Investment in Affiliate

6 Months Ended

Jun. 30, 2011

5. Investment in Affiliate

In connection with the October 31, 2005 formation of, and in exchange for its 25.0% ownership interest in, CMP, the Company contributed to CMP four radio stations (including related licenses and assets) in the Houston, Texas and Kansas City, Missouri markets with a book value of approximately $71.6 million, and approximately $6.2 million in cash. The Company recognized a gain of $2.5 million from the transfer of assets to CMP. In addition, upon consummation of the CMP acquisition, the Company received a payment of approximately $3.5 million as consideration for advisory services provided in connection with the CMP acquisition. The Company recorded the payment as a reduction in its investment in CMP. The table below presents summarized financial statement data related to CMP (dollars in thousands):


	Six Months Ended June 30,
	2011			2010
Income Statement Data:
Revenues	$	88,007		$	90,624
Operating expenses		50,132			59,322
Net income		8,349			9,741
Balance Sheet Data:
Assets		414,063			459,414
Liabilities		822,755			885,999
Shareholders’ deficit		(408,692	)		(426,585	)

The Company’s investment in CMP is accounted for under the equity method of accounting. At June 30, 2011, the Company’s proportionate share of the value of its affiliate losses exceeded the value of its investment in CMP. In addition, the Company has no contractual obligation to fund the losses of CMP. As a result, the Company has no exposure to loss as a result of its ownership interest in CMP.

Concurrent with the October 31, 2005 formation of CMP, the Company entered into a management agreement with a subsidiary of CMP pursuant to which the Company’s personnel manage the operations of CMP’s subsidiaries. The agreement provides for the Company to receive, on a quarterly basis, a management fee that is approximately 4.0% of the subsidiary of CMP’s annual EBITDA or $4.0 million, whichever is greater. For each of the three and six months ended June 30, 2011 and 2010, the Company recorded as net revenues approximately $1.0 million and $2.0 million in management fees, respectively, from CMP.

On August 1, 2011, the Company completed its previously announced acquisition of CMP to acquire the remaining 75.0% of the equity interests of CMP that it did not own. See Note 14, “Subsequent Event” for further discussion.