10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

 (Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number 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.)

7007 NW 77th Ave.

Miami, Florida 33166

(Address of principal executive offices) (Zip Code)

(305) 441-6901

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No   x

As of August 12, 2015, 4,166,991 shares of Class A common stock, par value $0.0001 per share, 2,340,353 shares of Class B common stock, par value $0.0001 per share and 380,000 shares of Series C convertible preferred stock, $0.01 par value per share, which are convertible into 760,000 shares of Class A common stock, were outstanding.

SPANISH BROADCASTING SYSTEM, INC.

INDEX

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements—Unaudited	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	28
ITEM 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	29
ITEM 6.	Exhibits	30
SIGNATURES		31

2

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not based on historical facts, but rather reflect our current expectations concerning future results and events. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe”, “expect”, “anticipate”, “intend”, “estimate”, “plan”, “project”, “foresee”, “likely”, “will” or other words or phrases with similar meanings. Similarly, statements that describe our objectives, plans or goals are, or may be, forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be different from any future results, performance and anticipated achievements expressed or implied by these statements. We do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2014, and those described from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”).

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements—Unaudited

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share data)

	June 30,			December 31,
Assets	2015			2014
Current assets:
Cash and cash equivalents	$	21,236		$	23,991
Receivables:
Trade		27,324			27,506
Barter		225			205
		27,549			27,711
Less allowance for doubtful accounts		1,032			2,322
Net receivables		26,517			25,389
Prepaid expenses and other current assets		5,281			3,928
Total current assets		53,034			53,308
Property and equipment, net of accumulated depreciation of $71,224 in 2015 and $69,632 in 2014		30,707			32,382
FCC broadcasting licenses		323,055			323,055
Goodwill		32,806			32,806
Other intangible assets, net of accumulated amortization of $972 in 2015 and $924 in 2014		1,576			1,624
Deferred financing costs, net of accumulated amortization of $11,391 in 2015 and $9,706 in 2014		6,225			7,910
Other assets		633			728
Total assets	$	448,036		$	451,813
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	15,608		$	16,495
Accrued interest		7,196			7,202
Unearned revenue		392			449
Other liabilities		282			269
Current portion of other long-term debt		320			336
10 3/4% Series B cumulative exchangeable redeemable preferred stock outstanding and dividends    outstanding, $0.01 par value, liquidation value $1,000 per share. Authorized 280,000 shares: 90,549    shares issued and outstanding at June 30, 2015 and December 31, 2014 and $50,698 and $45,831    of dividends payable as of June 30, 2015 and December 31, 2014, respectively.		141,247			136,380
Total current liabilities		165,045			161,131
Other liabilities, less current portion		87			94
Derivative instruments		327			408
12.5% senior secured notes due 2017, net of unamortized discount of $3,504 in 2015 and $4,343 in 2014		271,496			270,657
Other long-term debt, less current portion		4,769			4,922
Deferred income taxes		92,636			88,806
Total liabilities		534,360			526,018
Commitments and contingencies (note 6)
Stockholders’ deficit:
Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares;      380,000 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively		4			4
Class A common stock, $0.0001 par value. Authorized 100,000,000 shares; 4,166,991 shares      issued and outstanding at June 30, 2015 and December 31, 2014, respectively		—			—
Class B common stock, $0.0001 par value. Authorized 50,000,000 shares; 2,340,353 shares      issued and outstanding at June 30, 2015 and December 31, 2014, respectively		—			—
Additional paid-in capital		525,335			525,335
Accumulated other comprehensive loss, net		(327	)		(408	)
Accumulated deficit		(611,336	)		(599,136	)
Total stockholders’ deficit		(86,324	)		(74,205	)
Total liabilities and stockholders’ deficit	$	448,036		$	451,813

See accompanying notes to the unaudited condensed consolidated financial statements.  

4

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

and Comprehensive Loss

(In thousands, except per share data)

	Three-Months Ended						Six-Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net revenue	$	38,100			40,887		$	70,242			73,666
Operating expenses:
Engineering and programming		7,940			7,574			15,604			15,086
Selling, general and administrative		16,341			19,704			31,603			35,458
Corporate expenses		2,424			3,744			4,572			5,448
Depreciation and amortization		1,183			1,259			2,470			2,534
Total operating expenses		27,888			32,281			54,249			58,526
(Gain) loss on the disposal of assets		(72	)		(1,250	)		(78	)		(1,204	)
Impairment charges and restructuring costs		(137	)		(73	)		(137	)		(73	)
Operating income		10,421			9,929			16,208			16,417
Other (expense) income:
Interest expense, net		(9,995	)		(9,942	)		(19,928	)		(19,870	)
Dividends on Series B preferred stock classified as interest expense		(2,434	)		(2,434	)		(4,867	)		(4,867	)
Loss before income taxes		(2,008	)		(2,447	)		(8,587	)		(8,320	)
Income tax expense		1,577			786			3,613			1,000
Net loss	$	(3,585	)		(3,233	)	$	(12,200	)		(9,320	)
Basic and Diluted net loss per common share	$	(0.49	)		(0.44	)	$	(1.68	)		(1.28	)
Weighted average common shares outstanding:
Basic and Diluted		7,267			7,267			7,267			7,267
Net loss	$	(3,585	)		(3,233	)	$	(12,200	)		(9,320	)
Other comprehensive income, net of taxes- unrealized gain on      derivative instrument		49			36			81			75
Total comprehensive loss	$	(3,536	)		(3,197	)	$	(12,119	)		(9,245	)

See accompanying notes to the unaudited condensed consolidated financial statements.

5

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Deficit

for the Six-Months Ended June 30, 2015

(In thousands, except share data)

	Series C convertible preferred stock				Class A common stock				Class B common stock				Additional		Accumulated other						Total
	Number of				Number of				Number of				paid-in		comprehensive			Accumulated			stockholders’
	shares		Par value		shares		Par value		shares		Par value		capital		loss, net			deficit			deficit
Balance at December 31, 2014		380,000	$	4		4,166,991	$	—		2,340,353	$	—	$	525,335	$	(408	)	$	(599,136	)	$	(74,205	)
Net loss		—		—		—		—		—		—		—		—			(12,200	)		(12,200	)
Unrealized gain on derivative instrument		—		—		—		—		—		—		—		81			—			81
Balance at June 30, 2015		380,000	$	4		4,166,991	$	—		2,340,353	$	—	$	525,335	$	(327	)	$	(611,336	)	$	(86,324	)

See accompanying notes to the unaudited condensed consolidated financial statements

6

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Six-Months Ended
	June 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(12,200	)	$	(9,320	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Dividends on Series B preferred stock classified as interest expense		4,867			4,867
(Gain) loss on the disposal of assets		(78	)		(1,204	)
Impairment charges		(137	)		(73	)
Stock-based compensation		—			1
Depreciation and amortization		2,470			2,534
Net barter (income) loss		(115	)		(153	)
Provision for trade doubtful accounts		(830	)		(74	)
Amortization of deferred financing costs		1,685			1,675
Amortization of original issued discount		839			734
Deferred income taxes		3,830			783
Unearned revenue-barter		38			100
Changes in operating assets and liabilities:
Trade receivables		(657	)		3,419
Prepaid expenses and other current assets		(974	)		(1,640	)
Other assets		95			144
Accounts payable and accrued expenses		(911	)		(1,182	)
Accrued interest		(6	)		80
Other liabilities		143			(141	)
Net cash (used in) provided by operating activities		(1,941	)		550
Cash flows from investing activities:
Purchases of property and equipment		(724	)		(1,197	)
Proceeds from the sale of property and equipment		79			1,270
Net cash (used in) provided by investing activities		(645	)		73
Cash flows from financing activities:
Payments of other long-term debt		(169	)		(168	)
Net cash used in financing activities		(169	)		(168	)
Net (decrease) increase in cash and cash equivalents		(2,755	)		455
Cash and cash equivalents at beginning of period		23,991			23,566
Cash and cash equivalents at end of period	$	21,236		$	24,021
Supplemental cash flows information:
Interest paid	$	17,422		$	17,367
Income tax paid	$	199		$	305
Noncash investing and financing activities:
Unrealized gain on derivative instruments	$	81		$	75

See accompanying notes to the unaudited condensed consolidated financial statements.

7

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries (the Company, we, us, our or SBS). All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements as of June 30, 2015 and December 31, 2014 and for the three- and six-month periods ended June 30, 2015 and 2014 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements as of, and for the fiscal year ended December 31, 2014, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are all of a normal and recurring nature, necessary for a fair presentation of the results of the interim periods. Additionally, we evaluated subsequent events after the balance sheet date of June 30, 2015 through the financial statements issuance date. The results of operations for the six-months ended June 30, 2015 are not necessarily indicative of the results for the entire year ending December 31, 2015, or for any other future interim or annual periods.

Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As of June 30, 2015, we had a working capital deficit due to the reclassification of our Series B preferred stock as a current liability, although under Delaware law, our state of incorporation, the Series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to repurchase the Series B preferred stock and its accumulated unpaid dividends and management does not expect to be required to make any such repurchases during the next twelve months.  Management does not believe that the Series B preferred stockholders have legal remedies that would require such repurchases (see note 10).  In addition, for the six-months ended June 30, 2015, we had negative operating cash flows.  Management continually projects anticipated cash requirements and believes that cash from operating activities, together with cash on hand, should be sufficient to permit us to meet our operating obligations over the next twelve-month period.  

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. This update is effective for reporting periods beginning after December 15, 2015, and is to be applied on a retrospective basis. We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations. We plan to adopt ASU 2015-03 in the first quarter of 2016.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern.  This new standard defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  The standard is effective for annual reporting periods ending after December 15, 2016 and interim periods thereafter.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under U.S. GAAP.  In July 2015, the FASB postponed the effective date of this standard.  The standard is now effective for the first interim period within annual reporting periods beginning after December 15, 2017.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

2. Stockholders’ Deficit

(a) Series C Convertible Preferred Stock

On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with CBS Radio (formerly known as Infinity Media Corporation, CBS Radio), a division of CBS Corporation, Infinity Broadcasting Corporation of

8

San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly-owned subsidiary of SBS, pursuant to which SBS acquired the FCC license of Infinity SF (the “CBS Radio Merger”), we issued to CBS Radio an aggregate of 380,000 shares of Series C convertible preferred stock, $0.01 par value per share (the “Series C preferred stock”). Each share of Series C preferred stock is convertible at the option of the holder into two fully paid and non-assessable shares of the Class A common stock. The shares of Series C preferred stock issued at the closing of the CBS Radio Merger are convertible into 760,000 shares of Class A common stock, subject to certain adjustments. In connection with the CBS Radio Merger, we also entered into a registration rights agreement with CBS Radio, pursuant to which CBS Radio may instruct us to file up to three registration statements, on a best efforts basis, with the SEC, providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock.

We are required to pay holders of Series C preferred stock dividends on parity with our Class A common stock and Class B common stock, and each other class or series of our capital stock created after December 23, 2004.

(b) Class A and B Common Stock

The rights of the Class A common stockholders and Class B common stockholders are identical except with respect to their voting rights and conversion provisions. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. The Class B common stock is convertible to Class A common stock on a share-for-share basis at the option of the holder at any time, or automatically upon a transfer of the Class B common stock to a person or entity which is not a permitted transferee (as described in our Certificate of Incorporation). Holders of each class of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. Neither the holders of the Class A common stock nor the holders of the Class B common stock have preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Each class of common stock is subordinate to our 10 ³/4% Series B cumulative exchangeable redeemable preferred stock, par value $0.01 per share (the “Series B preferred stock”). The Series B preferred stock has a liquidation preference of $1,000 per share and is on parity with the Series C preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of SBS.

 (c) 2006 Omnibus Equity Compensation Plan

In July 2006, we adopted an omnibus equity compensation plan (the “Omnibus Plan”) in which grants of Class A common stock can be made to participants in any of the following forms: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) stock units, (v) stock awards, (vi) dividend equivalents, and (vii) other stock-based awards. The Omnibus Plan authorizes up to 350,000 shares of our Class A common stock for issuance, subject to adjustment in certain circumstances. The Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalents, to any individual during any calendar year is 100,000 shares, subject to adjustments. As of June 30, 2015, we had 113 thousand stock options outstanding and exercisable.

(d) Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss is comprised of accumulated gains and losses on a derivative instrument (interest rate swap) that qualifies for cash flow hedge treatment. Our total comprehensive loss consists of our net loss and a gain on our interest rate swap for the respective periods. The gain on the interest rate swap is shown net of taxes; however, there is no tax effect as a result of a full deferred tax asset valuation allowance related to the interest rate swap.

For the three-months ended June 30, 2015 and 2014, we reclassified from other comprehensive loss to interest expense $0.1 million.  During the three-months ended June 30, 2015 and 2014, we recognized in other comprehensive income, net of taxes- an unrealized gain on derivative instrument of approximately $49 thousand and $36 thousand, respectively.  

For the six-months ended June 30, 2015 and 2014, we reclassified from other comprehensive loss to interest expense $0.1 million.  During the six-months ended June 30, 2015 and 214, we recognized in other comprehensive income, net of taxes- an unrealized gain on derivative instrument of approximately $81 thousand and $75 thousand, respectively.

9

3. Basic and Diluted Net Loss Per Common Share

Basic net loss per common share was computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented, using the “if converted” method. Diluted net loss per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period.

The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the three- and six-month periods ended June 30, 2015 and 2014 (in thousands):

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Basic weighted average shares outstanding		7,267		7,267		7,267		7,267
Effect of dilutive equity instruments		—		—		—		—
Dilutive weighted average shares outstanding		7,267		7,267		7,267		7,267
Options to purchase shares of common stock and other stock-based     awards outstanding which are not included in the calculation of     diluted net income per share because their impact is anti-dilutive		86		105		78		102

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4. Operating Segments

We have two reportable segments: radio and television.

The following summary table presents separate financial data for each of our operating segments (in thousands):  

	Three-Months Ended						Six-Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net revenue:
Radio	$	34,492			36,019		$	63,719			65,464
Television		3,608			4,868			6,523			8,202
Consolidated	$	38,100			40,887		$	70,242			73,666
Engineering and programming expenses:
Radio	$	6,163			5,357		$	11,562			10,430
Television		1,777			2,217			4,042			4,656
Consolidated	$	7,940			7,574		$	15,604			15,086
Selling, general and administrative expenses:
Radio	$	15,485			17,004		$	29,133			31,091
Television		856			2,700			2,470			4,367
Consolidated	$	16,341			19,704		$	31,603			35,458
Corporate expenses:	$	2,424			3,744		$	4,572			5,448
Depreciation and amortization:
Radio	$	424			480		$	931			981
Television		663			691			1,347			1,382
Corporate		96			88			192			171
Consolidated	$	1,183			1,259		$	2,470			2,534
(Gain) loss on the disposal of assets, net:
Radio	$	(62	)		(1,250	)	$	(68	)		(1,204	)
Television		1			—			1			—
Corporate		(11	)		—			(11	)		—
Consolidated	$	(72	)		(1,250	)	$	(78	)		(1,204	)
Impairment charges and restructuring costs:
Radio	$	—			—		$	—			—
Television		—			—			—			—
Corporate		(137	)		(73	)		(137	)		(73	)
Consolidated	$	(137	)		(73	)	$	(137	)		(73	)
Operating income (loss):
Radio	$	12,482			14,428		$	22,161			24,166
Television		311			(740	)		(1,337	)		(2,203	)
Corporate		(2,372	)		(3,759	)		(4,616	)		(5,546	)
Consolidated	$	10,421			9,929		$	16,208			16,417
Capital expenditures:
Radio	$	277			382		$	450			782
Television		98			111			182			225
Corporate		64			93			92			190
Consolidated	$	439			586		$	724			1,197

	June 30,		December 31,
	2015		2014
Total Assets:
Radio	$	386,997	$	389,394
Television		52,316		51,876
Corporate		8,723		10,543
Consolidated	$	448,036	$	451,813

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5. Income Taxes

We are calculating our effective income tax rate using a year-to-date income tax calculation, with the exception of one of our Puerto Rico subsidiaries for which we calculate the income tax expense based on our projected effective tax rate. Our income tax expense differs from the statutory federal tax rate of 35% and related statutory state tax rates, primarily due to the change in the valuation allowance on substantially all of our deferred tax assets with the exception of one of our Puerto Rico subsidiaries.

We file federal, state and local income tax returns in the United States and Puerto Rico. The tax years that remain subject to assessment of additional liabilities by the United States federal tax authorities are 2011 through 2014.   The tax years that remain subject to assessment of additional liabilities by state and local tax authorities are 2010 through 2014. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2011 through 2014.

From time to time, we have been and are subject to certain legal proceedings and claims that have arisen in the ordinary course of business, including an audit by a State tax authority (the “State”) for the income tax years from December 31, 2007 through 2009, which was settled and closed.   The State audit did not result in a significant impact, as our tax positions were sustained.  The State audit resulted in an additional tax liability of approximately $0.1 million, plus interest, related to capital taxes and not based on income.  We do not anticipate the result of this audit to impact subsequent open tax years with the State, and thus have not set up a reserve.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements as of June 30, 2015 and December 31, 2014.

6. Commitments and Contingencies

We are subject to certain legal proceedings and claims that have arisen in the ordinary course of business and have not been fully adjudicated. In our opinion, we do not have a potential liability related to any current legal proceedings and claims that would individually or in the aggregate have a material adverse effect on our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. Should we fail to prevail in any of these legal matters or should all of these legal matters be resolved against us in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.

Litigation-Brevan Howard and Others Complaint

On December 27, 2013, River Birch Master Fund, L.P., P River Birch Ltd. (together, “River Birch”) and Visium Catalyst Credit Master Fund, Ltd. (collectively with River Birch, “Initial Plaintiffs”) brought a claim against us in the Delaware Court of Chancery (the “Court”) seeking a declaratory judgment that a Voting Rights Triggering Event had occurred (as of April 15, 2010) under the certificate of designations for our Series B preferred stock (the “Certificate of Designations”) as a result of our non-payment of dividends. The claim states that as a result of such Voting Rights Triggering Event, the incurrence of indebtedness for the purpose of purchasing our Houston television station and the issuance of our 12.5% Senior Secured Notes due 2017 (the “Notes”) under the Indenture governing the Notes were prohibited incurrences of indebtedness under the Certificate of Designations.

The Initial Plaintiffs further claim that we violated the Certificate of Designations by failing to take any actions or explore any options that would have given us legally available funds with which to repurchase the outstanding Series B preferred stock on October 15, 2013. In connection with their claims, Initial Plaintiffs also seek an award of contract damages. On January 17, 2014, we filed a motion to dismiss the complaint. On March 3, 2014, the complaint was amended to remove River Birch and add Brevan Howard Credit Catalyst Master Fund Ltd., Brevan Howard Master Fund, ALJ Capital I, LP, ALJ Capital II, LP, LJR Capital, LP, and Cedarview Opportunities Master Fund, LP as additional plaintiffs. Plaintiffs filed an answering brief to our Motion to Dismiss on April 30, 2014.  Our reply brief was filed on May 16, 2014, and a hearing was held on our Motion to Dismiss on June 10, 2014. Following the hearing, the parties agreed to stay all proceedings relating to Count I (which seeks a declaration that a Voting Rights Triggering Event was in effect at all times after April 15, 2010), Count II (which alleges that SBS breached the Certificate of Designations by incurring indebtedness in 2011 and 2012) and Count IV (which alleges that SBS breached the implied covenant of good faith and fair dealing by deferring certain dividends) of the complaint.  The stay has since been lifted.  On June 27, 2014, the Court denied our motion to dismiss Count III (which alleges that SBS breached the Certificate of Designations by failing to redeem all of the Series B preferred stock on October 15, 2013) of the complaint.  A hearing on our motion to dismiss Counts I, II and IV of the complaint was held on February 10, 2015, and on May 19, 2015, the Court granted our motion to dismiss Counts I, II and IV of the complaint.  

We deny the allegations contained in the complaint and, to the contrary, assert that we have been and continue to be in full and complete compliance with all of our obligations under the Certificate of Designations, as fully disclosed in our public filings dating

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back to 2009. Accordingly, we believe that the complaint’s allegations are frivolous and wholly without merit and intend to contest such allegations vigorously.

7. Fair Value Measurement Disclosures

Fair Value of Financial Instruments

Cash and cash equivalents, receivables, as well as accounts payable and accrued expenses, and other current liabilities, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of our other long-term debt instruments, approximate their carrying amounts as the interest rates approximate our current borrowing rate for similar debt instruments of comparable maturity, or have variable interest rates.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value of the senior secured notes are estimated using market quotes from a major financial institution taking into consideration the most recent activity and are considered Level 2 measurements within the fair value hierarchy.  The fair value of the Series B cumulative exchangeable redeemable preferred stock and the promissory notes payable were based upon either: (a)  unobservable market quotes from a major financial institution taking into consideration the most recent activity or (b) discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

The estimated fair values of our financial instruments are as follows (in millions):

		June 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
Description	Hierarchy	Amount		Value		Amount		Value
12.5% senior secured notes due 2017	Level 2	$	275.0		285.7	$	275.0		286.5
10 3/4% Series B cumulative exchangeable      redeemable preferred stock	Level 3		141.2		63.3		136.4		61.8
Promissory note payable, included in other long-      term debt	Level 3		5.1		4.5		5.2		4.5

Fair Value of Derivative Instruments

The following table represents required quantitative disclosures regarding fair values of our derivative instruments (in thousands).

			Fair value measurements at June 30, 2015
			Liabilities
Description	June 30, 2015 carrying value and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	327		—		327		—

			Fair value measurements at December 31, 2014
			Liabilities
Description	December 31, 2014 carrying value  and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	408		—		408		—

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The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk. There were no transfers between Levels during the three- and six-month periods ended June 30, 2015 and 2014, respectively.

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
Interest rate swaps	2015		2014		2015		2014
Gain recognized in other comprehensive loss      (effective portion)	$	49		36		81		75

8. Derivative Instrument and Hedging Activity

On January 4, 2007, in connection with a promissory note issued for the acquisition of a building, we entered into a ten-year interest rate swap agreement for the original notional principal amount of $7.7 million whereby we agreed to 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.

Our interest rate swap is governed by a master netting arrangement, which is required to be disclosed as a balance sheet offsetting item as follows (in thousands):

As of June 30, 2015

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

327

—

327

327

—

—

As of December 31, 2014

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

408

—

408

408

—

—

9. 12.5% Senior Secured Notes due 2017

On February 7, 2012 we closed our offering of $275 million in aggregate principal amount of 12.5% senior secured notes due 2017 (the “Notes”) at an issue price of 97% of the principal amount. The Notes were offered solely by means of a private placement either to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, or to certain persons outside the United States pursuant to Regulation S under the Securities Act. We used the net proceeds from the offering, together with cash on hand, to repay and terminate the previous senior credit facility, and to pay the transaction costs related to the offering.                

Interest

The Notes accrue interest at a rate of 12.5% per year. Interest on the Notes is paid semi-annually on each April 15 and October 15 (the “Interest Payment Date”), commencing on April 15, 2012. After April 15, 2013, interest will accrue at a rate of 12.5% per annum on (i) the original amount of the Notes plus (ii) any Additional Interest (as defined below) payable but unpaid in any prior interest period, payable in cash on each Interest Payment Date. Further, beginning on the Interest Payment Date occurring on April 15, 2013, additional interest will be payable at a rate of 2.00% per annum (the “Additional Interest”) on (i) the original principal amount of the Notes plus (ii) any amount of Additional Interest payable but unpaid in any prior interest period, to be paid in cash, at our election, (x) on the applicable Interest Payment Date or (y) on the earliest of the maturity date of the Notes, any acceleration of the

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Notes and any redemption of the Notes; provided that no Additional Interest will be payable on any Interest Payment Date if, for the applicable fiscal period, either (a) we record positive consolidated station operating income for our television segment or (b) our secured leverage ratio on a consolidated basis is less than 4.75 to 1.00.

The measurement periods that determine if Additional Interest is applicable for the respective Interest Payment Dates are as follows:

(1) Six-months ended December 31, 2012 or as of December 31, 2012 for the Interest Payment Date of April 15, 2013

(2) Last twelve months ended June 30, 2013 or as of June 30, 2013 for the Interest Payment Date of October 15, 2013

(3) Last twelve months ended December 31, 2013 or as of December 31, 2013 for the Interest Payment Date of April 15, 2014

(4) Last twelve months ended June 30, 2014 or as of June 30, 2014 for the Interest Payment Date of October 15, 2014

(5) Last twelve months ended December 31, 2014 or as of December 31, 2014 for the Interest Payment Date of April 15, 2015

(6) Last twelve months ended June 30, 2015 or as of June 30, 2015 for the Interest Payment Date of October 15, 2015

(7) Last twelve months ended December 31, 2015 or as of December 31, 2015 for the Interest Payment Date of April 15, 2016

(8) Last twelve months ended June 30, 2016 or as of June 30, 2016 for the Interest Payment Date of October 15, 2016

(9) Last twelve months ended December 31, 2016 or as of December 31, 2016 for the Interest Payment Date of April 15, 2017

Additional Interest during any given interest period, shall not be deemed to “accrue”.  Rather, Additional Interest becomes payable on a given Interest Payment Date (April 15 or October 15) unless the condition in either clause (a) or (b) above has been met as of that Interest Payment Date or unless the Television Segment has been divested or the Notes redeemed prior to that Interest Payment Date.

Although for the Additional Interest applicable periods (1), (2), (3), (4), (5) and (6) our secured leverage ratio was greater than 4.75 to 1.00, we recorded positive consolidated station operating income for our television segment for those respective periods (as defined in the Indenture). Therefore, no Additional Interest was incurred and/or payable for those respective Interest Payment Dates.

     Collateral and Ranking

The Notes and the guarantees are secured on a first-priority basis by a security interest in certain of the Company’s and the guarantors’ existing and future tangible and intangible assets (other than Excluded Assets (as defined in the Indenture)). The Notes and the guarantees are structurally subordinated to the obligations of our non-guarantor subsidiaries. The Notes and guarantees are senior to all of the Company’s and the guarantors’ existing and future unsecured indebtedness to the extent of the value of the collateral.

The Indenture permits us, under specified circumstances, to incur additional debt; however, the occurrence and continuance of the Voting Rights Triggering Event (as defined in note 10) currently prevents us from incurring any such additional debt.

The Notes are senior secured obligations of the Company that rank equally with all of our existing and future senior indebtedness and senior to all of our existing and future subordinated indebtedness. Subject to certain exceptions, the Notes are fully and unconditionally guaranteed by each of our existing and future wholly owned domestic subsidiaries (which excludes (i) our existing and future subsidiaries formed in Puerto Rico (the “Puerto Rican Subsidiaries”), (ii) our future subsidiaries formed under the laws of foreign jurisdictions and (iii) our existing and future subsidiaries, whether domestic or foreign, of the Puerto Rican Subsidiaries or foreign subsidiaries) and our other domestic subsidiaries that guarantee certain of our other debt. The Notes and guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of our nonguarantor subsidiaries.

Covenants and Other Matters

The Indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the guarantors to:

· incur or guarantee additional indebtedness;

· pay dividends and make other restricted payments;

· incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries;

· engage in sale-lease back transactions;

· enter into new lines of business;

· make certain payments to holders of Notes that consent to amendments to the Indenture governing the Notes without paying such amounts to all holders of Notes;

15

· create or incur certain liens;

· make certain investments and acquisitions;

· transfer or sell assets;

· engage in transactions with affiliates; and

· merge or consolidate with other companies or transfer all or substantially all of our assets.

The Indenture contains certain customary representations and warranties, affirmative covenants and events of default which could, subject to certain conditions, cause the Notes to become immediately due and payable, including, but not limited to, the failure to make premium, principal or interest payments; failure by us to accept and pay for Notes tendered when and as required by the change of control and asset sale provisions of the Indenture; failure to comply with certain covenants in the Indenture; failure to comply with certain agreements in the Indenture for a period of 60 days following notice by the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding; failure to pay any debt within any applicable grace period after the final maturity or acceleration of such debt by the holders thereof because of a default, if the total amount of such debt unpaid or accelerated exceeds $15 million; failure to pay final judgments entered by a court or courts of competent jurisdiction aggregating $15 million or more (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed, for a period of 60 days; and certain events of bankruptcy or insolvency.

As of June 30, 2015, we were in compliance with all of our covenants under our Indenture.

10. 10 ³/4% Series B Cumulative Exchangeable Redeemable Preferred Stock

Voting Rights Triggering Event

Pursuant to the Certificate of Designations, each holder of shares of our Series B preferred stock had the right, on October 15, 2013, to request that we repurchase (subject to the legal availability of funds and the Delaware General Corporate Law) all or a portion of such holder’s shares of Series B preferred stock at a purchase price equal to 100% of  the liquidation preference of such shares, plus all accumulated and unpaid dividends (as described in more detail below) on those shares to the date of repurchase.

On October 15, 2013, holders of shares ofour Series B preferred stock requested that we repurchase 92,223 shares of Series B preferred stock for an aggregate repurchase price of $126.9 million, which included accumulated and unpaid dividends on these shares as of October 15, 2013. We did not have sufficient funds legally available to repurchase all of the Series B preferred stock for which we received requests and instead used the limited funds legally available to us to repurchase 1,800shares for a purchase price of approximately $2.5 million, which included accrued and unpaid dividends. Consequently, a “voting rights triggering event” occurred(the “Voting Rights Triggering Event”).

Following the occurrence and during the continuationof the Voting Rights Triggering Event, holders of theoutstanding Series B preferred stock are entitled to elect two directors to newly created positions on our Board of Directors and we will be subject to more restrictiveoperating covenants, including a prohibition on our ability to incur any additional indebtedness and restrictions on our ability to pay dividends or make distributions, redeem or repurchase securities, make investments, enter into transactions with affiliates or merge or consolidate with (or sell substantially all of our assets to) any other person. On June 4, 2015, we held our Annual Meeting of Stockholders (“Annual Meeting”).  Alan Miller and Gary Stone, the two directors elected by the holders of the Series B preferred stock at the 2014 annual meeting were not subject to election at this year’s Annual Meeting and continue to serve as directors.  

The Voting Rights Triggering Event shall continue until (i) all dividends in arrears shall have been paid in full and (ii) all other failures, breaches or defaults giving rise to such Voting Rights Triggering Event are remedied or waived by the holders of at least a majority of the shares of the then outstanding Series B preferred stock.  We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Voting Rights Triggering Event. During the continuation of the Voting Rights Triggering Event, the Indenture governing our Notes prohibits us from paying dividends or from repurchasing the Series B preferred stock.

Quarterly Dividends

Under the terms of our Series B preferred stock, the holders of the outstanding shares of the Series B preferred stock are entitled to receive, when, as and if declared by the Board of Directors out of funds of the Company legally available therefor, dividends on the Series B preferred stock at a rate of 10 ¾% per year, of the $1,000 liquidation preference per share. All dividends are cumulative, whether or not earned or declared, and are payable quarterly in arrears on specified dividend payment dates. While the Voting Rights Triggering Event continues, we cannot pay dividends on the Series B preferred stock without causing a breach of covenants under the Indenture governing our Notes.  As of June 30, 2015, the aggregate cumulative unpaid dividends on the outstanding shares of the

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Series B preferred stock was approximately $50.7 million, which is accrued on our condensed consolidated balance sheet as 10 ¾% Series B cumulative exchangeable redeemable preferred stock.

Redemption Date and Subsequent Accounting Treatment of the Preferred Stock

Prior to October 15, 2013, the Series B preferred stock was considered “conditionally redeemable” because the redemption of the shares of Series B preferred stock was contingent on the Series B preferred stockholders requesting that their Series B preferred stock be repurchased on October 15, 2013. On October 15, 2013, almost all of the holders of the Series B preferred stock requested that we repurchase their shares of Series B preferred stock. As a result of their request, we assessed and determined that, under applicable accounting principles, the contingency had occurred, and the Series B preferred stock now met the definition of a “mandatorily redeemable” instrument under Accounting Standards Codification 480 “Distinguishing Liabilities from Equity” (“ASC 480”).  Although under Delaware law the Series B preferred stock is deemed equity, under ASC 480, if an instrument changes from being “conditionally redeemable” to “mandatorily redeemable,” then the financial instrument should be reclassified as a liability.  

In addition, the Series B preferred stock will be measured at each reporting date as the amount of cash that would be paid pursuant to the contract, had settlement occurred on the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest expense. Therefore, the accruing quarterly dividends of the Series B preferred stock will be recorded as interest expense (i.e. “Dividends on Series B preferred stock classified as interest expense”).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General Overview

We are a leading Spanish-language media and entertainment company with radio and television operations, together with live concerts and events, mobile, digital and interactive media platforms, which reach the growing U.S. Hispanic population, including Puerto Rico.  We produce and distribute original Spanish-language content, including radio programs, television shows, music and live entertainment through our multi-media platforms. We operate in two reportable segments: radio and television.  

We own and operate radio stations located in six of the eight most populous Hispanic markets in the United States: Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco. The Los Angeles and New York markets have the largest and second largest Hispanic populations and are also the largest and second largest radio markets in the United States measured by advertising revenue, respectively. We format the programming of each of our radio stations to capture a substantial share of the Hispanic audience in their respective markets. The U.S. Hispanic population is diverse, consisting of numerous identifiable ethnic groups from many different countries of origin, and each ethnic group has its own musical and cultural heritage. Since the music, culture, customs and Spanish dialects vary from one radio market to another, we strive to maintain familiarity with the musical tastes and preferences of each of the various Hispanic ethnic groups. To accommodate and monetize such diversity, we customize our programming to match the local preferences of our target demographic audience in each market we serve. In addition to our owned and operated radio stations, we have our AIRE Radio Network with over 103 affiliate radio stations serving over 35 of the top U.S. Hispanic markets, including 19 of the top 20 Hispanic markets.  AIRE Radio Network currently covers 88% of the coveted U.S. Hispanic market.  Our AIRE Radio Network reaches over 13.5 million listeners in an average week with our targeted networks.  For the six-months ended June 30, 2015 and 2014, our radio revenue was generated primarily from the sale of local, national and network advertising, and our radio segment generated 91% and 89% of our consolidated net revenue, respectively.

Our television stations and related affiliates operate under the “MegaTV” brand.  We broadcast via our owned and operated television stations in South Florida and Houston and through programming and/or distribution agreements, including nationally on a subscriber basis, which allow us to serve markets representing over 3.5 million Hispanic households. We have created a unique television format which focuses on entertainment, current events and variety with high-quality content. Our programming is formatted to capture a larger share of the U.S. Hispanic audience by focusing on our core strengths as an “entertainment” company, thus offering a new alternative compared to the traditional Hispanic television channels. MegaTV’s programming is based on a strategy designed to showcase a combination of programs, ranging from televised radio-branded shows to general entertainment programs, such as music, celebrity, debate, interviews and personality based shows. As part of our strategy, we have incorporated certain of our radio on-air personalities into our television programming. In addition, we have included interactive elements in our programming to complement our Internet websites. We produce over 50 hours of original programming per week.  For the six-months ended June 30, 2015 and 2014, our television revenue was generated primarily from the sale of local advertising and paid programming and generated 9% and 11% of our consolidated net revenues, respectively.

As part of our operating business, we also own 21 bilingual websites, including www.lamusica.com, Mega.tv and various station websites that provide content related to Latin music, entertainment, news and culture. LaMusica.com and our network of station websites generate revenue primarily from advertising and sponsorship. In addition, the majority of our station websites simultaneously stream our stations’ content, which has broadened the audience reach of our radio stations. We also produce live concerts and events in the United States and Puerto Rico. Concerts generate revenue from ticket sales, sponsorship and promotions while raising awareness of our brands in the surrounding communities. These distinct offerings provide additional synergistic opportunities for our advertising partners to reach their targeted audiences.

Business Drivers and Financial Statement Presentation

The following discussion provides a brief description of certain key items that appear in our consolidated financial statements and general business factors that impact these items.

Net Revenue Description and Factors

Our net revenue is primarily derived from the sale of advertising airtime to local, national and network advertisers. Net revenue is gross revenue less agency commissions, which are generally 15% of gross revenue.

● Local revenue generally consists of advertising airtime sold in a station’s local market either directly to the advertiser or through an advertiser’s agency. Local revenue includes local spot sales, integrated sales, sponsorship sales and paid-programming (or infomercials). For the six-months ended June 30, 2015 and 2014, local revenue comprised 62% and 63% of our gross revenues, respectively.

● National and network revenue generally consists of advertising airtime sold to agencies purchasing advertising for multiple markets. National sales are generally facilitated by our outside national representation firm, which serves as our

18

agent in these transactions. For thesix-months ended June 30, 2015 and 2014, national revenue comprised 12% and 13% of our gross revenues, respectively. Network sales consist of advertising airtime sold on our AIRE Radio Network platform by our network sales staff.  For thesix-months ended June 30, 2015 and 2014, network revenue comprised9% and 5% of our gross revenues, respectively.

Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listenership/viewership levels. Each station broadcasts a predetermined number of advertisements per hour with the actual number depending upon the format of a particular station and any programming strategy we are utilizing to attract an audience. The number of advertisements we decide to broadcast hourly is intended to maximize the station’s revenue without negatively impacting its audience listener/viewer levels. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year.

Our advertising rates are primarily based on the following factors:

● a station’s audience share in the demographic groups targeted by advertisers which are measured by ratings agencies, primarily Nielsen;

● the number of stations, as well as other forms of media, in the market competing for the attention of the same demographic groups;

● the supply of, and demand for, advertising time; and

● the size of the market.

Our net revenue is also affected by general economic conditions, competition and our ability to improve operations at our market clusters. Seasonal revenue fluctuations are also common in the broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our net revenue is typically lowest in the first calendar quarter of the year.

In addition to advertising revenue, we also generate revenue from barter sales, special events revenue, interactive revenue, syndication revenue, subscriber revenue and other revenue. For the six-months ended June 30, 2015 and 2014, these revenues combined comprised approximately 17% and 20% of our gross revenues, respectively.

● Barter sales. We use barter sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services. However, we endeavor to minimize barter revenue in order to maximize cash revenue from our available airtime.

● Special events revenue. We generate special events revenue from ticket sales and event sponsorships, as well as profit-sharing arrangements by producing or co-producing live concerts and events promoted by our radio and television stations.

● Interactive revenue. We derive internet revenue from our websites through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our radio stations over the internet.

● Syndication revenue. We receive syndication revenue from licensing various MegaTV content internationally.

● Subscriber revenue. We receive subscriber revenue in the form of a per subscriber based fee, which is paid to us by cable and satellite providers.

● Other revenue. We receive other ancillary revenue such as rental income from renting available tower space or sub-channels.

Operating Expenses Description and Factors

Our operating expenses consist primarily of (1) engineering and programming expenses, (2) selling, general and administrative expenses and (3) corporate expenses.

● Engineering and programming expenses. Engineering and programming expenses are related to the delivery and creation of our programming content on the air. These expenses include compensation and benefits for employees involved in engineering and programming, transmitter-related expenses, originally produced content, on-air promotions, acquired programming, music license fees, and other expenses.

● Selling, general and administrative expenses. Selling, general and administrative expenses are related to the costs of selling our programming content and administrative costs associated with operating and managing our stations. These expenses include compensation and benefits for employees involved in selling and administrative functions, commissions,

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rating services, advertising, barter expenses, facilities expenses, special events expenses, professional fees, insurance, allowance for doubtful accounts, affiliate station compensation and other expenses.

● Corporate expenses. Corporate expenses are related to the operations of our corporate offices and matters. These expenses include compensation and benefits for our corporate employees, professional fees, insurance, corporate facilities expenses and other expenses.

We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our market clusters. In our pursuit to control our operating expenses, we work closely with our local station management and vendors.

Comparison Analysis of the Operating Results for the Three-Months Ended June 30, 2015 and 2014

The following summary table presents financial data for each of our operating segments (in thousands):

	Three-Months Ended
	June 30,
	2015			2014
Net revenue:
Radio	$	34,492			36,019
Television		3,608			4,868
Consolidated	$	38,100			40,887
Engineering and programming expenses:
Radio	$	6,163			5,357
Television		1,777			2,217
Consolidated	$	7,940			7,574
Selling, general and administrative expenses:
Radio	$	15,485			17,004
Television		856			2,700
Consolidated	$	16,341			19,704
Corporate expenses:	$	2,424			3,744
Depreciation and amortization:
Radio	$	424			480
Television		663			691
Corporate		96			88
Consolidated	$	1,183			1,259
(Gain) loss on the disposal of assets, net:
Radio	$	(62	)		(1,250	)
Television		1			—
Corporate		(11	)		—
Consolidated	$	(72	)		(1,250	)
Impairment charges and restructuring costs:
Radio	$	—			—
Television		—			—
Corporate		(137	)		(73	)
Consolidated	$	(137	)		(73	)
Operating income (loss):
Radio	$	12,482			14,428
Television		311			(740	)
Corporate		(2,372	)		(3,759	)
Consolidated	$	10,421			9,929

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The following summary table presents a comparison of our results of operations for the three-months ended June 30, 2015 and 2014 (in thousands). Various fluctuations in our results are discussed below. This section should be read in conjunction with our unaudited condensed consolidated financial statements and notes.

	Three-Months Ended
	June 30,
	2015			2014
Net revenue	$	38,100			40,887
Engineering and programming expenses		7,940			7,574
Selling, general and administrative expenses		16,341			19,704
Corporate expenses		2,424			3,744
Depreciation and amortization		1,183			1,259
(Gain) loss on disposal of assets, net of disposal costs		(72	)		(1,250	)
Impairment charges and restructuring costs		(137	)		(73	)
Operating income	$	10,421			9,929
Interest expense, net		(9,995	)		(9,942	)
Dividends on Series B preferred stock classified as interest expense		(2,434	)		(2,434	)
Income tax expense		1,577			786
Net loss	$	(3,585	)		(3,233	)

Net Revenue

The decrease in our consolidated net revenues of $2.8 million or 7% was due to the decreases in both our radio and television segments’ net revenues.  Our radio segment net revenues decreased $1.5 million or 4%, due to decreases in special events revenue, local sales and barter sales, which were partially offset by an increase in network sales.  Our special events revenue decreased in our Los Angeles and Miami markets due to a decrease in scheduled events.  Our local sales decreased in our Puerto Rico, Los Angeles and San Francisco markets and the decrease in barter sales occurred throughout all of our markets.  Our network sales increase was directly related to our “AIRE Radio Network” advertising platform, which we launched in the beginning of 2014.  Our television segment net revenues decreased $1.3 million or 26%, due to the decreases in special events revenue, paid-programming, local sales and barter sales.

Engineering and Programming Expenses

The increase in our consolidated engineering and programming expenses of $0.4 million or 5% was primarily due to the increase in our radio segments’ expenses.  Our radio segment expenses increased $0.8 million or 15%, mainly due to an increase in programming personnel’s compensation and benefits.  This increase was offset by a decrease in our television segment expenses of $0.4 million or 20% related to a reduction in originally produced programming cost.    

Selling, General and Administrative Expenses

The decrease in our consolidated selling, general and administrative expenses of $3.4 million or 17% was due to the decreases in both our television and radio segments’ expenses.  Our television segment expenses decreased $1.9 million or 68%, primarily due to decreases in special events expenses, the allowance for doubtful accounts, professional fees and barter expenses.  Our radio segment expenses decreased $1.5 million or 9%, mainly due to decreases in special events expenses and barter expenses, which were offset by an increase in AIRE expenses, such as affiliate station compensation and promotional events.

Corporate Expenses

The decrease in corporate expenses of $1.3 million or 35% was mostly due to a decrease in compensation and benefits caused by the prior year retention bonus that was granted to our CEO per his new employee contract.  This decrease was offset by increases in professional fees and directors & officers insurance premiums.

Operating Income

The increase in operating income of $0.5 million or 5% was mainly due to the decrease in operating expenses and corporate expenses.  

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Income Tax Expense

The increase in income tax expense of $0.8 million was primarily a result of the tax amortization on some of our indefinite-lived intangible assets that do not have any valuation allowances.

Net Loss

The increase in net loss was primarily due to the increase in income tax expense, which was offset by the increase in operating income.

Comparison Analysis of the Operating Results for the Six-Months Ended June 30, 2015 and 2014

The following summary table presents financial data for each of our operating segments (in thousands):

	Six-Months Ended
	June 30,
	2015			2014
Net revenue:
Radio	$	63,719			65,464
Television		6,523			8,202
Consolidated	$	70,242			73,666
Engineering and programming expenses:
Radio	$	11,562			10,430
Television		4,042			4,656
Consolidated	$	15,604			15,086
Selling, general and administrative expenses:
Radio	$	29,133			31,091
Television		2,470			4,367
Consolidated	$	31,603			35,458
Corporate expenses:	$	4,572			5,448
Depreciation and amortization:
Radio	$	931			981
Television		1,347			1,382
Corporate		192			171
Consolidated	$	2,470			2,534
(Gain) loss on the disposal of assets, net:
Radio	$	(68	)		(1,204	)
Television		1			—
Corporate		(11	)		—
Consolidated	$	(78	)		(1,204	)
Impairment charges and restructuring costs:
Radio	$	—			—
Television		—			—
Corporate		(137	)		(73	)
Consolidated	$	(137	)		(73	)
Operating income (loss):
Radio	$	22,161			24,166
Television		(1,337	)		(2,203	)
Corporate		(4,616	)		(5,546	)
Consolidated	$	16,208			16,417

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The following summary table presents a comparison of our results of operations for the six-months ended June 30, 2015 and 2014 (in thousands). Various fluctuations in our results are discussed below. This section should be read in conjunction with our unaudited condensed consolidated financial statements and notes.

	Six-Months Ended
	June 30,
	2015			2014
Net revenue	$	70,242			73,666
Engineering and programming expenses		15,604			15,086
Selling, general and administrative expenses		31,603			35,458
Corporate expenses		4,572			5,448
Depreciation and amortization		2,470			2,534
(Gain) loss on disposal of assets, net of disposal costs		(78	)		(1,204	)
Impairment charges and restructuring costs		(137	)		(73	)
Operating income	$	16,208			16,417
Interest expense, net		(19,928	)		(19,870	)
Dividends on Series B preferred stock classified as interest expense		(4,867	)		(4,867	)
Income tax expense		3,613			1,000
Net loss	$	(12,200	)		(9,320	)

Net Revenue

The decrease in our consolidated net revenues of $3.4 million or 5% was due to the decreases in both our radio and television segments’ net revenues.  Our radio segment net revenues decreased $1.8 million or 3%, due to decreases in local, barter and national sales and special events revenue, which were partially offset by an increase in network sales. Our local sales decreased in our Los Angeles, Puerto Rico and San Francisco markets and the decrease in barter sales occurred throughout all of our markets.  Our national sales decreased in our Los Angeles, New York, San Francisco and Puerto Rico markets.  Our special events revenue decreased in our Los Angeles, Miami and San Francisco markets due to a decrease in scheduled events.  Our network sales increase was directly related to our “AIRE Radio Network” advertising platform, which we launched in the beginning of 2014.  Our television segment net revenues decreased $1.7 million or 20%, due to the decreases in paid-programming, special events revenue, local sales, barter sales and national sales.  

Engineering and Programming Expenses

The increase in our consolidated engineering and programming expenses of $0.5 million or 3% was primarily due to the increase in our radio segments’ expenses.  Our radio segment expenses increased $1.1 million or 11%, mainly due to an increase in programming personnel’s compensation and benefits.  This increase was offset by a decrease in our television segment expenses of $0.6 million or 13% related to a reduction in originally produced programming cost.    

Selling, General and Administrative Expenses

The decrease in our consolidated selling, general and administrative expenses of $3.9 million or 11% was due to the decreases in both our television and radio segments’ expenses.  Our television segment expenses decreased $1.9 million or 43%, primarily due to decreases in the allowance for doubtful accounts, special events expenses, professional fees and barter expenses.  Our radio segment expenses decreased $2.0 million or 6%, mainly due to decreases in special events expenses, barter expenses and professional fees, which were offset by an increase in AIRE expenses, such as affiliate station compensation and promotional events.  

Corporate Expenses

The decrease in corporate expenses of $0.9 million or 16% was mostly due to a decrease in compensation and benefits caused by the prior year retention bonus that was granted to our CEO per his new employee contract.  This decrease was offset by increases in professional fees and directors & officers insurance premiums.

Income Tax Expense

The increase in income tax expense of $2.6 million was primarily a result of the tax amortization on some of our indefinite-lived intangible assets that do not have any valuation allowances.

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Net Loss

The increase in net loss was primarily due to the increase in income tax expense.

Liquidity and Capital Resources

On October 15, 2013, as a result of a failure by us to repurchase all of the shares of Series B preferred stock that were requested to be repurchased by the holders thereof, a Voting Rights Triggering Event occurred. Following the occurrence, and during the continuation of the Voting Rights Triggering Event, we are subject to more restrictive operating covenants, including a prohibition on our ability to incur any additional indebtedness and restrictions on our ability to pay dividends or make distributions, redeem or repurchase securities, make investments, enter into transactions with affiliates or merge or consolidate with (or sell substantially all of our assets to) any other person. The Voting Rights Triggering Event shall continue until (i) all dividends in arrears shall have been paid in full and (ii) all other failures, breaches or defaults giving rise to such Voting Rights Triggering Event are remedied or waived by the holders of at least a majority of the shares of the then outstanding Series B preferred stock. We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Voting Rights Triggering Event.

Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2015, we had a working capital deficit due to the reclassification of our Series B preferred stock as a current liability, although under Delaware law, our state of incorporation, the Series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to repurchase the Series B preferred stock and its accumulated unpaid dividends and management does not expect to be required to make any such repurchases during the next twelve months.  Management does not believe that the Series B preferred stockholders have legal remedies that would require such repurchases.

Our primary sources of liquidity are our current cash and cash equivalents and the cash expected to be provided by operations. We do not currently have a revolving credit facility or other working capital lines of credit.  Our cash flows from operations are subject to factors impacting our customers and target audience, such as overall advertising demand, shifts in population, station listenership and viewership, demographics, audience tastes and fluctuations in preferred advertising media. Our ability to raise funds by increasing our indebtedness is currently precluded by the occurrence and continuation of the Voting Rights Triggering Event. The occurrence and continuation of the Voting Rights Triggering Event, our Certificate of Designations and the Indenture governing the Notes place other restrictions on us with respect to the sale of assets, liens, investments, dividends, debt repayments, transactions with affiliates, and consolidations and mergers, among other things.

Our strategy is to primarily utilize cash flows from operations to meet our capital needs and contractual obligations. For the six-months ended June 30, 2015, we had negative operating cash flows.  Management continually projects anticipated cash requirements and believes that cash from operating activities, together with cash on hand, should be sufficient to permit us to meet our operating obligations over the next twelve-month period, including, among other things, required semi-annual interest payments pursuant to the Notes, and capital expenditures.

Assumptions (none of which can be assured) which underlie management’s beliefs, include the following:

● the demand for advertising within the broadcasting industry and economic conditions in general will not deteriorate in any material respect;

● despite the consequences resulting from the occurrence of the Voting Rights Triggering Event, we will continue to successfully implement our business strategy;

● we will not use cash flows from operating activities to repurchase the Series B preferred stock; and

● we will not incur any material unforeseen liabilities, including but not limited to taxes, environmental liabilities, regulatory matters or legal judgments.

We evaluate strategic media acquisitions and/or dispositions and strive to expand our media content through distribution, programming and affiliation agreements in order to achieve a significant presence with clusters of stations in the top U.S. Hispanic markets. We engage in discussions regarding potential acquisitions and/or dispositions and expansion of our content through media outlets from time to time in the ordinary course of business. We anticipate that any future acquisitions would be financed through funds generated from equity financing, operations, asset sales or a combination of these or other available and/or permitted sources. As a result of the consequences resulting from the occurrence of the Voting Rights Triggering Event, we are currently not able to finance acquisitions through the incurrence of additional debt and are subject to additional restrictions which may preclude us from being able to execute this strategy.

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12.5% senior secured notes due 2017

On February 7, 2012 we closed our offering of $275 million in aggregate principal amount of 12.5% senior secured notes due 2017 (the “Notes”) at an issue price of 97% of the principal amount. The Notes were offered solely by means of a private placement either to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, or to certain persons outside the United States pursuant to Regulation S under the Securities Act. We used the net proceeds from the offering, together with some cash on hand, to repay and terminate the senior credit facility term loan, and to pay the transaction costs related to the offering.

Interest

The Notes accrue interest at a rate of 12.5% per year. Interest on the Notes is paid semi-annually on each April 15 and October 15 (the “Interest Payment Date”), commencing on April 15, 2012. After April 15, 2013, interest will accrue at a rate of 12.5% per annum on (i) the original amount of the Notes plus (ii) any Additional Interest (as defined below) payable but unpaid in any prior interest period, payable in cash on each Interest Payment Date. Further, beginning on the Interest Payment Date occurring on April 15, 2013, additional interest will be payable at a rate of 2.00% per annum (the “Additional Interest”) on (i) the original principal amount of the Notes plus (ii) any amount of Additional Interest payable but unpaid in any prior interest period, to be paid in cash, at our election, (x) on the applicable Interest Payment Date or (y) on the earliest of the maturity date of the Notes, any acceleration of the Notes and any redemption of the Notes; provided that no Additional Interest will be payable on any Interest Payment Date if, for the applicable fiscal period, either (a) we record positive consolidated station operating income for our television segment or (b) our secured leverage ratio on a consolidated basis is less than 4.75 to 1.00.

The measurement periods that determine if Additional Interest is applicable for the respective Interest Payment Dates are as follows:

(1) Six-months ended December 31, 2012 or as of December 31, 2012 for the Interest Payment Date of April 15, 2013

(2) Last twelve months ended June 30, 2013 or as of June 30, 2013 for the Interest Payment Date of October 15, 2013

(3) Last twelve months ended December 31, 2013 or as of December 31, 2013 for the Interest Payment Date of April 15, 2014

(4) Last twelve months ended June 30, 2014 or as of June 30, 2014 for the Interest Payment Date of October 15, 2014

(5) Last twelve months ended December 31, 2014 or as of December 31, 2014 for the Interest Payment Date of April 15, 2015

(6) Last twelve months ended June 30, 2015 or as of June 30, 2015 for the Interest Payment Date of October 15, 2015

(7) Last twelve months ended December 31, 2015 or as of December 31, 2015 for the Interest Payment Date of April 15, 2016

(8) Last twelve months ended June 30, 2016 or as of June 30, 2016 for the Interest Payment Date of October 15, 2016

(9) Last twelve months ended December 31, 2016 or as of December 31, 2016 for the Interest Payment Date of April 15, 2017

Additional Interest during any given interest period, shall not be deemed to “accrue”.  Rather, Additional Interest becomes payable on a given Interest Payment Date (April 15 or October 15) unless the condition in either clause (a) or (b) above has been met as of that Interest Payment Date or unless the Television Segment has been divested or the Notes redeemed prior to that Interest Payment Date.

Although for the Additional Interest applicable periods (1), (2), (3), (4), (5) and (6) our secured leverage ratio was greater than 4.75 to 1.00, we recorded positive consolidated station operating income for our television segment for those respective periods (as defined in the Indenture). Therefore, no Additional Interest was incurred and/or payable for those respective Interest Payment Dates.

Collateral and Ranking

The Notes and the guarantees are secured on a first-priority basis by a security interest in certain of the Company’s and the guarantors’ existing and future tangible and intangible assets (other than Excluded Assets (as defined in the Indenture)). The Notes and the guarantees are structurally subordinated to the obligations of our non-guarantor subsidiaries. The Notes and guarantees are senior to all of the Company’s and the guarantors’ existing and future unsecured indebtedness to the extent of the value of the collateral.

The Indenture permits us, under specified circumstances, to incur additional debt; however, the occurrence and continuance of the Voting Rights Triggering Event (as defined in note 10 to the unaudited condensed consolidated financial statements) currently prevents us from incurring any such additional debt.

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The Notes are senior secured obligations of the Company that rank equally with all of our existing and future senior indebtedness and senior to all of our existing and future subordinated indebtedness. Subject to certain exceptions, the Notes are fully and unconditionally guaranteed by each of our existing and future wholly owned domestic subsidiaries (which excludes (i) our existing and future subsidiaries formed in Puerto Rico (the “Puerto Rican Subsidiaries”), (ii) our future subsidiaries formed under the laws of foreign jurisdictions and (iii) our existing and future subsidiaries, whether domestic or foreign, of the Puerto Rican Subsidiaries or foreign subsidiaries) and our other domestic subsidiaries that guarantee certain of our other debt. The Notes and guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of our nonguarantor subsidiaries.

Covenants and Other Matters

The Indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the guarantors to:

· incur or guarantee additional indebtedness;

· pay dividends and make other restricted payments;

· incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries;

· engage in sale-lease back transactions;

· enter into new lines of business;

· make certain payments to holders of Notes that consent to amendments to the Indenture governing the Notes without paying such amounts to all holders of Notes;

· create or incur certain liens;

· make certain investments and acquisitions;

· transfer or sell assets;

· engage in transactions with affiliates; and

· merge or consolidate with other companies or transfer all or substantially all of our assets.

The Indenture contains certain customary representations and warranties, affirmative covenants and events of default which could, subject to certain conditions, cause the Notes to become immediately due and payable, including, but not limited to, the failure to make premium, principal or interest payments; failure by us to accept and pay for Notes tendered when and as required by the change of control and asset sale provisions of the Indenture; failure to comply with certain covenants in the Indenture; failure to comply with certain agreements in the Indenture for a period of 60 days following notice by the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding; failure to pay any debt within any applicable grace period after the final maturity or acceleration of such debt by the holders thereof because of a default, if the total amount of such debt unpaid or accelerated exceeds $15 million; failure to pay final judgments entered by a court or courts of competent jurisdiction aggregating $15 million or more (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed, for a period of 60 days; and certain events of bankruptcy or insolvency.

As of June 30, 2015, we were in compliance with all of our covenants under our Indenture.

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Summary of Capital Resources

The following summary table presents a comparison of our capital resources for the six-months ended June 30, 2015 and 2014, with respect to certain key measures affecting our liquidity (in thousands). The changes set forth in the table are discussed below. This section should be read in conjunction with the unaudited condensed consolidated financial statements and notes.

	Six-Months Ended
	June 30,						Change
	2015			2014			$
Capital expenditures:
Radio	$	450			782			(332	)
Television		182			225			(43	)
Corporate		92			190			(98	)
Consolidated	$	724			1,197			(473	)
Net cash flows (used in) provided by operating activities	$	(1,941	)		550			(2,491	)
Net cash flows (used in) provided by investing activities		(645	)		73			(718	)
Net cash flows used in financing activities		(169	)		(168	)		(1	)
Net (decrease) increase in cash and cash equivalents	$	(2,755	)		455

Capital Expenditures

The decrease in our capital expenditures was primarily due to the completion of various radio system upgrades and building improvements made to our SBS Miami Broadcast Center in 2014.    

Net Cash Flows (Used In) Provided by Operating Activities

Changes in our net cash flows from operating activities were primarily a result of a decrease in cash receipts from our trade receivables and an increase of cash payments to vendors mainly for accounts payable and accrued expenses.

Net Cash Flows (Used in) Provided by Investing Activities

Changes in our net cash flows from investing activities were a result of the decrease in cash proceeds received from the sale of property and equipment, offset by the decrease in capital expenditures.

Net Cash Flows Used in Financing Activities

There was no change in our net cash flows from financing activities.  

Recent Developments

NASDAQ Listing

On December 19, 2014, we received a written notice from The Nasdaq Stock Market (“NASDAQ”), advising us that the market value of our Class A common stock for the previous 30 consecutive business days had fallen below the $15,000,000 minimum market value of publicly held shares (“MVPHS”), required for continued listing on the NASDAQ Global Market pursuant to NASDAQ Listing Rule 5450(b)(2)(C) (the “Rule”).  As of March 17, 2015, we had regained compliance with the Rule.  

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the

27

balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. This update is effective for reporting periods beginning after December 15, 2015, and is to be applied on a retrospective basis. We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.We plan to adopt ASU 2015-03 in the first quarter of 2016.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern.  This new standard defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  The standard is effective for annual reporting periods ending after December 15, 2016 and interim periods thereafter.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under U.S. GAAP.  In July 2015, the FASB postponed the effective date of this standard.  The standard is now effective for the first interim period within annual reporting periods beginning after December 15, 2017.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:

· it requires assumptions to be made that were uncertain at the time the estimate was made; and

· changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

Our critical accounting policies are described in Item 7 of our annual report on Form 10-K for the year ended December 31, 2014. There have been no material changes to our critical accounting policies during the six-months ended June 30, 2015.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a “smaller reporting company” as defined by Regulation S-K and as such, we are not required to provide the information contained in this item pursuant to Regulation S-K.

Item 4. Controls and Procedures

Evaluation Of Disclosure Controls And Procedures. Our management, including our principal executive and financial officers, have conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures,” as such term is defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act, to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes In Internal Control Over Financial Reporting. There has been no change in our internal control over financial reporting during the quarter ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Litigation-  Brevan Howard and Others Complaint

On December 27, 2013, River Birch Master Fund, L.P., P River Birch Ltd. (together, “River Birch”) and Visium Catalyst Credit Master Fund, Ltd. (collectively with River Birch, “Initial Plaintiffs”) brought a claim against us in the Delaware Court of Chancery (the “Court”) seeking a declaratory judgment that a Voting Rights Triggering Event had occurred (as of April 15, 2010) under the certificate of designations for our Series B preferred stock (the “Certificate of Designations”) as a result of our non-payment of dividends. The claim states that as a result of such Voting Rights Triggering Event, the incurrence of indebtedness for the purpose of purchasing our Houston television station and the issuance of our 12.5% Senior Secured Notes due 2017 (the “Notes”) under the Indenture governing the Notes were prohibited incurrences of indebtedness under the Certificate of Designations.

The Initial Plaintiffs further claim that we violated the Certificate of Designations by failing to take any actions or explore any options that would have given us legally available funds with which to repurchase the outstanding Series B preferred stock on October 15, 2013. In connection with their claims, Initial Plaintiffs also seek an award of contract damages. On January 17, 2014, we filed a motion to dismiss the complaint. On March 3, 2014, the complaint was amended to remove River Birch and add Brevan Howard Credit Catalyst Master Fund Ltd., Brevan Howard Master Fund, ALJ Capital I, LP, ALJ Capital II, LP, LJR Capital, LP, and Cedarview Opportunities Master Fund, LP as additional plaintiffs. Plaintiffs filed an answering brief to our Motion to Dismiss on April 30, 2014.  Our reply brief was filed on May 16, 2014, and a hearing was held on our Motion to Dismiss on June 10, 2014. Following the hearing, the parties agreed to stay all proceedings relating to Count I (which seeks a declaration that a Voting Rights Triggering Event was in effect at all times after April 15, 2010), Count II (which alleges that SBS breached the Certificate of Designations by incurring indebtedness in 2011 and 2012) and Count IV (which alleges that SBS breached the implied covenant of good faith and fair dealing by deferring certain dividends) of the complaint.  The stay has since been lifted.  On June 27, 2014, the Court denied our motion to dismiss Count III (which alleges that SBS breached the Certificate of Designations by failing to redeem all of the Series B preferred stock on October 15, 2013) of the complaint.  A hearing on our motion to dismiss Counts I, II and IV of the complaint was held on February 10, 2015, and on May 19, 2015, the Court granted our motion to dismiss Counts I, II and IV of the complaint.

We deny the allegations contained in the complaint and, to the contrary, assert that we have been and continue to be in full and complete compliance with all of our obligations under the Certificate of Designations, as fully disclosed in our public filings dating back to 2009. Accordingly, we believe that the complaint’s allegations are frivolous and wholly without merit and intend to contest such allegations vigorously.

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Item 6. Exhibits

The following exhibits, which are numbered in accordance with Item 601 of Regulation S-K, are filed herewith or, as noted, furnished herewith or incorporated by reference herein:

Exhibit Number	Exhibit Description
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Periodic Financial Report by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Periodic Financial Report by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** Furnished herewith

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SIGNATURES

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

SPANISH BROADCASTING SYSTEM, INC.
By:	/s/ JOSEPH A. GARCÍA
	JOSEPH A. GARCÍA
	Chief Financial Officer, Chief Administrative Officer, Senior Executive Vice President and Secretary (principal financial and accounting officer and duly authorized officer of the registrant)

Date: August 14, 2015

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Periodic Financial Report by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Periodic Financial Report by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** Furnished herewith

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Raúl Alarcón, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spanish Broadcasting System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ RAÚL ALARCÓN, JR.
Name:	Raúl Alarcón, Jr.
Title:	Chairman of the Board of Directors, Chief Executive Officer and President

Date: August 14, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Joseph A. García, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spanish Broadcasting System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ JOSEPH A. GARCÍA
Name:	Joseph A. García
Title:	Chief Financial Officer, Chief Administrative Officer, Senior Executive Vice President and Secretary

Date: August 14, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Spanish Broadcasting System, Inc. (the “Company”) for the quarterly period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Raúl Alarcón, Jr., Chairman of the Board of Directors, President and Chief Executive Officer of the Company, certify, as of the dates hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

/s/ RAÚL ALARCÓN, JR.
Name:	Raúl Alarcón, Jr.
Title:	Chairman of the Board of Directors, President and Chief Executive Officer

Date: August 14, 2015  

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Spanish Broadcasting System, Inc. (the “Company”) for the quarterly period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph A. García, Chief Financial Officer, Executive Vice President and Secretary of the Company, certify, as of the dates hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

/s/ JOSEPH A. GARCÍA
Name:	Joseph A. García
Title:	Chief Financial Officer, Chief Administrative Officer, Senior Executive Vice President and Secretary

Date: August 14, 2015

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Twelve Point Five Percent Senior Secured Notes due Twenty Seventeen (Details Textual) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Feb. 07, 2012
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Aggregate principal amount of the notes	25.00%
Covenants, maximum unpaid principal payment	$ 15
Debt instrument payment period	60 days
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Notes issued principal amount		$ 275
Interest rate on Senior secured notes due 2017	12.50%	12.50%
Issue price percentage of principal amount		97.00%
Frequency of interest payment	semi-annually
Date of first required payment	Apr. 15, 2012
Additional interest rate	2.00%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period One
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period Two
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period Three
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period Four
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period Five
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | Maximum | Period Six
12.5% Senior Secured Notes due 2017 (Textual) [Abstract]
Secured leverage ratio	4.75%

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Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Net revenue:
Net revenue	$ 38,100	$ 40,887	$ 70,242	$ 73,666
Engineering and programming expenses:
Engineering and programming expenses	7,940	7,574	15,604	15,086
Selling, general and administrative expenses:
Selling, general and administrative expenses	16,341	19,704	31,603	35,458
Corporate expenses	2,424	3,744	4,572	5,448
Depreciation and amortization:
Depreciation and amortization	1,183	1,259	2,470	2,534
(Gain) loss on the disposal of assets, net:
(Gain) loss on the disposal of assets, net	(72)	(1,250)	(78)	(1,204)
Impairment charges and restructuring costs:
Impairment charges and restructuring costs	(137)	(73)	(137)	(73)
Operating income (loss):
Operating income (loss)	10,421	9,929	16,208	16,417
Capital expenditures:
Capital expenditures	439	586	724	1,197
Assets
Total Assets:	448,036		448,036		$ 451,813
Operating Segments | Radio
Net revenue:
Net revenue	34,492	36,019	63,719	65,464
Engineering and programming expenses:
Engineering and programming expenses	6,163	5,357	11,562	10,430
Selling, general and administrative expenses:
Selling, general and administrative expenses	15,485	17,004	29,133	31,091
Depreciation and amortization:
Depreciation and amortization	424	480	931	981
(Gain) loss on the disposal of assets, net:
(Gain) loss on the disposal of assets, net	(62)	(1,250)	(68)	(1,204)
Operating income (loss):
Operating income (loss)	12,482	14,428	22,161	24,166
Capital expenditures:
Capital expenditures	277	382	450	782
Assets
Total Assets:	386,997		386,997		389,394
Operating Segments | Television
Net revenue:
Net revenue	3,608	4,868	6,523	8,202
Engineering and programming expenses:
Engineering and programming expenses	1,777	2,217	4,042	4,656
Selling, general and administrative expenses:
Selling, general and administrative expenses	856	2,700	2,470	4,367
Depreciation and amortization:
Depreciation and amortization	663	691	1,347	1,382
(Gain) loss on the disposal of assets, net:
(Gain) loss on the disposal of assets, net	1		1
Operating income (loss):
Operating income (loss)	311	(740)	(1,337)	(2,203)
Capital expenditures:
Capital expenditures	98	111	182	225
Assets
Total Assets:	52,316		52,316		51,876
Corporate, Non-Segment
Selling, general and administrative expenses:
Corporate expenses	2,424	3,744	4,572	5,448
Depreciation and amortization:
Depreciation and amortization	96	88	192	171
(Gain) loss on the disposal of assets, net:
(Gain) loss on the disposal of assets, net	(11)		(11)
Impairment charges and restructuring costs:
Impairment charges and restructuring costs	(137)	(73)	(137)	(73)
Operating income (loss):
Operating income (loss)	(2,372)	(3,759)	(4,616)	(5,546)
Capital expenditures:
Capital expenditures	64	$ 93	92	$ 190
Assets
Total Assets:	$ 8,723		$ 8,723		$ 10,543

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Basic and Diluted Net Loss Per Common Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Common Share

3. Basic and Diluted Net Loss Per Common Share

Basic net loss per common share was computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented, using the “if converted” method. Diluted net loss per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period.

The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the three- and six-month periods ended June 30, 2015 and 2014 (in thousands):

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Basic weighted average shares outstanding		7,267		7,267		7,267		7,267
Effect of dilutive equity instruments		—		—		—		—
Dilutive weighted average shares outstanding		7,267		7,267		7,267		7,267
Options to purchase shares of common stock and other stock-based     awards outstanding which are not included in the calculation of     diluted net income per share because their impact is anti-dilutive		86		105		78		102

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Fair Value Measurement Disclosures (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Derivative designated as a cash flow hedging instrument:
Derivative instruments	$ 327	$ 408
Significant other observable inputs (Level 2)
Derivative designated as a cash flow hedging instrument:
Derivative instruments	$ 327	$ 408

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Fair Value Measurement Disclosures (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Carrying Amount | Significant other observable inputs (Level 2) | Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen
Estimated fair values of financial instruments
12.5% senior secured notes due 2017	$ 275.0	$ 275.0
Carrying Amount | Significant unobservable inputs (Level 3)
Estimated fair values of financial instruments
Promissory note payable, included in other long- term debt	5.1	5.2
Carrying Amount | Series B Preferred Stock | Significant unobservable inputs (Level 3)
Estimated fair values of financial instruments
10 3/4% Series B cumulative exchangeable redeemable preferred stock	141.2	136.4
Fair Value | Significant other observable inputs (Level 2) | Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen
Estimated fair values of financial instruments
12.5% senior secured notes due 2017	285.7	286.5
Fair Value | Significant unobservable inputs (Level 3)
Estimated fair values of financial instruments
Promissory note payable, included in other long- term debt	4.5	4.5
Fair Value | Series B Preferred Stock | Significant unobservable inputs (Level 3)
Estimated fair values of financial instruments
10 3/4% Series B cumulative exchangeable redeemable preferred stock	$ 63.3	$ 61.8

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Fair Value Measurement Disclosures (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest Rate Swap
Interest rate swaps
Gain (loss) recognized in other comprehensive loss (effective portion)	$ 49	$ 36	$ 81	$ 75

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Derivative Instrument and Hedging Activity (Details Textual) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jan. 04, 2007
Derivative Instrument and Hedging Activity (Textual) [Abstract]
Interest rate swap agreement period	10 years
Ten Year Interest Rate Swap
Derivative Instrument and Hedging Activity (Textual) [Abstract]
Notional amount		$ 7.7
Fixed interest rate	6.31%
Basis spread on variable rate of five year interest rate swap	1.25%
Derivative floating interest rate description	Equal to one-month LIBOR plus 125 basis points
Interest rate swap expiration date	Jan. 04, 2017

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Stockholders' Deficit

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Stockholders' Deficit

2. Stockholders’ Deficit

(a) Series C Convertible Preferred Stock

On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with CBS Radio (formerly known as Infinity Media Corporation, CBS Radio), a division of CBS Corporation, Infinity Broadcasting Corporation of San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly-owned subsidiary of SBS, pursuant to which SBS acquired the FCC license of Infinity SF (the “CBS Radio Merger”), we issued to CBS Radio an aggregate of 380,000 shares of Series C convertible preferred stock, $0.01 par value per share (the “Series C preferred stock”). Each share of Series C preferred stock is convertible at the option of the holder into two fully paid and non-assessable shares of the Class A common stock. The shares of Series C preferred stock issued at the closing of the CBS Radio Merger are convertible into 760,000 shares of Class A common stock, subject to certain adjustments. In connection with the CBS Radio Merger, we also entered into a registration rights agreement with CBS Radio, pursuant to which CBS Radio may instruct us to file up to three registration statements, on a best efforts basis, with the SEC, providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock.

We are required to pay holders of Series C preferred stock dividends on parity with our Class A common stock and Class B common stock, and each other class or series of our capital stock created after December 23, 2004.

(b) Class A and B Common Stock

The rights of the Class A common stockholders and Class B common stockholders are identical except with respect to their voting rights and conversion provisions. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. The Class B common stock is convertible to Class A common stock on a share-for-share basis at the option of the holder at any time, or automatically upon a transfer of the Class B common stock to a person or entity which is not a permitted transferee (as described in our Certificate of Incorporation). Holders of each class of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. Neither the holders of the Class A common stock nor the holders of the Class B common stock have preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Each class of common stock is subordinate to our 10 ³/4% Series B cumulative exchangeable redeemable preferred stock, par value $0.01 per share (the “Series B preferred stock”). The Series B preferred stock has a liquidation preference of $1,000 per share and is on parity with the Series C preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of SBS.

 (c) 2006 Omnibus Equity Compensation Plan

In July 2006, we adopted an omnibus equity compensation plan (the “Omnibus Plan”) in which grants of Class A common stock can be made to participants in any of the following forms: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) stock units, (v) stock awards, (vi) dividend equivalents, and (vii) other stock-based awards. The Omnibus Plan authorizes up to 350,000 shares of our Class A common stock for issuance, subject to adjustment in certain circumstances. The Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalents, to any individual during any calendar year is 100,000 shares, subject to adjustments. As of June 30, 2015, we had 113 thousand stock options outstanding and exercisable.

(d) Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss is comprised of accumulated gains and losses on a derivative instrument (interest rate swap) that qualifies for cash flow hedge treatment. Our total comprehensive loss consists of our net loss and a gain on our interest rate swap for the respective periods. The gain on the interest rate swap is shown net of taxes; however, there is no tax effect as a result of a full deferred tax asset valuation allowance related to the interest rate swap.

For the three-months ended June 30, 2015 and 2014, we reclassified from other comprehensive loss to interest expense $0.1 million.  During the three-months ended June 30, 2015 and 2014, we recognized in other comprehensive income, net of taxes- an unrealized gain on derivative instrument of approximately $49 thousand and $36 thousand, respectively.  

For the six-months ended June 30, 2015 and 2014, we reclassified from other comprehensive loss to interest expense $0.1 million.  During the six-months ended June 30, 2015 and 214, we recognized in other comprehensive income, net of taxes- an unrealized gain on derivative instrument of approximately $81 thousand and $75 thousand, respectively.

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Derivative Instrument and Hedging Activity (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Description of Derivative Liabilities
Derivative instruments	$ 327	$ 408
Interest Rate Swap
Description of Derivative Liabilities
Gross amounts of recognized liabilities	327	408
Derivative instruments	327	408
Interest Rate Swap | Financial Instruments
Description of Derivative Liabilities
Gross amounts not offset in the balance sheet	$ 327	$ 408

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Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 21,236	$ 23,991
Receivables:
Trade	27,324	27,506
Barter	225	205
Total Receivables	27,549	27,711
Less allowance for doubtful accounts	1,032	2,322
Net receivables	26,517	25,389
Prepaid expenses and other current assets	5,281	3,928
Total current assets	53,034	53,308
Property and equipment, net of accumulated depreciation of $71,224 in 2015 and $69,632 in 2014	30,707	32,382
FCC broadcasting licenses	323,055	323,055
Goodwill	32,806	32,806
Other intangible assets, net of accumulated amortization of $972 in 2015 and $924 in 2014	1,576	1,624
Deferred financing costs, net of accumulated amortization of $11,391 in 2015 and $9,706 in 2014	6,225	7,910
Other assets	633	728
Total assets	448,036	451,813
Current liabilities:
Accounts payable and accrued expenses	15,608	16,495
Accrued interest	7,196	7,202
Unearned revenue	392	449
Other liabilities	282	269
Current portion of other long-term debt	320	336
10 3/4% Series B cumulative exchangeable redeemable preferred stock outstanding and dividends outstanding, $0.01 par value, liquidation value $1,000 per share. Authorized 280,000 shares: 90,549 shares issued and outstanding at June 30, 2015 and December 31, 2014 and $50,698 and $45,831 of dividends payable as of June 30, 2015 and December 31, 2014, respectively.	141,247	136,380
Total current liabilities	165,045	161,131
Other liabilities, less current portion	87	94
Derivative instruments	327	408
12.5% senior secured notes due 2017, net of unamortized discount of $3,504 in 2015 and $4,343 in 2014	271,496	270,657
Other long-term debt, less current portion	4,769	4,922
Deferred income taxes	92,636	88,806
Total liabilities	$ 534,360	$ 526,018
Commitments and contingencies (note 6)
Stockholders’ deficit:
Additional paid-in capital	$ 525,335	$ 525,335
Accumulated other comprehensive loss, net	(327)	(408)
Accumulated deficit	(611,336)	(599,136)
Total stockholders’ deficit	(86,324)	(74,205)
Total liabilities and stockholders’ deficit	448,036	451,813
Preferred Stock | Series C convertible preferred stock
Stockholders’ deficit:
Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares; 380,000 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	4	4
Total stockholders’ deficit	$ 4	$ 4

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (12,200)	$ (9,320)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Dividends on Series B preferred stock classified as interest expense	4,867	4,867
(Gain) loss on the disposal of assets	(78)	(1,204)
Impairment charges	(137)	(73)
Stock-based compensation		1
Depreciation and amortization	2,470	2,534
Net barter (income) loss	(115)	(153)
Provision for trade doubtful accounts	(830)	(74)
Amortization of deferred financing costs	1,685	1,675
Amortization of original issued discount	839	734
Deferred income taxes	3,830	783
Unearned revenue-barter	38	100
Changes in operating assets and liabilities:
Trade receivables	(657)	3,419
Prepaid expenses and other current assets	(974)	(1,640)
Other assets	95	144
Accounts payable and accrued expenses	(911)	(1,182)
Accrued interest	(6)	80
Other liabilities	143	(141)
Net cash (used in) provided by operating activities	(1,941)	550
Cash flows from investing activities:
Purchases of property and equipment	(724)	(1,197)
Proceeds from the sale of property and equipment	79	1,270
Net cash (used in) provided by investing activities	(645)	73
Cash flows from financing activities:
Payments of other long-term debt	(169)	(168)
Net cash used in financing activities	(169)	(168)
Net (decrease) increase in cash and cash equivalents	(2,755)	455
Cash and cash equivalents at beginning of period	23,991	23,566
Cash and cash equivalents at end of period	21,236	24,021
Supplemental cash flows information:
Interest paid	17,422	17,367
Income tax paid	199	305
Noncash investing and financing activities:
Unrealized gain on derivative instrument	$ 81	$ 75

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Stockholders' Deficit (Details Textual) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) RegistrationStatements $ / shares shares	Jun. 30, 2014 USD ($)	Jul. 30, 2006 shares	Dec. 23, 2004 $ / shares shares
Stockholders Equity (Textual) [Abstract]
Amounts reclassified from other comprehensive loss to interest expense | $	$ 100	$ 100	$ 100	$ 100
Other comprehensive income, net of taxes- unrealized gain on derivative instrument | $	$ 49	$ 36	$ 81	$ 75
Stockholders Equity (Additional Textual) [Abstract]
Number of registration statements filled | RegistrationStatements			3
2006 Omnibus Equity Compensation Plan
Stockholders Equity (Textual) [Abstract]
Omnibus Plan authorizes shares of Class A common stock for issuance, subject to adjustment in certain circumstances					350,000
Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalent					100,000
Stock options outstanding and exercisable	113,000		113,000
Series C convertible preferred stock
Stockholders Equity (Textual) [Abstract]
Preferred stock par value per share | $ / shares						$ 0.01
Common stock shares to be issued to CBS Radio						760,000
Series B Preferred Stock
Stockholders Equity (Textual) [Abstract]
Preferred stock par value per share | $ / shares	$ 0.01		$ 0.01
Temporary Equity Dividend Rate Percentage	10.75%		10.75%
Liquidation preference per share | $ / shares	$ 1,000		$ 1,000
Class A common stock
Stockholders Equity (Textual) [Abstract]
Common stock voting right			one vote per share
Class B common stock
Stockholders Equity (Textual) [Abstract]
Common stock voting right			ten votes per share
CBS Radio | Series C convertible preferred stock
Stockholders Equity (Textual) [Abstract]
Preferred Stock issued to CBS Radio						380,000
Preferred Stock, shares issuable upon conversion						2

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Operating Segments (Details Textual)	6 Months Ended
	Jun. 30, 2015 Segment
Operating Segments (Textual) [Abstract]
Number of Reportable Segments	2

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Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries (the Company, we, us, our or SBS). All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements as of June 30, 2015 and December 31, 2014 and for the three- and six-month periods ended June 30, 2015 and 2014 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements as of, and for the fiscal year ended December 31, 2014, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are all of a normal and recurring nature, necessary for a fair presentation of the results of the interim periods. Additionally, we evaluated subsequent events after the balance sheet date of June 30, 2015 through the financial statements issuance date. The results of operations for the six-months ended June 30, 2015 are not necessarily indicative of the results for the entire year ending December 31, 2015, or for any other future interim or annual periods.

Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As of June 30, 2015, we had a working capital deficit due to the reclassification of our Series B preferred stock as a current liability, although under Delaware law, our state of incorporation, the Series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to repurchase the Series B preferred stock and its accumulated unpaid dividends and management does not expect to be required to make any such repurchases during the next twelve months.  Management does not believe that the Series B preferred stockholders have legal remedies that would require such repurchases (see note 10).  In addition, for the six-months ended June 30, 2015, we had negative operating cash flows.  Management continually projects anticipated cash requirements and believes that cash from operating activities, together with cash on hand, should be sufficient to permit us to meet our operating obligations over the next twelve-month period.  

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. This update is effective for reporting periods beginning after December 15, 2015, and is to be applied on a retrospective basis. We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations. We plan to adopt ASU 2015-03 in the first quarter of 2016.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern.  This new standard defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  The standard is effective for annual reporting periods ending after December 15, 2016 and interim periods thereafter.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under U.S. GAAP.  In July 2015, the FASB postponed the effective date of this standard.  The standard is now effective for the first interim period within annual reporting periods beginning after December 15, 2017.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Property and equipment, accumulated depreciation	$ 71,224	$ 69,632
Other intangible assets, accumulated amortization	972	924
Deferred financing costs, accumulated amortization	$ 11,391	$ 9,706
Cumulative exchangeable redeemable preferred stock dividend rate	10.75%	10.75%
12.5% Senior Secured Notes Due 2017
Interest rate on Senior secured notes due 2017	12.50%	12.50%
Senior secured notes due 2017, unamortized discount	$ 3,504	$ 4,343
Series B Preferred Stock
Preferred stock par value per share	$ 0.01
Preferred Stock | Series B Preferred Stock
Preferred stock par value per share	0.01	$ 0.01
Preferred stock, liquidation value per share	$ 1,000	$ 1,000
Preferred stock, shares authorized	280,000	280,000
Preferred stock, shares issued	90,549	90,549
Preferred stock, shares outstanding	90,549	90,549
Preferred Stock, dividends outstanding	$ 50,698	$ 45,831
Preferred Stock | Series C convertible preferred stock
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, liquidation value per share	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	600,000	600,000
Convertible preferred stock, shares issued	380,000	380,000
Convertible preferred stock, shares outstanding	380,000	380,000
Common Stock | Class A common stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	4,166,991	4,166,991
Common stock, shares outstanding	4,166,991	4,166,991
Common Stock | Class B common stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	2,340,353	2,340,353
Common stock, shares outstanding	2,340,353	2,340,353

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. This update is effective for reporting periods beginning after December 15, 2015, and is to be applied on a retrospective basis. We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations. We plan to adopt ASU 2015-03 in the first quarter of 2016.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern.  This new standard defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  The standard is effective for annual reporting periods ending after December 15, 2016 and interim periods thereafter.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under U.S. GAAP.  In July 2015, the FASB postponed the effective date of this standard.  The standard is now effective for the first interim period within annual reporting periods beginning after December 15, 2017.  We are currently evaluating the impact, if any, that this new standard will have on our financial position and results of operations.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 12, 2015
Entity Registrant Name	SPANISH BROADCASTING SYSTEM INC
Entity Central Index Key	0000927720
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Class A common stock
Entity Common Stock, Shares Outstanding		4,166,991
Class B common stock
Entity Common Stock, Shares Outstanding		2,340,353

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Basic and Diluted Net Loss Per Common Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Reconciliation of the Shares Used in the Computation of Basic and Diluted Net Loss Per Share

The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the three- and six-month periods ended June 30, 2015 and 2014 (in thousands):

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Basic weighted average shares outstanding		7,267		7,267		7,267		7,267
Effect of dilutive equity instruments		—		—		—		—
Dilutive weighted average shares outstanding		7,267		7,267		7,267		7,267
Options to purchase shares of common stock and other stock-based     awards outstanding which are not included in the calculation of     diluted net income per share because their impact is anti-dilutive		86		105		78		102

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Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Net revenue	$ 38,100	$ 40,887	$ 70,242	$ 73,666
Operating expenses:
Engineering and programming	7,940	7,574	15,604	15,086
Selling, general and administrative	16,341	19,704	31,603	35,458
Corporate expenses	2,424	3,744	4,572	5,448
Depreciation and amortization	1,183	1,259	2,470	2,534
Total operating expenses	27,888	32,281	54,249	58,526
(Gain) loss on the disposal of assets	(72)	(1,250)	(78)	(1,204)
Impairment charges and restructuring costs	(137)	(73)	(137)	(73)
Operating income	10,421	9,929	16,208	16,417
Other (expense) income:
Interest expense, net	(9,995)	(9,942)	(19,928)	(19,870)
Dividends on Series B preferred stock classified as interest expense	(2,434)	(2,434)	(4,867)	(4,867)
Loss before income taxes	(2,008)	(2,447)	(8,587)	(8,320)
Income tax expense	1,577	786	3,613	1,000
Net loss	$ (3,585)	$ (3,233)	$ (12,200)	$ (9,320)
Basic and Diluted net loss per common share	$ (0.49)	$ (0.44)	$ (1.68)	$ (1.28)
Weighted average common shares outstanding:
Basic and Diluted	7,267	7,267	7,267	7,267
Net loss	$ (3,585)	$ (3,233)	$ (12,200)	$ (9,320)
Other comprehensive income, net of taxes- unrealized gain on derivative instrument	49	36	81	75
Total comprehensive loss	$ (3,536)	$ (3,197)	$ (12,119)	$ (9,245)

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. Commitments and Contingencies

We are subject to certain legal proceedings and claims that have arisen in the ordinary course of business and have not been fully adjudicated. In our opinion, we do not have a potential liability related to any current legal proceedings and claims that would individually or in the aggregate have a material adverse effect on our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. Should we fail to prevail in any of these legal matters or should all of these legal matters be resolved against us in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.

Litigation-Brevan Howard and Others Complaint

On December 27, 2013, River Birch Master Fund, L.P., P River Birch Ltd. (together, “River Birch”) and Visium Catalyst Credit Master Fund, Ltd. (collectively with River Birch, “Initial Plaintiffs”) brought a claim against us in the Delaware Court of Chancery (the “Court”) seeking a declaratory judgment that a Voting Rights Triggering Event had occurred (as of April 15, 2010) under the certificate of designations for our Series B preferred stock (the “Certificate of Designations”) as a result of our non-payment of dividends. The claim states that as a result of such Voting Rights Triggering Event, the incurrence of indebtedness for the purpose of purchasing our Houston television station and the issuance of our 12.5% Senior Secured Notes due 2017 (the “Notes”) under the Indenture governing the Notes were prohibited incurrences of indebtedness under the Certificate of Designations.

The Initial Plaintiffs further claim that we violated the Certificate of Designations by failing to take any actions or explore any options that would have given us legally available funds with which to repurchase the outstanding Series B preferred stock on October 15, 2013. In connection with their claims, Initial Plaintiffs also seek an award of contract damages. On January 17, 2014, we filed a motion to dismiss the complaint. On March 3, 2014, the complaint was amended to remove River Birch and add Brevan Howard Credit Catalyst Master Fund Ltd., Brevan Howard Master Fund, ALJ Capital I, LP, ALJ Capital II, LP, LJR Capital, LP, and Cedarview Opportunities Master Fund, LP as additional plaintiffs. Plaintiffs filed an answering brief to our Motion to Dismiss on April 30, 2014.  Our reply brief was filed on May 16, 2014, and a hearing was held on our Motion to Dismiss on June 10, 2014. Following the hearing, the parties agreed to stay all proceedings relating to Count I (which seeks a declaration that a Voting Rights Triggering Event was in effect at all times after April 15, 2010), Count II (which alleges that SBS breached the Certificate of Designations by incurring indebtedness in 2011 and 2012) and Count IV (which alleges that SBS breached the implied covenant of good faith and fair dealing by deferring certain dividends) of the complaint.  The stay has since been lifted.  On June 27, 2014, the Court denied our motion to dismiss Count III (which alleges that SBS breached the Certificate of Designations by failing to redeem all of the Series B preferred stock on October 15, 2013) of the complaint.  A hearing on our motion to dismiss Counts I, II and IV of the complaint was held on February 10, 2015, and on May 19, 2015, the Court granted our motion to dismiss Counts I, II and IV of the complaint.  

We deny the allegations contained in the complaint and, to the contrary, assert that we have been and continue to be in full and complete compliance with all of our obligations under the Certificate of Designations, as fully disclosed in our public filings dating back to 2009. Accordingly, we believe that the complaint’s allegations are frivolous and wholly without merit and intend to contest such allegations vigorously.

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

5. Income Taxes

We are calculating our effective income tax rate using a year-to-date income tax calculation, with the exception of one of our Puerto Rico subsidiaries for which we calculate the income tax expense based on our projected effective tax rate. Our income tax expense differs from the statutory federal tax rate of 35% and related statutory state tax rates, primarily due to the change in the valuation allowance on substantially all of our deferred tax assets with the exception of one of our Puerto Rico subsidiaries.

We file federal, state and local income tax returns in the United States and Puerto Rico. The tax years that remain subject to assessment of additional liabilities by the United States federal tax authorities are 2011 through 2014.   The tax years that remain subject to assessment of additional liabilities by state and local tax authorities are 2010 through 2014. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2011 through 2014.

From time to time, we have been and are subject to certain legal proceedings and claims that have arisen in the ordinary course of business, including an audit by a State tax authority (the “State”) for the income tax years from December 31, 2007 through 2009, which was settled and closed.   The State audit did not result in a significant impact, as our tax positions were sustained.  The State audit resulted in an additional tax liability of approximately $0.1 million, plus interest, related to capital taxes and not based on income.  We do not anticipate the result of this audit to impact subsequent open tax years with the State, and thus have not set up a reserve.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements as of June 30, 2015 and December 31, 2014.

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Basic and Diluted Net Loss Per Common Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Reconciliation of the shares used in the computation of basic and diluted net income per share
Basic weighted average shares outstanding	7,267	7,267	7,267	7,267
Dilutive weighted average shares outstanding	7,267	7,267	7,267	7,267
Options to purchase shares of common stock and other stock-based awards outstanding which are not included in the calculation of diluted net income per share because their impact is anti-dilutive	86	105	78	102

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Operating Segments

The following summary table presents separate financial data for each of our operating segments (in thousands):  

	Three-Months Ended						Six-Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net revenue:
Radio	$	34,492			36,019		$	63,719			65,464
Television		3,608			4,868			6,523			8,202
Consolidated	$	38,100			40,887		$	70,242			73,666
Engineering and programming expenses:
Radio	$	6,163			5,357		$	11,562			10,430
Television		1,777			2,217			4,042			4,656
Consolidated	$	7,940			7,574		$	15,604			15,086
Selling, general and administrative expenses:
Radio	$	15,485			17,004		$	29,133			31,091
Television		856			2,700			2,470			4,367
Consolidated	$	16,341			19,704		$	31,603			35,458
Corporate expenses:	$	2,424			3,744		$	4,572			5,448
Depreciation and amortization:
Radio	$	424			480		$	931			981
Television		663			691			1,347			1,382
Corporate		96			88			192			171
Consolidated	$	1,183			1,259		$	2,470			2,534
(Gain) loss on the disposal of assets, net:
Radio	$	(62	)		(1,250	)	$	(68	)		(1,204	)
Television		1			—			1			—
Corporate		(11	)		—			(11	)		—
Consolidated	$	(72	)		(1,250	)	$	(78	)		(1,204	)
Impairment charges and restructuring costs:
Radio	$	—			—		$	—			—
Television		—			—			—			—
Corporate		(137	)		(73	)		(137	)		(73	)
Consolidated	$	(137	)		(73	)	$	(137	)		(73	)
Operating income (loss):
Radio	$	12,482			14,428		$	22,161			24,166
Television		311			(740	)		(1,337	)		(2,203	)
Corporate		(2,372	)		(3,759	)		(4,616	)		(5,546	)
Consolidated	$	10,421			9,929		$	16,208			16,417
Capital expenditures:
Radio	$	277			382		$	450			782
Television		98			111			182			225
Corporate		64			93			92			190
Consolidated	$	439			586		$	724			1,197

	June 30,		December 31,
	2015		2014
Total Assets:
Radio	$	386,997	$	389,394
Television		52,316		51,876
Corporate		8,723		10,543
Consolidated	$	448,036	$	451,813

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Twelve Point Five Percent Senior Secured Notes due Twenty Seventeen

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

12.5% Senior Secured Notes due 2017

9. 12.5% Senior Secured Notes due 2017

On February 7, 2012 we closed our offering of $275 million in aggregate principal amount of 12.5% senior secured notes due 2017 (the “Notes”) at an issue price of 97% of the principal amount. The Notes were offered solely by means of a private placement either to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, or to certain persons outside the United States pursuant to Regulation S under the Securities Act. We used the net proceeds from the offering, together with cash on hand, to repay and terminate the previous senior credit facility, and to pay the transaction costs related to the offering.               

Interest

The Notes accrue interest at a rate of 12.5% per year. Interest on the Notes is paid semi-annually on each April 15 and October 15 (the “Interest Payment Date”), commencing on April 15, 2012. After April 15, 2013, interest will accrue at a rate of 12.5% per annum on (i) the original amount of the Notes plus (ii) any Additional Interest (as defined below) payable but unpaid in any prior interest period, payable in cash on each Interest Payment Date. Further, beginning on the Interest Payment Date occurring on April 15, 2013, additional interest will be payable at a rate of 2.00% per annum (the “Additional Interest”) on (i) the original principal amount of the Notes plus (ii) any amount of Additional Interest payable but unpaid in any prior interest period, to be paid in cash, at our election, (x) on the applicable Interest Payment Date or (y) on the earliest of the maturity date of the Notes, any acceleration of the Notes and any redemption of the Notes; provided that no Additional Interest will be payable on any Interest Payment Date if, for the applicable fiscal period, either (a) we record positive consolidated station operating income for our television segment or (b) our secured leverage ratio on a consolidated basis is less than 4.75 to 1.00.

The measurement periods that determine if Additional Interest is applicable for the respective Interest Payment Dates are as follows:

(1) Six-months ended December 31, 2012 or as of December 31, 2012 for the Interest Payment Date of April 15, 2013

(2) Last twelve months ended June 30, 2013 or as of June 30, 2013 for the Interest Payment Date of October 15, 2013

(3) Last twelve months ended December 31, 2013 or as of December 31, 2013 for the Interest Payment Date of April 15, 2014

(4) Last twelve months ended June 30, 2014 or as of June 30, 2014 for the Interest Payment Date of October 15, 2014

(5) Last twelve months ended December 31, 2014 or as of December 31, 2014 for the Interest Payment Date of April 15, 2015

(6) Last twelve months ended June 30, 2015 or as of June 30, 2015 for the Interest Payment Date of October 15, 2015

(7) Last twelve months ended December 31, 2015 or as of December 31, 2015 for the Interest Payment Date of April 15, 2016

(8) Last twelve months ended June 30, 2016 or as of June 30, 2016 for the Interest Payment Date of October 15, 2016

(9) Last twelve months ended December 31, 2016 or as of December 31, 2016 for the Interest Payment Date of April 15, 2017

Additional Interest during any given interest period, shall not be deemed to “accrue”.  Rather, Additional Interest becomes payable on a given Interest Payment Date (April 15 or October 15) unless the condition in either clause (a) or (b) above has been met as of that Interest Payment Date or unless the Television Segment has been divested or the Notes redeemed prior to that Interest Payment Date.

Although for the Additional Interest applicable periods (1), (2), (3), (4), (5) and (6) our secured leverage ratio was greater than 4.75 to 1.00, we recorded positive consolidated station operating income for our television segment for those respective periods (as defined in the Indenture). Therefore, no Additional Interest was incurred and/or payable for those respective Interest Payment Dates.

     Collateral and Ranking

The Notes and the guarantees are secured on a first-priority basis by a security interest in certain of the Company’s and the guarantors’ existing and future tangible and intangible assets (other than Excluded Assets (as defined in the Indenture)). The Notes and the guarantees are structurally subordinated to the obligations of our non-guarantor subsidiaries. The Notes and guarantees are senior to all of the Company’s and the guarantors’ existing and future unsecured indebtedness to the extent of the value of the collateral.

The Indenture permits us, under specified circumstances, to incur additional debt; however, the occurrence and continuance of the Voting Rights Triggering Event (as defined in note 10) currently prevents us from incurring any such additional debt.

The Notes are senior secured obligations of the Company that rank equally with all of our existing and future senior indebtedness and senior to all of our existing and future subordinated indebtedness. Subject to certain exceptions, the Notes are fully and unconditionally guaranteed by each of our existing and future wholly owned domestic subsidiaries (which excludes (i) our existing and future subsidiaries formed in Puerto Rico (the “Puerto Rican Subsidiaries”), (ii) our future subsidiaries formed under the laws of foreign jurisdictions and (iii) our existing and future subsidiaries, whether domestic or foreign, of the Puerto Rican Subsidiaries or foreign subsidiaries) and our other domestic subsidiaries that guarantee certain of our other debt. The Notes and guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of our nonguarantor subsidiaries.

Covenants and Other Matters

The Indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the guarantors to:

· incur or guarantee additional indebtedness;

· pay dividends and make other restricted payments;

· incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries;

· engage in sale-lease back transactions;

· enter into new lines of business;

· make certain payments to holders of Notes that consent to amendments to the Indenture governing the Notes without paying such amounts to all holders of Notes;

· create or incur certain liens;

· make certain investments and acquisitions;

· transfer or sell assets;

· engage in transactions with affiliates; and

· merge or consolidate with other companies or transfer all or substantially all of our assets.

The Indenture contains certain customary representations and warranties, affirmative covenants and events of default which could, subject to certain conditions, cause the Notes to become immediately due and payable, including, but not limited to, the failure to make premium, principal or interest payments; failure by us to accept and pay for Notes tendered when and as required by the change of control and asset sale provisions of the Indenture; failure to comply with certain covenants in the Indenture; failure to comply with certain agreements in the Indenture for a period of 60 days following notice by the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding; failure to pay any debt within any applicable grace period after the final maturity or acceleration of such debt by the holders thereof because of a default, if the total amount of such debt unpaid or accelerated exceeds $15 million; failure to pay final judgments entered by a court or courts of competent jurisdiction aggregating $15 million or more (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed, for a period of 60 days; and certain events of bankruptcy or insolvency.

As of June 30, 2015, we were in compliance with all of our covenants under our Indenture.

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Fair Value Measurement Disclosures

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement Disclosures

7. Fair Value Measurement Disclosures

Fair Value of Financial Instruments

Cash and cash equivalents, receivables, as well as accounts payable and accrued expenses, and other current liabilities, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of our other long-term debt instruments, approximate their carrying amounts as the interest rates approximate our current borrowing rate for similar debt instruments of comparable maturity, or have variable interest rates.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value of the senior secured notes are estimated using market quotes from a major financial institution taking into consideration the most recent activity and are considered Level 2 measurements within the fair value hierarchy.  The fair value of the Series B cumulative exchangeable redeemable preferred stock and the promissory notes payable were based upon either: (a)  unobservable market quotes from a major financial institution taking into consideration the most recent activity or (b) discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

The estimated fair values of our financial instruments are as follows (in millions):

		June 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
Description	Hierarchy	Amount		Value		Amount		Value
12.5% senior secured notes due 2017	Level 2	$	275.0		285.7	$	275.0		286.5
10 3/4% Series B cumulative exchangeable      redeemable preferred stock	Level 3		141.2		63.3		136.4		61.8
Promissory note payable, included in other long-      term debt	Level 3		5.1		4.5		5.2		4.5

Fair Value of Derivative Instruments

The following table represents required quantitative disclosures regarding fair values of our derivative instruments (in thousands).

			Fair value measurements at June 30, 2015
			Liabilities
Description	June 30, 2015 carrying value and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	327		—		327		—

			Fair value measurements at December 31, 2014
			Liabilities
Description	December 31, 2014 carrying value  and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	408		—		408		—

The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk. There were no transfers between Levels during the three- and six-month periods ended June 30, 2015 and 2014, respectively.

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
Interest rate swaps	2015		2014		2015		2014
Gain recognized in other comprehensive loss      (effective portion)	$	49		36		81		75

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Derivative Instrument and Hedging Activity

6 Months Ended

Jun. 30, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instrument and Hedging Activity

8. Derivative Instrument and Hedging Activity

On January 4, 2007, in connection with a promissory note issued for the acquisition of a building, we entered into a ten-year interest rate swap agreement for the original notional principal amount of $7.7 million whereby we agreed to 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.

Our interest rate swap is governed by a master netting arrangement, which is required to be disclosed as a balance sheet offsetting item as follows (in thousands):

As of June 30, 2015

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

327

—

327

327

—

—

As of December 31, 2014

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

408

—

408

408

—

—

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Ten Point Seven Five Percent Series B Cumulative Exchangeable Redeemable Preferred Stock

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock

10. 10 ³/4% Series B Cumulative Exchangeable Redeemable Preferred Stock

Voting Rights Triggering Event

Pursuant to the Certificate of Designations, each holder of shares of our Series B preferred stock had the right, on October 15, 2013, to request that we repurchase (subject to the legal availability of funds and the Delaware General Corporate Law) all or a portion of such holder’s shares of Series B preferred stock at a purchase price equal to 100% of  the liquidation preference of such shares, plus all accumulated and unpaid dividends (as described in more detail below) on those shares to the date of repurchase.

On October 15, 2013, holders of shares ofour Series B preferred stock requested that we repurchase 92,223 shares of Series B preferred stock for an aggregate repurchase price of $126.9 million, which included accumulated and unpaid dividends on these shares as of October 15, 2013. We did not have sufficient funds legally available to repurchase all of the Series B preferred stock for which we received requests and instead used the limited funds legally available to us to repurchase 1,800shares for a purchase price of approximately $2.5 million, which included accrued and unpaid dividends. Consequently, a “voting rights triggering event” occurred(the “Voting Rights Triggering Event”).

Following the occurrence and during the continuationof the Voting Rights Triggering Event, holders of theoutstanding Series B preferred stock are entitled to elect two directors to newly created positions on our Board of Directors and we will be subject to more restrictiveoperating covenants, including a prohibition on our ability to incur any additional indebtedness and restrictions on our ability to pay dividends or make distributions, redeem or repurchase securities, make investments, enter into transactions with affiliates or merge or consolidate with (or sell substantially all of our assets to) any other person. On June 4, 2015, we held our Annual Meeting of Stockholders (“Annual Meeting”).  Alan Miller and Gary Stone, the two directors elected by the holders of the Series B preferred stock at the 2014 annual meeting were not subject to election at this year’s Annual Meeting and continue to serve as directors.  

The Voting Rights Triggering Event shall continue until (i) all dividends in arrears shall have been paid in full and (ii) all other failures, breaches or defaults giving rise to such Voting Rights Triggering Event are remedied or waived by the holders of at least a majority of the shares of the then outstanding Series B preferred stock.  We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Voting Rights Triggering Event. During the continuation of the Voting Rights Triggering Event, the Indenture governing our Notes prohibits us from paying dividends or from repurchasing the Series B preferred stock.

Quarterly Dividends

Under the terms of our Series B preferred stock, the holders of the outstanding shares of the Series B preferred stock are entitled to receive, when, as and if declared by the Board of Directors out of funds of the Company legally available therefor, dividends on the Series B preferred stock at a rate of 10 ¾% per year, of the $1,000 liquidation preference per share. All dividends are cumulative, whether or not earned or declared, and are payable quarterly in arrears on specified dividend payment dates. While the Voting Rights Triggering Event continues, we cannot pay dividends on the Series B preferred stock without causing a breach of covenants under the Indenture governing our Notes.  As of June 30, 2015, the aggregate cumulative unpaid dividends on the outstanding shares of the Series B preferred stock was approximately $50.7 million, which is accrued on our condensed consolidated balance sheet as 10 ¾% Series B cumulative exchangeable redeemable preferred stock.

Redemption Date and Subsequent Accounting Treatment of the Preferred Stock

Prior to October 15, 2013, the Series B preferred stock was considered “conditionally redeemable” because the redemption of the shares of Series B preferred stock was contingent on the Series B preferred stockholders requesting that their Series B preferred stock be repurchased on October 15, 2013. On October 15, 2013, almost all of the holders of the Series B preferred stock requested that we repurchase their shares of Series B preferred stock. As a result of their request, we assessed and determined that, under applicable accounting principles, the contingency had occurred, and the Series B preferred stock now met the definition of a “mandatorily redeemable” instrument under Accounting Standards Codification 480 “Distinguishing Liabilities from Equity” (“ASC 480”).  Although under Delaware law the Series B preferred stock is deemed equity, under ASC 480, if an instrument changes from being “conditionally redeemable” to “mandatorily redeemable,” then the financial instrument should be reclassified as a liability.  

In addition, the Series B preferred stock will be measured at each reporting date as the amount of cash that would be paid pursuant to the contract, had settlement occurred on the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest expense. Therefore, the accruing quarterly dividends of the Series B preferred stock will be recorded as interest expense (i.e. “Dividends on Series B preferred stock classified as interest expense”).

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Ten Point Seven Five Percent Series B Cumulative Exchangeable Redeemable Preferred Stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions		6 Months Ended
	Oct. 15, 2013	Jun. 30, 2015
10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract]
Rate of redemption of Preferred stock at purchase price		100.00%
Series B Preferred Stock
10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract]
Stock requested to be repurchased	92,223
Purchase price of stock requested to be repurchased	$ 126.9
Stock repurchased	1,800
Purchase price of stock repurchased	$ 2.5
Dividends on Series B preferred stock		10.75%
Liquidation preference per share		$ 1,000
Preferred stock outstanding carrying value		$ 50.7

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Derivative Instrument and Hedging Activity (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Interest Rate Swap Governed by Master Netting Arrangement

Our interest rate swap is governed by a master netting arrangement, which is required to be disclosed as a balance sheet offsetting item as follows (in thousands):

As of June 30, 2015

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

327

—

327

327

—

—

As of December 31, 2014

Gross amounts not offset in

the  balance sheet

Gross amounts of

Gross amounts

Net amounts of

Cash

recognized

offset in the

liabilities presented

Financial

collateral

Description

liabilities

balance sheet

in the balance sheet

Instruments

received

Net amount

Interest rate swap

$

408

—

408

408

—

—

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Income Taxes (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
U.S. federal income tax rate	35.00%
Additional tax liability based on audit result	$ 100,000
Significant of uncertain tax positions requiring recognition	$ 0	$ 0

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Unaudited Condensed Consolidated Statement of Changes in Stockholders' Deficit - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Total	Preferred Stock Series C convertible preferred stock	Common Stock Class A common stock	Common Stock Class B common stock	Additional paid-in capital	Accumulated other comprehensive loss, net	Accumulated deficit
Beginning Balance at Dec. 31, 2014	$ (74,205)	$ 4			$ 525,335	$ (408)	$ (599,136)
Net loss	(12,200)						(12,200)
Unrealized gain on derivative instrument	81					81
Ending Balance at Jun. 30, 2015	$ (86,324)	$ 4			$ 525,335	$ (327)	$ (611,336)
Beginning Balance, Shares at Dec. 31, 2014		380,000	4,166,991	2,340,353
Ending Balance, Shares at Jun. 30, 2015		380,000	4,166,991	2,340,353

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Operating Segments

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Operating Segments

4. Operating Segments

We have two reportable segments: radio and television.

The following summary table presents separate financial data for each of our operating segments (in thousands):  

	Three-Months Ended						Six-Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net revenue:
Radio	$	34,492			36,019		$	63,719			65,464
Television		3,608			4,868			6,523			8,202
Consolidated	$	38,100			40,887		$	70,242			73,666
Engineering and programming expenses:
Radio	$	6,163			5,357		$	11,562			10,430
Television		1,777			2,217			4,042			4,656
Consolidated	$	7,940			7,574		$	15,604			15,086
Selling, general and administrative expenses:
Radio	$	15,485			17,004		$	29,133			31,091
Television		856			2,700			2,470			4,367
Consolidated	$	16,341			19,704		$	31,603			35,458
Corporate expenses:	$	2,424			3,744		$	4,572			5,448
Depreciation and amortization:
Radio	$	424			480		$	931			981
Television		663			691			1,347			1,382
Corporate		96			88			192			171
Consolidated	$	1,183			1,259		$	2,470			2,534
(Gain) loss on the disposal of assets, net:
Radio	$	(62	)		(1,250	)	$	(68	)		(1,204	)
Television		1			—			1			—
Corporate		(11	)		—			(11	)		—
Consolidated	$	(72	)		(1,250	)	$	(78	)		(1,204	)
Impairment charges and restructuring costs:
Radio	$	—			—		$	—			—
Television		—			—			—			—
Corporate		(137	)		(73	)		(137	)		(73	)
Consolidated	$	(137	)		(73	)	$	(137	)		(73	)
Operating income (loss):
Radio	$	12,482			14,428		$	22,161			24,166
Television		311			(740	)		(1,337	)		(2,203	)
Corporate		(2,372	)		(3,759	)		(4,616	)		(5,546	)
Consolidated	$	10,421			9,929		$	16,208			16,417
Capital expenditures:
Radio	$	277			382		$	450			782
Television		98			111			182			225
Corporate		64			93			92			190
Consolidated	$	439			586		$	724			1,197

	June 30,		December 31,
	2015		2014
Total Assets:
Radio	$	386,997	$	389,394
Television		52,316		51,876
Corporate		8,723		10,543
Consolidated	$	448,036	$	451,813

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Commitments and Contingencies (Details Textual)	Jun. 30, 2015	Feb. 07, 2012
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen
Disclosure Commitments And Contingencies Details Textual [Line Items]
Interest rate on Senior secured notes due 2017	12.50%	12.50%

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Fair Value Measurement Disclosures (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instrument

The estimated fair values of our financial instruments are as follows (in millions):

		June 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
Description	Hierarchy	Amount		Value		Amount		Value
12.5% senior secured notes due 2017	Level 2	$	275.0		285.7	$	275.0		286.5
10 3/4% Series B cumulative exchangeable      redeemable preferred stock	Level 3		141.2		63.3		136.4		61.8
Promissory note payable, included in other long-      term debt	Level 3		5.1		4.5		5.2		4.5

Fair Value of Derivative Instruments

The following table represents required quantitative disclosures regarding fair values of our derivative instruments (in thousands).

			Fair value measurements at June 30, 2015
			Liabilities
Description	June 30, 2015 carrying value and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	327		—		327		—

			Fair value measurements at December 31, 2014
			Liabilities
Description	December 31, 2014 carrying value  and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow hedging instrument:
Interest rate swap liability	$	408		—		408		—

Interest Rate Swaps

The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk. There were no transfers between Levels during the three- and six-month periods ended June 30, 2015 and 2014, respectively.

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
Interest rate swaps	2015		2014		2015		2014
Gain recognized in other comprehensive loss      (effective portion)	$	49		36		81		75