iHeartMedia 2007 Annual Report Download - page 31

We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to
pursue additional acquisitions and may decide to dispose of certain businesses. These acquisitions or dispositions could be material.
Capital requirements necessary to implement strategic initiatives could pose risks
The purchase price of possible acquisitions and/or other strategic initiatives could require additional debt or equity financing on our part.
Since the terms and availability of this financing depend to a large degree upon general economic conditions and third parties over which we
have no control, we can give no assurance that we will obtain the needed financing or that we will obtain such financing on attractive terms. In
addition, our ability to obtain financing depends on a number of other factors, many of which are also beyond our control, such as interest rates
and national and local business conditions. If the cost of obtaining needed financing is too high or the terms of such financing are otherwise
unacceptable in relation to the strategic opportunity we are presented with, we may 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.
We face intense competition in the broadcasting and outdoor advertising 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 revenue with
other radio stations and outdoor advertising companies, as well as with other media, such as newspapers, magazines, television, direct mail,
satellite radio 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 revenue in that market. Our competitors may develop services or advertising media 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. An increased level of competition for advertising dollars
may lead to lower advertising rates as we attempt to retain customers or may cause us to lose customers to our competitors who offer lower
rates that we are unable or unwilling to match.
Our financial performance may be adversely affected by certain variables which are not in our control
Certain variables that could adversely affect our financial performance by, among other things, leading to decreases in overall revenue,
the numbers of advertising customers, advertising fees, or profit margins include:
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• certain of our acquisitions may prove unprofitable and fail to generate anticipated cash flows;
• to successfully manage our large portfolio of broadcasting, outdoor advertising and other properties, we may need to:
• recruit additional senior management as we cannot be assured that senior management of acquired companies will continue to
work for us and we cannot be certain that any of our recruiting efforts will succeed, and
• expand corporate infrastructure to facilitate the integration of our operations with those of acquired properties, because failure
to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our
ongoing businesses or by distracting our management;
• entry into markets and geographic areas where we have limited or no experience;
• we may encounter difficulties in the integration of operations and systems;
• our managemen
t
’s attention may be diverted from other business concerns; and
• we may lose key employees of acquired companies or stations.
• unfavorable shifts in population and other demographics which may cause us to lose advertising customers 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;
• unfavorable fluctuations in operating costs which we may be unwilling or unable to pass through to our customers;
• the impact of potential new royalties charged for terrestrial radio broadcasting which could materially increase our expenses;
• unfavorable changes in labor conditions which may require us to spend more to retain and attract key employees; an
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