iHeartMedia 2000 Annual Report Download - page 28

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28
Operational Risks. We intend to grow through the acquisition of radio broadcasting companie s
and assets, outdoor advertising companies, individual outdoor advertising display faces, live
entertainment companies and assets and other assets that we believe will assist our clients in marketing
their products and services. Our acquisition strategy involves numerous risks, including:
• certain of our acquisitions may prove unprofitable and fail to generate anticipated cash flows;
• successfully managing a rapidly expanding and significantly larger portfolio of broadcasting and
outdoor advertising properties, possibly needing to recruit additional senior management and expand
corporate infrastructure;
• successfully managing our new live entertainment assets;
• encountering difficulties in the integration of operations and systems;
• our management’ s attention may be diverted from other business concerns; and
• we may lose key employees of acquired companies or stations.
Capital Requirements Necessary for Additional Acquisitions. We will face stiff competition from
other radio broadcasting, outdoor advertising and live entertainment companies for acquisition
opportunities. If the prices sought by sellers of these companies continue to rise, we may find fewer
acceptable acquisition opportunities. In addition, the purchase price of possible acquisitions could require
additional debt or equity financing on our part. We can give no assurance that we will obtain the needed
financing or that we will obtain such financing on attractive terms. Additional indebtedness could
increase our leverage and make us more vulnerable to economic downturns and may limit our ability to
withstand competitive pressures. Additional equity financing could result in dilution to our stockholders.
New Technologies May Affect Our Broadcasting Operations
The FCC is considering ways to introduce new technologies to the broadcasting industry,
including satellite and terrestrial delivery of digital audio broadcasting and the standardization of
available technologies which significantly enhance the sound quality of AM broadcasts. We are unable to
predict the effect such technologies will have on our broadcasting operations, but the capital expenditures
necessary to implement such technologies could be substantial. We also face risks in implementing the
conversion of our television stations to digital television, which the FCC has ordered and for which it has
established a timetable. We will incur considerable expense in the conversion to digital television and are
unable to predict the extent or timing of consumer demand for any such dig ital television services.
Moreover, the FCC may impose additional public service obligations on television broadcasters in return
for their use of the digital television spectrum. This could add to our operational costs. One issue yet to
be resolved is the extent to which cable systems will be required to carry broadcasters’ new digital
channels. Our television stations are highly dependent on their carriage by cable systems in the areas they
serve. Thus, FCC rules that impose no or limited obligations on cable systems to carry the digital
television signals of television broadcast stations in their local markets could adversely affect our
television operations.
Caution Concerning Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements made by us or on our behalf. Except for the historical information, this report contains various
forward-looking statements which represent our expectations or beliefs concerning future events,
including the future levels of cash flow from operations. Management believes that all statements that
express expectations and projections with respect to future matters, including the strategic fit of radio
assets; expansion of market share; our ability to capitalize on synergies between the live entertainment
and radio broadcasting businesses; our ability to negotiate contracts having more favorable terms; and the