iHeartMedia 2001 Annual Report Download - page 29

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29
• changes in governmental regulations and policies and actions of federal regulatory bodies
which could restrict the advertising mediums which we employ or restrict some or all of our
customers that operate in regulated areas from using certain advertising mediums, or from
advertising at all, or which may restrict the operation of live entertainment events.
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 radio 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 and other companies
employing such technologies could compete with our businesses. 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 digital 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 require us to make
significant expenditures to arrange for carriage by cable systems of our television stations or result in
some of our television stations not being carried on cable systems.
Our Live Entertainment Business is Highly Sensitive to Public Tastes and Dependent on Our Ability to
Secure Popular Artists, Live Entertainment Events and Venues
Our ability to generate revenues through our live entertainment operations is highly sensitive to
rapidly changing public tastes and dependent on the availability of popular performers and events. Since
we rely on unrelated parties to create and perform live entertainment content, any lack of availability of
popular musical artists, touring Broadway shows, specialized motor sports talent and other performers
could limit our ability to generate revenues. In addition, we require access to venues to generate revenues
from live entertainment events. We operate a number of our live entertainment venues under leasing or
booking agreements. Our long-term success in the live entertainment business will depend in part on our
ability to renew these agreements when they expire or end. As many of these agreements are with third
parties over which we have little or no control, we may be unable to renew these agreements on
acceptable terms or at all, and may be unable to obtain favorable agreements with new venues. Our
ability to renew these agreements or obtain new agreements on favorable terms depends on a number of
other factors, many of which are also beyond our control, such as national and local business conditions.
If the cost of renewing these agreements is too high or the terms of any new agreement with a new venue
are unacceptable or incompatible with our existing operations, we may decide to forego these
opportunities. In addition, our competitors may offer more favorable terms than we do in order to obtain
agreements for new venues.