SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No.     )*

Spanish Broadcasting System, Inc.

(Name of Issuer)

Class A Common Stock; par value $0.0001 per share

(Title of Class of Securities)

846425882

(CUSIP Number)

Daniel J. Donoghue

Discovery Group I, LLC

191 North Wacker Drive

Suite 1685

Chicago, Illinois 60606

Telephone Number: (312) 265-9600

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

February 29, 2008

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No.   846425882
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Discovery Equity Partners, L.P.
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) WC
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6.	Citizenship or Place of Organization Delaware
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.
			8.	Shared Voting Power 3,423,507
			9.	Sole Dispositive Power None.
			10.	Shared Dispositive Power 3,423,507
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 3,423,507
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)o
	13.	Percent of Class Represented by Amount in Row (11) 8.4%
	14.	Type of Reporting Person (See Instructions) PN

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CUSIP No.   846425882
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Discovery Group I, LLC
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6.	Citizenship or Place of Organization Delaware
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.
			8.	Shared Voting Power 3,999,029
			9.	Sole Dispositive Power None.
			10.	Shared Dispositive Power 3,999,029
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 3,999,029
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)o
	13.	Percent of Class Represented by Amount in Row (11) 9.8%
	14.	Type of Reporting Person (See Instructions) OO

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CUSIP No.   846425882
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Daniel J. Donoghue
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6.	Citizenship or Place of Organization United States of America
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.
			8.	Shared Voting Power 3,999,029
			9.	Sole Dispositive Power None.
			10.	Shared Dispositive Power 3,999,029
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 3,999,029
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)o
	13.	Percent of Class Represented by Amount in Row (11) 9.8%
	14.	Type of Reporting Person (See Instructions) IN

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CUSIP No.   846425882
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Michael R. Murphy
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  o
	6.	Citizenship or Place of Organization United States of America
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.
			8.	Shared Voting Power 3,999,029
			9.	Sole Dispositive Power None.
			10.	Shared Dispositive Power 3,999,029
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 3,999,029
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)o
	13.	Percent of Class Represented by Amount in Row (11) 9.8%
	14.	Type of Reporting Person (See Instructions) IN

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Item 1.	Security and Issuer
	This statement relates to the Class A Common Stock, par value $0.0001 per share (the “Common Stock”), of Spanish Broadcasting System, Inc., a Delaware corporation (the “Company”), which has its principal executive offices at 2601 South Bayshore Drive, PH II, Coconut Grove, Florida 33133.
Item 2.	Identity and Background
	This statement is being jointly filed by the following persons (the “Reporting Persons”):
	Discovery Equity Partners, L.P. (“Discovery Equity Partners”) is an Illinois limited partnership primarily engaged in the business of investing in securities.
	Discovery Group I, LLC (“Discovery Group”) is a Delaware limited liability company primarily engaged in the business of investing in securities and is the general partner of Discovery Equity Partners.
	Daniel J. Donoghue is a Managing Member of Discovery Group and of various related entities, which is his principal occupation.
	Michael R. Murphy is a Managing Member of Discovery Group and of various related entities, which is his principal occupation.
	Both Mr. Donoghue and Mr. Murphy are United States citizens.
	The business address of each of the Reporting Persons is 191 North Wacker Drive, Suite 1685, Chicago, Illinois 60606.
	During the past five years, none of the Reporting Persons have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.
Item 3.	Source and Amount of Funds or Other Consideration
	The total purchase price for the 3,999,029 shares of Common Stock beneficially owned by Discovery Group and Messrs. Donoghue and Murphy on February 29, 2008 was approximately $19,055,577 and the total purchase price for the 3,423,507 shares of Common Stock beneficially owned by Discovery Equity Partners on February 29, 2008 was approximately $16,314,787. The source of such funds was the assets of Discovery Equity Partners and another investment partnership (together with Discovery Equity Partners, the “Partnerships”) over which Discovery Group exercises discretionary investment management authority, and proceeds of margin loans under a margin loan facility maintained in the ordinary course of business by the Partnerships with a broker on customary terms and conditions. The Partnerships are the legal owner of all of the Common Stock beneficially owned by Discovery Group and Messrs. Donoghue and Murphy.

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Item 4.	Purpose of Transaction
	The Reporting Persons acquired beneficial ownership of the shares of Common Stock reported herein as part of their investment activities on behalf of the Partnerships.The Reporting Persons acquired the shares of Common Stock reported herein because they believe that the trading prices of the Common Stock do not adequately reflect the potential value of the Company's underlying business and assets.
	After conducting research on the Company and its industry and meetings with the management of the Company and various other parties, Discovery Group on February 29, 2008 sent a letter (the “Letter”) to the Company’s Board of Directors that, among other things, requests that the Board of Directors of the Company form a Special Committee comprised of independent directors and empower the Committee to hire a nationally-recognized investment banking firm for the purpose of evaluating the following three specific alternatives:
	1.	A Company going-private transaction, which would allow the Company’s controlling stockholder, Mr. Raul Alarcon, Jr., to continue to run the Company as a private company, after tendering for the public equity at a fair value.
	2.	A sale of the Company to a strategic party, which would maximize value for all shareholders, including Mr. Alarcon.
	3.	The Company remaining public but adopting modern corporate governance practices, including equal shareholder voting rights among all classes of stock and splitting the Chairman and Chief Executive Officer roles at the Company.
	The description of the Letter contained in this Schedule 13D is qualified in its entirety by reference to the Letter, which is included as Exhibit 1 to this Schedule 13D and is incorporated by reference herein
	The Reporting Persons intend to review and evaluate their investment in the Common Stock on an ongoing basis and may, depending upon their evaluation of the business and prospects of the Company, or such other considerations as they may deem relevant, determine to increase, decrease, or dispose of their holdings of Common Stock. As a part of such review and evaluation, the Reporting Persons may hold discussions with the Company's management and directors, other shareholders and other interested parties.
	Except as otherwise described in this Item 4, the Reporting Persons do not have present plans or proposals that relate to or would result in any of the following (although the Reporting Persons reserve the right to develop such plans or proposals or any other plans relating to the Company and to take action with respect thereto): (i) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (ii) an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Company or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (iv) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (v) any material change in the present capitalization or dividend policy of the Company; (vi) any other material change in the Company’s business or corporate structure; (vii) changes in the Company's certificate of incorporation, bylaws, or instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person;

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	(viii) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action similar to any of those enumerated above.
Item 5.	Interest in Securities of the Issuer
	The information concerning percentages of ownership set forth below is based on 40,277,805 shares of Common Stock reported outstanding as of November 7, 2007 in the Company’s most recent Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2007.
	Discovery Equity Partners beneficially owns 3,423,507 shares of Common Stock as of February 29, 2008, which represents 8.4% of the outstanding Common Stock.
	Discovery Group beneficially owns 3,999,029 shares of Common Stock as of February 29, 2008, which represents 9.8% of the outstanding Common Stock.
	Mr. Donoghue beneficially owns 3,999,029 shares of Common Stock as of February 29, 2008, which represents 9.8% of the outstanding Common Stock.
	Mr. Murphy beneficially owns 3,999,029 shares of Common Stock as of February 29, 2008, which represents 9.8% of the outstanding Common Stock.
	Discovery Group is the sole general partner of Discovery Equity Partners and has sole discretionary investment authority with respect to the other Partnership’s investment in the Common Stock. Discovery Group is also a limited partner in the other Partnership. Messrs. Donoghue and Murphy are the sole managing members of Discovery Group. As a consequence, Discovery Group and Messrs. Donoghue and Murphy share beneficial ownership of all of the shares of Common Stock owned by both of the Partnerships.
	There were no transactions in Common Stock effected by the Reporting Persons during the past 60 days.
	No person other than the Partnerships is known to any Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any of the shares of Common Stock reported herein
Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	There are no contracts, arrangements, understandings or relationships (legal or otherwise) between or among any of the Reporting Persons and any other person with respect to any securities of the Company other than the governing documents of Discovery Group and the Partnerships, the margin loan facility referred to under Item 3 above, the Joint Filing Agreement of the Reporting Persons with respect to this Schedule 13D included as Exhibit 2 to this Schedule 13D, and the Powers of Attorney granted by Messrs Donoghue and Murphy with respect to reports under Section 13 of the Securities Exchange Act of 1934, as amended, which Powers of Attorney are included as Exhibit 3 and Exhibit 4, respectively, to this Schedule 13D.

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Item 7.	Material to be Filed as Exhibits
	Exhibit 1:Letter dated February 29, 2008 of Discovery Group to the Board of Directors of the Company.
	Exhibit 2:Joint Filing Agreement dated as of February 19, 2008, by and among Discovery Equity Partners, L.P.; Discovery Group I, LLC; Daniel J. Donoghue; and Michael R. Murphy.
	Exhibit 3:Power of Attorney of Daniel J. Donoghue, dated as of August 24, 2006.
	Exhibit 4:Power of Attorney of Michael R. Murphy, dated as of August 24, 2006.

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Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

February 29, 2008

Date

DISCOVERY GROUP I, LLC,

for itself and as general partner of
DISCOVERY EQUITY PARTNERS. L.P.

By: Daniel J. Donoghue*

Signature

Daniel J. Donoghue, Managing Member

Name/Title

Daniel J. Donoghue*

Signature

Daniel J. Donoghue

Name/Title

Michael R. Murphy*

Signature

Michael R. Murphy

Name/Title

*By: /s/ Robert M. McLennan

Robert M. McLennan

Attorney-in-Fact for Daniel J. Donoghue

Attorney-in-Fact for Michael R. Murphy

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Exhibit Index

Exhibit 1	Letter dated February 29, 2008 of Discovery Group to the Board of Directors of the Company
Exhibit 2	Joint Filing Agreement dated as of February 19, 2008, by and among Discovery Equity Partners, L.P.; Discovery Group I, LLC; Daniel J. Donoghue; and Michael R. Murphy.
Exhibit 3	Power of Attorney of Daniel J. Donoghue, dated as of August 24, 2006
Exhibit 4	Power of Attorney of Michael R. Murphy, dated as of August 24, 2006

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EX-1

EXHIBIT 1

	Daniel J. Donoghue Managing Partner 1 312 265 9604 ddonoghue@thediscoverygroup.com

February 29, 2008

The Board of Directors

Attn: Melanie M. Montenegro, Corporate & Finance Counsel

Spanish Broadcasting System Inc.

2601 South Bayshore Drive, PH II

Coconut Grove, FL 33133

Dear Sirs:

Discovery Group (“Discovery”) owns 3,999,029 million shares of the Class A common stock of Spanish Broadcasting (“SBSA”), constituting 9.8% of the Class A common shares outstanding. We are writing to express our grave concerns regarding the severe and steady erosion in shareholder value that has occurred since the Company went public eight years ago.  Senior officials of Discovery have met with the management of SBSA numerous times over the past few years to discuss these concerns.  More importantly, we recently presented to management several tangible, value-restoring opportunities that we uncovered, including the potential for a highly-strategic industry merger.  Management has been unresponsive to both our concerns and these important and favorable opportunities for public shareholders.  Management’s apathy with respect to the SBSA’s public shareholders is emboldened by a weak corporate governance structure that vests effective voting control in one individual; Mr. Raul Alarcon, Jr., who also holds the executive titles of Chairman, Chief Executive Officer, and President.

Under these circumstances, it is imperative that the Board of Directors form a Special Committee comprised of truly independent directors and empower the Committee to hire a nationally-recognized investment banking firm for the purpose of evaluating the following three specific alternatives:

1.     A going-private transaction, which would allow Mr. Alarcon to continue to run SBSA as a private company, after tendering for the public equity at a fair value

2.     A sale to a strategic party, which would maximize value for all shareholders, including Mr. Alarcon

3.     Remain public but adopt modern corporate governance practices, including equal shareholder voting rights and splitting the Chairman and Chief Executive Officer roles

It should be clear to all the SBSA Directors after reading this letter that they have a fiduciary duty to pursue these initiatives on behalf of the public investors they represent.  We are confident that Class A public shareholders would approve a shareholder proposal at this year’s annual meeting to hire an investment banker to explore strategic alternatives.

How SBSA Stock Went From $20 to Less Than $2; $1 Billion of Lost Company Value

In November 1999, Mr. Raul Alarcon chose to avail himself of public equity capital through an initial public offering of SBSA at $20 per share.  Now, eight years later, the price of SBSA stock is a mere $1.60.  The root causes of the collapse are; a) weak operating performance as measured by essentially no growth in operating income, b) significant sums spent on acquisitions that provided no incremental value to the Company, and c) the utter loss of management’s credibility with the investment community.

Disappointment and deterioration in public trust started early.  In the first quarter of operation as a public company, SBSA’s operating income fell to $0.7 million from $8.8 million in the prior year due to an increase of $11.0 million in corporate expenses for severance payments for two retiring executives and executive performance bonuses. In the subsequent quarters of that same year, the Company went on an acquisition binge spending over $400 million on three transactions.  Investor concerns about management’s appetite for acquisitions were justified as another half-a-billion dollars has been spent on acquisitions since then. Before SBSA celebrated its first anniversary as a public company the share price had tumbled from the IPO price of $20 to the $10 range.

The next 50% haircut in shareholder value came in 2005 when management embarked on an unanticipated, costly, and non-core television strategy.  On July 13, 2005 management announced its plan to acquire two television stations in Florida

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for an aggregate purchase price of $37.6 million.  In the days leading up to the announcement, SBSA’s stock traded at slightly more than $10 per share.  Before the deal closed on March 1, 2006, the market expressed its disapproval by pushing the share price down to $5, causing the Company to shed $360 million in market value.  The market was nervous that management would not maintain a much-needed focus on the core radio operations and rightly sensed that the acquisition purchase price did not represent the entirety of the cost of this endeavor.  Since this transaction, SBSA has consumed another $35 million in accumulated television operating losses.  Management originally counseled investors that the television operation would be break-even by the fourth quarter of 2007.  Recently management has changed its break-even story to sometime in 2009, further undermining its credibility with Wall Street.

The continued deterioration in share price from $5 to a current price of $1.60 reflects a string of disappointing operating results.  The lack of focus on the core radio operations has resulted, as expected, in the steady deterioration of SBSA’s national advertising franchise, recent weakness in local advertising, and a lack of any measurable progress on the Company’s promised initiatives to use its market leadership position to close the English-Hispanic advertising rate gap.  And now, instead of focusing management’s attention on these critical operating issues, Mr. Alarcon has developed a penchant for television production, which is a business notorious for large, risky capital investment.  The management team’s credibility with Wall Street is so bankrupt that even with the stock selling below $2 per share, short interest in SBSA stock is exceedingly and persistently high compared to other public companies at 15% of the outstanding Class A shares.  Investors have gone beyond selling their own shares.  They have such disregard for management that they borrow shares to sell in anticipation of more disappointing results.

To recap, when SBSA went public in 1999, the value of the Company was approximately $1.5 billion. Today the market capitalization is roughly $500 million, including $375 million in debt. Operating income in 1999 was $32 million.  At the time of this writing we are hoping for 2007 operating income of only $38 million.  As to management’s ambitions to build a media empire, its efforts can be measured by two revealing numbers; the $934 million spent on acquisitions and the $1 billion of lost Company value.

Corporate Governance Well-Below Market Standards

The only person who benefited over this period was Mr. Alarcon.  From the time SBSA went public through 2006, Mr. Alarcon has paid himself $10.1 million in salary, $7.3 million in bonuses, and over $2 million in apartments, automobiles, drivers and assorted personal benefits.  All of this despite the aforementioned loss

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of over $1 billion in Company value over that same period.  The Directors have also been treated generously, with annual compensation of $100,000-150,000 per year. These circumstances beg the question, have the Directors breached their fiduciary duties to public shareholders?

We believe that management’s disdainful posture toward the public investors reflects very weak corporate governance policies that are not consistent with current market standards. Like other public shareholders, Discovery participates in the economic risk of the business according to our 9.8% ownership of the Class A stock but is only afforded 1.4% participation in the governance of the Company because of the ten-fold voting rights bestowed on Mr. Alarcon.  This antiquated, dual-class common equity structure, that shields management and directors from any meaningful scrutiny by its public owners, can be found in less than 5% of all publicly-traded companies today.  Dual-class structures have generally been abolished because of the potential misalignment of incentives.  In an arrangement completely devoid of checks and balances, Mr. Alarcon, while holding effective voting control on all shareholder matters, serves in all the decision-making executive capacities of Chairman, Chief Executive Officer, and President.

The track record SBSA has for exploiting public shareholders has resulted in complete abandonment of SBSA by research analysts and institutional investors.  As a result, SBSA shares trade at a value that we believe is substantially less than either its strategic business value or its underlying asset value.  The most direct remedy for this bleak situation is a change-of-control transaction that would allow all shareholders to receive the true underlying economic value of their investment.  Unfortunately, management has made it clear to industry insiders and Wall Street deal-makers that it will not consider such opportunities.

Value-Restoring Takeover Opportunities Are Being Shunned

Senior officials of Discovery met with SBSA management several times over the past two years and held numerous telephone conferences.  Those discussions centered around the acute decline in shareholder value and the challenges SBSA faces to restore a fair public-market valuation given its small size, its weak governance structure, a track record for disappointing operating results, an unrestrained level of spending on acquisitions, a lack of credibility with the institutional investment community, and a general proclivity toward running the Company as if it were a privately-held entity.

In our discussions with management we shared in-depth industry intelligence we had gathered during the scope of our investment due diligence.  Our portfolio managers met with large media conglomerates, radio-specific operators, and private

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equity firms with a media/broadcasting focus.  We know that industry executives are actively evaluating consolidation opportunities to improve financial performance, enhance competitive position, and increase their shareholder value.  Many expressed their interest in a potential acquisition or merger with SBSA.

We consistently heard from media peers that SBSA owns premier properties, enjoys market leadership positions, operates in highly attractive geographic markets, and is situated in the most promising media genre.  Almost without exception, these knowledgeable industry insiders suggest that SBSA is a desirable and valuable target in the on-going industry consolidation.

However, we also found that it is generally understood in the media industry that Mr. Alarcon will not consider any transaction that requires him to relinquish any degree of control, regardless of the merits of the deal or the implications for public shareholders.  Further, industry insiders articulate concerns about Mr. Alarcon’s ability to work in a cooperative spirit of partnership with either a larger strategic suitor or a new private investor.  Many claim to have initiated prior discussions only to encounter disingenuous rhetoric, if not outright resistance, to a deal.

We now know this claim to be justified because we have direct knowledge of an important public media company (“XYZ”) that is interested in a potential transaction that could yield a substantial premium to the current SBSA stock price, yet Mr. Alarcon refuses to engage in an evaluation of this opportunity.  During a meeting with Mr. Alarcon in December 2007 members of our firm presented the rationale for a combination with XYZ, to which SBSA would bring great strategic value and substantial, immediate cost synergies. Mr. Alarcon concurred with the analysis and suggested that we get the reaction of XYZ’s management to the idea.  Our team met in January 2008 with XYZ’s Chairman/Chief Executive Officer and its Chief Financial Officer.  We communicated to Mr. Alarcon that the XYZ officials were very enthused about the possible combination and wish to engage in a further dialogue directly with Mr. Alarcon.  Mr. Alarcon is also in possession of detailed materials prepared by Discovery that outline a proposed structure for this transaction which yields a premium in excess of 100% to SBSA shareholders.  Suddenly and without explanation, Mr. Alarcon refuses to discuss this opportunity.  While Mr. Alarcon’s change in posture is consistent with his industry reputation, it is surprising nonetheless.  Mr. Alarcon’s resistance in this case cannot be attributed to valuation because the proposed structure gives him the option to either remain invested or liquidate his shares.  Rather, it appears that Mr. Alarcon fears a loss of control.  That fear is interfering with Mr. Alarcon’s ability to act in the interest of all shareholders.

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The Board of Directors Must Intervene NOW on Behalf of the Public Investors

In order to begin a process to restore the tremendous loss of public equity capital entrusted to SBSA, the Board of Directors must evaluate change-of-control alternatives that can provide an immediate recognition of SBSA’s underlying strategic value.  Simultaneously, the Board of Directors must implement sweeping changes in corporate governance needed to repair SBSA’s corporate integrity and rebuild public market confidence.

We call on the Board of Directors to empower a Special Committee of truly independent directors to undertake these directives.  The Special Committee must immediately retain a nationally-recognized investment banking firm to investigate, from the standpoint of public shareholder interests, these three specific alternatives:

1.     A Going-Private Transaction.  If Mr. Alarcon insists on retaining all voting control and all management authority, it seems rather obvious that there is no purpose to SBSA remaining public. Given the current stock price and the vast availability of private equity capital, we believe that a transaction can be structured that provides an acceptable premium to shareholders.  Any qualified investment banking firm can introduce Mr. Alarcon to numerous private equity firms, many with media expertise.  We have spoken to several of these potential financial partners that would be interested so long as Mr. Alarcon is willing to provide them with adequate financial oversight and controls.  As testament to the feasibility of this option, Univision was taken private in April 2007 by a consortium of industry-leading private equity firms; Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners, and Sabon Capital Group. Currently, Clear Channel Communications is close to completing a similar deal with Bain Capital Partners and Thomas H. Lee Partners. Cumulus Media is working on an announced going-private transaction with Merrill Lynch Global Private Equity.

2.     A Sale to a Strategic Party.  Industry consolidation is now seen as part of the solution to the long-term secular decline in radio advertising.  By combining platforms, companies seek to gain competitive advantage and reduce costs.  SBSA has a unique franchise in Hispanic radio that is a highly-desirable addition to any broad media platform.  The asset values of SBSA licenses and stations far exceed the current share price. While the current management team has not been able to harvest the value of SBSA’s assets and industry position, a strategic suitor would reward shareholders immediately for the opportunity to maximize the potential of this business.  As we have

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explained, we have direct knowledge of parties interested in a strategic combination with SBSA.

3.     Remain Public But Adopt Modern Corporate Governance Standards.  It is highly unlikely that a comprehensive evaluation of all alternatives would result in a decision to remain public, if measured in terms of the best interests of public shareholders.  Regardless, while the Company is public, the Directors must find the courage to invoke the governance changes needed to reassure the capital markets that they takes their stewardship responsibilities seriously.  The Board must dismantle the antiquated A/B common equity class structure, which only serves to entrench Mr. Alarcon and embolden his self-serving agenda.  Importantly, the jointly held positions of Chairman and Chief Executive Officer must be split in order to bring more accountability to bear on the management team.  Mr. Alarcon’s track record running SBSA since it became public makes abundantly clear the need for a change in operating management.  Lastly, the Board must undertake a director search to add truly independent directors that will serve the interests of public shareholders.

If the Board wishes to gain greater clarity as to the perspectives of other Class A public shareholders, it is within its authority to add to this year’s proxy a proposal asking if Class A shareholders support the hiring of an investment banker to explore strategic alternatives.  The Board can expect that if it takes no action regarding the concerns expressed in this letter, Discovery will formally place such a referendum on next year’s proxy under its rights defined in 14a-8 of the Securities Exchange Act of 1934.

We request a response to our concerns and expect that a member of the Board of Directors will address these matters on your upcoming conference call with investors on March 12, 2008.

Respectfully submitted,

DISCOVERY GROUP

/s/ Daniel J. Donoghue

Daniel J. Donoghue

Managing Partner

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EX-2

EXHIBIT 2

JOINT FILING AGREEMENT

The undersigned hereby agree to the joint filing of the Schedule 13D to which this Agreement is attached.

Dated:  February 29, 2008

DISCOVERY GROUP I, LLC,
for itself and as general partner of
DISCOVERY EQUITY PARTNERS, L.P.

By	Michael R. Murphy*
	Michael R. Murphy
	Managing Member
Daniel J. Donoghue*
Daniel J. Donoghue
Michael R. Murphy*
Michael R. Murphy
*By:	/s/ Robert M. McLennan
	Robert M. McLennan
	Attorney-in-Fact for Daniel J. Donoghue
	Attorney-in-Fact for Michael R. Murphy

EX-3

EXHIBIT 3

POWER OF ATTORNEY

The undersigned, Daniel J. Donoghue, hereby appoints Robert M. McLennan his true and lawful attorney-in-fact and agent, with full power to execute and file with the United States Securities and Exchange Commission and any stock exchange or similar authority, for and on his behalf in any and all capacities, any and all reports required to be filed pursuant to Section 13 of the Securities Exchange Act of 1934 and the rules thereunder on Schedule 13D or 13G, any and all amendments to such reports, with all exhibits, and any other forms or documents as may be necessary in connection with the filing of such reports with the United States Securities and Exchange Commission and any stock exchange or similar authority, granting unto said attorney full power and authority to do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete, as fully as the undersigned might or could do in person.

                This Power of Attorney shall remain in full force and effect until revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact and agent.

                IN WITNESS WHEREOF the undersigned has caused this Power of Attorney to be executed this 24th day of August, 2006.

		/s/ Daniel J. Donoghue
		Daniel J. Donoghue
STATE OF ILLINOIS	)
	) SS
COUNTY OF COOK	)

                I, Kareema M. Cruz, a Notary Public in and for the County of Cook, State of Illinois, DO HEREBY CERTIFY that Daniel J. Donoghue, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he signed and delivered the said instrument as his own free and voluntary act, for the uses and purposes therein set forth.

                Given under my hand and notarial seal, this 24th day of August, 2006.

/s/ Kareema M. Cruz

Notary Public

EX-4

EXHIBIT 4

POWER OF ATTORNEY

The undersigned, Michael R. Murphy, hereby appoints Robert M. McLennan his true and lawful attorney-in-fact and agent, with full power to execute and file with the United States Securities and Exchange Commission and any stock exchange or similar authority, for and on his behalf in any and all capacities, any and all reports required to be filed pursuant to Section 13 of the Securities Exchange Act of 1934 and the rules thereunder on Schedule 13D or 13G, any and all amendments to such reports, with all exhibits, and any other forms or documents as may be necessary in connection with the filing of such reports with the United States Securities and Exchange Commission and any stock exchange or similar authority, granting unto said attorney full power and authority to do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete, as fully as the undersigned might or could do in person.

                This Power of Attorney shall remain in full force and effect until revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact and agent.

                IN WITNESS WHEREOF the undersigned has caused this Power of Attorney to be executed this 24th day of August, 2006.

		/s/ Michael R. Murphy
		Michael R. Murphy
STATE OF ILLINOIS	)
	) SS.
COUNTY OF COOK	)

                I, Kareema M. Cruz, a Notary Public in and for the County of Cook, State of Illinois, DO HEREBY CERTIFY that Michael R. Murphy, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he signed and delivered the said instrument as his own free and voluntary act, for the uses and purposes therein set forth.

                Given under my hand and notarial seal, this 24th day of August, 2006.

/s/ Kareema M. Cruz

Notary Public