Discussion and Results

Raul Alarcon, Jr., Chairman and CEO, commented, "During the second quarter, we continued to implement our multi-platform growth strategy, while maintaining a disciplined approach to cost-management. Our overall results were impacted by the continued nationwide advertising slowdown, offset in part by our success in reducing expenses via our restructuring plan. Despite current macro-economic challenges impacting all media, we remain focused on further strengthening our content and delivering valuable audiences to national and local advertisers. Given the strength of our brands and the continued expansion and growing influence of the Hispanic population, we remain optimistic about our ability to return to top-line growth as the economy recovers."

Quarter Results

For the quarter ended June 30, 2009, consolidated net revenue totaled $37.1 million compared to $45.2 million for the same prior year period, resulting in a decrease of $8.1 million or 18%. This consolidated decrease was mainly attributable to the decrease in our radio segment net revenue of $7.8 million or 19%. Our radio segment net revenue decreased due to lower local and national sales caused mainly by the decline in economic conditions. The decrease in local sales occurred in all of our markets, with the exception of our Puerto Rico market. The decrease in national sales occurred in all of our markets.

Operating income before depreciation and amortization, gain on the disposal of assets, net, and impairment of FCC broadcasting licenses and restructuring costs, a non-GAAP measure, totaled $11.0 million compared to $8.4 million for the same prior year period, representing an increase of $2.6 million or 31%. This increase was primarily attributed to the decreases in station operating expenses of $9.4 million and corporate expenses of $1.4 million, offset by a decrease in net revenue of $8.1 million. Please refer to the Unaudited Segment Data and Non-GAAP Financial Measures sections for definitions and a reconciliation of GAAP to non-GAAP financial measures.

Operating income totaled $9.4 million compared to an operating loss of $(389.3) million for the same prior year period. The increase in operating income was mainly due to the decrease in our impairment of FCC broadcasting licenses and restructuring costs of $396.2 million. Also contributing to the increase in operating income was a decrease in our operating expenses and corporate expenses, offset by a decrease in our net revenue. Please refer to the Impairment of FCC Broadcasting Licenses and Restructuring Costs sections for detailed discussions.

Income before income taxes totaled $2.4 million compared to a loss before income taxes of $(394.6) million for the same prior year period.

Six-month Results

For the six-months ended June 30, 2009, consolidated net revenue totaled $64.8 million compared to $81.6 million for the same prior year period, resulting in a decrease of $16.8 million or 21%. This consolidated decrease was mainly attributable to the decrease in our radio segment net revenue of $16.7 million or 23%. Our radio segment net revenue decreased due to lower local and national sales caused mainly by the decline in economic conditions. The decrease in local sales occurred in all of our markets, with the exception of our Chicago market. The decrease in national sales occurred in all of our markets.

Operating income before depreciation and amortization, gain on the disposal of assets, net, and impairment of FCC broadcasting licenses and restructuring costs, a non-GAAP measure, totaled $13.6 million compared to $7.0 million for the same prior year period, representing an increase of $6.6 million or 94%. This increase was primarily attributed to the decreases in station operating expenses of $21.3 million and corporate expenses of $2.1 million, offset by a decrease in net revenue of $16.8 million. Please refer to the Unaudited Segment Data and Non-GAAP Financial Measures sections for definitions and a reconciliation of GAAP to non-GAAP financial measures.

Operating loss totaled $(0.2) million compared to $(392.0) million for the same prior year period. The decrease in operating loss was mainly due to the decrease in impairment of FCC broadcasting licenses and restructuring costs of $385.6 million. Also contributing to the decrease in operating loss was a decrease in our operating expenses and corporate expenses, offset by a decrease in our net revenue. Please refer to the Impairment of FCC Broadcasting Licenses and Restructuring Costs sections for detailed discussions.

Loss before income taxes totaled $(10.9) million compared to $(400.5) million for the same prior year period.

Impairment of FCC Broadcasting Licenses

For the six-months ended June 30, 2009, we recorded a non-cash impairment loss of approximately $10.1 million that reduced the carrying values of our FCC broadcasting licenses in our Chicago and San Francisco markets as a result of our SFAS No. 142 impairment testing of our indefinite-lived intangible assets and goodwill. The impairment loss was due to changes in estimates and assumptions which were primarily: (a) lower industry advertising revenue growth projections in our respective markets, and (b) lower industry profit margins.

Restructuring Costs

As a result of the decrease in the demand for advertising and the continued deterioration of the economy, we began to implement a restructuring plan in the third quarter of fiscal year 2008 to reduce expenses throughout the Company. We have incurred restructuring costs totaling $3.0 million to date, which includes $0.6 million for the six-months ended June 30, 2009, related to the termination of various programming contracts and personnel. In addition, we continue to review further cost-cutting measures, as we continue to evaluate the scope and duration of the current economic slowdown and its impact on our operations and financial position.

About Spanish Broadcasting System, Inc.

Spanish Broadcasting System, Inc. is the largest publicly traded Hispanic-controlled media and entertainment company in the United States. SBS owns and/or operates 21 radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, including the #1 Spanish-language radio station in America, WSKQ-FM in New York City, as well as leading radio stations airing the Tropical, Mexican Regional, Spanish Adult Contemporary and Hurban format genres. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. SBS also produces live concerts and events in the major U.S. markets and Puerto Rico. In addition, the Company operates www.LaMusica.com, a bilingual Spanish-English online site providing content related to Latin music, entertainment, news and culture. The Company's corporate Web site can be accessed at www.spanishbroadcasting.com.

This press release contains certain forward-looking statements.