iHeartMedia 2002 Annual Report Download - page 23

decide to forego that opportunity. 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 shareholders.
We Face Intense Competition in the Broadcasting, Outdoor Advertising and Live Entertainment Industries
Our business segments are in highly competitive industries, and we may not be able to maintain or increase our current audience ratings and
advertising and sales revenues. Our radio stations and outdoor advertising properties compete for audiences and advertising revenues with other
radio stations and outdoor advertising companies, as well as with other media, such as newspapers, magazines, television, direct mail and
Internet based media, within their respective markets. Audience ratings and market shares are subject to change, which could have the effect of
reducing our revenues in that market. Our live entertainment operations compete with other venues to serve artists likely to perform in that
general region and, in the markets in which we promote musical concerts, we face competition from promoters, as well as from certain artists
who promote their own concerts. These competitors may engage in more extensive development efforts, undertake more far reaching marketing
campaigns, adopt more aggressive pricing policies and make more attractive offers to existing and potential customers or artists. Our
competitors may develop services, advertising media or entertainment venues that are equal or superior to those we provide or that achieve
greater market acceptance and brand recognition than we achieve. It is possible that new competitors may emerge and rapidly acquire
significant market share in any of our business segments. Other variables that could adversely affect our financial performance by, among other
things, leading to decreases in overall revenues, the numbers of advertising customers, advertising fees, event attendance, ticket prices or profit
margins include:
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.
23
•unfavorable economic conditions, both general and relative to the radio broadcasting, outdoor advertising, live entertainment and all
related media industries, which may cause companies to reduce their expenditures on advertising or corporate sponsorship or reduce
the number of persons willing to attend live entertainment events;
•unfavorable shifts in population and other demographics which may cause us to lose advertising customers and audience as people
migrate to markets where we have a smaller presence, or which may cause advertisers to be willing to pay less in advertising fees if
the general population shifts into a less desirable age or geographical demographic from an advertising perspective;
•an increased level of competition for advertising dollars, which may lead to lower advertising rates as we attempt to retain customers
or which may cause us to lose customers to our competitors who offer lower rates that we are unable or unwilling to match;
•unfavorable fluctuations in operating costs which we may be unwilling or unable to pass through to our customers;
•technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive advertising or
entertainment alternatives than what we currently offer, which may lead to a loss of advertising customers or ticket sales, or to lower
advertising rates or ticket prices;
•unfavorable changes in labor conditions which may require us to spend more to retain and attract key employees; an
d
•changes in governmental regulations and policies and actions of federal regulatory bodies which could restrict the advertising media
which we employ or restrict some or all of our customers that operate in regulated areas from using certain advertising media, or
from advertising at all, or which may restrict the operation of live entertainment events.