
    
    
    813
    
    
    
    1,247Net receivables
    
    
    26,160
    
    
    
    24,800Prepaid expenses and other current assets
    
    
    3,219
    
    
    
    3,439Total current assets
    
    
    84,519
    
    
    
    81,819Property and equipment, net
    
    
    40,006
    
    
    
    45,365FCC broadcasting licenses
    
    
    312,623
    
    
    
    312,623Goodwill
    
    
    32,806
    
    
    
    32,806Other intangible assets, net of accumulated amortization of $250 in 2010 and $214 in 2009
    
    
    1,184
    
    
    
    1,220Deferred financing costs, net of accumulated amortization of $6,088 in 2010 and $5,028 in 2009
    
    
    1,514
    
    
    
    2,574Other assets
    
    
    2,167
    
    
    
    2,386Total assets
    
    $
    474,819
    
    
    
    478,793Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable and accrued expenses
    
    
    17,980
    
    
    
    18,211Accrued interest
    
    
    4,057
    
    
    
    5,608Unearned revenue
    
    
    745
    
    
    
    570Other liabilities
    
    
    750
    
    
    
    602Derivative instruments
    
    
    
    
    
    
    5,863Senior credit facility revolver due 2010
    
    
    
    
    
    
    15,000Current portion of the senior credit facility term loan due 2012
    
    
    3,250
    
    
    
    3,250Current portion of other long-term debt
    
    
    416
    
    
    
    447Series B cumulative exchangeable redeemable preferred stock dividends payable
    
    
    14,478
    
    
    
    7,032Total current liabilities
    
    
    41,676
    
    
    
    56,583Other liabilities, less current portion
    
    
    985
    
    
    
    405Derivative instruments
    
    
    829
    
    
    
    612Senior credit facility term loan due 2012, less current portion
    
    
    303,063
    
    
    
    306,313Other long-term debt, less current portion
    
    
    6,180
    
    
    
    6,605Deferred income taxes
    
    
    78,247
    
    
    
    71,408Total liabilities
    
    
    430,980
    
    
    
    441,926Commitments and contingencies (notes 11, 13, and 15)Cumulative exchangeable redeemable preferred stock:10 3/4% Series B cumulative exchangeable redeemable preferred stock, $0.01 par value,
liquidation value $1,000 per share. Authorized 280,000 shares; 92,349 shares
issued and outstanding at December 31, 2010 and 2009, respectively
    
    
    92,349
    
    
    
    92,349Stockholders deficit:Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares;
380,000 shares issued and outstanding at December 31, 2010 and 2009, respectively
    
    
    4
    
    
    
    4Class A common stock, 0.0001 par value. Authorized 100,000,000 shares; 41,639,805 and 41,542,513
shares issued and outstanding at December 31, 2010 and 2009, respectively
    
    
    4
    
    
    
    4Class B common stock, 0.0001 par value. Authorized 50,000,000 shares; 23,403,500 shares
issued and outstanding at December 31, 2010 and 2009, respectively
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    525,199
    
    
    
    525,026Accumulated other comprehensive loss
    
    
    (829
    )
    
    
    (2,513
    )Accumulated deficit
    
    
    (572,890
    )
    
    
    (578,005
    )Total stockholders deficit
    
    
    (48,510
    )
    
    
    (55,482
    )Total liabilities and stockholders deficit
    
    $
    474,819
    
    
    
    478,793
   53




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIAIRIES
 
    2010
    
    
    2009Net revenue
    
    $
    136,122
    
    
    
    139,389Operating expenses:Engineering and programming
    
    
    39,961
    
    
    
    41,379Selling, general and administrative
    
    
    48,987
    
    
    
    50,029Corporate expenses
    
    
    8,178
    
    
    
    9,686Depreciation and amortization
    
    
    5,810
    
    
    
    6,262Total operating expenses
    
    
    102,936
    
    
    
    107,356(Loss) gain on the sale of assets, net of disposal costs
    
    
    210
    
    
    
    (14
    )Impairment charges and restructuring costs
    
    
    3,024
    
    
    
    21,641Operating income
    
    
    29,952
    
    
    
    10,406Other (expense) income:Interest expense
    
    
    (13,821
    )
    
    
    (26,900
    )Interest income
    
    
    24
    
    
    
    31Change in fair value of derivative instrument
    
    
    5,863
    
    
    
    5,790Other, net
    
    
    
    
    
    
    (414
    )Income (loss) before income taxes
    
    
    22,018
    
    
    
    (11,087
    )Income tax expense
    
    
    6,976
    
    
    
    2,691Net income (loss)
    
    
    15,042
    
    
    
    (13,778
    )Dividends on Series B preferred stock
    
    
    (9,927
    )
    
    
    (9,927
    )Net income (loss) available to
common stockholders
    
    $
    5,115
    
    
    
    (23,705
    )Basic and diluted net income (loss) per common share
    
    $
    0.07
    
    
    
    (0.33
    )Weighted average common shares outstanding:Basic
    
    
    72,614
    
    
    
    72,517Diluted
    
    
    72,816
    
    
    
    72,517
   54




---



##### Table of Contents





SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 
    Class C preferred stock
    
    
    Class A common stock
    
    
    Class B common stock
    
    
    Additional
    
    
    Accumulated
other
    
    
    
    
    
    
    TotalNumber of
    
    
    Par
    
    
    Number of
    
    
    Par
    
    
    Number of
    
    
    Par
    
    
    paid-in
    
    
    comprehensive
    
    
    Accumulated
    
    
    stockholdersshares
    
    
    value
    
    
    shares
    
    
    value
    
    
    shares
    
    
    value
    
    
    capital
    
    
    loss
    
    
    deficit
    
    
    deficitBalance at December 31, 2008
    
    
    380,000
    
    
    $
    4
    
    
    
    41,445,222
    
    
    $
    4
    
    
    
    23,403,500
    
    
    $
    2
    
    
    
    524,722
    
    
    
    (8,187
    )
    
    
    (554,300
    )
    
    
    (37,755
    )Issuance of Class A common stock from vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    97,291
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    304Series B preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,927
    )
    
    
    (9,927
    )Comprehensive loss:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,778
    )
    
    
    (13,778
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,398
    
    
    
    
    
    
    
    5,398Amounts reclassified to earnings during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276
    
    
    
    
    
    
    
    276Unrealized gain on derivative instrument
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,104
    )Comprehensive loss
    
    
    380,000
    
    
    
    4
    
    
    
    41,542,513
    
    
    
    4
    
    
    
    23,403,500
    
    
    
    2
    
    
    
    525,026
    
    
    
    (2,513
    )
    
    
    (578,005
    )
    
    
    (55,482
    )Balance at December 31, 2009
    
    
    
    
    
    
    
    
    
    
    97,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of Class A common stock from vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173
    
    
    
    
    
    
    
    
    
    
    
    173Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,927
    )
    
    
    (9,927
    )Series B preferred stock dividendsComprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,042
    
    
    
    15,042Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,901
    
    
    
    
    
    
    
    1,901Amounts reclassified to earnings during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (217
    )
    
    
    
    
    
    
    (217
    )Unrealized loss on derivative instrument
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,726Comprehensive income
    
    
    380,000
    
    
    $
    4
    
    
    
    41,639,805
    
    
    $
    4
    
    
    
    23,403,500
    
    
    $
    2
    
    
    
    525,199
    
    
    
    (829
    )
    
    
    (572,890
    )
    
    
    (48,510
    )Balance at
December 31, 2010
   55




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 
 2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    15,042
    
    
    
    (13,778
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Loss (gain) on the sale of assets
    
    
    210
    
    
    
    (14
    )Impairment of assets
    
    
    3,024
    
    
    
    20,023Stock-based compensation
    
    
    173
    
    
    
    304Depreciation and amortization
    
    
    5,810
    
    
    
    6,263Net barter income
    
    
    (189
    )
    
    
    (368
    )Provision for trade doubtful accounts
    
    
    512
    
    
    
    379Amortization of deferred financing costs
    
    
    1,060
    
    
    
    1,072Deferred income taxes
    
    
    6,839
    
    
    
    3,326Unearned revenue-barter
    
    
    263
    
    
    
    184Change in fair value of derivative instrument, net of amortization
    
    
    (3,962
    )
    
    
    (392
    )Changes in operating assets and liabilities:Trade receivables
    
    
    (1,771
    )
    
    
    2,627Prepaid expenses and other current assets
    
    
    220
    
    
    
    987Other assets
    
    
    219
    
    
    
    680Accounts payable and accrued expenses
    
    
    (635
    )
    
    
    2,899Accrued interest
    
    
    (1,551
    )
    
    
    5,122Other liabilities
    
    
    (980
    )
    
    
    770Net cash provided by operations
    
    
    24,284
    
    
    
    30,084Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,537
    )
    
    
    (954
    )Proceeds from the sale of property and equipment and insurance recoveries
    
    
    
    
    
    
    249Net cash used in investing activities
    
    
    (1,537
    )
    
    
    (705
    )Cash flows from financing activities:Payments of senior credit facility revolver due 2010
    
    
    (15,000
    )
    
    
    Payment of senior credit facility term loan 2012
    
    
    (3,250
    )
    
    
    (3,250
    )Payment of Series B preferred stock cash dividends
    
    
    (2,481
    )
    
    
    (4,963
    )Payments of other long-term debt
    
    
    (456
    )
    
    
    (438
    )Net cash used in financing activities
    
    
    (21,187
    )
    
    
    (8,651
    )Net increase in cash and cash equivalents
    
    
    1,560
    
    
    
    20,728Cash and cash equivalents at beginning of year
    
    
    53,580
    
    
    
    32,852Cash and cash equivalents at end of year
    
    $
    55,140
    
    
    
    53,580Supplemental cash flows information:Interest paid
    
    $
    10,379
    
    
    
    15,298Income tax paid, net
    
    $
    20
    
    
    
    29Noncash investing and financing activities:Unrealized (loss) gain on derivative instruments
    
    $
    (217
    )
    
    
    276Accrual of Series B preferred stock cash dividends not declared
    
    $
    7,446
    
    
    
    7,032
   56




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 
   (1)
    
    Organization and Nature of Business
 Spanish Broadcasting System, Inc., a Delaware corporation, and its subsidiaries owns and/or
operates 21 radio stations in the Los Angeles, New York, Puerto Rico, Chicago, Miami and San
Francisco markets. In addition, we own and operate two television stations, which operate as
one television operation, branded as MegaTV. We also have various MegaTV broadcasting
outlets under affiliation or programming agreements. As part of our operating business, we
operate LaMusica.com, Mega.tv, and our radio station websites, which are bilingual
Spanish-English websites providing content related to Latin music, entertainment, news and
culture. We also occasionally produce live concerts and events throughout the U.S., including
Puerto Rico.Our primary source of revenue is the sale of advertising time on our stations to local and
national advertisers. Our revenue is affected primarily by the advertising rates that our
stations are able to charge, as well as the overall demand for advertising time in each
respective market. Seasonal net broadcasting revenue fluctuations are common in the
broadcasting industry and are due to fluctuations in advertising expenditures by local and
national advertisers. Typically for the broadcasting industry, the first calendar quarter
generally produces the lowest revenue.The broadcasting industry is subject to extensive federal regulation which, among other
things, requires approval by the Federal Communications Commission for the issuance, renewal,
transfer and assignment of broadcasting station operating licenses and limits the number of
broadcasting properties we may acquire.
 (2)
    
    Summary of Significant Accounting Policies and Related Matters
 (a)
    
    Basis of PresentationThe consolidated financial statements include the accounts of Spanish Broadcasting
System, Inc. and its subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation. In addition, we evaluated subsequent events after
the balance sheet date and through the financial statements issuance date. Certain prior
year amounts have been reclassified to conform with the current year presentation.(b)
    
    Revenue RecognitionWe recognize broadcasting revenue as advertisements are aired on our stations, subject to
meeting certain conditions, such as persuasive evidence that an agreement exists, a fixed
or determinable price and reasonable assurance of collection. Our revenue is presented
net of agency commissions. Agency commissions are calculated based on a stated percentage
applied to gross billing revenue. Advertisers remit the gross billing amount to the
agency, and then the agency remits gross billings less their commission to us when the
advertisement is not placed directly by the advertiser. Payments received in advance of
being earned are recorded as customer advances, which are included in accounts payable
and accrued expenses.(c)
    
    Valuation of Accounts ReceivableWe review accounts receivable to determine which accounts are doubtful of collection. In
making the determination of the appropriate allowance for doubtful accounts, we consider
our history of write-offs, relationships with our customers, age of the invoices and the
overall creditworthiness of our customers. For the years ended December 31, 2010 and
2009, we incurred bad debt expense of $0.5 million and $0.4 million, respectively.
Changes in the credit worthiness of customers, general economic conditions and other
factors may impact the level of future write-offs.
   57




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 (d)
    
    Property and EquipmentProperty and equipment, including capital leases, are stated at historical cost, less
accumulated depreciation and amortization. We depreciate the cost of our property and
equipment using the straight-line method over the
respective estimated useful lives (see note 5). Leasehold improvements are amortized on a
straight-line basis over the shorter of the remaining life of the lease or the useful
life of the improvements.Maintenance and repairs are charged to expense as incurred; improvements are capitalized.
When items are retired or are otherwise disposed of, the related costs and accumulated
depreciation and amortization are removed from the accounts and any resulting gains or
losses are credited or charged to income from operations.(e)
    
    Impairment or Disposal of Long-Lived AssetsAccounting for impairment or disposal of long-lived assets requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset to future
net cash flows expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is recognized in the amount
by which the carrying amount of the asset exceeds the estimated fair value of the asset.(f)
    
    FCC Broadcasting LicensesOur indefinite-lived intangible assets consist of FCC broadcasting licenses. FCC
broadcasting licenses are granted to stations for up to eight years under the
Telecommunications Act of 1996. The Act requires the FCC to renew a broadcast license if:
(i) it finds that the station has served the public interest, convenience and necessity;
(ii) there have been no serious violations of either the Communications Act of 1934 or
the FCCs rules and regulations by the licensee; and (iii) there have been no other
serious violations, which taken together, constitute a pattern of abuse. We intend to
renew our licenses indefinitely and evidence supports our ability to do so. Historically,
there has been no material challenge to our license renewals. In addition, the technology
used in broadcasting is not expected to be replaced by another technology any time in the
foreseeable future.We do not amortize our FCC broadcasting licenses. We test these indefinite-lived
intangible assets for impairment at least annually or when an event occurs that may
indicate that impairment may have occurred. We test our FCC broadcasting licenses for
impairment at the market cluster level. We apply the guidance of FASB ASC Topic
350-30-35, Unit of Accounting for Purposes of Testing for Impairment of Intangible Assets
Not Subject to Amortization,to certain of our FCC broadcasting licenses, if their market
operations are consolidated.Our valuations principally use the discounted cash flow methodology. This income approach
consists of a quantitative model, which assumes the FCC broadcasting licenses are
acquired and operated by a third-party. The valuation method used is based on the premise
that the only asset that the unbuilt start-up station would possess is the FCC
broadcasting license. The valuation method isolates the income attributable to a FCC
broadcasting license by modeling a hypothetical greenfield build-up to a normalized
enterprise that, by design, lacks inherent goodwill and whose only other assets have
essentially been paid for as part of the build-up process. Consequently, the resulting
accretion in value is solely attributed to the FCC broadcasting license.In the discounted cash flow projections, a period of ten years was determined to be an
appropriate time horizon for the analysis. The yearly streams of cash flows are adjusted
to present value using an after-tax discount rate calculated for the broadcast industry
as of December 31 of each year. A risk premium is added to this base rate, in order to
reflect the uncertainty associated with a start-up operation. Additionally, it is
necessary to project the terminal value at the end of the ten-year projection period. The
terminal value represents the hypothetical value of the licenses at the end of a ten-year
period. An estimated amount of taxes are deducted from the assumed terminal value, which
accordingly is discounted to net present value.The key assumptions incorporated in the discounted cash flow model are market revenue
projections, market revenue share projections, anticipated operating profit margins and
risk adjusted discount rates. These assumptions vary based on the market size, type of
broadcast of signal, media competition and audience share. These assumptions primarily
reflect industry norms for similar stations/broadcast signals, as well as historical
performance and trends of the markets. In the preparation of the FCC broadcasting license
appraisals, estimates
and assumptions are made that affect the valuation of the intangible asset. These
estimates and assumptions could differ from actual results and could have a material
impact on our financial statements in the future.
   58




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   These key assumptions are subject to such factors as: overall advertising demand, station
listenership and viewership, audience tastes, technology, fluctuation in preferred
advertising media and the estimated cost of capital. Since a number of factors may
influence the determination of the fair value of our FCC broadcasting licenses, we are
unable to predict whether impairments will occur in the future. Any significant change in
these factors will result in a modification of the key assumptions, which may result in
an additional impairment.(g)
    
    GoodwillGoodwill consists of the excess of the purchase price over the fair value of tangible and
identifiable intangible net assets acquired in business combinations. We test goodwill
for impairment at least annually at the reporting unit level. We have determined that we
have two reporting, Radio and Television. We currently only have goodwill in our radio
reporting unit. We have aggregated our operating components (radio stations) into a
single radio reporting unit based upon the similarity of their economic characteristics.
Our evaluation included consideration of factors, such as regulatory environment,
business model, gross margins, nature of services and the process for delivering these
services.The goodwill impairment test is a two-step test. Under the first step, the fair value of
the reporting unit is compared with its carrying value (including goodwill). If the fair
value of the reporting unit is less than its carrying value, an indication of goodwill
impairment exists for the reporting unit and the enterprise must perform step two of the
impairment test (measurement). If the fair value of the reporting unit exceeds its
carrying value, step two does not need to be performed. Under step two, an impairment
loss is recognized for any excess of the carrying amount of the reporting units goodwill
over the implied fair value of that goodwill. The implied fair value of goodwill is
determined by allocating the fair value of the reporting unit in a manner similar to a
purchase price allocation. The residual fair value after this allocation is the implied
fair value of the reporting unit goodwill. Fair value of the reporting unit is determined
using a discounted cash flow analysis. If the fair value of the reporting unit exceeds
its carrying value, step two does not need to be performed.During the years-ended December 31, 2010 and 2009, we performed at least an annual
impairment review of our goodwill and determined that there was no impairment of
goodwill. The estimated enterprise value of our radio reporting unit exceeded its
carrying value during our impairment testing. In addition, there is currently a net
accumulated deficit in our radio reporting unit and we have a net overall accumulated
deficit; therefore we have not performed a step-two impairment test. When evaluating our
estimated enterprise value, we utilized an income approach which uses assumptions and
estimates which among others include the aggregated expected revenues and operating
margins generated by our FCC broadcasting licenses (i.e. our stations) and use of a risk
adjusted discount rate. We did not find reconciliation to our current market
capitalization meaningful in the determination of our enterprise value given current
factors that impact our market capitalization, including but not limited to: our recent
NASDAQ delisting notice; limited trading volume; the impact of our television segment
operating losses; and the significant voting control of our Chairman and CEO.
   59




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (h)
    
    Other Intangible Assets, NetOther intangible assets, net, consist of favorable tower leases acquired. Gross other
intangible assets total $1.4 million. These assets are being amortized over the lives of
the leases; however, not to exceed 40 years.Amortization expense amounted to $36 thousand for the fiscal years ended December 31,
2010 and 2009, respectively. Estimated amortization expense for the five years subsequent
to December 31, 2010 is as follows (in thousands):
 Fiscal year ending December 31:2011
    
    $
    362012
    
    
    362013
    
    
    362014
    
    
    362015
    
    
    36
 (i)
    
    Deferred Financing CostsDeferred financing costs relate to the refinancing of our debt in June 2005 (see note 7).
Deferred financing costs are being amortized to interest expense using the effective
interest method.(j)
    
    Barter TransactionsBarter transactions represent advertising time exchanged for non-cash goods and/or
services, such as promotional items, advertising, supplies, equipment and services.
Revenue from barter transactions are recognized as income when advertisements are
broadcasted. Expenses are recognized when goods or services are received or used. We
record barter transactions at the fair value of goods or services received or advertising
surrendered, whichever is more readily determinable. Barter revenue amounted to $5.1
million and $5.3 million for the fiscal years ended December 31, 2010 and 2009,
respectively. Barter expense amounted to $4.9 million and $5.0 million for the fiscal
years ended December 31, 2010 and 2009, respectively.Unearned revenue consists of the excess of the aggregate fair value of goods or services
received by us, over the aggregate fair value of advertising time delivered by us on
certain barter customers.(k)
    
    Cash and Cash EquivalentsCash and cash equivalents consist of cash and money market accounts at various commercial
banks. All cash equivalents have original maturities of 90 days or less.(l)
    
    Income TaxesWe file a consolidated federal and combined state and local income tax return for substantially all of our domestic
operations. We are also subject to foreign taxes on our Puerto Rico operations. We
account for income taxes under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment
date.
   60




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   In assessing the realizability of deferred tax assets, management considers whether it is
more likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income, and tax planning strategies in making
this assessment. If the realization of deferred tax assets in the future is considered
more likely than not, an adjustment to the deferred tax assets would increase net income
in the period such determination is made. Based upon the level of historical taxable
income and projections for future taxable income over the periods which the deferred tax
assets are deductible, at this time, management believes it is more likely than not that
we will not realize the benefits of the majority of these deductible differences. As a
result, we have established and maintained a valuation allowance for that portion of the
deferred tax assets we believe will not be realized. We account for uncertain tax
positions which require that a position taken or expected to be taken in a tax return be
recognized in the financial statements when it is more likely than not (a likelihood of
more than 50 percent) that the position would be sustained upon examination by tax
authorities. A recognized tax position is then measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon ultimate settlement.
Interest and penalties on tax liabilities, if any, would be recorded in interest expense
and other non-interest expense, respectively (see note 12).(m)
    
    Advertising CostsWe incur advertising costs to add and maintain listeners. These costs are charged to
expense in the period incurred. Cash advertising costs amounted to $0.1 million and $0.3
million in fiscal years ended December 31, 2010 and 2009, respectively.(n)
    
    Contingent LiabilitiesAccounting standards require that an estimated loss from a loss contingency shall be
accrued when information available prior to the issuance of the financial statements
indicate that it is probable that an asset has been impaired or a liability has been
incurred at the date of the financial statements and when the amount of the loss can be
reasonably estimated. Accounting for contingencies such as legal and income tax matters
requires us to use our judgment. We believe that our accruals for these matters are
adequate. Nevertheless, the actual loss from a loss contingency might differ from our
estimates.(o)
    
    Use of EstimatesThe preparation of consolidated financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Significant items
subject to such estimates and assumptions, include the useful lives of fixed assets;
allowance for doubtful accounts; the valuation of derivatives; deferred tax assets; fixed
assets, and share-based compensation. These estimates and assumptions are based on
managements best judgments. Management evaluates its estimates and assumptions on an
ongoing basis using historical experience and other factors, including the current
economic environment, which management believes to be reasonable under the circumstances.
Management adjusts such estimates and assumptions as facts and circumstances dictate.
Illiquid credit markets, volatile equity markets and reductions in advertising spending
have combined to increase the uncertainty inherent in such estimates and assumptions.
Actual results could differ from these estimates.(p)
    
    Concentration of Business and Credit RisksFinancial instruments that potentially subject us to concentrations of risk include
primarily cash, and trade receivables and financial instruments used in hedging
activities (see notes 2(w) and 4). We place our cash with highly rated credit
institutions. Although we try to limit the amount of credit exposure with any one
financial institution, we do in the normal course of business maintain cash balances in
excess of federally insured limits.
   61




---



##### Table of Contents



SPANISH
BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Our operations are conducted in several markets across the United States, including
Puerto Rico. Our New York, Miami and Los Angeles markets accounted for more than 70% of
net revenue for the fiscal years ended December 31, 2010 and 2009. Our credit risk is
spread across a large number of diverse customers in a number of different industries,
thus spreading the trade credit risk. We do not normally require collateral on credit
sales; however, a credit analysis is performed before extending substantial credit to any
customer and occasionally we request payment in advance. We establish an allowance for
doubtful accounts based on customers payment history and perceived credit risks.(q)
    
    Basic and Diluted Net Income (Loss) per Common ShareBasic net income (loss) per common share was computed by dividing net loss available to
common stockholders by the weighted average number of shares of common stock and
convertible preferred stock outstanding for each period presented. Diluted net loss per
common share is computed by giving effect to common stock equivalents as if they were
outstanding for the entire period. Common stock equivalents were not considered for the
fiscal year ended December 31, 2009, since their effect would be anti-dilutive. If
included, common stock equivalents for the fiscal year ended December 31, 2009 would have
amounted to 45. The following table summarizes the net income (loss) applicable to common
stockholders and the net income (loss) per common share for the fiscal years ended
December 31, 2010 and 2009 (in thousands, except per share data):
 2010
    
    
    2009Net income (loss)
    
    $
    15,042
    
    
    
    (13,778
    )Less: dividends on Series B preferred stock
    
    
    (9,927
    )
    
    
    (9,927
    )Net income (loss) available to common stockholders
    
    
    5,115
    
    
    
    (23,705
    )Basic and diluted net income (loss) per common stock
    
    $
    0.07
    
    
    
    (0.33
    )Weighted average common shares outstanding:
    
    
    72,614
    
    
    
    72,517Basic and diluted
    
    
    72,816
    
    
    
    72,517
 (r)
    
    Fair Value MeasurementWe determine the fair value of assets and liabilities using a fair value hierarchy that
distinguishes between market participant assumptions developed based on market data
obtained from sources independent of the reporting entity, and the reporting entitys own
assumptions about market participant assumptions developed based on the best information
available in the circumstances.
   62




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date,
essentially an exit price (see note 16). The levels of the fair value hierarchy are:
 Level 1:
 Level 2:
 Level 3:
 (s)
    
    Share-based Compensation ExpenseWe account for our share-based compensation expense based on the estimated grant date
fair value method using the Black-Scholes option pricing model. For these awards, we have
recognized compensation expense using a straight-line amortization method (prorated).
Share-based compensation expense is based on awards that are ultimately expected to vest.
Share-based compensation for the fiscal years ended December 31, 2010 and 2009 were
reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary
termination behaviors, as well as trends of actual option forfeitures.(t)
    
    Leasing (Operating Leases)We recognize rent expense for operating leases with periods of free rent (including
construction periods), step rent provisions and escalation clauses on a straight line
basis over the applicable lease term. We consider lease renewals in the useful life of
related leasehold improvements when such renewals are reasonably assured. We take these
provisions into account when calculating minimum aggregate rental commitments under
noncancelable operating leases (see note 11). From time to time, we receive capital
improvement funding from our lessors. These amounts are recorded as deferred liabilities
and amortized over the remaining lease term as a reduction of rent expense.(u)
    
    Segment ReportingAccounting standards establish the way public business enterprises report information
about operating segments in annual financial statements and require those enterprises to
report selected information about operating segments in interim financial reports issued
to stockholders. We have two reportable segments: radio and television (see note 17).(v)
    
    Other, NetIn the fiscal year ended December 31, 2009, the amount in other, net in our consolidated
statement of operations was primarily related to the write-down of a deposit.(w)
    
    Derivative InstrumentWe only enter into derivative contracts to hedge against the potential impact of
increases in interest rates on our debt instruments. We also only enter into derivative
contracts that we intend to designate as a hedge of the variability of cash flows to be
paid related to a recognized asset or liability (cash flow hedge).By using derivative financial instruments to hedge exposures to changes in interest
rates, we expose ourselves to credit risk and market risk. Credit risk is the failure of
the counterparty to perform under the terms of the derivative contract. We attempt to
minimize the credit risk in derivative instruments by entering into transactions with
high-quality counterparties whose credit rating is higher than Aa.
   63




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Market risk is the adverse effect on the value of a derivative instrument that results
from a change in interest rates. The market risk associated with interest-rate contracts
is managed by establishing and monitoring parameters that limit the types and degree of
market risk that may be undertaken.For all hedging relationships, we formally document the hedging relationship and its
risk-management objective and strategy for undertaking the hedge, the hedging instrument,
the hedged item, the nature of the risk being hedged, how the hedging instruments
effectiveness in offsetting the hedged risk will be assessed prospectively and
retrospectively, and a description of the method of measuring ineffectiveness. We also
formally assess, both at the hedges inception and on an ongoing basis, whether the
derivatives that are used in hedging transactions are highly effective in offsetting cash
flows of hedged items.We are accounting for our interest rate swaps as cash flow hedges, which requires us to
recognize all derivative instruments on the balance sheet at fair value. The related
gains or losses on these instruments are deferred in stockholders deficit as a component
of accumulated other comprehensive (loss) income. The deferred gains or losses on these
transactions are recognized in income in the period in which the related items being
hedged are recognized in expense. However, to the extent that the change in value of the
derivative contracts does not offset the change in the value of the underlying
transaction being hedged, that ineffective portion is immediately recognized into income.
We recognize gains and losses immediately when the underlying transaction settles. For
cash flow hedges in which hedge accounting is discontinued because it is determined that
the derivative no longer qualifies as an effective cash flow hedge, we continue to carry
the derivative instrument at its fair value on the consolidated balance sheet and
recognize any subsequent changes in its fair value in earnings (change in fair value of
derivative instrument).(x)
    
    Comprehensive LossOur comprehensive loss consists of net income (loss) and other items recorded directly to the
equity accounts. The objective is to report a measure of all changes in equity of an
enterprise that result from transactions and other economic events during the period. Our
other comprehensive loss consists of net income (loss) and gains and losses on derivative
instruments that qualify for cash flow hedge treatment.(y)
    
    New Accounting StandardsIn December 2010, the FASB issued ASU 2010-28, IntangiblesGoodwill and Other (Topic
350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with
Zero or Negative Carrying Amounts, a consensus of the FASB Emerging Issues Task Force
(Issue No. 10-A). ASU 2010-28 modifies Step 1 of the goodwill impairment test under ASC
Topic 350 for reporting units with zero or negative carrying amounts to require an entity
to perform Step 2 of the goodwill impairment test if it is more likely than not that a
goodwill impairment exists. In determining whether it is more likely than not that a
goodwill impairment exists, an entity should consider whether there are adverse
qualitative factors, including the examples provided in ASC paragraph 350-20-35-30, in
determining whether an interim goodwill impairment test between annual test dates is
necessary. The ASU allows an entity to use either the equity or enterprise valuation
premise to determine the carrying amount of a reporting unit. ASU 2010-28 is effective
for fiscal years, and interim periods within those years, beginning after December 15,
2010. The Company is currently evaluating the impact of the adoption of ASU 2010-28 on
its consolidated financial statements and has preliminarily concluded that it will not have a material
impact.
 (3)
    
    Impairment Charges and Restructuring Costs
 Impairment of FCC Broadcasting LicensesWe generally perform our annual impairment test of our indefinite-lived intangibles during the
fourth quarter of our fiscal year.
   64




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   During the fourth quarter 2010 annual impairment test, we determined that there was no
impairment of our FCC broadcasting licenses. During the fourth quarter 2009 annual impairment
test, we determined that there was an impairment of our FCC broadcasting licenses. We recorded
a non-cash impairment loss of approximately $8.5 million that reduced the carrying values of
our FCC broadcasting licenses. The tax impact of the impairment loss was an approximate $0.6
million tax benefit, which was related to the reduction of the book/tax basis differences on
our FCC broadcasting licenses.Given the deteriorating economic conditions and revenue
declines in the broadcasting industry in 2009 and 2008, we also performed an interim impairment test as of
March 31, 2009. As a result of the March 31, 2009 interim impairment test, we determined that there was an
impairment of our FCC broadcasting licenses. We recorded a non-cash impairment loss of
approximately $10.1 million that reduced the carrying values of our FCC broadcasting licenses.
The tax impact of the impairment loss was an approximate $4.1 million tax benefit, which was
related to the reduction of the book/tax basis differences on our FCC broadcasting licenses.The impairment losses were due to changes in estimates and assumptions which were primarily
(a) lower industry advertising revenue growth projections in our respective markets, (b) lower
industry profit margins, and (c) increased risk adjusted discount rates used in fair value
determinations. Also, the current decline in cash flow multiples for recent station sales were
considered in the estimates and assumptions used.Impairment of Property and EquipmentDuring the fiscal year 2010, we entered into a sublease of office space and determined that
$1.3 million of property and equipment related to leasehold improvements and furniture and
fixtures were impaired.During the fiscal year 2009, we entered into a sublease of office space and determined that
$1.4 million of property and equipment related to leasehold improvements and furniture and
fixtures were impaired.Restructuring CostsWe incurred restructuring costs related to the abandonment of a leased office space and losses
on various subleased office spaces.During the fiscal year 2010, we incurred restructuring costs of $1.7 million, of which $1.0
million was paid in 2010. As of December 31, 2010, the total accrued expenses on our
consolidated balance sheet related to restructuring costs was $1.6 million, which was included
in other liabilities.During the fiscal year 2009, we incurred restructuring expenses of $1.6 million, of which $1.0
million was paid in 2009. As of December 31, 2009, the total accrued expenses on our
consolidated balance sheet related to restructuring activities was $0.9 million, of which $0.1
million was included in accounts payable and accrued expenses and $0.8 million was included in
other liabilities.
 (4)
    
    Derivatives and Hedging Activities
 At December 31, 2010 and 2009, derivative financial instruments are comprised of the following
(in thousands):
 Fixed
    
    
    
    
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009interest
    
    
    Expiration
    
    
    Notional
    
    
    Notional
    
    
    Fair
    
    
    FairAgreement
    
    rate
    
    
    date
    
    
    amounts
    
    
    amounts
    
    
    value
    
    
    valueInterest rate swap
    
    
    5.98
    %
    
    June 2010
    
    $
    
    
    
    
    309,563
    
    
    $
    
    
    
    
    5,863Interest rate swap
    
    
    6.31
    %
    
    January 2017
    
    
    6,452
    
    
    
    6,758
    
    
    
    829
    
    
    
    612$
    6,452
    
    
    
    316,321
    
    
    $
    829
    
    
    
    6,475
   65




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   In June 2005, we entered into a five-year interest rate swap agreement for the original
notional principal amount of $324.2 million whereby we paid a fixed interest rate of 5.98% as
compared to interest at a floating rate equal to three-month LIBOR plus 175 basis points. The
interest rate swap amortization schedule was identical to the First Lien Credit Facility
amortization schedule during June 2005 to June 2010 (see note 7).In September and October 2008, the counterparty to this interest rate swap, Lehman Brothers
Special Financing Inc., and its parent and credit support provider, Lehman Brothers Holdings
Inc., each filed for bankruptcy. Based on these bankruptcy filings, this cash flow hedge was
deemed ineffective and no longer qualified for hedge accounting. Therefore, the change in fair
value from September 2008 to June 2010 was recorded in earnings as a Change in fair value of
derivative instrument. For the fiscal years ended 2010 and 2009, the change in the fair value
of derivative instrument totaled $5.9 million and $5.8 million, respectively. Additionally,
the Accumulated Other Comprehensive Loss associated with this hedge as of September 2008 was
$7.8 million and was reclassified into earnings (interest expense) monthly until June 2010.
For the fiscal years ended 2010 and 2009, $1.9 million and $5.4 million were reclassified and
recorded as interest expense, respectively.As a result of the Lehman bankruptcy filings, a dispute arose with respect to the outstanding
payments under the swap agreement. On June 17, 2010, the parties successfully resolved the
dispute under mediation and entered into a confidential settlement and release agreement. The
financial impact of the settlement is reflected in our consolidated balance sheet and
statement of operations.On January 4, 2007, we entered into a ten-year interest rate swap agreement for the original
notional principal amount of $7.7 million whereby we will pay a fixed interest rate of 6.31%,
as compared to interest at a floating rate equal to one-month LIBOR plus 125 basis points. The
interest rate swap amortization schedule is identical to the promissory note amortization
schedule, which has an effective date of January 4, 2007, monthly notional reductions and an
expiration date of January 4, 2017 (see note 8).
 (5) Property and Equipment, Net
 Property and equipment, net consists of the following at December 31, 2010 and 2009 (in
thousands):
 Estimated2010
    
    
    2009
    
    
    useful livesLand
    
    $
    7,306
    
    
    
    7,306
    
    
    
    Building and building improvements
    
    
    35,931
    
    
    
    35,822
    
    
    720 yearsTower and antenna systems
    
    
    5,646
    
    
    
    5,258
    
    
    10 yearsStudio and technical equipment
    
    
    19,945
    
    
    
    19,459
    
    
    510 yearsFurniture and fixtures
    
    
    5,152
    
    
    
    5,444
    
    
    510 yearsTransmitter equipment
    
    
    7,253
    
    
    
    6,942
    
    
    10 yearsLeasehold improvements
    
    
    3,162
    
    
    
    6,434
    
    
    120 yearsComputer equipment and software
    
    
    6,517
    
    
    
    6,327
    
    
    35 yearsOther
    
    
    1,913
    
    
    
    1,933
    
    
    35 years92,825
    
    
    
    94,925Less accumulated depreciation and
amortization
    
    
    (52,819
    )
    
    
    (49,560
    )$
    40,006
    
    
    
    45,365
   66




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    (6)
    
    Accounts Payable and Accrued Expenses
  2010
    
    
    2009Accounts payable  trade
    
    $
    2,423
    
    
    
    3,002Accrued compensation and commissions
    
    
    5,570
    
    
    
    6,464Accrued professional fees
    
    
    1,779
    
    
    
    1,445Accrued step-up leases
    
    
    1,222
    
    
    
    1,380Accrued income taxes
    
    
    1,818
    
    
    
    1,704Other accrued expenses
    
    
    5,168
    
    
    
    4,216$
    17,980
    
    
    
    18,211
 (7)
    
    Senior Secured Credit Facilities
  2010
    
    
    2009Revolving credit facility of $25.0 million, due 2010
    
    $
    
    
    
    
    15,000Term loan payable due in quarterly principal repayments of
0.25% of the original outstanding amount of $325.0 million
including variable interest based on LIBOR plus 175 basis
points, with outstanding balance due in 2012
    
    
    306,313
    
    
    
    309,563306,313
    
    
    
    324,563Less current portion
    
    
    (3,250
    )
    
    
    (18,250
    )$
    303,063
    
    
    
    306,313
  Fiscal year ending December 31:2011
    
    $
    3,2502012
    
    
    303,063$
    306,313
   67




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    Interest and Fees
   Collateral and Guarantees
  Covenants and Other Matters
  
    
    incur additional debt, incur contingent obligations and issue additional preferred
stock;
    
    create liens;
    
    pay dividends, distributions or make other specified restricted payments, and
restrict the ability of certain of our subsidiaries to pay dividends or make other
payments to us;
    
    sell assets;
    
    make certain capital expenditures, investments and acquisitions;
    
    enter into certain transactions with affiliates;
    
    enter into sale and leaseback transactions; and
    
    merge or consolidate with any other person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of our assets.
   68




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    (8)
    
    Other Long-Term Debt
  2010
    
    
    2009Promissory note payable, due in monthly principal installments of
$26, plus interest at 6.31%, commencing January 2007, with
balance due on January 2017
    
    $
    6,452
    
    
    
    6,758Obligation under capital lease with related party payable in
monthly installments of $9, including interest at 6.25%,
commencing June 1992. See notes 11 and 14
    
    
    136
    
    
    
    231Various obligations under capital leases
    
    
    8
    
    
    
    636,596
    
    
    
    7,052Less current portion
    
    
    (416
    )
    
    
    (447
    )$
    6,180
    
    
    
    6,605
  Fiscal year ending December 31:2011
    
    $
    4162012
    
    
    3402013
    
    
    3062014
    
    
    3062015
    
    
    306Thereafter
    
    
    4,922$
    6,596
    69




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
      (9)
    
    10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock
       70




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
     (10)
    
    Stockholders Equity
 (a)
    
    Series C Convertible Preferred Stock
    (b)
    
    Class A and B Common Stock
    71




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (c)
    
    Share-Based Compensation Plans
 2006 Omnibus Equity Compensation Plan
  1999 Stock Option Plans
  Accounting for Share-Based Plans
       72




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Valuation Assumptions
  2010
    
    2009Expected term
    
    7 years
    
    7 yearsDividends to common stockholders
    
    None
    
    NoneRisk-free interest rate
    
    1.75%
    
    3.11%Expected volatility
    
    105.22%
    
    99.43%
    73




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Stock Options and Nonvested Shares Activity
  WeightedWeighted
    
    
    
    
    
    
    averageaverage
    
    
    Aggregate
    
    
    remainingexercise
    
    
    intrinsic
    
    
    contractualShares
    
    
    price
    
    
    value
    
    
    life (years)Outstanding at December 31, 2008
    
    
    2,747
    
    
    $
    10.17
    
    
    
    
    
    
    
    Granted
    
    
    100
    
    
    
    0.73
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (790
    )
    
    
    18.75
    
    
    
    
    
    
    
    Outstanding at December 31, 2009
    
    
    2,057
    
    
    $
    6.41
    
    
    
    
    
    
    
    Granted
    
    
    150
    
    
    
    1.11
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (289
    )
    
    
    7.05
    
    
    
    Outstanding at December 31, 2010
    
    
    1,918
    
    
    $
    5.90
    
    
    $
    86
    
    
    
    4.7Excercisable at December 31, 2010
    
    
    1,868
    
    
    $
    6.01
    
    
    $
    86
    
    
    
    4.6
   WeightedWeighted
    
    
    average
    
    
    
    
    
    
    Weightedaverage
    
    
    remaining
    
    
    
    
    
    
    averageVested
    
    
    Unvested
    
    
    exercise
    
    
    contractual
    
    
    Options
    
    
    exerciseRange of exercise prices
    
    options
    
    
    options
    
    
    price
    
    
    life (years)
    
    
    exercisable
    
    
    price$0.204.99
    
    
    675
    
    
    
    50
    
    
    $
    1.64
    
    
    
    7.8
    
    
    
    675
    
    
    $
    1.61$5.009.99
    
    
    995
    
    
    
    
    
    
    
    8.04
    
    
    
    2.6
    
    
    
    995
    
    
    
    8.04$10.0014.99
    
    
    198
    
    
    
    
    
    
    
    10.79
    
    
    
    3.8
    
    
    
    198
    
    
    
    10.791,868
    
    
    
    50
    
    
    
    5.90
    
    
    
    4.7
    
    
    
    1,868
    
    
    
    6.01
    74




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    Weightedaveragegrant-date
    
    
    Aggregatefair value
    
    
    intrinsicShares
    
    
    (per share)
    
    
    valueNonvested at December 31, 2008
    
    
    225
    
    
    $
    1.75Awarded
    
    
    
    
    
    
    Vested
    
    
    (97
    )
    
    
    1.78Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2009
    
    
    128
    
    
    
    1.73Awarded
    
    
    
    
    
    
    Vested
    
    
    (98
    )
    
    
    1.78Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2010
    
    
    30
    
    
    $
    1.57
    
    
    $
    22
 (11)
    
    Commitments
 (a)
    
    Leases
  2010
    
    
    2009Building under capital lease
    
    $
    1,230
    
    
    
    1,230Various furniture and fixtures under capital leases
    
    
    135
    
    
    
    1781,365
    
    
    
    1,408Less accumulated depreciation
    
    
    (1,360
    )
    
    
    (1,355
    )$
    5
    
    
    
    53
    75




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    Capital
    
    
    Operatinglease
    
    
    leaseFiscal year ending December 31:2011
    
    $
    159
    
    
    
    4,4442012
    
    
    53
    
    
    
    4,5022013
    
    
    
    
    
    
    4,3372014
    
    
    
    
    
    
    4,1562015
    
    
    
    
    
    
    2,484Thereafter
    
    
    
    
    
    
    9,667Total minimum lease payments
    
    
    212
    
    
    
    29,590Less executory costs
    
    
    (60
    )152Less interest
    
    
    (8
    )Present value of minimum lease payments
    
    $
    144
    Fiscal year ending December 31:2011
    
    $
    1,5102012
    
    
    1,7532013
    
    
    1,8532014
    
    
    1,9012015
    
    
    880Thereafter
    
    
    1,201$
    9,098
   76




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (b)
    
    Employment and Service Agreements
  Fiscal year ending December 31:2011
    
    $
    8,8272012
    
    
    3,9362013
    
    
    1,3402014
    
    
    47$
    14,150
   (c)
    
    401(k)Profit-Sharing Plan
    77




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (d)
    
    Other Commitments
  Fiscal year ending December 31:2011
    
    $
    17,1462012
    
    
    9,6682013
    
    
    9,5732014
    
    
    6,6022015
    
    
    5,428Thereafter
    
    
    153$
    48,570
 (12)
    
    Income Taxes
  2010
    
    
    2009Income from  operations
    
    $
    6,976
    
    
    
    2,691
  2010
    
    
    2009U.S. operations
    
    $
    25,436
    
    
    
    (5,915
    )Foreign operations
    
    
    (3,418
    )
    
    
    (5,172
    )$
    22,018
    
    
    
    (11,087
    )
   78




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    2010
    
    
    2009Current:Federal
    
    $
    
    
    
    
    (380
    )State and local, net of federal income tax benefit
    
    
    35
    
    
    
    35Foreign
    
    
    102
    
    
    
    (290
    )137
    
    
    
    (635
    )Deferred:Federal
    
    
    5,913
    
    
    
    2,213State and local, net of federal income tax benefit
    
    
    926
    
    
    
    1,113Foreign
    
    
    
    
    
    
    6,839
    
    
    
    3,326Total income tax expense
    
    $
    6,976
    
    
    
    2,691
    79




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    2010
    
    
    2009Deferred tax assets:Federal and state net operating loss carryforwards
    
    $
    74,150
    
    
    
    75,255Foreign net operating loss carryforwards
    
    
    13,605
    
    
    
    13,963FCC licenses
    
    
    37,978
    
    
    
    46,811Allowance for doubtful accounts
    
    
    843
    
    
    
    1,108Unearned revenue
    
    
    303
    
    
    
    234AMT credit
    
    
    806
    
    
    
    806Derivatives and hedging instruments
    
    
    1,998
    
    
    
    4,948Fixed assets
    
    
    2,063
    
    
    
    997Accrued foreign witholding
    
    
    2,152
    
    
    
    2,051Straight-line expense adjustments
    
    
    937
    
    
    
    Accrued restructuring
    
    
    559
    
    
    
    Production costs
    
    
    6,542
    
    
    
    4,031Other
    
    
    4,779
    
    
    
    4,992Total gross deferred tax assets
    
    
    146,715
    
    
    
    155,196Less valuation allowance
    
    
    (145,909
    )
    
    
    (154,390
    )Net deferred tax assets
    
    
    806
    
    
    
    806Deferred tax liabilities:FCC licenses
    
    
    79,053
    
    
    
    72,214Total gross deferred tax
liabilities
    
    
    79,053
    
    
    
    72,214Net deferred tax liability
    
    $
    78,247
    
    
    
    71,408
     80




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
     2010
    
    
    2009Computed
expected tax expense (benefit)
    
    
    35.0
    %
    
    
    (35.0
    )%State and local income taxes, net of federal benefit
    
    
    7.3
    
    
    
    (3.2
    )Foreign tax differental
    
    
    (0.6
    )
    
    
    (1.9
    )Current year change in valuation allowance
    
    
    (35.4
    )
    
    
    50.2Nondeductible expenses
    
    
    1.4
    
    
    
    1.8Change in effective rate
    
    
    (0.6
    )
    
    
    7.1Expiration of net operating losses
    
    
    26.4
    
    
    
    Other
    
    
    (1.9
    )
    
    
    5.331.6
    %
    
    
    24.3
    %
   (13)
    
    Contingencies
 FCC Licenses Matters
    81




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (14)
    
    Related-Party Transactions
      (15)
    
    Litigation
  (a) Wolf, et al., Litigation
    82




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
       sub judice
    83




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
     sub judice
 (16)
    
    Fair Value Measurement Disclosures
 Fair Value of Financial Instruments
     84




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    December 31,2010
    
    
    2009Gross
    
    
    
    
    
    
    Grosscarrying
    
    
    
    
    
    
    carryingamount
    
    
    Fair value
    
    
    amount
    
    
    Fair valueSenior credit facility term loan
    
    $
    306.3
    
    
    
    291.2
    
    
    
    309.6
    
    
    
    255.910 3/4% Series B cumulative exchangeable
redeemable preferred stock
    
    
    92.3
    
    
    
    69.3
    
    
    
    92.3
    
    
    
    57.9Promisory note payable, included
in other long-term debt
    
    
    6.5
    
    
    
    6.4
    
    
    
    6.8
    
    
    
    6.5
    85




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Fair Value of Derivative Instruments
  Fair value measurements atDecember 31, 2010December 31, 2010
    
    
    Liabilitiescarrying value and
    
    
    Quoted prices inbalance sheet
    
    
    active marketslocation of
    
    
    for identical
    
    
    Significant other
    
    
    Significantderivative
    
    
    instruments
    
    
    observable inputs
    
    
    unobservable inputsDescription
    
    instruments
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative designed as a cash flow
hedging instrument:Interest rate swap
    
    $
    829
    
    
    
    
    
    
    
    829
    
    
    
    
 Fair value measurements atDecember 31, 2009December 31, 2009
    
    
    Liabilitiescarrying value and
    
    
    Quoted prices inbalance sheet
    
    
    active marketslocation of
    
    
    for identical
    
    
    Significant other
    
    
    Significantderivative
    
    
    instruments
    
    
    observable inputs
    
    
    unobservable inputsDescription
    
    instruments
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative designed as a cash flow
hedging instrument:Interest rate swap
    
    $
    612
    
    
    
    
    
    
    
    612
    
    
    
    Derivative no longer designated as
a cash flow hedging instrument:
    
    
    
    
    
    
    Interest rate swap
    
    
    5,863
    
    
    
    
    
    
    
    5,863
    
    
    
    Total
    
    $
    6,475
    
    
    
    
    
    
    
    6,475
    
    
    
    
    86




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   December 31,Interest rate swap
    
    2010
    
    
    2009(in thousands)(Loss) gain recognized in other comprehensive loss
(effective portion)
    
    $
    (217
    )
    
    
    276Amounts reclassified from accumulated other comprehensive
loss into interest expense
    
    
    1,901
    
    
    
    5,398Gain recognized in change in fair value of
derivative instrument
    
    
    5,863
    
    
    
    5,790
 Fair Value of Nonfinancial Assets
  December 31, 2009
    
    
    Fair value measurements atcarrying value and
    
    
    December 31, 2009balance sheet
    
    
    Nonfinancial assetslocation of
    
    
    Quoted prices in
    
    
    Significant other
    
    
    SignificantFCC broadcasting
    
    
    active markets
    
    
    observable inputs
    
    
    unobservable inputsDescription
    
    licenses
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)FCC broadcasting
licenses
    
    $
    34,848
    
    
    
    
    
    
    
    
    
    
    
    34,848
    87




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   (17)
    
    Segment Data
  Fiscal year ended2010
    
    
    2009Net revenue:Radio
    
    $
    119,533
    
    
    
    123,602Television
    
    
    16,589
    
    
    
    15,787Consolidated
    
    $
    136,122
    
    
    
    139,389Engineering and programming expenses:Radio
    
    $
    22,791
    
    
    
    27,435Television
    
    
    17,170
    
    
    
    13,944Consolidated
    
    $
    39,961
    
    
    
    41,379Selling, general, and administrative:Radio
    
    $
    41,281
    
    
    
    41,766Television
    
    
    7,706
    
    
    
    8,263Consolidated
    
    $
    48,987
    
    
    
    50,029Corporate expenses
    
    $
    8,178
    
    
    
    9,686Depreciation and amortization:Radio
    
    $
    2,646
    
    
    
    3,111Television
    
    
    2,248
    
    
    
    2,202Corporate
    
    
    916
    
    
    
    949Consolidated
    
    $
    5,810
    
    
    
    6,262(Gain) loss on sale of assets, net:Radio
    
    $
    202
    
    
    
    (7
    )Television
    
    
    8
    
    
    
    15Corporate
    
    
    
    
    
    
    (22
    )Consolidated
    
    $
    210
    
    
    
    (14
    )
   88




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
   Fiscal year ended2010
    
    
    2009Impairment of assets and restructuring
costs:Radio
    
    $
    
    
    
    
    14,188Television
    
    
    43
    
    
    
    7,405Corporate
    
    
    2,981
    
    
    
    48Consolidated
    
    $
    3,024
    
    
    
    21,641Operating income (loss):Radio
    
    $
    52,613
    
    
    
    37,109Television
    
    
    (10,586
    )
    
    
    (16,042
    )Corporate
    
    
    (12,075
    )
    
    
    (10,661
    )Consolidated
    
    $
    29,952
    
    
    
    10,406Capital expenditures:Radio
    
    $
    753
    
    
    
    525Television
    
    
    452
    
    
    
    380Corporate
    
    
    332
    
    
    
    49Consolidated
    
    $
    1,537
    
    
    
    954
 December 31,2010
    
    
    2009Total assets:Radio
    
    $
    425,106
    
    
    
    425,565Television
    
    
    45,707
    
    
    
    45,811Corporate
    
    
    4,006
    
    
    
    7,417Consolidated
    
    $
    474,819
    
    
    
    478,793
  89




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
    Balance at
    
    
    Charged to
    
    
    Charged tobeginning of
    
    
    cost and
    
    
    other
    
    
    
    
    
    
    Balance atDescription
    
    year
    
    
    expense
    
    
    accounts (1)
    
    
    Deductions (2)
    
    
    end of yearFiscal year ended December 31, 2009:Allowance for doubtful
accounts
    
    $
    1,675
    
    
    
    379
    
    
    
    
    
    
    
    807
    
    
    
    1,247Valuation allowance on
deferred
taxes
    
    
    151,127
    
    
    
    5,568
    
    
    
    (2,305
    )
    
    
    
    
    
    
    154,390Fiscal year ended December 31, 2010:Allowance for doubtful
accounts
    
    
    1,247
    
    
    
    512
    
    
    
    
    
    
    
    946
    
    
    
    813Valuation allowance on
deferred
taxes
    
    
    154,390
    
    
    
    (7,785
    )
    
    
    (696
    )
    
    
    
    
    
    
    145,909
 (1)
    
    Amounts charged to other comprehensive income related to derivatitve instruments.(2)
    
    Cash write-offs, net of recoveries.   90




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 (b)
    
    Exhibits
  Exhibit number
    
    Exhibit description3.1
    
    
    Third Amended and Restated Certificate of
Incorporation of Spanish Broadcasting System, Inc.,
dated September 29, 1999 (incorporated by reference to
the Companys 1999 Registration Statement on Form S-1
(Commission File No. 333-85499) (the 1999
Registration Statement)) (Exhibit A to this exhibit
is incorporated by reference to the Companys Current
Report on Form 8-K, dated March 25, 1996 (the 1996
Current Report)).3.2
    
    
    Certificate of Amendment to the Third Amended and
Restated Certificate of Incorporation of the Company,
dated September 29, 1999 (incorporated by reference to
Exhibit 3.2 of the Companys 1999 Registration
Statement).3.3
    
    
    Amended and Restated By-Laws of the Company
(incorporated by reference to Exhibit 3.3 of the
Companys 1999 Registration Statement).3.4
    
    
    Certificate of Elimination of 14 1/4% Senior
Exchangeable Preferred Stock, Series A of the Company,
dated October 28, 2003 (incorporated by reference to
Exhibit 3.3 of the Companys Quarterly Report on Form
10-Q, dated November 14, 2003 (the 11/14/03 Quarterly
Report)).4.1
    
    
    Article V of the Third Amended and Restated
Certificate of Incorporation of the Company, dated
September 29, 1999 (incorporated by reference to
Exhibit 3.1 of the Companys 1999 Registration
Statement).4.2
    
    
    Certificate of Designations dated October 29, 2003
Setting Forth the Voting Power, Preferences and
Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and
Restrictions of the 10 3/4% Series A Cumulative
Exchangeable Redeemable Preferred Stock of Spanish
Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.1 of the Companys 11/14/03 Quarterly
Report).4.3
    
    
    Certificate of Designations dated October 29, 2003
Setting Forth the Voting Power, Preferences and
Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and
Restrictions of the 10 3/4% Series B Cumulative
Exchangeable Redeemable Preferred Stock of Spanish
Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.2 of the Companys 11/14/03 Quarterly
Report).4.4
    
    
    Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the
Guarantors named therein and the Purchasers named
therein (incorporated by reference to Exhibit 4.1 of
the Companys 1994 Registration Statement on Form S-4
(the 1994 Registration Statement)).4.5
    
    
    First Supplemental Indenture dated as of March 25,
1996 to the Indenture dated as of June 29, 1994 among
the Company, the Guarantors named therein and IBJ
Schroder Bank & Trust Company, as Trustee
(incorporated by reference to the 1996 Current
Report).4.6
    
    
    Second Supplemental Indenture dated as of March 1,
1997 to the Indenture dated as of June 29, 1994 among
the Company, the Guarantors named therein and IBJ
Schroder Bank & Trust Company, as Trustee
(incorporated by reference to the 1996 Current
Report).
  91




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description4.7
    
    
    Supplemental Indenture dated as of October 21, 1999 to the Indenture
dated as of June 29, 1994 among the Company, the Guarantors named
therein and IBJ Schroder Bank & Trust Company, as Trustee
(incorporated by reference to the Companys 1999 Registration
Statement).4.8
    
    
    Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009
with The Bank of New York as Trustee, dated November 2, 1999
(incorporated by reference to the Current Report on Form 8-K dated
November 2, 1999 (the 1999 Current Report)).4.9
    
    
    Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009
with the Bank of New York as Trustee, dated June 8, 2001
(incorporated by reference to the Companys Registration Statement
on Form S-3, filed on June 25, 2001 (the 2001 Form S-3)).4.10
    
    
    Form of stock certificate for the Class A common stock of the
Company (incorporated by reference to the Companys 1999
Registration Statement).4.11
    
    
    Certificate of Elimination of 14 1/4% of Senior Exchangeable
Preferred Stock, Series A of the Company, dated October 28, 2003
(incorporated by reference to Exhibit 3.3 of the Companys Quarterly
Report on Form 10-Q filed November 14, 2003).4.12
    
    
    Certificate of Designation Setting Forth the Voting Power,
Preferences and Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and Restrictions of the
Series C Convertible Preferred Stock of the Company (Certificate of
Designation of Series C Preferred Stock) (incorporated by reference
to Exhibit 4.1 of the Companys Current Report on Form 8-K filed on
December 27, 2004).4.13
    
    
    Certificate of Correction to Certificate of Designation of Series C
Preferred Stock of the Company dated January 7, 2005 (incorporated
by reference to Exhibit 4.13 of the Companys Annual Report filed on
Form 10-K for the fiscal year 2004).10.1
    
    
    Warrant Agreement dated as of March 15, 1997 among the Company and
IBJ Schroder Bank & Trust Company, as Warrant Agent (incorporated by
reference to the 1996 Current Report).10.2
    *
    
    Common Stock Registration Rights and Stockholders Agreement dated as
of June 29, 1994 among the Company and certain Management
Stockholders named therein (incorporated by reference to the 1994
Registration Statement).10.3
    *
    
    Amended and Restated Employment Agreement dated as of October 25,
1999, by and between the Company and Raúl Alarcón, Jr. (incorporated
by reference to the Companys 1999 Registration Statement).10.4
    *
    
    Employment Agreement dated as of October 25, 1999, by and between
the Company and Joseph A. García (incorporated by reference to the
Companys 1999 Registration Statement).10.5
    
    
    Ground Lease dated December 18, 1995 between Louis Viola Company and
SBS-NJ (incorporated by reference to the 1996 Current Report).10.6
    
    
    Ground Lease dated December 18, 1995 between Frank F. Viola and
Estate of Thomas C. Viola and SBS-NJ (incorporated by reference to
the 1996 Current Report).10.7
    
    
    Lease and License Agreement dated February 1, 1991 between Empire
State Building Company, as landlord, and SBS-NY, as tenant
(incorporated by reference to Exhibit 10.15.1 of the 1994
Registration Statement).
  92




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.8
    
    
    Modification of Lease and License dated June 30, 1992 between Empire State Building
Company and SBS-NY related to WSKQ-FM (incorporated by reference to Exhibit 10.15.2
of the 1994 Registration Statement).10.9
    
    
    Lease and License Modification and Extension Agreement dated as of June 30, 1992
between Empire State Building Company, as landlord, and SBS-NY as tenant
(incorporated by reference to Exhibit 10.15.3 of the 1994 Registration Statement).10.10
    
    
    Lease Agreement dated June 1, 1992 among Raúl Alarcón, Sr., Raúl Alarcón, Jr., and
SBS-Fla (incorporated by reference to Exhibit 10.30 of the 1994 Registration
Statement).10.11
    
    
    Agreement of Lease dated as of March 1, 1996 No. WT-174-A119 1067 between The Port
Authority of New Jersey and SBS of Greater New York, Inc. as assignee of Park Radio
(incorporated by reference to the 1996 Current Report).10.12
    
    
    Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish
Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California,
Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System,
Inc., and One-on-One Sports, Inc. (incorporated by reference to Exhibit 10.62 of the
Companys Registration Statement on Form S-4 (Commission File No. 333-26295)).10.13
    
    
    Amendment No. 1 dated as of September 29, 1997 to the Asset Purchase Agreement dated
as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey),
Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of
Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc.
(incorporated by reference to the Companys Registration Statement on Form S-1, dated
January 21, 1999 (Commission File No. 333-29449)).10.14
    
    
    Extension of lease of a Condominium Unit (Metropolitan Tower Condominium) between
Raúl Alarcón, Jr. (Landlord) and Spanish Broadcasting System, Inc. (Tenant)
(incorporated by reference to the Companys 1998 Annual Report on Form 10-K).10.15
    *
    
    Indemnification Agreement with Raúl Alarcón, Jr. dated as of November 2, 1999
(incorporated by reference to the 1999 Current Report).10.16
    
    
    Indemnification Agreement with Jason L. Shrinsky dated as of November 2, 1999
(incorporated by reference to the 1999 Current Report).10.17
    *
    
    Spanish Broadcasting System 1999 Stock Option Plan (incorporated by reference to the
Companys 1999 Registration Statement).10.18
    *
    
    Spanish Broadcasting System 1999 Company Stock Option Plan for Nonemployee Directors
(incorporated by reference to the Companys 1999 Registration Statement).10.19
    
    
    Form of Lock-Up Letter Agreement (incorporated by reference in the Companys 1999
Registration Statement).10.20
    *
    
    Option Grant not under the Stock Option Plans with Arnold Sheiffer, dated October 27,
1999 (incorporated by reference to the 1999 Current Report).10.21
    
    
    Credit Agreement, dated as of July 6, 2000, among Spanish Broadcasting System, Inc.,
a Delaware corporation, the several banks and other financial institutions or
entities from time to time party to the Credit Agreement and Lehman Commercial Paper
Inc., as administrative agent (incorporated by reference to Exhibit 10.44 of the
Companys Annual Report on Form 10-K for fiscal year 2000 (the 2000 Form 10-K)).
  93




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.22
    
    
    Guarantee and Collateral Agreement made by Spanish Broadcasting System, Inc. and
certain of its subsidiaries in favor of Lehman Commercial Paper, Inc. as
Administrative Agent, dated as of July 6, 2000 (incorporated by reference to Exhibit
10.45 of the Companys 2000 Form 10-K).10.23
    *
    
    Employment Agreement dated August 31, 2000, between William Tanner and the Company
(incorporated by reference to Exhibit 10.47 of the Companys 2000 Form 10-K).10.24
    
    
    Deed of Constitution of Mortgage, Cadena Estereotempo, Inc., as Mortgagor, and Banco
Bilbao Vizcaya Puerto Rico, as Mortgagee (incorporated by reference to Exhibit 10.49
of the Companys 2000 Form 10-K).10.25
    
    
    Lease Agreement by and between the Company and Irradio Holdings, Ltd. made as of
December 14, 2000 (incorporated by reference to Exhibit 10.50 of the Companys 2000
Form 10-K).10.26
    
    
    First Addendum to Lease between the Company and Irradio Holdings, Ltd. as of December
14, 2000 (incorporated by reference to Exhibit 10.51 of the Companys 2000 Form
10-K).10.27
    
    
    Asset Purchase Agreement dated as of November 2, 2000 by and between International
Church of the FourSquare Gospel and the Company (incorporated by reference to Exhibit
10.1 of the Companys 2000 Form 10-K).10.28
    
    
    Addendum to Asset Purchase Agreement, dated March 13, 2001, by and between
International Church of the FourSquare Gospel and the Company (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q filed on May
9, 2001 (5/9/01 Quarterly Report)).10.29
    
    
    Time Brokerage Agreement, dated March 13, 2001, by and between International Church
of the FourSquare Gospel and the Company (incorporated by reference to Exhibit 10.3
of the Companys 5/9/01 Quarterly Report).10.30
    
    
    93.5 Time Brokerage Agreement, dated March 13, 2001, by and between Spanish
Broadcasting System Southwest, Inc. and International Church of the FourSquare Gospel
(incorporated by reference to Exhibit 10.4 of the Companys 5/9/01 Quarterly Report).10.31
    
    
    Radio Network Affiliation Agreement, dated April 5, 2001, between Clear Channel
Broadcasting, Inc. and SBS of San Francisco, Inc. (incorporated by reference to
Exhibit 10.5 of the Companys 5/9/01 Quarterly Report).10.32
    
    
    First Amendment to Credit Agreement, dated as of March 5, 2001, by and among the
Company, the lenders party to the Credit Agreement dated as of July 6, 2000 and
Lehman Commercial Paper, Inc. (incorporated by reference to Exhibit 10.1 of the
Companys 5/9/01 Quarterly Report).10.33
    
    
    Purchase Agreement dated May 24, 2001 between the Company and Lehman Brothers Inc.
with respect to 9 5/8% Senior Subordinated Notes due 2009 (incorporated by reference
to the Companys 2001 Form S-3).10.34
    
    
    Registration Rights Agreement dated June 8, 2001 between the Company and Lehman
Brothers Inc. with respect to 9 5/8% Senior Subordinated Notes due 2009 (incorporated
by reference to the Companys 2001 Form S-3).10.35
    
    
    Form of Indemnification Agreement with Carl Parmer dated as of August 9, 2001
(incorporated by reference to Exhibit 10.48 to the Companys Annual Report on Form
10-K filed December 31, 2001).10.36
    *
    
    Stock Option Agreement dated as of January 15, 2001 between the Company and Joseph A.
García (incorporated by reference to Exhibit 10.49 to the Companys Annual Report on
Form 10-K filed December 31, 2001).
  94




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.37
    *
    
    Form of Stock Option Agreement dated as of October 29, 2001 between Spanish
Broadcasting System, Inc. and Carl Parmer (incorporated by reference to Exhibit 10.51
to the Companys Annual Report on Form 10-K filed December 31, 2001).10.38
    
    
    Amendment dated as of February 8, 2002 to Asset Purchase Agreement dated as of
November 2, 2000 by and between International Church of the FourSquare Gospel and
Spanish Broadcasting System, Inc., as amended by an Addendum dated March 13, 2001
(incorporated by reference to Exhibit 10.1 to the Companys Quarterly Transition
Report on Form 10-Q filed February 13, 2002).10.39
    
    
    Amendment No. 1 dated as of February 8, 2002 to Time Brokerage Agreement dated as of
March 13, 2001 by and between International Church of the FourSquare Gospel, as
Licensee, and Spanish Broadcasting System, Inc., as Time Broker (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Transition Report on Form 10-Q
filed February 13, 2002).10.40
    
    
    Amendment No. 1 dated as of February 8, 2002 to the 93.5 Time Brokerage Agreement
dated as of March 13, 2001 by and between Spanish Broadcasting System SouthWest,
Inc., as Licensee and International Church of the FourSquare Gospel, as Time Broker
(incorporated by reference to Exhibit 10.3 to the Companys Quarterly Transition
Report on Form 10-Q filed February 13, 2002).10.41
    
    
    Warrant dated February 8, 2002 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q filed May 2, 2002).10.42*
    
    
    Stock Option Agreement dated as of January 16, 2002 between the Company and Joseph A.
García (incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report
on Form 10-Q filed May 2, 2002).10.43
    
    
    Asset Purchase Agreement dated June 4, 2002 by and among the Company, KTCY Licensing,
Inc. and Entravision  Texas Limited Partnership (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q filed August 14, 2002).10.44
    
    
    Time Brokerage Agreement dated as of June 4, 2002 between KTCY Licensing, Inc. as
Licensee and Entravision Communications Corporation as Programmer (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q filed August
14, 2002).10.45
    *
    
    Companys 1999 Stock Option Plan as amended on May 6, 2002 (incorporated by reference
to Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q filed August 14,
2002).10.46
    *
    
    Companys 1999 Stock Option Plan for Non-Employee Directors as amended on May 6, 2002
(incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form
10-Q filed August 14, 2002).10.47
    *
    
    Stock Option Agreement dated as of October 29, 2002 between the Company and Raúl
Alarcón, Jr. (incorporated by reference to Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q filed November 13, 2002).10.48
    
    
    Asset Purchase Agreement dated as of December 31, 2002 by and among Spanish
Broadcasting System of Illinois, Inc., Big City Radio, Inc. and Big City Radio-CHI,
L.L.C. (incorporated by reference to Exhibit 10.59 to the Companys Annual Report on
Form 10-K filed March 31, 2003 (the 2003 Form 10-K)).
  95




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.49
    
    
    Time Brokerage Agreement dated as of December 31, 2002 between Big City Radio-CHI,
L.L.C. as Licensee and Spanish Broadcasting System of Illinois, Inc. as Programmer
(incorporated by reference to Exhibit 10.60 to the Companys 2003 Form 10-K).10.50
    
    
    Guaranty Agreement dated as of December 31, 2002 by the Company in favor of Big City
Radio, Inc. and Big City Radio-CHI, L.L.C. (incorporated by reference to Exhibit
10.61 to the Companys 2003 Form 10-K).10.51
    
    
    Warrant dated March 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.4 of the Companys
Quarterly Report on Form 10-Q, dated May 15, 2003 (the 5/15/03 Quarterly Report)).10.52
    
    
    Warrant dated April 30, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.5 of the Companys 5/15/03
Quarterly Report).10.53
    
    
    Warrant dated May 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q, dated August 13, 2003 (the 8/13/03 Quarterly
Report)).10.54
    
    
    Warrant dated June 30, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.2 of the Companys 8/13/03
Quarterly Report).10.55
    
    
    Warrant dated July 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.3 of the Companys 8/13/03
Quarterly Report).10.56
    
    
    Asset Purchase Agreement dated as of September 18, 2003 between Spanish Broadcasting
System, Inc. and Border Media Partners, LLC (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K, dated September 25, 2003).10.57
    
    
    Asset Purchase Agreement dated as of October 2, 2003 between Spanish Broadcasting
System, Inc., Spanish Broadcasting System-San Francisco, Inc., KPTI Licensing, Inc.
and 3 Point Media-San Francisco, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Current Report on Form 8-K, dated October 9, 2003).10.58
    
    
    Warrant dated August 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 of the Companys
11/14/03 Quarterly Report).10.59
    
    
    Warrant dated September 30, 2003 by the Company in favor of International Church of
the FourSquare Gospel (incorporated by reference to Exhibit 10.2 of the Companys
11/14/03 Quarterly Report).10.60
    
    
    Credit Agreement between the Company and Merrill Lynch, Pierce Fenner & Smith
Incorporated, Deutsche Bank Securities Inc. and Lehman Commercial Paper Inc. dated
October 30, 2003 (incorporated by reference to Exhibit 10.3 of the Companys 11/14/03
Quarterly Report).10.61
    
    
    Guarantee and Collateral Agreement between the Company and certain of its
subsidiaries in favor of Lehman Commercial Paper Inc. dated October 30, 2003
(incorporated by reference to Exhibit 10.4 of the Companys 11/14/03 Quarterly
Report).10.62
    
    
    Assignment of Leases and Rents by the Company in favor of Lehman Commercial Paper
Inc. dated October 30, 2003 (incorporated by reference to Exhibit 10.5 of the
Companys 11/14/03 Quarterly Report).
  96




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.63
    
    
    Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
by the Company in favor of Lehman Commercial Paper Inc. dated October 30, 2003
(incorporated by reference to Exhibit 10.6 of the Companys 11/14/03 Quarterly
Report).10.64
    
    
    Transmission Facilities Lease between the Company and International Church of the
FourSquare Gospel, dated October 30, 2003 (incorporated by reference to Exhibit 10.7
of the Companys 11/14/03 Quarterly Report).10.65
    
    
    Purchase Agreement dated October 30, 2003 between the Company and Merrill Lynch,
Pierce Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
Inc. with respect to 10 3/4% Series A Cumulative Exchangeable Redeemable Preferred
Stock (incorporated by reference to Exhibit 10.8 of the Companys 11/14/03 Quarterly
Report).10.66
    *
    
    Registration Rights Agreement dated October 30, 2003 between the Company and Merrill
Lynch, Pierce Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Lehman
Brothers Inc. with respect to 10 3/4% Series A Cumulative Exchangeable Redeemable
Preferred Stock (incorporated by reference to Exhibit 10.9 of the Companys 11/14/03
Quarterly Report).10.67
    *
    
    Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and
Jack Langer (incorporated by reference to Exhibit 10.74 of the Companys 2003 Form
10-K).10.68
    *
    
    Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and
Dan Mason (incorporated by reference to Exhibit 10.75 of the Companys 2003 Form
10-K).10.69
    *
    
    Amended and Restated Employment Agreement dated October 31, 2003 between the Company
and Marko Radlovic (incorporated by reference to Exhibit 10.81 of the Companys 2003
Form 10-K).10.70
    *
    
    Nonqualified Stock Option Agreement dated October 27, 2003 between the Company and
Raúl Alarcón, Jr. (incorporated by reference to Exhibit 10.78 of the Companys 2003
Form 10-K).10.71
    *
    
    Nonqualified Stock Option Agreement dated December 10, 2003 between the Company and
Marko Radlovic (incorporated by reference to Exhibit 10.79 of the Companys 2003 Form
10-K).10.72
    *
    
    Incentive Stock Option Agreement dated December 10, 2003 between the Company and
Marko Radlovic (incorporated by reference to Exhibit 10.80 of the Companys 2003 Form
10-K).10.73
    *
    
    Non-Qualified Stock Option Agreement dated as of March 3, 2004 between the Company
and Joseph A. García (incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q filed May 10, 2004 (the 5/10/04 Quarterly Report)).10.74
    *
    
    Incentive Stock Option Agreement dated as of March 3, 2004 between the Company and
Joseph A. García (incorporated by reference to Exhibit 10.2 to the Companys 5/10/04
Quarterly Report).10.75
    
    
    Amendment dated as of April 15, 2004, to the Asset Purchase Agreement dated as of
October 2, 2003 between Spanish Broadcasting System, Inc., Spanish Broadcasting
System-San Francisco, Inc., KPTI Licensing, Inc. and 3 Point Media-San Francisco, LLC
(incorporated by reference to Exhibit 10.3 of the Companys 5/10/04 Quarterly
Report).10.76
    
    
    Time Brokerage Agreement dated as of April 15, 2004 between KPTI Licensing, Inc., and
Spanish Broadcasting System-San Francisco, Inc. and 3 Point Media-San Francisco, LLC
(incorporated by reference to Exhibit 10.4 of the Companys 5/10/04 Quarterly
Report).
  97




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.77
    *
    
    Stock Option Letter Agreement dated as of July 2, 2004 between the Company and
Antonio S. Fernandez (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q filed August 9, 2004 (the 8/9/04 Quarterly Report)).10.78
    *
    
    Stock Option Letter Agreement dated as of July 2, 2004 between the Company and Jose
Antonio Villamil (incorporated by reference to Exhibit 10.2 of the Companys 8/9/04
Quarterly Report).10.79
    
    
    Asset Purchase Agreement dated as of July 26, 2004 between Newsweb Corporation and
Spanish Broadcasting System of Illinois, Inc. (incorporated by reference to Exhibit
10.5 of the Companys 8/9/04 Quarterly Report).10.80
    
    
    Asset Purchase Agreement dated as of August 17, 2004 between Styles Media Group, LLC
and Spanish Broadcasting System Southwest, Inc. (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K filed August 23, 2004).10.81
    
    
    Merger Agreement dated as of October 5, 2004 among Infinity Media Corporation,
Infinity Broadcasting Corporation of San Francisco, Spanish Broadcasting System, Inc.
and SBS Bay Area, LLC (incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on October 12, 2004).10.82
    
    
    Stockholder Agreement dated as of October 5, 2004 among Spanish Broadcasting System,
Inc., Infinity Media Corporation and Raúl Alarcón, Jr. (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K filed on October 12, 2004).10.83
    
    
    Local Marketing Agreement dated as of October 5, 2004 between Infinity Broadcasting
Corporation of San Francisco and SBS Bay Area, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Current Report on Form 8-K filed on October 12, 2004).10.84
    
    
    Time Brokerage Agreement dated as of August 17, 2004 between Spanish Broadcasting
System Southwest, Inc. and Styles Media Group, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Quarterly Report on Form 10-Q filed on November 9,
2004).10.85
    
    
    Warrant to Purchase Series C Preferred Stock of Spanish Broadcasting System, Inc.
dated December 23, 2004 by the Company in favor of Infinity Media Corporation
(incorporated by reference to Exhibit 4.2 of the Companys Current Report on Form 8-K
filed on December 27, 2004).10.86
    
    
    Registration Rights Agreement dated as of December 23, 2004 between Spanish
Broadcasting System, Inc. and Infinity Media Corporation (incorporated by reference
to Exhibit 4.3 of the Companys Current Report on Form 8-K filed on December 27,
2004).10.87
    *
    
    Nonqualified Stock Option Agreement, dated as of March 15, 2005 between the Company
and Jason Shrinsky (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q filed May 10, 2005).10.88
    
    
    Amendment to Asset Purchase Agreement, dated March 30, 2005, by and among Styles
Media Group, LLC, Spanish Broadcasting Southwest, Inc. and Spanish Broadcasting
System, Inc. (incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed April 5, 2005).10.89
    
    
    First Lien Credit Agreement, dated as of June 10, 2005, among Spanish Broadcasting
System, Inc., Merrill Lynch, Pierce Fenner & Smith, Incorporated, Wachovia Bank,
National Association, Lehman Commercial Paper Inc. and various lenders (incorporated
by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed June
16, 2005).
  98




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.90
    
    
    Second Lien Term Loan Agreement, dated as of June 10, 2005, among Spanish
Broadcasting System, Inc., Merrill Lynch, Pierce Fenner & Smith, Incorporated,
Wachovia Bank, National Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form
8-K filed June 16, 2005).10.91
    
    
    First Lien Guarantee and Collateral Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc., certain of its subsidiaries and Lehman Commercial
Paper Inc. (incorporated by reference to Exhibit 10.3 of the Companys Current Report
on Form 8-K filed June 16, 2005).10.92
    
    
    Second Lien Guarantee and Collateral Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc., certain of its subsidiaries and Lehman Commercial
Paper Inc (incorporated by reference to Exhibit 10.4 of the Companys Current Report
on Form 8-K filed June 16, 2005).10.93
    
    
    Intercreditor Agreement, dated as of June 10, 2005, among Spanish Broadcasting
System, Inc. and Lehman Commercial Paper Inc. (incorporated by reference to Exhibit
10.5 of the Companys Current Report on Form 8-K filed June 16, 2005).10.94
    *
    
    Nonqualified Stock Option Agreement, dated as of July 11, 2003 between the Company
and Joseph A. García (incorporated by reference to Exhibit 10.2 of the Companys
Quarterly Report on Form 10-K filed May 10, 2005).10.95
    
    
    Asset Purchase Agreement, dated July 12, 2005 among the Company, WDLP Broadcasting
Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
Robin Licensed Subsidiary, LLC (incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q filed August 9, 2005).10.96
    
    
    Second Amendment to Lease, dated December 1, 2004 between the Company and Irradio
Holdings, Ltd. (incorporated by reference to Exhibit 10.2 of the Companys Quarterly
Report on Form 10-Q filed August 9, 2005).10.97
    *
    
    Amendment to Amended and Restated Employment Agreement, dated as of July 21, 2005,
between Spanish Broadcasting System, Inc. and Marko Radlovic (incorporated by
reference to Exhibit 10.100 of the Companys Annual Report on Form 10-K filed March
16, 2006).10.98
    
    
    Second Amendment to Asset Purchase Agreement, dated as of July 29, 2005, by and among
Styles Media Group, LLC, Spanish Broadcasting System Southwest, Inc., and Spanish
Broadcasting System, Inc. (incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed August 2, 2005).10.99
    
    
    Amendment to Asset Purchase Agreement, dated January 6, 2006, by and among Mega Media
Holdings, Inc., WDLP Licensing, Inc., and WDLP Broadcasting Company, LLC, WDLP
Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin Licensed
Subsidiary, LLC (incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed January 12, 2006).10.100
    
    
    Security Agreement, dated as of March 1, 2006, among Mega Media Holdings, Inc., WDLP
Licensing, Inc., WDLP Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin
Broadcasting Company, LLC and Robin Licensed Subsidiary, LLC (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed March 6,
2006).
  99




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.101
    
    
    Pledge Agreement, dated as of March 1, 2006, among Mega Media Holdings, Inc., WDLP
Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting Company,
LLC and Robin Licensed Subsidiary, LLC (incorporated by reference to Exhibit 10.2 of
the Companys Current Report on Form 8-K filed March 6, 2006).10.102
    
    
    Secured Promissory Note, dated March 1, 2006, made by Spanish Broadcasting System,
Inc., Mega Media Holdings, Inc. and WDLP Licensing, Inc. in favor of WDLP
Broadcasting Company, LLC and Robin Broadcasting Company, LLC, in the principal
amount of $18,500,000 (incorporated by reference to Exhibit 10.3 of the Companys
Current Report on Form 8-K filed March 6, 2006).10.103
    
    
    Third Amendment to Lease, dated as of March 7, 2006, between Irradio Holdings, Ltd.
and Spanish Broadcasting System, Inc. (incorporated by reference to Exhibit 10.106 of
the Companys Annual Report on Form 10-K filed March 16, 2006).10.104
    *
    
    Employment Agreement dated as of November 21, 2005, effective January 3, 2006 between
the Company and Cynthia Hudson-Fernandez (incorporated by reference to Exhibit 10.1
of the Companys Current Report on Form 8-K filed on July 6, 2006).10.105
    *
    
    Spanish Broadcasting System, Inc. 2006 Omnibus Equity Compensation Plan (incorporated
by reference to Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q filed on
August 8, 2006).10.106
    
    
    Agreement for Purchase and Sale dated August 24, 2006, by and between 7007 Palmetto
Investments, LLC and the Company (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed on October 30, 2006 (the 10/30/06 Current
Report)).10.107
    
    
    Amendment to Purchase and Sale dated September 25, 2006, by and between 7007 Palmetto
Investments, LLC and the Company (incorporated by reference to Exhibit 10.2 of the
Companys 10/30/06 Current Report).10.108
    
    
    Second Amendment dated October 25, 2006, by and between 7007 Palmetto Investments,
LLC and the Company (incorporated by reference to Exhibit 10.3 of the Companys
10/30/06 Current Report).10.109
    
    
    Assignment and Assumption Agreement dated October 25, 2006, by and between the
Company and SBS Miami Broadcast Center, Inc. (incorporated by reference to Exhibit
10.4 of the Companys 10/30/06 Current Report).10.110
    
    
    Lease dated October 25, 2006, by and between the 7007 Palmetto Investments, LLC and
SBS Miami Broadcast Center (incorporated by reference to Exhibit 10.5 of the
Companys 10/30/06 Current Report).10.111
    
    
    Loan Agreement dated January 4, 2007, by and between Wachovia Bank, National
Association and SBS Miami Broadcast Center (incorporated by reference to Exhibit 10.1
of the Companys Current Report on Form 8-K filed on January 10, 2006 (the 1/10/06
Current Report)).10.112
    
    
    Promissory Note, dated January 4, 2007, by SBS Miami Broadcast Center in favor of
Wachovia (incorporated by reference to Exhibit 10.2 of the Companys 1/10/06 Current
Report).10.113
    
    
    Mortgage, Assignment of Rents and Security Agreement dated January 4, 2007, by and
between Wachovia and SBS Miami Broadcast Center (incorporated by reference to Exhibit
10.3 of the Companys 1/10/06 Current Report).10.114
    
    
    Unconditional Guaranty dated January 4, 2007, by Spanish Broadcasting System, Inc. in
favor of Wachovia (incorporated by reference to Exhibit 10.4 of the Companys 1/10/06
Current Report).
  100




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.115
    
    
    Termination of Lease dated January 4, 2007, by and between the Seller and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.5 of the Companys 1/10/06
Current Report).10.116
    *
    
    Restricted Stock Grant, dated as of March 10, 2007 to Raúl Alarcón, Jr. (incorporated
by reference to Exhibit 10.116 of the Companys Annual Report filed on Form 10-K for
the fiscal year 2007 (the 2007 Annual Report)).10.117
    *
    
    Indemnification Agreement with Mitchell A. Yelen as of October 1, 2007 (incorporated
by reference to Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q filed
November 11, 2007).10.118
    *
    
    Stock Option Agreement dated as of October 1, 2007 between the Company and Mitchell
A. Yelen (incorporated by reference to Exhibit 10.2 of the Companys Quarterly Report
on Form 10-Q filed November 11, 2007).10.119
    *
    
    Incentive Stock Option Agreement dated November 8, 2007 between the Company and
Cynthia Hudson (incorporated by reference to Exhibit 10.119 of the Companys 2007
Annual Report).10.120
    *
    
    Amendment No. 2 to Amended and Restated Employment Agreement dated as of November 7,
2007 by and between the Company and Marko Radlovic (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K filed November 9, 2007).10.121
    *
    
    Amended and Restated Employment Agreement dated as of August 4, 2008, by and between
the Company and Joseph A. García (incorporated by reference to Exhibit 10.1 of the
Companys Current Report filed on Form 8-K filed on August 8, 2008).10.122
    *
    
    Amended and Restated Employment Agreement dated as of April 1, 2009, by and between
the Company and Frank Flores (incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q filed on May 15, 2009).10.123
    *
    
    Stock Option Agreement dated as of June 3, 2010 between the Company and Manuel E.
Machado (incorporated by reference to Exhibit 10.1 of the Companys Quarterly Report
filed on Form 10-Q filed on August 13, 2010).14.1
    
    
    Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 of the
Companys Current Report on Form 8-K filed May 15, 2009).21.1
    
    
    List of Subsidiaries of the Company.23.1
    
    
    Consent of KPMG LLP.24.1
    
    
    Power of Attorney (included on the signature page of this Annual Report on Form 10-K).31.1
    
    
    Chief Executive Officers Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    
    Chief Financial Officers Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    
    Chief Executive Officers Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Chief Financial Officers Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  101




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description99.1
    
    
    Form of Notice of Redemption, dated June 10, 2005, with respect to the redemption of
the registrants 9 5/8% Senior Subordinated Notes due 2009 under the indenture dated
as of November 2, 1999 (incorporated by reference to Exhibit 99.1 of the Companys
Current Report on Form 8-K filed June 16, 2005).99.2
    
    
    Form of Notice of Redemption, dated June 10, 2005, with respect to the redemption of
the registrants 9 5/8% Senior Subordinated Notes due 2009 under the indenture dated
as of June 8, 2001 (incorporated by reference to Exhibit 99.2 of the Companys
Current Report on Form 8-K filed June 16, 2005).
 *
    
    Indicates a management contract or compensatory plan or arrangement, as
required by Item 15(a)(3) of Form 10-K.  102




---



##### Table of Contents



SIGNATURES
 st
 Spanish Broadcasting System, Inc.By:
    
    /s/ Raúl Alarcón, Jr.Name:
    
    Raúl Alarcón, Jr.Title:
    
    Chairman of the Board of Directors,Chief Executive Officer and President
  st
  /s/
Raúl Alarcón, Jr.
Raúl Alarcón, Jr.
    
    Chairman of the Board of Directors, Chief Executive Officer
and President (principal executive officer)/s/
Joseph A. García
Joseph A. García
    
    Director, Senior Executive Vice President, Chief Financial
Officer, Chief Administration Officer and
Secretary (principal financial and accounting officer)/s/
Jose A. Villamil
Jose A. Villamil
    
    Director/s/
Mitchell A. Yelen
Mitchell A. Yelen
    
    Director/s/
Jason L. Shrinsky
Jason L. Shrinsky
    
    Director/s/
Manuel E. Machado
Manuel E. Machado
    
    Director
  103




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit Index
 Exhibit number
    
    Exhibit description3.1
    
    
    Third Amended and Restated Certificate of Incorporation of
Spanish Broadcasting System, Inc., dated September 29, 1999
(incorporated by reference to the Companys 1999
Registration Statement on Form S-1 (Commission File No.
333-85499)) (Exhibit A to this exhibit is incorporated by
reference to the Companys Current Report on Form 8-K,
dated March 25, 1996).3.2
    
    
    Certificate of Amendment to the Third Amended and Restated
Certificate of Incorporation of the Company, dated
September 29, 1999 (incorporated by reference to Exhibit
3.2 of the Companys 1999 Registration Statement).3.3
    
    
    Amended and Restated By-Laws of the Company (incorporated
by reference to Exhibit 3.3 of the Companys 1999
Registration Statement).3.4
    
    
    Certificate of Elimination of 14 1/4% Senior Exchangeable
Preferred Stock, Series A of the Company, dated October 28,
2003 (incorporated by reference to Exhibit 3.3 of the
Companys Quarterly Report on Form 10-Q, dated November 14,
2003).4.1
    
    
    Article V of the Third Amended and Restated Certificate of
Incorporation of the Company, dated September 29, 1999
(incorporated by reference to Exhibit 3.1 of the Companys
1999 Registration Statement).4.2
    
    
    Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and
Qualifications, Limitations and Restrictions of the 10 3/4%
Series A Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by
reference to Exhibit 4.1 of the Companys 11/14/03
Quarterly Report).4.3
    
    
    Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and
Qualifications, Limitations and Restrictions of the 10 3/4%
Series B Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by
reference to Exhibit 4.2 of the Companys 11/14/03
Quarterly Report).4.4
    
    
    Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the Guarantors
named therein and the Purchasers named therein
(incorporated by reference to Exhibit 4.1 of the Companys
1994 Registration Statement on Form S-4).4.5
    
    
    First Supplemental Indenture dated as of March 25, 1996 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the 1996
Current Report).4.6
    
    
    Second Supplemental Indenture dated as of March 1, 1997 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the 1996
Current Report).
  104




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description4.7
    
    
    Supplemental Indenture dated as of October 21, 1999 to the Indenture dated as of June
29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the Companys 1999
Registration Statement).4.8
    
    
    Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009 with The Bank of
New York as Trustee, dated November 2, 1999 (incorporated by reference to the Current
Report on Form 8-K dated November 2, 1999).4.9
    
    
    Indenture with respect to 9 5/8% Senior Subordinated Notes due 2009 with the Bank of
New York as Trustee, dated June 8, 2001 (incorporated by reference to the Companys
Registration Statement on Form S-3, filed on June 25, 2001).4.10
    
    
    Form of stock certificate for the Class A common stock of the Company (incorporated
by reference to the Companys 1999 Registration Statement).4.11
    
    
    Certificate of Elimination of 14 1/4% of Senior Exchangeable Preferred Stock, Series
A of the Company, dated October 28, 2003 (incorporated by reference to Exhibit 3.3 of
the Companys Quarterly Report on Form 10-Q filed November 14, 2003).4.12
    
    
    Certificate of Designation Setting Forth the Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and Qualifications, Limitations and
Restrictions of the Series C Convertible Preferred Stock of the Company (incorporated
by reference to Exhibit 4.1 of the Companys Current Report on Form 8-K filed on
December 27, 2004).4.13
    
    
    Certificate of Correction to Certificate of Designation of Series C Preferred Stock
of the Company dated January 7, 2005 (incorporated by reference to Exhibit 4.13 of
the Companys Annual Report filed on Form 10-K for the fiscal year 2004).10.1
    
    
    Warrant Agreement dated as of March 15, 1997 among the Company and IBJ Schroder Bank
& Trust Company, as Warrant Agent (incorporated by reference to the 1996 Current
Report).10.2
    *
    
    Common Stock Registration Rights and Stockholders Agreement dated as of June 29, 1994
among the Company and certain Management Stockholders named therein (incorporated by
reference to the 1994 Registration Statement).10.3
    *
    
    Amended and Restated Employment Agreement dated as of October 25, 1999, by and
between the Company and Raúl Alarcón, Jr. (incorporated by reference to the Companys
1999 Registration Statement).10.4
    *
    
    Employment Agreement dated as of October 25, 1999, by and between the Company and
Joseph A. García (incorporated by reference to the Companys 1999 Registration
Statement).10.5
    
    
    Ground Lease dated December 18, 1995 between Louis Viola Company and SBS-NJ
(incorporated by reference to the 1996 Current Report).10.6
    
    
    Ground Lease dated December 18, 1995 between Frank F. Viola and Estate of Thomas C.
Viola and SBS-NJ (incorporated by reference to the 1996 Current Report).
  105




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.7
    
    
    Lease and License Agreement dated February 1, 1991 between Empire State Building
Company, as landlord, and SBS-NY, as tenant (incorporated by reference to Exhibit
10.15.1 of the 1994 Registration Statement).10.8
    
    
    Modification of Lease and License dated June 30, 1992 between Empire State Building
Company and SBS-NY related to WSKQ-FM (incorporated by reference to Exhibit 10.15.2
of the 1994 Registration Statement).10.9
    
    
    Lease and License Modification and Extension Agreement dated as of June 30, 1992
between Empire State Building Company, as landlord, and SBS-NY as tenant
(incorporated by reference to Exhibit 10.15.3 of the 1994 Registration Statement).10.10
    
    
    Lease Agreement dated June 1, 1992 among Raúl Alarcón, Sr., Raúl Alarcón, Jr., and
SBS-Fla (incorporated by reference to Exhibit 10.30 of the 1994 Registration
Statement).10.11
    
    
    Agreement of Lease dated as of March 1, 1996 No. WT-174-A119 1067 between The Port
Authority of New Jersey and SBS of Greater New York, Inc. as assignee of Park Radio
(incorporated by reference to the 1996 Current Report).10.12
    
    
    Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish
Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California,
Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System,
Inc., and One-on-One Sports, Inc. (incorporated by reference to Exhibit 10.62 of the
Companys Registration Statement on Form S-4 (Commission File No. 333-26295)).10.13
    
    
    Amendment No. 1 dated as of September 29, 1997 to the Asset Purchase Agreement dated
as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey),
Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of
Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc.
(incorporated by reference to the Companys Registration Statement on Form S-1, dated
January 21, 1999 (Commission File No. 333-29449)).10.14
    
    
    Extension of lease of a Condominium Unit (Metropolitan Tower Condominium) between
Raúl Alarcón, Jr. (Landlord) and Spanish Broadcasting System, Inc. (Tenant)
(incorporated by reference to the Companys 1998 Annual Report on Form 10-K).10.15
    *
    
    Indemnification Agreement with Raúl Alarcón, Jr. dated as of November 2, 1999
(incorporated by reference to the 1999 Current Report).10.16
    
    
    Indemnification Agreement with Jason L. Shrinsky dated as of November 2, 1999
(incorporated by reference to the 1999 Current Report).10.17
    *
    
    Spanish Broadcasting System 1999 Stock Option Plan (incorporated by reference to the
Companys 1999 Registration Statement).10.18
    *
    
    Spanish Broadcasting System 1999 Company Stock Option Plan for Nonemployee Directors
(incorporated by reference to the Companys 1999 Registration Statement).10.19
    
    
    Form of Lock-Up Letter Agreement (incorporated by reference in the Companys 1999
Registration Statement).10.20
    *
    
    Option Grant not under the Stock Option Plans with Arnold Sheiffer, dated October 27,
1999 (incorporated by reference to the 1999 Current Report).10.21
    
    
    Credit Agreement, dated as of July 6, 2000, among Spanish Broadcasting System, Inc.,
a Delaware corporation, the several banks and other financial institutions or
entities from time to time party to the Credit Agreement and Lehman Commercial Paper
Inc., as administrative agent (incorporated by reference to Exhibit 10.44 of the
Companys Annual Report on Form 10-K for fiscal year 2000).10.22
    
    
    Guarantee and Collateral Agreement made by Spanish Broadcasting System, Inc. and
certain of its subsidiaries in favor of Lehman Commercial Paper, Inc. as
Administrative Agent, dated as of July 6, 2000 (incorporated by reference to Exhibit
10.45 of the Companys 2000 Form 10-K).
  106




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.23
    *
    
    Employment Agreement dated August 31, 2000, between William Tanner and the Company
(incorporated by reference to Exhibit 10.47 of the Companys 2000 Form 10-K).10.24
    
    
    Deed of Constitution of Mortgage, Cadena Estereotempo, Inc., as Mortgagor, and Banco
Bilbao Vizcaya Puerto Rico, as Mortgagee (incorporated by reference to Exhibit 10.49
of the Companys 2000 Form 10-K).10.25
    
    
    Lease Agreement by and between the Company and Irradio Holdings, Ltd. made as of
December 14, 2000 (incorporated by reference to Exhibit 10.50 of the Companys 2000
Form 10-K).10.26
    
    
    First Addendum to Lease between the Company and Irradio Holdings, Ltd. as of December
14, 2000 (incorporated by reference to Exhibit 10.51 of the Companys 2000 Form
10-K).10.27
    
    
    Asset Purchase Agreement dated as of November 2, 2000 by and between International
Church of the FourSquare Gospel and the Company (incorporated by reference to Exhibit
10.1 of the Companys 2000 Form 10-K).10.28
    
    
    Addendum to Asset Purchase Agreement, dated March 13, 2001, by and between
International Church of the FourSquare Gospel and the Company (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q filed on May
9, 2001).10.29
    
    
    Time Brokerage Agreement, dated March 13, 2001, by and between International Church
of the FourSquare Gospel and the Company (incorporated by reference to Exhibit 10.3
of the Companys 5/9/01 Quarterly Report).10.30
    
    
    93.5 Time Brokerage Agreement, dated March 13, 2001, by and between Spanish
Broadcasting System Southwest, Inc. and International Church of the FourSquare Gospel
(incorporated by reference to Exhibit 10.4 of the Companys 5/9/01 Quarterly Report).10.31
    
    
    Radio Network Affiliation Agreement, dated April 5, 2001, between Clear Channel
Broadcasting, Inc. and SBS of San Francisco, Inc. (incorporated by reference to
Exhibit 10.5 of the Companys 5/9/01 Quarterly Report).10.32
    
    
    First Amendment to Credit Agreement, dated as of March 5, 2001, by and among the
Company, the lenders party to the Credit Agreement dated as of July 6, 2000 and
Lehman Commercial Paper, Inc. (incorporated by reference to Exhibit 10.1 of the
Companys 5/9/01 Quarterly Report).10.33
    
    
    Purchase Agreement dated May 24, 2001 between the Company and Lehman Brothers Inc.
with respect to 9 5/8% Senior Subordinated Notes due 2009 (incorporated by reference
to the Companys 2001 Form S-3).10.34
    
    
    Registration Rights Agreement dated June 8, 2001 between the Company and Lehman
Brothers Inc. with respect to 9 5/8% Senior Subordinated Notes due 2009 (incorporated
by reference to the Companys 2001 Form S-3).10.35
    
    
    Form of Indemnification Agreement with Carl Parmer dated as of August 9, 2001
(incorporated by reference to Exhibit 10.48 to the Companys Annual Report on Form
10-K filed December 31, 2001).10.36
    *
    
    Stock Option Agreement dated as of January 15, 2001 between the Company and Joseph A.
García (incorporated by reference to Exhibit 10.49 to the Companys Annual Report on
Form 10-K filed December 31, 2001).
  107




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.37
    *
    
    Form of Stock Option Agreement dated as of October 29, 2001 between Spanish
Broadcasting System, Inc. and Carl Parmer (incorporated by reference to Exhibit 10.51
to the Companys Annual Report on Form 10-K filed December 31, 2001).10.38
    
    
    Amendment dated as of February 8, 2002 to Asset Purchase Agreement dated as of
November 2, 2000 by and between International Church of the FourSquare Gospel and
Spanish Broadcasting System, Inc., as amended by an Addendum dated March 13, 2001
(incorporated by reference to Exhibit 10.1 to the Companys Quarterly Transition
Report on Form 10-Q filed February 13, 2002).10.39
    
    
    Amendment No. 1 dated as of February 8, 2002 to Time Brokerage Agreement dated as of
March 13, 2001 by and between International Church of the FourSquare Gospel, as
Licensee, and Spanish Broadcasting System, Inc., as Time Broker (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Transition Report on Form 10-Q
filed February 13, 2002).10.40
    
    
    Amendment No. 1 dated as of February 8, 2002 to the 93.5 Time Brokerage Agreement
dated as of March 13, 2001 by and between Spanish Broadcasting System SouthWest,
Inc., as Licensee and International Church of the FourSquare Gospel, as Time Broker
(incorporated by reference to Exhibit 10.3 to the Companys Quarterly Transition
Report on Form 10-Q filed February 13, 2002).10.41
    
    
    Warrant dated February 8, 2002 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q filed May 2, 2002).10.42
    *
    
    Stock Option Agreement dated as of January 16, 2002 between the Company and Joseph A.
García (incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report
on Form 10-Q filed May 2, 2002).10.43
    
    
    Asset Purchase Agreement dated June 4, 2002 by and among the Company, KTCY Licensing,
Inc. and Entravision  Texas Limited Partnership (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q filed August 14, 2002).10.44
    
    
    Time Brokerage Agreement dated as of June 4, 2002 between KTCY Licensing, Inc. as
Licensee and Entravision Communications Corporation as Programmer (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q filed August
14, 2002).10.45
    *
    
    Companys 1999 Stock Option Plan as amended on May 6, 2002 (incorporated by reference
to Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q filed August 14,
2002).10.46
    *
    
    Companys 1999 Stock Option Plan for Non-Employee Directors as amended on May 6, 2002
(incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form
10-Q filed August 14, 2002).10.47
    *
    
    Stock Option Agreement dated as of October 29, 2002 between the Company and Raúl
Alarcón, Jr. (incorporated by reference to Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q filed November 13, 2002).10.48
    
    
    Asset Purchase Agreement dated as of December 31, 2002 by and among Spanish
Broadcasting System of Illinois, Inc., Big City Radio, Inc. and Big City Radio-CHI,
L.L.C. (incorporated by reference to Exhibit 10.59 to the Companys Annual Report on
Form 10-K filed March 31, 2003).
  108




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.49
    
    
    Time Brokerage Agreement dated as of December 31, 2002 between Big City Radio-CHI,
L.L.C. as Licensee and Spanish Broadcasting System of Illinois, Inc. as Programmer
(incorporated by reference to Exhibit 10.60 to the Companys 2003 Form 10-K).10.50
    
    
    Guaranty Agreement dated as of December 31, 2002 by the Company in favor of Big City
Radio, Inc. and Big City Radio-CHI, L.L.C. (incorporated by reference to Exhibit
10.61 to the Companys 2003 Form 10-K).10.51
    
    
    Warrant dated March 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.4 of the Companys
Quarterly Report on Form 10-Q, dated May 15, 2003).10.52
    
    
    Warrant dated April 30, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.5 of the Companys 5/15/03
Quarterly Report).10.53
    
    
    Warrant dated May 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q, dated August 13, 2003).10.54
    
    
    Warrant dated June 30, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.2 of the Companys 8/13/03
Quarterly Report).10.55
    
    
    Warrant dated July 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.3 of the Companys 8/13/03
Quarterly Report).10.56
    
    
    Asset Purchase Agreement dated as of September 18, 2003 between Spanish Broadcasting
System, Inc. and Border Media Partners, LLC (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K, dated September 25, 2003).10.57
    
    
    Asset Purchase Agreement dated as of October 2, 2003 between Spanish Broadcasting
System, Inc., Spanish Broadcasting System-San Francisco, Inc., KPTI Licensing, Inc.
and 3 Point Media-San Francisco, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Current Report on Form 8-K, dated October 9, 2003).10.58
    
    
    Warrant dated August 31, 2003 by the Company in favor of International Church of the
FourSquare Gospel (incorporated by reference to Exhibit 10.1 of the Companys
11/14/03 Quarterly Report).10.59
    
    
    Warrant dated September 30, 2003 by the Company in favor of International Church of
the FourSquare Gospel (incorporated by reference to Exhibit 10.2 of the Companys
11/14/03 Quarterly Report).10.60
    
    
    Credit Agreement between the Company and Merrill Lynch, Pierce Fenner & Smith
Incorporated, Deutsche Bank Securities Inc. and Lehman Commercial Paper Inc. dated
October 30, 2003 (incorporated by reference to Exhibit 10.3 of the Companys 11/14/03
Quarterly Report).10.61
    
    
    Guarantee and Collateral Agreement between the Company and certain of its
subsidiaries in favor of Lehman Commercial Paper Inc. dated October 30, 2003
(incorporated by reference to Exhibit 10.4 of the Companys 11/14/03 Quarterly
Report).10.62
    
    
    Assignment of Leases and Rents by the Company in favor of Lehman Commercial Paper
Inc. dated October 30, 2003 (incorporated by reference to Exhibit 10.5 of the
Companys 11/14/03 Quarterly Report).10.63
    
    
    Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
by the Company in favor of Lehman Commercial Paper Inc. dated October 30, 2003
(incorporated by reference to Exhibit 10.6 of the Companys 11/14/03 Quarterly
Report).10.64
    
    
    Transmission Facilities Lease between the Company and International Church of the
FourSquare Gospel, dated October 30, 2003 (incorporated by reference to Exhibit 10.7
of the Companys 11/14/03 Quarterly Report).
  109




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.65
    
    
    Purchase Agreement dated October 30, 2003 between the Company and Merrill Lynch,
Pierce Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
Inc. with respect to 10 3/4% Series A Cumulative Exchangeable Redeemable Preferred
Stock (incorporated by reference to Exhibit 10.8 of the Companys 11/14/03 Quarterly
Report).10.66
    *
    
    Registration Rights Agreement dated October 30, 2003 between the Company and Merrill
Lynch, Pierce Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Lehman
Brothers Inc. with respect to 10 3/4% Series A Cumulative Exchangeable Redeemable
Preferred Stock (incorporated by reference to Exhibit 10.9 of the Companys 11/14/03
Quarterly Report).10.67
    *
    
    Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and
Jack Langer (incorporated by reference to Exhibit 10.74 of the Companys 2003 Form
10-K).10.68
    *
    
    Nonqualified Stock Option Agreement dated as of July 11, 2003 between the Company and
Dan Mason (incorporated by reference to Exhibit 10.75 of the Companys 2003 Form
10-K).10.69
    *
    
    Amended and Restated Employment Agreement dated October 31, 2003 between the Company
and Marko Radlovic (incorporated by reference to Exhibit 10.81 of the Companys 2003
Form 10-K).10.70
    *
    
    Nonqualified Stock Option Agreement dated October 27, 2003 between the Company and
Raúl Alarcón, Jr. (incorporated by reference to Exhibit 10.78 of the Companys 2003
Form 10-K).10.71
    *
    
    Nonqualified Stock Option Agreement dated December 10, 2003 between the Company and
Marko Radlovic (incorporated by reference to Exhibit 10.79 of the Companys 2003 Form
10-K).10.72
    *
    
    Incentive Stock Option Agreement dated December 10, 2003 between the Company and
Marko Radlovic (incorporated by reference to Exhibit 10.80 of the Companys 2003 Form
10-K).10.73
    *
    
    Non-Qualified Stock Option Agreement dated as of March 3, 2004 between the Company
and Joseph A. García (incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q filed May 10, 2004).10.74
    *
    
    Incentive Stock Option Agreement dated as of March 3, 2004 between the Company and
Joseph A. García (incorporated by reference to Exhibit 10.2 to the Companys 5/10/04
Quarterly Report).10.75
    
    
    Amendment dated as of April 15, 2004, to the Asset Purchase Agreement dated as of
October 2, 2003 between Spanish Broadcasting System, Inc., Spanish Broadcasting
System-San Francisco, Inc., KPTI Licensing, Inc. and 3 Point Media-San Francisco, LLC
(incorporated by reference to Exhibit 10.3 of the Companys 5/10/04 Quarterly
Report).10.76
    
    
    Time Brokerage Agreement dated as of April 15, 2004 between KPTI Licensing, Inc., and
Spanish Broadcasting System-San Francisco, Inc. and 3 Point Media-San Francisco, LLC
(incorporated by reference to Exhibit 10.4 of the Companys 5/10/04 Quarterly
Report).10.77
    *
    
    Stock Option Letter Agreement dated as of July 2, 2004 between the Company and
Antonio S. Fernandez (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q filed August 9, 2004).10.78
    *
    
    Stock Option Letter Agreement dated as of July 2, 2004 between the Company and Jose
Antonio Villamil (incorporated by reference to Exhibit 10.2 of the Companys 8/9/04
Quarterly Report).
  110




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.79
    
    
    Asset Purchase Agreement dated as of July 26, 2004 between Newsweb Corporation and
Spanish Broadcasting System of Illinois, Inc. (incorporated by reference to Exhibit
10.5 of the Companys 8/9/04 Quarterly Report).10.80
    
    
    Asset Purchase Agreement dated as of August 17, 2004 between Styles Media Group, LLC
and Spanish Broadcasting System Southwest, Inc. (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K filed August 23, 2004).10.81
    
    
    Merger Agreement dated as of October 5, 2004 among Infinity Media Corporation,
Infinity Broadcasting Corporation of San Francisco, Spanish Broadcasting System, Inc.
and SBS Bay Area, LLC (incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on October 12, 2004).10.82
    
    
    Stockholder Agreement dated as of October 5, 2004 among Spanish Broadcasting System,
Inc., Infinity Media Corporation and Raúl Alarcón, Jr. (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K filed on October 12, 2004).10.83
    
    
    Local Marketing Agreement dated as of October 5, 2004 between Infinity Broadcasting
Corporation of San Francisco and SBS Bay Area, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Current Report on Form 8-K filed on October 12, 2004).10.84
    
    
    Time Brokerage Agreement dated as of August 17, 2004 between Spanish Broadcasting
System Southwest, Inc. and Styles Media Group, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Quarterly Report on Form 10-Q filed on November 9,
2004).10.85
    
    
    Warrant to Purchase Series C Preferred Stock of Spanish Broadcasting System, Inc.
dated December 23, 2004 by the Company in favor of Infinity Media Corporation
(incorporated by reference to Exhibit 4.2 of the Companys Current Report on Form 8-K
filed on December 27, 2004).10.86
    
    
    Registration Rights Agreement dated as of December 23, 2004 between Spanish
Broadcasting System, Inc. and Infinity Media Corporation (incorporated by reference
to Exhibit 4.3 of the Companys Current Report on Form 8-K filed on December 27,
2004).10.87
    *
    
    Nonqualified Stock Option Agreement, dated as of March 15, 2005 between the Company
and Jason Shrinsky (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q filed May 10, 2005).10.88
    
    
    Amendment to Asset Purchase Agreement, dated March 30, 2005, by and among Styles
Media Group, LLC, Spanish Broadcasting Southwest, Inc. and Spanish Broadcasting
System, Inc. (incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed April 5, 2005).10.89
    
    
    First Lien Credit Agreement, dated as of June 10, 2005, among Spanish Broadcasting
System, Inc., Merrill Lynch, Pierce Fenner & Smith, Incorporated, Wachovia Bank,
National Association, Lehman Commercial Paper Inc. and various lenders (incorporated
by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed June
16, 2005).10.90
    
    
    Second Lien Term Loan Agreement, dated as of June 10, 2005, among Spanish
Broadcasting System, Inc., Merrill Lynch, Pierce Fenner & Smith, Incorporated,
Wachovia Bank, National Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form
8-K filed June 16, 2005).10.91
    
    
    First Lien Guarantee and Collateral Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc., certain of its subsidiaries and Lehman Commercial
Paper Inc. (incorporated by reference to Exhibit 10.3 of the Companys Current Report
on Form 8-K filed June 16, 2005).
  111




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.92
    
    
    Second Lien Guarantee and Collateral Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc., certain of its subsidiaries and Lehman Commercial
Paper Inc (incorporated by reference to Exhibit 10.4 of the Companys Current Report
on Form 8-K filed June 16, 2005).10.93
    
    
    Intercreditor Agreement, dated as of June 10, 2005, among Spanish Broadcasting
System, Inc. and Lehman Commercial Paper Inc. (incorporated by reference to Exhibit
10.5 of the Companys Current Report on Form 8-K filed June 16, 2005).10.94
    *
    
    Nonqualified Stock Option Agreement, dated as of July 11, 2003 between the Company
and Joseph A. García (incorporated by reference to Exhibit 10.2 of the Companys
Quarterly Report on Form 10-K filed May 10, 2005).10.95
    
    
    Asset Purchase Agreement, dated July 12, 2005 among the Company, WDLP Broadcasting
Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
Robin Licensed Subsidiary, LLC (incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q filed August 9, 2005).10.96
    
    
    Second Amendment to Lease, dated December 1, 2004 between the Company and Irradio
Holdings, Ltd. (incorporated by reference to Exhibit 10.2 of the Companys Quarterly
Report on Form 10-Q filed August 9, 2005).10.97
    *
    
    Amendment to Amended and Restated Employment Agreement, dated as of July 21, 2005,
between Spanish Broadcasting System, Inc. and Marko Radlovic (incorporated by
reference to Exhibit 10.100 of the Companys Annual Report on Form 10-K filed March
16, 2006).10.98
    
    
    Second Amendment to Asset Purchase Agreement, dated as of July 29, 2005, by and among
Styles Media Group, LLC, Spanish Broadcasting System Southwest, Inc., and Spanish
Broadcasting System, Inc. (incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed August 2, 2005).10.99
    
    
    Amendment to Asset Purchase Agreement, dated January 6, 2006, by and among Mega Media
Holdings, Inc., WDLP Licensing, Inc., and WDLP Broadcasting Company, LLC, WDLP
Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin Licensed
Subsidiary, LLC (incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed January 12, 2006).10.100
    
    
    Security Agreement, dated as of March 1, 2006, among Mega Media Holdings, Inc., WDLP
Licensing, Inc., WDLP Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin
Broadcasting Company, LLC and Robin Licensed Subsidiary, LLC (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed March 6,
2006).10.101
    
    
    Pledge Agreement, dated as of March 1, 2006, among Mega Media Holdings, Inc., WDLP
Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting Company,
LLC and Robin Licensed Subsidiary, LLC (incorporated by reference to Exhibit 10.2 of
the Companys Current Report on Form 8-K filed March 6, 2006).
  112




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.102
    
    
    Secured Promissory Note, dated March 1, 2006, made by Spanish Broadcasting System,
Inc., Mega Media Holdings, Inc. and WDLP Licensing, Inc. in favor of WDLP
Broadcasting Company, LLC and Robin Broadcasting Company, LLC, in the principal
amount of $18,500,000 (incorporated by reference to Exhibit 10.3 of the Companys
Current Report on Form 8-K filed March 6, 2006).10.103
    
    
    Third Amendment to Lease, dated as of March 7, 2006, between Irradio Holdings, Ltd.
and Spanish Broadcasting System, Inc. (incorporated by reference to Exhibit 10.106 of
the Companys Annual Report on Form 10-K filed March 16, 2006).10.104
    *
    
    Employment Agreement dated as of November 21, 2005, effective January 3, 2006 between
the Company and Cynthia Hudson-Fernandez (incorporated by reference to Exhibit 10.1
of the Companys Current Report on Form 8-K filed on July 6, 2006).10.105
    *
    
    Spanish Broadcasting System, Inc. 2006 Omnibus Equity Compensation Plan (incorporated
by reference to Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q filed on
August 8, 2006).10.106
    
    
    Agreement for Purchase and Sale dated August 24, 2006, by and between 7007 Palmetto
Investments, LLC and the Company (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed on October 30, 2006).10.107
    
    
    Amendment to Purchase and Sale dated September 25, 2006, by and between 7007 Palmetto
Investments, LLC and the Company (incorporated by reference to Exhibit 10.2 of the
Companys 10/30/06 Current Report).10.108
    
    
    Second Amendment dated October 25, 2006, by and between 7007 Palmetto Investments,
LLC and the Company (incorporated by reference to Exhibit 10.3 of the Companys
10/30/06 Current Report).10.109
    
    
    Assignment and Assumption Agreement dated October 25, 2006, by and between the
Company and SBS Miami Broadcast Center, Inc. (incorporated by reference to Exhibit
10.4 of the Companys 10/30/06 Current Report).10.110
    
    
    Lease dated October 25, 2006, by and between the 7007 Palmetto Investments, LLC and
SBS Miami Broadcast Center (incorporated by reference to Exhibit 10.5 of the
Companys 10/30/06 Current Report).10.111
    
    
    Loan Agreement dated January 4, 2007, by and between Wachovia Bank, National
Association and SBS Miami Broadcast Center (incorporated by reference to Exhibit 10.1
of the Companys Current Report on Form 8-K filed on January 10, 2006).10.112
    
    
    Promissory Note, dated January 4, 2007, by SBS Miami Broadcast Center in favor of
Wachovia (incorporated by reference to Exhibit 10.2 of the Companys 1/10/06 Current
Report).10.113
    
    
    Mortgage, Assignment of Rents and Security Agreement dated January 4, 2007, by and
between Wachovia and SBS Miami Broadcast Center (incorporated by reference to Exhibit
10.3 of the Companys 1/10/06 Current Report).10.114
    
    
    Unconditional Guaranty dated January 4, 2007, by Spanish Broadcasting System, Inc. in
favor of Wachovia (incorporated by reference to Exhibit 10.4 of the Companys 1/10/06
Current Report).10.115
    
    
    Termination of Lease dated January 4, 2007, by and between the Seller and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.5 of the Companys 1/10/06
Current Report).
  113




---



##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
 Exhibit number
    
    Exhibit description10.116
    *
    
    Restricted Stock Grant, dated as of March 10, 2007 to Raúl Alarcón, Jr. (incorporated
by reference to Exhibit 10.116 of the Companys Annual Report filed on Form 10-K for
the fiscal year 2007).10.117
    *
    
    Indemnification Agreement with Mitchell A. Yelen as of October 1, 2007 (incorporated
by reference to Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q filed
November 11, 2007).10.118
    *
    
    Stock Option Agreement dated as of October 1, 2007 between the Company and Mitchell
A. Yelen (incorporated by reference to Exhibit 10.2 of the Companys Quarterly Report
on Form 10-Q filed November 11, 2007).10.119
    *
    
    Incentive Stock Option Agreement dated November 8, 2007 between the Company and
Cynthia Hudson (incorporated by reference to Exhibit 10.119 of the Companys 2007
Annual Report).10.120
    *
    
    Amendment No. 2 to Amended and Restated Employment Agreement dated as of November 7,
2007 by and between the Company and Marko Radlovic (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K filed November 9, 2007).10.121
    *
    
    Amended and Restated Employment Agreement dated as of August 4, 2008, by and between
the Company and Joseph A. García (incorporated by reference to Exhibit 10.1 of the
Companys Current Report filed on Form 8-K filed on August 8, 2008).10.122
    *
    
    Amended and Restated Employment Agreement dated as of April 1, 2009, by and between
the Company and Frank Flores (incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q filed on May 15, 2009).10.123
    *
    
    Stock Option Agreement dated as of June 3, 2010 between the Company and Manuel E.
Machado (incorporated by reference to Exhibit 10.1 of the Companys Quarterly Report
filed on Form 10-Q filed on August 13, 2010).14.1
    
    
    Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 of the
Companys Current Report on Form 8-K filed May 15, 2009).21.1
    
    
    List of Subsidiaries of the Company.23.1
    
    
    Consent of KPMG LLP.24.1
    
    
    Power of Attorney (included on the signature page of this Annual Report on Form 10-K).31.1
    
    
    Chief Executive Officers Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    
    Chief Financial Officers Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    
    Chief Executive Officers Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Chief Financial Officers Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  114




---



##### Table of Contents



Exhibit number
    
    Exhibit description99.1
    
    
    Form of Notice of Redemption, dated June 10, 2005, with respect to the redemption of
the registrants 9 5/8% Senior Subordinated Notes due 2009 under the indenture dated
as of November 2, 1999 (incorporated by reference to Exhibit 99.1 of the Companys
Current Report on Form 8-K filed June 16, 2005).99.2
    
    
    Form of Notice of Redemption, dated June 10, 2005, with respect to the redemption of
the registrants 9 5/8% Senior Subordinated Notes due 2009 under the indenture dated
as of June 8, 2001 (incorporated by reference to Exhibit 99.2 of the Companys
Current Report on Form 8-K filed June 16, 2005).
 *
    
    Indicates a management contract or compensatory plan or arrangement, as required by Item
15(a)(3) of Form 10-K.  115