The asset sale to Entravision is subject to prior initial approval by the FCC under the Communications Act of 1934 as amended, or the Communications Act. Third parties may file with the FCC petitions to deny or informal objections requesting denial of or the imposition of conditions on the FCC’s approval of the asset sale. The FCC could seek to prevent completion of the asset sale or condition approval of the asset sale on Entravision’s agreement to divest itself of other assets or to accept other restrictions or conditions with respect to its operations. Such ~~opposition~~objections to the asset sale or the imposition of such restrictions or conditions could:

delay completion of the asset sale and increase the risk that the holders of Big City Radio’s senior notes may seek to exercise their remedies against Big City Radio, which could result in Big City Radio having to seek protection from its creditors under the United States bankruptcy code;

diminish the anticipated benefits of the asset sale to Entravision and its stockholders, and to Big City Radio and its stockholders, by adversely affecting Entravision’s operations after completion of the transaction; and

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result in additional transaction costs and other effects associated with uncertainty about the timing of the completion of the asset sale.

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~~result in additional transaction costs and other effects associated with uncertainty about the timing of the completion of the asset sale.~~

There can be no assurance that the FCC will grant its consent to the assignment before the termination date of September 23, 2003 under the Asset Purchase Agreement.

Failure to complete the asset sale to Entravision could negatively affect Big City Radio’s ability to sell its Los Angeles area radio stations to another buyer at a price or by a date necessary to enable Big City Radio to repay its senior notes.

If the asset sale to Entravision is not completed for any reason, Big City Radio may not be able to dispose of its Los Angeles area radio stations for a price at least equal to the price Entravision has agreed to pay for those assets or on other terms at least as favorable to Big City Radio. In addition, Big City Radio may be unable to find another buyer for the Los Angeles area radio stations or complete a sale to such a buyer by a date which is acceptable to the holders of its senior notes. Any failure by Big City Radio to complete a timely sale of its Los Angeles area stations at a price, together with the prices received in the other Big City Radio station sales, sufficient to generate required proceeds under the forbearance agreement could result in Big City Radio having to seek protection from its creditors under the United States bankruptcy code.

Big City Radio’s forbearance agreement with some holders of its senior notes may not prevent action by ~~the~~such noteholders, other noteholders or the indenture trustee to exercise their remedies against Big City Radio before the asset sale is completed.

In consideration for Big City Radio’s agreement to sell its radio stations to raise the funds necessary to pay all principal of, and accrued and unpaid interest on, its senior notes, holders of approximately 75% in principal amount of the senior notes acting through an ad hoc committee have agreed not to enforce Big City Radio’s payment obligations under the senior notes until March 31, 2003, based on existing defaults known to the noteholders as of November 13, 2002. The forbearance agreement may not prevent the exercise of remedies by ~~the~~such noteholders, other noteholders or the indenture trustee against Big City Radio before the asset sale is completed because:

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the noteholders that are parties to the forbearance agreement may refuse to extend the term of the agreement if, among other reasons, they determine that Big City Radio has not made satisfactory progress in selling its radio stations;

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the forbearance agreement is limited to existing defaults known to the noteholders as of November 13, 2002, and does not prevent the noteholders from exercising remedies for defaults unknown to the noteholders as of that date or arising after that date;

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~~the noteholders may terminate the forbearance agreement upon a failure by Big City Radio to comply with the terms of the forbearance agreement;~~

the noteholders may terminate the forbearance agreement upon a failure by Big City Radio to comply with its terms;

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the noteholders may terminate the forbearance agreement if Big City Radio or the buyer under any current asset purchase agreement, including the Asset Purchase Agreement, fails to comply with the terms of the applicable agreement, or if any such asset purchase agreement is terminated or modified in any material respect; and

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~~remedies may be exercised by the trustee under the senior notes indenture or by the noteholders who are not parties to the forbearance agreement, none of whom is bound by the agreement.~~

remedies may be exercised by the trustee under the senior notes indenture or by the noteholders who are not parties to the forbearance agreement, none of whom is bound by the agreement.

Neither the asset sale to Entravision nor the three other pending station sales will be completed before March 31, 2003, which is the current expiration date of the forbearance agreement. As of the date of this joint information statement/prospectus, the FCC had not granted initial approval, which is a non-waivable closing condition to each of the four pending transactions, to the asset sale to Entravision or the pending station sale to HBC Illinois, Inc. Although the FCC has granted initial approval to the pending station sales to Nassau Broadcasting Holdings, Inc. and Spanish Broadcasting System of Illinois, Inc., those two transactions cannot be completed until the first half of April, assuming the other closing conditions are satisfied. The net sales proceeds to be received by Big City Radio from those two transactions will not be sufficient to enable Big City Radio to pay all principal of, and accrued and unpaid interest on, the senior notes, as required under the forbearance agreement. Big City Radio intends to request the noteholders committee before March 31 to agree to an extension of the term of the forbearance agreement. There can be no assurance that the noteholders committee will agree to such an extension, or if it grants such an extension, that it will agree to any further extensions that Big City Radio may request.

If the noteholders or the indenture trustee were to seek to enforce their remedies, whether before or following any termination of the forbearance agreement, Big City Radio may be compelled to seek protection from its creditors under the United States bankruptcy code. For more information regarding the terms of the forbearance agreement, see “Information About Big City Radio—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

The value of Entravision’s Class A common stock to be issued to Big City Radio when the asset sale is completed could be less than the value at the time the Asset Purchase Agreement was signed.

The Asset Purchase Agreement does not contain any price adjustment provisions designed to protect Big City Radio against a decline in the value of Entravision’s Class A common stock before Big City Radio receives the stock at the completion of the asset sale. The number of shares of Entravision’s Class A common stock to be issued as consideration in the asset sale is fixed at 3,766,478 shares in the Asset Purchase Agreement and will not be adjusted based on changes in market price to ensure that Big City Radio receives shares with a specified value. When the Asset Purchase Agreement was signed, the shares to be issued to Big City Radio were valued at $40 million based on a price of $10.62 per share, which represented the average closing price of the shares as reported by The New York Stock Exchange for the 20 consecutive trading days ending on December 18, 2002. The market price of Entravision’s Class A common stock will vary from the price of $10.62 per share before the closing of the asset sale because of changes in the business, operations or prospects of Entravision, market assessments of the likelihood that the asset sale will be completed and the timing of completion, general market and economic conditions and other factors that may be beyond the parties’ control. If the market price of Entravision’s Class A common stock is less than $10.62 per share at the time Entravision and Big City Radio complete the asset sale, the portion of the purchase price represented by the shares on the closing date will be less than $40 million. Based on the closing sale price of Entravision’s Class A common stock as reported by The New

York Stock Exchange on ,March 17, 2003, the last full trading day before the date of this joint information statement/prospectus, the shares to be issued to Big City Radio had an aggregate value of approximately $$23.5 million.

If and when Big City Radio seeks to sell its Entravision shares after completion of the asset sale, it may not be able to do so for a price that approximates the closing date value.

Big City Radio may be required to sell at least a portion of its shares of Entravision’s Class A common stock after completion of the asset sale to generate additional cash to repay its senior notes and to satisfy its other liabilities and obligations. For so long as Big City Radio holds shares of Entravision’s Class A common stock, it will be subject to the risk that the market price of the shares may decline as a result of, among other factors, the risks described below under “Risks Related to Entravision’s Business.” Big City Radio may not be able to sell its shares of Entravision’s Class A common stock for a price equal to the market price of Entravision’s Class A common stock on the closing date of the asset sale.

If Entravision does not successfully integrate the acquired radio stations into its overall business strategy, Entravision may fail to realize some or all of the potential benefits of the asset sale, which could adversely affect the market price of its Class A common stock.

In an effort to integrate the three Los Angeles area radio stations to be acquired from Big City Radio into its overall business strategy, Entravision intends to consider various options. These options include implementing

changes to the programming format, and may also include selling one or two of the stations. If Entravision fails to integrate the stations successfully into its overall business strategy, it may not achieve the intended benefits of the asset sale. Some of these potential benefits include lower operating costs, lower promotional costs, the opportunity for cross-promotion and faster revenue growth. If Entravision’s earnings per share are less than, or its loss per share is greater than, the earnings (or loss) Entravision would have ~~been~~ realized if it had not acquired the three Los Angeles area radio stations from Big City Radio, the price of Entravision’s Class A common stock could decrease. There can be no assurance that Entravision will achieve revenue growth, cost savings or other economies of scale as a result of the asset sale which are sufficient to offset the potentially dilutive impact of its issuance of Class A common stock to Big City Radio.

Big City Radio cannot determine at this time whether it will make any distributions of proceeds from the Entravision asset sale or the other Big City Radio station sales to its stockholders or the amount or timing of any such distributions.

Big City Radio cannot determine at this time whether or when it will make any distributions of proceeds from the Entravision asset sale or the other Big City Radio station sales to its stockholders, whether under a plan of dissolution or otherwise, or the amount of any such distributions. Those determinations will depend on various factors, some of which are not within Big City Radio’s control, including the following:

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whether, in the judgment of Big City Radio’s board of directors, it is in the best interests of Big City Radio and its stockholders, to distribute any remaining assets to Big City Radio’s stockholders or to seek to deploy those assets into new operations;

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~~the dates on which the asset sale with Entravision and the other pending Big City Radio station sales are completed;~~

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~~whether these asset sales are completed;~~

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the prices at which Big City Radio is able to sell the shares of Entravision’s Class A common stock it will receive in the asset sale, if Big City Radio determines to sell some or all of these shares;

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~~the amount of Big City Radio’s liabilities and other obligations to be paid in the future;~~

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~~the resolution of pending litigation and other contingent liabilities;~~

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~~the outcome of pending or proposed tax legislation; and~~

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~~general business and economic conditions.~~

~~Because of the foregoing uncertainties, Big City Radio cannot assure its stockholders that~~ it will have any assets available for distribution to its stockholders, under a plan of dissolution or otherwise, from the proceeds of the asset sales and the other Big City Radio station sales, or, if it does have assets available for distribution, that it will make a distribution of any or all of such assets. Those determinations will depend on various factors, some of which are not within Big City Radio’s control, including the following:

whether, in the judgment of Big City Radio’s board of directors, it is in the best interests of Big City Radio and its stockholders to distribute any remaining assets to Big City Radio’s stockholders or to seek to deploy those assets into new operations;

the dates on which the asset sale to Entravision and the other pending Big City Radio station sales are completed;

whether these asset sales are completed;

the amount of Big City Radio’s liabilities and other obligations to be paid in the future;

the resolution of pending litigation and other contingent liabilities;

the outcome of pending or proposed tax legislation; and

general business and economic conditions.

Risks Related to Entravision’s Business

Entravision has a history of losses that, if continued, could adversely affect the market price of its securities and its ability to raise capital.

Entravision had net losses of approximately ~~$7.7~~$10.6 million, $65.8 million, and ~~$43.9 million for the nine-month periods ended September 30, 2002 and 2001, respectively, and net losses of approximately $65.8 million,~~ $92.2 ~~million and $40~~ million for the years ended December 31, 2002, 2001, ~~2000~~ and ~~1999,~~2000, respectively. In addition, Entravision had a pro forma net ~~losses~~loss applicable to common stock of $88.8 million ~~and $37.6 million~~ for the ~~years~~year ended December 31, ~~2000 and 1999, respectively.~~2000. Entravision had net losses applicable to common stock of ~~$15.2~~$20.8 million, ~~and $48.5 million for the nine-month periods ended September 30, 2002 and 2001, respectively, and~~ $75.9 million and $94.7 million for the years ended December 31, 2002, 2001 and 2000, respectively. If Entravision cannot generate profits in the future, its failure to do so could adversely affect the market price of its securities,

which in turn could adversely affect Entravision’s ability to raise additional equity capital or to incur additional debt.

If Entravision cannot raise required capital, it may have to curtail existing operations and its future growth through acquisitions.

Entravision may require significant additional capital for future acquisitions and general working capital and debt service needs. If Entravision’s cash flow and existing working capital are not sufficient to fund future acquisitions and its general working capital and debt service requirements, Entravision will have to raise additional funds by selling equity, refinancing some or all of its existing debt or selling assets or subsidiaries. None of these alternatives for raising additional funds may be available on acceptable terms to Entravision or in amounts sufficient for it to meet its requirements. In addition, Entravision’s ability to raise additional funds is limited by the terms of its bank credit facility and the indenture governing its senior subordinated notes. Entravision’s failure to obtain any required new financing may prevent future ~~acquisitions and have a material adverse effect on its ability to grow through~~ acquisitions.

Entravision’s substantial level of debt could limit its ability to grow and compete.

As of December 31, 2002, Entravision had approximately $66 million of debt outstanding under its bank credit facility, and $225 million principal amount of its senior subordinated notes. In addition, Entravision expects to draw down from its bank credit facility to pay the cash portion of the total consideration to be paid to Big City Radio to acquire the Los Angeles area radio stations.

A significant portion of Entravision’s cash flow from operations will be dedicated to servicing its debt obligations, and its ability to obtain additional financing may be limited. Entravision may not have sufficient future cash flow to meet its debt payments, or it may not be able to refinance any of its debt at maturity. Entravision has pledged substantially all of its assets to its lenders as collateral. Entravision’s lenders could proceed against the collateral to repay outstanding indebtedness if Entravision is unable to meet its debt service obligations. If the amounts outstanding under Entravision’s bank credit facility are accelerated, its assets may not be sufficient to repay in full the money owed to such lenders.

Entravision’s substantial indebtedness could have important consequences to its business, such as:

limiting its ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of its growth strategy or other purposes; and

placing Entravision at a disadvantage compared to those of its competitors who have less debt.

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~~limiting its ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of its growth strategy or other purposes; and~~

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~~placing Entravision at a disadvantage compared to those of its competitors who have less debt.~~

The indenture for the senior subordinated notes and the credit agreement governing Entravision’s bank credit facility contain various covenants that limit management’s discretion in the operations of Entravision’s business and could limit Entravision’s ability to grow and compete.

The indenture governing Entravision’s senior subordinated notes and the credit agreement governing Entravision’s bank credit facility contain various provisions that limit Entravision’s ability to:

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~~incur additional debt and issue preferred stock;~~

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~~pay dividends and make other distributions;~~

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~~make investments and other restricted payments;~~

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~~create liens;~~

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~~sell assets; and~~

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~~enter into certain transactions with affiliates.~~

incur additional debt and issue preferred stock;

pay dividends and make other distributions;

make investments and other restricted payments;

create liens;

sell assets; and

enter into certain transactions with affiliates.

These provisions restrict management’s ability to operate Entravision’s business in accordance with management’s discretion and could limit Entravision’s ability to grow and compete.

If Entravision fails to comply with any of its financial covenants or ratios under its financing agreements, its lenders could:

elect to declare all amounts borrowed to be immediately due and payable, together with accrued and unpaid interest; and/or

terminate their commitments, if any, to make further extensions of credit.

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~~elect to declare all amounts borrowed to be immediately due and payable, together with accrued and unpaid interest; and/or~~

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~~terminate their commitments, if any, to make further extensions of credit.~~

In addition, a breach of some of the restrictions or covenants under the indenture governing the senior subordinated notes, or an acceleration by its senior secured lenders of Entravision’s obligations to them, would cause a default under the senior subordinated notes. Entravision may not have, or be able to obtain, sufficient funds to make accelerated payments, including payments on the senior subordinated notes, or to repay the senior subordinated notes in full after Entravision pays its senior secured lenders to the extent of their collateral.

Entravision’s failure to maintain its FCC broadcast licenses could cause a default under Entravision’s bank credit facility and cause an acceleration of its indebtedness.

Entravision’s bank credit facility requires Entravision to maintain its FCC licenses. If the FCC were to revoke any of Entravision’s material licenses, its lenders could declare all amounts outstanding under the bank credit facility to be immediately due and payable. If Entravision’s indebtedness is accelerated, it may not have sufficient funds to pay the amounts owed.

Cancellations or reductions of advertising could adversely affect Entravision’s results of operations.

Entravision does not obtain long-term commitments from its advertisers, and advertisers may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising could adversely affect Entravision’s revenue, especially if itEntravision is unable to replace such purchases. Entravision’s expense levels are based, in part, on expected future revenue and are relatively fixed once set. Therefore, unforeseen fluctuations in advertising sales could adversely impact Entravision’s operating results.

Univision’s tentative agreement with DOJ to sell a significant portion of its equity interest in Entravision over the next six years could have an adverse affect on the market price of Entravision’s securities.

In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision announced in February 2003 that it had reached a tentative agreement with DOJ pursuant to which Univision agreed, among

other things, to sell enough of its Entravision stock so that its ownership of Entravision will not exceed 15% at the end of three years and 10% at the end of six years. Univision currently owns approximately 31% of Entravision’s outstanding capital stock. If Univision’s agreement with DOJ is finalized in its proposed form, as is currently anticipated, the pending future sale of a substantial number of shares could create a long-term downward pressure on the market price of Entravision’s securities, also known as an overhang. Any such overhang could limit Entravision’s access to the capital markets for the foreseeable future.

Univision’s ability to exert significant influence over Entravision’s business may make some transactions difficult or impossible to complete without Univision’s support.

Univision, as the holder of all of Entravision’s Class C common stock, has the ability to exert significant influence over material decisions relating to Entravision’s business. This influence includes the right to elect two of Entravision’s directors and the right to approve material decisions involving Entravision, including any merger, consolidation or other business combination, any dissolution of Entravision and any assignment of the FCC licenses for any of Entravision’s Univision-affiliated television stations.

In connection with Univision’s proposed merger with Hispanic Broadcasting Corporation, the two Univision-elected directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time. In addition, Univision’s tentative agreement with DOJ requires that all of Univision’s shares of Entravision capital stock be converted into a new series of non-voting preferred stock. However, subject to regulatory approvals, such preferred stock would still include those approval rights set forth above. For more information, please see “Information About Entravision—Recent Developments” at page 55. Accordingly, Univision’s ownership interest, with respect to either Entravision’s Class C common stock or the proposed new series of non-voting preferred stock, may have the effect of delaying, deterring or preventing a change in control of Entravision and may make some transactions more difficult or impossible to complete without Univision’s support.

Entravision’s television ratings and revenue could decline significantly if its affiliation relationship with Univision or Univision’s programming success changes in an adverse manner.

If Entravision’s affiliation relationship with Univision changes in an adverse manner, or if Univision’s programming success diminishes, Entravision’s ability to generate television advertising revenue on which its television business depends could be negatively affected. Univision’s ratings might decline or Univision might

not continue to provide programming, marketing, available advertising time and other support to its affiliates on the same basis as currently provided. Additionally, by aligning itself closely with Univision, Entravision might forego other opportunities that could diversify its television programming and avoid dependence on Univision’s television networks. Univision’s relationships with Grupo Televisa, S.A. de C.V. and Corporacion Venezolana de Television, C.A., or Venevision, are important to Univision’s, and consequently Entravision’s, continued success.

Because three of Entravision’s directors and officers, and stockholders affiliated with them, hold the majority of Entravision’s voting power, they can ensure the outcome of most matters on which Entravision’s stockholders vote.

As of the date of this joint information statement/prospectus, Walter F. Ulloa, Philip C. Wilkinson and Paul Zevnik, each of whom is a director and officer of Entravision, together hold approximately 75% of the combined voting power of Entravision’s outstanding shares of common stock. In addition to their shares of Entravision’s Class A common stock, collectively they own all of the issued and outstanding shares of Entravision’s Class B common stock, which have ten votes per share on any matter subject to a vote of the stockholders. Accordingly, Messrs. Ulloa, Wilkinson and Zevnik have the ability to elect each of the members of Entravision’s board of directors, other than the two members of Entravision’s board of directors elected by Univision, ~~(which~~which seats are currently ~~vacant).~~vacant. Messrs. Ulloa, Wilkinson and Zevnik have agreed contractually to vote their shares to elect

themselves and a representative of TSG Capital Fund III, L.P. as directors of Entravision. Messrs. Ulloa, Wilkinson and Zevnik, acting ~~in concert,~~together, also have the ability to control the outcome of most matters requiring stockholder approval. This control may discourage certain types of transactions involving an actual or potential change of control of Entravision, such as a merger or sale of Entravision.

Displacement of any of Entravision’s low-power television stations could cause its ratings and revenue for any such station to decrease.

A significant portion of Entravision’s television stations are licensed by the FCC for low-power service only. Entravision’s low-power television stations operate with far less power and coverage than its full-power stations. The FCC rules under which Entravision operates provide that low-power television stations are treated as a secondary service. If any or all of Entravision’s low-power stations are found to cause interference to full-power stations, Entravision would be required to eliminate the interference or terminate service. As a result of the FCC’s initiation of digital television service and actions by Congress to reclaim broadcast spectrum, channels 52-69, previously used for broadcasting, will be cleared and put up for auction generally to wireless services or assignment to public safety services. In a few urban markets where Entravision operates, including Washington, D.C. and San Diego, there are a limited number of alternative channels to which Entravision’s low-power television stations could migrate as they are displaced by full-power digital broadcasters and non-broadcast services. If Entravision is unable to move the signals of its low-power television stations to replacement channels to the extent legally required, it may be unable to maintain the same level of service, which could harm its ratings and advertising revenue or, in the worst case, cause Entravision to discontinue operations at those low-power television stations.

Entravision may have difficulty meeting certain FCC deadlines to comply with the required conversion to digital television, and such conversion may not result in commercial benefit unless there is sufficient consumer demand.

The FCC required full-power television stations in the United States to begin broadcasting a digital television, or DTV, signal by May 1, 2002. The FCC has allocated an additional television channel to most such station owners so that each full-power television station can broadcast a DTV signal on the additional channel while continuing to broadcast an analog signal on the station’s original channel. As part of the transition from analog to DTV, full-power television station owners may be required to stop broadcasting analog signals and relinquish their analog channels to the FCC by 2006 if the market penetration of DTV receivers reaches certain levels by that time.

Entravision’s full-power television stations did not meet the May 1, 2002 deadline to begin broadcasting a DTV signal. In some cases, the inability to meet the deadline resulted from the FCC having not yet granted construction permits authorizing Entravision to build the facilities necessary to operate on Entravision’s allocated DTV channels. Some of Entravision’s other full-power television stations received construction permits from the FCC, but were not able to finish construction and begin broadcasting DTV signals before the May 1, 2002 deadline. The FCC granted Entravision extensions to complete construction of DTV facilities for Entravision’s full-power television stations that have received construction permits. These extensions will expire ~~on May 1,~~during the second quarter of 2003, unless further extended by the FCC. Entravision intends to complete construction of DTV facilities and commence DTV operations by constructing low-power facilities, as permitted by the FCC’s rules described in the next paragraph.

FCC rules allow Entravision to satisfy the obligation for its full-power television stations to begin broadcasting a DTV signal by broadcasting a signal that serves at least each full-power television station’s applicable community of license. In most instances, this rule permits Entravision to install temporary DTV facilities of a lower power level, which does not require the initial degree of capital investment that Entravision had anticipated to meet the requirements of its stations’ DTV authorizations. Entravision’s initial cost of converting its full-power stations to DTV, therefore, is considerably lower than it would have been if it were required to operate initially at the full signal strength provided for by its DTV authorizations.

Because Entravision’s full-power television stations rely on “must carry” rights to obtain cable carriage, new laws or regulations that eliminate or limit the scope of Entravision’s cable carriage rights could have a material adverse impact on its television operations.

Under the Cable Television Consumer Protection and Competition Act of 1992, or the Cable Act, each broadcast station is required to elect, every three years, to exercise the right either to require cable television system operators in its local market to carry its signal, or to prohibit cable carriage or condition it upon payment of a fee or other consideration. Under these “must carry” provisions of the Cable Act, a broadcaster may demand carriage on a specific channel on cable systems within its market. These “must carry” rights are not absolute, and under some circumstances, a cable system may decline to carry a given station. Entravision’s television stations, for the most part, elected “must carry” on local cable systems for the three-year election period which commenced January 1, 2003. The required election date for the next three-year election period commencing January 1, 2006 will be October 1, 2005.

The future of “must carry” rights is uncertain, especially as they relate to the extent of carriage of DTV stations. The FCC is developing rules to govern the obligations of cable television systems to carry local television stations during and following the transition from analog to DTV broadcasting. ~~Entravision cannot predict what final rules the FCC ultimately will adopt or what effect those rules will have on its business.~~

~~Current FCC rules generally relate only to the carriage of analog television signals.~~

The extent of the “must carry” rights television stations will have after they make the transition to DTV is not certain. So long as Entravision continues to broadcast in analog mode, the FCC has not yet required cable operators to carry Entravision’s digital signal. New laws or regulations that eliminate or limit the scope of Entravision’s cable carriage rights could have a material adverse impact on its television operations.

Entravision cannot predict what final rules the FCC ultimately will adopt or what effect those rules will have on Entravision’s business.

Entravision’s low-power television stations do not have cable “must carry” rights. Entravision may face future uncertainty with respect to the availability of cable carriage for its stations in seven markets where Entravision currently holds only a low-power license.

The policies of direct broadcast satellite companies may make it more difficult for their customers to receive Entravision’s local broadcast station signals.

The Satellite Home Viewer Improvement Act of 1999, or SHVIA, allows direct broadcast satellite, or DBS, television companies, which are currently DirecTV and EchoStar/Dish Network, for the first time to transmit

local broadcast television station signals back to their subscribers in local markets. In exchange for this privilege, however, SHVIA requires that in television markets in which a DBS company elects to pick up and retransmit any local broadcast station signals, the DBS provider must also offer to its subscribers signals from all other qualified local broadcast television stations in that market. ~~Entravision~~Entravision’s broadcast television stations in markets for which DBS operators have elected to carry local stations have sought to qualify for carriage under this “carry one/carry all” rule.

A controversy has arisen in the manner in which EchoStar/Dish Network has implemented the carry one/carry all rule. In order to get signals from all local stations, including the signals from Entravision’s stations, EchoStar/Dish Network subscribers were being required to install a second receiving dish to receive all of the local stations in some markets. This was an inconvenience for the typical DBS subscriber and, as a result, limited the size of the viewership for Entravision’s stations available only on the “second dish” under the carry one/carry all rule. The FCC has determined that EchoStar/Dish Network cannot require use of a second dish for carriage of local signals. EchoStar/Dish Network must implement alternative methods of complying with its SHVIA obligations, which has not resulted in EchoStar/Dish Network delivering certain of Entravision’s stations to its customers’ primary dish. EchoStar/Dish Network has petitioned the FCC for reconsideration of this decision, and other parties have asked for review as to whether EchoStar/Dish Network was entitled to comply by any means other than by placing all television stations on the same dish. At this time, Entravision cannot predict the outcome of this dispute or its effect on Entravision’s stations’ ability to reach viewers who subscribe to EchoStar/Dish Network services.

Risks Related to Entravision’s Capital Structure

Stockholders who desire to change control of Entravision may be prevented from doing so by provisions of Entravision’s first restated certificate of incorporation, the credit agreement governing Entravision’s bank credit facility and the indenture governing ~~its~~Entravision’s senior subordinated notes. In addition, other agreements contain provisions that could discourage a takeover.

Entravision’s first restated certificate of incorporation could make it more difficult for a third party to acquire Entravision, even if doing so would benefit Entravision’s stockholders. The provisions of Entravision’s certificate of incorporation could diminish the opportunities for a stockholder to participate in tender offers. In addition, under Entravision’s certificate of incorporation, ~~its~~Entravision’s board of directors may issue preferred stock on terms that could have the effect of delaying or preventing a change in control of Entravision. The issuance of preferred stock could also negatively affect the voting power of holders of Entravision’s common stock. The provisions of Entravision’s certificate of incorporation may have the effect of discouraging or preventing an acquisition or sale of ~~its~~Entravision’s business.

In addition, the agreements governing Entravision’s indebtedness and the senior subordinated notes contain limitations on Entravision’s ability to enter into a change of control transaction. Under these agreements, the occurrence of a change of control, in some cases after notice and grace periods, would constitute an event of default permitting acceleration of Entravision’s outstanding indebtedness.

The issuance by Entravision of preferred stock could adversely affect the rights of Entravision’s other stockholders.

Entravision’s certificate of incorporation authorizes Entravision’s board of directors to issue up to 50,000,000 shares of preferred stock in one or more series, to fix the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued shares of preferred stock, to fix the number of shares constituting any such series, and to fix the designation of any such series, without further vote or action by its stockholders. The terms of any series of preferred stock, which may include priority claims to assets and dividends and special voting rights, could adversely affect the rights of the holders of common stock and thereby reduce the value of Entravision’s common stock. Entravision has 5,865,102 million shares of Series A

mandatorily redeemable convertible preferred stock, or Series A preferred stock, ~~outstanding.~~outstanding , and currently expects to issue shares of a new series of preferred stock to Univision as described further under the caption “Information About Entravision—Recent Developments” at page 55. The issuance of preferred stock, coupled with the concentration of the voting power of common stock in three of Entravision’s directors and executive officers, could discourage transactions involving an actual or potential change in control of Entravision. These include transactions in which the holders of common stock might otherwise receive a premium for their shares over then current prices and may limit the ability of such stockholders to approve transactions which they may deem to be in their best interests.

If the holders of Entravision’s Series A preferred stock exercise their option to redeem their preferred stock on or after April 19, 2006, Entravision may not have sufficient funds to do so and it may be in default under the terms of its bank credit facility and/or the senior subordinated notes.

The holders of a majority of Entravision’s Series A preferred stock have the right on or after April 19, 2006 to require Entravision to redeem any or all of their preferred stock at the original issue price plus accrued dividends. On April 19, 2006, such redemption price would be approximately $143.5 million, and would continue to accrue a dividend of 8.5% per year. If Entravision has sufficient funds under Delaware law to pay the redemption price, but is prevented from redeeming this preferred stock because of restrictions in ~~its~~the indenture governing ~~the~~Entravision’s senior subordinated notes and/or its bank credit facility, Entravision would be in violation of the terms of the Series A preferred stock. In such event, Entravision may be in default under its bank credit facility and the holders of the Series A preferred stock may be able to obtain a judgment against Entravision. Any such judgment may be found to bepari passu with the claims of the holders of the senior

subordinated notes. In the event a judgment is obtained and remains unpaid, or the Series A preferred stock is paid in violation of Entravision’s bank credit facility or the indenture governing the senior subordinated notes, Entravision would be in default under its bank credit facility and the senior subordinated notes and it could be obligated to repay the obligations under its bank credit facility, if accelerated, and the senior subordinated notes, if accelerated. Entravision may not have sufficient funds at that time to pay all of its obligations in such event.

FORWARD-LOOKING STATEMENTS

This joint information statement/prospectus contains or incorporates by reference forward-looking statements, including statements concerning Entravision’s and/or Big City Radio’s expectations of future revenue, expenses, the outcome of their respective growth and acquisition strategies and the projected growth of the Hispanic population in the United States. Forward-looking statements often include words or phrases such as “will likely result,” “expect,” “will continue,” “anticipate,” “may,” “estimate,” “intend,” “plan,” “project,” “outlook,” “seek” or similar expressions. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond Entravision’s and Big City Radio’s control. These risks and uncertainties are difficult to predict and could cause actual results to differ materially from those expressed in the forward-looking statements. Factors which could cause actual results to differ from expectations include those discussed under “Risk Factors.” Entravision’s and Big City Radio’s respective results of operations may be adversely affected by one or more of these factors. These factors do not include all factors which might affect Entravision’s ~~and~~or Big City Radio’s respective business and financial condition. Entravision and Big City Radio caution you not to place undue reliance on these forward-looking statements, which reflect the view of their respective ~~management’s view~~managements only as of the date of this joint information statement/prospectus. Entravision and Big City Radio do not intend, and undertake no obligation, to update any forward-looking statement, except to the extent required by law.

Market data and industry and statistical information contained or incorporated by reference in this joint information statement/prospectus are based on independent industry publications, government publications, reports by market research firms or other published independent sources. Some of this information is also based on Entravision’s and Big City Radio’s good faith estimates, which are derived from a review of internal surveys, as well as the independent sources referred to above. Although Entravision and Big City Radio believe that these sources are reliable, Entravision and Big City Radio have not independently verified the information derived from these sources and cannot guarantee its accuracy or completeness.

APPROVAL OF THE ASSET SALE BY BIG CITY RADIO STOCKHOLDERS

Big City Radio has obtained stockholder approval of the asset sale and the Asset Purchase Agreement under Delaware law and Big City Radio’s amended and restated certificate of incorporation. ~~This~~Big City Radio may first take corporate action in accordance with the stockholder approval ~~of the asset sale to Entravision will become effective~~ 20 business days after this joint information statement/prospectus is first mailed to Big City Radio’s stockholders. No vote or consent of any other stockholder of Big City Radio is necessary to approve and adopt the asset sale and the Asset Purchase Agreement. Accordingly, Big City Radio is not soliciting any stockholder votes or consents by this joint information statement/prospectus. BIG CITY RADIO IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND BIG CITY RADIO A PROXY.

At a meeting held on December 23, 2002, Big City Radio’s board of directors unanimously approved the asset sale and the Asset Purchase Agreement and determined that the asset sale and the Asset Purchase Agreement are in the best interests of Big City Radio and its stockholders and creditors. Big City Radio’s board of directors also recommended that, to the extent required by law, the stockholders of Big City Radio authorize, adopt and approve the asset sale and the Asset Purchase Agreement.

If consummated, the asset sale, taken together with the other Big City Radio station sales, may be deemed to constitute a sale of substantially all of the assets of Big City Radio within the meaning of Section 271 of the Delaware General Corporation Law. Section 271 permits a Delaware corporation to sell all or substantially all of its assets if the sale is approved by the holders of a majority of the voting power of the outstanding capital stock of the corporation entitled to vote on the sale. Pursuant to Big City Radio’s amended and restated certificate of incorporation, the holders of Big City Radio’s Class A common stock are entitled to one vote per share on all matters voted upon by Big City Radio’s stockholders and the holders of the Class B common stock are entitled to ten votes per share on all matters voted upon by Big City Radio’s stockholders. In addition, Big City Radio’s certificate of incorporation provides that, except for the election and removal of directors and as otherwise required by law, the holders of Class A common stock and Class B common stock vote together as one class.

On ~~December 23, 2002,~~March 5, 2003, Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P. executed and delivered to Big City Radio a written consent approving ~~and adopting~~ the asset sale and approving and adopting the Asset Purchase Agreement. As of that date, Big City Radio had outstanding 6,226,817 shares of Class A common stock and 8,250,458 shares of Class B common stock. Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P. consented in respect of the 8,200,458 shares of Class B common stock owned by them, which represented approximately 92.4% of the combined voting power of the Class A common stock and Class B common stock. A copy of the foregoing written consent is attached asAnnex C to this joint information statement/prospectus. As a result, in accordance with Delaware law and Big City Radio’s amended and restated certificate of incorporation, the asset sale and the Asset Purchase Agreement were approved and adopted by the holders of a majority of the voting power of the outstanding shares of common stock of Big City Radio entitled to vote on this matter.

This joint information statement/prospectus serves as notice to Big City Radio’s stockholders pursuant to Section 228 of the Delaware General Corporation Law of the approval of the asset sale and the Asset Purchase Agreement by less than unanimous consent of Big City Radio’s stockholders.

THE ASSET SALE

This section of this joint information statement/prospectus describes material aspects of the asset sale. While Entravision and Big City Radio believe that the description sets forth the material terms of the asset sale and the related transactions, this summary may not contain all of the information that is important to you. Therefore, you should carefully read this entire joint information statement/prospectus and the other documents included or referred to in this joint information statement/prospectus for a more complete understanding of the asset sale. For information about where you can find these documents, see “Where You Can Find More Information.”

General

Entravision has agreed to purchase assets of Big City Radio, primarily consisting of three radio stations owned and operated by Big City Radio in the greater Los Angeles area, which currently broadcast as KSSE-FM, KSSC-FM and KSSD-FM and formerly broadcast as KLYY-FM, KVYY-FM and KSYY-FM. For these assets, Entravision has agreed to pay Big City Radio $100 million in cash and 3,766,478 shares of Entravision’s Class A common stock at the closing of the asset sale.

The number of shares of Entravision’s Class A common stock to be issued to Big City Radio will not change between December 23, 2002, the date the Asset Purchase Agreement was signed, and the date of the closing. Neither Entravision nor Big City Radio has the right to terminate the Asset Purchase Agreement or to obtain an adjustment of the number of shares of Entravision Class A common stock to be issued to Big City Radio as a result of fluctuations in the market price of Entravision’s Class A common stock before the closing. You are encouraged to obtain current market quotations for Entravision’s Class A common stock. For historical market price information regarding Entravision’s Class A common stock, see “Summary—Market Price and Dividend Information.”

On January 10, 2003, DOJ and the FTC granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act. On January 15, 2003, Entravision and Big City Radio entered into the Time Brokerage Agreement. Under the Time Brokerage Agreement, Entravision will, subject to the FCC’s rules and policies under which Big City Radio is required to retain and exercise ultimate control while it is the licensee, broker time on the three Los Angeles area radio stations being acquired until the closing of the asset sale. For a summary of the terms of the Time Brokerage Agreement, see “Other Principal Agreements Between Entravision and Big City Radio—Time Brokerage Agreement.”

Background of the Asset Sale

Big City Radio was formed in 1994 to acquire radio broadcast properties in or adjacent to major metropolitan markets. ~~Since its inception, Big City Radio has incurred substantial net operating losses primarily due to broadcast cash flow deficits associated with the start up of its radio station operations. Since the~~The majority of Big City Radio’s broadcast properties are in various stages of development, either as a result of recently granted or pending requests to the FCC for enhancements or upgrades, or as a result of having recently changed ~~formats,~~formats. As a result, since its inception, Big City Radio has ~~generated significant~~incurred substantial net operating ~~losses. In addition, because~~losses primarily due to broadcast cash flow deficits associated with the start up of its radio station operations. As of December 31, 2002, Big City Radio had incurred a cumulative cash flow deficit of approximately $164 million and a cumulative net loss of approximately $135 million since inception. Because of Big City Radio’s substantial indebtedness, a significant portion of Big City Radio’s broadcast cash flow is required for debt service.

As of December 31, 2002, Big City Radio had outstanding indebtedness, including accrued and unpaid interest, under its senior notes of approximately $190 million and remaining payment obligations under its operating leases of approximately $4.5 million.

Entravision regularly reviews potential acquisitions that it believes will benefit the company and its stockholders. Prior to entering into the Asset Purchase Agreement, Entravision ~~currently has~~owned and operated three radio

stations in the greater Los Angeles area, which currently broadcast as KDLD-FM, KDLE-FM and KLYY-FM and formerly broadcast as KSSC-FM, KSSD-FM and KSSE-FM. Entravision’s management has long believed that strengthening its market position in the greater Los Angeles area would be advantageous to Entravision’s long-term business strategy. Los Angeles is the largest Hispanic media market in the United States.

As part of the ongoing evaluation of Big City Radio’s business, Big City Radio’s board of directors and management regularly ~~considered a variety~~evaluated Big City Radio’s strategic alternatives and its most efficient use of ~~strategic options~~capital. These alternatives included the sale of Big City Radio’s broadcast assets and, ~~transactions.~~depending on market conditions, debt and/or equity financing, and purchasing, restructuring, recapitalizing or otherwise retiring some of Big City Radio’s securities in the open market or by other means, in each case subject to the restrictions of the indenture governing its senior notes. Periodically since the summer of 2000, Entravision and Big City Radio held intermittent exploratory discussions regarding the possibility of a

transaction in which Entravision would acquire all of the outstanding capital stock of Big City Radio. In connection with those discussions, Entravision conducted preliminary due diligence regarding Big City Radio’s operations. None of the discussions that preceded Big City Radio’s auction process that began in November 2002 advanced beyond the preliminary stage.

Big City Radio’s on-going evaluation process was significantly affected by the liquidity crisis that was precipitated by Big City Radio’s obligation to make semi-annual interest payments of $9.8 million on its senior notes. Although Big City Radio sold the senior notes in March 1998, the senior notes were issued at an original issue discount, and no note interest was payable in cash until September 15, 2001. Big City Radio’s existing sources of liquidity were not sufficient to enable it to service its senior note indebtedness and to meet its operating requirements and capital needs. To make the semi-annual interest payment on the senior notes due on September 15, 2001, Big City Radio was required to obtain a $15 million bridge loan.

In light of Big City Radio’s deteriorating liquidity position, its board of directors determined that the selective sale of assets offered the most timely and achievable strategy to satisfy Big City payment obligations under the senior notes. Big City Radio’s board of directors also authorized the implementation of reductions in expenditures for promotional and programming activities and in corporate, general and administrative expenses. Notwithstanding these expense reductions, Big City Radio expected to continue to incur cash flow deficits and operating losses under its original business strategy. The board of directors determined that there were no alternative financing arrangements available that would allow Big City Radio to continue operating all of its current properties while servicing the senior notes.

On October 31, 2001, ~~in connection with its ongoing evaluation process,~~ Big City Radio sold its four radio stations in the Phoenix, Arizona area to Hispanic Broadcasting Corporation for $34 million in cash. Big City Radio applied the proceeds from this sale to repay its $15 million bridge loan and other indebtedness, to make a semi-annual interest payment on its senior notes due on March 15, 2002, and to fund its ongoing operations.

In the spring of 2002, the Big City Radio engaged in discussions with some noteholders regarding a potential restructuring of its senior notes, but these discussions did not extend beyond the exploratory phase. During the late summer of 2002, Big City Radio entered into discussions with potential buyers to sell Big City Radio’s radio stations in Chicago operating at the 103.1 FM frequency in order to realize proceeds sufficient to satisfy interest payment obligations under its senior notes.

On September 15, 2002, Big City Radio failed to make a semi-annual interest payment of approximately $9.8 million on its senior notes because it did not have sufficient cash to make the payment. The grace period with respect to the non-payment of interest expired on October 15, 2002, resulting in an event of default under the indenture governing ~~Big City Radio’s~~the senior notes. Another event of default exists under the indenture as a result of Big City Radio’s failure to make an offer to repurchase its senior notes on or before October 31, 2002 with the net cash proceeds from the October 31, 2001 sale of its Phoenix radio stations because it did not have sufficient remaining cash resources to consummate such an offer.

Big City Radio received one offer for the Chicago stations. In October 2002, Big City Radio determined not to proceed with the discussions related to the Chicago stations, in favor of a broader auction involving all of Big City Radio’s station assets, as described below and in “Big City Radio’s Reasons for the Asset Sale.”

Big City Radio believed that the auction process would enable it to determine if it could obtain a higher purchase price for these Chicago stations.

On October 11, 2002, Big City Radio retained outside counsel to advise Big City Radio’s board of directors on creditors’ rights, bankruptcy and other related matters.

On October 17, 2002, a group of holders of the senior notes delivered to Big City Radio an acceleration notice declaring all principal of, and accrued and unpaid interest on, all of the senior notes to be immediately due and payable. Upon the payment default, Big City Radio publicly announced that it was considering various alternatives, including the sale of its assets and the restructuring of the senior notes. Big City Radio also announced that, in the absence of such sale or restructuring, it would consider filing for protection from its creditors under the United States bankruptcy code.

On October 24, 2002, Big City Radio’s board of directors met to discuss Big City Radio’s strategic and financial position as a result of its default under the senior notes and the indenture. Big City Radio’s board of directors discussed various strategic alternatives, including filing for protection under the United States bankruptcy code and the sale of radio station assets. Following a discussion and consideration of such presentations, Big City Radio’s board of directors authorized the retention of Jorgenson Broadcast Brokerage, a media brokerage company, in connection with an auction sale of Big City Radio’s assets. The board of directors further authorized management to negotiate a forbearance agreement with the holders of the senior notes pursuant to which the noteholders would agree to refrain from exercising remedies under the senior notes to afford Big City Radio sufficient time to pursue the auction transactions.

On November 4, 2002, Big City Radio issued a press release announcing that Big City Radio had retained Jorgenson to market and conduct an auction of all of its radio stations. In the press release, Big City Radio also announced that the proceeds from any sales of its radio stations would be utilized first to pay all principal of, and accrued and unpaid interest on, its senior notes. Big City Radio’s board of directors and management directed Jorgenson to:

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~~contact a wide range of potential buyers to gauge the level of interest in potential transactions with Big City Radio for its radio stations;~~

contact a wide range of potential buyers to gauge the level of interest in potential transactions with Big City Radio for its radio stations;

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~~prepare a confidential offering memorandum for prospective buyers presenting an overview of the Big City Radio stations, their markets and the potential opportunities for the potential buyers;~~

prepare offering materials for prospective buyers presenting an overview of the Big City Radio stations, their markets and the potential opportunities for the potential buyers;

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~~assist in the due diligence process with all qualified interested parties that executed a customary confidentiality agreement;~~

assist in the due diligence process with all qualified interested parties that executed a customary confidentiality agreement;

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~~coordinate meetings between Big City Radio’s management and interested parties that requested management meetings;~~

coordinate meetings between Big City Radio’s management and interested parties that requested management meetings;

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~~organize and conduct the auction; and~~

organize and conduct the auction; and

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~~keep management, the board of directors and holders of the senior notes regularly advised of the auction’s progress.~~

keep management, the board of directors and holders of the senior notes regularly advised of the auction’s progress.

On November 13, 2002, Big City Radio entered into an agreement with the holders of approximately 75% in principal amount of the senior notes, acting through an ad hoc committee of noteholders. Under the agreement, the noteholders agreed that they would forbear through and including January 31, 2003, from taking any action, including any involuntary bankruptcy filing, against any property, officers, directors, employees or agents of Big City Radio to enforce Big City Radio’s payment obligations under its senior notes for existing defaults on the senior notes known to the noteholders as of November 13, 2002.Big City Radio also agreed to conduct the

auction of its radio stations in a good faith manner designed to sell the assets as soon as practicable for aggregate net cash consideration in an amount at least sufficient to pay all principal of, and accrued and unpaid interest on, its senior notes.

During the first two weeks of November 2002, Jorgenson and Big City ~~Radio~~Radio’s management identified prospective buyers for Big City Radio’s radio stations. Jorgenson communicated with approximately 60 prospective strategic and financial buyers. Strategic buyers consisted of radio broadcasters, including Entravision, radio and television networks and program suppliers. Financial buyers consisted of publishing companies and private equity funds. Jorgenson sent ~~confidential~~ offering materials, a confidentiality agreement and a form of asset purchase agreement to Entravision and the other prospective buyers during this period. The prospective buyers were advised that Big City Radio would consider any all-cash offers to buy the Big City Radio stations, whether individually or as a group, as well as offers to buy Big City Radio itself. Prospective buyers were required to submit best and final offers before the close of business on December 9, 2002. All offers were required to be accompanied by comments to the form of asset purchase agreement and evidence of the financial ability of the prospective buyer to consummate the proposed transaction.

During November 2002, Jorgenson met separately with approximately 14 prospective buyers to discuss the terms of potential transactions. On or about November 7, 2002, Jorgensen met with Walter F. Ulloa, Entravision’s Chairman and Chief Executive Officer, and Jeffery Liberman, President of Entravision’s Radio Division, to discuss the possibility of Entravision submitting a bid for some of Big City Radio’s assets.

From October 18, 2002 to November 21, 2002, representatives of UBS Warburg LLC, Entravision’s financial advisor, had several telephone calls and meetings with, and made several presentations to, Entravision’s senior management, discussing alternative acquisition strategies, as well as setting forth financial analysis relating to a possible transaction with Big City Radio. Entravision received a form bid letter from Jorgenson on or around November 26, 2002.

Of the approximately 60 prospective buyers that received the auction materials, approximately 25, including Entravision, executed a confidentiality agreement and indicated an interest in participating in the auction process. Jorgenson provided due diligence materials, which consisted primarily of leases, contracts and selected financial information, to those prospective buyers that signed confidentiality agreements. Entravision received those due diligence materials on or around December 4, 2002.

Throughout the auction process, Jorgenson and Big City Radio’s management periodically advised members of Big City Radio’s board of directors on the progress of the auction. In addition, Jorgenson and Big City Radio’s

management and counsel conducted conference calls with members of the ad hoc noteholders committee to update them on the progress of the auction. On December 2, 2002, Jorgenson and Big City Radio’s management met with representatives of members of the ad hoc noteholders committee in Los Angeles and presented a detailed summary of the auction process and the prospective buyers who had been contacted through that date.

On December 6, 2002, Entravision held a regularly scheduled meeting of its board of directors. At that meeting, representatives of UBS Warburg made a presentation setting forth financial analysis relating to a potential acquisition of some or all of Big City Radio’s assets. Entravision’s board of directors discussed, among other things, Entravision’s intention to submit a bid for all of Big City Radio’s Los Angeles area and Chicago radio stations in response to Big City Radio’s invitation to bid.

As of the offer deadline on December 9, 2002, Big City Radio had received approximately 24 written offers for the 12 radio stations being sold. None of the offers was for all of the stations or for Big City Radio itself. During the week of December 9, 2002, Jorgenson and Big City Radio management engaged in discussions with some of the bidders to clarify their offers. In particular, some prospective buyers who submitted an offer for more than one station were requested to allocate the offered price among the stations they proposed to acquire.

On December 9, 2002, Entravision submitted its initial offer to acquire all of the assets of Big City Radio’s Los Angeles area and Chicago radio stations for $160 million in cash and securities. In response to Jorgenson’s request to allocate the $160 million purchase price by station group, Entravision indicated that it would be willing to pay a total of $135 million for the Los Angeles area radio stations and $25 million for the Chicago stations. On or about December 13, 2002, Big City Radio invited Entravision to hold further discussions in person in New York City. By this time, Big City Radio had determined to focus its discussions with Entravision on the sale of Big City Radio’s Los Angeles area radio stations only.

By December 16, 2002, Big City Radio’s management, in consultation with Jorgenson, had identified the highest and best qualified offers for each station, taking into account the total consideration payable, the prospective buyer’s likelihood of obtaining regulatory approval and financing and other factors. From December 16, 2002 through December 20, 2002, Jorgenson contacted most of the bidders that had submitted offers and informed each such bidder whether or not Big City Radio was prepared to accept such bidder’s offer and enter into a definitive asset purchase agreement.

On December 16, 2002, representatives of Entravision’s senior management and of UBS Warburg met with representatives of Big City Radio and Jorgenson in New York City. The parties were not able to reach an agreement regarding the structure of the proposed transaction and the Entravision representatives returned to Los Angeles that evening.

On December 17 and 18, 2002, Entravision and Big City Radio recommenced negotiations through a series of letters regarding the terms and conditions of a potential asset sale, including the purchase price for the Los Angeles area radio stations and the relative portions of the purchase price to be paid in cash and Entravision’s Class A common stock. Big City Radio indicated a willingness to consider a proposal that included cash and stock, but informed Entravision that Entravision’s Class A common stock would have to be registered under the Securities Act of 1933, as amended, or the Securities Act, and be freely tradable upon issuance to Big City Radio.

On December 19, 2002, Big City Radio and Entravision entered into a letter agreement that set forth the principal terms and conditions of the proposed asset sale, and Big City Radio agreed to negotiate exclusively with Entravision for the sale of the Los Angeles area radio stations until December 22, 2002. In accordance with the letter agreement, Entravision revised its offer for the Los Angeles area radio stations to provide for a total purchase price of $140 million, consisting of between $100 million and $110 million in cash, with the balance to be paid in shares of Entravision’s Class A common stock based on a $10.62 per share price. That per share price represented the average closing price of Entravision’s Class A common stock as reported by The New York Stock Exchange for the 20 consecutive trading days ending on December 18, 2002.

Entravision was the only bidder in the auction process that proposed a purchase price not payable solely in cash. Although Big City Radio valued Entravision’s bid at $5 million less than the price offered by another bidder, Entravision’s bid was not subject to a financing condition. The other bidder indicated that it would have to sell other radio properties to raise the funds necessary to purchase the Los Angeles area stations. Big City Radio’s board of directors accepted Entravision’s bid because, among other reasons, Entravision’s lack of a financing condition provided greater assurance than the competing bid that Big City Radio would be able to conclude the sale by a date acceptable to the holders of the senior notes.

From December 19, 2002 through December 23, 2002, the parties and their counsel negotiated the final terms and conditions of the Asset Purchase Agreement, the Time Brokerage Agreement and related documents. During this period, the parties agreed that the asset sale consideration would consist of $100 million in cash and 3,766,478 shares of Entravision’s Class A common stock.

From December 16, 2002 through January 2, 2003, Big City Radio management and counsel negotiated the final terms and conditions of the sales of eight of Big City Radio’s nine remaining radio stations and other assets to three other buyers.

Big City Radio received several bids for its last remaining radio station, which broadcasts as WYXX-FM in Morris, Illinois, but none of the bids proposed a purchase price that was acceptable to Big City Radio. Big City Radio is continuing to seek a buyer for this station.

On December 23, 2002, Big City Radio’s board of directors held a special meeting to consider the question of approving the terms of the Big City Radio station sales, including the asset sale to Entravision. Jorgenson and Big City Radio management reviewed the auction process, draft asset purchase agreements, and the ~~resulting offers.~~price terms, contingencies, conditions and other material terms of the various bids, and presented their evaluation of the strengths and weaknesses of the competing bids. Jorgenson and management reported to the board of directors that the offers of the three other purchasers under the asset sales were the highest offers for the stations covered by the bids of these companies. The board of directors also considered that Entravision and two of the other three winning bidders are large public companies whose SEC reports have disclosed strong balance sheets or access to financing, while the fourth wining bidder is a major privately-held regional radio broadcasting company with a proven record of completing acquisitions of radio properties. Management advised the board of directors that none of the four winning bidders had required the satisfaction of any financing contingency as a condition to closing. After thorough discussion, the board of directors unanimously determined that the Big City Radio station sales, including the asset sale to Entravision, were in the best interests of Big City Radio and its stockholders and creditors, approved and authorized the asset sales, including the asset sale to Entravision, and recommended that stockholders approve the asset sale to Entravision.

On December 23, 2002, Entravision’s board of directors met telephonically to review the proposed terms of Entravision’s acquisition of the Los Angeles area radio stations from Big City Radio. Senior management and representatives of UBS Warburg discussed the key provisions of the transaction. The UBS Warburg representatives provided a final presentation setting forth financial analysis relating to the acquisition. After thorough discussion, the board of directors determined that the acquisition of the Los Angeles area radio stations from Big City Radio was fair to, and in the best interests of, Entravision and its stockholders and approved and authorized the Asset Purchase Agreement.

On December 23, 2002, shortly after adjournment of the board of directors’ meetings of Big City Radio and Entravision, Big City Radio, Big City Radio-LA, L.L.C. and Entravision executed the Asset Purchase Agreement and the related agreements.

On December 23, 2002, Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P., owners of Big City Radio securities representing a majority of the voting power, executed a letter agreement for the benefit of Entravision in which they agreed to vote their shares of Big City Radio stock in favor of the approval and adoption of the Asset Purchase Agreement and the transactions contemplated therein, in connection with any meeting of, or written consent in lieu of a meeting, at which such matters are submitted for the consideration and approval of the Big City Radio stockholders. On December 23, 2002, such stockholders also executed a written consent of stockholders in lieu of a meeting approving and adopting the Asset Purchase Agreement and the transactions contemplated therein.

Entravision and Big City Radio each issued a press release announcing the asset sale on December 24, 2002.

On March 5, 2003, Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P. executed and delivered to Big City Radio a written consent supplementing, ratifying and superseding their previous written consent delivered on December 23, 2002 approving and adopting the Asset Purchase Agreement and the transactions contemplated therein. In this consent, the stockholders also approved and authorized any amendments or modifications to, or waivers under, the Asset Purchase Agreement that may be approved from time to time by Big City Radio’s board of directors or authorized officers, so long as such amendments, modifications or waivers do not decrease the purchase price payable by Entravision.

Big City Radio’s Reasons for the Asset Sale

The following discussion of Big City Radio’s reasons for the asset sale contains a number of forward-looking statements that reflect the current views of Big City Radio’s management with respect to future events that may have an effect on Big City Radio’s financial condition and prospects. Forward-looking statements are subject to risks and uncertainties. Actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Cautionary statements that identify important factors that could cause or contribute to differences in results and outcomes include those discussed in “Risk Factors” and “Forward-Looking Statements.”

The asset sale to Entravision is one of a series of auction sales of Big City Radio’s radio stations undertaken by Big City Radio following the evaluation process described above under “Background of the Asset Sale.” In

unanimously approving the auction process, Big City Radio’s board of directors considered a number of factors, including, without limitation, the following:

the cash flow deficits and operating losses that Big City Radio was incurring, and expected to continue to incur, under its original business strategy, which would not generate funds sufficient to satisfy its payment obligations under its senior notes;

the risks associated with continued execution of Big City Radio’s original strategy, if it were to continue to pursue this strategy following the default on, and acceleration of, its senior notes, as an alternative to the auction sale of its radio stations, including, among other risks, those associated with remaining independent during a time of industrywide consolidation and the exposure of smaller, less well-capitalized companies to continued deterioration in the national and regional advertising markets;

•

the obligation of Big City Radio to repay the senior notes in full within a limited period, which would not give Big City Radio sufficient time to develop and implement a new business strategy;

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the risks associated with continued execution of Big City Radio’s original strategic plan, if it were to continue to pursue this plan following the default on, and acceleration of, its senior notes, as an alternative to the auction sale of its radio stations, including, among other risks, those associated with remaining independent during a time of industrywide consolidation and the exposure of smaller, less well-capitalized companies to continued deterioration in the national and regional advertising markets;

the absence of alternative financing arrangements or transactions that would enable Big City Radio to restructure its senior notes or raise the funds necessary to satisfy its payment obligations under the senior notes; and

•

~~the absence of alternative financing arrangements or transactions that would enable Big City Radio to raise the funds necessary to satisfy its payment obligations under its senior notes; and~~

the prospect that the auction process offered the most timely and achievable strategy to enable Big City Radio to obtain acceptable value for its assets and to satisfy its payment obligations under its senior notes.

•

the prospect that the auction process offered the most timely and achievable strategy to enable Big City Radio to satisfy its payment obligations under its senior notes and to obtain maximum value for its assets.

In considering the proposed transaction with Entravision resulting from the auction process, Big City Radio’s board of directors unanimously determined that the terms of the Asset Purchase Agreement are in the best interests of Big City Radio and its stockholders and creditors and unanimously approved the Asset Purchase Agreement and the asset sale. In reaching its determination, the Big City Radio board of directors considered a number of factors and sources of information, including, without limitation, the following:

the results of Big City Radio’s auction process commenced in November 2002 and the intensive efforts made by Big City Radio management and Jorgenson to solicit indications of interest from third parties regarding a potential purchase of some or all of the assets of Big City Radio;

the value of the cash and stock consideration and liquidity of the shares of Entravision’s Class A common stock to be received upon completion of the asset sale, which would enhance Big City Radio’s ability to sell the stock consideration following the closing when it deems such sale appropriate and enable it to satisfy in a timely manner its payment obligations under its senior notes and other obligations;

•

historical information concerning the business, financial performance, condition, operations and results of operations, competitive position and trends and prospects of Entravision;

•

reports and other information filed by Entravision with the SEC;

•

~~historical information concerning the business, financial performance, condition, operations and results of operations, competitive position and trends and prospects of Entravision;~~

Entravision’s financial ability to complete the asset sale;

•

~~reports and other information filed by Entravision with the SEC;~~

the FCC approval required to consummate the asset sale and its evaluation of the prospect that the FCC would grant such approval in a timely manner and without imposing conditions on the asset sale; and

•

~~Entravision’s financial ability to complete the asset sale;~~

the limited conditions to the obligation of Entravision to complete the asset sale under the Asset Purchase Agreement, which reduced the risk that completion of the sale would be delayed or the agreement would be terminated because of the failure to satisfy a closing condition.

•

~~the regulatory approvals required to consummate the asset sale and Big City Radio’s evaluation of the prospects for receiving those approvals;~~

•

~~the terms and conditions of the Asset Purchase Agreement, including the limited conditions to closing; and~~

•

~~the interests of Big City Radio officers and directors in the asset sale discussed below under “Interests of Big City Radio Executive Officers and Directors in the Asset Sale.”~~

Big City Radio’s board of directors also considered a number of potentially negative factors in its deliberations concerning the asset sale, including, without limitation, the following:

•

~~the risk that the asset sale might not be completed in a timely manner;~~

•

the structure of the transaction as a sale of assets in which Entravision would assume only selected liabilities and in which Big City Radio would remain responsible for liabilities that are not assumed by Entravision, which could expose Big City Radio to liability for currently unanticipated claims that might be made in the future and could reduce amounts, if any, available for distribution to its stockholders;

the risk that the asset sale might not be completed in a timely manner;

•

the value, as of the closing date of the asset sale, of the shares of Entravision’s Class A common stock to be received by Big City Radio, and the absence of any price adjustment provisions that might limit any decrease in such value as a result of fluctuations in the market price of the shares; and

•

~~the risks and uncertainties discussed under “Risk Factors.”~~

the potential costs to be incurred as a result of the cash payments and potential stock option benefits to which some of Big City Radio’s executive officers and directors may become entitled upon completion of the asset sale, and the related conflicts of interest of these executive officers and directors with respect to the asset sale; and

other risks involved in the asset sale, including the risks that:

failure to complete the asset sale could negatively affect Big City Radio’s ability to sell the Los Angeles area radio stations to another buyer on terms or by a date necessary to enable Big City Radio to repay its senior notes;

Big City Radio’s forbearance agreement with some of the holders of its senior notes may not prevent such noteholders, other noteholders or the indenture trustee from exercising remedies against Big City Radio before the asset sale is completed; and

Big City Radio may not realize sufficient proceeds from the asset sale and the other Big City Radio station sales to make distributions to its stockholders or may determine not to make any such distributions.

The foregoing discussion of factors and information considered by Big City Radio’s board of directors with respect to its approval of the auction process and the sale to Entravision is not intended to be exhaustive, but Big City Radio believes that this discussion includes all of the material factors considered by its board of directors. In view of the wide variety of factors considered by Big City Radio’s board of directors, the board of directors did not find it practicable to quantify or otherwise assign relative weights to the specific factors that it considered. In addition, the board of directors did not reach any specific conclusions based on each factor considered, or any aspect of a particular factor, but conducted an overall analysis of these factors and reached a conclusion based on the totality of all factors that it considered. Individual members of the board of directors may have given different weights to different factors. After taking into account all of the factors set forth above, Big City Radio’s board of directors determined that the auction process and the transactions contemplated by the Asset Purchase Agreement are in the best interests of Big City Radio and its stockholders and creditors, and that Big City Radio should proceed with the proposed asset sale and enter into the Asset Purchase Agreement.

For a discussion of the interests in the asset sale of some of Big City Radio’s executive officers and directors, see “Interests of Big City Radio Executive Officers and ~~Directors in the Asset Sale”~~Directors” below.

Entravision’s Reasons for Entering ~~Into~~into the Asset Sale

The following discussion of Entravision’s reasons for entering into the asset sale contains a number of forward-looking statements that reflect the current views of Entravision’s management with respect to future events that may have an effect on Entravision’s financial performance. Forward-looking statements are subject to risks and uncertainties. Actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Cautionary statements that identify important factors that could cause or contribute to differences in results and outcomes include those discussed in “Risk Factors” and “Forward-Looking Statements.”

Entravision entered into the Asset Purchase Agreement based on its belief that the purchase of the three Los Angeles area radio stations will result in a number of strategic and economic benefits to Entravision, including the following:

•

Entravision will have the opportunity to strengthen and enhance its market position in the Los Angeles market, the largest Hispanic radio market in the United States, through the consolidation of its Super Estrella format on Big City Radio’s 107.1 FM, which is currently being simulcast on its 97.5 FM and 103.1 FM frequencies;

•

by consolidating its Super Estrella format on 107.1 FM, Entravision will be the only Spanish-language “pop rock” format in the Los Angeles market, and will have the opportunity to program its 97.5 FM and 103.1 FM frequencies with two new formats, giving Entravision a total of three revenue-producing formats in the approximately $900 million Los Angeles radio market;

•

based on current ownership interests in the market, Big City Radio’s 107.1 FM frequency will be one of the last available full-market FM signals in the Los Angeles market for sale in the foreseeable future and is superior to Entravision’s existing FM frequencies in Los Angeles;

•

~~Big City Radio’s 107.1 FM signal reaches 95% of the Hispanic population in Los Angeles;~~

•

~~Entravision will have the opportunity to benefit both economically and operationally from its existing infrastructure and experienced management in the Los Angeles market; and~~

•

Entravision will operate the Los Angeles area radio stations prior to the closing of the asset sale under the Time Brokerage Agreement at no additional cost other than reimbursement of certain operating expenses.

Big City Radio’s 107.1 FM signal reaches 95% of the Hispanic population in Los Angeles;

Entravision will have the opportunity to benefit both economically and operationally from its existing infrastructure and experienced management in the Los Angeles market; and

Entravision will operate the Los Angeles area radio stations prior to the closing of the asset sale under the Time Brokerage Agreement at no significant additional cost other than reimbursement of certain operating expenses.

In reaching its determination that the purchase of the three Los Angeles area radio stations on the terms provided for in the Asset Purchase Agreement is fair to, and in the best interests of, Entravision and its stockholders, Entravision’s board of directors considered a number of factors, including the following:

the judgment, advice and analyses of Entravision’s management with respect to the potential strategic, financial, competitive and operational benefits of the asset purchase, including Entravision management’s favorable recommendation of the terms of the Asset Purchase Agreement;

the terms of the Asset Purchase Agreement, including total purchase price and allocation of the purchase price between cash and Entravision’s Class A common stock;

•

the benefits of buying assets versus stock, including the tax benefit and the benefit of acquiring assets free and clear of liens and encumbrances with no assumption of liabilities other than specifically assumed contracts;

•

~~the terms of the Asset Purchase Agreement, including total purchase price and allocation of the purchase price between cash and Entravision’s Class A common stock;~~

the cash position and balance sheet liquidity of Entravision following completion of the asset sale, especially during periods of volatility in the financial markets;

•

Entravision’s obligations, including financial covenants, under its bank credit facility and the indenture governing its senior subordinated notes;

•

~~the cash position and balance sheet liquidity of Entravision following completion of the asset sale, especially during periods of volatility in the financial markets;~~

the financial condition of Big City Radio, its future business prospects and the perceived business, financial and competitive benefits to be obtained by acquiring Big City Radio’s Los Angeles area radio stations at this time; and

•

~~Entravision’s obligations, including financial covenants, under its bank credit facility and the indenture governing its senior subordinated notes;~~

the agreement of the principal stockholders of Big City Radio to vote in favor of the asset sale.

•

~~the agreement of the principal stockholders of Big City Radio to vote in favor of the asset sale.~~

Entravision’s board of directors also considered a number of potentially negative factors in the course of its deliberations concerning the proposed asset sale, including, without limitation, the following:

the amount of the purchase price for the assets and the amount of Entravision’s total indebtedness, including compliance with the financial covenants under its debt instruments, following the payment of the cash portion of the purchase price;

the risk that the transaction might not be completed in a timely manner or at all;

•

the risk that regulatory agencies might prevent the asset sale or, in granting consent to the asset sale, might impose requirements that would compel Entravision to take actions that would reduce the benefits of the transaction;

•

~~the risk that the transaction might not be completed in a timely manner or at all;~~

the transaction costs associated with the asset sale, whether or not the asset sale is completed;

•

the potential negative reaction of the financial community after announcement of the proposed transaction;

•

~~the transaction costs associated with the asset sale, whether or not the asset sale is completed;~~

the risk that some or all the potential benefits of the transaction may not be realized; and

•

~~the potential negative reaction of the financial community after announcement of the proposed transaction;~~

the other risks and uncertainties discussed under “Risk Factors.”

•

~~the risk that some or all the potential benefits of the transaction may not be realized; and~~

•

~~the other risks and uncertainties discussed under “Risk Factors.”~~

The foregoing discussion of factors and information considered by Entravision’s board of directors is not intended to be exhaustive, but Entravision believes that this discussion includes all of the material factors considered by its board of directors. In view of the wide variety of factors considered by Entravision’s board of directors, the board of directors did not find it practicable to quantify or otherwise assign relative weights to the specific factors that it considered. In addition, the board of directors did not reach any specific conclusions based on each factor considered, or any aspect of any particular factor, but conducted an overall analysis of these factors and reached a conclusion based on the totality of all factors that it considered. Individual members of Entravision’s board of directors may have given different weights to different factors. After taking into account all of the factors set forth above, Entravision’s board of directors agreed that the Asset Purchase Agreement was fair to, and in the best interests of, Entravision and its stockholders, and that Entravision should proceed with the proposed asset sale and enter into the Asset Purchase Agreement.

There can be no assurance that the benefits of the potential growth, synergies, opportunities and other perceived business, financial and competitive benefits to be obtained by acquiring the Los Angeles area radio stations from Big City Radio will be achieved by Entravision as a result of the completion of the asset purchase. See “Risk Factors” for a discussion of risks relating to the asset sale and Entravision’s business.

Absence of a Fairness Opinion for Big City Radio

Big City Radio has not sought or received a report, opinion or appraisal from an independent third party regarding the fairness, to Big City Radio, from a financial point of view, of the asset sale, either alone or together with the other Big City Radio station ~~sales, to Big City Radio.~~sales. As discussed above under “Background of the Asset Sale,” Big City Radio has sought to maximize the value of its radio station assets through a professionally managed auction process, which it initiated in early November 2002. The auction process involved the solicitation of approximately 60 prospective strategic and financial buyers and resulted in approximately 24 written offers for the radio stations being auctioned. In the absence of other financing arrangements or transactions that would enable Big City Radio to repay its senior notes in a timely manner, Big City Radio believes its most likely alternative to the asset sale to Entravision and the other Big City Radio station sales would have been to file for protection from its creditors under the United

States bankruptcy code. Big City Radio believes that the net value that its assets could realize in any court-supervised reorganization proceeding, with the delays, uncertainties and expense inherent in any such proceeding, would be ~~significantly below~~less than the net value ~~that~~ its assets will realize in the pending asset sale with Entravision and the other Big City Radio station sales.

Interests of Big City Radio Executive Officers and Directors

The following executive officers and directors have interests in the asset sale to Entravision and the other Big City Radio station sales that are different from, or in addition to, the interests generally of Big City Radio’s stockholders.

Employment ~~Agreements~~Agreements.

If the employment of two of Big City Radio’s executive officers is terminated under specified circumstances following completion of the asset sale to Entravision and the other Big City Radio station sales, Big City Radio may be obligated to make cash severance payments to those executive officers.

Charles M. Fernandez. Big City Radio is party to an employment agreement with Charles M. Fernandez, Big City Radio’s President and Chief Executive Officer and a member of Big City Radio’s board of directors. This agreement provides that if Mr. Fernandez terminates his employment with Big City Radio as a result of his being assigned, without his prior written consent, to any position, duties or responsibilities that are significantly diminished in comparison to his position, duties or responsibilities at the date of his employment agreement, his termination will be deemed a termination without cause by Big City Radio. Upon termination of his employment in these circumstances, Mr. Fernandez will be entitled to receive severance payments in an amount equal to any unpaid base salary, together with any prorated bonus, accrued through the date of termination, plus the greater of two years’ annual base salary then in effect or the net present value of his annual base salary then in effect, multiplied by the number of years remaining in the term. Mr. Fernandez’s annual base salary at December 31, 2002 was approximately $520,000. The term under Mr. Fernandez’s employment agreement expires on October 31, 2003. As a result, assuming a termination of his employment effective on March 31, 2003, Mr. Fernandez would be entitled to a cash payment of approximately $1 million.

Paul R. Thomson. The completion of the asset sale and the other Big City Radio station sales will constitute a change of control of Big City Radio under the terms of Big City Radio’s employment agreement with Paul R. Thomson, Big City Radio’s Vice President and Chief Financial Officer. If Mr. Thomson does not continue to serve as Big City Radio’s Chief Financial Officer following such a change of control, or if Big City Radio does not create a similar position for Mr. Thomson, Mr. Thomson will have a right, exercisable for a period of 90 days following the change of control, to terminate his employment. Upon such a termination, Mr. Thomson will be entitled to a lump-sum payment equal to the net present value of the amounts owed under the

remaining term of his employment agreement. Mr. Thomson’s annual base salary at December 31, 2002 was $300,000. The term under Mr. Thomson’s employment agreement expires on June 30, 2003. As a result, assuming a termination effective on March 31, 2003, Mr. Thomson would be entitled to a cash payment of approximately $75,000.

As of the date of this joint information statement/prospectus, Mr. Thomson had not indicated to Big City Radio that he intends to terminate his employment.

Payments Based on Stock ~~Options~~Options.

All options to purchase shares of Big City Radio’s Class A common stock awarded to Mr. Thomson and Bryan Subotnick, Big City Radio’s Executive Vice President-Corporate Development, will become immediately vested upon any sale or change in control of Big City Radio. The completion of the asset sale and the other Big City Radio station sales may constitute a sale or a change in control of Big City Radio for purposes of Big City Radio’s agreements with ~~Messrs.~~Mr. Thomson and ~~Subotnick.~~Bryan Subotnick, although there can be no assurance in this regard. If upon such immediate vesting the in-the-money value of such stock options held by ~~Messrs.~~Mr. Thomson and Bryan Subotnick is less than the amount equal to two years of such officer’s annual compensation, which is defined as the officer’s gross compensation reported to the Internal Revenue Service for the most recently completed fiscal year at the date of completion of the sale, Big City Radio would be obligated to make a cash payment equal to the difference between the value of such in-the-money stock options and two years’ annual compensation. In the case of Mr. Thomson, this payment would be in addition to any payment to

which he is entitled pursuant to his employment agreement, as described above. Because the stock options held by ~~Messrs.~~Mr. Thomson and Bryan Subotnick are not ~~in the money,~~in-the-money, Big City Radio anticipates that Mr. Thomson may be entitled to a cash payment of $589,877 and ~~Mr.~~Bryan Subotnick may be entitled to a cash payment of $500,427, assuming that a sale or change in control of Big City Radio occurs as of March 31, 2003. ~~Mr.~~Bryan Subotnick is the son of Stuart Subotnick, Big City Radio’s Chairman of the board of directors, and of Anita Subotnick, a Big City Radio director.

Accelerated Vesting of Stock Options. The completion of the asset sale to Entravision and the other Big City Radio station sales would constitute a change of control for purposes of Big City Radio’s stock option plans. The compensation committee of Big City Radio’s board of directors has the discretion under those plans to approve immediate vesting of outstanding stock options to purchase Class A common stock effective upon the occurrence of a change of control. As of the date of this joint information statement/prospectus, the compensation committee has not approved immediate vesting of any stock options. Unvested stock options are held by the following executive officers and directors: Paul Thomson (21,000 shares), Bryan Subotnick (21,000 shares), Stuart and Anita Subotnick (45,000 shares) and Silvia Kessel (10,000 shares). The exercise prices of the foregoing options held by these executive officers and directors, which provide the holders the right to purchase a total of 97,000 shares of Class A common stock, range from $3.4375 to $4.313 per share. See “Summary—Market Price and Dividend Information” for recent market prices of the Class A common stock.

Big City Radio’s board of directors was aware of these interests and considered them, among other matters, in approving the Asset Purchase Agreement and the transactions contemplated thereby.

Other Big City Radio Station Sales

As of the date of this joint information statement/prospectus, Big City Radio has entered into ~~binding~~definitive asset purchase agreements to sell eight of its nine remaining radio stations and related assets to three other buyers. In addition, Big City Radio is seeking to ~~enter into a binding agreement for the sale of~~sell its last remaining radio station, which broadcasts as WYXX-FM in Morris, Illinois. Each of the transactions below is subject to customary closing conditions, including the receipt of initial FCC approval of the transfer of the FCC licenses of the stations.

Sale to Nassau Broadcasting Holdings, Inc. On December 30, 2002, Big City Radio and its license holding subsidiary, Big City ~~Radio-NY,~~Radio-NYC, L.L.C., entered into an asset purchase agreement to sell radio broadcast stations WYNY-FM, licensed to Briarcliff Manor, New York, WWZY-FM, licensed to Long Branch, New Jersey, WWXY-FM, licensed to Hampton Bays, New York, and WWYY-FM, licensed to Belvidere, New Jersey, to Nassau Broadcasting Holdings, Inc., a New Jersey corporation, for $43 million in cash. On February 25, 2003, the FCC issued a consent to the assignment of the licenses for these stations to Nassau Broadcasting Holdings, Inc.

Sale to Spanish Broadcasting System of Illinois, Inc. On December 31, 2002, Big City Radio and its license holding subsidiary, Big City-CHI, L.L.C., entered into an asset purchase agreement to sell radio broadcast stations WDEK-FM, licensed to De Kalb, Illinois, WKIE-FM, F-32, licensed to Arlington Heights, Illinois, and WKIF-FM, licensed to Kankakee, Illinois, to Spanish Broadcasting System of Illinois, Inc., a Delaware corporation, for $22 million in cash. Big City Radio-CHI, L.L.C. and Spanish Broadcasting System of Illinois, Inc. entered into a time brokerage agreement, which ~~will permit~~permits Spanish Broadcasting System of Illinois to broadcast the programming of Spanish Broadcasting System of Illinois over these stations pending consummation of the asset sale. On February 14, 2003, the FCC issued a consent to the assignment of the licenses for these stations to Spanish Broadcasting System of Illinois, Inc.

Sale to HBC Illinois, Inc. On January 2, 2003, Big City Radio and its license holding subsidiary, Big City Radio-CHI, L.L.C., entered into an asset purchase agreement to sell radio broadcast station WVIV-FM, formerly WXXY-FM, licensed to Highland Park, Illinois, to HBC Illinois, Inc., a Delaware corporation and an affiliate of Hispanic Broadcasting

Corporation, for $32.9 million in cash. ~~On January 10, 2003,~~HBC Illinois has designated Superior Broadcasting

of Chicago, LLC to be the assignee of the FCC license for the Highland Park station. Big City Radio-CHI, L.L.C. and HBC Illinois entered into a time brokerage agreement, which ~~will permit~~permits HBC Illinois to broadcast the programming of HBC Illinois over ~~WXXY-FM~~WVIV-FM pending the consummation of the asset sale.

On January 10, 2003, Spanish Broadcasting System, Inc., the buyer under another asset purchase agreement described above, submitted a letter to the FCC in which it stated that it intended to file with the FCC a petition to deny the proposed assignment of Big City ~~Radio, Big City Radio-CHI, L.L.C. and~~Radio’s license for the Highland Park, Illinois station. Although Spanish Broadcasting did not submit such a petition by the date required, the FCC might treat Spanish Broadcasting’s letter as an informal objection to the proposed license assignment that would require a written decision by the FCC or its staff. Such a written decision could deny or place adverse conditions on the assignment of such license to the designated licensee or restrict the time brokerage of the station by HBC ~~Illinois also entered into an amendment~~Illinois. Moreover, the need to issue a written decision could defer action by the FCC. There can be no assurance that the FCC will grant its consent to the assignment before the termination date under the asset purchase agreement ~~to reflect the time brokerage agreement between the parties.~~with HBC Illinois has entered into an agreement with Superior Broadcasting of Chicago, LLC whereby, upon the closing of the asset sale between Big City Radio and HBC Illinois, Superior Broadcasting will hold the FCC licenses and certain other assets of the newly acquired station and HBC Illinois will program the station under a time brokerage agreement. Superior Broadcasting and HBC License Corporation have entered into an option agreement by which HBC License Corporation has an option to purchase the FCC licenses and certain assets used by the station, subject to prior FCC consent. Upon completion of Hispanic Broadcasting Corporation’s proposed merger with Univision Communications Inc., it is anticipated that Superior Broadcasting will file an application with the FCC requesting consent to the assignment of the station’s FCC licenses to HBC License Corporation.

Illinois.

Application of Asset Sale Proceeds; Future Operations of Big City Radio

The asset sale to Entravision is one of a series of auction sales of Big City Radio’s radio stations undertaken by Big City Radio since November 2002. Under its purchase agreements with Entravision and the other buyers, pursuant to which Big City Radio has committed to sell 11 of its 12 radio stations, Big City Radio will receive gross cash proceeds of approximately $197.9 million, if all of these asset sales are completed. Under its forbearance agreement with holders of its senior notes, Big City Radio is obligated to apply the aggregate net cash proceeds of the asset sales first to pay the principal amount of the senior notes and all accrued and unpaid interest thereon through the date of such payment. As of the date of this joint information statement/prospectus, Big City Radio owed holders of the senior notes a total of approximately $193.8 million, consisting of $174 million of principal and approximately $19.8 million of accrued and unpaid interest. After it applies the sale proceeds to repay its senior notes and its other liabilities described below, Big City Radio may not have any assets available for distribution to its stockholders from the proceeds of these sales.

The table below summarizes information about the ~~pending~~gross cash proceeds payable to Big City Radio upon completion of the asset ~~sales.~~

Buyer

Stations

Purchase Price(1)

(In millions)
Entravision Communications Corporation    KVYY-FM (Ventura, California)      $ 100
   KLYY-FM (Arcadia, California)
   KSYY-FM (Fallbrook, California)
Nassau Broadcasting Holdings, Inc.    WYNY-FM (Briarcliff Manor, New York)      43
   WWZY-FM (Long Branch, New Jersey)
   WWXY-FM (Hampton Bays, New York)
   WWYY-FM (Belvidere, New Jersey)
Spanish Broadcasting System of Illinois, Inc.    WDEK-FM (De Kalb, Illinois)      22
   WKIE-FM (Arlington Heights, Illinois)
   WKIF-FM (Kankakee, Illinois)
HBC Illinois, Inc.    WXXY-FM (Highland Park, Illinois)      32.9

        $ 197.9

sale to Entravision and the other station sales to Nassau Broadcasting, Spanish Broadcasting and Hispanic Broadcasting.

Buyer	Stations	Purchase Price(1)
		(In millions)
Entravision Communications Corporation	KSSC-FM (formerly KVYY-FM) (Ventura, California)	$	100.0
	KSSE-FM (formerly KLYY-FM) (Arcadia, California)
	KSSD-FM (formerly KSYY-FM) (Fallbrook, California)

Nassau Broadcasting Holdings, Inc.	WYNY-FM (Briarcliff Manor, New York)		43.0
	WWZY-FM (Long Branch, New Jersey)
	WWXY-FM (Hampton Bays, New York)
	WWYY-FM (Belvidere, New Jersey)

Spanish Broadcasting System of Illinois, Inc.	WDEK-FM (De Kalb, Illinois)		22.0
	WKIE-FM (Arlington Heights, Illinois)
	WKIF-FM (Kankakee, Illinois)

HBC Illinois, Inc.	WVIV (formerly WXXY-FM) (Highland Park, Illinois)		32.9


		$	197.9

(1)

Excludes stock consideration ~~discussed below.~~payable in the form of Entravision’s Class A common stock.

In addition, Entravision will issue 3,766,478 shares of Entravision’s Class A common stock to Big City Radio in connection with the asset sale to Entravision. Based on the closing sale price of the Class A common stock as reported by The New York Stock Exchange on ,March 17, 2003, the last full trading day before the date of this joint information statement/prospectus, the shares to be issued to Big City Radio had an aggregate value of $approximately $23.5 million. The Asset Purchase Agreement does not contain any price adjustment provisions designed to protect Big City Radio against a decline in the value of Entravision’s Class A common stock before it receives the stock upon the closing of the asset sale. After the closing, Big City Radio may have to sell at least a portion of its Entravision shares to obtain sufficient cash to repay its senior notes and satisfy its other liabilities and obligations. If and when Big City Radio seeks to sell its shares of Entravision’s Class A common stock, it may not be able to do so for proceeds that approximate the closing date value or that are sufficient to meet its cash needs.

The table below summarizes the information about Big City ~~Radio currently estimates that it will incur federal, state and local income taxes~~Radio’s estimated use of ~~approximately $14.4 million in connection with~~the proceeds from the asset sales and other matters, after the application of available net operating loss carryforwards. See “Unaudited Pro Forma Financial Information of Big City Radio” for a presentation of the pro forma effect of income taxes. Big City Radio estimates that the brokerage, legal and accounting fees payable by it relatingsale to the transactions will total approximately $2.5 million. Big City Radio will incur other transaction costs, including the payments to its executive officers and directors summarized above under "Interests of Big City Radio Executive Officers and Directors in the Asset Sale," severance payments, lease termination expense and other similar expenses associated with the termination of contracts which are not being assumed by Entravision and the other ~~buyers.~~

~~Under its forbearance agreement with holders~~station sales to Nassau Broadcasting, Spanish Broadcasting and Hispanic Broadcasting in the order of ~~its senior notes,~~the priority of such payments. The amounts shown represent Big City ~~Radio is obligated to apply the aggregate net cash proceeds~~Radio’s current estimate of the asset sales first to pay the principal amount of the senior notes and all accrued and unpaid interest thereon through the date of such payment. As of January 15, 2003, Big City Radio owed holders of the senior notes approximately $190.7 million, consisting of $174 million of principal and approximately $16.7 million of accrued and unpaid interest.

those amounts.

Use of Asset Sale Proceeds	Estimated Amount
	(In millions)
Payment to holders of the senior notes(1)	$	193.8
Transaction related expenses(2)	$	3.0
Taxes(3)	$	9.0
Other(4)	$	4.5

	$	210.3

(1)

Reflects the amount payable to the holders of the senior notes as of the date of this joint information statement/prospectus, consisting of $174 million of principal and approximately $19.8 million of accrued and unpaid interest. Interest will continue to accrue on the senior notes until the date of payment.

(2)

Reflects brokerage, legal and accounting fees.

(3)

Reflects federal, state and local income taxes to be incurred in connection with the asset sale to Entravision, the other Big City Radio station sales and other matters, after the application of available net operating loss carryforwards. See “Unaudited Pro Forma Financial Information of Big City Radio” for a presentation of the effect of income taxes.

(4)

Reflects (a) lease termination expenses, (b) severance payments and (c) payments of approximately $2.2 million that may become due to three of Big City Radio’s executive officers, one of whom is a director, under their employment and stock option agreements upon completion of the asset sale to Entravision and the other Big City Radio station sales, assuming such transactions are completed on March 31, 2003. See “Interests of Big City Radio Executive Officers and Directors” above for information about these potential payments.

In connection with the asset sale to Entravision and the other station sales to Nassau Broadcasting, Spanish Broadcasting and Hispanic Broadcasting, Big City Radio will retain specified assets and liabilities. For a description of the specific assets and liabilities Big City Radio will retain in connection with the asset sale to Entravision, see “Terms of the Asset Purchase Agreement.”

If Big City Radio completes its asset sale to Entravision and its other pending station sales, it will have sold substantially all of its operating assets. At such time, Big City Radio’s board of directors would determine whether it would then be in the best interests of Big City Radio and its stockholders for Big City Radio to distribute any available proceeds to the stockholders, whether under a plan of dissolution or otherwise. If Big City Radio is unable to complete the asset sale to Entravision or any of the other Big City Radio station sales, it will not be in a position to make such a distribution. Accordingly, Big City Radio’s board of directors will be in a position only at a later date to determine whether Big City Radio should make a distribution of available proceeds of the asset sales to its stockholders and, if it determines to make a distribution, the amount thereof. These determinations will depend on various factors, a number of which are not within Big City Radio’s control, including the following:

whether, in the judgment of Big City Radio’s board of directors, it is in the best interests of Big City Radio and its stockholders to distribute any remaining assets to stockholders or to seek to deploy those assets into new operations;

the dates on which the asset sale to Entravision and the other pending Big City Radio station sales are completed;

•

whether these asset sales are completed;

•

~~the dates on which the Entravision asset sale and the other pending Big City Radio station sales are completed;~~

•

~~whether these asset sales are completed;~~

the amount of Big City Radio’s liabilities and other obligations to be paid in the future;

•

the resolution of pending litigation and other contingent liabilities;

•

~~the amount of Big City Radio’s liabilities and other obligations to be paid in the future;~~

the outcome of pending or proposed tax legislation; and

•

~~the resolution of pending litigation and other contingent liabilities;~~

general business and economic conditions.

•

~~the outcome of pending or proposed tax legislation; and~~

•

~~general business and economic conditions.~~

One alternative Big City Radio’s board of directors would consider following completion of the asset sales is adoption of a plan for the dissolution of Big City Radio. A plan of dissolution would require approval by Big City Radio’s stockholders under Delaware law. If it were to adopt a plan of dissolution, the Big City Radio board of directors would determine the terms of such a plan at the time of adoption consistent with the requirements of Delaware law. Big City Radio expects that such a plan generally would provide that Big City Radio would sell or otherwise dispose of all of its remaining property and assets, with such exceptions as its board of directors may

approve at the time, such as retention of property and assets that the board of directors may deem necessary or advisable to enable Big City Radio to pursue any claims and causes of action. Following the liquidation of its remaining assets, Big City Radio would pay, or provide for the payment of, its remaining liabilities and obligations to the extent possible, as required by Delaware law. Subject to the payment, or the provision for payment, of Big City Radio’s liabilities and obligations, any remaining assets would be available for distribution from time to time on a pro rata basis to stockholders. Big City Radio may not be able to determine for a significant period following adoption of a plan of dissolution whether any assets would be available for distribution to its stockholders. Such a determination would be made only after Big City Radio’s creditors have received legally required notices concerning the plan and after adequate provision has been made for contingent as well as known liabilities. Big City Radio cannot ~~provide any assurance~~assure its stockholders that there would ultimately be sufficient proceeds from the asset sales to provide for Big City Radio’s liabilities and obligations or to make distributions to Big City Radio’s stockholders under a plan of dissolution.

Even if Big City Radio is able to repay its senior notes and other liabilities and has additional proceeds from the asset sales, its board of directors may determine not to approve a plan of dissolution or otherwise authorize a distribution of such proceeds to its stockholders, but instead may approve use of the proceeds for investment in opportunities for new operations for Big City Radio. Big City Radio does not know whether, if it does have available assets and determines to seek new opportunities, it will have any success in establishing any new operations. In addition, Big City Radio expects that for some period following completion of the auction sale of all of its radio station properties, during which it may seek to identify new opportunities, it would not be engaged in operating activities.

Whether or not Big City Radio’s board of directors adopts a plan of dissolution, Big City Radio will be obligated to continue to comply with the applicable reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, even though compliance with such reporting requirements is financially burdensome. If the dissolution of Big City Radio pursuant to a plan of dissolution is approved, in order to curtail expenses, Big City Radio may seek relief from the SEC from the reporting requirements under the Exchange Act.

Because of the uncertainties discussed above, Big City Radio cannot ~~provide any assurance~~assure its stockholders that it will have any assets available for distribution to its stockholders from proceeds of the asset sales or, if it does have assets available for distribution, that it will make a distribution of any or all of such assets.

Regulatory Approvals Required to Complete the Asset Sale

Antitrust Regulations. Under the HSR Act, the asset sale may not be consummated unless certain filings are submitted to the antitrust agencies and waiting period requirements are satisfied. Entravision and Big City Radio filed their respective notification and report forms required under the HSR Act with the antitrust agencies on December 31, 2002. Early termination of the waiting period was granted on January 10, 2003.

The FTC and DOJ frequently scrutinize the legality of transactions such as the asset sale under antitrust laws. At any time before or after the completion of the asset sale, the FTC or DOJ could take a variety of actions under the antitrust laws, including seeking to prevent the asset sale or seeking the divestiture of certain assets of Entravision. In addition, private parties as well as state attorneys general and other antitrust authorities may challenge the asset sale under federal and state antitrust laws. Entravision does not believe that any antitrust filings are required in any other jurisdiction before completion of the asset sale, but Entravision will make any such filings if it later determines that they are required.

FCC Regulations. Television and radio broadcasting are subject to the jurisdiction of the FCC under the Communications Act. The FCC has adopted comprehensive regulations governing broadcasting.

The Communications Act prohibits the assignment of a license or the transfer of control of a licensee without prior approval of the FCC. The asset sale would result in the assignment of various licenses to

Entravision Holdings LLC, a wholly-owned subsidiary of Entravision, and therefore requires FCC consent. To obtain such consent, an application containing required information must be ~~submitted to~~filed with the FCC. Big City Radio-LA, L.L.C. and Entravision Holdings LLC ~~tendered~~filed an application towith the FCC on December 24, 2002. An FCC public notice announcing that the application was accepted for filing was issued on January 6, 2003. Interested parties ~~have~~had until February 5, 2003 to file a formal petition to deny the application and can file informal objections at any time prior to the grant of the application. No party filed a formal petition to deny the application by February 5, 2003. Under the Communications Act, the FCC will weigh any pleadings, may consider its own concerns, and may consider oral presentations from other interested persons in acting upon the application. An evidentiary hearing may be conducted if, after a review of the application and any opposing petitions, there are unresolved substantial and material questions of fact. The application may be acted upon by the staff of the FCC or referred to the full commission for decision. If the FCC or its staff grants the application, the grant is effective upon its issuance, and the FCC will give public notice of ~~the grant.~~its action. Interested parties have 30 days from the date of that public notice to seek reconsideration or review by the full commission, or, if the action was taken by the full commission, to appeal to a court of competent jurisdiction. The full commission has 40 days from the date of public notice of an action taken by the FCC’s staff in which to set aside such action on its own motion. The closing of the asset sale between Big City Radio and Entravision is conditioned, among other things, on obtaining the initial FCC grant, but is not conditioned upon such grant no longer being subject to reconsideration or review.

Based upon the application, the FCC will also assess the qualifications of Entravision, the compliance of the transaction with FCC rules, and various other factors in order to determine whether the change in ownership serves the public interest. Among other things, the FCC will consider whether Entravision complies with limitations on alien ownership of broadcast interests and whether the asset sale conforms to various rules limiting common ownership of media properties in a market.

The FCC rules regulate the extent to which one may have an “attributable interest” in more than one broadcast station. Each of the following are viewed to have an attributable interest in a licensee:

each officer, director, general partner and party with the power to vote or control the vote of 5% or more of the outstanding voting power of a licensee, although the ownership threshold for certain passive investors is 20%; and

a party that holds a financial interest, whether equity or debt, in excess of 33% of a licensee’s total capital, if such party is either a significant program supplier to the licensee or has another media interest in the same market.

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In addition, a licensee that provides more than 15% of the programming of another station in the same market is considered to have an attributable interest in that station. Common ownership of two television stations in the same Nielsen Designated Market Area, or DMA, is permitted where there is no overlap of certain signal strength contours among the stations, where a specified number of separately owned full-power television stations will remain after the combination takes place and at least one of the stations is not a top-four station in the DMA, or where certain waiver criteria are met.

The FCC’s radio ownership rules establish numerical limits as to the number of radio stations in a single market area, which is defined by the overlap of certain signal strength contours, in which a party may have an attributable interest. The numerical limits are tied to the number of radio stations owned by all entities within that market area. The rules permit the ownership of up to eight radio stations in areas with 45 or more radio stations, and as few as one AM and one FM station in the smallest market areas.

The FCC’s radio-television cross-ownership rules limit the ability of a party to hold attributable interests in both radio and television stations in the same market. The rules prohibit a single entity from owning more than one television station and seven radio stations, or two television stations and six radio stations, in the largest markets, which are markets with at least 20 independently owned media voices.

Univision presently holds what the FCC considers to be an attributable interest in Entravision. If Univision were to continue to hold an attributable interest in Entravision after Univision’s proposed acquisition of Hispanic

Broadcasting Corporation, the numerical limits set forth in the FCC’s radio multiple ownership rules and radio-television cross-ownership rules would be exceeded in certain market areas ~~including~~which could include, subject to appropriate analysis, Los Angeles.

In ~~connection~~February 2003, Univision announced that it had reached a tentative agreement with ~~Univision’s~~DOJ pursuant to which Univision agreed, among other things, to convert all of its shares of Entravision capital stock into a new series of non-voting preferred stock (with certain approval rights over specific types of transactions). On March 10, 2003, Entravision’s board of directors approved in principle the creation of a new series of non-voting preferred stock to satisfy these conditions. The exact terms of such non-voting preferred stock remain subject to final approval by Entravision. For more information, please see “Information About Entravision—Recent Developments” at page 55.

The proposed ~~acquisition of Hispanic Broadcasting Corporation, Entravision understands that~~conversion to non-voting preferred stock is also intended by Univision ~~expects~~ to ~~restructure~~result in its ~~ownership~~equity interest in Entravision ~~in an effort to make Univision’s interest in Entravision~~being deemed non-attributable for FCC purposes. ~~Any changes~~As of the date of this joint information statement/prospectus, the FCC is reviewing whether Univision’s proposed retention of its right to approve the sale of any of Entravision’s ~~charter documents~~Univision-affiliated television stations is consistent with such non-attributable status. Univision has presented to ~~implement any restructuring would require~~ the ~~agreement of both Entravision and Univision,~~FCC its arguments for such treatment, but there can be no assurances as ~~well as any necessary approvals by Entravision’s board of directors and/or stockholders.~~

to the FCC’s determination on this issue.

Material Federal Income Tax Considerations

Big City Radio intends the following discussion to provide only a general summary of the material federal income tax consequences to Big City Radio of the asset sale to Entravision. This discussion is not a complete analysis or description of all potential federal income tax consequences of this transaction.

This discussion describes certain material federal income tax consequences to Big City Radio in connection with the asset sale to Entravision. This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended, existing and proposed Treasury regulations thereunder and current administrative rulings and court decisions, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences as described herein. In addition, the following discussion does not address the tax consequences to Big City Radio of the asset sale to Entravision and the other Big City Radio station sales under foreign tax laws or the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the asset sale to Entravision and the other Big City Radio station sales, whether or not any such transactions are undertaken in connection with the asset sale to Entravision.

The asset sale to Entravision will be treated as a taxable asset sale. As a result, Big City Radio will recognize gain or loss on the sale in an amount equal to the purchase price received, consisting of the fair market value of Entravision’s Class A common stock issued to Big City Radio on the closing date, the cash portion of the purchase price and the liabilities assumed, less transaction costs, less Big City Radio’s adjusted tax basis in

the assets sold to Entravision. Gain recognized by Big City Radio on the asset sale will be offset to the extent of available net operating losses, subject to applicable limitations. Big City Radio currently estimates it will incur federal, state and local income taxes of approximately ~~$14.4~~$9 million in connection with the asset sales to Entravision and the other buyers, and other matters, after the application of available net operating loss carryforwards. See “Unaudited Pro Forma Financial Information of Big City Radio” for a presentation of the effect of income taxes. Big City Radio’s tax basis in the Entravision shares received in exchange for the assets will equal the fair market value used to calculate Big City Radio’s gain or loss, as described above. The asset sale to Entravision and the other Big City Radio station sales, by themselves, will have no significant tax consequences to the existing Big City Radio stockholders, except indirectly to the extent of the corporate-level tax consequences to Big City Radio.

Accounting Treatment

Upon the closing of the asset sale to Entravision, Big City Radio will remove the assets and assumed liabilities associated with the Los Angeles area radio stations to be sold in the asset sale from Big City Radio’s consolidated balance sheet and record a gain or loss on the sale of these stations equal to the difference between the purchase price received and the book value of the net assets disposed of, including related intangibles. See “Unaudited Pro Forma Financial Information of Big City Radio” for a presentation of the pro forma effect of the asset sale to Entravision and the other ~~pending~~ Big City Radio station sales.

Absence of Dissenters’ Rights

Under Delaware law, which governs the rights of Big City Radio and the rights of its stockholders, Big City Radio’s stockholders are not entitled to dissenters’ rights of appraisal or other rights to demand fair value for their shares of Big City Radio by reason of the asset sale to Entravision.

TERMS OF THE ASSET PURCHASE AGREEMENT

The following is a summary of the material provisions of the Asset Purchase Agreement, a copy of which is attached asAnnex A to this joint information statement/prospectus and is incorporated by reference into this document. This summary is not complete and is qualified in its entirety by reference to the Asset Purchase Agreement. Entravision and Big City Radio urge you to read the Asset Purchase Agreement for a more complete description of the terms and conditions of the asset sale.

The Asset Sale

Entravision, Big City Radio and Big City Radio-LA, L.L.C., a wholly-owned subsidiary of Big City Radio, entered into an Asset Purchase Agreement dated as of December 23, 2002. The Asset Purchase Agreement provides that Entravision will purchase three Los Angeles area radio stations which currently broadcast as KSSE-FM, KSSC-FM and KSSD-FM and formerly broadcast as KLYY-FM, KVYY-FM and KSYY-FM, a related booster station, KSSE-FM1, which formerly broadcast as KLYY-FM1, and an FM translator station, K252BF, from Big City Radio. The three radio stations, the booster station and the translator station are referred to below as the Stations. The Asset Purchase Agreement provides that Big City Radio will sell to Entravision, and Entravision will purchase from Big City Radio, the following assets:

all licenses, construction permits or authorizations issued by or pending before the FCC for use in the operation of the Stations;

Big City Radio’s leases for transmitter sites used in the operation of the Stations;

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~~all licenses, construction permits or authorizations issued by or pending before the FCC for use in the operation of the Stations;~~

Big City Radio’s transmitter equipment, including broadcast towers, antennas, main and back-up transmitters and generators, and other tangible property of Big City Radio located or used at the transmitter sites of the Stations;

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~~Big City Radio’s leases for transmitter sites used in the operation of the Stations;~~

Big City Radio’s leases for studios used in the operation of the Stations;

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all of Big City Radio’s studio equipment, production and imaging equipment, office equipment, furniture and vehicles used in operating the Stations; and

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~~Big City Radio’s leases for studios used in the operation of the Stations;~~

all of Big City Radio’s intellectual property related to the operation of the Stations, including promotional materials, tapes, record libraries, call letters, Marti frequencies, trademarks, trade names, including the trade names “Viva 107.1,” “Viva” and “Viva Alternativa” in the geographic areas served by the Stations, copyrights and internet domain names.

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~~all of Big City Radio’s studio equipment, production and imaging equipment, office equipment, furniture and vehicles used in operating the Stations; and~~

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The following items are excluded from the sale:

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~~all cash or cash equivalents of Big City Radio or the Stations on hand on the day immediately preceding the date of the closing;~~

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~~any accounts receivable, notes receivable or other receivables of Big City Radio;~~

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~~all deposits and prepaid expenses of the Stations;~~

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~~Big City Radio’s corporate seal, minute books, charter documents, stock record books and other books and records that pertain to the organization of Big City Radio;~~

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~~all securities owned by Big City Radio;~~

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~~all insurance contracts;~~

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~~all time sales agreements or barter rights of the Stations;~~

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~~all claims arising out of acts occurring prior to the closing date, or claims that related to the period prior to the closing date;~~

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~~all of Big City Radio’s rights under the Asset Purchase Agreement;~~

all cash or cash equivalents of Big City Radio or the Stations on hand on the day immediately preceding the date of the closing;

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~~all pension, profit sharing, retirement, bonus, medical, dental, life, accident insurance, disability, executive or deferred compensation and other similar fringe or employee benefit plans;~~

any accounts receivable, notes receivable or other receivables of Big City Radio;

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~~all rights to the name “Big City” and “Big City Radio” and any logo or variation thereof and the goodwill associated therewith; and~~

all deposits and prepaid expenses of the Stations;

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~~all rights to the trade name “Viva” and any derivatives thereof except to the extent indicated above as acquired by Entravision.~~

Big City Radio’s corporate seal, minute books, charter documents, stock record books and other books and records that pertain to the organization of Big City Radio;

all securities owned by Big City Radio;

all insurance contracts;

all time sales agreements or barter rights of the Stations;

all claims arising out of acts occurring prior to the closing date, or claims that related to the period prior to the closing date;

all of Big City Radio’s rights under the Asset Purchase Agreement;

all pension, profit sharing, retirement, bonus, medical, dental, life, accident insurance, disability, executive or deferred compensation and other similar fringe or employee benefit plans;

all rights to the name “Big City” and “Big City Radio” and any logo or variation thereof and the goodwill associated therewith; and

all rights to the trade name “Viva” and any derivatives thereof except to the extent indicated above as acquired by Entravision.

In addition, Entravision will assume the obligations of Big City Radio under various agreements specified in the schedules to the Asset Purchase Agreement. However, Entravision will not assume any liabilities of Big City Radio arising from or out of the following:

claims made against Big City Radio’s assets which are not being purchased by Entravision;

the operation of the Stations or the ownership or use of the assets being purchased prior to the closing date, except as provided for in the Time Brokerage Agreement;

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~~claims made against Big City Radio’s assets which are not being purchased by Entravision;~~

taxes;

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~~the operation of the Stations or the ownership or use of the assets being purchased prior to the closing date, except as provided for in the Time Brokerage Agreement;~~

claims by former or current officers, directors, employees, stockholders or affiliates of Big City Radio, including liabilities in connection with any employment agreements or contracts, employee benefit plans or collective bargaining, labor or employment agreements or other similar agreements, or obligations in respect of retiree health benefits;

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~~taxes;~~

the Asset Purchase Agreement or the events or negotiations leading up to the Asset Purchase Agreement;

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accounts payable as of the closing date; or

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~~the Asset Purchase Agreement or the events or negotiations leading up to the Asset Purchase Agreement;~~

any existing, pending or future litigation of Big City Radio arising out of or related to events occurring prior to the closing date.

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~~accounts payable as of the closing date; or~~

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~~any existing, pending or future litigation of Big City Radio arising out of or related to events occurring prior to the closing date.~~

Consideration to be Paid by Entravision

The total consideration to be paid by Entravision for the assets of the Stations at the closing will be $100 million in cash and 3,766,478 shares of Entravision’s Class A common stock. Of the $100 million cash portion of the consideration, Entravision has paid $1 million into escrow pursuant to a deposit escrow agreement.

The number of shares of Entravision’s Class A common stock to be issued to Big City Radio is fixed and therefore will be adjusted only to reflect stock dividends, stock splits, stock combinations or similar changes in Entravision’s capitalization before the closing of the asset sale.

The purchase price will be allocated among the assets being purchased by Entravision for all purposes, including financial, accounting and tax purposes, as agreed by the parties within 60 days after the date of the Asset Purchase Agreement. If Big City Radio and Entravision are unable to agree on such allocation within such period of time, they will retain a nationally recognized appraisal firm experienced in valuing radio broadcast properties to perform an appraisal and deliver a report to Big City Radio and Entravision as soon as reasonably practicable.

Items of income, expense, liability for state and local taxes, annual FCC regulatory fees, prepaid items, deposits, credits, utility and service charges, lease expenses and license fees will be prorated between Big City Radio and Entravision as provided for in the Asset Purchase Agreement, except as provided otherwise in the Time Brokerage Agreement. See “Other Principal Agreements Between Entravision and Big City Radio—Time Brokerage Agreement” for a discussion of the terms of the Time Brokerage Agreement.

Closing

Subject to the satisfaction or waiver of the conditions precedent in the Asset Purchase Agreement, the closing will be held on the fifth business day after the date on which the FCC grants an initial order consenting to the assignment of the FCC licenses from Big City Radio to Entravision Holdings, LLC, a wholly-owned subsidiary of Entravision.

Representations and Warranties

The Asset Purchase Agreement contains a number of representations and warranties by Big City Radio and Entravision to each other, including those regarding:

their organization, existence and good standing;

their authority to enter into the Asset Purchase Agreement, the Time Brokerage Agreement and the deposit escrow agreement, to carry out the transactions contemplated in those agreements, and the validity and binding effect of those agreements;

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~~their organization, existence and good standing;~~

in connection with the execution and delivery of the principal agreements to the transaction, the absence of any conflict with such party’s organizational documents, the absence of any violation of any laws which would have a material adverse effect on that party, and the absence of a default under or the creation of a lien on any of the assets being purchased under any material agreement or instrument by which that party is bound;

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no approval, authorization, consent order or other action, or filing with, any court or governmental authority being required in connection with the execution of the principal agreements in the transaction, other than those of the FCC and as required under the HSR Act;

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finders fees, broker commissions or similar payments to be made by the parties; and

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information contained in this joint information statement/prospectus.

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~~finders fees, broker commissions or similar payments to be made by the parties; and~~

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~~information contained in this joint information statement/prospectus.~~

In addition, Big City Radio has made representations to Entravision regarding:

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~~the approval of Big City Radio’s stockholders in connection with the execution, delivery and performance by Big City Radio of the Asset Purchase Agreement and the transactions contemplated thereby;~~

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~~sole and exclusive ownership of all the assets being purchased, except leased property;~~

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~~valid, binding and enforceable leasehold interests to the leased transmitter sites and studio sites being purchased;~~

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~~the non-existence of violations of zoning, building, health, fire, water use or similar laws in connection with the leased transmitter sites and studio sites being purchased;~~

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~~the good condition and working order of Big City Radio’s tangible personal property being purchased;~~

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the status of all of the material FCC licenses necessary for the lawful ownership and operation of the Stations as currently conducted, that such licenses are in full force and effect, and that the Stations are being operated in compliance in all material respects with the Communications Act, the rules and regulations of the FCC;

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~~the filing of all reports required by law or order of any court or governmental authority;~~

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the filing of all tax reports and returns required to be filed by or relating to the assets being purchased, and the payment of all taxes, penalties, interest, deficiencies, assessments or other charges due with respect to such taxes;

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~~compliance with all environmental laws with respect to the assets being purchased;~~

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~~the status of litigation;~~

the approval of Big City Radio’s stockholders in connection with the execution, delivery and performance by Big City Radio of the Asset Purchase Agreement and the transactions contemplated thereby;

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~~non-default under any of the contracts being assumed by Entravision;~~

sole and exclusive ownership of all the assets being purchased, except leased property;

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~~the right to use the business records of the Stations being purchased free and clear of any royalty or other payment obligation;~~

valid, binding and enforceable leasehold interests to the leased transmitter sites and studio sites being purchased;

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~~third-party consents required to consummate the transactions; and~~

the non-existence of violations of zoning, building, health, fire, water use or similar laws in connection with the leased transmitter sites and studio sites being purchased;

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~~the limitation of the representations and warranties of Big City Radio in the Asset Purchase Agreement.~~

the good condition and working order of Big City Radio’s tangible personal property being purchased;

the filing of all reports required by law or order of any court or governmental authority;

compliance with all environmental laws with respect to the assets being purchased;

the status of litigation;

non-default under any of the contracts being assumed by Entravision;

the right to use the business records of the Stations being purchased free and clear of any royalty or other payment obligation;

third-party consents required to consummate the transactions; and

the limitation of the representations and warranties of Big City Radio in the Asset Purchase Agreement.

Entravision has made representations to Big City Radio regarding:

Entravision Holdings, LLC, the entity acquiring the FCC licenses being purchased from Big City Radio, being legally, financially and otherwise qualified to be the assignee of such FCC licenses;

Entravision and its affiliates not being required to sell, dispose or surrender any FCC license held by Entravision or its affiliates with respect to any broadcast properties under the Communications Act or antitrust laws;

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~~Entravision Holdings, LLC, the entity acquiring the FCC licenses being purchased from Big City Radio, being legally, financially and otherwise qualified to be the assignee of such FCC licenses;~~

the media interests Entravision owns or possesses in the Los Angeles market;

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Entravision’s financial ability to consummate the transaction at the closing in terms of the cash purchase price and the shares of its Class A common stock to be issued at such time;

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~~the media interests Entravision owns or possesses in the Los Angeles market;~~

the status of the shares of Entravision’s Class A common stock to be issued to Big City Radio as being duly and validly issued, fully paid and nonassessable and not subject to pre-emptive or similar rights, and free and clear of all liens;

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~~Entravision’s financial ability to consummate the transaction at the closing in terms of the cash purchase price and the shares of its Class A common stock to be issued at such time;~~

the status of the shares of Entravision’s Class A common stock to be issued to Big City Radio as being duly registered under the Securities Act, freely and immediately transferable and distributable by Big City Radio, free of all restrictions on transfer under applicable federal and state securities laws and issued in compliance with all applicable federal and state securities laws;

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the status of the shares of Entravision’s Class A common stock being issued to Big City Radio as being listed on The New York Stock Exchange, subject only to official notice of issuance;

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no requirement of approval by Entravision’s stockholders to issue the shares of Entravision’s Class A common stock to Big City Radio; and

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~~the status of the shares of Entravision’s Class A common stock being issued to Big City Radio as being listed on The New York Stock Exchange, subject only to official notice of issuance;~~

the filing of SEC reports.

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~~no requirement of approval by Entravision’s stockholders to issue the shares of Entravision’s Class A common stock to Big City Radio; and~~

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~~the filing of SEC reports.~~

The representations and warranties contained in the Asset Purchase Agreement will terminate upon the closing of the asset sale to Entravision.

Covenants and Agreements

Within five business days following the signing of the Asset Purchase Agreement, the parties have agreed to complete the filing under the HSR Act. This filing was made on December 31, 2002 and early termination of the waiting period was granted on January 10, 2003.

Within one business day following the signing of the Asset Purchase Agreement, the parties have agreed to file applications with the FCC requesting its consent to assign the FCC licenses from Big City Radio-LA, L.L.C., a wholly owned subsidiary of Big City Radio, to Entravision Holdings, LLC. The parties filed these applications on December 24, 2002.

The parties have agreed to use their reasonable best efforts to:

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~~consummate the transactions contemplated by the Asset Purchase Agreement;~~

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~~obtain governmental or other actions, non-actions, clearances, waivers, consents, approvals, permits and orders required to consummate the transactions;~~

consummate the transactions contemplated by the Asset Purchase Agreement;

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~~furnish all information required for any application or other filing;~~

obtain governmental or other actions, non-actions, clearances, waivers, consents, approvals, permits and orders required to consummate the transactions;

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~~avoid the entry of any order that would restrain, prevent or delay the closing or the FCC order consenting to the assignment of the FCC licenses for the Stations; and~~

furnish all information required for any application or other filing;

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~~execute and deliver any additional instruments necessary to assign the FCC licenses from Big City Radio-LA, L.L.C. to Entravision Holdings, LLC.~~

avoid the entry of any order that would restrain, prevent or delay the closing or the FCC order consenting to the assignment of the FCC licenses for the Stations; and

execute and deliver any additional instruments necessary to assign the FCC licenses from Big City Radio-LA, L.L.C. to Entravision Holdings, LLC.

The parties have further agreed that:

the terms of the confidentiality agreement among them will continue in full force and effect until the closing; and

they will consult with each other before issuing any press release or otherwise making any public announcements.

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~~the terms of the confidentiality agreement among them will continue in full force and effect until the closing; and~~

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~~they will consult with each other before issuing any press release or otherwise making any public announcements.~~

Big City Radio has agreed:

to use its reasonable best efforts to obtain all necessary third-party consents;

to use its reasonable best efforts to provide Entravision access to information of Big City Radio related to the assets being purchased, including Big City Radio’s books and records;

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~~to use its reasonable best efforts to obtain all necessary third-party consents;~~

to conduct the business of the Stations in the ordinary course, subject to the terms of the Time Brokerage Agreement, unless the prior consent of Entravision is first obtained; and

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~~to use its reasonable best efforts to provide Entravision access to information of Big City Radio related to the assets being purchased, including Big City Radio’s books and records;~~

to bear the risk of loss of all damage to, or loss or destruction of any of, the assets being purchased by Entravision between the date of the Asset Purchase Agreement and the closing date; provided, however, that if any restoration, repair or replacement does not exceed $100,000 and is not accomplished prior to the closing date, the parties will consummate the closing and Entravision will be entitled to all insurance proceeds; and provided, further, that if any such restoration, repair or replacement exceeds $100,000 and is not accomplished prior to September 23, 2003, Entravision may terminate the Asset Purchase Agreement in its sole and absolute discretion.

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~~to conduct the business of the Stations in the ordinary course, subject to the terms of the Time Brokerage Agreement, unless the prior consent of Entravision is first obtained; and~~

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Within one business day after the earlier of the expiration or termination of any waiting period under the HSR Act, the parties agreed to enter into the Time Brokerage Agreement, which will remain in effect until the closing or the termination of the Asset Purchase Agreement. Early termination of the waiting period was granted on January 10, 2003 and Entravision and Big City Radio entered into the Time Brokerage Agreement on January 15, 2003.

Within three business days after the effective date of the Time Brokerage Agreement, Big City Radio has agreed to deliver to Entravision a complete list of all the Stations’ accounts receivable. For a period of 180 days following the date of the Time Brokerage Agreement, Entravision will forward promptly to Big City Radio any amounts received by Entravision representing any of Big City Radio’s accounts receivable. Any account receivable not collected by Entravision within such time will revert to Big City Radio.

As of the closing date, Entravision may, at its option, offer employment to any of Big City Radio’s employees who works primarily at or for the Stations, on such terms and conditions as may be agreed upon by Entravision and such employee.

Prior to the closing, Big City Radio will consult with Entravision and obtain Entravision’s consent, which will not be unreasonably withheld, prior to making any changes to facilities in connection with the proposed upgrade of ~~KLYY-FM.~~

KSSE-FM (formerly KLYY-FM).

The covenants and agreements of the parties contained in the Asset Purchase Agreement will not survive the closing of the asset sale, except to the extent that such covenants and agreements contemplate actions to be taken or obligations in effect after the closing.

Securities Matters

The parties have agreed as follows:

they will share equally the SEC filing fee with respect to the registration statement of which this joint information statement/prospectus is a part;

they will use all reasonable best efforts to have the registration statement declared effective by the SEC as promptly as practicable;

•

~~they will share equally the SEC filing fee with respect to the registration statement of which this joint information statement/prospectus is a part;~~

as promptly as practicable after effectiveness of the registration statement, Big City Radio will mail this joint information statement/prospectus to its stockholders;

•

~~they will use all reasonable best efforts to have the registration statement declared effective by the SEC as promptly as practicable;~~

Entravision will take any action, other than qualifying to do business in any jurisdiction in which it is currently not so qualified, required to be taken under any applicable state securities laws in connection with the issuance of the shares to Big City Radio;

•

~~as promptly as practicable after effectiveness of the registration statement, Big City Radio will mail this joint information statement/prospectus to its stockholders;~~

Entravision will use reasonable best efforts to maintain the effectiveness of the registration statement until Big City Radio completes a stockholder distribution or public sale of the shares being issued to it by Entravision; provided, however, that Entravision will have no obligation to maintain the effectiveness of the registration statement for more than 15 months after the closing date;

•

Entravision will use reasonable best efforts to amend the registration statement as may be required from time to time to permit Big City Radio to effect a stockholder distribution or public sale of the shares being issued to it by Entravision;

•

Big City Radio will suspend use of the registration statement to effect a stockholder distribution or public sale if, as, and when requested by Entravision, provided that Entravision may not require any such suspension for more than a total of five business days on any occasion or on more than a total of two occasions during the 15-month period referred to above; and

•

prior to the closing date, Entravision will cause the shares to be issued to Big City Radio to be approved for listing on The New York Stock Exchange, subject to official notice of issuance.

•

~~prior to the closing date, Entravision will cause the shares to be issued to Big City Radio to be approved for listing on The New York Stock Exchange, subject to official notice of issuance.~~

Conditions to Closing

Conditions to Entravision’s Closing Obligations.

The obligations of Entravision to proceed with the closing are subject to the satisfaction, or waiver by Entravision, of the following conditions:

•

the representations and warranties of Big City Radio will be true and correct as of the closing date unless inaccuracies in the representations and warranties would not materially adversely effect the assets being purchased;

•

Big City Radio will have performed the covenants and agreements provided for in the Asset Purchase Agreement, including those mentioned above, unless the failure to perform such covenants and agreements would not materially adversely effect the assets being purchased;

•

the FCC order consenting to the assignment of the FCC licenses for the Stations will be in full force and effect, although Entravision’s obligations to consummate the purchase of the assets shall not be subject to the condition that such order be a final order;

•

~~any waiting period under the HSR Act applicable to the assets being purchased will have expired or will have been terminated;~~

•

no orders, or temporary, preliminary or permanent injunction of any governmental authority will have been entered expressly prohibiting or materially restraining the transactions contemplated by the Asset Purchase Agreement;

•

~~all required third party consents will have been obtained or alternative arrangements providing Entravision with the benefit of the subject contracts will have been entered into;~~

•

the registration statement of which this joint information statement/prospectus is a part will have become effective under the Securities Act, and no stop order suspending the effectiveness of the registration statement will have been issued by the SEC;

•

~~all necessary state securities authorizations, if any, will have been received;~~

any waiting period under the HSR Act applicable to the assets being purchased will have expired or will have been terminated;

•

~~at least 20 days will have elapsed since the mailing of this joint information statement/prospectus to Big City Radio’s stockholders; and~~

•

~~the shares of Entravision’s Class A common stock to be issued to Big City Radio will have been listed on The New York Stock Exchange, subject only to official notice of issuance.~~

all required third party consents will have been obtained or alternative arrangements providing Entravision with the benefit of the subject contracts will have been entered into;

all necessary state securities authorizations, if any, will have been received;

at least 20 days will have elapsed since the mailing of this joint information statement/prospectus to Big City Radio’s stockholders; and

the shares of Entravision’s Class A common stock to be issued to Big City Radio will have been listed on The New York Stock Exchange, subject only to official notice of issuance.

The failure by Big City Radio to obtain required consents of third parties, including consents to assignments of transmitter and studio leases, could delay completion of the asset sale or increase Big City Radio’s costs to complete the asset sale.

Conditions to Big City Radio’s Closing Obligations.

The obligations of Big City Radio to sell, transfer, convey and deliver the assets being purchased to Entravision and to proceed with the closing are subject to the satisfaction, or waiver by Big City Radio, of the following conditions:

the representations and warranties of Entravision will be true and correct in all material respects as of the closing date except for Entravision’s representations and warranties regarding the issuance of Entravision’s Class A common stock to Big City Radio, which will be true and correct in all respects;

Entravision will have performed in all material respects the covenants and agreements provided for in the Asset Purchase Agreement, including those referred to above;

•

the FCC order consenting to the assignment of the FCC licenses for the Stations will be in full force and effect, although Big City Radio’s obligations to consummate the asset sale to Entravision shall not be subject to the condition that such order be a final order;

•

~~Entravision will have performed in all material respects the covenants and agreements provided for in the Asset Purchase Agreement, including those referred to above;~~

any waiting period under the HSR Act applicable to the assets being purchased will have expired or will have been terminated;

•

~~any waiting period under the HSR Act applicable to the assets being purchased will have expired or will have been terminated;~~

•

all necessary state securities authorizations, if any, will have been received;

•

at least 20 days will have elapsed since the mailing of this joint information statement/prospectus to Big City Radio’s stockholders; and

•

~~all necessary state securities authorizations, if any, will have been received;~~

the shares of Entravision’s Class A common stock to be issued to Big City Radio will have been listed on The New York Stock Exchange, subject only to official notice of issuance.

•

~~at least 20 days will have elapsed since the mailing of this joint information statement/prospectus to Big City Radio’s stockholders; and~~

•

~~the shares of Entravision’s Class A common stock to be issued to Big City Radio will have been listed on The New York Stock Exchange, subject only to official notice of issuance.~~

Termination of the Asset Purchase Agreement

The Asset Purchase Agreement may be terminated by the mutual written agreement of the parties, or as follows:

•

by Entravision, if Big City Radio is in material breach of its obligations under the Asset Purchase Agreement so that the conditions to Entravision’s obligations to close with respect to representations, warranties and covenants have not been satisfied as of the closing and such breach has not been cured by Big City Radio within 30 days following written notice of such breach;

•

by Big City Radio, if Entravision is in material breach of its obligations under the Asset Purchase Agreement so that the conditions to Big City Radio’s obligations to close with respect to representations, warranties and covenants have not been satisfied as of the closing and such breach has not been cured by Entravision within 30 days following written notice of such breach; provided, however, that no cure period will apply if the breach by Entravision is caused by the failure to issue the shares of its Class A common stock to Big City Radio in the manner specified in Entravision’s representations and warranties with respect thereto;

•

~~by either party if the FCC denies the application for consent to the assignment of the transfer of the licenses for the Stations in a final order, or has designated the application for a hearing; or~~

by either party if the FCC denies the application for consent to the assignment of the transfer of the licenses for the Stations in a final order, or has designated the application for a hearing; or

•

~~by either party if the closing has not occurred on or before September 23, 2003.~~

by either party if the closing has not occurred on or before September 23, 2003.

If the Asset Purchase Agreement is terminated as described above, all rights and obligations of the parties will terminate without any liability, except for any liability as a result of any material breach of the Asset Purchase Agreement. However, the confidentiality agreement will remain in full force and effect and the parties will each bear the cost of their own fees and expenses, including those of counsel, financial advisors and accountants.

If the Asset Purchase Agreement is terminated by Big City Radio because of Entravision’s material breach described above and failure to cure within the specified period of time, if any, the $1 million deposit will be forfeited by Entravision and paid to Big City Radio. However, this forfeiture will not constitute liquidated damages and Big City Radio will be entitled to any and all rights available at law or in equity. If the Asset Purchase Agreement is terminated for any other reason, the $1 million deposit will be refunded to Entravision.

Waiver, Assignment and Amendment

No delay or failure on the part of any party in exercising any right, power or privilege under the Asset Purchase Agreement or under any other instrument or document given in connection with the Asset Purchase Agreement will impair any such right, power or privilege or be construed as a waiver of any default by the other party. No waiver will be valid unless it is made in writing and signed by the party against whom enforcement of the waiver is sought.

The Asset Purchase Agreement may not be assigned by any party without the prior written consent of the other party. Any amendment, modification or discharge of the Asset Purchase Agreement will be set forth in writing and signed by the party against whom enforcement of the amendment, modification or discharge is sought.

Miscellaneous Provisions

Other provisions of the Asset Purchase Agreement include the following:

•

because of the unique nature of the assets and the transactions contemplated by the parties under the Asset Purchase Agreement, the parties agree that, in the event of a default by the other, the non-defaulting party may seek specific performance in additional to any other legal or equitable remedies available;

•

~~in the event of any action brought under the Asset Purchase Agreement, the prevailing party will be entitled to recover court costs and reasonable attorneys’ fees;~~

•

~~the parties will each bear the cost of their own fees and expenses, including those of counsel, financial advisors and accountants;~~

•

all sales, use, transfer, filing, recordation, registration and similar taxes and fees arising from the transactions in the Asset Purchase Agreement, whether levied on Entravision or Big City Radio, will be borne by Entravision; and

•

~~the Asset Purchase Agreement will be construed in accordance with the laws of the State of New York.~~

in the event of any action brought under the Asset Purchase Agreement, the prevailing party will be entitled to recover court costs and reasonable attorneys’ fees;

the parties will each bear the cost of their own fees and expenses, including those of counsel, financial advisors and accountants;

the Asset Purchase Agreement will be construed in accordance with the laws of the State of New York.

OTHER PRINCIPAL AGREEMENTS BETWEEN

ENTRAVISION AND BIG CITY RADIO

The following are summaries of the material provisions of additional agreements contemplated by, or referred to in, the Asset Purchase Agreement. These summaries are not complete and are qualified in their entirety by reference to the specific agreements themselves. A copy of the Time Brokerage Agreement is attached asAnnex B to this joint information statement/prospectus and is incorporated by reference into this document. Entravision and Big City Radio urge you to read ~~this agreement~~the Time Brokerage Agreement for a more complete description of its terms and conditions.

Time Brokerage Agreement

Entravision and Big City Radio-LA, L.L.C., which is the licensee of the FCC licenses to operate the Stations and is referred to herein as Big City Radio Sub, entered into the Time Brokerage Agreement on January 15, 2003. Under the Time Brokerage Agreement Entravision will provide programming and related services to the Stations in conformity with the Communications Act. Under the Asset Purchase Agreement, the parties agreed to enter into the Time Brokerage Agreement within one business day after the earlier of the expiration or termination of any waiting period under the HSR Act. Early termination of the waiting period was granted on January 10, 2003. The Time Brokerage Agreement will remain in effect until the closing under or termination of the Asset Purchase Agreement, unless terminated earlier as provided in the Time Brokerage Agreement.

Use of Station Air Time. During the term of the Time Brokerage Agreement, Big City Radio Sub will make available to Entravision, as programmer, broadcast time on the Stations as provided for in the Time Brokerage Agreement. Entravision will deliver programming, including commercial matter, news, public service announcements and other programming, at Entravision’s expense, to the Stations’ transmitters or other mutually agreed remote control points. Big City Radio Sub agrees to broadcast such programming in its entirety, including commercials at the times specified, on the Stations, subject to preemption, cancellation or substitution by Big City Radio Sub, as discussed below. Big City Radio Sub may use up to two hours per week to broadcast its own non-entertainment programming on the Stations, to be scheduled at mutually agreeable times. During the term of the Time Brokerage Agreement, Entravision will have the exclusive right to sell, directly or through a third party, commercial time during the programming provided by Entravision, for Entravision’s account.

Station Operations. Big City Radio Sub will retain ultimate authority, power and control over the operations of the Stations during the term of the Time Brokerage Agreement. Subject to this retention, Entravision agrees to use its brokered time to provide programming and related services to the Stations at its sole cost and expense. Such related services include:

sale of advertising time on the Stations;

coordination of traffic and billing functions;

•

~~sale of advertising time on the Stations;~~

ordinary maintenance of the Stations’ transmitting or studio equipment and other assets used in the business and operation of the Stations, other than the FCC licenses; and

•

~~coordination of traffic and billing functions;~~

other mutually-agreed upon administrative and operational functions consistent with FCC rules and regulations.

•

~~ordinary maintenance of the Stations’ transmitting or studio equipment and other assets used in the business and operation of the Stations, other than the FCC licenses; and~~

•

~~other mutually-agreed upon administrative and operational functions consistent with FCC rules and regulations.~~

Entravision will pay Big City Radio Sub a $1,000 fee on the commencement of the term of the Time Brokerage Agreement and at the end of each succeeding month, with the final month pro-rated based on the actual number of calendar days elapsed.

During the term of the Time Brokerage Agreement, Entravision will reimburse Big City Radio Sub and/or pay on an ongoing basis only scheduled expenses. Disputes regarding payment of any expenses which cannot be resolved by the parties within 30 days will be resolved by arbitration.

If during the term of the Time Brokerage Agreement there is any material loss, damage or destruction of any of the Stations’ transmitting or studio equipment or any of the other assets used in the business and operation of the Stations, Big City Radio Sub will make all repairs or replacements necessary to restore such item to its condition as of the date of the Time Brokerage Agreement and Entravision will reimburse Big City Radio Sub for the cost of such repairs or replacements within 15 days following receipt of written evidence of such expenses; provided, however, that in the event that repair or replacement of any single item exceeds $5,000, such excess expense will be the sole responsibility of Big City Radio Sub. Disputes in connection with such repairs or replacements will be resolved by arbitration.

Station Programming and Operational ~~Policies~~Policies.

The parties agree to handle certain matters of programming and operations as follows:

Big City Radio Sub will remain responsible for the Stations’ compliance with all FCC rules and regulations and all other applicable laws, and Entravision will cooperate with Big City Radio Sub as Big City Radio Sub may request in so doing. Nothing in the Time Brokerage Agreement abrogates or limits Big City Radio Sub’s authority to discharge its obligations to the public and to the FCC. Big City Radio Sub retains the right to interrupt Entravision’s programming in case of an emergency or for programming which, in the good faith judgment of Big City Radio Sub, is of greater local or national public importance. The parties agree to cooperate to ensure that the Stations remain in compliance with all public interest obligations, hourly station identification and maintenance of each Station’s local public inspection file, as required by FCC rules and regulations.

Entravision has agreed to comply in all material respects with Big City Radio Sub’s programming policy statement, as the same may be amended from time to time to comply with FCC rules and regulations. If, in Big City Radio Sub’s reasonable discretion, Big City Radio Sub determines that a program, commercial announcement or promotional material supplied by Entravision is contrary to the public interest or does not comply with the programming policy statement, upon written notice to Entravision, Big City Radio Sub may cancel or suspend such programming and substitute its own programming or request Entravision to provide substitute programming.

•

Big City Radio Sub also has the right to delete or preempt any material in any programming furnished by Entravision that Big City Radio Sub reasonably and in good faith believes is unsuitable for broadcast or the broadcast of which would be contrary to the public interest. In such event, Big City Radio Sub may cancel or suspend such programming and substitute its own programming.

•

Big City Radio Sub will remain responsible for the Stations’ compliance with political advertising, as provided for in the Communications Act, and Entravision agrees to cooperate with Big City Radio Sub in so complying with the Communications Act.

•

Advertising of credit terms will comply with the rules of the FTC.

•

Entravision will comply, at Entravision’s expense, with the Communications Act by disclosing to Big City Radio Sub, in advance of any scheduled Station broadcast, any information of which Entravision has knowledge, as to any money, service or valuable consideration that any person has paid or accepted, or has agreed to pay or accept, for the inclusion of any matter as part of the programming to be supplied.

•

~~Advertising of credit terms will comply with the rules of the FTC.~~

Entravision will comply with the provisions of the Copyright Act of 1976, as amended.

•

~~Entravision will comply with the provisions of the Copyright Act of 1976, as amended.~~

~~Termination~~Termination.

The Time Brokerage Agreement may be terminated as follows:

•

by Entravision, if it is not then in material breach of the Time Brokerage Agreement or the Asset Purchase Agreement, if Big City Radio Sub is in material breach of Big City Radio Sub’s representations or material obligations under the Time Brokerage Agreement and has failed to cure such breach within 30 days following written notice of such breach;

•

by Entravision, in the event of the failure of any of the Stations to broadcast Entravision’s programming for two consecutive days or for one-half hour for five consecutive days as a result of Big City Radio Sub’s preemption of such programming, without notice to, or cure by, Big City Radio Sub;

•

by Big City Radio Sub, if it is not then in material breach of the Time Brokerage Agreement or the Asset Purchase Agreement, if Entravision is in material breach of Entravision’s representations or material obligations under the Time Brokerage Agreement and has failed to cure such breach within 30 days following written notice of such breach; or

•

~~automatically, upon the first to occur of any of the following:~~

automatically, upon the first to occur of any of the following:

•

~~the Time Brokerage Agreement is declared invalid by order or decree of an administrative agency or court of competent jurisdiction;~~

the Time Brokerage Agreement is declared invalid by order or decree of an administrative agency or court of competent jurisdiction;

•

~~there has been a material change in FCC rules and regulations that would cause the Time Brokerage Agreement to be in material violation thereof;~~

there has been a material change in FCC rules and regulations that would cause the Time Brokerage Agreement to be in material violation thereof;

•

~~the mutual written consent of both parties; or~~

the mutual written consent of both parties; or

•

~~the termination of the Asset Purchase Agreement in accordance with its terms.~~

the termination of the Asset Purchase Agreement in accordance with its terms.

Agreement of Principal Stockholders of Big City Radio to Consent to Asset Sale

Pursuant to an agreement dated December 23, 2002 entered into in connection with the Asset Purchase Agreement, Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P., the principal stockholders of Big City Radio, agreed to vote, or cause the holder of record to vote, in person or by proxy, all of such stockholder’s shares of Class A and Class B common stock of Big City Radio, and any other voting interest in Big City Radio, in favor of the approval and adoption of the Asset Purchase Agreement and the transactions contemplated thereby, in connection with any meeting, or written consent in lieu of a meeting, at which or in connection with which the Asset Purchase Agreement and the transactions contemplated thereby are submitted for consideration and approval of the Big City Radio stockholders. The agreement will automatically terminate on the earlier to occur of the date on which the Asset Purchase Agreement is terminated or the closing under the Asset Purchase Agreement.

On ~~December 23, 2002,~~March 5, 2003, Stuart Subotnick, Anita Subotnick and Subotnick Partners, L.P. executed and delivered to Big City Radio a written consent approving the asset sale and approving and adopting the Asset Purchase Agreement. For information about this approval, see “Approval of the Asset Sale by Big City Radio Stockholders.”

INFORMATION ABOUT ENTRAVISION

Overview

Entravision is a diversified Spanish-language media company with a unique portfolio of television, radio, outdoor advertising and publishing assets, reaching approximately 80% of all Hispanics in the United States.

•

~~Television~~Television.. Entravision owns and/or operates 42 primary television stations, ~~that~~a majority of which are located ~~primarily~~ in the southwestern United States, including the U.S./Mexican border markets. Its television stations consist primarily of affiliates of the two television networks of Univision, serving 20 of the top 50 Hispanic markets in the United States. Entravision is the largest Univision-affiliated television group in the United States. Univision is a key source of programming for Entravision’s television broadcasting business, and Entravision considers Univision to be a valuable strategic partner.

Univision’s primary network is the leading Spanish-language network in the United States, reaching more than 97% of all Hispanic households. Univision’s primary network is the most watched television network (English- or Spanish-language) among U.S. Hispanic ~~households, representing~~households. Univision’s primary network, together with its TeleFutura Network, represent an approximately ~~a 72% market~~81% share of the U.S. Spanish-language network television prime time audience as of December 2002. Univision’s networks make available to Entravision’s Univision-affiliated stations 24 hours a day of Spanish-language programming. Univision’s prime time schedule on its primary network consists of substantially all first-run programming throughout the year.

•

~~Radio~~Radio.. Entravision operates one of the largest groups of Spanish-language radio stations in the United States. Entravision owns and/or operates 58 radio stations in 23 U.S. markets, 57 of which are located in the top 50 Hispanic markets in the United States, including Spanish-language stations in Los Angeles, San Francisco, Phoenix and Dallas-Ft. Worth. Entravision’s radio stations consist of 43 FM and 15 AM stations located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas. Its radio stations cover in aggregate approximately ~~57%~~56% of the Hispanic population in the United States.

Entravision’s radio operations combine network programming with local time slots available for advertising, news, traffic, weather, promotions and community events. This strategy allows Entravision to provide quality programming with significantly lower costs of operations than it could otherwise deliver solely with independent programming.

•

Outdoor ~~Advertising~~Advertising.. Entravision’s outdoor advertising operations consist of approximately 11,400 advertising faces located primarily in ~~high-density~~high density Hispanic communities in Los Angeles and New York. Its outdoor advertising operations complement its television and radio businesses and allow for cross-promotional opportunities. Outdoor advertising offers the ability to target specific demographic groups on a cost-effective basis as compared to other advertising media. Entravision’s outdoor portfolio ~~adds to~~complements its ~~television and radio reach~~operations by providing local advertisers with significant coverage of the Hispanic communities in Los Angeles and New York.

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~~Publishing~~Publishing.. Entravision owns El Diario/la Prensa, the oldest major Spanish-language daily newspaper in the United States and one of ~~only two~~three Spanish-language daily newspapers in New York. The newspaper reports news of interest to the Hispanic community, focusing primarily on local news events and daily occurrences in Latin America. El Diario/la Prensa ~~has~~had a daily paid circulation of 57,550 as of September 29, 2002, up from 56,938 as of September 23, 2001.

For the ~~nine-month period~~year ended ~~September 30,~~December 31, 2002, the percentage of Entravision’s total net revenue contributed by each of its four segments was: television, 47%; radio, 32%; outdoor, 13%; and publishing, 8%.

Entravision was organized as a Delaware limited liability company in January 1996 to combine the operations of its predecessor entities. On August 2, 2000, Entravision completed a reorganization from a limited liability company to a corporation. On August 2, 2000, Entravision also completed ~~its~~an initial public offering of its Class A common stock.

Entravision’s principal offices are located at 2425 Olympic Boulevard, Suite 6000 West, Santa Monica, California 90404, and its telephone number is (310) 447-3870.

Recent Developments

Relationship with Univision

In connection with ~~its~~Univision’s proposed merger with Hispanic Broadcasting Corporation, Univision’s Class C directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time. In addition, in February 2003, Univision ~~has stated publicly~~announced that it ~~expects~~had reached a tentative agreement with DOJ pursuant to ~~work~~which DOJ agreed not to object to the proposed merger if Univision takes the following actions with respect to its investment in Entravision:

Univision must convert all of its shares of capital stock of Entravision ~~to restructure its interest in~~into a new series of non-voting preferred stock of Entravision ~~by exchanging its~~that would not have any consent or other voting rights other than certain of the rights that Univision had already enjoyed as the sole holder of Entravision’s Class C common stock, ~~for non-voting stock. Any changes~~namely the right to ~~Entravision’s charter documents to implement any restructuring would require the agreement~~approve a merger, sale, liquidation, or winding up of ~~both~~ Entravision and the sale by Entravision of any television station affiliated with a Univision-owned network. Any shares of such preferred stock that are transferred by Univision ~~as well as any necessary approvals~~other than to its affiliates would be converted automatically into Class A common stock of Entravision.

Over the next six years, Univision must sell enough of its Entravision stock so that Univision’s ownership of Entravision will not exceed 15% at the end of three years and 10% at the end of six years.

This tentative agreement was negotiated by Univision directly with DOJ. On March 10, 2003, Entravision’s board of directors ~~and/or stockholders.~~

approved in principle the creation of a new series of preferred stock to satisfy these conditions. The exact terms of such preferred stock remain subject to final approval by Entravision.

Univision’s agreement with DOJ will have no impact on Entravision’s existing television station affiliation agreement with Univision.

Bank Credit Facility

Entravision has obtained a consent from its lenders in connection with the purchase of the three Los Angeles area radio stations from Big City Radio. In connection with such consent, and concurrently with the closing of the asset sale, Entravision will amend its bank credit facility to, among other things, specifically contemplate the asset sale, adjust upward the existing covenants relating to maximum total debt ratio and remove the existing cap on the incurrence of subordinated indebtedness.

Selected Historical Financial Data

(In thousands, except per share and per membership unit data)

The following table contains Entravision’s selected historical financial data. The selected historical financial data have been derived from Entravision’s audited consolidated financial statements for each of the fiscal years for the five-year period ended December 31, ~~2001,~~2002, which have been audited by McGladrey & Pullen, LLP, independent public ~~accountants, and the unaudited financial statements for the nine-month periods ended September 30, 2002 and 2001.~~accountants. This selected historical financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Entravision’s audited ~~and unaudited~~ consolidated financial statements and related notes, incorporated herein by reference.

The selected historical statement of operations data for the nine months ended September 30, 2002 and 2001 and the selected historical balance sheet data as of such dates are unaudited, but include, in the opinion of Entravision’s management, all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentaion of such data. The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of results to be expected for the entire year or for any other period.

Year Ended December 31,

Nine-Month Period Ended September 30,


2001

2000

1999

1998

1997

2002

2001


(unaudited)

Statement of Operations Data:

Net revenue    $ 208,908    $ 154,021    $ 58,999    $ 44,820    $ 30,456    $ 175,970    $ 155,286







Expenses:
Direct operating    100,347    60,987    24,441    15,794    9,184    83,867    74,715
Selling, general and administrative (excluding non-cash stock-based compensation)    42,485    36,600    11,611    8,877    5,845    37,514    32,112
Corporate    15,636    12,741    5,809    3,963    3,899    12,076    11,673
Non-cash stock-based
compensation (1)    3,243    5,822    29,143    500    900    2,499    2,418
Depreciation and amortization    120,017    69,238    15,982    10,934    10,216    28,292    87,964







Total expenses    281,728    185,388    86,986    40,068    30,044    164,248    208,882







Operating income (loss)    (72,820 )    (31,367 )    (27,987 )    4,752    412    11,722    (53,596 )
Interest expense, net    (20,978 )    (23,916 )    (9,591 )    (8,244 )    (5,107 )    (18,491 )    (16,842 )
Non-cash interest expense relating to related party beneficial conversion options (2)    —      (39,677 )    (2,500 )    —      —      —      —
Gain (loss) on sale of assets    4,977    —      —      —      —      (707 )    1,668







Loss before income taxes    (88,821 )    (94,960 )    (40,078 )    (3,492 )    (4,695 )    (7,476 )    (68,770 )
Income tax (expense) benefit (3)    22,999    2,934    121    (210 )    7,531    (300 )    24,757







Net income (loss) before equity in earnings of nonconsolidated affiliates    (65,822 )    (92,026 )    (39,957 )    (3,702 )    2,836    (7,776 )    (44,013 )
Equity in earnings (loss) of nonconsolidated affiliates    27    (214 )    —      —      —      95    67







Net income (loss)    (65,795 )    (92,240 )    $ (39,957 )    $ (3,702 )    $ 2,836    (7,681 )    (43,946 )




Accretion of preferred stock redemption value    (10,117 )    (2,449 )             (7,548 )    (4,532 )




Net loss applicable to common stock    $ (75,912 )    $ (94,689 )             $ (15,229 )    $ (48,478 )




Net loss per share, basic and diluted    $ (0.66 )    $ (0.27 )             $ (0.13 )    $ (0.42 )




Weighted average common shares outstanding, basic and diluted    115,223,005    115,287,988             118,926,100    115,144,366




Pro forma: (4)
Provision for income tax benefit       5,904    2,499    322    643





Net loss applicable to common stock       $ (88,785 )    $ (37,579 )    $ (3,170 )    $ (4,052 )





Per share data:
Net loss per share, basic and diluted       $ (1.34 )    $ (1.16 )    $ (0.10 )    $ (0.12 )





Weighted average common shares outstanding, basic and diluted       66,451,637    32,402,378    32,894,802    32,972,425       ��





Loss per L.L.C. membership unit (5)       $ (31.04 )    $ (19.12 )    $ (0.07 )    $ (1.19 )

Year Ended December 31,

Nine-Month Period Ended September 30,


2001

2000

1999

1998

1997

2002

2001


(unaudited)

Other Financial Data:

Broadcast cash flow (6)    $ 66,076    $ 56,434    $ 22,947    $ 20,149    $ 15,427    $ 54,589    $ 48,459
EBITDA as adjusted (6)    50,440    43,693    17,138    16,186    11,528    42,513    36,786
Cash flows from operating activities    11,998    10,608    6,128    7,658    6,509    21,924    7,407
Cash flows used in investing activities    (63,733 )    (1,002,300 )    (59,063 )    (25,586 )    (61,908 )    (118,748 )    (61,774 )
Cash flows from financing activities    1,524    1,058,559    51,631    19,339    54,763    89,985    2,112
Capital expenditures    28,941    23,675    12,825    3,094    2,366    16,194    21,666

As of December 31,

As of September 30,


2001

2000

1999

1998

1997

2002

2001


(unaudited)

Balance Sheet Data:

Cash and cash equivalents    $ 19,013    $ 69,224    $ 2,357    $ 3,661    $ 2,250    $ 12,174    $     16,969
Total assets    1,535,517    1,560,493    205,017    131,291    111,953    1,641,930    1,557,295
Long-term debt, including current portion    252,769    254,947    167,306    99,737    74,656    310,045    253,354
Series A mandatorily redeemable convertible
preferred stock    90,720    80,603    —      —      —      98,268    85,133
Total equity    987,395    1,055,377    28,011    24,871    32,057    1,018,577    1,013,370

~~Goodwill and Other Intangible Assets—Adoption of SFAS No. 142~~

See Note 4 of Notes to Entravision’s Consolidated Financial Statements included in Entravision’s Quarterly Report on Form 10-Q for the nine-month period ended September 30, 2002 regarding the effects of its adoption of SFAS No. 142.

An unaudited reconciliation of previously reported net loss applicable to common stock and basic and diluted loss per share to the amounts adjusted for the exclusion of the amortization of goodwill and Entravision’s indefinite life intangible assets, net of the related income tax, as if SFAS No. 142 had been adopted as of January 1, 1999, follows:

Year Ended December 31,

Nine-Month Period Ended September 30,


2001

2000

1999

2002

2001


(In thousands, except per share data)

Reported net loss applicable to common stock (7)    $ (75,912 )    $ (88,785 )    $ (37,579 )    $ (15,229 )    $ (48,478 )
Add back:
Goodwill amortization    18,049    7,842    859    —      11,868
Other identified indefinite life intangible asset amortization    39,323    21,254    4,529    —      28,883





Adjusted net loss applicable to common stock    $ (18,540 )    $ (59,689 )    $ (32,191 )    $ (15,229 )    $ (7,727 )





Basic and diluted loss per share
Reported net loss applicable to common stock (7)    $ (0.66 )    $ (1.34 )    $ (1.16 )    $ (0.13 )    $ (0.42 )
Add back:
Goodwill amortization    0.16    0.12    0.03    —      0.10
Other identified indefinite life intangible asset amortization    0.34    0.32    0.14    —      0.25





Adjusted net loss applicable to common stock    $ (0.16 )    $ (0.90 )    $ (0.99 )    $ (0.13 )    $ (0.07 )

~~(footnotes on next page)~~

	Year Ended December 31,
	2002			2001			2000			1999			1998

Statement of Operations Data:
Net revenue	$	238,469		$	208,908		$	154,021		$	58,999		$	44,820

Expenses:
Direct operating		113,930			100,347			60,987			24,441			15,794
Selling, general and administrative		49,116			42,485			36,600			11,611			8,877
Corporate expenses		16,731			15,636			12,741			5,809			3,963
Non-cash stock-based compensation (1)		2,942			3,243			5,822			29,143			500
Depreciation and amortization		41,194			120,017			69,238			15,982			10,934

Total expenses		223,913			281,728			185,388			86,986			40,068

Operating income (loss)		14,556			(72,820	)		(31,367	)		(27,987	)		4,752
Interest expense, net		(24,829	)		(20,978	)		(23,916	)		(9,591	)		(8,244	)
Non-cash interest expense relating to related party beneficial conversion options (2)		—			—			(39,677	)		(2,500	)		—
Gain (loss) on sale of media properties		(707	)		4,977			—			—			—

Loss before income taxes		(10,980	)		(88,821	)		(94,960	)		(40,078	)		(3,492	)
Income tax (expense) benefit (3)		122			22,999			2,934			121			(210	)

Net loss before equity in earnings of nonconsolidated affiliates		(10,858	)		(65,822	)		(92,026	)		(39,957	)		(3,702	)
Equity in net earnings of nonconsolidated affiliates		213			27			(214	)		—			—

Net loss		(10,645	)		(65,795	)		(92,240	)	$	(39,957	)	$	(3,702	)

Accretion of preferred stock redemption value		(10,201	)		(10,117	)		(2,449	)

Net loss applicable to common stock	$	(20,846	)	$	(75,912	)	$	(94,689	)

Net loss per share, basic and diluted	$	(0.18	)	$	(0.66	)	$	(0.27	)

Weighted average common shares outstanding, basic and diluted		119,110,908			115,223,005			115,287,988

Pro forma: (4)
Provision for income tax benefit								5,904			2,499			322

Net loss applicable to common stock							$	(88,785	)	$	(37,579	)	$	(3,170	)

Per share data:
Net loss per share, basic and diluted							$	(1.34	)	$	(1.16	)	$	(0.10	)

Weighted average common shares outstanding, basic and diluted								66,451,637			32,402,378			32,894,802

Loss per L.L.C. membership unit (5)							$	(31.04	)	$	(19.12	)	$	(0.07	)

~~(footnotes from preceding page)~~

	Year Ended December 31,
	2002			2001			2000			1999			1998

Other Financial Data:
Broadcast cash flow (6)	$	75,423		$	66,076		$	56,434		$	22,947		$	20,149
EBITDA as adjusted (6)		58,692			50,440			43,693			17,138			16,186
Cash flows from operating activities		35,018			11,998			10,608			6,128			7,658
Cash flows used in investing activities		(127,216	)		(63,733	)		(1,002,300	)		(59,063	)		(25,586	)
Cash flows from financing activities		85,754			1,524			1,058,559			51,631			19,339
Capital expenditures		19,562			28,941			23,675			12,825			3,094

	As of December 31,
	2002			2001			2000			1999			1998

Balance Sheet Data:
Cash and cash equivalents	$	12,569		$	19,013		$	69,224		$	2,357		$	3,661
Total assets		1,573,481			1,535,517			1,560,493			205,017			131,291
Long-term debt, including current portion		305,910			252,769			254,947			167,306			99,737
Series A mandatorily redeemable convertible preferred stock		100,921			90,720			80,603			—			—
Total equity		1,015,043			987,395			1,055,377			28,011			24,871

(1)

Non-cash stock-based compensation consists primarily of compensation expense relating to stock awards granted to Entravision’s employees and ~~consultants and vesting of the intrinsic value of unvested options exchanged in Entravision’s acquisition of Z-Spanish Media Corporation in August 2000.~~consultants.

(2)

~~Represents non-cash~~Non-cash interest expense charges ~~related~~relate to the estimated intrinsic value of the conversion options contained in Entravision’s subordinated note to Univision in the amount of $31.6 million in 2000 and ~~$2.5 million in 1999, and~~ the conversion option feature in Entravision’s convertible subordinated note in the amount of $8.1 million in 2000.

(3)

Included in the 1997 income tax expense is a $7.8 million tax benefit that resulted from the reversal of previously recorded deferred tax liabilities that were established in Entravision’s acquisition of television station KNVO-TV, upon its conversion from a C corporation to a S corporation. Included in the 2000 income tax benefit is a charge of $10.5 million relating to the effect of change in tax status, which resulted from the recording of a net deferred tax liability upon Entravision’s reorganization from a limited liability company to a C corporation, effective with its initial public offering.

(4)

Pro forma net loss applicable to common stock and pro forma basic and diluted net loss per share give effect to Entravision’s reorganization from a limited liability company to a C corporation for federal and state income tax purposes and assume that Entravision was subject to corporate income taxes at an effective combined federal and state income tax rate of 40% before the effect of amortization of non-tax deductible goodwill, non-cash stock-based compensation and non-cash interest expense for each of the three years in the period ended December 31, 1999. The December 31, , 2000 statement of operations reflects operations and the related income tax benefit as a C corporation for the period subsequent to Entravision’s reorganization. Pro forma income tax expense is presented for the period from January 1, 2000 through the August 2, 2000 reorganization onas if Entravision had been a C corporation for the ~~same basis as the preceding years.~~entire year.

(5)

Loss per membership unit is computed as net loss of Entravision’s predecessor divided by the number of membership units as of the last day of each reporting period. For 2000, loss per membership unit is for the period from January 1, 2000 through the August 2, 2000 reorganization.

(6)

Broadcast cash flow means operating income (loss) before corporate expenses, depreciation and amortization and non-cash stock-based compensation. EBITDA as adjusted means broadcast cash flow less corporate expenses. Entravision uses the term EBITDA as adjusted because that measure does not include non-cash stock-based compensation. Entravision evaluates and projects the liquidity and cash flows of its business using several measures, including broadcast cash flow and EBITDA as adjusted. Entravision considers these measures as important indicators of liquidity relating to ~~the company’s~~its operations, as they eliminate the effects of non-cash depreciation and amortization and non-cash stock-based compensation awards. Entravision uses these measures to evaluate liquidity and cash flows improvement from year to year, as they eliminate non-cash expense items. Entravision believes that its investors should use these measures because they may provide a better comparability of Entravision’s liquidity to that of its competitors.

Entravision’s calculation of EBITDA as adjusted included herein is substantially similar to the measures used in the financial covenants included in its bank credit facility and in the indenture governing its senior subordinated notes. In those instruments, EBITDA as adjusted is referred to as “operating cash flow” and “consolidated cash flow,”

(footnotes from preceding page)

respectively. Under Entravision’s bank credit facility, the company cannot incur additional indebtedness if the incurrence of such indebtedness would result in its ratio of total debt to operating cash flow having exceeded 7.0 to 1 on a pro forma basis for the prior full four quarters. Under the indenture, the corresponding ratio of total indebtedness to consolidated cash flow cannot exceed 7.1 to 1 on the same basis. The actual ratios of total indebtedness to each of operating cash flow and consolidated cash flow were as follows (in each case for the year ended December 31): 2002, 5.2 to 1; 2001, 5.0 to 1; 2000, 5.8 to 1; 1999, 9.8 to 1; and 1998, 6.2 to 1. Entravision entered into the bank credit facility in September 2000 and issued its senior subordinated notes in March 2002, so the company was not subject to the same calculations and covenants in prior years. For consistency of presentation, however, the foregoing historical ratios assume that the current definitions had been applied for all periods.

While Entravision and many in the financial community consider broadcast cash flow and EBITDA as adjusted to be important, they should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. In addition, Entravision’s definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

~~(7)~~

Reported net loss applicable to common stock for the years ended December 31, 2000 and 1999, used to reflect Entravision’s adoption of SFAS No. 142, is adjusted to reflect the pro forma effect of Entravision’s reorganization from a limited liability company to a C corporation, as described in footnote 4 above.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the beneficial ownership of Entravision’s common stock as of December 31, 2002 by:

each person, or group of affiliated persons, known by Entravision to be the beneficial owner of more than 5% of the outstanding shares of its common stock;

each of Entravision’s directors;

•

~~each person, or group of affiliated persons, known by Entravision to be the beneficial owner of more than 5% of the outstanding shares of its common stock;~~

the Chief Executive Officer of Entravision and each of the four other most highly compensated executive officers of Entravision serving as such as of December 31, 2002 (and one additional individual who would have been included in such group but for the fact that she was no longer serving as an executive officer of Entravision as of such date) whose total annual salary and bonus exceeded $100,000, for services rendered in all capacities to Entravision and its subsidiaries (such individuals are hereafter referred to as the “Named Executive Officers”); and

•

~~each of Entravision’s directors;~~

all of Entravision’s directors and Named Executive Officers as a group.

•

~~all of Entravision’s directors and Named Executive Officers as a group.~~

Because Entravision’s Class B and Class C common stock and Series A preferred stock can be converted into Class A common stock at any time, Entravision is presenting the information below based on such conversions.

Name and Address of Beneficial Owner(1)	Class of Shares	Number of Shares of Common Stock Beneficially Owned		Percent(2)
Univision Communications Inc.(3)	A	14,943,231		11.86	%
	C	21,983,392		17.45	%
TSG Capital Group(4)	A	9,242,164		7.34	%
Walter F. Ulloa	A	264,614	(5)	*
	B	11,489,365	(6)	9.12	%
Philip C. Wilkinson	A	264,395	(7)	*
	B	11,489,365	(8)	9.12	%
Jeanette Tully(9)	A	424,599	(10)	*
John F. DeLorenzo(11)	A	—		*
Paul A. Zevnik	A	124,957	(12)	*
	B	4,699,803	(13)	3.73	%
Jeffery A. Liberman	A	79,840	(14)	*
Glenn Emanuel	A	364,915	(15)	*
Darryl B. Thompson	A	9,286,484	(16)	7.37	%
Amador S. Bustos	A	724,384	(17)	*
Michael S. Rosen	A	120,545	(18)	*
Esteban E. Torres	A	35,861	(19)	*
Patricia Diaz Dennis	A	15,000	(20)	*
All directors and Named Executive Officers as a group (12 persons)	A	11,705,594		9.21	%
	B	27,678,533		21.97	%

*Represents

beneficial ownership of less than 1%.

(1)

Unless otherwise noted, the address for each person is c/o Entravision Communications Corporation, 2425 Olympic Boulevard, Suite 6000 West, Santa Monica, California 90404.

(2)

Percentage ownership is based on ~~125,972,291~~125,972,293 shares of common stock outstanding on December 31, 2002 (assuming conversion of all outstanding shares of Class B and Class C common stock and Series A mandatorily redeemable convertible preferred stock). Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days, are deemed outstanding for determining the number of shares beneficially owned and for computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

(footnotes continued on next page)

(footnotes continued from previous page)

(3)

The address for Univision is 1999 Avenue of the Stars, Suite 3050, Los Angeles, California 90067.

(4)

TSG Capital Group consists of TSG Capital Fund II, L.P., TSG Capital Fund III, L.P., TSG Associates II Inc. and TSG Associates III, LLC. The address for each of these entities is 177 Broad Street, 12th Floor, Stamford, Connecticut 06901. Includes 5,865,102 shares of Class A common stock reserved for issuance upon conversion of Series A preferred stock held by TSG Capital Fund III, L.P. Voting and investment power over the shares held by TSG Capital Group are shared by Cleveland A. Christophe, Mark D. Inglis and Darryl B. Thompson.

(5)

Consists of 425 shares held by Ms. Alexandra Seros (Mr. Ulloa’s spouse), 1,689 shares held by Mr. Ulloa personally and an option to purchase 262,500 shares of Class A common stock.

(6)

Consists of 889,848 shares held by The Walter F. Ulloa Irrevocable Trust of 1996 and 10,599,517 shares held by Mr. Ulloa personally, of which aggregate amount 34,283 shares of Class B common stock are subject to a right of Entravision to repurchase under certain conditions.

(7)

Consists of 1,895 shares held by Mr. Wilkinson personally and an option to purchase 262,500 shares of Class A common stock.

(8)

Consists of 9,424,800 shares held by The 1994 Wilkinson Family Trust, 889,848 shares held by The 1994 Wilkinson Children’s Gift Trust and 1,174,717 shares held by Mr. Wilkinson personally, of which aggregate amount 34,283 shares of Class B common stock are subject to a right of Entravision to repurchase under certain conditions.

(9)

Ms. Tully resigned all of her positions with Entravision effective December 20, 2002.

(10)

Consists of 362 shares held by Ms. Tully personally, 249,237 shares held by The Jeanette Tully 1996 Revocable Trust and an option to purchase 175,000 shares of Class A common stock.

(11)

Mr. DeLorenzo became Entravision’s Executive Vice President and Chief Financial Officer effective December 20, 2002.

(12)

Consists of 13,821 shares held by The Zevnik Charitable Foundation and an option to purchase 111,136 shares of Class A common stock. Mr. Zevnik has shared voting power in The Zevnik Charitable Foundation.

(13)

Consists of 800,666 shares held by The Paul A. Zevnik Irrevocable Trust of 1996, 1,282,321 shares held by The Zevnik Family L.L.C. and 2,616,816 shares held by Mr. Zevnik personally, of which aggregate amount 14,507 shares of Class B common stock are subject to a right of Entravision to repurchase under certain conditions.

(14)

Consists of 1,090 shares held by Mr. Liberman personally and an option to purchase 78,750 shares of Class A common stock.

(15)

Consists of 286,165 shares held by Mr. Emanuel personally and an option to purchase 78,750 shares of Class A common stock.

(16)

Consists of 9,242,164 shares held by TSG Capital Group (see footnote 4 above) and an option to purchase 44,320 shares of Class A common stock. Mr. Thompson is a principal in each of the TSG Capital Group entities. Mr. Thompson may be deemed to exercise voting and investment power over such shares. Mr. Thompson disclaims beneficial ownership of such shares, except to the extent of his proportionate interest therein.

(17)

Consists of 709,384 shares held by Bustos Asset Management, L.L.C. and an option to purchase 15,000 shares of Class A common stock.

(18)

Consists of 76,500 shares held by LJ Holdings, L.L.C. and an option to purchase 44,045 shares of Class A common stock.

(19)

Consists of an option to purchase 35,861 shares of Class A common stock.

(20)

Consists of an option to purchase 15,000 shares of Class A common stock.

INFORMATION ABOUT BIG CITY RADIO

Business

General

Big City Radio currently owns and operates radio broadcast station groups in Los Angeles, New York, and Chicago. Big City Radio was formed in 1994 to acquire radio broadcast properties in or adjacent to major metropolitan markets and utilize innovative engineering techniques and low-cost, ratings-driven operating strategies to develop these properties into successful metropolitan radio stations. To accomplish this objective, Big City Radio has applied a variety of innovative broadcast engineering techniques to the radio broadcast properties it ~~acquires,~~has acquired, including Synchronized Total Market Coverage^™, or STMC^™. STMC^™ involves the acquisition of two or more stations which broadcast on the same frequency and then simulcasting their signals to achieve broad coverage of a targeted metropolitan market. In addition to STMC^™, Big City Radio may employ other broadcast engineering techniques. These engineering techniques include acquiring suburban radio stations and moving the station’s broadcast antenna closer to the metropolitan market and acquiring high-power stations adjacent to major metropolitan markets and focusing such stations’ broadcast signal into the metropolitan area.

Big City Radio’s acquisition and engineering strategies have enabled it to provide coverage of major metropolitan markets at a significantly lower acquisition cost than is typically required to acquire a major market Class B station. Class B radio stations are defined by the FCC as those facilities whose signal is predicted to cover a regional urban area. Big City Radio currently owns and operates one STMC^™ station combination in each of New York and Los Angeles and two STMC^™ station combinations in Chicago.

Since its inception, Big City Radio has incurred substantial net operating losses primarily due to broadcast cash flow deficits associated with the start up of its radio station operations. As of December 31, 2002, Big City Radio had incurred a cumulative cash flow deficit of approximately $164 million and a cumulative net loss of approximately $135 million since inception.

On October 31, 2001, Big City Radio sold its ~~three~~four radio stations in Phoenix, Arizona for an aggregate purchase price of $34 million.

Station Operations

Los Angeles, New York, and Chicago are the three largest markets in the United States in terms of aggregate radio revenues. Big City Radio has chosen formats for its radio station properties in these markets that it believes offer the greatest ratings and revenue potential and have a strong competitive position.

Historically, Big City Radio has derived the largest portion of its revenues from its Los Angeles area radio stations.

Los Angeles. The Los Angeles market is the second largest Arbitron market in terms of population and the largest in terms of aggregate radio market revenues in the United States, with ~~2001~~estimated 2002 revenues of ~~$794~~$845 million. The Arbitron Company provides advertisers with the industry-accepted measure or ratings of listening audience classified by demographic segment and time of day that the audience listens to particular radio stations. Arbitron provides “diaries,” or listening logs, to listeners in each significant radio market. These individuals record their listening by time and station, and Arbitron compiles their responses to produce ratings. An Arbitron market is the geographic area in which Arbitron performs its radio audience studies and for which it produces periodic reports of radio audience listening data. From ~~1997~~1998 to ~~2001,~~2002, radio advertising revenue in the Los Angeles Arbitron Metro Survey Area, or MSA, grew from ~~$553~~$656 million to ~~$794~~$845 million, representing a compound annual growth rate of ~~9.5%~~6.5%.

Until January 15, 2003, when Big City Radio ~~operates~~entered into a time brokerage agreement with Entravision in connection with the pending sale of its Los Angeles area radio stations to Entravision, Big City Radio operated three Los Angeles stations ~~which broadcast~~ as Viva 107.1. Viva 107.1 ~~and feature~~featured a Hispanic contemporary hit radio format on the

107.1 FM frequency. ~~Viva 107.1 covers~~The Los Angeles area stations cover approximately 90% of the Arbitron diaries, the method by which Arbitron gathers data on radio audience listening preferences, in the Los Angeles MSA, as a result of an increase in its transmission power which Big City Radio implemented in the first quarter of 1998. Big City Radio believes that this coverage is substantially similar to the Arbitron diary coverage of many of the highest-ranked Los Angeles Class B stations. Big City Radio debuted Viva 107.1 in December 1999 as its first Hispanic station, and it earned a 1.1% share in the 12+ category, the broad demographic group of radio listeners age 12 and over, as of the ~~Summer~~Fall 2002 Arbitron book. The Arbitron book is a quarterly report of radio audience listening preferences for a given market. Big City Radio acquired the Los Angeles area radio stations in May 1996 for a combined purchase price which is significantly lower than the reported purchase prices of Class B stations in the Los Angeles MSA before such acquisition, as evidenced by reported transactions consummated after the deregulation initiated by the passage of the Telecommunications Act of 1996, or Telecom Act. See “Acquisitions” below for more information about these acquisitions. In addition to its coverage of the Los Angeles market, Viva 107.1 covers parts of the Ventura, Orange, Riverside-San Bernardino and San Diego markets.

Entravision is currently providing programming and related services for the Los Angeles area stations, which remain under Big City Radio’s ultimate control pending completion of the sale of the stations to Entravision.

Big City Radio believes that identifying the appropriate format in a particular market for a station is crucial to the station’s ability to achieve meaningful penetration of the market’s listening audience and aggregate advertising revenues. Big City Radio launched its current Hispanic contemporary hit radio format after an extensive updated research study of the Los Angeles market in 1999.

Big City Radio believes that extensive engineering expertise is required to achieve Class B station equivalent Arbitron coverage and broadcast quality. In Los Angeles, Big City Radio uses several advanced techniques to achieve what Big City Radio believes to be substantially full coverage. In addition to the three stations, Big City Radio uses a booster located in the San Fernando Valley to enhance its coverage of the market. Big City Radio believes these engineering solutions have resulted in significantly broader coverage than traditional simulcasting.

New York. The New York MSA is the largest Arbitron market in terms of population and the second largest in terms of aggregate radio market revenues in the United States, with ~~2001~~estimated 2002 revenues of ~~$685~~$754 million. From ~~1997~~1998 to ~~2001,~~2002, radio advertising revenue in the New York MSA grew from ~~$524~~an estimated $611 million to ~~$685~~an estimated $754 million, representing a compound annual growth rate of ~~6.9%~~5.4%.

Big City Radio entered the New York market with its acquisitions of four radio stations. Big City Radio has implemented STMC^™ in New York and believes that it has created the equivalent of a New York Class B station. Big City Radio’s four stations in the New York MSA collectively broadcast on the 107.1 FM frequency and, since May 2002 have been programmed as “Rumba 107.1,” which features a Hispanic contemporary hit radio format. In ~~its first full~~the Fall 2002 Arbitron book, ~~Summer 2002,~~ Rumba 107.1 did not report an audience share. Prior to May 2002, the four stations were programmed as New Country Y-107, a country music format. Rumba 107.1 currently covers approximately 90% of the Arbitron diaries in the New York MSA as a result of an increase in its transmission power pursuant to a power increase and other technical improvements, which Big City Radio implemented during the third quarter of 1998. Big City Radio believes that this coverage is substantially similar to the Arbitron diary coverage of many of the highest-ranked New York Class B stations. Big City Radio acquired the four New York stations for a combined purchase price ~~which is~~ significantly lower than the reported purchase prices of Class B stations in the New York MSA prior to such acquisitions, as evidenced by reported transactions consummated after the passage of the Telecom Act. See “Acquisitions” below for more information about these acquisitions.

Chicago. Big City Radio owns two groups of stations in the Chicago MSA. The Chicago MSA is the third largest Arbitron market in terms of population and aggregate radio market revenues in the United States with ~~2001~~estimated 2002 revenues of ~~$503~~$519 million. From ~~1997~~1998 to ~~2001,~~2002, estimated radio advertising revenue in the Chicago MSA grew from ~~$389~~$403 million to ~~$503~~$519 million, representing a compound annual growth rate of ~~6.6%~~6.5%.

~~Two~~

Until the January 13, 2003 commencement of Big City Radio’s time brokerage agreement with Hispanic Broadcasting, the purchaser of one of Big City Radio’s Chicago area stations, two of Big City Radio’s stations collectively broadcast as Viva 103.1 on the 103.1 FM frequency. Viva 103.1 commenced operations in January 2001, broadcasting a Hispanic contemporary hit radio format. Throughout 2000, it operated as The Eighties Channel, an Eighties music format. Viva 103.1 earned a ~~0.8%~~0.7% share in the 12+ category as of the ~~Summer~~Fall 2002 Arbitron book. ~~Viva 103.1~~These two stations currently ~~covers~~cover approximately 85% of the Arbitron diaries in the Chicago MSA as a result of an increase in its transmission power pursuant to a power increase and other technical improvements, which Big City Radio implemented during the third quarter of 1999. Big City Radio acquired ~~the~~these two stations ~~constituting FM 103.1~~ for a combined purchase price ~~which is~~ significantly less than the reported purchase prices of Class B stations in the Chicago MSA, as evidenced by transactions consummated since the passage of the Telecom Act. See “Acquisitions” below for more information about these acquisitions.

Hispanic Broadcasting is currently providing programming and related services for the station it has agreed to purchase, which remains under Big City Radio’s ultimate control pending completion of the asset sale to Hispanic Broadcasting. Hispanic Broadcasting paid Big City Radio a $75,000 fee on the commencement of the term of the time brokerage agreement and will pay this amount on each succeeding monthly anniversary thereof, with the final month pro-rated based on the actual number of calendar days elapsed.

The second group of stations in the Chicago area currently comprises three stations. Until the January 6, 2003 commencement of Big City Radio’s time brokerage agreement with Spanish Broadcasting, the purchaser of three of Big City Radio’s Chicago area stations, ~~which~~these stations collectively broadcast as Energy 92.7/5, or Energy 92, on the 92.7 and 92.5 FM frequencies. Energy 92 commenced operations in January 2001, broadcasting a contemporary dance hit radio format. Energy 92 earned a ~~1.2%~~0.8% share in the 12+ category as of the ~~Summer~~Fall 2002 Arbitron book. Throughout 2000, itthis station group operated as 92 KISS FM,

broadcasting a contemporary hit radio format. In February 1999, Big City Radio completed the acquisition of substantially all the assets of WDEK-FM and WLBK-AM, DeKalb, Illinois. Big City Radio added WDEK-FM, which broadcasts on the 92.5 FM frequency, to the 92.7 stations. Through use of Big City Radio’s STMC^™ technology, WDEK-FM 92.5 was engineered to form part of the Energy 92 synchronized station group together with the 92.7 FM frequency stations. ~~Energy 92~~This station group currently covers approximately 90% of the Arbitron diaries in the Chicago MSA. Spanish Broadcasting is currently providing programming and related services for this station group, which remain under Big City Radio’s ultimate control pending completion of the asset sale to Spanish Broadcasting. Spanish Broadcasting paid Big City Radio a $150,000 fee on the commencement of the term of the time brokerage agreement and will pay this amount on each succeeding monthly anniversary thereof, with the final month pro-rated based on the actual number of calendar days elapsed.

Station Advertising Sales

The advertising rates a station can charge are in large part dictated by the station’s ability to attract audiences in the demographic groups targeted by its advertisers, as measured principally by Arbitron Radio Market Reports. Big City Radio believes that identifying the appropriate format in a particular market is crucial to the station’s ability to achieve meaningful penetration of the listening audience of the market. In each market which it enters, Big City Radio performs an extensive competitive analysis to select the format with the greatest audience and revenue potential.

Big City Radio generates virtually all of its revenues from the sale of local and national advertising for broadcast on its radio stations. Big City Radio believes that radio is one of the most efficient and cost-effective means for advertisers to reach specific demographic groups. Advertising rates charged by radio stations depend primarily on a station’s share of the audience in the demographic groups targeted by advertisers, the number of stations in the market competing for the same demographic groups, and the supply of and demand for radio advertising time. Rates are generally highest during morning and afternoon commuting hours.

The format of a particular station limits, in part, the number of advertisements that the station can broadcast without jeopardizing listening levels and the resulting ratings. Big City Radio’s stations strive to maximize revenue by constantly managing the number of commercials available for sale and adjusting prices based upon local market conditions. In the broadcasting industry, radio stations often utilize trade, or barter, agreements to

generate advertising time sales in exchange for goods or services such as travel and lodging, instead of for cash. Big City Radio minimizes its use of trade agreements. Big City Radio determines the number of advertisements broadcast hourly so as to maximize available revenue dollars without jeopardizing listening levels. Although the number of advertisements broadcast during a given time period varies, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. As is typical of the radio broadcasting industry, Big City Radio’s stations respond to changing demand for advertising inventory by varying prices rather than by varying the target inventory level for a particular station.

Most advertising contracts are short-term and run only for a few weeks. Of its gross revenue, Big City Radio generated approximately 83% of its revenue from local advertising in the year ended December 31, 2001 and approximately 73% from local advertising in the ~~nine months~~year ended ~~September 30,~~December 31, 2002. Local advertising is sold primarily by a station’s sales staff. To achieve greater control over advertising revenue, Big City Radio’s sales force focuses on establishing direct relationships with local advertisers. Big City Radio formed Independent Radio Reps, LLC in November 2000, and ~~has~~ used this in-house firm of sales personnel to represent it in generating national radio advertising business.

Big City Radio completed disbanding this in-house agency in February 2003.

Internet and Publishing Operations

Big City Radio ceased its internet operations in December 2001 and discontinued its publishing operations in June 2002.

Big City Radio launched a bilingual internet portal, TodoAhora.com, in May ~~2000.~~2000 following the acquisition of Hispanic Internet Holdings, Inc. on November 1, 1999. TodoAhora.com delivered a range of world wide web programming to the Hispanic community, including news, entertainment, finance, culture, and e-commerce opportunities. During the second half of 2000, and continuing throughout 2001, there was a severe contraction in the internet sector as many actual and potential advertisers reduced internet spending. In general, portal sites rely on advertising for revenue. Many of TodoAhora.com’s competitors, as well as a number of potential new competitors, had significantly greater financial, technical, marketing and

distribution resources. As a result of the economic environment affecting the internet sector, and the existence of many competitors with greater resources, during 2001 Big City Radio decided to cease the development and operation of TodoAhora.com. The decision was based upon management’s evaluation of future revenue generation potential and the current resources needed to continue to develop and operate the portal.

In November 2000, Big City Radio acquired magazine publishing operations, which included a Hispanic music trade magazine, “Disco,” a graphic design business, and a website maintained as LatinMusicTrends.com which was designed to complement the information provided to Latin music industry professionals. In June 2002, in response to the continued downturn in the music industry advertising marketplace, Big City Radio discontinued these operations.

Competition

Radio broadcasting is a highly competitive business. Within their respective markets, each of Big City Radio’s radio stations competes for audience share and advertising revenue directly with other radio stations, as well as with other media such as television, print media, billboards, compact discs and music videos. Companies with greater financial resources than Big City Radio, including Clear Channel Communications, Inc., Infinity Broadcasting Corporation, and Hispanic Broadcasting Corporation, compete in the same geographic markets as Big City Radio. In addition, the radio industry recently has experienced significant consolidation which has resulted in the formation of several radio station groups that have a large number of radio stations throughout the United States and significantly greater financial resources and access to capital than Big City Radio.

The financial success of each of Big City Radio’s radio stations depends principally upon its share of the overall radio advertising revenue within its geographic market, its ~~promotion~~promotional and other expenses incurred to obtain that revenue and the economic health of the geographic market. Radio advertising revenues are, in turn, highly dependent upon audience share. Radio station operators are subject to the possibility of another station changing programming formats to compete directly for listeners and advertisers or launching an aggressive promotional campaign in support of an already existing competitive format. If a competitor, particularly one with substantial financial resources, were to attempt to compete in either of these fashions, the broadcast cash flow of Big City Radio’s affected station could decrease due to increased promotional and other expenses, lower advertising revenues resulting from lower ratings, or both. ~~There can be no assurance~~

Big City Radio has chosen formats that ~~any one~~target Hispanic listeners for each of its radio station groups. Each of the metropolitan areas in which Big City Radio’s station groups broadcast have large Hispanic populations. Big City Radio believes that competition among radio stations targeting the Hispanic markets in these metropolitan areas currently is less intense than the competition generally among radio stations broadcasting with other formats. However, Big City Radio believes that competition in these Hispanic markets is intensifying.

Each of Big City Radio’s stations competes for audience share and advertising revenue directly with both Spanish-language and English-language radio stations ~~will be able~~in its market, and with other media, such as newspapers, broadcast and cable television, magazines, billboard advertising, transit advertising and direct mail advertising. Big City Radio’s primary competitors in Spanish-language radio in its markets include Hispanic Broadcasting (whose merger with Univision is currently pending before federal regulators), Spanish Broadcasting and Entravision. Other large radio broadcasting companies such as Clear Channel Communications, Inc. and Infinity Broadcasting Corporation, which operate English-language radio stations, compete in the same geographic markets as Big City Radio. Most of the companies with which Big City Radio competes, including the competitors named above, are large national or regional media companies that have significantly greater resources and longer operating histories than Big City Radio. Because of its limited financial resources and severe liquidity constraints, Big City Radio has been unable to ~~maintain or increase~~devote the resources to its ~~current~~programming and promotional activities needed to compete with other companies for audience ~~ratings~~share and radio advertising revenue market share.

Big City Radio ~~may also face competition from other radio stations~~believes that ~~attempt to replicate the~~its application of a variety of innovative engineering techniques, including STMC^™, enable it to achieve broad coverage of a targeted metropolitan market. Big City Radio ~~to cover~~believes that this provides a ~~metropolitan area and from~~competitive advantage over radio stations ~~that~~utilizing traditional broadcast techniques such as simply ~~simulcast~~simulcasting on the same or first adjacent frequencies. While simulcasting has been employed by other broadcast radio operators in the past, the primary purpose has been to reduce programming costs for the individual stations. Big City Radio believes that most broadcast radio operators that have employed simulcasting have done so on different frequencies. Big City Radio believes that few operators have successfully used simulcasting to effectively cover an entire MSA.

Radio broadcasting is also subject to competition from new media technologies that are being developed or introduced, such as the delivery of audio programming by cable television systems or the introduction of a new technology known as Digital Audio Broadcasting. Digital Audio Broadcasting may deliver by satellite or terrestrial means multi-channel, multi-format digital radio services to nationwide and regional audiences. These services have sound quality equivalent to that provided by compact discs. Big City Radio cannot predict the effect, if any, that any such new technologies may have on the radio broadcasting industry.

Acquisitions

Since its incorporation in August 1994, Big City Radio has acquired the assets of 20 radio stations, an internet company, and related internet and publishing businesses. It has disposed of eight stations and ceased

internet and publishing operations. The following is a summary of the acquisitions and dispositions of radio stations which Big City Radio has consummated since its incorporation. All of these transactions were with non-affiliated persons.

New York. In December 1994, Big City Radio acquired the assets of radio station WRGX-FM (now WYNY-FM), Briarcliff Manor, New York, from West-Land Communicators, Inc. for a purchase price of $2.5 million and the issuance of a promissory note in the amount of $1 million to West-Land. In April 1997, Big City Radio acquired the assets of radio station WWHB-FM (now WWXY-FM), Hampton Bays, New York, from South Fork Broadcasting Corporation for a purchase price of $4 million. In June 1997, Big City Radio acquired the assets of radio station WZVU-FM (now WWZY-FM), Long Branch, New Jersey, including a radio tower, a radio antenna and a building from K&K Radio Broadcasting L.L.C. and K&K Tower, L.L.C., for an aggregate purchase price of $12 million and certain payments under existing leases of the building facilities. K&K Radio

Broadcasting, L.L.C., K&K Tower, L.L.C. and each of their controlling members and the general manager of WZVU-FM entered into a covenant not to compete with Big City Radio for a period of three years. In August 1998, Big City Radio acquired all of the stock of Radio New Jersey, owner of the FCC licenses of WRNJ-FM, now WWYY-FM, Belvidere, New Jersey, ~~(now WWYY-FM),~~ and WRNJ-AM, Hackettstown, New Jersey. The aggregate purchase price for WRNJ-FM was $5.4 million excluding acquisition-related expenses, of which $3 million was paid in cash and the remainder was satisfied by the issuance of two promissory notes. Simultaneously, Big City Radio sold substantially all of the assets of WRNJ-AM to one of the existing stockholders of Radio New Jersey. Also, in December 1994, Big City Radio acquired the assets of radio station WRKL-AM, Pomona, New York, from Rockland Communicators, Inc. for a purchase price of $1 million. Big City Radio sold this station in March 1999 to Polnet Communications, Ltd. for a price of $1.6 million.

Los Angeles. In May 1996, Big City Radio acquired four radio stations in the Los Angeles area from Douglas Broadcasting, Inc. Big City Radio acquired the assets of radio station KMAX-FM ~~(now KLYY-FM)~~(subsequently KLYY-FM and now KSSE-FM), Arcadia, California, KAXX-FM ~~(now KVYY-FM)~~(subsequently KVYY-FM and now KSSC-FM), Ventura, California, KBAX-FM ~~(now KSYY-FM)~~(subsequently KSYY-FM and now KSSD-FM) Fallbrook, California, and KWIZ-FM, Santa Ana, California, for an aggregate purchase price of $38 million. Big City Radio also acquired FM Translator station K252BF, Temecula, California, which rebroadcasts on 98.3 MHz the signal of ~~KSYY-FM,~~KSSD-FM, and FM Booster station ~~KLYY-FM,~~KSSE-FM1, Burbank, California, which boosts on 107.1 MHz the broadcast of the signal of ~~KLYY-FM.~~KSSE-FM. In December 1996, Big City Radio sold radio station KWIZ-FM to Liberman Broadcasting, Inc. for a price of $11.2 million.

Chicago. In August 1997, Big City Radio acquired the assets of radio station WVVX-FM ~~(now WXXY-FM)~~(subsequently WXXY-FM and now WVIV-FM), Highland Park, Illinois, from WVVX License, Inc., for a purchase price of $9.5 million. Douglas, WVVX, Inc. and WVVX License, Inc. agreed not to compete for a period of 18 months. In August 1997, Big City Radio acquired the assets of radio station WJDK-FM (now WYXX-FM), Morris, Illinois, from DMR Media, Inc., for a purchase price of $1.1 million. In addition, Big City Radio agreed not to compete with DMR Media, Inc.’s operations of radio station WCSJ-AM, Morris, Illinois, for a period of five years. In August 1998, Big City Radio closed two transactions in which it acquired substantially all of the assets of WCBR-FM (now WKIE-FM), Arlington Heights, Illinois from Darrel Peters Productions, Inc. and WLRT-FM (now WKIF-FM), Kankakee, Illinois from STARadio Corp. for an aggregate purchase price of $19.5 million. In February 1999, Big City Radio acquired substantially all of the assets of radio stations WDEK-FM and WLBK-AM, DeKalb, Illinois, from DeKalb Radio Studios, Inc. for a purchase price of $4.5 million. Big City Radio added WDEK-FM, which operates on the 92.5 FM frequency, to existing 92.7 FM stations in the Chicago metropolitan area, collectively known as Energy 92. Big City Radio sold the operating assets of WLBK-AM on April 12, 2000. No gain or loss was recorded on this transaction.

Phoenix. In July 1999, Big City Radio acquired the assets of radio stations KEDJ-FM, Sun City, Arizona, and KDDJ-FM, Globe, Arizona, from New Century Arizona for a purchase price of $22 million. In September 1999, Big City Radio acquired the assets of radio station KBZR-FM, Arizona City, Arizona, from Brentlinger Broadcasting, Inc. for a purchase price of $3.9 million. In September 1999, Big City Radio acquired the assets of radio station KMYL-FM (now KSSL-FM), Wickenburg, Arizona, from Interstate Broadcasting Systems of

Arizona, Inc. for a purchase price of $5.6 million. On October 31, 2001, Big City Radio sold its Phoenix radio properties and operating assets to Hispanic Broadcasting Corporation for $34 million. Big City Radio recorded a gain of $2.3 million on this transaction.

Internet and Publishing Operations. On November 1, 1999, Big City Radio acquired Hispanic Internet Holdings, Inc., a privately held bilingual web site, for 400,000 shares of Big City Radio’s Class A common stock at a value of $4.00 per share. The transaction was accounted for as a purchase. The assets of this business included TodoAhora.com, the bilingual internet portal operated by Big City Radio until December 2001. In December 2001, when it ceased development and operation of the portal, Big City Radio wrote off goodwill of $897,000 related to its internet operations.

On November 8, 2000, Big City Radio completed a transaction in which it acquired substantially all of the assets and properties of United Publishers of Florida, Inc., which owned and operated a Hispanic music trade magazine, “Disco,” a graphic design business and the LatinMusicTrends.com website. Big City Radio paid $250,000 in cash at closing and accounted for this acquisition as a purchase. In June 2002, when it discontinued its publishing operations, Big City Radio wrote off goodwill of $108,000.

Employees

At ~~November 30,~~December 31, 2002, Big City Radio had approximately 106 full-time employees and 6567 part-time employees. Big City Radio believes that its relations with its employees are satisfactory. None of Big City Radio’s employees is represented by a labor union.

Big City Radio employs several on-air personalities and enters into employment agreements with some of these personalities to protect its interests in those relationships that it believes to be valuable. The loss of some of these personalities could result in a short-term loss of audience share, but Big City Radio does not believe that any such loss would have a material adverse effect on Big City Radio.

Patents and Trademarks

Big City Radio owns registered trademark rights for STMC^™ and domestic trademark registrations related to the business of Big City Radio. Big City Radio does not believe that any of its trademarks are material to its business or operations. Big City Radio does not own any patents or patent applications.

Properties

Big City Radio leases approximately 6,000 square feet in New York, New York, where its corporate offices are located.

The type of properties required to support each of Big City Radio’s radio stations includes offices, studios, transmitter sites, booster sites, translator sites and antenna sites. Big City Radio owns, leases or licenses the properties required to operate its radio stations. Big City Radio owns facilities for WDEK-FM and WLBK-AM in DeKalb, Illinois (approximately 4,500 square feet). Big City Radio leases or licenses facilities for the Los Angeles ~~Stations~~stations in Century City (approximately 16,000 square feet), Arcadia, Fallbrook, Ventura (approximately 750 square feet), Temecula and ~~Burbank.~~Burbank, California. Big City Radio leases facilities for the New York ~~Stations~~stations in Hampton Bays (approximately 1,250 square feet), ~~New York,~~ East Quogue and ~~Westchester.~~Westchester, New York. Big City Radio leases facilities for the Chicago ~~Stations~~stations in Chicago (approximately 18,700 square feet), Highland Park (approximately 2,100 square feet), Arlington Heights (approximately 2,800 square feet), Kankakee, and ~~Morris.~~Morris, Illinois. Big City Radio leases facilities for its discontinued internet and publishing operations in Coral Gables (approximately 12,600 square feet). Big City Radio considers its facilities to be suitable and of adequate sizes for their current and intended purposes and does not anticipate any difficulties in renewing those leases or licenses or in leasing or licensing additional space, if required.

Big City Radio owns substantially all of its other equipment, consisting principally of transmitting antennae, transmitters, studio equipment and general office equipment. Big City Radio owns towers in Arcadia, California, Ventura, California, Long Branch, New Jersey, Highland Park, Illinois, Morris, Illinois and DeKalb, Illinois. The towers, antennae and other transmission equipment used in Big City Radio’s stations are generally in good condition.

The following table sets forth the location of Big City Radio’s principal properties as of December 31, 2002:

Location		Facility
Los Angeles
Arcadia, CA		FM tower ~~(3)~~(1)
Fallbrook, CA		FM tower, studio, transmitter site ~~(1)~~(2)
Ventura, CA		FM tower, ~~(3),~~ studio, transmitter site ~~(1)~~(2)
Temecula, CA		Translator site ~~(1)~~(2)
Century City, CA		Studio, business offices ~~(1)~~(2)
Burbank, CA		Booster site ~~(1)~~(2)

New York
~~Hampton Bays, NY~~ Atlantic Highlands, NJ		~~Business offices (1)~~
~~New York, NY~~		~~Studio, corporate offices (1)~~
~~Long Branch, NJ~~		~~FM tower, studio (2)(4)~~
~~Westchester, NY~~		~~FM tower (1)~~
~~East Quogue, NY~~		FM tower, transmitter site ~~(1)~~(2)
Hampton Bays, NY		Business offices (2)
New York, NY		Studio, corporate offices (2)
Long Branch, NJ		FM tower (2), studio (3)
Westchester, NY		FM tower, transmitter site (2)
East Quogue, NY		FM tower, transmitter site (2)
Stroudsberg, PA		FM tower (2), transmitting building (4)

Chicago
Highland Park, IL		FM tower ~~(3), studio~~ (1)
Morris, IL		FM tower, transmitter site (4)
Arlington Heights, IL		FM tower, transmitter site (2)
~~Arlington Heights,~~ Kankakee, IL		Studio, FM tower, ~~(1)~~transmitter site (2)
~~Kankakee,~~ Chicago, IL		~~Studio, antenna (1)~~
~~Chicago, IL~~		Studio, business offices ~~(1)~~(2)
~~Arlington Heights,~~ DeKalb, IL		FM ~~tower (1)~~
~~DeKalb, IL~~		Tower, studio, business offices ~~(2)~~(4)

Florida
Coral Gables, FL		Business offices ~~(1)~~(2)

(1)

~~Leased.~~

~~(2)~~

~~Owned.~~

~~(3)~~

Tower owned by Big City Radio, ~~while~~ the underlying property is leased.

~~(4)~~(2)

Leased.

(3)

Big City Radio sold its Long Branch studio facility ~~during~~in March 2002.

(4)

Owned.

Legal Proceedings

Big City Radio is ~~involved~~a defendant in ~~litigation~~A.L., a minor by her guardian ad litem, Antonio L.; C.V., a minor by her guardian ad litem, Sophia A. v. Big City Radio, Inc., Firmo Martin Rosetti, aka Hector Rocksetti, aka Hector Rosetti; KSYY-FM; KVYY-FM; VIVA 107.1. The case commenced in Superior Court for the County of Los Angeles on August 15, 2002 and was subsequently removed to the United States District Court for the Central District of California. The complaint alleges claims for relief for negligence, sexual assault, battery, negligent infliction of emotional distress and intentional infliction of emotional distress arising from ~~time~~actions alleged to ~~time~~have been perpetrated by Hector Rosetti, a former employee of Big City Radio. Mr. Rosetti is currently incarcerated in a California state prison for the ~~ordinary~~actions that are the subject to this lawsuit. The plaintiffs have not specified the damages they seek, except that they have stated that they seek damages in excess of the $75,000 jurisdictional amount for the federal district courts. Big City Radio is vigorously contesting its liability based on its contentions that Mr. Rosetti’s conduct, if any, was outside the course and scope of his employment, done without the knowledge of Big City Radio or its ~~business. In management’s opinion, the outcome of all pending legal proceedings, individually~~officers and ~~in the aggregate,~~contrary to its policies and procedures. Big City Radio believes that any liability it bears will not ~~have~~result in a material adverse effect on ~~Big City Radio.~~

its financial condition or results of operations.

Federal Regulation of Radio Broadcasting

The ownership, operation and sale of radio stations are subject to the jurisdiction of the FCC, which acts under authority granted by the Communications Act. Among other things, the FCC:

•

~~assigns frequency bands for broadcasting;~~

•

~~determines the particular frequencies, locations and power of stations;~~

assigns frequency bands for broadcasting;

•

~~issues, renews, revokes and modifies station licenses;~~

determines the particular frequencies, locations and power of stations;

•

~~determines whether to approve changes in ownership or control of station licenses;~~

issues, renews, revokes and modifies station licenses;

•

~~regulates equipment used by stations;~~

determines whether to approve changes in ownership or control of station licenses;

•

~~imposes regulations and takes other action to prevent harmful interference between stations;~~

regulates equipment used by stations;

•

~~adopts and implements regulations and policies that directly or indirectly affect the ownership, management, programming, operation and employment practices of stations; and~~

imposes regulations and takes other action to prevent harmful interference between stations;

•

~~has the power to impose penalties for violations of its rules or the Communications Act.~~

adopts and implements regulations and policies that directly or indirectly affect the ownership, management, programming, operation and employment practices of stations; and

has the power to impose penalties for violations of its rules or the Communications Act.

In February 1996, Congress enacted the Telecom Act to amend the Communications Act. The Telecom Act, among other measures, directed the FCC, which has since conformed its rules, to eliminate the national radio ownership limits, liberalize the local radio ownership limits as specified in the Telecom Act, issue broadcast licenses for periods of up to eight years, and eliminate the opportunity for the filing of competing applications against broadcast license renewal applications.

In the Balanced Budget Act of 1997, Congress authorized the FCC to conduct auctions for the awarding of initial broadcast licenses or construction permits for commercial radio and television stations. To facilitate the settlement without auctions of already pending mutually exclusive applications, Congress directed the FCC to waive existing rules as necessary. This action has resulted in the awarding of construction permits for additional radio stations, some of which might have the potential to compete with Big City Radio’s radio stations. Although the 1997 Act exempted noncommercial applicants from auctions, the FCC had subjected all mutually-exclusive commercial and noncommercial applicants to auction procedures for broadcast authorizations not reserved for noncommercial use. Following the vacation by the U.S. Court of Appeals for the D.C. Circuit of that policy, the FCC is considering several options to preserve the noncommercial exemption as well as the directive to award permits with more than one applicant by auction. In the meantime, the FCC has not acted on existing mutually-exclusive broadcast applications where one or more of the applicants is a noncommercial broadcaster, nor has the FCC opened filing windows for available broadcast frequencies. Big City Radio is not, and has not been, a participant in any broadcast auction proceeding,

License Grants and Renewals. The Communications Act provides that a radio broadcast license may be granted to an applicant if the grant would serve the public interest, convenience and necessity, subject to certain limitations referred to below. In making licensing determinations, the FCC considers the legal, technical, financial and other qualifications of the applicant, including compliance with the Communications Act’s limitations on alien ownership, compliance with various rules limiting common ownership of broadcast and newspaper properties, and the “character” qualifications of the licensee and those persons holding “attributable” interests in the licensee. Broadcast licenses are granted for specific periods of time and, upon application, are renewable for additional terms. The Telecom Act amended the Communications Act to provide that broadcast licenses be granted, and thereafter renewed, for a term not to exceed eight years, if the FCC finds that the public interest, convenience, and necessity would be served.

Generally, the FCC renews broadcast licenses without a hearing. The Telecom Act amended the Communications Act to require the FCC to grant an application for renewal of a broadcast license if the station has served the public interest, convenience and necessity, there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC, and there have been no other violations by the

licensee of the Communications Act or the rules and regulations of the FCC which, taken together, would constitute a pattern of abuse. Competing applications against broadcast license renewal applications are therefore not entertained. The Telecom Act provided that if the FCC, after notice and an opportunity for a hearing, decides that the requirements for renewal have not been met and that no mitigating factors warrant lesser sanctions, it may deny a renewal application. Only thereafter may the FCC accept applications by third parties to operate on the frequency of the former licensee. The Communications Act continues to authorize the filing of petitions to

deny broadcast license renewal applications during particular periods of time following the filing of renewal applications. Petitions to deny can be used by interested parties, including members of the public, to raise issues concerning the qualifications of the renewal applicant.

The broadcast licenses of Big City Radio’s Chicago stations were renewed in 1996 and will expire on December 1, 2004. The broadcast licenses of the Los Angeles area radio stations were renewed in 1997 and will expire on December 1, 2005. The broadcast licenses of the New York stations were renewed in 1998 and will expire on June 1, 2006. Big City Radio does not anticipate any material difficulty in obtaining license renewals for full terms in the future.

License Assignments and Transfers of Control. The Communications Act prohibits the assignment of an FCC license or the transfer of control of a corporation holding or controlling such a license without the prior approval of the FCC. Applications to the FCC for such assignments or transfers are subject to petitions to deny by interested parties and must satisfy requirements similar to those for renewal and new station applicants. In reviewing assignment and transfer applications, the FCC has indicated that in evaluating whether a proposed transaction would serve the public interest, the FCC may consider, among other things, the impact of the transaction on the diversity of media voices and whether the transaction would result in the acquiring party obtaining an excessive share of the radio advertising revenues in a given market or would otherwise result in excessive concentration of media ownership. The FCC is currently considering changes to its local radio ownership rules. The FCC has adopted an interim policy guiding its review of radio transactions, which if certain levels of radio advertising market shares are present, will result in an FCC analysis of the product and geographic market definitions, market participants, shares and concentration, barriers to entry, potential adverse competitive effects and efficiencies and other public interest benefits. DOJ also reviews proposed acquisitions of radio stations. In some instances, DOJ has obtained consent decrees requiring radio station divestitures in a particular market based on allegations that acquisitions would lead to unacceptable concentration levels.

Ownership Rules. Rules of the FCC limit the number and location of broadcast stations in which one licensee, or any party with a control position or attributable interest therein, may have an attributable interest. Pursuant to the Telecom Act, the FCC has eliminated the previously existing “national radio ownership rule.” Consequently, there now is no limit imposed by the FCC to the number of radio stations one party may own nationally.

The “local radio ownership rule” limits the number of stations in a radio market in which any one individual or entity may have a control position or attributable interest. Pursuant to the Telecom Act, the FCC revised its rules to set the local radio ownership limits as follows:

in markets with 45 or more commercial radio stations, a party may own up to eight commercial radio stations, no more than five of which are in the same service, AM or FM;

in markets with 30-44 commercial radio stations, a party may own up to seven commercial radio stations, no more than four of which are in the same service;

•

~~in markets with 45 or more commercial radio stations, a party may own up to eight commercial radio stations, no more than five of which are in the same service, AM or FM;~~

in markets with 15-29 commercial radio stations, a party may own up to six commercial radio stations, no more than four of which are in the same service; and

•

~~in markets with 30-44 commercial radio stations, a party may own up to seven commercial radio stations, no more than four of which are in the same service;~~

in markets with 14 or fewer commercial radio stations, a party may own up to five commercial radio stations, no more than three of which are in the same service, provided that no party may own more than 50% of the commercial stations in the market.

•

~~in markets with 15-29 commercial radio stations, a party may own up to six commercial radio stations, no more than four of which are in the same service; and~~

•

As noted above, the FCC is currently reviewing its local radio ownership rules, and is considering, among other issues, whether the FCC should rely exclusively on these numerical limits or instead adopt a case-by-case competition analysis in determining compliance with the local radio ownership rules, whether the FCC should revise its definition of the local radio market, and whether the FCC should revise its treatment of local marketing and joint sales agreements. FCC cross-ownership rules also limit or prohibit one party from having attributable

interests in a radio station as well as in a local television station or daily newspaper, although such restrictions are waived by the FCC under certain circumstances. In September 2001, the FCC initiated a rulemaking proceeding to determine whether and how to modify its newspaper-broadcast cross-ownership rule. The FCC has proposed several potential modifications of such rule, including redefining the relevant geographic market or allowing cross-ownership of broadcast stations and a daily newspaper if a certain number of independent voices will remain in the relevant market following the proposed transaction. A number of commenters have urged the complete elimination of the rule or the retention of the rule only for newspaper-television combinations, so that radio stations and newspapers may be commonly owned. In September 2002, the FCC issued a notice of proposed rulemaking for the biennial review of broadcast ownership restrictions, including the cross-ownership of newspapers and broadcast stations. As part of the biennial review process, the FCC commissioned a number of studies on the various impacts of media concentration. Comments on these studies and on the issues raised by the notice of proposed rulemaking were filed on January 2, 2003. Big City Radio cannot predict whether in such biennial reviews the FCC would eliminate or modify any of its ownership rules applicable to broadcasting, or, if so, what the new rules would be or how they might affect Big City Radio.

Attribution Rules. All holders of attributable interests must comply with, or obtain waivers of, the FCC’s multiple and cross-ownership rules. Under the current FCC rules, an individual or other entity owning or having voting control of 5% or more of a corporation’s voting stock is considered to have an attributable interest in the corporation, its subsidiaries and their stations, except that investment companies, insurance companies and banks holding such stock in their trust accounts are not considered to have an attributable interest unless they own or have voting control over 20% or more of such stock, provided that none of the officers or directors of the broadcast licensee are representatives of the investment company, insurance company or bank concerned. An officer or director of a corporation or any general partner of a partnership also is deemed to hold an attributable interest in the media license. Furthermore, under the FCC’s Equity-Debt Plus, or EDP, rule, otherwise non-attributable equity or debt interests in a licensee are deemed to be attributable interests when a party holds equity and/or debt in excess of 33% of the total assets, which is defined as equity plus debt, of a licensee or its parent and such party also holds an attributable, non-EDP interest in another media entity in the same market or is a major programmer supplier to another media entity in the market. To Big City Radio’s knowledge, no person or entity qualifies as an attributable party to Big City Radio under the EDP rule. Subject to the EDP rule, the FCC does not consider holders of non-voting stock or of minority stock interests when there is a single majority stockholder to be attributable parties. Moreover, subject to the EDP rule, holders of warrants, convertible debentures, options, or other non-voting interests with rights of conversion to voting interests generally will not be attributed such an interest unless and until such conversion is effected. Although the FCC had decided to eliminate the “single majority shareholder exemption,” following the reversal by the U.S. Court of Appeals for the D.C. Circuit of the FCC’s elimination of this exemption in the cable context, the FCC has suspended its repeal of the single majority shareholder exemption. As a result, minority voting interests currently are not attributable if there is a single holder of more than ~~50 %~~50% of the outstanding voting stock of a corporate broadcast licensee, unless such stockholder is otherwise attributable as an officer, director or EDP holder. Holders of attributable interests must comply with or obtain waivers of the FCC’s multiple and cross-ownership rules. Also, holders of attributable interests must possess “character qualifications” to be parties to a broadcast license. Character disqualification is reserved generally for adjudicated instances of intentional misrepresentation to or lack of candor with governmental agencies or convictions for serious crimes. At present, none of Big City Radio’s attributable parties has any other media interests besides those of Big City Radio that implicate the FCC’s multiple ownership limits, and each of the attributable parties meets the FCC character qualification criteria. If Big City Radio learns of a new attributable party and if such party holds interests that exceed the FCC limits on media ownership or is unqualified, under Big City Radio’s certificate of incorporation, the board of

directors of Big City Radio has the corporate power to redeem capital stock of Big City Radio’s stockholders to the extent necessary to be in compliance with FCC and Communications Act requirements.

The FCC will consider a radio station providing programming and sales on another local radio station pursuant to a local marketing agreement to have an attributable ownership interest in the other station for purposes of the FCC’s multiple ownership rules. In particular, a radio station is not permitted to enter into a local

marketing agreement giving it the right to program more than 15% of the broadcast time, on a weekly basis, of another local radio station which it could not own under the FCC’s local radio ownership rules. Joint sales agreements, which involve the sale of time on, but not the provision of programming to, another broadcaster’s station, have not been subject to the multiple ownership limits. The FCC is currently considering whether to revise its treatment of local marketing agreements and joint sales agreements.

Alien Ownership Limits. Under the Communications Act, broadcast licenses may not be granted, transferred or assigned to any corporation of which more than one-fifth of the capital stock is owned of record or voted by non-U.S. citizens or foreign governments or their representatives or by foreign corporations. Where the corporation owning the license is controlled by another corporation, the parent corporation cannot have more than one-fourth of the capital stock owned of record or voted by aliens, unless the FCC finds it in the public interest to allow otherwise. The FCC has issued interpretations of existing law under which the alien ownership restrictions in slightly modified form apply to other forms of business organizations, including general and limited partnerships. The FCC also prohibits a licensee from continuing to control broadcast licenses if the licensee otherwise falls under alien influence or control in a manner determined by the FCC to be in violation of the Communications Act or contrary to the public interest. At present, two of Big City Radio’s officers are known by Big City Radio to be aliens. To Big City Radio’s knowledge, less than one-fourth of the capital stock of Big City Radio is owned of record or is voted by aliens. In the event that Big City Radio learns that aliens own, control or vote stock in Big City Radio in excess of the limits set in the Communications Act and the FCC’s rules, under Big City Radio’s certificate of incorporation, the board of directors of Big City Radio has the corporate power to redeem capital stock of Big City Radio’s stockholders to the extent necessary to be in compliance with FCC and Communications Act requirements on alien ownership.

Programming and EEO Requirements. While the FCC has relaxed or eliminated many of its regulatory requirements related to programming and content, radio stations are still required to broadcast programming responsive to the problems, needs and interests of the stations’ service areas and must comply with various rules promulgated under the Communications Act that regulate political broadcasts and advertisements, sponsorship identifications, indecent programming and other matters. In addition, while the U.S. Court of Appeals for the D.C. Circuit has twice overturned the FCC’s equal employment opportunity, or EEO, rules, the FCC has adopted new EEO rules, which require broadcast licensees to implement outreach efforts designed to broaden the pool of employment applicants. Failure to observe these or other FCC rules can result in the imposition of monetary forfeitures, in the grant of a “short,” less than full-term, license term or, where there have been serious or a pattern of violations, license revocation.

Technical and Interference Rules. FCC rules specify technical and interference requirements and parameters that govern the signal strength and coverage area of radio stations, and which, unless waived, must be complied with in order to obtain FCC consent to modify a station’s service area or other technical operations. The FCC allots specific FM radio frequencies and class designations to particular communities of license. The FM class designations, which vary by geographic location, include, in order of increasing potential coverage area, Class A, B1, C3, B, C2, C1, C0 and C. The C Class designations are generally not allocated to communities in the more densely-populated regions of the United States, such as the Northeast and California. Each FM class has minimum and maximum power specifications and must not cause interference to the protected service areas of other radio stations, domestic or international, operating on the same or adjacent frequencies. Under FCC rules, a radio station must transmit a minimum predicted signal strength to its allocated community of license, and therefore must locate its transmitting antenna at a site providing such coverage while also being within a specified power and height range for that station’s class designation, and at specified minimum distances from

the transmitting sites of nearby radio stations operating on the same or adjacent frequencies. Big City Radio must also comply with certain technical, reporting, and notification requirements imposed by the FAA with respect to the installation, location, lighting, and painting of the transmitter towers used by Big City Radio’s radio stations. The combination of these requirements sets limits on the ability of a particular radio station to relocate in certain directions and to increase signal coverage. Stations may petition the FCC to change a particular station’s

community of license and/or class, which changes are granted by the FCC when its service priorities are met and conflicting re-allotment proposals, if any, are resolved. As to minimum distance separation requirements designed to afford interference protection to other FM stations, the FCC rarely waives such specifications. However, the FCC permits radio stations in certain circumstances to relocate to a site not meeting the minimum distance separation rule when the station demonstrates that the service contours of neighboring radio stations will be protected from interference. Because STMC^™ uses radio stations that operate on the same or adjacent frequencies, the STMC^™ stations’ transmitting sites must be sufficiently distant from each other to comply with the FCC’s interference protection guidelines, unless such stations are exempt from compliance by their grandfathered status.

FCC Power or Class Increases and Other Engineering Enhancements. In most instances, changes to the technical specifications of radio stations, such as increases in the effective radiated power, or ERP, and subsequent increased coverage area, may be made only after application to the FCC, and grant by the FCC of a construction permit for the modification of the station. Big City Radio implemented in 2002 an authorized modification of WWZY-FM, Long Branch, New Jersey, to relocate its transmitting facilities closer to New York City. In 1998, WYNY-FM, Briarcliff Manor, New York, WWXY-FM, Hampton Bays, New York, and KLYY-FM, Arcadia, California, implemented increases in their power levels which have resulted in larger service areas. These changes were authorized following the FCC’s adoption, in 1997, of rule changes governing power increases and other modifications by grandfathered short-spaced FM radio stations. Grandfathered short-spaced stations are those that do not meet the FCC’s current requirements for distance separation of FM radio stations operating on the same or adjacent frequencies as the stations were authorized before the adoption of the current spacing rules.

There is currently pending before the FCC a proposed change in the current rules that could allow some of Big City Radio’s stations to increase their power or move their transmitter sites to provide improved coverage within the desired metro area pursuant to “negotiated interference” agreements. Big City Radio cannot predict whether the FCC will adopt such a rule change, and unless and until the FCC changes its rules to permit negotiated interference and the approval of the station modifications are granted, Big City Radio cannot be certain that the new policy would serve to permit increases in Big City Radio’s station’s coverage areas.

Changes may made in a broadcast station’s channel, station class, which sets the maximum service area of the station, and/or community of license through a request to change the FCC’s “Table of Allotments.” Big City Radio requested that the FCC change the class of KLYY-FM (now KSSE-FM), Arcadia, California, from class A to B1, which would authorize a larger service area, and to change the frequency of KSYY-FM (now KSSD-FM), Fallbrook, California, from 107.1 MHz to 96.9 MHz. Such changes might require the relocation of the transmitting facilities of these stations. The requested upgrade in class for KLYY-FM (now KSSE-FM) is contingent upon the Fallbrook frequency change and other contingencies. The Media Division of the FCC in October 2002 denied Big City Radio’s request to change the class of Arcadia, and Big City Radio has appealed this decision to the FCC commissioners. Big City Radio cannot predict whether the FCC commissioners will grant the request that they review and reverse this decision or if the other contingencies will occur.

Agreements ~~With~~with Other Broadcasters. Over the past several years, a significant number of broadcast licensees, including Big City Radio, have entered into cooperative agreements with other stations in their markets. One typical example is a local marketing agreement between two separately or co owned stations, whereby the licensee of one station programs substantial portions or all of the broadcast day on the other licensee’s station, subject to ultimate editorial and other controls being exercised by the latter licensee, and sells advertising time during such program segments for its own account. The FCC has held that local marketing

agreements do not per se constitute a transfer of control and are not contrary to the Communications Act, provided that the licensee of the station maintains ultimate responsibility for and control over operations of its broadcast station. As in the case of Big City Radio, typically licensees enter into the local marketing agreement in anticipation of the sale of the station, with the proposed acquirer providing programming for the station while the parties are awaiting the necessary regulatory approvals to the transaction.

The FCC’s rules also prohibit a radio licensee from simulcasting more than 25% of its programming on other radio stations in the same broadcast service, such as AM AM or FM FM, whether it owns both stations or operates one or both through a local marketing agreement, where such stations serve substantially the same geographic area as defined by the stations’ principal community contours. Big City Radio’s stations are not subject to this limitation.

Proposed Regulatory Changes and Recent Developments. Congress and the FCC have under consideration, and may in the future consider and adopt new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly:

affect the operation, programming, technical requirements, ownership and profitability of Big City Radio and its radio broadcast stations;

result in the loss of audience share and advertising revenues of Big City Radio’s radio broadcast stations;

•

~~affect the operation, programming, technical requirements, ownership and profitability of Big City Radio and its radio broadcast stations;~~

affect the ability of Big City Radio to acquire additional radio broadcast stations or finance such acquisitions;

•

~~result in the loss of audience share and advertising revenues of Big City Radio’s radio broadcast stations;~~

affect cooperative agreements and/or financing arrangements with other radio broadcast licensees;

•

~~affect the ability of Big City Radio to acquire additional radio broadcast stations or finance such acquisitions;~~

affect Big City Radio’s competitive position in relationship to other advertising media in its markets; or

•

~~affect cooperative agreements and/or financing arrangements with other radio broadcast licensees;~~

affect Big City Radio’s ability to exploit its unique technical capabilities and innovative approach to acquiring and using radio broadcast stations.

•

~~affect Big City Radio’s competitive position in relationship to other advertising media in its markets; or~~

•

~~affect Big City Radio’s ability to exploit its unique technical capabilities and innovative approach to acquiring and using radio broadcast stations.~~

Such matters include, for example, changes to the license, authorization and renewal process; spectrum use fees; revisions of the FCC’s equal employment opportunity rules and other matters relating to minority and female involvement in broadcasting; proposals to change rules or policies relating to political broadcasting; proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages on radio; proposals to allow telephone companies to deliver audio and video programming to the home through existing phone lines; changes in the FCC’s multiple ownership, alien ownership and cross ownership policies; and proposals to limit the tax deductibility of advertising expenses by advertisers.

Other matters that could affect Big City Radio include technological innovations and developments generally affecting competition in the mass communications industry. Digital audio radio service, or DARS, provides a medium for the digital delivery of multiple audio programming formats to local and national audiences with sound quality potentially equivalent to compact discs. Satellite DARS employs digital transmissions from satellites directly to fixed, mobile, and/or portable receivers. The FCC has licensed two entities, XM Radio, Inc. and Sirius Satellite Radio, Inc., to provide DARS by satellite, and both companies are presently offering service in selected markets. The FCC is considering what permanent rules to impose on the use of terrestrial repeaters by satellite DARS operators to overcome satellite signal blockage and/or multipath interference. Big City Radio cannot predict what regulations the FCC will adopt regarding terrestrial repeaters and what effect such regulations would have on Big City Radio’s business or the operations of its radio stations. Nor can Big City Radio predict the impact of satellite DARS operations by XM Radio and Sirius Satellite Radio on its business. The FCC is also considering various proposals for non-satellite delivered DARS. In October 2002, the FCC adopted a policy authorizing on an interim basis and subject to certain qualifications the use of in-band, on-channel, or IBOC technology for radio stations. IBOC technology permits an AM or FM station to transmit radio programming in both analog and digital formats, or in digital only formats, using the bandwidth that the radio station is currently licensed to use. Such IBOC operations might not be consistent with ~~STMCä~~ STMC

operations. It is uncertain what final standards and regulations the FCC will adopt regarding IBOC technology and what effect such standards and regulations would have on Big City Radio’s business or the operations of its radio stations. Following its adoption of rules establishing the low-power radio service within the existing FM band, the FCC has begun to authorize low-power radio stations, including stations in California, Illinois and New York. Low-power radio stations operate on a non-commercial basis at power levels below that of full-power FM radio stations, such as those owned by Big City Radio, and low-power radio stations are required to meet

specified interference criteria in regards to full-power FM radio stations. Ownership of low-power radio stations is restricted to entities that have no attributable interests in any other broadcast station or other media subject to the FCC’s ownership rules. It is not possible to predict what effect, including interference effect, low-power radio stations might have on the operations of Big City Radio’s radio stations.

Streaming of Broadcasts Over the Internet. Big City Radio does not currently ~~makes~~make available or ~~“streams”~~“stream” over its internet websites the programming its stations broadcast over the ~~air.~~air, although it has done so in the past. In 2002, the Copyright Arbitration Royalty Panel issued a report recommending that the U.S. Copyright Office adopt specified royalty performance fees (retroactive to October 1998) to be paid to the recording industry for streaming by broadcasters and for webcasting by non-broadcasters. The Librarian of Congress adopted a modified royalty payment requirement for streaming and webcasts, with the first payments collected in October 2002. Several broadcasters have appealed the royalty payment requirements, arguing that the rates and terms are confiscatory and unreasonable, and are forcing some broadcasters to cease streaming their programming. Congress has also conducted hearings and has proposed legislation impacting royalty payments. In December 2002, federal legislation was signed into law that authorizes the music industry’s principal royalty collector to negotiate binding royalty contracts with small webcasters on behalf of all artists and record labels. It is not possible to predict how the outstanding royalty payment issues involving streaming and webcasting will be resolved or how such resolution would affect Big City Radio’s business.

Although Big City Radio believes the foregoing discussion is sufficient to provide the reader with a general understanding of all material aspects of FCC regulations that affect Big City Radio, it does not purport to be a complete summary of all provisions of the Communications Act or FCC rules and policies. Reference is made to the Communications Act, FCC rules, and the public notices and rulings of the FCC for further information.

Possible Delisting of Big City Radio Class A Common Stock

During 2002, Big City Radio’s Class A common stock, which is listed on the American Stock Exchange, was subject to a listing review and related proceedings by the Exchange.

Under the Exchange’s requirements as communicated to Big City Radio in connection with these proceedings, Big City Radio’s Class A common stock remains subject to delisting due to the fact that after the completion of the auction sale of its radio station properties, Big City Radio would not retain any of its existing assets and, for a period of time, may not continue to be an operating company. Moreover, if Big City Radio

consummates some but not all of the asset sales such that it has at least $4 million in stockholders’ equity, but does so after March 31, 2003, or

consummates some but not all of the asset sales on or before March 31, 2003, but has less than $4 million in stockholders’ equity, or

•

~~consummates some but not all of the asset sales such that it has at least $4,000,000 in stockholders’ equity, but does so after March 31, 2003, or~~

consummates some but not all of the asset sales on or before March 31, 2003, but otherwise fails to continue to be an operating company,

•

~~consummates some but not all of the asset sales on or before March 31, 2003 but has less than $4,000,000 in stockholders’ equity, or~~

•

~~consummates some but not all of the asset sales on or before March 31, 2003 but otherwise fails to continue to be an operating company,~~

then Big City Radio will not satisfy the Exchange’s requirements, and its Class A common stock may be subject to delisting. If the Exchange delists Big City Radio’s Class A common stock, the liquidity and the market price of its Class A common stock would be adversely affected.

Selected Historical Financial Data

(In thousands, except per share data)

The following table presents selected historical financial data and should be read in conjunction with Big City Radio’s financial statements and the related notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this joint information statement/prospectus. The selected balance sheet data as of December 31, ~~1997, 1998, 1999, 2000~~2001 and ~~2001~~2002 and statement of operations data for the years ended December 31, ~~1997, 1998, 1999, 2000~~2001 and ~~2001~~2002 are derived from Big City Radio’s financial statements, which have been audited by KPMG LLP, independent auditors.

The selected historical statement of operations data for the nine months ended September 30, 2001 and 2002 and the selected historical balance sheet data as of such dates are unaudited, but include, in the opinion of Big City Radio’s management, all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation of such data. The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of results to be expected for the entire year or for any other period.

The historical financial results of Big City Radio are not comparable from period to period because of the acquisition and sale of various broadcasting properties by Big City Radio during the periods covered.

Year Ended December 31,

Nine Months Ended
September 30,


1997
(1)(9)

1998
(2)(3)(9)

1999
(4)(5)(9)

2000
(6)(9)

2001
(7)(8)(9)

2001
(9)

2002
(9)


(unaudited)

Statement of Operations Data:

Gross revenues    $ 11,731 $ 15,883 $ 23,296 $ 26,820 $ 22,395 $ 17,508 $ 11,282
Net revenues    10,460 14,202 20,604 23,766 20,086 15,705 10,227
Station operating expenses    12,979 17,525 23,566 26,047 21,307 16,731 12,026
Internet operating expenses    —   —   51 1,457 436 421 —
Corporate, general and administrative expenses    1,745 2,527 4,371 3,845 3,610 2,752 2,816
Employment incentives    3,863 808 —   —   —   —   —
Cost of abandonment of station acquisition    —   —   —   550 —   —   —
Impairment loss on goodwill    —   —   —   —   897 —   —
Depreciation and amortization    1,791 2,528 3,812 4,863 4,818 3,748 1,126
Operating loss    (9,918 ) (9,186 ) (11,196 ) (12,966 ) (10,982 ) (7,947 ) (5,741 )
Gain on sale of stations    —   —   663 —   2,275 —   —
Interest expense    (4,488 ) (12,608 ) (16,953 ) (18,392 ) (21,540 ) (15,016 ) (15,181 )
Other, net    81 (224 ) (337 ) (83 ) 11 (197 ) (11 )
Loss from continuing operations before income taxes    (14,305 ) (18,942 ) (25,871 ) (31,190 ) (30,125 ) (23,118 ) (20,805 )
Income tax benefit, net    1,050 1,988 63 63 63 47 47
Deferred income taxes resulting from conversion to C corporation status    (3,350 ) —   —   —   —   —   —
Loss from continuing operations before discontinued operations and extraordinary loss    (16,605 ) (16,954 ) (25,808 ) (31,127 ) (30,062 ) (23,071 ) (20,758 )
Loss on discontinued operations    —   —   —   (41 ) (645 ) (447 ) (658 )
Extraordinary loss on extinguishment of debt, net of income taxes    (313 ) (495 ) —   —   —   —   —
Net loss    $ (16,918 ) $ (17,449 ) $ (25,808 ) $ (31,168 ) $ (30,707 ) $ (23,518 ) $ (21,416 )
Basic and dilutive loss per common share:
Continuing operations    $ (1.74 ) $ (1.21 ) $ (1.83 ) $ (2.15 ) $ (2.08 ) $ (1.59 ) $ (1.43 )
Discontinued operations    —   —   —   —   (0.04 ) (0.03 ) (0.05 )
Extraordinary loss    (0.03 ) (0.03 ) —   —   —   —   —


Net loss    $ (1.77 ) $ (1.24 ) $ (1.83 ) $ (2.15 ) $ (2.12 ) $ (1.62 ) $ (1.48 )

As of December 31,

As of
September 30,


1997

1998

1999

2000

2001

2001

2002


(unaudited)

Balance Sheet Data:

Cash    $ 80 $ 5,285 $ 2,431 $ 862 $ 3,194 $ 177 $ 323
Intangibles, net    54,115 80,309 113,873 110,476 77,063 108,011 76,955
Total assets    60,108 152,082 144,511 129,846 108,445 123,475 90,317
Interest payable    —   —   —   —   5,873 10,815 10,771
Short-term debt    326 1,287 974 36 79 2,275 174,069 (10)
Long-term liabilities    30,142 138,227 153,094 170,917 174,420 174,750 389
Stockholders’ equity (deficiency)    25,032 8,391 (15,935 ) (46,929 ) (77,627 ) (70,438 ) (99,043 )

~~Adoption of SFAS No. 142~~

See Note 4 of Notes to Big City’s financial statements for the nine-month periods ended September 30, 2002 and 2001, included in this joint information statement/prospectus, regarding the effects of Big City Radio’s adoptions of SFAS No. 142 (in thousands, except per share data).

Year Ended December 31,

Nine Months Ended September 30,


1999

2000

2001

2001

2002


(unaudited)

Reported net loss    $ (25,808 )    $ (31,168 )    $ (30,707 )    $ (23,518 )    $ (21,416 )
Add back: Goodwill amortization    53    321    319    239    —
Add back: Broadcast license amortization    2,512    2,970    2,813    2,207    —





Adjusted net loss    $ (23,243 )    $ (27,877 )    $ (27,575 )    $ (21,072 )    $ (21,416 )

Basic and diluted net loss per share:
Reported net loss    $ (1.83 )    $ (2.15 )    $ (2.12 )    $ (1.62 )    $ (1.48 )
Add back: Goodwill amortization    0.00    0.02    0.02    0.02    —
Add back: Broadcast license amortization    0.18    0.21    0.19    0.15    —





Adjusted net loss    $ (1.65 )    $ (1.92 )    $ (1.91 )    $ (1.45 )    $ (1.48 )

	Year Ended December 31,
	1998 (1)(2)(3)(4)			1999 (3)(4)(5)(6)			2000 (3)(4)(7)			2001 (3)(4)(8)(9)			2002 (3)(4)
Statement of Operations Data:
Gross revenues	$	1,595		$	3,624		$	6,679		$	4,622		$	—
Net revenues		1,517			3,301			5,966			4,125			—
Station operating expenses		1,767			2,641			5,538			4,272			—
Internet operating expenses		—			51			1,457			436			—
Corporate, general and administrative expenses		2,527			4,320			3,845			3,610			4,717
Employment incentives		808			—			—			—			—
Cost of abandonment of station acquisition agreement		—			—			550			—			—
Impairment loss on goodwill		—			—			—			897			—
Depreciation and amortization		32			438			1,312			1,263			120
Operating loss from continuing operations		(3,617	)		(4,149	)		(6,736	)		(6,353	)		(4,837	)
Gain on sale of stations		—			663			—			2,275			—
Other, net		(140	)		(297	)		(115	)		(173	)		(21	)
Loss from continuing operations before income taxes		(618	)		(1,833	)		(6,570	)		(4,140	)		(422	)
Income tax benefit, net		1,988			63			63			63			4,284
Income (loss) from continuing operations before discontinued operations and extraordinary loss		1,307			(1,770	)		(6,507	)		(4,077	)		(422	)
Loss from discontinued operations, net of income tax expense of $2,000 in 2002		(18,261	)		(23,975	)		(24,661	)		(26,630	)		(27,300	)
Extraordinary loss on extinguishment of debt, net of income taxes		(495	)		—			—			—			—
Net loss	$	(17,449	)	$	(25,808	)	$	(31,168	)	$	(30,707	)	$	(27,722	)
Basic and Dilutive Income (loss) per Common Share:
Continuing operations	$	0.09		$	(0.13	)	$	(0.45	)	$	(0.28	)	$	(0.03	)
Discontinued operations		(1.30	)		(1.70	)		(1.70	)		(1.84	)		(1.88	)
Extraordinary loss		(0.03	)		—			—			—			—

Net loss	$	(1.24	)	$	(1.83	)	$	(2.15	)	$	(2.12	)	$	(1.91	)

	As of December 31,
	1998		1999			2000			2001(9)			2002(10)
Balance Sheet Data:
Cash	$	5,285	$	2,431		$	862		$	3,194		$	732
Assets held for sale		—		—			—			—			79,571
Intangibles, net		80,309		113,873			110,476			77,063			—
Total assets		152,082		144,511			129,846			108,445			87,528
Interest payable		—		—			—			5,873			15,983
Short-term debt		1,287		974			36			79			174,074
Long-term liabilities		138,227		153,094			170,917			174,420			301
Stockholders’ equity (deficiency)		8,391		(15,935	)		(46,929	)		(77,627	)		(105,357	)

(1)

Big City Radio acquired substantially all of the assets of WWHB-FM on April 1, 1997 and WZVU-FM on June 5, 1997 and commenced operations of these stations under a local marketing agreement during December 1996. WWHB-FM and WZVU-FM together with WRGX-FM form Y-107, a single trimulcast. The financial statements include the operations of this station since December 1996.

~~(2)~~

Big City Radio acquired all of the stock of Radio New Jersey, owner of the FCC licenses of WRNJ-FM and WRNJ-AM, on August 14, 1998. Simultaneously atwith the closing, Big City Radio sold substantially all of the assets of WRNJ-AM to one of the existing stockholders of Radio New Jersey. The remaining WRNJ-FM operates on 107.1 FM and was added to Big City Radio’s New Country Y-107 trimulcast under a local marketing agreement, effective April 28, 1998. The consolidated financial statements include the operations of ~~this station~~WRNJ-FM since April 1998.

~~(3)~~(2)

Big City Radio acquired substantially all of the assets of WCBR-FM and WLRT-FM on August 4 and 7, 1998, respectively. The operations of these stations have been included in the consolidated statements of operations from these dates.

(3)

In June 2002, Big City Radio discontinued its publishing operations. The consolidated financial statements for all periods presented have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

(4)

In December 2002, Big City Radio announced sales of 11 of its 12 radio stations. Big City Radio also intends to sell its remaining station. The assets to be sold, which primarily consist of broadcast licenses and property and equipment, have been classified as held for sale at December 31, 2002. The purchasers of the stations are not assuming any liabilities as part of the transactions. The consolidated financial statements for all periods presented have been adjusted to reflect the sales of assets as discontinued operations in accordance with SFAS No. 144.

(5)

Big City Radio acquired substantially all of the assets of WDEK-FM and WLBK-AM on February 25, 1999. The consolidated financial statements include the operations of these stations from that date.

~~(5)~~(6)

Big City Radio acquired substantially all of the assets of KEDJ-FM and KDDJ-FM on July 31, 1999, KBZR-FM on September 22, 1999 and KMYL-FM on September 29, 1999. The operations of these stations have been included in the consolidated statements of operations from these dates.

~~(6)~~(7)

Big City Radio acquired substantially all of the assets of United Publishers of Florida, Inc. on November 8, 2000. The consolidated financial statements include the operations of United Publishers of Florida, Inc. from that date.

~~(footnotes continued on next page)~~

~~(footnotes continued from previous page)~~

~~(7)~~(8)

Big City Radio sold substantially all of the assets of KEDJ-FM, KDDJ-FM, KBZR-FM and KSSL-FM on October 31, 2001. The consolidated financial statements include the operations of these stations from their date of acquisition to October 31, 2001, the date on which they were sold. For the year ended December 31, 2001, the gain on sale of stations represents the gain on sales of these stations.

~~(8)~~(9)

During 2001, Big City Radio ceased the development and operation of its internet portal, TodoAhora.com. For the year ended December 31, 2001, the impairment loss on goodwill represents the write-off of internet goodwill.

~~(9)~~

In June 2002, Big City Radio discontinued its publishing operations. Big City Radio’s consolidated financial statements for all periods presented have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144.

(10)

Big City Radio failed to make a semi-annual interest payment on September 15, 2002 on its 11¼% senior discount notes due 2005. As a result of this payment default and an additional default existing under the senior notes, Big City Radio has reclassified the $174 million principal amount of the senior notes as current liabilities in accordance with SFAS No. 78, ~~“Classification~~Classification of Obligations that are Callable by a Creditor.”

Goodwill and Other Intangible Assets—Adoption of SFAS No. 142

See Note 2 of Notes to Big City’s financial statements as of December 31, 2002 and 2001 and the three- year period ended December 31, 2002 included elsewhere in this joint information statement/prospectus regarding the effects of Big City Radio’s adoption of SFAS No. 142. The following table presents an unaudited reconciliation of previously reported net loss applicable to common stock and basic and diluted loss per share to the amounts adjusted for the exclusion of the amortization of goodwill and Big City Radio’s indefinite life intangible assets as if SFAS No. 142 had been adopted as of January 1, 1998.

	Year Ended December 31,
	1998			1999			2000			2001			2002

Reported net loss	$	(17,449	)	$	(25,808	)	$	(31,168	)	$	(30,707	)	$	(27,722	)
Add back: Goodwill amortization		—			53			321			319			—
Add back: Broadcast license amortization		1,679			2,512			2,970			2,813			—

Adjusted net loss	$	(15,770	)	$	(23,243	)	$	(27,877	)	$	(27,575	)	$	(27,722	)

Basic and diluted net loss per share:
Reported net loss	$	(1.24	)	$	(1.83	)	$	(2.15	)	$	(2.12	)	$	(1.91	)
Add back: Goodwill amortization		—			0.00			0.02			0.02			—
Add back: Broadcast license amortization		0.12			0.18			0.21			0.19			—

Adjusted net loss	$	(1.12	)	$	(1.65	)	$	(1.92	)	$	(1.91	)	$	(1.91	)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with “Selected Historical Financial Data” and the other financial information appearing elsewhere in this joint information statement/prospectus. This discussion contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. See “Forward-Looking Statements” for a discussion of considerations related to such statements.

Results of Operations

Throughout the period beginning on January 1, 1999, Big City Radio has owned and operated radio stations in three of the largest radio markets in the United States. Big City Radio’s radio broadcast properties are located in or adjacent to major metropolitan markets and utilize innovative engineering techniques and low-cost, ratings-driven operating strategies to develop these properties into successful metropolitan radio stations.

Big City Radio’s financial results are dependent on a number of factors, including the general strength of the local and national economies, local market competition, the relative efficiency and effectiveness of radio broadcasting compared to other advertising media, governmental regulation and policies, and Big City Radio’s ability to provide popular programming.

Big City Radio’s primary source of revenue is the sale of advertising. Each station’s total revenue is determined by the number of advertisements aired by the station and the advertising rates that the station is able to charge. Until it discontinued its publishing operations in June 2002, Big City Radio derived publishing revenues principally from the sale of advertising announcements and from contract graphic design projects.

Because Big City Radio’s strategy has involved developing brand new metropolitan area radio stations, the initial revenue base was zero and subject to factors other than ratings and radio broadcasting seasonality. After a station start-up period, as is typical in the radio broadcasting industry, Big City Radio’s first calendar quarter generally would produce the lowest revenues for the year, and the fourth quarter generally would produce the highest revenues for the year. Big City Radio’s operating results in any period are affected by the incurrence of advertising and promotional expenses that do not produce commensurate revenues in the period in which the expenses are incurred.

In each of its markets, Big City Radio seeks to maximize the operating results of its broadcast properties by selecting the most competitively viable formats, engaging experienced and talented management, and optimizing the signal coverages of its transmitting facilities.

The ~~foregoing summary~~independent auditors’ reports on Big City Radio’s financial statements for each of the last three fiscal years have stated that Big City Radio’s recurring losses from operations, negative cash flows from operations, stockholders’ deficiency and default under the terms of its senior notes raise substantial doubt about Big City Radio’s ability to continue as a going concern. Because of the severe constraints on its liquidity, Big City Radio is in default on $174,000,000 principal amount of senior notes. As a result, holders of the requisite amount of the notes have declared the principal and interest on the senior notes to be due and payable, and Big City Radio has agreed with the holders of approximately 75% of the notes to conduct an auction sale of substantially all of its operating properties as soon as practicable for net cash consideration in an amount at least sufficient to pay all principal of, and accrued and unpaid interest on, the senior notes. As of the date of this joint information statement/prospectus, Big City Radio owed holders of the senior notes payment of a total of approximately $193,800,000.

The majority of Big City Radio’s ~~business describes general factors affecting~~broadcast properties are in various stages of development, either as a result of recently granted or pending requests to the FCC for enhancements or upgrades or as a result of having recently changed formats. As a result, since its inception, Big City Radio has incurred substantial net operating

losses primarily due to broadcast cash flow deficits associated with the start up of its radio station operations. Big City Radio’s original business plan envisaged that Big City Radio would generate sufficient cash flows from operations to fund its operating requirements and ~~does~~capital needs and to service interest payments on the senior notes when those interest payments first became due. Although Big City Radio sold the senior notes in March 1998, the senior notes were issued at an original issue discount, and no note interest was payable in cash until September 15, 2001. Big City Radio’s inability to generate sufficient cash flows from operations to meet all of its cash needs was attributable to a number of factors, including an adverse competitive environment, a downturn in the demand for music industry advertising, which resulted in discontinuation of the internet and publishing businesses, and the reduction in listening levels and resulting ratings for some of Big City Radio’s original station formats. Although a change in station formats produced an improvement in net revenues, the enhanced revenues were not ~~reflect~~sufficient in most markets to offset station operating expenses and other costs.

Big City Radio’s liquidity crisis was precipitated by its lack of ability to generate operating income and its obligation to make semi-annual interest payments of $9,800,000 on its senior notes beginning on March 31, 2001. Although it was able to make the first two such interest payments, Big City Radio had to fund those payments from the proceeds of additional borrowings and the sale of its four Phoenix stations in October 2001. To address its liquidity problems, Big City Radio has sought to reduce expenses by decreasing capital expenditures and ~~related issues discussed below under “Liquidity~~expenditures for promotional and ~~Capital Resources.”~~

programming activities and by reducing corporate, general and administrative expenses through employee terminations. These measures to decrease operating expenses have further limited Big City Radio’s ability to compete effectively during a time of industry-wide consolidation and the exposure of smaller, less well-capitalized companies to continued deterioration in the national and regional advertising markets.

~~Nine Months~~Year Ended ~~September 30,~~December 31, 2002 Compared with ~~Nine Months~~Year Ended ~~September 30,~~December 31, 2001

Net Revenues. Net revenues in the year ended December 31, 2002 were $0 compared with $4,125,000 for the ~~nine months~~year ended ~~September 30, 2002 were $10,227,000 compared to $15,705,000 for the nine months ended September 30, 2001, which represented a decrease of $5,478,000, or 34.9%.~~December 31, 2001. This decrease was due ~~primarily~~ to Big City Radio’s decision in 2002 to discontinue its publishing and radio station operations. As noted elsewhere in this joint information statement/prospectus, all publishing and radio station operations discontinued in 2002 have been classified as losses from discontinued operations. The net revenues in 2001 represent net revenues from the ~~following factors:~~Phoenix radio stations for the ten months ended October 31, 2001, which was the date on which Big City Radio sold these stations.

•

~~the sale on October 31, 2001 of the Phoenix stations, which had generated net revenues of $3,710,000 for the nine months ended September 30, 2001;~~

•

decreased net revenues at the New York stations due to declining ratings linked to signal deficiencies that existed from September 2001 through April 2002 and were attributable to a variety of transmission problems in the New York and New Jersey areas indirectly resulting from the September 11 terrorist attacks, and a change in format of the New York stations on May 9, 2002; and

•

~~decreased net revenues at the Los Angeles area radio stations resulting from an adverse competitive environment.~~

~~This decrease was partially offset by increased broadcast and concert revenues of the Chicago Viva 103.1 station.~~

Station Operating ~~Expenses.~~Expenses. Station operating expenses excluding depreciation and amortization for the ~~nine~~year ended December 31, 2002 were $0 compared with $4,272,000 in the year ended December 31, 2001 because of the discontinuation of all publishing and radio station operations. The station operating expenses in 2001 were attributable to the Phoenix radio station operations for the ten months ended ~~September 30, 2002 were $12,026,000 compared to $16,731,000 for the nine months ended September 30,~~October 31, 2001, which ~~represented a decrease of $4,705,000, or 28.1%. This decrease~~ was ~~due principally to decreased operating expenses of $3,512,000 for~~ the ~~Phoenix stations,~~date on which Big City Radio sold ~~on October 31, 2001, and the reduction in operating expenses for the New York and Los Angeles area radio~~these stations. ~~This decrease was partially offset by the increased concert and sales expenses for the Chicago Viva 103.1 station.~~

Internet Operating ~~Expenses.~~Expenses ~~Big City Radio did not incur internet~~. Internet operating expenses excluding depreciation and amortization for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 were $0 compared with $436,000 in the year ended December 31, 2001. This decrease was due to ~~such expenses of $421,000 for~~ the ~~nine months ended September 30, 2001.~~ Big City ~~Radio ceased its internet operations~~Radio’s decision in the second half of ~~2001.~~2001 to cease its internet operations.

Corporate, General and Administrative ~~Expenses.~~Expenses. Corporate, general and administrative expenses for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 were ~~$2,816,000~~$4,717,000 compared ~~to $2,752,000~~with $3,610,000 for the ~~nine months~~year ended ~~September 30,~~December 31, 2001, which represented an increase of ~~$64,000,~~$1,107,000, or ~~2.3%~~30.7%. ~~The~~This increase was primarily attributable to the following factors:

higher legal and professional ~~fees~~fee expense;

Phoenix station expenses of approximately $250,000 incurred in 2002 subsequent to the sale of the Phoenix radio stations, which Big City Radio previously classified as station operating expenses in 2001 during the period of radio station operations in that market; and ~~liability~~

higher insurance ~~expenses and~~costs.

This increase was partially offset by lower personnel costs in 2002.

Impairment Loss on Goodwill. Impairment loss on goodwill for the ~~2002 nine month period.~~year ended December 31, 2001 was $897,000. During 2001, Big City Radio decided to cease the development and operation of its internet portal, TodoAhora.com. The impairment loss represented the write-off on the remaining internet goodwill balances.

Depreciation and ~~Amortization.~~Amortization Expenses. Depreciation and amortization expenses for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 were ~~$1,126,000~~$120,000 compared ~~to $3,748,000~~with $1,263,000 for the ~~nine months~~year ended ~~September 30,~~December 31, 2001, which represented a decrease of ~~$2,622,000,~~$1,143,000, or ~~70.0%~~90.5%. This decrease was ~~due~~primarily attributable to the following factors:

the adoption of SFAS No. 142 on January 1, 2002, which eliminated amortization expense for goodwill and intangible assets with indefinite useful lives for the ~~nine months~~year ended ~~September 30, 2002,~~December 31, 2002; and

the ~~elimination~~lack of depreciation ~~expense at~~and amortization expenses from the Phoenix radio stations in 2002 due to their disposition on October 31, 2001.

Gain on Sale of Station. Gain on sale of station for the year ended December 31, 2002 was $0 compared to $2,275,000 for the year ended December 31, 2001. The gain on sale in 2001 was attributable to the sale of the Phoenix radio stations in October 2001. There were no station sales in 2002.

Interest Income. Interest income for the year ended December 31, 2002 was $152,000 compared to $111,000 for the year ended December 31, 2001, which represented an increase of $41,000, or 36.9%. This increase was primarily attributable to higher marketable securities balances as a result of the sale of ~~these properties on~~Phoenix radio stations in October ~~31,~~ 2001.

~~Interest Expense.~~Income Tax Benefit. ~~Interest expense~~Income tax benefit for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 was ~~$15,181,000~~$4,284,000 compared ~~to $15,016,000~~with $63,000 for the ~~nine months~~year ended ~~September 30,~~December 31, 2001, which represented an increase of ~~$165,000, or 1.1%. The average outstanding total debt for~~$4,221,000. This increase was attributable to a reduction in the valuation allowance at December 31, 2002 as a result of Big City ~~Radio was $174,000,000 in~~Radio’s adoption of a plan to sell its radio stations and the ~~nine months ended September 30, 2002 and $174,391,000 in the nine months ended September 30, 2001. The average rate~~impact of ~~interest~~this plan on the outstanding debt was 11.63% in the 2002 nine-month period and 11.47% in the 2001 nine-month period. Interest income for the nine months ended September 30, 2002 increased to $128,000 from $42,000 for the nine months ended September 30, 2001 due to a higher average balance of investments in marketable securities resulting from investmenttiming of the ~~proceeds~~reversal of ~~the sale of the Phoenix stations in October 2001.~~certain deferred tax liabilities.

Loss onfrom Discontinued ~~Operations.~~Operations. Loss onfrom discontinued operations for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 was ~~$658,000~~$27,300,000 compared ~~to $447,000~~with $26,630,000 for the ~~nine months~~year ended ~~September 30, 2001. In June~~December 31, 2001, which represented an increase of $670,000, or 2.5%. This increase was primarily attributable to an income tax provision expense of approximately $2,000,000 in 2002 ~~Big City Radio discontinued its publishing operations and wrote off $108,000 of the remaining goodwill. Big City Radio determined to terminate these operations in response~~related to the ~~continued downturn in the music industry advertising marketplace. As these operations represented the only publishing operations~~difference between book and tax amortization of Big City ~~Radio, Big City~~ Radio’s ~~consolidated financial statements for all periods presented have been adjusted~~FCC licenses. The increase was partially offset by decreased interest expense resulting from a reduction of average total debt balances during 2002 compared to ~~reflect the publishing operations as discontinued operations.~~2001 and facility fees paid to obtain a $15,000,000 bridge loan in October 2001.

Net ~~Loss.~~Loss. Net loss for the ~~nine months~~year ended ~~September 30,~~December 31, 2002 was ~~$21,416,000~~$27,722,000 compared ~~to $23,518,000~~with $30,707,000 for the ~~nine months~~year ended ~~September 30, 2001. The~~December 31, 2001, which represented a decrease ~~in net loss~~ of ~~$2,102,000,~~$2,985,000, or ~~8.9%,~~9.7%. This decrease was primarily attributable to reduced station operating expenses, reduced internet operating expenses, reduced depreciation and amortization expenses, loss from discontinued operations, the ~~following factors:~~lack of impairment losses on goodwill and the increased income tax benefit. The decrease was partially offset by reduced net revenues, increased corporate, general and administrative expenses and the lack of a gain on radio station sale in 2002 compared to 2001.

•

~~the absence of operating losses of the Phoenix stations due to the sale of these properties on October 31, 2001;~~

•

~~lower station operating expenses and the lack of internet expenses;~~

•

~~the adoption of SFAS No. 142, which resulted in no amortization expense for goodwill and intangible assets for the nine months ended September 30, 2002; and~~

•

revenues from concert events at the Los Angeles area and Chicago stations for the nine months ended September 30, 2002, which were partially offset by lower net revenues at the New York, Los Angeles and Chicago Energy92 stations, and the absence of net revenues from the Phoenix stations compared to the corresponding nine months ended September 30, 2001.

Year Ended December 31, 2001 Compared with Year Ended December 31, 2000

Net Revenues. Net revenues in the year ended December 31, 2001 were ~~$20,086,000~~$4,125,000 compared ~~to $23,766,000~~with $5,966,000 for the year ended December 31, 2000, which represented a decrease of ~~$3,680,000,~~$1,841,000, or ~~15%~~31%. This decrease was ~~due primarily~~attributable to ~~the following factors:~~

•

~~decreased net revenues of the Chicago stations resulting from their change in format in January 2001;~~

•

~~decreased net revenues at the New York stations resulting from an adverse competitive environment and the overall decline in revenues in the New York City market; and~~

•

~~decreased net revenues from the Phoenix stations due to the sale of these properties on October 31, 2001.~~

~~This decrease was partially offset by increased~~reduced net revenues at the Phoenix radio stations in 2001 compared to 2000 as a result of the ~~Los Angeles area radio stations, which began broadcasting their current Hispanic contemporary hit radio format in December 1999.~~

sale of these properties on October 31, 2001.

Station Operating Expenses. Station operating expenses, excluding depreciation and amortization, for the year ended December 31, 2001 were ~~$21,307,000~~$4,272,000 compared ~~to $26,047,000 for~~with $5,538,000 in the year ended December 31, 2000, which represented a decrease of ~~$4,740,000,~~$1,266,000, or ~~18%~~23%. This decrease was due ~~principally~~ to ~~the reduction in operating expenses for the New York, Chicago, and Los Angeles stations, as well as~~ reduced operating expenses ~~for~~at the Phoenix radio stations ~~which were sold~~in 2001 compared to 2000 as a result of the sale of these properties on October 31, ~~2001, eliminating further Phoenix station expenses.~~2001.

Internet Operating Expenses. Internet operating expenses, excluding depreciation and amortization for the year ended December 31, 2001 were $436,000 compared to $1,457,000 for the year ended December 31, 2000, which represented a decrease of $1,021,000, or 70%. In the second half of 2001, Big City Radio ceased its internet operations.

Corporate, General and Administrative Expenses. Corporate, general and administrative expenses for the year ended December 31, 2001 were $3,610,000 compared to $3,845,000 for the year ended December 31, 2000, which represented a decrease of $235,000, or 6%. This decrease was primarily attributable to lower personnel costs in 2001.

Cost of Abandonment of Station Acquisition. Big City Radio incurred cost of abandonment of station acquisition as a result of the cancellation of a signed agreement under which the assets of radio station KLVA FM, Casa Grande, Arizona, would have been exchanged for the assets of radio station KDDJ-FM, Globe, Arizona. Upon execution of the acquisition agreement, Big City Radio deposited $275,000 into an escrow account in April 1999. In February 2000, Big City Radio paid the balance in the escrow account and an additional amount of $275,000, for a total of $550,000, to terminate the agreement. Big City Radio decided to abandon the acquisition in response to a change in the engineering enhancement plan for Big City Radio’s Phoenix radio licenses. There were no such expenses in 2001.

Impairment Loss on Goodwill. Impairment loss on goodwill for the year ended December 31, 2001 was $897,000. During 2001, Big City Radio decided to cease the development and operation of its internet portal, ~~TodoAhora.com, and focus on its publishing operations.~~TodoAhora.com. The impairment loss represented the write-off of the remaining internet goodwill balances.

Depreciation and ~~Amortization.~~Amortization Expenses. Depreciation and amortization expenses for the year ended December 31, 2001 were ~~$4,818,000,~~$1,263,000 compared to $4,863,000 for the year ended December 31, 2000. The effects of capital expenditures for the Phoenix and New York stations were partially offset by the decreased depreciation and amortization expenses attributable to the Phoenix stations, which were sold on October 31, 2001.

~~Interest Expense.~~ ~~Interest expense for the year ended December 31, 2001 was $21,540,000 compared to $18,392,000~~with $1,312,000 for the year ended December 31, 2000, which represented ~~an increase~~a decrease of ~~$3,148,000,~~$49,000, or ~~17%~~4%. This ~~increase reflected additional interest resulting from~~decrease was due to decreased depreciation and amortization expenses relating to the ~~issuance~~Phoenix radio stations, which were sold on October 31, 2001.

Gain on Sale of ~~the senior notes in March 1998 and their accreted principal amount~~Station. Gain on sale of station was $2,275,000 for the year ended December 31, ~~2001 when compared to~~2001. The gain on sale resulted from the ~~corresponding period~~sale of the Phoenix radio stations in 2000. The increase in interest expense was also attributable to interest incurred on a bridge loan and on a promissory note to an affiliate of Big City Radio in 2001, as discussed below under “Liquidity and Capital Resources.” The weighted average outstanding total debt for Big City Radio was $175,182,000 in the year ended December 31, 2001 and $162,288,000 in the year ended December 31, 2000. The weighted average rate of interest on the outstanding debt in the two years was 12.29% and 11.324%, respectively.October 2001.

Interest Income. Interest income for the year ended December 31, 2001 was $111,000 compared to $281,000 for the year ended December 31, 2000, which represented a decrease of $170,000, or ~~61%~~60%. This decrease was due primarily to a decline in marketable securities balances as a result of the application of previously invested funds to operations.

Loss onfrom Discontinued ~~Operations.~~Operations. Loss onfrom discontinued operations for the year ended December 31, 2001 was ~~$645,000~~$26,630,000 compared ~~to $41,000~~with $24,661,000 for the year ended December 31, ~~2000. In June 2002, Big City Radio discontinued its publishing operations~~2000, which represented an increase of $1,969,000, or 8.0%. This increase was primarily attributable to an increase in interest expense resulting from an increased average total debt during 2001 and ~~wrote off $108,000 of~~facility fees paid to obtain a $15,000,000 bridge loan in October 2001, and increased operating losses at the ~~remaining goodwill. Big City Radio determined to terminate these operations in response to~~New York radio station. This increase was partially offset by increased operating income from the ~~downturn in the music industry advertising marketplace.~~Los Angeles and Chicago radio stations.

Net ~~Loss.~~Loss. Net loss for the year ended December 31, 2001 was $30,707,000 compared towith $31,168,000 for the year ended December 31, 2000, which represented a decrease of $461,000, or 1%1.5%. ~~The~~This decrease ~~in the net loss~~ was primarily attributable to the gain on the sale of the Phoenix stations, ~~lower~~a reduced loss from discontinued operations,

reduced station operating expenses, ~~and a~~reduced internet operating expenses, the absence of the $550,000 cancellation charge related to the ~~abandoned~~ KLVA-FM acquisition, ~~in 2000.~~and reduced corporate, general and administrative expenses. The ~~effects of these factors were substantially~~decrease was partially offset by ~~higher~~reduced net ~~interest expense, the~~revenues, an impairment loss on internet goodwill and ~~the decrease in net revenues for the year ended December 31, 2001.~~

reduced interest income.

~~Year Ended December 31, 2000 Compared with Year Ended December 31, 1999~~Inflation.

~~Net Revenues.~~ Net revenues in the year ended December 31, 2000 were $23,766,000 compared to $20,604,000 for the year ended December 31, 1999, which represented an increase of $3,162,000, or 15%. This increase was due primarily to the increase in net revenues of the New York stations and the Chicago stations and the addition of the Phoenix stationsInflation did not have a material impact on ~~July 31, 1999. The net revenue increase was partially offset by a decrease in net revenues at the Los Angeles stations resulting from a program format change implemented in December 1999.~~

~~Station Operating Expenses.~~ Station operating expenses, excluding depreciation and amortization for the year ended December 31, 2000 were $26,047,000 compared to $23,566,000 for the year ended December 31, 1999, which represented an increase of $2,481,000, or 11%. This increase was due principally to the addition of the operations of the Phoenix stations and the increased costs associated with revenue growth of the Chicago stations. The effects of these increases were partially offset by the reduction in operating expenses for the New York stations, the Los Angeles area radio stations and WRKL-AM.

~~Internet Operating Expenses.~~ Internet operating expenses, excluding depreciation and amortization for the year ended December 31, 2000 were $1,457,000 compared to $51,000 for the year ended December 31, 1999. The increase was due principally to the start-up operations of TodoAhora.com, Big City Radio’s ~~internet portal, since its inception~~operating results in ~~November 1999.~~2000, 2001 or 2002.

~~Corporate, General and Administrative Expenses.~~ Corporate, general and administrative expenses for the year ended December 31, 2000 were $3,845,000 compared to $4,371,000 for the year ended December 31, 1999, which represented a decrease of $526,000, or 12%. This decrease was due primarily to a severance payment made to Big City Radio’s prior Chief Executive Officer in 1999, and a decrease in legal and professional fees in 2000.

~~Cost of Abandonment of Station Acquisition.~~ Cost of abandonment of station acquisition for the year ended December 31, 2000 was incurred as a result of the cancellation of a signed agreement under which the assets of radio station KLVA-FM, Casa Grande, Arizona, would have been exchanged for the assets of radio station KDDJ-FM, Globe, Arizona. Upon execution of the acquisition agreement, Big City Radio deposited $275,000 into an escrow account in April 1999. In February 2000, Big City Radio paid the balance in the escrow account and an additional amount of $275,000, for a total of $550,000, to terminate the agreement. Big City Radio decided to abandon the acquisition in response to a change in the engineering enhancement plan for Big City Radio’s Phoenix radio licenses.

~~Depreciation and Amortization.~~ Depreciation and amortization expenses for the year ended December 31, 2000 were $4,863,000 compared to $3,812,000 for the year ended December 31, 1999, which represented an increase of $1,051,000, or 28%. This increase was due primarily to the amortization of intangibles and depreciation of capital assets of the Phoenix stations, which were acquired in July and September 1999, and Hispanic Internet Holdings, Inc., which was acquired in November 1999.

~~Interest Expense.~~ Interest expense for the year ended December 31, 2000 was $18,392,000 compared to $16,953,000 for the year ended December 31, 1999, which represented an increase of $1,439,000, or 8%. This increase reflected additional interest resulting from the issuance of the senior notes in March 1998 and their accreted principal amount for the year ended December 31, 2000. The weighted average outstanding total debt for Big City Radio was $162,288,000 in the year ended December 31, 2001 and $146,540,000 in the year ended December 31, 2000. The weighted average rate of interest on the outstanding debt in the two years was 11.324% and 11.323%, respectively.

~~Interest Income.~~ Interest income for the year ended December 31, 2000 was $281,000 compared to $1,952,000 for the year ended December 31, 1999, which represented a decrease of $1,671,000, or 86%. This decrease was due primarily to a decline in marketable securities balances as a result of the application of previously invested funds to operations.

~~Loss on Discontinued Operations.~~ Loss on discontinued operations for the year ended December 31, 2000 was $41,000. There were no such losses for the year ended December 31, 1999. In June 2002, Big City Radio discontinued its publishing operations and wrote off $108,000 of the remaining goodwill. Big City Radio determined to terminate these operations in response to the downturn in the music industry advertising marketplace. As these operations represented the only publishing operations of Big City Radio, Big City Radio’s consolidated financial statements for all periods have been adjusted to reflect the publishing operations as discontinued operations.

~~Net Loss.~~ Net loss for the year ended December 31, 2000 was $31,168,000 compared to $25,808,000 for the year ended December 31, 1999, which represented an increase of $5,360,000, or 21%. The increase in the net loss was primarily attributable to higher station operating expenses and the start-up operations of TodoAhora.com, higher depreciation and amortization expenses and net interest expense, which resulted primarily from the Phoenix station acquisitions in 1999, a $550,000 cancellation charge related to the abandoned KLVA-FM acquisition, and the absence of the gain on sale of radio stations in 2000. The effects of these factors were partially offset by the increase in net revenues for the year ended December 31, 2000.

Liquidity and Capital Resources

As of ~~December 31, 2002,~~February 1, 2003, Big City Radio had available approximately ~~$2,386,000~~$900,000 of cash, cash equivalents and marketable securities. Big City Radio’s existing sources of liquidity are insufficient to enable it to service its

current indebtedness and to meet its operating requirements and capital needs. The independent auditors’ report on Big City Radio’s financial statements for the year ended December 31, ~~2001~~2002 states that Big City Radio’s recurring losses from operations and negative cash flows from operations raise substantial doubt about Big City Radio’s ability to continue as a going concern. As discussed below and elsewhere in this joint information statement/prospectus, because of the severe constraints on its liquidity, Big City Radio has failed to make payments due on the senior notes. As a result, holders of the requisite amount of the notes have declared the principal and interest on the senior notes to be due and payable, and Big City Radio has agreed with the holders of approximately 75% of the notes to conduct an auction sale of its radio stations as soon as practicable for net cash consideration in an amount at least sufficient to pay all principal of, and accrued and unpaid interest on, the senior notes.

Big City Radio has incurred substantial net losses since inception primarily due to broadcast cash flow deficits characteristic of the start up of radio stations. In addition, since the majority of its broadcast properties are in various stages of development, either as a result of pending FCC applications and their appeals that, if granted, will permit Big City Radio to effect engineering enhancements or upgrades, or as a result of having recently changed formats, Big City Radio expects to generate significant net losses for the foreseeable future.

As a result of these factors, Big City Radio has met its working capital needs primarily through borrowings, including loans from Big City Radio’s principal stockholders, Stuart and Anita Subotnick, loans under credit facilities, and proceeds from the issuance of the senior notes in March 1998. Since October 31, 2001, Big City Radio has met its working capital needs primarily from the proceeds of the sale of Big City Radio’s Phoenix radio stations which it completed on that date.

Cash Flows ~~From~~from Operating Activities. In each of the ~~periods presented,~~years ended December 31, 2002, 2001 and 2000, Big City Radio used cash in its operations. In the ~~nine months~~year ended ~~September 30,~~December 31, 2002, cash used in operations related primarily to corporate, general and administrative activities and was offset by the ~~cash flow deficit was predominantly due~~collection of receivables, less payments to creditors relating to the payment of semi-annual interest on the senior notes of approximately $9,800,000 on March 15, 2002, and operating losses attributable to the New York stations, Chicago stations, Independent Radio Reps, LLC, and the publishing business. In the nine months ended September 30, 2001, the cash flow deficit was predominantly due to operating losses attributable to the New York and Chicago stations and the funding of start-up operations of the ~~internet and publishing businesses and Independent Radio Reps, LLC.~~Phoenix radio stations, which were sold on October 31, 2001. In the year ended December 31, 2001, cash used in operations related primarily to corporate, general and administrative activities, losses from the ~~cash flow deficit was predominantly due to start-up~~internet operations, and operating losses of the ~~Chicago~~Phoenix radio stations ~~operating as Viva 103.1 and Energy92 and operating losses attributable to~~in the ~~New York stations.~~ten months ended October 31, 2001. In the year ended December 31, 2000, cash used in operations related primarily to corporate, general and administrative activities, losses from the ~~cash flow deficit was predominantly due to the start-up operating losses attributable to the Los Angeles area stations operating as Viva 107.1, the Que Buena Phoenix station,~~internet operations and the ~~internet portal site, TodoAhora.com, as well as~~cost of abandonment of a radio station purchase, and was partially offset by operating income from the ~~operating losses attributable to the Chicago~~Phoenix radio stations. ~~In the year ended December 31, 1999, the cash flow deficit was predominantly due to the funding of start-up operations at New York and Chicago stations.~~

Cash Flows ~~From~~from Investing Activities. Capital expenditures made in continuing operations, excluding acquisitions of radio stations, were ~~$251,000~~$0 in the ~~nine months~~year ended ~~September 30,~~December 31, 2002, ~~$552,000 in the nine months ended September 30, 2001, $851,000~~$121,000 in the year ended December 31, 2001 ~~$1,584,000~~and $895,000 in the year ended December 31, ~~2000, and $2,941,000 in~~2000. In the year ended December 31, ~~1999. These~~2001, capital expenditures inprimarily consisted of the ~~2002~~replacement of studio, transmission and ~~2001 nine-month periods~~computer equipment. In the year ended December 31, 2000, capital expenditures primarily ~~reflect~~reflected costs ~~associated with~~incurred at the Phoenix stations for technical improvements, ~~at Big City Radio’s stations, primarily~~ the upgrade and expansion of ~~the~~ studio ~~and~~ broadcast facilities, and the purchase of

promotional vehicles. Capital expenditures in 2000 were also applied to the purchase of furniture, fixtures and computer ~~support equipment.~~equipment for the internet and publishing operations. In the ~~nine months~~year ended ~~September 30,~~December 31, 2002, Big City Radio sold ~~$11,921,000~~$13,139,000 of marketable securities to generate cash for general working capital and interest payments on the senior notes. In the nine months ended September 30, 2001, Big City Radio sold $1,895,000 of marketable securities to generate cash for general working capital purposes. For 2001, 2000 and 1999, these expenditures primarily reflect costs associated with the power increases and other technical improvements at Big City Radio’s stations, the upgrade and expansion of the studio and broadcast facilities, computer support equipment, and purchase of promotional vehicles for the new station properties, as well as purchase of furniture, fixtures and computer equipment for the internet and publishing operations. In the year ended December 31, 2001, Big City Radio purchased $15,000,000 inof marketable securities, ~~and~~ sold $1,895,000 to generate cash for general working capital ~~purposes.~~purposes and sold its Phoenix radio stations for $32,692,000. In the year ended December 31, 2000, Big City Radio sold $5,964,000 inof marketable securities to generate cash for general working capital purposes. ~~In the~~

year ended December 31, 1999, Big City Radio purchased $34,508,000 in marketable securities and sold $75,065,000 of marketable securities to generate cash for the purchase of radio stations in DeKalb, Illinois and Phoenix, Arizona and for general working capital purposes. Cash paid and advanced for the purchase of assets of radio stations and internet and publishing businesses were $250,000 in the year ended December 31, 2000 and $36,177,000 in the year ended December 31, 1999.

Cash Flows ~~From~~from Financing Activities. Big City Radio completed a sale of $174,000,000 aggregate principal amount at maturity of senior notes on March 17, 1998, generating approximately $125,400,000 of gross proceeds. Big City Radio used approximately $32,600,000 of these proceeds to repay outstanding indebtedness under a credit facility with The Chase Manhattan Bank entered into in 1996. Big City Radio ~~has~~ used the proceeds of the senior notes offering to finance the acquisition costs of radio station properties and for general working capital purposes.

The senior notes were issued at an original issue discount and accreted in value until March 15, 2001 at a rate of 11¹/4% per annum, compounded semi-annually to an aggregate principal amount of $174,000,000. Cash interest began accruing on the senior notes on March 15, 2001 at a rate of 11¹/4% per annum and is payable in cash semi-annually, each March 15 and September 15 through and including March 15, 2005. The senior notes will mature on March 15, 2005, but may be redeemed at the option of Big City Radio, in whole or in part, at a redemption price of 105.625%, 102.813% or 100.000% if redeemed during the 12-month period commencing on March 15, 2002, March 15, 2003 and on and after March 15, 2004, respectively.

Holders of the senior notes have the right to require Big City Radio to repurchase their senior notes upon a “change of control” of Big City Radio, as defined in the indenture governing the senior notes, at a price equal to 101% of the principal amount of such notes. A “change of control” for purposes of the senior notes is deemed to occur:

when any person other than Stuart and Anita Subotnick, officers and members of Big City Radio’s management as of March 17, 1998 and their respective family members, relatives and trusts becomes the beneficial owner of more than 35% of the total voting power of Big City Radio’s capital stock and the foregoing permitted holders own in the aggregate a lesser percentage of such voting power and do not have the right or ability to designate for election a majority of the board of directors;

upon specified changes in the composition of the board of directors;

•

when any person other than Stuart and Anita Subotnick, officers and members of Big City Radio’s management as of the issue date of the senior notes and their respective family members, relatives and trusts becomes the beneficial owner of more than 35% of the total voting power of Big City Radio’s capital stock and the foregoing permitted holders own in the aggregate a lesser percentage of such voting power and do not have the right or ability to designate for election a majority of the board of directors;

upon the occurrence of a sale, lease, transfer, conveyance or other disposition to any person of all or substantially all of the assets of Big City Radio taken as a whole; or

•

~~upon specified changes in the composition of the board of directors;~~

upon the adoption by the stockholders of a plan for the liquidation or dissolution of Big City Radio.

•

~~upon the occurrence of a sale, lease, transfer, conveyance or other disposition to any person of all or substantially all of the assets of Big City Radio taken as a whole; or~~

•

~~upon the adoption by the stockholders of a plan for the liquidation or dissolution of Big City Radio.~~

Payments under the senior notes are guaranteed on a senior unsecured basis by Big City Radio’s “restricted subsidiaries,” as defined in the indenture governing the senior notes. As of ~~September 30,~~December 31, 2002, all of Big City Radio’s subsidiaries were restricted subsidiaries. The senior notes contain financial and operational covenants with which Big City Radio and its restricted subsidiaries must comply, including covenants restricting the incurrence of additional indebtedness, investments, payment of dividends on and redemption of capital stock, redemption of specified subordinated obligations, sales of assets and the use of proceeds therefrom, transactions with affiliates, creation and existence of liens, the types of businesses in which Big City Radio may operate, asset swaps, distributions from restricted subsidiaries, sales of capital stock of restricted subsidiaries, and consolidations, mergers and transfers of all or substantially all of Big City Radio’s assets. The senior notes contain customary events of default, including payment defaults and default in the performance of other covenants, specified bankruptcy defaults, cross defaults to other indebtedness and to judgments, and failure of a subsidiary guarantee to be in full force and effect.

In connection with the consummation of the senior notes offering, Big City Radio entered into a revolving credit facility with The Chase Manhattan Bank providing for up to $15,000,000 of borrowings based upon a multiple of the positive rolling four-quarter broadcast cash flow of Big City Radio’s stations and subject to

compliance with specified financial and operational covenants. The revolving credit facility was to mature on March 17, 2003. At December 31, 2000, Big City Radio was in compliance with all material covenants and restrictions under the revolving credit facility, with the exception that, in violation of one such covenant, the independent auditors’ report on Big City Radio’s financial statements for the year ended December 31, 2000 included a “going concern” paragraph. In April 2001, the lender declined to permit Big City Radio to draw under the revolving credit facility due to Big City Radio’s violation of the foregoing covenant. As a result of its inability to draw under the revolving credit facility, Big City Radio issued a promissory note in May 2001 to borrow up to $5,000,000 from Stuart Subotnick, a principal stockholder, in order to meet its short-term working capital needs. The amount outstanding under this note, which was payable on demand, bore interest equal to JP Morgan Chase Bank’s prime rate plus 2.0%.

Cash interest commenced accruing on the senior notes on March 15, 2001 and semi-annual cash interest payments of $9,800,000 commenced on September 15, 2001. Big City Radio failed to make the initial semi-annual interest payment when due on September 15, 2001. In order to obtain the funds to make this payment within the 30-day grace period provided under the indenture, Big City Radio obtained a bridge loan in the amount of $15,000,000 by the assignment of Big City Radio’s revolving credit facility from the lender thereunder to a new lender. The bridge loan was secured to the same extent as the revolving credit facility and bore interest at the rate of LIBOR plus 3.0%, or a base rate plus 2.0%, at the option of Big City Radio. Big City Radio used the net proceeds of the bridge loan to pay the semi-annual interest on the senior notes due on September 15, ~~2002,~~2001, together with applicable additional interest thereon, and to repay $2,235,000 of principal indebtedness and $51,000 of interest incurred under the promissory note issued to Mr. Subotnick in May 2001. Big City Radio repaid the bridge loan on October 31, 2001 with a portion of the proceeds from the sale of the Phoenix radio station properties, as discussed below. Big City Radio currently does not have a credit facility.

On October 31, 2001, Big City Radio completed the sale of its four Phoenix radio properties to Hispanic Broadcasting Corporation for a cash price of $34,000,000. The indenture governing the senior notes permits Big City Radio to reinvest the approximately $18,000,000 of proceeds which remained from the sale of the Phoenix stations after the repayment of the bridge loan in broadcast assets for a period of up to one year from the date of these asset sales. Thereafter, any net proceeds that are not timely reinvested in broadcast assets must be used to make an offer to repurchase senior notes. As described above, Big City Radio used a portion of the proceeds to repay indebtedness under the bridge loan and to fund the semi-annual interest payment due on the senior notes on ~~September~~March 15, 2002. Big City Radio has been using the remaining proceeds to fund its ongoing operations, and has not reinvested such proceeds in broadcast assets. Big City Radio has not made the required offer to repurchase senior notes, because it does not have sufficient cash resources to consummate such an offer. Its failure to make an offer to repurchase constitutes an event of default under the indenture.

Big City Radio failed to make the semi-annual interest payment of $9,800,000 due on the senior notes on September 15, 2002. Big City Radio’s cash resources were insufficient to enable Big City Radio to make the semi-annual interest payment within the 30-day grace period provided under the indenture. The grace period expired on October 15, 2002, thereby resulting in an additional event of default under the indenture. On October 17, 2002, pursuant to the indenture, holders of the senior notes delivered an acceleration notice to Big City Radio declaring the principal and interest on all of the senior notes to be immediately due and payable.

As described elsewhere in this joint information statement/prospectus, Big City Radio has evaluated its strategic alternatives and the most efficient use of ~~Big City Radio’s~~its capital. These alternatives include the sale of Big City Radio’s broadcast assets and, depending on market conditions, debt and/or equity financing, and purchasing, restructuring, recapitalizing, refinancing or otherwise retiring certain of Big City Radio’s securities in the open market or by other means, in each case subject to the restrictions contained in the indenture governing the senior notes. On November 4, 2002, Big City Radio announced it had retained Jorgenson Broadcast Brokerage to

market and conduct an auction sale of all of Big City Radio’s radio stations. As discussed below, proceeds from any sales of the stations will be applied first to repay the senior notes.

Big City Radio, the subsidiary guarantors of the senior notes, and the holders of approximately $128,000,000 in principal amount of the senior notes, acting through an ad hoc committee of noteholders, entered into a forbearance agreement on November 13, 2002. Under the forbearance agreement, the signatory noteholders have agreed to forbear, through January 31, 2003, from taking, initiating or continuing any action to enforce Big City Radio’s payment obligations under the senior notes, including, without limitation, any involuntary bankruptcy filing against Big City Radio, or against any property, officers, directors, employees or agents of Big City Radio to collect on or enforce payment of any indebtedness or obligations, or to otherwise assert any claims or causes of action seeking payment under the senior notes, in each case arising under or relating to the payment default or the default arising from the failure to make the required offer to repurchase senior notes or other existing defaults known to the signatory noteholders as of November 13, 2002. Under the forbearance agreement, Big City Radio agreed to conduct the auction of its radio stations in a good faith manner designed to sell the assets as soon as practicable for net cash consideration in an amount at least sufficient to pay all principal of, and accrued and unpaid interest on, the senior notes. If signatory noteholders reasonably believe that Big City Radio is not conducting the auction process in good faith or is not operating or managing the business and financial affairs of Big City Radio in good faith in the ordinary course and consistent with past practices, they may notify Big City Radio in writing and may elect to terminate the forbearance agreement. Big City Radio further has agreed not to pay, discharge or satisfy any liability or obligation except for obligations reflected on Big City Radio’s balance sheet as of December 31, 2001 or incurred in the ordinary course since that date which are paid, discharged or satisfied for fair and equivalent value in the ordinary course of business and consistent with past practices. The forbearance agreement will not prevent the trustee under the indenture or noteholders that are not parties to the forbearance agreement from pursuing remedies under the indenture.

Big City Radio and the noteholders executed an amendment to the forbearance agreement as of January 14, 2003, in which the expiration date of the forbearance period was extended from January 31, 2003 through and including March 31, 2003. The forbearance agreement was further amended to provide that:

Big City Radio will pay the noteholders the net cash proceeds of any asset sale within five business days after the completion of such asset sale, until such time as the noteholders have received cash in an amount equal to all principal of, and accrued and unpaid interest on, the senior notes;

the forbearance agreement may be terminated by either Big City Radio or the ad hoc committee upon written notice if

•

any party to the forbearance agreement fails to perform any of its obligations, or breaches any of its representations, covenants or warranties, under the forbearance agreement,

•

~~the forbearance agreement may be terminated by either Big City Radio or the ad hoc committee upon written notice if~~

Big City Radio or any party to any asset purchase agreement for any asset sale which Big City Radio had publicly announced on or before January 6, 2003, including the asset sale to Entravision, breaches any representation, warranty or covenant in such asset purchase agreement, and does not cure such breach within ten days, or

~~any party to the forbearance agreement fails to perform any of its obligations, or breaches any of its representations, covenants or warranties, under the forbearance agreement,~~

one or more of the asset purchase agreements is terminated or modified in any material respect; and

Big City Radio must immediately notify the ad hoc committee by written notice of

~~one or more of the asset purchase agreements is terminated or modified in any material respect; and~~

any breach by Big City Radio of the forbearance agreement,

•

~~Big City Radio must immediately notify the ad hoc committee by written notice of~~

any breach by Big City Radio or any other party of any of the foregoing asset purchase agreements, whether or not such breach is curable, and

~~any breach by Big City Radio of the forbearance agreement,~~

any termination by Big City Radio or any other party thereto of any of such asset purchase agreements.

~~any breach by Big City Radio or any other party of any of the foregoing asset purchase agreements, whether or not such breach is curable, and~~

~~any termination by Big City Radio or any other party thereto of any of such asset purchase agreements.~~

In addition, the forbearance agreement provides that it will automatically terminate upon the filing of a voluntary or involuntary petition under the insolvency or bankruptcy laws of the United States or any state with respect to Big City Radio, except that, upon the filing of an involuntary bankruptcy petition by unaffiliated, arm’s length creditors, Big City Radio will have a period of ten days to obtain the dismissal or withdrawal of such a petition before the forbearance agreement terminates as a result of the filing.

If Big City Radio completes the asset sale to Entravision and the other station sales, it will receive gross cash proceeds of approximately $197,900,000. Under the senior notes forbearance agreement described above, Big City Radio will be obligated to apply the net proceeds of the asset sales first to pay the principal amount of the senior notes and all accrued and unpaid interest thereon through the date of such payment. As of ~~January 15, 2003,~~the date of this joint information statement/prospectus, Big City Radio owed holders of the senior notes payment of a total of approximately ~~$190,700,000,~~$193,800,000, consisting of $174,000,000 of principal and approximately ~~$16,700,000~~$19,800,000 of accrued and unpaid interest.

Big City Radio will apply any remaining net proceeds from the asset sales, together with its other liquidity sources, to pay expenses relating to the asset sales, including employee severance amounts, tax liabilities and expenses associated with termination of contracts not assumed by the buyers, as well as trade payables and other operating expenses.

If Big City Radio completes its pending station sales and sells the sole station that was not subject to a binding purchase agreement as of the date of this joint information statement/prospectus, it will have disposed of substantially all of its operating properties. Its principal sources of liquidity will then consist of cash on hand, including any remaining proceeds of the station sales, and amounts earned on its investment of such cash, and collections of trade receivables, which amounted to approximately $1,900,000 as of December 31, 2002. Big City Radio also may seek to obtain additional liquidity by selling shares of the Entravision Class A common stock it will receive upon completion of the asset sale. Assuming the closing of its pending station sales, Big City Radio believes that these liquidity sources will be sufficient to meet its short-term cash needs. The amount and nature of Big City Radio’s long-term liquidity needs will depend on, among other things, a decision by the board of directors regarding future operations, if any, of Big City Radio. ~~For~~

As of the date of this joint information ~~about~~statement/prospectus, Big City Radio’s ~~planned use~~board of directors has not determined the uses to which Big City Radio will apply any cash or other assets remaining after it has repaid the senior notes and its other liabilities. This determination will depend on various factors, a number of which are not within Big City Radio’s control, including whether the asset ~~sale proceeds~~sales are completed, the dates on which the sales are completed and ~~related matters, see “The Asset Sale—Application of Asset Sale Proceeds; Future Operations~~the amount of Big City ~~Radio.”~~

~~Contractual Obligations~~Radio’s obligations that must be paid with the proceeds of the sales.

If some of the radio station sales are not completed, and ~~Commitments~~

the holders of the senior notes continue to forbear from exercising their remedies, Big City Radio will attempt to continue to finance its operations and obligations while it seeks new buyers for its unsold stations. Big City Radio’s principal sources of liquidity would then consist of cash on hand and operating revenues of stations no longer subject to time brokerage agreements with potential purchasers. Big City Radio would seek to manage its operating expense levels by further reducing corporate, general and administrative expenses and expenditures for promotional and programming activities.

If Big City Radio is not successful in selling the stations at all or selling the stations at prices sufficient to pay all principal of, and accrued and unpaid interest on, the senior notes, Big City Radio will consider other strategic alternatives, including filing for protection from its creditors under the United States bankruptcy code. Because events of default exist under the indenture governing the senior notes, Big City Radio also could be subject to an involuntary filing under the bankruptcy code initiated by noteholders or other creditors.

Cash Used in Discontinued Operations. Big City Radio used cash in its discontinued operations in each of the years ended December 31, 2002, 2001 and 2000. In the years ended December 31, 2002 and 2001, Big City Radio used the cash primarily to make interest payments on the senior notes and to fund operating cash deficits in the New York and Chicago station operations. In the year ended December 31, 2000, Big City Radio used cash to fund operating cash deficits in the Los Angeles, New York and Chicago station operations.

Contractual Obligations and Commitments

As of December 31, 2002, Big City Radio’s contractual obligations and commitments were as follows:

Senior Notes

Operating Leases

Employment Contracts

Total
2003    $ 174,000,000    1,652,000    804,000    176,456,000
2004    —      1,089,000    —      1,089,000
2005    —      649,000    —      649,000
2006    —      446,000    —      446,000
Thereafter    —      422,000    —      422,000




   $ 174,000,000    $ 4,258,000    $ 804,000    $ 179,062,000

	Senior Notes (Principal and Interest)		Operating Leases		Employment Contracts		Total
2003	$	189,983,000	$	1,652,000	$	804,000	$	192,439,000
2004		—		1,089,000		46,000		1,135,000
2005		—		649,000		—		649,000
2006		—		446,000		—		446,000
Thereafter		—		704,000		—		704,000

	$	189,983,000	$	4,540,000	$	850,000	$	195,373,000

Critical Accounting Policies and Material Estimates

Big City Radio’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States. The preparation of these financial statements requires Big City Radio to make estimates and judgments that affected the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, Big City Radio evaluates its estimates, including those to broadcast rights, bad debts, intangible assets, income taxes, and contingencies and litigation. Big City Radio bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results

may differ from these estimates under different assumptions or conditions. Big City Radio believes the following critical accounting policies affect its more significant judgment and estimates used in the preparation of its consolidated financial statements.

Big City Radio reviews the carrying values of its long-lived assets (tangible) for impairment based upon estimated future cash flows of the stations. As of September 30, 2002, Big City Radio did not record any impairment related to its long lived tangible assets or broadcast license. In June 2002, Big City Radio ceased the operation of United Publishers of Florida, Inc., and wrote off the remaining $108,000 of goodwill associated with United Publishers of Florida, Inc. Future adverse changes in market conditions, changes in technology and other factors could reduce the expected future cash flows and result in an impairment charge in the future.

Big City Radio records revenue from the sale of airtime related to advertising and contracted time at the time of broadcast. Big City Radio maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Big City Radio utilizes information available to Big City Radio, including the timing of payments and the financial condition of its customers to estimate the allowance for doubtful accounts. If the financial condition of Big City Radio’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Big City Radio does not have a significant concentration of accounts receivable from one customer or industry segment.

Recent Accounting Pronouncements

Business Combinations and Goodwill and ~~other~~Other Intangible Assets. In July 2001, the Financial Accounting Standards Board, or FASB, issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria that intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Big City Radio adopted SFAS No. 141 and SFAS No. 142 effective January 1, 2002. Any goodwill and any intangible asset determined to have an indefinite useful life that was acquired in a purchase business combination

completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 have been amortized through December 31, 2001.

SFAS No. 141 requires that upon adoption of SFAS No. 142, Big City Radio evaluate its existing intangible assets and goodwill that was acquired in a prior purchase business combination, and make any necessary reclassifications in order to conform with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon adoption of SFAS No. 142, Big City Radio reassessed the useful lives and residual values of all intangible assets acquired in business combinations accounted for using the purchase method. In addition, to the extent Big City Radio identified an intangible asset as having an indefinite useful life, Big City Radio was required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142 within the first interim period. Any impairment loss would have been measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle. No significant adjustments or impairment losses resulted from the adoption of SFAS No. 141 and SFAS No. 142.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142 required Big City Radio to perform an assessment of whether there was an indication that goodwill was impaired as of the date of

adoption. To accomplish this, Big City Radio identified its reporting units and determined the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. ~~To the extent a~~As each reporting unit’s carrying amount ~~exceeds~~did not exceed its fair value, anthere was no indication ~~exists~~ that the reporting unit’s goodwill may be impaired and Big City Radio ~~must~~was not required to perform the second step of the transitional impairment ~~test. In the second step,~~test, in which Big City Radio ~~compared~~would compare the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of itits assets, recognized and unrecognized, and liabilities in a manner similar to a purchase price allocation in accordance with SFAS No. 141, to its carrying amount, both of which would be measured as of the date of adoption. Any transitional impairment loss was required to be recognized as the cumulative effect of a change in accounting principle in Big City Radio’s statement of earnings. No such loss resulted from Big City Radio’s adoption of SFAS No. 142.

In accordance with SFAS No. 142, Big City Radio discontinued the amortization of goodwill and intangible assets, consisting of a broadcast license, effective January 1, 2002. During the quarter ended March 31, 2002, Big City Radio completed the transitional impairment test, which did not result in impairment of recorded intangible assets. In June 2002, Big City Radio ceased the operation of its publishing operations, and wrote off the remaining $108,000 of goodwill associated with such operations. During the fourth quarter of 2002, Big City Radio made the decision to sell its broadcast licenses. In accordance with SFAS No. 144, these licenses are reported as assets held for sale. Big City Radio compared the licenses’ carrying value to their fair value, less the estimated cost to sell them. The fair value of the stations were based on asset sales agreements for 11 of the 12 stations, and an estimate for the remaining station, based on offers received during the auction process. This review of the carrying value of Big City Radio’s intangible assets resulted in a charge of $630,000 relating to the impairment in value of some of its FCC broadcast licenses. As of ~~September 30,~~December 31, 2002, Big City Radio has no remaining unamortized goodwill, and has unamortized broadcast licenses in the amount of ~~$76,955,000.~~

$76,325,000.

Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”), which supersedes both SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (“SFAS No. 121”), and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions (“Opinion 30”), for the disposal of a segment of a business (as previously defined in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No. 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant implementation issues associated with SFAS No. 121. For example, SFAS No. 144 provides guidance on how a long-lived asset

that is used as part of a group should be evaluated for impairment, establishes criteria for when a long-lived asset is held for sale, and prescribes the accounting for a long-lived asset that will be disposed of other than by sale. SFAS No. 144 retains the basic provisions of Opinion 30 on how to present discontinued operations in the income statement but broadens that presentation to include a component of an entity, rather than a segment of a business. Unlike SFAS No. 121, an impairment assessment under SFAS No. 144 will never result in a write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS No. ~~142, Goodwill and Other Intangible Assets.~~

142.

Big City Radio adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS No. 144 did not have a material impact on the financial position, cash flows or results of operations of Big City Radio. Big City Radio discontinued its publishing operations during June 2002. This was treated as a discontinued operation under SFAS No. 144.

In December 2002, Big City Radio announced sales of 11 of its 12 radio stations. Big City Radio also intends to sell its remaining station. Big City Radio’s consolidated financial statements for all periods presented have been adjusted to reflect the radio station sales and ceased publishing operations as discontinued operations in accordance with SFAS No. 144.

Accounting for Costs Associated with Exit or Disposal Activities.In June 2002, the Financial Accounting Standards Board issued FASB Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities (“SFAS No. 146”), which nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) (“Issue 94-3”).

The principal difference between SFAS No. 146 and Issue 94-3 relates to ~~its~~the requirements for recognition of a liability for a cost associated with an exit or disposal activity. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost as defined in Issue 94-3 was recognized at the date of an entity’s commitment to an exit plan. Under SFAS No. 146, a commitment to a plan, by itself, does not create a present obligation to others that meets the definition of a liability. SFAS No. 146 also establishes that fair value is the objective for initial measurement of the liability.

Big City Radio is required to adopt SFAS No. 146 on exit and disposal activities that are initiated after December 31, 2002, with early application encouraged. Big City Radio will adopt SFAS No. 146 onwith respect to those ~~transactions~~activities after December 31, 2002. Big City Radio does not currently expect a material impact on ~~the~~its financial position, cash flow or results of operations ~~of Big City Radio~~ in connection with its adoption of SFAS No. 146.

Quantitative and Qualitative Disclosures About Market Risk

Big City Radio is exposed to the impact of interest rate changes and the change in the market values of its investments.

Big City Radio’s exposure to market rate risk for changes in interest rates relates primarily to Big City Radio’s investment portfolio. Big City Radio has not used derivative financial instruments in its investment portfolio. Big City Radio invests its excess cash in debt instruments of the U.S. Government and its agencies and, by policy, limits the amount of credit exposure to any one issuer. Big City Radio protects and preserves its invested funds by limiting default, market and reinvestment risk.

Investments in fixed-rate, interest-earning instruments carry a degree a of interest rate risk. The fair value of fixed-rate securities may be adversely affected by a rise in interest rates. Big City Radio may suffer losses in principal if forced to sell securities which have declined in market value due to changes in interest rates.

Security Ownership of Certain Beneficial Owners and Management

The table presented on the following page shows information regarding the beneficial ownership of Big City Radio’s two outstanding classes of voting securities as of ~~December 31, 2002~~February 19, 2003 by:

each person known by Big City Radio to own beneficially more than 5% of the outstanding shares of any class of Big City Radio’s outstanding voting securities;

each director of Big City Radio;

•

~~each person known by Big City Radio to own beneficially more than 5% of the outstanding shares of any class of Big City Radio’s outstanding voting securities;~~

Big City Radio’s Chief Executive Officer and its three executive officers whose total annual salary and bonus exceeded $100,000 in 2002; and

•

~~each director of Big City Radio;~~

all of the directors and executive officers of Big City Radio as a group.

•

~~Big City Radio’s Chief Executive Officer and its three executive officers whose total annual salary and bonus exceeded $100,000 in 2001; and~~

•

~~all of the directors and executive officers of Big City Radio as a group.~~

Big City Radio’s outstanding voting securities consist of its Class A common stock and Class B common stock. As of ~~December 31, 2002,~~February 19, 2003, 6,226,817 shares of Class A common stock and 8,250,458 shares of Class B common stock were outstanding.

Stockholders of Big City Radio are entitled to one vote for each share of Class A common stock held and to ten votes for each share of Class B common stock held. In addition, holders of Big City Radio’s Class B common stock are entitled to vote as a separate class to elect a majority of the members of Big City Radio’s board of directors.

The information presented below regarding beneficial ownership of Big City Radio’s voting securities has been presented in accordance with the rules of the SEC and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. ~~Under these rules, beneficial ownership includes~~A person is deemed to own beneficially any security as to which asuch person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership ~~as to~~by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of

shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, Big City Radio believes that the beneficial owners of Big City Radio’s common stock listed below have sole voting and investment power with respect to the shares shown. Except as otherwise indicated below, the address for each 5% stockholder is c/o Big City Radio, Inc., 1888 Century Park East, Suite 212, Los Angeles, California 90067.

The number of shares of Class A common stock shown as beneficially owned by a Big City Radio stockholder as of ~~December 31, 2002~~February 19, 2003 includes the number of shares of Class A common stock the stockholder would acquire as a result of the conversion of the shares of Class B common stock beneficially owned by the stockholder as of that date. Shares of Big City Radio’s Class B common stock are convertible at any time into shares of Class A common stock on a one-for-one basis at the holder’s option.

All of the options included in the beneficial ownership of the Big City Radio directors and executive officers below are exercisable at a price equal to or greater than ~~$3.5625~~$3.4375 per share.

Big City Radio Common Stock


Class A
Common Stock

Class B
Common Stock

Percent of Voting Power as a Single Class

Name of Beneficial Owner

Number

Percent

Number

Percent

Directors and Executive Officers:

Charles M. Fernandez    530,000    8.2 %    —      —   %      * %
Michael H. Boyer    25,000    *    —      —        *
Silvia Kessel    102,140    1.6 %    —      —        *
David A. Persing    —      —      —      —        *
Anita and Stuart Subotnick    8,424,493    57.7 %    8,200,458    99.4 %      92.4 %
Bryan Subotnick    194,000    3.0 %    10,000    *      *
Paul R. Thomson    189,000    2.9 %    —      —        *
Leonard White    25,000    *    —      —        *
Kenneth A. Horowitz    —      —      —      —        *
All directors and named executive officers as a group (10 persons)    9,489,633    61.7 %    8,210,458    99.5 %      92.9 %
Other Stockholders:

Phillip Frost, M.D.    540,400    8.7 %    —      —        *
Gilder, Gagnon, Howe & Co.    516,575    8.3 %    —      —        *
Michael Kakoyiannis    871,700    14.0 %    —      —        *
Earle I. Mack    1,465,700    23.5 %    —      —        1.7 %

	Big City Radio Common Stock
	Class A Common Stock			Class B Common Stock			Percent of Voting Power as a Single Class
Name of Beneficial Owner	Number	Percent		Number	Percent		Percent of Voting Power as a Single Class
Directors and Executive Officers:
Charles M. Fernandez	530,000	8.2	%	—	—		*
Michael H. Boyer	25,000	*		—	—		*
Silvia Kessel	102,140	1.6	%	—	—		*
David A. Persing	—	—		—	—		*
Stuart and Anita Subotnick	8,424,493	57.7	%	8,200,458	99.4	%	92.4	%
Bryan Subotnick	195,000	3.0	%	10,000	*		*
Paul R. Thomson	190,000	3.0	%	—	—		*
Leonard White	25,000	*		—	—		*
Kenneth A. Horowitz	—			—	—		*
All directors and executive officers as a group (10 persons)	9,491,633	61.7	%	8,210,458	99.5	%	92.9	%
Other Stockholders:
Farallon Capital Management, L.L.C.
Farallon Partners L.L.C.	319,000	5.1	%	—	—		*
Phillip Frost, M.D.	550,400	8.8	%	—	—		*
Gilder, Gagnon, Howe & Co.	516,575	8.3	%	—	—		*
Michael Kakoyiannis	871,700	14.0	%	—	—		*
Earle I. Mack	1,465,700	23.5	%	—	—		1.7	%

Less than one percent.

The shares of Class A common stock shown as beneficially owned by Charles M. Fernandez include 250,000 shares that Mr. Fernandez has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares of Class A common stock shown as beneficially owned by Michael H. Boyer include 25,000 shares that Mr. Boyer has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares of Class A common stock shown as beneficially owned by Silvia Kessel include 95,000 shares that Ms. Kessel has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares of Class A common stock shown as beneficially owned by each of Stuart Subotnick and Anita Subotnick ~~and Stuart Subotnick reflect ownership of~~include 38,300 shares of Class A common stock, 8,200,458 shares of Class B common stock beneficially owned by Mr. and Mrs. Subotnick that are convertible into shares of Class A common stock on a one-for-one basis, 180,000 shares of Class A common stock that Mr. and Mrs. Subotnick have the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options and 5,735 shares of Class A common stock held by Mr. and Mrs. Subotnick as custodian for their grandchildren’s account pursuant to the New York Uniform Gift to Minors Act. Of the shares of Class B common stock shown as beneficially owned by Mr. and Mrs. Subotnick, 2,000,000 shares are held of record by Subotnick Partners, L.P., of which Mrs. Subotnick is general partner and Mr. Subotnick is a limited partner. Mr. and Mrs. Subotnick share voting and investment power with respect to all of the shares shown.

The shares of Class A common stock shown as beneficially owned by Bryan Subotnick ~~are composed of~~include 10,000 shares of Class B common stock beneficially owned by Mr. Subotnick that are convertible into shares of

Class A common stock on a one-for-one basis and a total of ~~184,000~~185,000 shares of Class A common stock that Mr. Subotnick has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares of Class A common stock shown as beneficially owned by Paul R. Thomson include 184,000 shares that Mr. Thomson has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares of Class A common stock shown as beneficially owned by Leonard White ~~are composed of~~include 25,000 shares that Mr. White has the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The shares shown as beneficially owned by all directors and executive officers as a group include the following: 8,210,458 shares of Class B common stock that are beneficially owned by all directors and executive officers and that are convertible into shares of Class A common stock on a one-for-one basis; and 943,000 shares which all directors and executive officers as a group have the right to purchase within 60 days after ~~December 31, 2002~~February 19, 2003 pursuant to the exercise of stock options.

The information concerning Farallon Partners, L.L.C. and Farallon Capital Management, L.L.C. is based upon a statement on Schedule 13G filed with the SEC on February 6, 2003. The number of shares includes 153,700 shares held by accounts managed by Farallon Capital Management, L.L.C. and 165,300 shares held by limited partnerships for which Farallon Partners, L.L.C. is the general partner. Farallon Capital Management, as the investment advisor to the managed accounts, may be deemed to have shared voting and investment power with respect to the 153,700 shares held by the managed accounts. Farallon Partners, L.L.C., as the general partner of the limited partnerships, may be deemed to have shared voting and investment power with respect to the 165,300 shares held by the limited partnerships. David I. Cohen, Joseph F. Downes, William F. Duhamel, Richard B. Fried, Monica R. Landry, William F. Mellin, Stephen L. Millham, Thomas F. Steyer and Mark C. Wehrly, as managing members of both the general partner and the investment advisor, may be deemed to have shared voting and investment power with respect to all of such shares. Each of these persons and entities disclaims any beneficial ownership of any such shares. The address of each of these persons and entities is c/o Farallon Capital Management, L.L.C., One Maritime Plaza, Suite 1325, San Francisco, California 94111.

The information concerning Phillip Frost, M.D. is based upon a statement on Schedule 13G/A filed with the SEC on February ~~14, 2002.~~18, 2003. Dr. Frost shares voting and investment power with respect to all of the shares shown with Frost Gamma Limited Partnership, Frost Gamma Inc., Frost Nevada Limited Partnership and Frost Nevada Corporation. As the sole limited partner of Frost Gamma Limited Partnership and Frost Nevada Limited Partnership and the sole shareholder of Frost Gamma Inc. and Frost Nevada Corporation, Dr. Frost may be deemed to be the beneficial owner of the shares shown. Frost Gamma Inc. is the general partner of Frost Gamma Limited Partnership and Frost Nevada Corporation is the general partner of Frost Nevada Limited Partnership. Dr. Frost reports that record ownership of the shares shown may be transferred from time to time among any or all of the foregoing entities. The address of Dr. Frost is 4400 Biscayne Blvd., Miami, Florida 33137.

The information concerning Gilder, Gagnon, Howe & Co., a broker-dealer registered under Section 15 of the Exchange Act, is based upon a statement on Schedule 13G filed with the SEC on February 15, 2000. The address of Gilder, Gagnon, Howe & Co is 1775 Broadway, 26th Floor, New York, New York 10019.

The information concerning Michael Kakoyiannis is based upon a statement on Schedule 13G/A filed with the SEC on February 14, 2001 and subsequent Form 144 filings. The address of Mr. Kakoyiannis is 183 Cambridge Avenue, Garden City, New York 11530.

The information concerning Earle I. Mack is based upon a statement on Schedule 13G filed with the SEC on January 12, 2001. The address of Mr. Mack is 370 West Passaic Street, Rochelle Park, New Jersey 07662.

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF BIG CITY RADIO

Unaudited Pro Forma Balance Sheet

As of ~~September 30,~~December 31, 2002

The unaudited pro forma balance sheet as of ~~September 30,~~December 31, 2002 is presented as if, at such date, Big City Radio had (1) completed the sale of its Los Angeles, New York and Chicago area radio stations, and recorded the transaction costs and tax-related effects associated with such transactions, and (2) used the net proceeds derived from the asset sales to repay principal under its 11¹/4% senior discount notes due 2005 and the accrued and unpaid interest thereon. The pro forma adjustments reflect the sale of 11 of Big City Radio’s 12 radio stations, and therefore are calculated by reference to the terms in the four definitive asset purchase agreements described elsewhere in this document and management’s estimate of the price at which Big City Radio will be able to sell the only station not subject to a definitive agreement as of the date of this joint information statement/prospectus. That station broadcasts as WYXX-FM in Morris, Illinois.

Historical

Sale of Stations

Pro Forma Adjustments

Pro Forma
Assets

Current assets:
Cash and cash equivalents $ 323,000 $ 199,875,000 (1)      $ (184,771,000 )(4)      $ 15,427,000
Investment-Entravision Class A Common —   40,000,000 (1)      —        40,000,000
Cash held in investment, restricted 1,297,000 —        —        1,297,000
Marketable securities 3,079,000 —        —        3,079,000
Accounts receivable, net 2,269,000 —        —        2,269,000
Interest receivable 9,000 —        —        9,000
Prepaid expenses and other current assets 640,000 —        —        640,000



Total current assets 7,617,000 239,875,000      (184,771,000 )      62,721,000
Property and equipment, net 3,970,000 (3,557,000 )(1)      —        413,000
Intangibles, net 76,955,000 (76,955,000 )(1)      —        —
Deferred financing fees, net 1,605,000 —        (1,605,000 )(5)      —
Other assets 170,000 —        —        170,000



Total assets $ 90,317,000 $ 159,363,000      $ (186,376,000 )      $ 63,304,000



Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable $ 696,000 $ —        $ —        $ 696,000
Accrued expenses 1,198,000 2,500,000 (2)      —        3,698,000
Interest payable 10,771,000 —        (10,771,000 )(4)      —
Senior discount notes 174,000,000 —        (174,000,000 )(4)      —
Other current liabilities 69,000 (69,000 )(1)      —        —



Total current liabilities 186,734,000 2,431,000      (184,771,000 )      4,394,000



Long-term liabilities:
Other long-term liabilities 389,000 (353,000 )(1)      —        36,000
Deferred income tax liabilities 2,237,000 12,163,000 (3)      —        14,400,000
Stockholders’ equity (deficiency):
Stockholders’ equity and additional paid-in capital 29,637,000 —        —        29,637,000
Accumulated deficit (128,680,000 ) 145,122,000 (1)(2)(3)      (1,605,000 )(5)      14,837,000



(99,043,000 ) 145,122,000      (1,605,000 )      42,237,000



Total liabilities and stockholders’ equity (deficiency) $ 90,317,000 $ 159,363,000      $ (186,376,000 )      $ 63,304,000

	Historical			Sale of Stations			Pro Forma Adjustments			Pro Forma
Assets
Current assets
Cash and cash equivalents	$	732,000		$	198,350,000	(1)	$	(189,983,000	)(4)	$	9,099,000
Investment-Entravision Class A common		—			26,365,000	(1)		—			26,365,000
Cash held in investment, restricted		1,085,000			—			—			1,085,000
Marketable securities		1,861,000			—			—			1,861,000
Accounts receivable, net		1,997,000			—			—			1,997,000
Interest receivable		6,000			—			—			6,000
Assets held for sale		79,571,000			(79,571,000	)(1)		—			—
Prepaid expenses and other current assets		289,000			—			—			289,000

Total current assets		85,541,000			145,144,000			(189,983,000	)		40,702,000
Property and equipment, net		376,000			—			—			376,000
Deferred financing fees, net		1,441,000			—			(1,441,000	)(5)		—
Other assets		170,000			—			—			170,000

Total assets	$	87,528,000		$	145,144,000		$	(191,424,000	)	$	41,248,000

Liabilities and Stockholders' Equity (Deficiency)
Accounts payable	$	883,000		$	—		$	—		$	883,000
Accrued expenses		1,644,000			3,000,000	(2)		—			4,644,000
Interest payable		15,983,000			—			(15,983,000	)(4)		—
Senior discount notes		174,000,000			—			(174,000,000	)(4)		—
Other current liabilities		74,000			(74,000	)(1)		—			—

Total current liabilities		192,584,000			2,926,000			(189,983,000	)		5,527,000

Long-term liabilities:
Other long-term liabilities		301,000			(295,000	)(1)		—			6,000
Deferred income tax liabilities		—			9,012,000	(3)		—			9,012,000
Stockholders' equity (deficiency):
Common stock and additional paid-in capital		29,637,000			—			—			29,637,000
Other comprehensive loss		(8,000	)		—			—			(8,000	)
Accumulated deficit		(134,986,000	)		133,501,000	(1)(2)(3)		(1,441,000	)(5)		(2,926,000	)

		(105,357,000	)		133,501,000			(1,441,000	)		26,703,000

Total liabilities and stockholders' equity (deficiency)	$	87,528,000		$	145,144,000		$	(191,424,000	)	$	41,248,000

(1)

To record the sale of certain assets, assumption of specified liabilities and proceeds from the following radio stations:

•

Los Angeles area radio stations for $100,000,000 and 3,766,478 shares of Entravision's Class A common stock valued at $26,365,000, based on a price per share of $7.00, which was the closing sale price reported by The

New York Stock Exchange on February 28, 2003. Big City Radio will account for the shares of Entravision’s Class A common stock ~~valued at $40,000,000, based on a per share price of $10.62;~~as equity securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” The investment will not qualify for equity method accounting.

New York stations for $43,000,000

•

~~New York stations for $43,000,000;~~

Chicago—WXXY-FM station for $32,875,000

Chicago—WKIE-FM/WDEK-FM/WKIF-FM stations for $22,000,000; and

•

~~Chicago—WXXY station for $32,875,000;~~

Chicago—WYXX-FM station for $475,000

•

~~Chicago—WKIE/WDEK/WKIF stations for $22,000,000; and~~

•

~~Chicago—WYXX stations for $2,000,000.~~

(2)

To record transaction costs.

(3)

To reflect income tax liabilities related to sale of stations.

(4)

To reflect repayment of the senior notes.

(5)

To write off deferred financing fees related to the senior notes.

Unaudited Pro Forma Statement of Operations

Year ended December 31, ~~2001~~2002

The unaudited pro forma statement of operations for the year ended December 31, ~~2001 and the nine months ended September 30,~~ 2002 ~~are~~is presented as if, at the beginning of ~~each of~~ the ~~periods~~period presented, Big City Radio had (1) completed the sale of its Los Angeles, New York and Chicago area radio stations, and (2) used the net proceeds derived from the asset sales to repay principal under its 11¹/4% senior discount notes due 2005 and the accrued and unpaid interest thereon. The pro forma adjustments to the statement of operations do not include a gain on the sale of the stations of approximately ~~$145~~$131 million, net of tax expense from the sales of approximately ~~$12~~$9 million, net of the tax benefit relating to the utilization of available net operating loss carryforwards, and an extraordinary expense relating to the write-off of unamortized debt issuance costs.

Historical(1)

Phoenix Stations(2)

Sale of Stations(3)

Pro Forma Adjustments

Pro Forma

Gross revenues    $ 22,395,000    $ (4,622,000 )    $ (17,733,000 )    $ —      $ 40,000
Less commissions and fees    2,309,000    (497,000 )    (1,812,000 )    —      —





Net revenues    20,086,000    (4,125,000 )    (15,921,000 )    —      40,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    21,307,000    (4,271,000 )    (16,697,000 )    —      339,000
Internet and publishing, excluding depreciation and amortization    436,000    —      —      —      436,000
Corporate, general and administrative expenses    3,610,000    —      —      —      3,610,000
Impairment loss on goodwill    897,000    —      —      —      897,000
Depreciation and amortization    4,818,000    (818,000 )    (3,557,000 )    —      443,000





Total operating expenses    31,068,000    (5,089,000 )    (20,254,000 )    —      5,725,000





Operating loss    (10,982,000 )    964,000    4,333,000    —      (5,685,000 )
Other income (expenses):
Gain on sale of Phoenix stations    2,275,000    (2,275,000 )    —      —      —
Interest income    111,000    —      —      —      111,000
Interest expense    (21,537,000 )    —      10,000    20,000,000 (4)    (1,527,000 )
Other, net    8,000    (26,000 )    (185,000 )    —      (203,000 )





Total other (expenses)    (19,143,000 )    (2,301,000 )    (175,000 )    20,000,000    (1,619,000 )





Loss before benefit from income taxes    (30,125,000 )    (1,337,000 )    4,158,000    20,000,000    (7,304,000 )
Income tax benefit/(expense), net    63,000    —      —      —      63,000





Loss from continuing operations    (30,062,000 )    $ (1,337,000 )    $ 4,158,000    $ 20,000,000    $ (7,241,000 )





Pro forma loss per share:
Loss from continuing operations    $ (2.08 )             $ (0.50 )


Weighted average shares outstanding    14,477,000             14,477,000

~~(1)~~

~~Adjusted to reflect the publishing operations discontinued in June 2002 as a discontinued operation.~~

~~(2)~~

~~To eliminate the historical results of the Phoenix radio stations that were sold in October 2001.~~

~~(3)~~

~~To eliminate the historical results of the stations being sold.~~

~~(4)~~

~~Eliminated interest expense on senior notes.~~

~~Unaudited Pro Forma Statement of Operations~~

~~Nine months ended September 30, 2002~~

Historical

Sale of
Stations(1)

Pro Forma Adjustments

Pro Forma

Gross revenues    $ 11,282,000    $ (11,219,000 )    $ —      $ 63,000
Less: commissions and fees    1,055,000    (1,055,000 )    —      —




Net revenues    10,227,000    (10,164,000 )    —      63,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    12,026,000    (11,467,000 )    —      559,000
Corporate, general and administrative expenses    2,816,000    —      —      2,816,000
Depreciation and amortization    1,126,000    (1,037,000 )    —      89,000




Total operating expenses    15,968,000    (12,504,000 )    —      3,464,000




Operating income/(loss)    (5,741,000 )    2,340,000    —      (3,401,000 )
Other income (expenses):
Interest income    128,000    —      —      128,000
Interest expense    (15,181,000 )    5,000    15,176,000 (2)    —
Other, net    (11,000 )    22,000    —      11,000




Total other expenses    (15,064,000 )    27,000    15,176,000    139,000
Gain/(loss) from continuing operations before income taxes    (20,805,000 )    2,367,000    15,176,000    (3,262,000 )
Income tax benefit/(expense), net    47,000    —         47,000




Loss from continuing operations    $ (20,758,000 )    $ 2,367,000    $ 15,176,000    $ (3,215,000 )




Pro forma loss per share:
Loss from continuing operations    $ (1.43 )          $ (0.22 )


Weighted average shares outstanding    14,477,000          14,477,000

	Historical			Sale of Stations(1)		Pro Forma Adjustments		Pro Forma
Net revenues	$	—		$	—	$	—	$	—
Operating expenses:
Corporate, general and administrative expenses		4,717,000			—		—		4,717,000
Depreciation and amortization		120,000			—		—		120,000

Total operating expenses		4,837,000			—		—		4,837,000

Operating loss		(4,837,000	)		—		—		(4,837,000	)
Other income/(expenses):
Interest income		152,000			—		—		152,000
Other, net		(21,000	)		—		—		(21,000	)

Total other income		131,000			—		—		131,000
Loss from continuing operations before income taxes		(4,706,000	)		—		—		(4,706,000	)
Income tax benefit, net		4,284,000			—		—		4,284,000

Loss from continuing operations		(422,000	)		—		—		(422,000	)

Pro forma loss per share:
Loss from continuing operations		(0.03	)		—		—		(0.03	)

Weighted average shares outstanding		14,477,000			—		—		14,477,000

(1)

To eliminate the historical results of the stations being sold.

~~(2)~~

~~Eliminated interest expense on senior notes.~~

DILUTION

Big City Radio will suffer immediate and substantial dilution in net tangible book value per share. Dilution is the amount by which the fair market value of shares received by Big City Radio, as the purchaser of the shares of Entravision’s Class A common stock, will exceed the net tangible book value per share of Entravision’s Class A common stock after the asset sale. The net tangible book value per share of common stock is determined by subtracting total liabilities from the total tangible assets and dividing the difference by the number of shares of Entravision’s Class A common stock deemed to be outstanding on the date the tangible book value is determined. As of ~~September 30,~~December 31, 2002, Entravision had a deficit tangible book value of ~~$352~~$285 million, or a deficit of ~~$2.94~~$2.38 per share. After giving effect to the asset sale, Big City Radio will incur an immediate dilution of ~~$12.79~~$9.15 per share. The following table illustrates this per share dilution:

Assumed market price(1)    $   9.13

Deficit tangible book value per share as of September 30, 2002    (2.94 )
Decrease per share attributable to Big City Radio(2)    (0.72 )

Pro forma deficit tangible book value after this transaction    (3.66 )

Dilution per share to Big City Radio    $ 12.79

Assumed market price(1)	$	6.23

Deficit tangible book value per share as of December 31, 2002		(2.38	)
Decrease per share attributable to Big City Radio(2)		(0.54	)

Pro forma deficit tangible book value after this transaction		(2.92	)

Dilution per share to Big City Radio	$	9.15

(1)

Based on the closing sale price of Entravision’s Class A common stock as reported by The New York Stock Exchange on ~~January 13,~~March 17, 2003.

(2)

For the purpose of this joint information statement/prospectus, Entravision assumes that there will be an addition of intangible assets greater than the amount of cash paid in the acquisition of Big City Radio assets. Therefore, the cash paid is assumed to decrease the tangible book value per share.

PLAN OF DISTRIBUTION OF ENTRAVISION CLASS A COMMON STOCK

This joint information statement/prospectus may be used by Big City Radio and its stockholders to cover the public reoffering and resale of Entravision’s Class A common stock to be issued in connection with the asset sale.

Restriction on Resale of Entravision’s Class A Common Stock

Pursuant to the registration statement of which this joint information statement/prospectus is a part, Entravision has registered under the Securities Act the issuance of its Class A common stock to Big City Radio pursuant to the Asset Purchase Agreement and the distribution of such Class A common stock by Big City Radio to its stockholders pursuant to a plan or agreement of dissolution, or another plan or agreement providing for a pro rata or similar distribution to its stockholders, if Big City Radio’s board of directors adopts such a plan or agreement within one year after stockholder approval of the asset sale. The shares of Entravision’s Class A common stock may be traded freely and without restriction under the Securities Act by Big City Radio’s stockholders receiving the shares in such a distribution unless any such stockholder may be deemed to be an “underwriter” of the shares within the meaning of the Securities Act. Any transfer of the shares by Big City Radio other than in such a distribution to its stockholders, or any subsequent transfer of the shares by any person who, at the time of stockholder approval of the asset sale, may be deemed to be an “affiliate” of Big City Radio will, under existing law, require one of the following:

registration of the transfer under the Securities Act;

compliance with Rule 145 under the Securities Act, which allows sales subject to compliance with volume limitations and other conditions; or

•

~~registration of the transfer under the Securities Act;~~

availability of another exemption from registration.

•

~~compliance with Rule 145 under the Securities Act, which allows sales subject to compliance with volume limitations and other conditions; or~~

•

~~availability of another exemption from registration.~~

An affiliate of Big City Radio is a person who directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Big City Radio. The foregoing restrictions on transfer may apply to, among other persons, directors and executive officers of Big City Radio and any holders of common stock of Big City Radio representing 10% or more of the voting power of all classes of such common stock.

As described elsewhere in this joint information statement/prospectus under “Terms of the Asset Purchase Agreement—~~Certain~~ Securities Matters,” Entravision has agreed in the Asset Purchase Agreement that, to the extent that such transfers may be subject to restriction under the Securities Act, this joint information statement/prospectus may be used to cover the public reoffering and resale of Entravision’s Class A common stock issued in the asset sale by Big City Radio to its stockholders and/or to other persons and by Big City Radio’s stockholders. To facilitate such transfers, Entravision has agreed to use its reasonable best efforts to maintain the effectiveness of the registration statement, of which this joint information statement/prospectus is a part, for 15 months after the closing date under the Asset Purchase Agreement, or until such earlier date ~~that~~on which the foregoing transfers have been completed, and to amend the registration statement as may be required from time to time to permit Big City Radio and its stockholders to effect such transfers.

Plan of Distribution

The following describes the manner in which Big City Radio or any stockholder of Big City Radio may offer or sell the shares of Entravision’s Class A common stock issued in connection with the asset sale pursuant to this joint information statement/prospectus, as it may be appropriately amended or supplemented. ~~Any~~Big City Radio and any other holder of such shares who relies on this joint information statement/prospectus, as so amended or supplemented, in connection with any such offer or sale is referred to below as the “selling stockholder.”

The shares of Entravision’s Class A common stock may be sold or distributed from time to time by the selling stockholder, by its donees, pledgees or transferees, or by its other successors in interest. The selling

stockholder may sell its shares at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The selling stockholder reserves the right to accept or reject, in whole or in part, any proposed purchase of shares, whether the purchase is to be made directly or through agents.

The selling stockholder may offer its shares at various times in one or more of the following transactions:

in ordinary brokers’ transactions and transactions in which the broker solicits purchasers;

in transactions involving cross or block trades or otherwise on The New York Stock Exchange;

•

~~in ordinary brokers’ transactions and transactions in which the broker solicits purchasers;~~

in transactions in which brokers, dealers or underwriters purchase the shares as principal and resell the shares for their own accounts pursuant to this document;

•

~~in transactions involving cross or block trades or otherwise on The New York Stock Exchange;~~

in transactions “at the market” to or through market makers in the Class A common stock or into an existing market for the Class A common stock;

•

~~in transactions in which brokers, dealers or underwriters purchase the shares as principal and resell the shares for their own accounts pursuant to this document;~~

in other ways not involving market makers or established trading markets, including direct sales of the shares to purchasers or sales of the shares effected through agents;

•

~~in transactions “at the market” to or through market makers in the Class A common stock or into an existing market for the Class A common stock;~~

through transactions in options, swaps or other derivatives which may or may not be listed on an exchange;

•

~~in other ways not involving market makers or established trading markets, including direct sales of the shares to purchasers or sales of the shares effected through agents;~~

in privately negotiated transactions;

•

~~through transactions in options, swaps or other derivatives which may or may not be listed on an exchange;~~

in transactions to cover short sales; or

•

~~in privately negotiated transactions;~~

in a combination of any of the foregoing transactions.

•

~~in transactions to cover short sales; or~~

•

~~in a combination of any of the foregoing transactions.~~

The selling stockholder also may sell its shares in accordance with Rule 144 or Rule 145 under the Securities Act if the conditions of the applicable rule are satisfied. In addition, Big City Radio may distribute some or all of the shares to its stockholders by dividend or otherwise and subject to such terms and conditions as the board of directors may prescribe.

From time to time, the selling stockholder may pledge or grant a security interest in some or all of its shares. If the selling stockholder defaults in performance of its secured obligations, the pledgees or secured parties may offer and sell the shares from time to time by this document. The selling stockholder also may transfer and donate shares in other circumstances. The number of shares beneficially owned by the selling stockholder will decrease as and when the selling stockholder transfers or donates its shares or defaults in performing obligations secured by its shares. The plan of distribution for the shares offered and sold under this document will otherwise remain unchanged, except that the donees, pledgees, transferees, other secured parties or other successors in interest will be a selling stockholder for purposes of this document.

The selling stockholder may sell short Entravision’s Class A common stock. The selling stockholder may deliver this document in connection with such short sales and use the shares offered by this document to cover such short sales.

The selling stockholder may enter into hedging transactions with broker-dealers. The broker-dealers may engage in short sales of Entravision’s Class A common stock in the course of hedging the positions they assume with the selling stockholder, including positions assumed in connection with distributions of the shares by such broker-dealers. The selling stockholder also may enter into option or other transactions with broker-dealers that involve the delivery of the shares to the broker-dealers, who may then resell or otherwise transfer such shares. In addition, the selling stockholder may loan or pledge shares to a broker-dealer, which may sell the loaned shares or, upon a default by the selling stockholder of the secured obligation, may sell or otherwise transfer the pledged shares.

The selling stockholder may use brokers, dealers, underwriters or agents to sell its shares. Such agents may receive compensation in the form of commissions, discounts or concessions. This compensation may be paid by

the selling stockholder or the purchasers of the shares for whom such persons may act as agent, or to whom they may sell as principal, or both. The compensation as to a particular person may be less than or in excess of customary commissions. The selling stockholder and any agents or broker-dealers that participate with the selling stockholder in its offer and sale of the shares may be deemed to be “underwriters” within the meaning of the Securities Act. Any commissions they receive and any profit they realize on the resale of the shares by them may be deemed to be underwriting discounts and commissions under the Securities Act. Neither Entravision nor the selling stockholder can presently estimate the amount of such compensation.

If the selling stockholder sells shares in an underwritten offering, the underwriters may acquire the shares for their own account and resell the shares from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. In such event, Entravision will set forth in a supplement to this document the names of the underwriters and the terms of the transactions, including any underwriting discounts, concessions or commissions and other items constituting compensation of the underwriters and broker-dealers. The underwriters from time to time may change any public offering price and any discounts, concessions or commissions allowed or reallowed or paid to broker-dealers. Unless otherwise set forth in a supplement, the obligations of the underwriters to purchase the shares will be subject to certain conditions, and the underwriters will be obligated to purchase all of the shares specified in the supplement if they purchase any of the shares.

During such time as it may be engaged in a distribution of the shares, the selling stockholder will be required to comply with Regulation M under the Exchange Act. With exceptions, Regulation M prohibits any selling stockholder, any affiliated purchasers and other persons who participate in such a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete.

The selling ~~stockholders~~stockholder will be legally required to deliver copies of this document in connection with any sale of the shares in accordance with applicable prospectus delivery requirements.

In order to comply with the securities laws of states and other jurisdictions, if applicable, the shares offered by this document may not be offered or sold in a particular state or other jurisdiction unless such securities have been registered or qualified for offer and sale in such state or other jurisdiction or an exemption from registration or qualification is available and complied with, and, if so required, may be offered or sold in that state or other jurisdiction only through registered or licensed brokers or dealers.

DESCRIPTION OF ENTRAVISION CAPITAL STOCK

The following description of Entravision’s capital stock does not purport to be complete and is subject to detailed provisions of, and is qualified in its entirety by reference to, Entravision’s first restated certificate of incorporation. The certificate of incorporation is an exhibit to the registration statement of which this joint information statement/prospectus is a part and is available as set forth under “Where You Can Find More Information.”

Entravision’s capital stock consists of:

325,000,000 authorized shares of common stock, $0.0001 par value per share, which consists of

260,000,000 shares of Class A common stock,

•

~~325,000,000 authorized shares of common stock, $0.0001 par value per share, which consists of~~

~~260,000,000 shares of Class A common stock,~~

40,000,000 shares of Class B common stock,

~~25,000,000 shares of Class C common stock; and~~

•

~~50,000,000 shares of preferred stock, par value $0.0001 per share, 11,000,000 shares of which have been designated as Series A preferred stock.~~

25,000,000 shares of Class C common stock; and

50,000,000 shares of preferred stock, par value $0.0001 per share, 11,000,000 shares of which have been designated as Series A preferred stock.

In February 2003, Univision announced that it had reached a tentative agreement with DOJ pursuant to which Univision agreed to convert all of its shares of Entravision capital stock into a new class of non-voting preferred stock (with certain approval rights over specific types of transactions). On March 10, 2003, Entravision’s board of directors approved in principle the creation of a new series of preferred stock to satisfy these conditions. The exact terms of such preferred stock remain subject to final approval by Entravision. For more information, please see “Information About Entravision—Recent Developments” at page 55.

The proposed new series of preferred stock to be issued to Univision has not yet been created and Univision’s conversion of its existing shares of Class A and Class C common stock into shares of such new preferred stock has not yet occurred. Accordingly, the following description of Entravision’s capital stock is accurate as of the date of this joint information statement/prospectus, and does not give effect to the proposed changes in Entravision’s capital structure that relate to Univision’s equity interest in Entravision.

Common Stock

General. The holders of Entravision’s Class A common stock, Class B common stock and Class C common stock have the same rights except with respect to voting, convertibility and transfer.

Dividends. Subject to the right of the holders of any class of Entravision’s preferred stock, holders of shares of Entravision’s common stock are entitled to receive dividends that may be declared by Entravision’s board of directors out of legally available funds. No dividend may be declared or paid in cash or property on any share of any class of Entravision’s common stock unless simultaneously the same dividend is declared or paid on each share of that and every other class of its common stock; except with respect to the payment of stock dividends, in which case holders of a specific class of its common stock are entitled to receive only additional shares of that class. Entravision may not reclassify, subdivide or combine shares of any class of its common stock without, at the same time, proportionally reclassifying, subdividing or combining shares of the other classes.

Voting Rights. Holders of Entravision’s Class A common stock and Class C common stock are entitled to one vote per share on all matters to be voted on by stockholders,while holders of Entravision’s Class B common stock are entitled to ten votes per share. Generally, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all holders of Entravision’s common stock present in person or represented by proxy, voting together as a single class, subject to any voting rights granted to holders of any class of its preferred stock.

Univision, as the holder of all of Entravision’s issued and outstanding Class C common stock, is entitled to vote as a separate class to elect two of Entravision’s directors, and has the right to vote as a class on certain material decisions involving Entravision, including any merger, consolidation or other business combination, any dissolution of Entravision and any transfer of the FCC licenses for any of Entravision’s Univision-affiliated stations. These special voting rights will terminate upon Univision selling below 30% of its initial ownership level of Entravision’s Class C common stock. In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision’s Class C directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time. In addition, Univision has stated publicly that it expects to work with Entravision to restructure its interest in Entravision by exchanging its common stock for non-voting stock. Any changes to Entravision’s charter documents to implement any restructuring would require the agreement of both Entravision and Univision, as well as any necessary approvals by Entravision’s board of directors and/or stockholders.

Messrs. Ulloa, Wilkinson and Zevnik, as the holders of all of Entravision’s issued and outstanding Class B common stock, have entered into a voting agreement in which each of such individuals has agreed, in any

election of its directors, to vote the shares of Entravision’s Class B common stock held by such individual in favor of the director-nominees designated by Messrs. Ulloa and Wilkinson. Under the voting agreement, Messrs. Ulloa, Wilkinson and Zevnik contractually agreed to elect themselves and a representative of TSG Capital Fund III, L.P. as directors of Entravision.

Liquidation Rights. The holders of each class of Entravision’s common stock share equally on a per share basis upon liquidation or dissolution of all of Entravision’s assets available for distribution to common stockholders.

Conversion and Transfer. Shares of Entravision’s Class B common stock are convertible into shares of Entravision’s Class A common stock on a share-for-share basis at the option of the holder at any time, or automatically:

upon the transfer of such shares to a person or entity which is not a permitted transferee;

upon the death of such holder;

•

~~upon the transfer of such shares to a person or entity which is not a permitted transferee;~~

when such holder is no longer actively involved in the business of Entravision; or

•

~~upon the death of such holder;~~

if such holder owns less than 30% of his, her or its initial ownership level.

•

~~when such holder is no longer actively involved in the business of Entravision; or~~

•

~~if such holder owns less than 30% of his, her or its initial ownership level.~~

In general, permitted transferees include Messrs. Ulloa, Wilkinson and Zevnik, and any of their respective spouses, legal descendants, adopted children, minor children supported by such holder and controlled entities. In addition, each share of Entravision’s Class B common stock will automatically convert into Class A common stock on a share-for-share basis upon the death of the second of Mr. Ulloa and Mr. Wilkinson or when the second of Mr. Ulloa and Mr. Wilkinson ceases to be actively involved in the business of Entravision.

Shares of Entravision’s Class C common stock are convertible into shares of Entravision’s Class A common stock on a share-for-share basis at the option of the holder at any time or automatically upon the transfer to a person or entity which is not a permitted transferee or if such holder owns less than 30% of its initial ownership level.

Other Rights. The holders of Entravision’s common stock have no preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to these shares.

Preferred Stock

Series A ~~mandatorily redeemable convertible preferred stock~~Mandatorily Redeemable Convertible Preferred Stock

Dividends. The holders of the Series A mandatorily redeemable convertible preferred stock have dividends declared at the rate of 8.5% per annum compounded annually. Such dividends accrue and are only payable upon liquidation of Entravision or redemption of the Series A preferred stock, payable in cash. Accrued but unpaid dividends are waived and forgiven upon conversion of the Series A preferred stock into Class A common stock.

Liquidation Preference. The Series A preferred stock is senior to the rights of each class of Entravision’s common stock upon liquidation or distribution of Entravision’s assets in dissolution.

Voting Rights. The Series A preferred stock does not vote, except that the affirmative vote of a majority of the holders of the Series A preferred stock is required to:

•

~~amend Entravision’s certificate of incorporation or second amended and restated bylaws, as adopted on July 11, 2002, in a manner that adversely affects the rights of the Series A preferred stock;~~

•

~~issue any equity security that is senior to the Series A preferred stock; or~~

•

~~enter into or engage in any transaction with an affiliate of Entravision or its stockholders not at arms length.~~

amend Entravision’s certificate of incorporation or second amended and restated bylaws, as adopted on July 11, 2002, in a manner that adversely affects the rights of the Series A preferred stock;

issue any equity security that is senior to the Series A preferred stock; or

enter into or engage in any transaction with an affiliate of Entravision or its stockholders not at arms length.

Redemption. The Series A preferred stock is subject to redemption at the original issue price plus accrued dividends at the option of the holder of the Series A preferred stock for a period of 90 days beginning five years after its issuance and must be redeemed in full ten years after its issuance, on April 19, 2010. The Series A preferred stock, with respect to which the holders thereof do not elect to convert into Entravision’s common stock, is also fully redeemable at the original issue price plus accrued dividends upon a change in control of Entravision. Entravision has the right to redeem the Series A preferred stock at its option at any time one year after its issuance, provided that the trading price of Entravision’s Class A common stock equals or exceeds 130% of the initial public offering price of Entravision’s Class A common stock for 15 consecutive trading days immediately before such redemption.

Conversion. The Series A preferred stock is convertible into Entravision’s Class A common stock on a share-for-share basis at the option of the holder at any time.

Blank-Check Preferred Stock

Entravision’s board of directors is empowered, without approval of the stockholders, to cause additional shares of preferred stock to be issued from time to time in one or more series, and the board of directors may fix the number of shares of each series and the designation, powers, privileges, preferences and rights and the qualifications, limitations and restrictions of the shares of each series. The specific matters that Entravision’s board of directors may determine with respect to additional series of preferred stock include the following:

the number of shares of each series;

the designation of each series;

•

~~the number of shares of each series;~~

the rate of any dividends;

•

~~the designation of each series;~~

whether any dividends will be cumulative or non-cumulative;

•

~~the rate of any dividends;~~

any voting rights;

•

~~whether any dividends will be cumulative or non-cumulative;~~

the rights and terms of any conversion or exchange;

•

~~any voting rights;~~

the terms of any redemption, or any sinking fund with respect to any redemption of each series;

•

~~the rights and terms of any conversion or exchange;~~

the amount payable in the event of any voluntary liquidation, dissolution or winding up of the affairs of Entravision; and

•

~~the terms of any redemption, or any sinking fund with respect to any redemption of each series;~~

any other relative rights, privileges and limitations of each series.

•

~~the amount payable in the event of any voluntary liquidation, dissolution or winding up of the affairs of Entravision; and~~

•

~~any other relative rights, privileges and limitations of each series.~~

The issuance of additional shares of preferred stock, or the issuance of rights to purchase additional shares of preferred stock, could be used to discourage an unsolicited acquisition proposal. For example, a business combination could be impeded by issuing a series of preferred stock containing class voting rights that would enable the holder or holders of this series to block the transaction. Alternatively, a business combination could be facilitated by issuing a series of preferred stock having sufficient voting rights to provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of additional shares of preferred stock could adversely affect the voting power and other rights of the holders of Entravision’s common stock. Although Entravision’s board of directors is required to make any determination to issue any additional shares of

preferred stock based on its judgment as to the best interests of Entravision’s stockholders, it could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over prevailing market prices of the stock. Entravision’s board of directors does not, at present, intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange requirements.

Foreign Ownership

Entravision’s certificate of incorporation restricts the ownership of Entravision’s capital stock in accordance with the Communications Act and the rules of the FCC that prohibit direct ownership of more than 20% of

Entravision’s outstanding capital stock, or beneficial ownership of more than 25% of Entravision’s capital stock through others, by or for the account of aliens, foreign governments or non-U.S. corporations or corporations otherwise subject to control by those persons or entities. Entravision’s certificate of incorporation also prohibits any transfer of Entravision’s capital stock which would cause Entravision to violate this prohibition. In addition, Entravision’s certificate of incorporation authorizes Entravision’s board of directors to adopt other provisions that it deems necessary to enforce these prohibitions.

Delaware Anti-Takeover Law and Charter Provisions

Provisions of Entravision’s certificate of incorporation are intended to enhance continuity and stability in Entravision’s board of directors and in Entravision’s policies, but might have the effect of delaying or preventing a change in control of Entravision and may make the removal of incumbent management more difficult even if the transactions could be beneficial to the interests of stockholders. A summary description of these provisions follows:

Change in Control. Entravision is subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, the statute prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. For purposes of Section 203 of the Delaware General Corporation Law, a “business combination” includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior did own, 15% or more of a corporation’s voting stock.

The provisions of Section 203 of the Delaware General Corporation Law, together with the ability of Entravision’s board of directors to issue preferred stock without further stockholder action, could delay or frustrate the removal of incumbent directors or a change in control of Entravision. The provisions also could discourage, impede or prevent a merger, tender offer or proxy contest, even if this event would be favorable to the interests of stockholders. Entravision’s stockholders, by adopting an amendment to Entravision’s certificate of incorporation or its bylaws, may elect not to be governed by Section 203 effective 12 months after adoption. Neither Entravision’s certificate of incorporation nor its bylaws currently excludes Entravision from the restrictions imposed by Section 203 of the Delaware General Corporation Law.

Limitation of Director Liability. Section 102(b)(7) of the Delaware General Corporation Law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breach of directors’ fiduciary duty of care. Although Section 102(b)(7) of the Delaware General Corporation Law does not change directors’ duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. Entravision’s certificate of incorporation limits the liability of directors to Entravision or its stockholders to the fullest extent permitted by Section 102(b)(7) of the Delaware General Corporation Law. Specifically, Entravision’s directors will not be personally liable for monetary damages for breach of a director’s fiduciary duty as a director, except for liability:

for any breach of the director’s duty of loyalty to Entravision or its stockholders;

for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

•

~~for any breach of the director’s duty of loyalty to Entravision or its stockholders;~~

for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

•

~~for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;~~

for any transaction from which the director derived an improper personal benefit.

•

~~for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or~~

•

~~for any transaction from which the director derived an improper personal benefit.~~

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit indemnification for liabilities, including reimbursement for expenses incurred, arising under the Securities Act. This indemnification may, however, be unenforceable as against public policy.

Indemnification. As permitted by Delaware law, Entravision’s certificate of incorporation includes a provision that eliminates the personal liability of Entravision’s directors for monetary damages for breach of fiduciary duty as a director, except for liability:

for any breach of the director’s duty of loyalty to Entravision or its stockholders;

for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

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~~for any breach of the director’s duty of loyalty to Entravision or its stockholders;~~

under Section 174 of the Delaware General Corporation Law regarding unlawful dividends and stock purchases; or

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~~for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;~~

for any transaction from which the director derived an improper personal benefit.

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~~under Section 174 of the Delaware General Corporation Law regarding unlawful dividends and stock purchases; or~~

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~~for any transaction from which the director derived an improper personal benefit.~~

As permitted by Delaware law, Entravision’s certificate of incorporation provides that:

Entravision is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, so long as:

the person being indemnified acted in good faith and in a manner the person reasonably believed to be in or not opposed to Entravision’s best interests; and

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~~Entravision is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, so long as:~~

with respect to any criminal action or proceeding, the person being indemnified had no reasonable cause to believe his or her conduct was unlawful;

~~the person being indemnified acted in good faith and in a manner the person reasonably believed to be in or not opposed to Entravision’s best interests; and~~

Entravision is permitted to indemnify its other employees and agents to the extent that Entravision indemnifies its officers and directors, unless otherwise required by law;

~~with respect to any criminal action or proceeding, the person being indemnified had no reasonable cause to believe his or her conduct was unlawful;~~

Entravision is required to advance expenses to its directors and officers incurred in connection with a legal proceeding to the fullest extent permitted by Delaware law, subject to limited exceptions; and

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~~Entravision is permitted to indemnify its other employees and agents to the extent that Entravision indemnifies its officers and directors, unless otherwise required by law;~~

the rights conferred in Entravision’s certificate of incorporation are not exclusive.

•

~~the rights conferred in Entravision’s certificate of incorporation are not exclusive.~~

In addition, Entravision has entered into indemnification agreements with each of its current directors and officers to give such directors and officers additional contractual assurances regarding the scope of indemnification set forth in Entravision’s certificate of incorporation and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving any of Entravision’s directors, officers or employees regarding which indemnification is sought, nor is Entravision aware of any threatened litigation that may result in claims for indemnification.

Entravision maintains directors’ and officers’ liability insurance.

Registration Rights

Entravision has entered into an investor rights agreement with all of the holders of restricted stock at the time of Entravision’s initial public offering and with the former stockholders of Z-Spanish Media Corporation that received Entravision stock in connection with Entravision’s acquisition of Z-Spanish Media Corporation in August 2000. The investor rights agreement provides these stockholders with rights to require Entravision to register their stock with the SEC upon certain conditions.

Entravision has also entered into an investor rights agreement with TSG Capital Fund III, L.P. that provides TSG Capital Fund III, L.P. with rights to require Entravision to register its shares of Series A preferred stock, upon conversion into Class A common stock, with the SEC upon certain conditions. Darryl Thompson, one of Entravision’s directors, is also a principal of TSG Capital Fund III, L.P.

Transfer Agent and Registrar

The transfer agent and registrar for Entravision’s stock is Mellon Investor Services, L.L.C.

Listing

Entravision’s Class A common stock is traded on The New York Stock Exchange under the trading symbol “EVC.”

COMPARATIVE RIGHTS OF ENTRAVISION AND BIG CITY RADIO STOCKHOLDERS

General

Big City Radio is a Delaware corporation and a public company, and your rights as a Big City Radio stockholder are governed by the Delaware General Corporation Law and Big City Radio’s certificate of incorporation and bylaws. If some or all shares of Entravision’s Class A common stock are distributed by Big City Radio to its stockholders following the asset sale, whether under a plan of distribution or otherwise, Big City Radio stockholders will also be common stockholders of Entravision, which is also a Delaware corporation and a public company. In such event, the rights of Big City Radio stockholders or stockholders of Entravision will continue to be governed by the Delaware General Corporation Law, and will also be governed by Entravision’s certificate of incorporation and bylaws.

Significant differences, which Entravision and Big City Radio believe are the material differences, between the rights of Entravision stockholders and Big City Radio stockholders are summarized below. This summary is not an exhaustive list or detailed description of the provisions discussed and is qualified in its entirety by Entravision’s certificate of incorporation and bylaws, and Big City Radio’s certificate of incorporation and bylaws. Copies of these documents may be obtained as described under “Where You Can Find More Information.” For additional information about Entravision’s capital stock, see “Description of Entravision Capital Stock.”

The proposed new series of preferred stock to be issued to Univision has not yet been created and Univision’s conversion of its existing shares of Class A and Class C common stock into shares of such new preferred stock has not yet occurred. Accordingly, the information about Entravision’s capital stock included in this description of the comparative rights of Entravision and Big City Radio stockholders is accurate as of the date of this joint information statement/prospectus, and does not give effect to the proposed changes in Entravision’s capital structure that relate to Univision’s equity interest in Entravision.

Authorized Shares of Capital Stock; Dividend Rights

Entravision. Entravision’s capital stock consists of:

325,000,000 authorized shares of common stock, $0.0001 par value per share, which consists of

260,000,000 shares of Class A common stock,

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~~325,000,000 authorized shares of common stock, $0.0001 par value per share, which consists of~~

~~260,000,000 shares of Class A common stock,~~

40,000,000 shares of Class B common stock,

~~25,000,000 shares of Class C common stock; and~~

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~~50,000,000 shares of preferred stock, par value $0.0001 per share, 11,000,000 shares of which have been designated as Series A preferred stock.~~

25,000,000 shares of Class C common stock; and

50,000,000 shares of preferred stock, par value $0.0001 per share, 11,000,000 shares of which have been designated as Series A preferred stock.

As of December 31, 2002, ~~70,445,264~~70,445,266 shares of Entravision’s Class A common stock, 27,678,533 shares of Entravision’s Class B common stock, 21,983,392 shares of Entravision’s Class C common stock and 5,865,102 shares of Entravision’s Series A preferred stock were issued and outstanding. Under Entravision’s certificate of incorporation, Entravision’s board of directors currently has the authority, without further action by Entravision’s stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the voting powers, designations, preferences and the relative participating, optional or other special rights and qualifications, limitations and restrictions of each series, including dividend rights, conversion rights, voting

rights, terms of redemption, liquidation preferences and the number of shares constituting any series. Of the authorized shares of Entravision preferred stock, Entravision’s board of directors has designated 11,000,000 shares as Series A preferred stock, of which amount 5,865,102 shares have been issued as of the date hereof.

During the time that any series of Entravision preferred stock is outstanding, if the terms of the series so provide, no dividends may be declared or paid by Entravision’s board of directors on Entravision common stock, unless dividends on all outstanding shares of the relevant class or series of Entravision preferred stock for the current and all past dividend periods have been declared and paid or provision has made for the payment of those dividends.

Big City Radio. Big City Radio’s authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 20,000,000 shares of preferred stock, par value $0.01 per share. Big City Radio’s authorized common stock consists of 80,000,000 shares of Class A common stock and 20,000,000 shares

of Class B common stock. As of ~~December 31, 2002,~~February 19, 2003, 6,226,817 shares of Class A common stock, 8,250,458 shares of Class B common stock, and no shares of Big City Radio preferred stock were issued and outstanding.

Big City Radio’s board of directors may from time to time, without further action by Big City Radio’s stockholders, issue shares of Big City Radio preferred stock in one or more classes or series, provided the total number of shares issued and not canceled of any and all series does not exceed the total number of shares of preferred stock authorized. The Big City Radio board of directors generally has the authority to determine the designation, voting rights, dividend rate, redemption, liquidation, dissolution and distribution rights, payment and sinking fund provisions, conversion rights, number of shares constituting any class or series, and any other special rights it may deem advisable. The board of directors, however, may not issue any shares of preferred stock that have the right to vote for the election of directors under ordinary circumstances, or under any circumstances to elect 25% or more of the directors of Big City Radio after giving effect to the directorships filled by the holders of such shares of preferred stock, unless the holders of at least 75% of the outstanding shares of the Class B common stock have approved the issuance of the shares of preferred stock.

While any class or series of Big City Radio preferred stock is outstanding, if the terms of that class or series so provide, the board of directors may not declare or pay dividends on Big City Radio common stock or shares of any class or series subordinate in right of payment of dividends to the outstanding class or series of preferred stock, unless dividends on all outstanding shares of the relevant class or series of preferred stock for the current and all past dividend periods have been declared and paid or provision has been made for the payment of all such dividends.

Voting Rights

Entravision. Holders of Entravision’s Class A common stock and Class C common stock are entitled to one vote per share on all matters to be voted on by stockholders, while holders of Entravision’s Class B common stock are entitled to ten votes per share. Generally, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all holders of Entravision’s common stock present in person or represented by proxy, voting together as a single class, subject to any voting rights granted to holders of any class of its preferred stock.

Univision, as the holder of all of Entravision’s issued and outstanding Class C common stock, is entitled to vote as a separate class to elect two of Entravision’s directors and has the right to vote as a class on certain material decisions involving Entravision, including any merger, consolidation or other business combination, any dissolution of Entravision and any transfer of the FCC licenses for any of Entravision’s Univision-affiliated stations. These special voting rights will terminate upon Univision selling below 30% of its initial ownership level of Entravision’s Class C common stock. In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision’s Class C directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time. In addition, Univision has stated publicly that it expects to work with Entravision to restructure its interest in Entravision by exchanging its common stock for non-voting stock. Any changes to Entravision’s charter documents to implement any restructuring would require the agreement of both Entravision and Univision, as well as any necessary approvals by Entravision’s board of directors and/or stockholders.

The Series A preferred stock does not vote, except as may be required by Delaware law or, so long as any shares of Series A preferred stock are outstanding, the majority of the then outstanding shares of such stock must approve:

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~~any amendment to Entravision’s certificate of incorporation or bylaws which adversely affects the rights of the Series A preferred stock;~~

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the authorization or issuance of any other equity security having a preference over, or being on a parity with, the Series A preferred stock with respect to dividends, liquidation, redemption or voting, including any other security convertible into or exercisable for any security other than senior preferred stock; or

any amendment to Entravision’s certificate of incorporation or bylaws which adversely affects the rights of the Series A preferred stock;

•

Entravision’s entry into or engagement in any transaction with an affiliate on terms materially less advantageous to Entravision or its stockholders than would be the case if such transaction had been effected with a non-affiliate.

Big City Radio. On each matter submitted to a vote of the stockholders, each holder of Class A common stock is entitled to one vote for each share outstanding in the holder’s name on the records of Big City Radio and each holder of Class B common stock is entitled to ten votes for each share outstanding in the holder’s name on the records of Big City Radio. Except for the election and the removal of directors described below, and as otherwise required by law, the holders of Class A common stock and Class B common stock vote together as one class. Shares of Big City Radio common stock have no cumulative voting rights.

Supermajority Voting Requirements; Business Combinations

Entravision and Big City Radio are subject to Section 203 of the Delaware General Corporation Law, which, with specified exceptions, prohibits a Delaware corporation from engaging in any “business combination” with any “interested stockholder” for a period of three years following the time that the stockholder became an interested stockholder unless:

before that time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

upon completion of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

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~~before that time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;~~

at or after that time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

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Section 203 of the Delaware General Corporation Law defines “business combination” to include the following:

any merger or consolidation of the corporation with the interested stockholder;

any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

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~~any merger or consolidation of the corporation with the interested stockholder;~~

subject to specified exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

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~~any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;~~

any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

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~~subject to specified exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;~~

any receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

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~~any receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.~~

In general, Section 203 of the Delaware General Corporation Law defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by that entity or person.

Entravision. Entravision’s certificate of incorporation and bylaws do not have supermajority or other special voting requirements for business combinations or other transactions. However, without the consent of the holders of at least a majority of the shares of Class C common stock then outstanding, voting as a separate class, Entravision will not:

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merge, consolidate or enter into a business combination, or otherwise reorganize with or into one or more entities (other than a merger of a wholly-owned subsidiary into another wholly-owned subsidiary);

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~~dissolve, liquidate or terminate;~~

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~~directly or indirectly dispose of any interest in any FCC license with respect to television stations which are affiliates of Univision; or~~

dissolve, liquidate or terminate;

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amend, alter or repeal any provision of its certificate of incorporation or bylaws, so as to adversely affect the rights, privileges or restrictions provided for the benefit of the holders of the Class C common stock.

directly or indirectly dispose of any interest in any FCC license with respect to television stations which are affiliates of Univision; or

Big City Radio. The Big City Radio certificate of incorporation and bylaws do not contain any supermajority or other special voting requirements for business combinations or other transactions.

Appraisal Rights

Entravision. Entravision’s certificate of incorporation does not provide for appraisal rights other than those rights designated by the Delaware General Corporation Law. The Delaware General Corporation Law provides for appraisal rights only in the case of specified mergers or consolidations and not, unless the certificate of incorporation of a corporation so provides, in the case of other mergers, a sale or transfer of all or substantially all of its assets or an amendment to its certificate of incorporation. In addition, the Delaware General Corporation Law does not provide appraisal rights in connection with a merger or consolidation, unless the certificate of incorporation of a corporation so provides, to the holders of shares of a constituent corporation listed on a national securities exchange, or designated as a national market system security by the National Association of Securities Dealers, Inc., or held of record by more than 2,000 stockholders, unless the applicable agreement of merger or consolidation requires the holders of those shares to receive, in exchange for those shares, any property other than shares of stock of the resulting or surviving corporation, shares of stock of any other corporation listed on a national securities exchange or designated as described above, or held of record by more than 2,000 holders, cash in lieu of fractional shares or any combination of the foregoing. The Delaware General Corporation Law also denies appraisal rights to the stockholders of the surviving corporation in a merger if such merger did not require approval by the stockholders of the surviving corporation.

Big City Radio. Big City Radio’s certificate of incorporation does not provide for appraisal rights other than those rights designated by the Delaware General Corporation Law, as summarized above.

Special Meetings of Stockholders

Entravision. Entravision’s bylaws provide that special meetings may be called by Entravision’s board of directors, and will be called at the written request of the chairman of the board of directors, a majority of the board of directors, or stockholders owning a majority in voting power of Entravision’s issued and outstanding shares of common stock.

For a stockholder proposal to be considered at a special meeting, the stockholder must have satisfied all the conditions of the SEC’s proxy rules and the proposal must be received by Entravision’s corporate secretary a reasonable time before Entravision begins to print and mail its proxy materials.

Big City Radio. The Big City Radio certificate of incorporation and bylaws provide that special meetings of stockholders may be called by the chairman or the vice chairman of the board of directors, by the president, or by any holder or holders of at least 33% of the voting power of the outstanding common stock.

Stockholder Action Without a Meeting

Entravision. Entravision’s bylaws provide that, subject to Section 228 of the Delaware General Corporation Law, stockholder action may be taken by written consent without a meeting, without prior notice and without a vote, provided a written consent setting forth the action to be taken is signed by the holders of

outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize or take such action at which all shares entitled to vote on the matter were present and voted. Prompt notice of any action taken without a meeting by less than unanimous written consent will, to the extent required by law, be given to those stockholders who have not consented in writing.

Big City Radio. Big City Radio’s bylaws permit any action required or permitted at any meeting of the stockholders to be taken without a meeting, without prior notice, and without a vote, if one or more written consents describing the action to be taken are signed by the holders of at least that number of shares of outstanding stock necessary to approve the matter at a meeting at which the holders of all shares entitled to vote were present and voted. In order for such a consent to be effective, all necessary consents must be delivered to Big City Radio within a 60-day period.

Stockholder Proposal Procedures

Entravision. Entravision’s bylaws require that proposals by stockholders to be brought before any annual meeting must satisfy all of the conditions set forth in the SEC’s proxy rules and the proposal must be received by Entravision’s corporate secretary not less than 90 calendar days prior to the date of Entravision’s proxy statement in connection with the prior year’s annual meeting. If, however, Entravision did not hold an annual meeting in the previous year or the annual meeting is changed more than 30 days from the date of the previous year’s annual meeting, the proposal must be received not less than 60 calendar days prior to the meeting date nor more than ten calendar days after the public announcement of the meeting if the announcement is made less than 60 calendar days prior to the date of the meeting.

The notice must include, as to each matter the stockholder proposes to bring before the annual meeting:

the information required by the SEC’s proxy rules; and

any material interest of the stockholder in the business proposed to be brought before the meeting.

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~~the information required by the SEC’s proxy rules; and~~

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~~any material interest of the stockholder in the business proposed to be brought before the meeting.~~

Big City Radio. Big City Radio’s bylaws require a stockholder to deliver notice of any proposal that the stockholder seeks to bring before any annual meeting to Big City Radio not later than the 60th day nor earlier than the 90th day before the scheduled date of the annual meeting, regardless of any postponement, deferral or adjournment of that meeting. If, however, the date of the annual meeting is announced less than 70 days before the meeting, notice by the stockholder must be received by Big City Radio not later than the tenth day following the earlier of the mailing of such announcement or the date of public disclosure of the date of the annual meeting. The stockholder’s notice must include, as to each matter the stockholder proposes to bring before the annual meeting:

a brief description of the business desired to be brought before the annual meeting and the reasons for conducting that business at the annual meeting;

the name and addresses, as they appear on Big City Radio’s records, of the stockholder proposing such business and any other stockholder known by such stockholder supporting such proposal;

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~~a brief description of the business desired to be brought before the annual meeting and the reasons for conducting that business at the annual meeting;~~

the class and number of shares of Big City Radio’s capital stock which are beneficially owned by the stockholder;

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~~the name and addresses, as they appear on Big City Radio’s records, of the stockholder proposing such business and any other stockholder known by such stockholder supporting such proposal;~~

a brief description of any material interest of the stockholder in the proposed business; and

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~~the class and number of shares of Big City Radio’s capital stock which are beneficially owned by the stockholder;~~

a representation that the stockholder is a holder of record of the stock of Big City Radio and intends to appear in person or by proxy at the meeting to present the proposal.

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~~a brief description of any material interest of the stockholder in the proposed business; and~~

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~~a representation that the stockholder is a holder of record of the stock of Big City Radio and intends to appear in person or by proxy at the meeting to present the proposal.~~

A stockholder bringing any proposal to an annual or special meeting also must comply with all applicable requirements of the Exchange Act and the rules and regulations under that act.

Classified Board of Directors

Entravision. Entravision’s bylaws provide for a board of directors of not less than seven nor more than eleven members, as determined from time to time by resolution of the board of directors. At present, Entravision’s board of directors has fixed the number of directors at ten members. Until a Class C common stock conversion has occurred, as provided in Entravision’s certificate of incorporation, two members of the board of directors serve as Class C directors and are elected by the holders of Entravision’s Class C common stock voting as a separate class. In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision’s Class C directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time. The rest of the directors serve as Class A/B directors and are elected by the holders of Entravision’s Class A and Class B common stock, voting together as a single class. For more information regarding a Class C common stock conversion, see “Description of Entravision Capital Stock—Common Stock.”

Big City Radio. The size of the Big City Radio board of directors is currently fixed by the Big City Radio bylaws and certificate of incorporation at eight directors, of which six are designated by the holders of Class B common stock and two are designated by the holders of Class A common stock.

Nominations of Directors

Entravision. Entravision’s bylaws provide that nominations for the election of directors may be made by Entravision’s board of directors, a committee of the board of directors, or Entravision’s stockholders. Entravision’s bylaws provide that any stockholder wishing to nominate persons for election as directors at an annual meeting must deliver to the corporate secretary of Entravision, at its principal executive office in Santa Monica, California, a written notice of the stockholder’s intention to make a director nomination. The stockholder is required to furnish the notice within the time periods prescribed for a stockholder proposal in connection with an annual meeting, as described above under “Stockholder Proposal Procedures.”

The notice must set forth the following information as to each person whom the stockholder proposes to nominate for election or re-election as a Class A/B director:

the name, age, business address and residence address of the nominee;

the principal occupation or employment of the nominee;

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~~the name, age, business address and residence address of the nominee;~~

the class and number of shares of Entravision capital stock which are beneficially owned by the nominee; and

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~~the principal occupation or employment of the nominee;~~

any other information relating to the nominee that is required to be disclosed in solicitations of proxies under the SEC’s proxy rules.

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~~the class and number of shares of Entravision capital stock which are beneficially owned by the nominee; and~~

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~~any other information relating to the nominee that is required to be disclosed in solicitations of proxies under the SEC’s proxy rules.~~

In addition, the notice must set forth the following information about the stockholder making the nomination:

the name and address, as they appear on Entravision’s books, of the nominating stockholder; and

the class and number of shares of Entravision capital stock which are beneficially owned by the nominating stockholder.

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~~the name and address, as they appear on Entravision’s books, of the nominating stockholder; and~~

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~~the class and number of shares of Entravision capital stock which are beneficially owned by the nominating stockholder.~~

Big City Radio. Big City Radio’s bylaws provide separate procedures for the nominations of Class A directors and Class B directors for election to the board of directors. Class A directors may be nominated by the Class A nominating committee, which is composed of at least two directors, a majority of whom are Class A directors. Class B directors are nominated by the Class B nominating committee, which is composed of at least two directors, a majority of whom are Class B directors. Nominations of Class A directors may also be made at

an annual or special meeting of stockholders called by the board of directors for the purpose of electing directors by any holder of Class A common stock entitled to vote for the election of directors at such meeting who complies with the following notice procedures. A stockholder’s written notice must be delivered to the secretary of Big City Radio not later than the 60th day nor earlier than the 90th day before the scheduled date of the annual meeting, regardless of any postponement, deferral or adjournment of the annual meeting. If, however, the date of the annual meeting is announced less than 70 days before that meeting, notice by the stockholder must be received not later than the tenth day following the earlier of the mailing of such announcement or the public disclosure of the annual meeting date. The notice must set forth the following information regarding each person whom the stockholder proposes to nominate for election:

the name, age, business address and residence address of the proposed nominee;

the principal occupation or employment of the proposed nominee;

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~~the name, age, business address and residence address of the proposed nominee;~~

the class and number of shares of stock of Big City Radio which are beneficially owned by the proposed nominee on the date of the nominating stockholder’s notice; and

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~~the principal occupation or employment of the proposed nominee;~~

all information relating to the proposed nominee required under the Exchange Act.

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~~the class and number of shares of stock of Big City Radio which are beneficially owned by the proposed nominee on the date of the nominating stockholder’s notice; and~~

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~~all information relating to the proposed nominee required under the Exchange Act.~~

In addition, the notice must set forth the following information regarding the stockholder giving notice:

the name and address, as they appear on the Big City Radio records, of the stockholder nominating such person or persons and any other stockholder known by such stockholder to be supporting such nominee or nominees;

the class and number of shares of stock of Big City Radio that are owned beneficially and of record by such stockholder of record and by any other stockholder known by such stockholder to be supporting such nominee or nominees; and

•

a representation that the stockholder is a holder of record of the stock of Big City Radio and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice.

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The notice must also set forth a description of all arrangements or understandings between the stockholder and each nominee and other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder.

A stockholder making any nomination at an annual or special meeting also must comply with all applicable requirements of the Exchange Act and the rules and regulations under that Act.

Removal of Directors

Entravision. Under Entravision’s certificate of incorporation, Entravision’s Class A/B directors may be removed at any time, with or without cause, solely by the affirmative vote of holders having a majority of the voting power of Class A and Class B common stock, voting together as a single class. Under Entravision’s certificate of incorporation, until a Class C conversion has occurred, Entravision’s Class C directors may be removed at any time, with or without cause, solely by the affirmative vote of the holder of the Class C common stock, voting as a separate class.

Big City Radio. Under Big City Radio’s bylaws, directors may be removed with or without cause only by a majority of the holders of the class or classes of common stock or series of preferred stock of Big City Radio

that, as of the date such removal is effected, would be entitled to elect such director at the next annual meeting of stockholders of Big City Radio.

Vacancies on the Board of Directors

Entravision. Entravision’s certificate of incorporation provides that, when any vacancy occurs among Class A/B directors, whether by reason of removal, an increase in the number of members composing

Entravision’s Class A/B directors or otherwise, such vacancy will be filled solely by the holders of Entravision’s Class A common stock and Class B common stock voting together as a single class.

Entravision’s certificate of incorporation also provides that, when any vacancy occurs among Class C directors, whether by reason of removal or otherwise, such vacancy will be filled either by the holders of Entravision’s Class C common stock voting as a separate class or by the sole remaining Class C director. In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision’s Class C directors resigned from Entravision’s board of directors in August 2002 to avoid any potential conflict of interest arising out of that transaction, and those board seats have remained vacant since that time.

Big City Radio. Big City Radio’s bylaws provide that newly created directorships resulting either from an increase in the number of directors or from vacancies occurring in the board of directors for any other reason, including the removal of directors without cause, may be filled by the affirmative votes of a majority of the remaining directors elected by holders of each class of common stock or series of preferred stock that elected such directorship, and as of the date such vacancy is filled, would be entitled to elect such directorship at the next annual meeting of stockholders. If no such directors remain, then a vacancy in the board of directors may be filled by a plurality of the votes cast by the holders of the class or classes of common stock or series of preferred stock that, as of the date such vacancy is filled, would be entitled to elect such directorship at the next annual meeting of stockholders, voting as a separate class at a meeting, special or otherwise, of the holders of common stock of such class or classes or series of preferred stock.

Indemnification

Entravision. As permitted by Delaware law, Entravision’s certificate of incorporation provides that:

Entravision is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, so long as:

the person being indemnified acted in good faith and in a manner the person reasonably believed to be in or not opposed to Entravision’s best interests; and

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~~Entravision is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, so long as:~~

with respect to any criminal action or proceeding, the person being indemnified had no reasonable cause to believe his or her conduct was unlawful;

~~the person being indemnified acted in good faith and in a manner the person reasonably believed to be in or not opposed to Entravision’s best interests; and~~

Entravision is permitted to indemnify its other employees and agents to the extent that Entravision indemnifies its officers and directors, unless otherwise required by law;

~~with respect to any criminal action or proceeding, the person being indemnified had no reasonable cause to believe his or her conduct was unlawful;~~

•

~~Entravision is permitted to indemnify its other employees and agents to the extent that Entravision indemnifies its officers and directors, unless otherwise required by law;~~

the rights conferred in Entravision’s certificate of incorporation are not exclusive.

•

~~the rights conferred in Entravision’s certificate of incorporation are not exclusive.~~

Big City Radio. The Big City Radio certificate of incorporation and bylaws provide for indemnification by Big City Radio, to the fullest extent permitted by law, of its officers and directors. The Big City Radio certificate of incorporation and bylaws provide similar indemnification to any other persons with respect of service to Big City Radio to the extent the Big City Radio board of directors specifies that such persons are entitled to indemnification.

Limitation of Personal Liability of Directors

Entravision. Entravision’s certificate of incorporation provides for the limitation and elimination of the personal liability of directors for monetary damages to the fullest extent permitted by the Delaware General Corporation Law, except for any breach of the director’s duty of loyalty to Entravision or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, any unlawful payment of dividends or unlawful stock repurchases or redemptions under Section 174 of the Delaware General Corporation Law, or any transaction from which the director derived any improper benefits. In addition, Entravision’s certificate of incorporation provides that if the Delaware General Corporation Law is amended to authorize the further elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. The effect of this provision is to eliminate the rights of Entravision and its stockholders, through

stockholder derivative suits on behalf of Entravision, to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except in the situations described above. The provision does not limit or eliminate the rights of Entravision or any stockholder to seek non-monetary relief such as an injunction or rescission upon breach of a director’s duty of care. This provision is consistent with Section 102(b)(7) of the Delaware General Corporation Law, which is designed, among other things, to encourage qualified individuals to serve as directors of Delaware corporations.

Big City Radio. Big City Radio’s certificate of incorporation provides for the limitation and elimination of the personal liability of directors for monetary damages to the fullest extent permitted by the Delaware General Corporation Law, except for any breach of the director’s duty of loyalty to Big City Radio or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, any unlawful payment of dividends or unlawful stock repurchases or redemptions under Section 174 of the Delaware General Corporation Law, or any transaction from which the director derived any improper benefits. In addition, Big City Radio’s certificate of incorporation provides that if the Delaware General Corporation Law is amended to authorize the further elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. The effect of this provision is to eliminate the rights of Big City Radio and its stockholders, through stockholder derivative suits on behalf of Big City Radio, to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except in the situations described above. The provision does not limit or eliminate the rights of Big City Radio or any stockholder to seek non-monetary relief such as an injunction or rescission upon breach of a director’s duty of care. This provision is consistent with Section 102(b)(7) of the Delaware General Corporation Law, which is designed, among other things, to encourage qualified individuals to serve as directors of Delaware corporations.

Amendment of Certificate of Incorporation

Entravision. Entravision’s certificate of incorporation may be amended under the Delaware General Corporation Law by a vote of the majority of the voting power of the shares outstanding and entitled to vote on the amendment. If any amendment of Entravision’s certificate of incorporation would adversely affect the rights of any holders of shares of a class or series of capital stock, or such holders are entitled to vote on the amendment, the vote of the holders of a majority of all outstanding shares of the class or series, voting as a class, is also necessary to authorize the amendment.

Big City Radio. Big City Radio’s certificate of incorporation contains the same provisions as Entravision’s certificate of incorporation regarding amendment of the certificate of incorporation.

Amendment of Bylaws

Entravision. Entravision’s bylaws may be amended or repealed either by Entravision’s board of directors, acting by the affirmative vote of a majority of Entravision’s directors, subject to the right of Entravision’s stockholders to make, amend or repeal any bylaw adopted by either the board of directors or the stockholders. No amendment made by the board of directors may adversely affect the rights of the holders of Class B common stock or Class C common stock which affects such class differently from the other classes of Entravision common stock without the approval a majority of the Class A/B directors or the Class C directors, as the case may be.

Big City Radio. Big City Radio’s board of directors may adopt, alter, amend or repeal Big City Radio’s bylaws, subject to the right of the stockholders of Big City Radio, by a vote of a majority of the holders of shares of stock of Big City Radio entitled to vote in the election of directors to adopt, amend, alter, change or revoke the bylaws.

LEGAL MATTERS

The law firm of Foley & Lardner will pass upon certain legal matters relating to the validity of the securities offered by this joint information statement/prospectus. A partner of Foley & Lardner holds 14,450 shares of Entravision’s Class A common stock and was granted an option to purchase an additional 50,000 shares of Entravision’s Class A common stock.

EXPERTS

Entravision’s consolidated financial statements appearing in its Annual Report on Form 10-K for the year ended December 31, ~~2001,~~2002, have been audited by McGladrey & Pullen, LLP, independent auditors, as set forth in their report included therein and incorporated in this joint information statement/prospectus by reference. The consolidated financial statements are incorporated in this joint information statement/prospectus in reliance upon such report given upon the authority of that firm as experts in accounting and auditing.

The consolidated financial statements of Big City Radio, Inc. as of December 31, ~~2001~~2002 and ~~2000,~~2001, and for each of the years in the three-year period ended December 31, ~~2001,~~2002, have been included herein and in the registration statement of which this joint registration statement/prospectus is a part in reliance upon the report of KPMG LLP, independent accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

Entravision

Entravision is subject to the informational requirements of the Exchange Act and, in accordance ~~with it,~~therewith, is required to file reports, proxy and information statements, and other information with the SEC. Such reports, proxy and information statements and other information can be inspected and copied at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Entravision electronically files reports, proxy and information statements, and other information with the SEC. The SEC maintains an internet website that contains Entravision’s electronically filed reports, proxy and information statements, and other information athttp://www.sec.gov.

Entravision’s Class A common stock is listed on The New York Stock Exchange and trades under the symbol “EVC.” Entravision’s SEC filings and other information concerning Entravision may be inspected at the offices of The New York Stock Exchange located at 20 Broad Street, New York, New York, 10005.

The SEC allows Entravision to “incorporate by reference” in this joint information statement/prospectus certain information which Entravision files with the SEC. This means that Entravision can fulfill its obligations to provide you with certain important information by referring you to other documents which Entravision has filed with the SEC. The information which is incorporated by reference is an important part of this joint information statement/prospectus.

Entravision is incorporating by reference in this joint information statement/prospectus the following documents which Entravision has filed, or may later file, with the SEC under the Exchange Act. The information Entravision files with the SEC later will automatically update and supersede the present information.

(a) Entravision’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2001~~2002 (SEC File No. 001-15997), which includes audited financial statements as of and for the fiscal year ended December 31, ~~2001;~~

2002;

(b) ~~Entravision’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2002, June 30, 2002 and September 30, 2002 (SEC File No. 001-15997);~~

~~(c) Entravision’s Current Reports on Form 8-K filed with the SEC on March 5, 2002, March 13, 2002, August 6, 2002 and December 26, 2002;~~

~~(d)~~ All other reports which Entravision filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, ~~2001;~~2002; and

~~(e)~~

(c) The description of Entravision’s Class A common stock in its Registration Statement on Form 8-A (SEC File No. 001-15997) filed with the SEC on July 20, 2000 pursuant to Section 12 of the Exchange Act, which, in turn, incorporated such description by reference to page 78 of Entravision’s Preliminary Prospectus dated April 20, 2000, filed with the SEC on April 21, 2000, as part of Entravision’s Registration Statement on Form S-1 (SEC File No. 333-35336), and any amendments or reports filed to update the description.

All documents which Entravision files under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this joint information statement/prospectus and the termination of the offering will be deemed to be incorporated by reference into this joint information statement/prospectus. Entravision will provide to each person to whom a joint information statement/prospectus is delivered, including any beneficial owner, a copy of any or all of the information which is incorporated by reference in this joint information statement/prospectus but which is not delivered with this joint information statement/prospectus.

This joint information statement/prospectus is part of a registration statement on Form S-4 that has been filed with the SEC. It does not include all of the information that is in the registration statement and the additional documents filed as exhibits with it. For more detailed information, you should read the exhibits themselves.

Entravision will provide without charge to each person to whom this joint information statement/prospectus is delivered, upon request, a copy of any or all of the documents described above that have been or may be incorporated by reference in this joint information statement/prospectus other than exhibits to those documents, unless the exhibits are specifically incorporated by reference into the documents. Any such requests should be directed to:

General Counsel

Entravision Communications Corporation

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

Telephone: (310) 447-3870

You should rely only on the information in this joint information statement/prospectus or any joint information statement/prospectus supplement or incorporated by reference in either of them. Entravision has not authorized anyone else to provide you with different information. Offers of the shares are being made only in states where the offers are permitted. You should not assume that the information in this joint information statement/prospectus or any joint information statement/prospectus supplement is accurate as of any date other than the date on the front of those documents. If information in incorporated documents conflicts with information in this joint information statement/prospectus, you should rely on the most recent information. If information in an incorporated document conflicts with information in another incorporated document, you should rely on the most recent incorporated document.

Entravision maintains a website athttp://www.entravision.com. The contents of this website are not a part of this joint information statement/prospectus.

Big City Radio

Big City Radio is subject to the informational requirements of the Exchange Act and, in accordance ~~with it,~~therewith, is required to file reports, proxy and information statements, and other information with the SEC. Such reports, proxy and information statements and other information can be inspected and copied at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Big City Radio’s Exchange Act SEC File No. is 001-13715. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Big City Radio electronically files reports, proxy and information statements, and other information with the SEC. The SEC maintains an internet website that contains Big City Radio’s electronically filed reports, proxy and information statements, and other information athttp://www.sec.gov.

Big City Radio’s Class A common stock is listed on the American Stock Exchange and trades under the symbol “YFM.” Big City Radio’s SEC filings and other information concerning Big City Radio may be inspected at the offices of the American Stock Exchange located at 86 Trinity Place, New York, New York 10006.

Big City Radio will provide without charge to each person to whom this joint information statement/prospectus is delivered, upon request, a copy of its reports, proxy and information statements, and other information filed with the SEC. Any such requests should be directed to:

Big City Radio, Inc.

1888 Century Park East

Suite 212

Los Angeles, California 90067

Attention: Paul R. Thomson

Telephone: (310) 556-2489

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

OF BIG CITY RADIO

		Page
Consolidated Financial Statements

Report of KPMG LLP, Independent Auditors		F-2

Consolidated Balance Sheets as of December 31, ~~2000~~2001 and ~~2001~~2002		F-3

Consolidated Statements of Operations for the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002		F-4

Consolidated Statements of Cash Flows for the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002		F-5

Consolidated Statements of Stockholders’ Equity (Deficiency)		F-6

Notes to Consolidated Financial Statements		F-7

~~Consolidated Financial Statements (Unaudited)~~

~~Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001~~		~~F-35~~

~~Consolidated Statements of Operations for the nine months ended September 30, 2002 and 2001~~		~~F-36~~

~~Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001~~		~~F-37~~

~~Consolidated Statements of Stockholders’ Equity (Deficiency)~~		~~F-38~~

~~Notes to Consolidated Financial Statements~~		~~F-39~~

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

of Big City Radio, Inc.:

We have audited the accompanying consolidated balance sheets of Big City Radio, Inc. and subsidiaries as of December 31, ~~2000~~2001 and ~~2001,~~2002, and the related consolidated statements of operations, stockholders’ equity (deficiency) and cash flows for each of the years in the three-year period ended December 31, 2001. In connection with our audits of the consolidated financial statements, we also have audited Schedule II, Valuation and Qualifying Accounts for each of the years in the three year period ended December 31, 2001.2002. These consolidated financial statements ~~and financial statement schedule~~ are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements ~~and financial statement schedule~~ based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Big City Radio, Inc. and subsidiaries as of December 31, ~~2000~~2001 and ~~2001,~~2002, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, ~~2001~~2002 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

The accompanying consolidated financial statements ~~and financial statement schedule~~ have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses and cash deficits, ~~and~~ has a stockholders’ deficiency of ~~$77,627,000~~$105,357,000 at December 31, ~~2001~~2002 and was in default under the terms of its Senior Discount Notes that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements ~~and financial statement schedules~~ do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.”

KPMG LLP

Los Angeles, California

~~March 8, 2002, except as to Note 19,~~

~~dated January 6,~~

February 14, 2003

BIG CITY RADIO, INC.

CONSOLIDATED BALANCE SHEETS

~~December 31, 2000 and 2001~~

2000

2001

Assets

Current assets:
Cash and cash equivalents    $ 862,000    $ 3,194,000
Cash held in investment, restricted (note 5)    802,000    1,336,000
Marketable securities (note 2)    1,895,000    15,000,000
Accounts receivable, net of allowance of $338,000 and $458,000 in 2000 and 2001, respectively    4,716,000    3,817,000
Interest receivable    38,000    21,000
Prepaid expenses and other current assets    981,000    602,000


Total current assets    9,294,000    23,970,000
Property and equipment, net (note 6)    7,148,000    5,206,000
Intangibles, net (note 7)    110,476,000    77,063,000
Deferred financing fees, net    2,747,000    2,094,000
Other assets    181,000    112,000


Total assets    $ 129,846,000    $ 108,445,000


Liabilities and Stockholders’ Equity (Deficiency)

Current liabilities:
Accounts payable    $ 1,337,000    $ 1,428,000
Accrued expenses    2,138,000    1,988,000
Interest payable (note 8)    —      5,873,000
Other current liabilities    36,000    79,000


Total current liabilities    3,511,000    9,368,000


Long-term liabilities:
Senior discount notes (note 8)    170,296,000    174,000,000
Other long-term liabilities    621,000    420,000
Deferred income tax liabilities (note 14)    2,347,000    2,284,000
Commitments, contingencies and going concern (notes 3 and 12)
Stockholders’ equity (deficiency) (note 13):
Preferred stock, $.01 par value. Authorized 20,000,000 shares; zero shares issued and outstanding in 2000 and 2001    —      —
Common stock, Class A, $.01 par value. Authorized 80,000,000 shares; issued and outstanding 6,226,817 shares in 2000 and 2001, respectively    62,000    62,000
Common stock, Class B, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 8,250,458 shares in 2000 and 2001    83,000    83,000
Additional paid-in capital    29,492,000    29,492,000
Other comprehensive loss (note 2)    (9,000 )    —
Accumulated deficit    (76,557,000 )    (107,264,000 )


   (46,929,000 )    (77,627,000 )


Total liabilities and stockholders’ equity (deficiency)    $ 129,846,000    $ 108,445,000

	December 31, 2001			December 31, 2002
Assets
Current assets:
Cash and cash equivalents	$	3,194,000		$	732,000
Cash held in investment, restricted		1,336,000			1,085,000
Marketable securities		15,000,000			1,861,000
Accounts receivable, net of allowance of $458,000 and $362,000 in 2001 and 2002, respectively		3,817,000			1,997,000
Interest receivable		21,000			6,000
Assets held for sale (note 4)		—			79,571,000
Prepaid expenses and other current assets		602,000			289,000

Total current assets		23,970,000			85,541,000
Property and equipment, net (note 7)		5,206,000			376,000
Intangibles, net (note 8)		77,063,000			—
Deferred financing fees, net		2,094,000			1,441,000
Other assets		112,000			170,000

Total assets	$	108,445,000		$	87,528,000

Liabilities and Stockholders’ Equity (Deficiency)
Current liabilities:
Accounts payable	$	1,428,000		$	883,000
Accrued expenses		1,988,000			1,644,000
Interest payable		5,873,000			15,983,000
Senior discount notes (note 9)		—			174,000,000
Other current liabilities		79,000			74,000

Total current liabilities		9,368,000			192,584,000

Long-term liabilities:
Senior discount notes		174,000,000			—
Other long-term liabilities		420,000			301,000
Deferred income tax liabilities		2,284,000			—
Commitments and contingencies		—			—
Stockholders’ equity (deficiency):
Preferred stock, $.01 par value. Authorized 20,000,000 shares; zero shares issued and outstanding in 2001 and 2002		—			—
Common stock, Class A, $.01 par value. Authorized 80,000,000 shares; issued and outstanding 6,226,817 shares in 2001 and 2002		62,000			62,000
Common stock, Class B, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 8,250,458 shares in 2001 and 2002		83,000			83,000
Additional paid-in capital		29,492,000			29,492,000
Other comprehensive loss (note 2)		—			(8,000	)
Accumulated deficit		(107,264,000	)		(134,986,000	)

		(77,627,000	)		(105,357,000	)

Total liabilities and stockholders’ equity (deficiency)	$	108,445,000		$	87,528,000

See accompanying notes to consolidated financial statements.

BIG CITY RADIO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002

1999

2000

2001

Gross revenues    $ 23,296,000    $ 26,820,000    $ 22,395,000
Less commissions and fees    2,692,000    3,054,000    2,309,000



Net revenues    20,604,000    23,766,000    20,086,000



Operating expenses:
Station operating expenses, excluding depreciation and amortization    23,566,000    26,047,000    21,307,000
Internet operating expenses, excluding depreciation and amortization    51,000    1,457,000    436,000
Corporate, general and administrative expenses    4,371,000    3,845,000    3,610,000
Cost of abandonment of station acquisition agreement    —      550,000    —
Impairment loss on goodwill    —      —      897,000
Depreciation and amortization    3,812,000    4,863,000    4,818,000



Total operating expenses    31,800,000    36,762,000    31,068,000



Operating loss    (11,196,000 )    (12,996,000 )    (10,982,000 )
Other income (expenses):
Gain on sale of station (note 3)    663,000    —      2,275,000
Interest income    1,952,000    281,000    111,000
Interest expense    (16,953,000 )    (18,392,000 )    (21,540,000 )
Other, net    (337,000 )    (83,000 )    11,000



Total other (expenses)    (14,675,000 )    (18,194,000 )    (19,143,000 )
Loss from continuing operations before income taxes    (25,871,000 )    (31,190,000 )    (30,125,000 )
Income tax benefit, net (notes 2 and 12)    63,000    63,000    63,000



Loss from continuing operations    (25,808,000 )    (31,127,000 )    (30,062,000 )
Discontinued operations: (note 18)
Loss on discontinued publishing operations    —      (41,000 )    (645,000 )



Net loss    $ (25,808,000 )    $ (31,168,000 )    $ (30,707,000 )



Basic and diluted loss per share:
Loss from continuing operations    $ (1.83 )    $ (2.15 )    $ (2.08 )
Loss on discontinued publishing operations    —      —      (0.04 )



Net loss    $ (1.83 )    $ (2.15 )    $ (2.12 )
Weighted average shares outstanding    14,136,000    14,475,000    14,477,000

	2000			2001			2002
Gross revenues from continuing operations	$	6,679,000		$	4,622,000		$	—
Less commissions and fees		713,000			497,000			—

Net revenues		5,966,000			4,125,000			—

Operating expenses:
Station operating expenses, excluding depreciation and amortization		5,538,000			4,272,000			—
Internet operating expenses, excluding depreciation and amortization		1,457,000			436,000			—
Corporate, general and administrative expenses		3,845,000			3,610,000			4,717,000
Cost of abandonment of station acquisition agreement		550,000			—			—
Impairment loss on goodwill		—			897,000			—
Depreciation and amortization		1,312,000			1,263,000			120,000

Total operating expenses		12,702,000			10,478,000			4,837,000

Operating loss from continuing operations		(6,736,000	)		(6,353,000	)		(4,837,000	)
Other income (expenses):
Gain on sale of station (note 5)		—			2,275,000			—
Interest income		281,000			111,000			152,000
Other, net		(115,000	)		(173,000	)		(21,000	)

Total other income		166,000			2,213,000			131,000
Loss from continuing operations before income taxes		(6,570,000	)		(4,140,000	)		(4,706,000	)
Income tax benefit, net (notes 2 and 14)		63,000			63,000			4,284,000

Loss from continuing operations		(6,507,000	)		(4,077,000	)		(422,000	)
Discontinued operations: (note 4)
Radio operations		(24,620,000	)		(25,985,000	)		(26,555,000	)
Publishing operations		(41,000	)		(645,000	)		(745,000	)

Loss from discontinued operations, net of income tax expense of $2,000,000 in 2002		(24,661,000	)		(26,630,000	)		(27,300,000	)

Net loss	$	(31,168,000	)	$	(30,707,000	)	$	(27,722,000	)

Basic and diluted loss per share:
Loss from continuing operations	$	(0.45	)	$	(0.28	)	$	(0.03	)
Loss from discontinued operations		(1.70	)		(1.84	)		(1.88	)

Net loss	$	(2.15	)	$	(2.12	)	$	(1.91	)

Weighted average shares outstanding		14,475,000			14,477,000			14,477,000

See accompanying notes to consolidated financial statements.

BIG CITY RADIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002

1999

2000

2001

Cash flows from operating activities:
Net loss from continuing operations    $ (25,808,000 )    $ (31,127,000 )    $ (30,062,000 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization    3,812,000    4,863,000    4,818,000
Deferred income taxes (notes 2 and 12)    (63,000 )    (63,000 )    (63,000 )
Non cash interest    16,504,000    18,352,000    4,357,000
Non cash change in other comprehensive loss    (149,000 )    140,000    9,000
Gain on sale of station (note 4)    (663,000 )    —      (2,275,000 )
Impairment loss on goodwill (note 11)    —      —      897,000
Loss on disposal of fixed assets    11,000    —      2,000
Disposal of fixed assets    33,000    —      —
Employment stock incentives (note 13)    —      34,000    —
Changes in operating assets and liabilities, net of acquisitions:
(Increase) decrease in assets:
Accounts receivable    (2,728,000 )    1,374,000    899,000
Interest receivable    1,048,000    488,000    17,000
Prepaid expenses and other current assets    (67,000 )    (61,000 )    379,000
Other assets    110,000    (122,000 )    69,000
Increase (decrease) in liabilities:
Accounts payable    304,000    515,000    91,000
Accrued expenses    1,960,000    (1,009,000 )    (150,000 )
Interest payable    —      —      5,873,000
Other liabilities    (91,000 )    66,000    (158,000 )



Net cash used in operating activities    (5,787,000 )    (6,550,000 )    (15,297,000 )



Cash flows from investing activities:
Purchase of property and equipment    (2,941,000 )    (1,584,000 )    (851,000 )
Purchase of marketable securities    (34,508,000 )    —      (15,000,000 )
Sale of marketable securities    75,065,000    5,964,000    1,895,000
Cash paid and advanced for assets of radio stations acquired    (36,177,000 )    (250,000 )    —
Decrease (increase) in cash held in restricted investment    1,416,000    1,132,000    (534,000 )
Decrease in cash held in escrow    —      275,000    —
Cash received for disposal of fixed assets    58,000    10,000    22,000
Cash received for radio station sold    1,195,000    352,000    32,692,000



Net cash provided by investing activities    4,108,000    5,899,000    18,224,000



Cash flows from financing activities:
Cash received from issuance of promissory note (note 9)    —      —      2,235,000
Cash received from bridge loan (note 10)    —      —      15,000,000
Repayment of promissory note    —      —      (2,235,000 )
Repayment of bridge loan    —      —      (15,000,000 )
Repayment of promissory notes    (1,175,000 )    (881,000 )    —



Net cash used in financing activities    (1,175,000 )    (881,000 )    —



Cash flows from discontinued operations    —      (37,000 )    (595,000 )
Change in cash and cash equivalents    (2,854,000 )    (1,569,000 )    2,332,000
Cash and cash equivalents at beginning of year    5,285,000    2,431,000    862,000



Cash and cash equivalents at end of year    2,431,000    862,000    3,194,000

	2000			2001			2002
Cash flows from operating activities:
Net loss from continuing operations	$	(6,507,000	)	$	(4,077,000	)	$	(422,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,312,000			1,263,000			120,000
Deferred income taxes		(63,000	)		(63,000	)		(4,284,000	)
Non cash change in other comprehensive loss		140,000			9,000			(8,000	)
Gain on sale of station		—			(2,275,000	)		—
Impairment loss on goodwill		—			897,000			—
Employment stock incentives		34,000			—			—
Changes in operating assets and liabilities, net of acquisitions:
(Increase) decrease in assets:
Accounts receivable		141,000			686,000			444,000
Interest receivable		488,000			17,000			15,000
Prepaid expenses and other current assets		463,000			(240,000	)		254,000
Other assets		(3,000	)		6,000			2,000
Increase (decrease) in liabilities:
Accounts payable		188,000			52,000			(42,000	)
Accrued expenses		(941,000	)		394,000			64,000
Other liabilities		(36,000	)		—			—

Net cash used in operating activities		(4,784,000	)		(3,331,000	)		(3,857,000	)

Cash flows from investing activities:
Purchase of property and equipment		(895,000	)		(121,000	)		—
Purchase of marketable securities		—			(15,000,000	)		—
Sale of marketable securities		5,964,000			1,895,000			13,139,000
Decrease in cash held in restricted investment		1,132,000			(534,000	)		251,000
Decrease in cash held in escrow		275,000			—			—
Cash received for disposal of fixed assets		10,000			—			—
Cash received for radio station sold		352,000			32,692,000			—

Net cash provided by investing activities		6,838,000			18,932,000			13,390,000

Cash flows from financing activities:
Cash received from issuance of promissory note to related party		—			2,235,000			—
Cash received from bridge loan		—			15,000,000			—
Repayment of promissory note to related party		—			(2,235,000	)		—
Repayment of bridge loan		—			(15,000,000	)		—
Repayment of promissory notes		(881,000	)		—			—

Net cash used in financing activities		(881,000	)		—			—

Cash used in discontinued operations		(2,742,000	)		(13,269,000	)		(11,995,000	)

Change in cash and cash equivalents		(1,569,000	)		2,332,000			(2,462,000	)
Cash and cash equivalents at beginning of year		2,431,000			862,000			3,194,000

Cash and cash equivalents at end of year	$	862,000		$	3,194,000		$	732,000

See accompanying notes to consolidated financial statements.

BIG CITY RADIO, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

Years ~~ended~~Ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002

Common Stock

Additional
Paid-In
Capital

Other
Comprehensive
Loss

Accumulated
Deficit

Total

Shares

Amount

Balance at December 31, 1998 14,069,275 $ 141,000 $ 27,831,000    $ —   $ (19,581,000 ) $ 8,391,000
Capital contribution related to employment incentive
(note 13) —   —   31,000    —   —   31,000
Acquisition of Hispanic Internet Holdings (note 3) 400,000 4,000 1,596,000    —   —   1,600,000
Unrealized loss on marketable securities —   —   —      (149,000 ) —   (149,000 )
Net loss —   —   —      —   (25,808,000 ) (25,808,000 )



Total comprehensive loss    (149,000 ) (25,808,000 ) (25,957,000 )
Balance at December 31, 1999 14,469,275 145,000 29,458,000    (149,000 ) (45,389,000 ) (15,935,000 )
Employee stock options 8,000 —   34,000    —   —   34,000
Unrealized income on marketable securities —   —   —      140,000 —   140,000
Net loss —   —   —      —   (31,168,000 ) (31,168,000 )



Total comprehensive loss    140,000 (31,168,000 ) (31,028,000 )
Balance at December 31, 2000 14,477,275 145,000 29,492,000    (9,000 ) (76,557,000 ) (46,929,000 )
Unrealized income on marketable securities —   —   —      9,000 —   9,000
Net loss —   —   —      —   (30,707,000 ) (30,707,000 )



Total comprehensive loss    9,000 (30,707,000 ) (30,698,000 )



Balance at December 31, 2001 14,477,275 $ 145,000 $ 29,492,000    $ —   $ (107,264,000 ) $ (77,627,000 )

	Common Stock			Additional Paid-In Capital		Other Comprehensive Loss			Accumulated Deficit			Total
	Shares	Amount		Additional Paid-In Capital		Other Comprehensive Loss			Accumulated Deficit			Total
Balance at December 31, 1999	14,469,275	$	145,000	$	29,458,000	$	(149,000	)	$	(45,389,000	)	$	(15,935,000	)
Employee stock options	8,000		—		34,000		—			—			34,000
Unrealized income on marketable securities	—		—		—		140,000			—			140,000
Net loss	—		—		—		—			(31,168,000	)		(31,168,000	)

Total comprehensive loss	—		—		—		140,000			(31,168,000	)		(31,028,000	)

Balance at December 31, 2000	14,477,275		145,000		29,492,000		(9,000	)		(76,557,000	)		(46,929,000	)
Unrealized income on marketable securities	—		—		—		9,000			—			9,000
Net loss	—		—		—		—			(30,707,000	)		(30,707,000	)

Total comprehensive loss							9,000			(30,707,000	)		(30,698,000	)

Balance at December 31, 2001	14,477,275		145,000		29,492,000		—			(107,264,000	)		(77,627,000	)
Unrealized loss on marketable securities	—		—		—		(8,000	)		—			(8,000	)
Net loss	—		—		—		—			(27,722,000	)		(27,722,000	)

Total comprehensive loss	—		—		—		(8,000	)		(134,986,000	)		(105,357,000	)

Balance at December 31, 2002	14,477,275	$	145,000	$	29,492,000	$	(8,000	)	$	(134,986,000	)	$	(105,357,000	)

See accompanying notes to consolidated financial ~~statements.~~

statements

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2000~~2001 and ~~2001~~2002

(1) Organization and Business

Big City Radio, Inc. ~~(formerly~~(“Big City Radio” or the “Company,” formerly Odyssey Communications, Inc.~~) (“Big City Radio”~~) was incorporated in Delaware on August 2, 1994 and commenced operations on January 1, 1995. On May 30, 1996, Big City Radio merged with Q Broadcasting, Inc. ~~(“Q”, and together with Big City Radio, the “Company”)~~, with Big City Radio being the surviving company. Big City Radio and Q were owned 94% and 100%, respectively by Stuart and Anita ~~Subotnick (the “Principal Stockholders”).~~Subotnick. Accordingly, the merger has been accounted for as a combination of entities under common control. As a result, the combination of Big City Radio and Q was effected utilizing historical costs. At the date of conversion from S Corporation status to C Corporation status (see ~~Note~~note 2), the Company formed five wholly owned subsidiaries, Big City Radio-LA, LLC; Big City Radio-NYC, LLC; Big City Radio-CHI, LLC; WRKL Rockland Radio, LLC; and Odyssey Traveling Billboards, Inc.

The Company owns and operates radio broadcasting stations. As of December 31, ~~2001,~~2002, the Company owned three FM stations in Southern California, KLYY-FM, Arcadia, KVYY-FM, Ventura and KSYY-FM, Fallbrook (programmed as “Viva 107.1”). In the New York area, the Company ~~owns~~owned four radio properties, ~~WWXY-FM Westchester County,~~WYNY-FM, Briarcliff Manor, New York, ~~(the “Original New York Stations”),~~ WWZY-FM, ~~Monmouth,~~Long Branch, New Jersey, ~~WWVY-FM~~WWXY-FM, Hampton Bays, New York and WWYY-FM, ~~Hackettstown,~~Belvidire, New Jersey. ~~WWXY-FM,~~WYNY-FM, WWZY-FM, ~~WWVY-FM,~~WWXY-FM, and WWYY-FM are programmed as “Rumba ~~107.1.~~107.” In the Chicago area, the Company ~~owns~~owned five radio properties, WXXY-FM Highland Park, Illinois, WYXX-FM Morris, Illinois (programmed as “Viva 103.1”), WKIE-FM Arlington Heights, Illinois, WKIF-FM Kankakee, Illinois, and WDEK-FM DeKalb, Illinois (programmed as “Energy92”).

Big City Radio is seeking to sell all of its radio stations in an auction process that it announced on November 4, 2002. Between December 24, 2002 and January 2, 2003, Big City Radio signed four, separate definitive asset purchase agreements to sell eleven of its twelve FCC FM licenses. The Company also plans to sell the remaining station. Big City Radio is selling these radio stations to raise the funds necessary to pay all principal of, and accrued and unpaid interest on, its 11¼% Senior Discount Notes due 2005 (the “Senior Discount Notes,” the “Notes” or the “senior notes”). Noteholders have accelerated payment of the senior notes as a result of defaults by Big City Radio under these notes. None of these transactions is conditioned on the completion of any other transaction. As discussed in note 4, the radio station operations have been treated as discontinued operations.

The Company owns ~~Hispanic Internet Holdings,~~HIH Acquisition, Inc. (“HIH”) which owns the TodoAhora.com ~~a bilingual internet portal, which delivered a range of internet programming to the Hispanic community including news, entertainment, finance, culture,~~website, and e-commerce opportunities. During 2001, the Company decided to significantly curtail the development and operation of its internet portal, TodoAhora.com. The decision was based upon management’s evaluation of future revenue generation potential and the current resources needed to continue to develop and operate the portal. The Company also in turn owns United Publishers of Florida, Inc., (“UPF”) which ~~publishes~~published the Hispanic music trade magazine, ~~“Disco”,~~“Disco,” operated a graphic design business, and owns the LatinMusicTrends.com website.

In response to the continued downturn in the music industry advertising marketplace, during December 2001 the Company ceased its internet operations, and during June 2002 the Company ceased the operation of UPF, and wrote-off the remaining $108,000 of goodwill associated with UPF. As discussed in note 4, this was treated as discontinued operations. The Company also owns Independent Radio Reps, LLC, an in-house rep firm to represent it in generating national Hispanic radio business.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Big City Radio ~~Inc.~~ and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

As a result of the Company’s decisions during 2002 to close down publishing operations and to sell the radio stations, the publishing and radio station operations of the Company have been presented as discontinued operations (see note 4).

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash Equivalents

Cash equivalents of ~~$2,757,000~~$73,000 with maturities less than three months were included in cash and cash equivalents at December 31, ~~2001.~~

2002.

Marketable Securities

Marketable securities at December 31, ~~2000~~2001 and ~~2001~~2002 consist of U.S. Treasury, mortgage-backed, and corporate debt securities. The Company classifies its debt securities as available-for-sale. Securities are recorded at fair value with the unrealized holding gain or loss, net of the related tax effect, excluded from earnings and reported

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. As of December 31, ~~2001, there were no~~2002, unrealized holding ~~gains or losses.~~losses were $8,000. Proceeds from the sale of securities were ~~$1.9~~$13 million in ~~2001. Gross realized losses were $3,000 in 2001.~~

2002.

A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary results in a charge to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets ranging from 5 to 7 years for transmission equipment, vehicles and furniture and office equipment to 39 years for buildings and leasehold improvements over the lesser of the useful life or the term of the lease.

~~Impairment~~ As of ~~Long-Lived Assets and Long-Lived Assets to be Disposed of~~

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparisonDecember 31, 2002, substantially all of the ~~carrying amount of an asset to future net cash flows expected to be generated~~property and equipment owned by the ~~asset. If such~~Company are presented as assets ~~are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount~~held for sale, as a result of the Company announcing the auction sale of its radio station assets ~~exceeds~~and entering into four asset purchase agreements in the ~~fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.~~

period between December 23, 2002 and January 3, 2003 (see note 4).

Business Combinations and Goodwill and Other Intangible Assets

Intangible assets include the portion of the purchase price allocable to FCC broadcast licenses, which are amortized on a straight-line method over 40 years. Covenants not to compete, signed as part of station acquisition agreements, are amortized over the period of the agreements, generally three years. Goodwill resulting from the acquisition of the Hispanic Internet Holdings, Inc. and United Publishers of Florida, Inc. are amortized over five years.

It is the Company’s policy to account for intangible assets at the lower of amortized cost or fair market value. As part of an ongoing review of the valuation and amortization of intangible assets, management assesses the carrying value of the Company’s intangible assets if facts and circumstances suggest that they are impaired. If this review indicates that the intangibles will not be recoverable as determined by a non-discounted cash flow analysis over the remaining amortization period, the carrying value of the Company’s intangibles will be reduced to their estimated fair market value. The Company has determined that intangibles are not impaired at December 31, 2001.

In July 2001, the Financial Accounting Standards Board or FASB issued SFAS No. 141,Business Combinations, and SFAS No. 142,Goodwill and Other Intangible ~~Assets.~~Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria that intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 ~~will require~~requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS No.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

142. SFAS No. 142 ~~will also require~~requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. ~~121,~~ 144,Accounting for the Impairment or Disposal of Long-Lived ~~Assets and for Long-Lived Assets to Be Disposed Of.~~

Assets.

The Company ~~is required to adopt the provisions of~~adopted SFAS No. 141 ~~immediately, except with regard to business combinations initiated prior to July 1, 2001,~~ and SFAS No. 142 effective January 1, 2002. ~~Furthermore, any~~Any goodwill and any intangible asset determined to have an indefinite useful life that ~~are~~was acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 ~~will continue~~have been amortized through December 31, 2001.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

SFAS No. 141 requires that upon adoption of SFAS No. 142, the Company evaluate its existing intangible assets and goodwill that was acquired in a prior purchase business combination, and make any necessary reclassifications in order to ~~be amortized prior~~conform with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon adoption of SFAS No. 142, the Company reassessed the useful lives and residual values of all intangible assets acquired in business combinations accounted for using the purchase method. In addition, to the extent the Company identified an intangible asset as having an indefinite useful life, the Company was required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142 within the first interim period. Any impairment loss would have been measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle. No significant adjustments or impairment losses resulted from the adoption of SFAS No. 141 and SFAS No. 142.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142 required the Company to perform an assessment of whether there was an indication that goodwill was impaired as of the date of adoption. To accomplish this the Company identified its reporting units and determined the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. To the extent a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company must perform the second step of the transitional impairment test. In the second step, the Company compared the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of it assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with SFAS No. 141, to its carrying amount, both of which would be measured as of the date of adoption. Any transitional impairment loss was required to be recognized as the cumulative effect of a change in accounting principle in the Company’s statement of earnings. No such loss resulted from the Company’s adoption of SFAS No. 142.

In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill and intangible assets (comprised solely of broadcast license) effective January 1, 2002. During the quarter ended March 31, 2002, the Company completed the transitional impairment test, which did not result in impairment of recorded intangible assets. In June 2002, the Company ceased the operation of UPF, and wrote off the remaining $108,000 of goodwill associated with UPF. During the fourth quarter of 2002, the Company made the decision to sell its broadcast licenses. In accordance with SFAS No. 144, these licenses are reported as assets held for sale. The Company compared the licenses’ carrying value to their fair value, less the estimated cost to sell them. This review of the carrying value of its intangible assets resulted in a charge of $630,000 relating to the impairment in value of some of its FCC broadcast licenses. As of December 31, 2002, the Company has no remaining un-amortized goodwill and un-amortized broadcast licenses in the amount of $76,325,000.

At December 31, 2002, all the intangible assets of the Company are the subject of asset purchase agreements entered into between December 24, 2002 and January 2, 2003 and are presented as assets held for sale. The carrying amount of un-amortized intangible assets at December 31, 2001 and 2002 is as follows:

	2001		2002
Broadcast licenses	$	76,955,000	$	76,325,000
Goodwill		108,000		—

	$	77,063,000	$	76,325,000

The amortization expense on broadcast license was $2,970,000, $2,813,000 and $0 for the year ended December 31, 2000, 2001 and 2002 respectively. The amortization expense on goodwill was $321,000, $319,000 and $0 for the year ended December 31, 2000, 2001 and 2002, respectively.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents net loss and basic and diluted net loss per share as if the broadcast licenses and goodwill had not been amortized during the periods presented.

	Year Ended December 31,
	2000			2001			2002
Reported net loss	$	(31,168,000	)	$	(30,707,000	)	$	(27,722,000	)
Add back: Goodwill amortization		321,000			319,000			—
Add back: Broadcast license amortization		2,970,000			2,813,000			—

Adjusted net loss	$	(27,877,000	)	$	(27,575,000	)	$	(27,722,000	)

Basic and diluted net loss per share:
Reported net loss	$	(2.15	)	$	(2.12	)	$	(1.91	)
Add back: Goodwill amortization		0.02			0.02			—
Add back: Broadcast license amortization		0.20			0.19			—

Adjusted net loss	$	(1.93	)	$	(1.91	)	$	(1.91	)

Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

In August 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”), which supersedes both SFAS No. 121,Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (“SFAS No. 121”), and the accounting and reporting provisions of APB Opinion No. 30,Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions (“Opinion 30”), for the disposal of a segment of a business (as previously defined in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No. 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant implementation issues associated with SFAS No. 121. For example, SFAS No. 144 provides guidance on how a long-lived asset that is used as part of a group should be evaluated for impairment, establishes criteria for when a long-lived asset is held for sale, and prescribes the accounting for a long-lived asset that will be disposed of other than by sale. SFAS No. 144 retains the basic provisions of Opinion 30 on how to present discontinued operations in the income statement but broadens that presentation to include a component of an entity (rather than a segment of a business). Unlike SFAS No. 121, an impairment assessment under SFAS No. 144 will never result in a write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS No. 142,Goodwill and Other Intangible Assets.

The Company adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS No. 144 did not have a material impact on the financial position, cash flows, or results of operations of the Company. The Company discontinued its publishing operations during June 2002. This was treated as a discontinued operation under SFAS No. 144. In December 2002, the Company announced sales of eleven of its twelve radio stations in Los Angeles, New York, and Chicago. The Company also intends to sell its remaining station. Big City Radio’s consolidated financial statements for all periods presented have been adjusted to reflect the radio station sales and ceased publishing operations as discontinued operations in accordance with SFAS No. 144.

Accounting for Costs Associated with Exit and Disposal Activities

In June 2002, the Financial Accounting Standards Board issued FASB Statement No. 146,Accounting for Costs Associated with Exit or Disposal Activities (“SFAS No. 146”) which nullifies Emerging Issues Task Force (EITF) Issue No. 94-3Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) (“Issue 94-3”).

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The principal difference between this Statement and Issue 94-3 relates to its requirements for recognition of a liability for a cost associated with an exit or disposal activity. This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost as defined in Issue 94-3 was recognized at the date of an entity’s commitment to an exit plan. Under SFAS No. 146, a commitment to a plan, by itself, does not create a present obligation to others that meets the definition of a liability. SFAS No. 146 also establishes that fair value is the objective for initial measurement of the liability.

The Company is required to adopt SFAS No. 146 on exit and disposal activities that are initiated after December 31, 2002, with early application encouraged. The Company has adopted SFAS No. 146 for exit and disposal activities initiated after September 30, 2002.

Deferred Financing Fees

Deferred finance costs and loan origination fees are amortized over the period of the relevant facility.

Revenue Recognition

Broadcasting revenue is recognized when commercials are aired. Net revenues represent gross revenues, less direct fees and commissions paid to independent advertising agencies.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The following methods and assumptions were used in estimating the fair value disclosures for financial instruments:

The carrying amounts reported in the balance sheets for cash, current receivables, accounts payable and accrued expenses approximate fair value.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

The carrying value of Senior Discount Notes are ~~$170.3 million and $174.0~~$174 million at December 31, ~~2000~~2001 and ~~2001, respectively~~2002. The fair values of Senior Discount Notes are ~~$60.9~~$88.7 million and ~~$88.7~~$104.4 million at December 31, ~~2000~~2001 and ~~2001,~~2002, respectively. Fair values of Senior Discount Notes are based on market prices.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of accounts receivable. The Company believes that concentration of credit risk with respect to accounts receivable, which are unsecured, are limited due to the Company’s ongoing relationship with its clients. The Company estimates uncollectible accounts on a periodic basis. The Company has not experienced significant losses relating to accounts receivable. For periods ended December 31, ~~1999,~~ 2000, 2001 and ~~2001,~~2002, no customer accounted for more than 10% of revenues.

Barter Transactions

The Company trades commercial air time for goods and services used principally for promotional, sales and other business activities. An asset and a liability are recorded at the fair market value of the goods or services received. Barter revenue is recorded and the liability is relieved when the commercials are broadcast, and barter expense is recorded and the assets are relieved when the goods or services are received or used.

Barter transactions resulted in sales of $1,107,000, $1,046,000 and $930,000 and related expenses of $1,061,000, $910,000 and $828,000 for the years ended December 31, 2000, 2001 and 2002, respectively.

Advertising

The Company charges advertising costs, as incurred, to expense. Advertising costs amounted to ~~$1,326,000,~~ $1,703,000, $675,000 and ~~$675,000~~$281,000 for the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001,~~2002, respectively.

Loss per Share

The Company calculates loss per share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings Per Share”. Under SFAS No. 128, basic EPS includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from securities that could share in the earnings of the Company. In calculating diluted EPS, no potential shares of common stock are to be included in the computation when a loss from continuing operations available to common stockholders exists. The statement requires dual presentation of basic and diluted EPS by entities with complex capital structures. Stock options issued under the Company’s ~~1999, 2000~~1997, 1998 and ~~2001~~1999 Incentive Stock Plan amounting to ~~2,193,300,~~ 1,964,100, 1,870,250 and ~~1,870,250~~1,320,000 at December 31, ~~1999,~~ 2000, 2001 and ~~2001,~~2002, respectively, were not included in the computation of diluted EPS because to do so would have been ~~antidilutive.~~

anti-dilutive.

Accounting for Stock Options

On January 1, 1996, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” which permits entities to recognize as expense over the vesting period the fair value of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 allows entities to continue to apply the provisions of APB Opinion No. 25 and provide pro forma net income and disclosure for employee stock option grants made in 1995, 1996 and future years as if the fair-value-based method defined in SFAS No. 123 had been applied. The Company has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In 2000, 2001 and 2002, had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Company’s net loss would have been increased to the pro forma amounts indicated below:

	2000			2001			2002
Net loss:
As reported	$	(31,168,000	)	$	(30,707,000	)	$	(27,722,000	)
Pro forma		(32,869,000	)		(32,804,000	)		(31,322,000	)
Loss per share:
As reported		(2.15	)		(2.12	)		(1.91	)
Pro forma		(2.27	)		(2.27	)		(2.16	)

At December 31, 2000 and 2001, the per share weighted average fair value of stock options granted was $1.99 and $2.14, respectively, on the date of grant using the modified Black-Scholes option-pricing model with the following weighted average assumptions: expected dividend yield of 0%, risk-free interest rate of 4.93%, expected volatility of 50% and an expected life of 10 years for options granted in 2000; expected dividend yield of 0%, risk-free interest rate of 5.0%, expected volatility of 95% and an expected life of 10 years for options granted in February 2001; and expected dividend yield of 0%, risk-free interest rate of 3.25%, expected volatility of 105% and an expected life of 10 years for options granted in July 2001. There were no options granted during 2002.

Reporting Comprehensive Income

In fiscal 1998, the Company adopted the provisions of Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (“SFAS No. 130”). The statement required that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in-capital in the equity section of a statement of financial position. Accumulated other comprehensive income of the Company consists solely of net unrealized gains (losses) on available for sale investments.

Accounting for Derivatives

In June 1998, Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”, was issued. SFAS ~~No.~~ 133 established accounting and reporting standards for derivative instruments and for hedging activities. SFAS ~~No.~~ 133 requires that an entity recognize all derivatives as either assets or liabilities and measure those instruments at fair value. The accounting for the gain or loss due to changes in fair value of the derivative instrument depends on whether the derivative instrument qualifies as a hedge. In June 2000, SFAS ~~No.~~ 138 was issued which addresses a limited number of issues causing implementation difficulties for numerous entities that have applied SFAS ~~No.~~ 133. SFAS ~~No.~~ 133 and SFAS ~~No.~~ 138 are effective for all fiscal quarters of fiscal years beginning after June 15, 2000. SFAS ~~No.~~ 133 can not be applied retroactively to financial statements of prior periods. The Company adopted SFAS No. 133 and 138 as of January 1, 2001. The adoption of SFAS No. 133 and 138 did not have a material impact on the financial position or results of operations of the Company.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(3) Liquidity and Going Concern

~~The Company~~

Big City Radio has incurred substantial net losses since inception primarily due to ~~the~~ broadcast cash flow deficits characteristic of the start up of ~~its~~ radio stations. In addition, since the majority of its broadcast properties are in various stages of development, either as a result of ~~them awaiting~~pending FCC applications and their appeals that, if granted, will permit Big City Radio to effect engineering enhancements or upgrades, ~~from pending FCC applications,~~ or as a result of ~~them being~~having recently ~~reformatted, the Company~~changed formats, Big City Radio expects to generate significant net losses for the foreseeable future, as it continues to expand its presence in major markets. In addition, because of the Company’s substantial indebtedness, a significant portion of the Company’s broadcast cash flow will be required for debt service. These matters raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made in the accompanying unaudited consolidated financial statements as a result of this uncertainty.

As a result of these factors, Big City Radio has met its ~~inability to draw on~~working capital needs primarily through borrowings, including loans from Big City Radio’s principal stockholders, Stuart and Anita Subotnick, loans under credit facilities, and proceeds from the ~~Revolving Credit Facility, the Company issued a promissory note (the “Affiliate Promissory Note”) on May 8, 2001 to borrow up to $5,000,000 from an affiliate~~issuance of the ~~Company~~senior notes in ~~order to meet the Company’s short-term~~March 1998. Since October 31, 2001, Big City Radio has met its working capital ~~needs.~~needs primarily from the proceeds of the sale of Big City Radio’s Phoenix radio stations which it completed on that date.

Big City Radio completed a sale of $174,000,000 aggregate principal amount at maturity of senior notes on March 17, 1998, generating approximately $125,400,000 of gross proceeds. Big City Radio used approximately $32,600,000 of these proceeds to repay outstanding indebtedness under a credit facility with The ~~amount outstanding under~~Chase Manhattan Bank entered into in 1996. Big City Radio has used the ~~Affiliate Promissory Note bore interest equal~~proceeds of the senior notes offering to finance the ~~lower~~acquisition costs of ~~(i) JP Morgan Chase’s prime rate plus 2.00% or (ii) the highest rate permitted by New York Law,~~radio station properties and it was due upon demand. The Company borrowed $2,235,000 under this Affiliate Promissory Note, and interest expense on the Affiliate Promissory Note during 2001 was $51,000. All amounts payable under the Promissory Note were repaid on October 12, 2001 from proceeds available from Bridge Loan (see below).

for general working capital purpose.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Cash interest commenced accruing on the ~~Company’s Senior Discount Notes~~senior notes on March 15, 2001 and ~~is payable semi-annually commencing~~semi-annual cash interest payments of $9,800,000 commenced on September 15, 2001. ~~The Company~~Big City Radio failed to make the initial semi-annual interest payment when due on September 15, 2001. In order to obtain the funds to make this payment within the 30-day grace period provided under the indenture, Big City Radio obtained a bridge loan in the amount of $15,000,000 by the assignment of Big City Radio’s revolving credit facility from the lender thereunder to a new lender. The bridge loan was secured to the same extent as the revolving credit facility and bore interest at the rate of LIBOR plus 3.0%, or a base rate plus 2.0%, at the option of Big City Radio. Big City Radio used the net proceeds of the bridge loan to pay the semi-annual interest on the senior notes due on September 15, 2001, ~~however,~~together with applicable additional interest thereon, and to repay $2,235,000 of principal indebtedness and $51,000 of interest incurred under the ~~terms~~promissory note issued to Mr. Subotnick in May 2001. Big City Radio repaid the bridge loan on October 31, 2001 with a portion of ~~the Senior Discount Notes’ Indenture, there is a grace period of thirty days in which to pay the interest due. On October 12, 2001 the Company obtained the Bridge Loan (see Note 10), and used~~ the proceeds from ~~borrowing under~~ the ~~Bridge Loan to pay~~sale of the ~~September 15, 2001 Senior Discount Note interest and applicable additional interest, and to repay the indebtedness and accrued interest on the Affiliate Promissory Note to an affiliate.~~

Phoenix radio station properties, as discussed below. Big City Radio currently does not have a credit facility.

On October 31, 2001, the Company completed the sale of its four Phoenix radio stations to Hispanic Broadcasting Corporation for a cash purchase price of ~~$34 million.~~$34,000,000. The ~~Company used a portion~~indenture governing the senior notes permits Big City Radio to reinvest the approximately $18,000,000 of ~~the~~ proceeds ~~from this sale to repay indebtedness under the Bridge Loan and the Affiliate Promissory Note to related party and will use the remainder to fund ongoing operations. Management believes the proceeds~~which remained from the sale of the Phoenix ~~Stations will provide sufficient capital to satisfy its short-term liquidity. However, because~~stations after the repayment of the ~~Company’s substantial indebtedness, a significant portion of the Company’s~~bridge loan in broadcast cash flow will be required for debt service. Management believes that its long-term liquidity can be satisfied through a combination of i) achieving positive operating results and cash flows through revenue growth and control of operating expenses and ii) the raising of additional equity and/or the restructuring of the Notes. It should be noted that there is no guarantee that the Company will be able to raise additional equity or restructure the Notes.

~~The Company has the ability to reinvest the proceeds of $34 million from the sale of the Phoenix Stations in like-assets~~assets for a period of up to one year from the date of ~~this~~these asset ~~sale.~~sales. Thereafter, any net proceeds that are not timely reinvested in broadcast assets must be used to make an offer to repurchase ~~the Senior Discount Notes.~~senior notes. As described above, ~~the Company~~Big City Radio used a portion of the proceeds to repay indebtedness under the ~~Bridge Loan~~bridge loan and ~~will use the remainder~~ to fund ~~ongoing operations. The Company is currently considering all available options to repay such amounts, if required, to~~ the ~~bondholders. These matters raise substantial doubt about the Company’s ability to continue as a going concern.~~

~~The Company had available approximately $18.2 million of cash and cash equivalents and marketable securities at December 31, 2001. Cash~~semi-annual interest ~~commenced accruing~~payment due on the ~~Company’s Senior Discount Notes~~senior notes on March 15, ~~2001~~2002. Big City Radio has been using the remaining proceeds to fund its ongoing operations, and ~~is payable semi-annually. The semi-annual interest payment is $9.8 million.~~

Cash on hand may be insufficient to support the Company’s operations (exclusive of interest payments) through December 31, 2002. In addition, because of the Company’s substantial indebtedness, a significant portion of the Company’s cash on hand will be required for debt service. Cash on hand will be insufficient to satisfy the Company’s debt service requirements for the foreseeable future. In addition, the Company is required to reinvest the net proceeds from the sale of Phoenix Stations remaining after the repayment of the Bridge Loan in like-assets for a period of up to one year from the date of this assets sales. Thereafter, any net proceedshas not reinvested ~~must be used~~such proceeds in broadcast assets. Big City Radio has not made the required offer to repurchase senior notes, because it does not have sufficient cash resources to consummate such an offer. Its failure to make an offer to repurchase constitutes an event of default under the ~~Senior Discount Notes.~~ indenture.

The Company ~~will not be able~~failed to make the ~~$9.8 million~~semi-annual interest payment of $9,800,000 due on the ~~Notes that is due~~senior notes on September 15, 2002. Big City Radio’s cash resources were insufficient to enable Big City Radio to make the semi-annual interest payment within the 30-day grace period provided under the indenture. The grace period expired on October 15, 2002, ~~and will not able to repay any net proceeds not reinvested~~thereby resulting in ~~like-assets from~~an additional event of default under the ~~sales of Phoenix Stations~~indenture. On

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

October 17, 2002, pursuant to the ~~bondholders, unless it is able~~indenture, holders of the senior notes delivered an acceleration notice to ~~obtain additional debt or equity financing or sell assets. No assurances can~~Big City Radio declaring notice to Big City Radio declaring the principal and interest on all of the senior notes to be ~~provided that~~immediately due and payable.

In light of these developments, the Company will be able to obtain any such financing or sell assets on acceptable terms or at all. In the event that the Company is unable to obtain financing or sell assets it may need to restructure the Notes. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

~~The Company will evaluate on a continuing basis~~evaluated its strategic alternatives and the most efficient use of its capital. On November 4, 2002, Big City Radio announced it had retained Jorgenson Broadcast Brokerage to market and conduct an auction sale of all of Big City Radio’s radio stations.

On November 13, 2002, Big City Radio, and the holders of approximately $128,000,000 in principal amount of the senior notes acting through an ad hoc committee of noteholders, entered into a forbearance agreement on November 13, 2002. Under the forbearance agreement, the signatory noteholders agreed to forebear, through January 31, 2003 (later extended to March 31, 2003), from taking, initiating or continuing any action to enforce the Company’s ~~capital,~~payment obligations under the senior notes, including, without limitation, any involuntary bankruptcy filing against the ~~sale~~Company, or against any property, officers, directors, employees or agents of the ~~Company’s broadcast assets and, depending~~Company to collect on ~~market conditions, debt and/~~or ~~equity financing and purchasing, restructuring, recapitalizing, refinancing~~enforce payment of any indebtedness or obligations, or to otherwise ~~retiring certain~~assert any claims or causes of action seeking payment under the ~~Company’s securities in the open market or by other means,~~senior notes, in each case ~~subject~~arising under or relating to the ~~restrictions contained~~payment default or the default arising from the failure to make the required offer to repurchase senior notes or other existing defaults known to the signatory noteholders as of November 13, 2002. Under the forbearance agreement, the Company agreed to conduct the auction of its radio stations in a good faith manner designed to sell the assets as soon as practicable for net cash consideration in an amount at least sufficient to pay all principal of, and accrued and unpaid interest on, the senior notes. If signatory noteholders reasonably believe that the Company is not conducting the auction process in good faith or is not operating or managing the business and financial affairs of the Company in good faith in the ~~Indenture governing~~ordinary course and consistent with past practices, they may notify the ~~Notes.~~Company in writing and may elect to terminate the forbearance agreement. The Company further has agreed not to pay, discharge or satisfy any liability or obligation except for obligations reflected on the Company’s balance sheet as of December 31, 2001 or incurred in the ordinary course since that date which are paid, discharged or satisfied for fair and equivalent valued in the ordinary course of business and consistent with past practices. The forbearance agreement will not prevent the trustee under the indenture or noteholders that are not parties to the forbearance agreement from pursuing remedies under the indenture.

the forbearance agreement may be terminated by either Big City Radio or the ad hoc committee upon written notice if

any party to the forbearance agreement fails to perform any of its obligations, or breaches any of its representations, covenants or warranties, under the forbearance agreement,

one or more of the asset purchase agreements is terminated or modified in any material respect; and

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Big City Radio must immediately notify the ad hoc committee by written notice of

any breach by Big City Radio of the forbearance agreement,

any breach by Big City Radio or any other party of any of the foregoing asset purchase agreements, whether or not such breach is curable, and

any termination by Big City Radio or any other party thereto of any such asset purchase agreements.

Between December 23, 2002 and January 2, 2003, Big City Radio signed asset purchase agreements to sell eleven of the twelve FCC radio stations that it owns (see note 4). If Big City Radio completes the asset sales, it will receive gross cash proceeds of approximately $197,900,000 and 3,766,478 shares of Entravision Communications Corporation’s Class A Common Stock. Under the senior notes forbearance agreement described above, Big City Radio will be obligated to apply the net proceeds of the asset sales first to pay the principal amount of the senior notes and all accrued and unpaid interest thereon through the date of such payment.

If Big City Radio completes its pending station sales and sells the sole station that is not subject to a binding purchase agreement as of this date, it will have disposed of substantially all of its operating properties. Its principal sources of liquidity will then consist of cash on hand, including any remaining proceeds of the station sales, and amounts earned on the investment of such cash, and collections of trade receivables, which amounted to $1,997,000 as of December 31, 2002. Big City Radio also may seek to obtain additional liquidity by selling shares of the Entravision Class A common stock it will receive upon completion of the Los Angeles radio stations asset sale. Assuming the closing of its pending station sales, Big City Radio believes that these liquidity sources will be sufficient to meet its short-term cash needs. The amount and nature of Big City Radio’s long-term liquidity needs will depend on, among other things, a decision by the board of directors regarding future operations, if any, of Big City Radio.

(4) Discontinued Operations

As described more fully in note 3, on November 4, 2002, Big City Radio announced its intention to undertake an auction sale of all of its radio stations. This auction process has, to date, resulted in the asset disposition transactions detailed below, which will result in the sale of eleven of the twelve FCC licenses owned by the Company. It is the intention of the Company to sell the remaining FCC license. Big City Radio has discontinued its radio station operations. The Company’s consolidated financial statements for all periods presented have been adjusted to reflect the radio station operations as discontinued operations in accordance with SFAS No. 144.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes financial information for the discontinued radio operations:

	December 31,
Radio operations	2001		2002
Property and equipment, net	$	4,687,000	$	3,246,000
Intangible, net		76,955,000		76,325,000

Net assets—discontinued radio operations	$	81,642,000		79,571,000

	For the Year Ended December 31,
	2000			2001			2002
Gross revenues	$	20,141,000		$	17,773,000		$	14,852,000
Less commissions and fees		2,341,000			1,812,000			1,384,000

Net revenues		17,800,000			15,961,000			13,468,000

Operating expenses:
Stations operating expenses, excluding depreciation and amortization		20,508,000			17,037,000			15,548,000
Impairment loss on broadcast licenses		—			—			630,000
Depreciation and amortization		3,552,000			3,555,000			1,372,000

Total operating expenses		24,060,000			20,592,000			17,550,000

Operating loss from discontinued operations		(6,260,000	)		(4,631,000	)		(4,082,000	)

Other income (expenses):
Interest expense		(18,392,000	)		(21,540,000	)		(20,570,000	)
Other, net		32,000			186,000			97,000

Total other expense		(18,360,000	)		(21,354,000	)		(20,473,000	)
Loss from discontinued operations before income tax		(24,620,000	)		(25,985,000	)		(24,555,000	)
Income tax expense		—			—			2,000,000

Loss from discontinued operations	$	(24,620,000	)	$	(25,985,000	)	$	(26,555,000	)

At December 31, 2002, the Company’s property and equipment and intangible assets from the discontinued operations were reported as assets held for sale.

On December 23, 2002, the Company entered into an asset purchase agreement to sell its radio stations KLYY-FM Arcadia, California, KSYY-FM Fallbrook, California and KVYY-FM Ventura, California to Entravision Communications Corporation for a combined purchase consideration of $100 million in cash and 3,766,478 shares of Entravision’s Class A Common Stock. The sale is subject to initial FCC approval for the assignment of the FCC licenses. On January 15, 2003, Entravision and Big City Radio entered into a time brokerage agreement following clearance of the asset sale under federal antitrust law. Under the agreement, Entravision is providing programming and related services to the stations it is purchasing from Big City Radio until the asset sale is completed or the asset purchase agreement is terminated.

On December 30, 2002, the Company entered into an asset purchase agreement to sell its radio stations WYNY-FM Briarcliff Manor, New York, WWXY-FM Hampton Bays, New York, WWYY-FM Belvidere,

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

New Jersey and WWZY-FM Long Branch, New Jersey to Nassau Broadcasting Holdings, Inc. for a total consideration of $43 million in cash. The sale is subject to initial FCC approval for the assignment of the FCC licenses.

On December 31, 2002, the Company entered into an asset purchase agreement to sell its radio stations WDEK-FM DeKalb, Illinois, WKIE-FM Arlington Heights, Illinois and WKIF-FM Kankakee, Illinois to Spanish Broadcasting Systems, Inc. (SBS) for a total consideration of $22 million in cash. The sale is subject to initial FCC approval for the assignment of the FCC licenses. On the same date, SBS and Big City Radio entered into a time brokerage agreement. Under the agreement, SBS is providing programming and related services to the stations it is purchasing from Big City Radio until the asset sale is completed or the asset purchase agreement is terminated.

On January 2, 2003, the Company entered into an asset purchase agreement to sell its radio station WXXY-FM Highland Park, Illinois to Hispanic Broadcasting Corporation (HBC) for a total consideration of $32.875 million in cash. The sale is subject to initial FCC approval for the assignment of the FCC licenses. On January 10, 2003, HBC and Big City Radio entered into a time brokerage agreement. Under the agreement, HBC is providing programming and related services to the stations it is purchasing from Big City Radio until the asset sale is completed or the asset purchase agreement is terminated.

During June 2002, the Company discontinued the operation of United Publishing of Florida (“UPF”) (which was comprised solely of publishing operations), and wrote-off the remaining $108,000 of goodwill associated with its acquisition. The decision to terminate publishing operations was made in response to the continued downturn in the music industry, advertising marketplace. As UPF’s publishing operation represented the only publishing operations of Big City Radio, Inc., the Company’s consolidated financial statements for all periods presented have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144.

Summarized financial information for the discontinued publishing operations is as follows:

	For the year ended December 31,
Publishing operations	2000			2001			2002
Net revenues	$	75,000		$	463,000		$	138,000
Operating expenses		116,000			1,108,000			883,000

Operating loss	$	(41,000	)	$	(645,000	)	$	(745,000	)

	December 31,
	2001		2002
Property and equipment, net	$	90,000	$	—
Intangible, net		108,000		—

Net assets—discontinued publishing operations	$	198,000	$	—

During the quarter ended June 30, 2002, the Company transferred $78,000 of property and equipment previously used in its publishing operations to its radio operations, and no liabilities of the discontinued publishing operations remained.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes cash flow information with respect to the discontinued radio and publishing operations:

	For the Year Ended December 31,
	2000			2001			2002
Cash flows from operating activities:
Net loss from discontinued operations	$	(24,661,000	)	$	(26,630,000	)	$	(27,300,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,555,000			3,605,000			1,395,000
Deferred income tax expense		—			—			2,000,000
Non cash interest		18,352,000			4,357,000			653,000
Loss on disposal of fixed assets		—			—			49,000
Impairment loss on broadcast license		—			—			630,000
Impairment loss on goodwill		—			—			108,000
Changes in operating assets and liabilities, net of acquisitions:
(Increase) decrease in assets:
Accounts receivable		1,232,000			214,000			1,376,000
Prepaid expenses and other current assets		(525,000	)		618,000			60,000
Other assets		(119,000	)		63,000			(60,000	)
Accounts payable		327,000			38,000			(504,000	)
Interest payable		—			5,873,000			10,110,000
Other accrual		34,000			(699,000	)		(532,000	)

Net cash used in operating activities		(1,805,000	)		(12,561,000	)		(12,015,000	)

Cash flows from investing activities:
Purchase of property and equipment		(687,000	)		(730,000	)		(275,000	)
Cash received for disposal of fixed assets		—			22,000			295,000
Purchase of publishing operation		(250,000	)		—			—

Net cash used in investing activities		(937,000	)		(708,000	)		20,000

Cash flow from financing activities:
Net cash used in financing activities		—			—			—

Cash used in discontinued operations	$	(2,742,000	)	$	(13,269,000	)	$	(11,995,000	)

(5) Acquisitions and ~~Dispositions~~Disposals

On October 31, 2001 the Company sold the assets of radio stations KEDJ-FM, KDDJ-FM, KBZR-FM, and KSSL-FM to Hispanic Broadcasting Corporation for a sales price of $34.0 million. A gain of $2.28 million on the sale of the stations was recognized during the period.

During 2001, the Company ~~severely curtailed~~ceased the development and operation of its internet portal site. The Company wrote-off all internet-related goodwill. An impairment loss of $897,000 was recognized during the period.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On November 8, 2000 the Company entered into an asset purchase agreement in which the Company acquired substantially all of the assets and properties of ~~United Publishers of Florida, Inc.,~~UPF, which owned and operated a Hispanic music trade magazine, ~~“Disco”,~~“Disco,” a graphic design business and the LatinMusicTrends.com website. The purchase price for the acquired business was $250,000 excluding acquisition related expenses and was paid in cash. Under the terms of the purchase agreement a second installment of up to $250,000 is due at the one year anniversary of the acquisition, subject to certain operating cash flow targets to be attained by the acquired business. The cash flow target was not met and accordingly no additional payment was made. In June 2002, the Company discontinued its publishing operations. The fair value of the assets acquired in this transaction is as follows:

Fixed assets		$	118,000
Goodwill			132,000

On April 12, 2000, the Company sold the assets of radio station WLBK-AM, DeKalb, Illinois for a sale price of $416,000. No gain or loss was recorded on this transaction.

On November 1, 1999 the Company consummated the acquisition, in an all stock transaction, all the issued and outstanding stock of Hispanic Internet Holdings, Inc., a privately held bilingual Online Service Provider for the U.S. Hispanic and Latin American markets. The transaction was accounted for as a purchase. The Company issued 400,000 shares of its Class A Common Stock with a fair market value of $4 per share. Under the terms of the Agreement, an additional 600,000 shares may be issued, (i) over the next five years contingent upon the successful achievement of certain annual revenue goals, or (ii) in the event of a sale or spin-off of the internet company, prior to the fifth anniversary of the merger, for a valuation of at least $10 million, or (iii) in the event of a sale of Big City Radio prior to the fifth anniversary of the merger at a price of at least $4.00 per share.

On September 28, 1999 the Company completed the acquisition of KSSL-FM (formerly KMYL-FM), Wickenburg, Arizona. The operations of this station have been included in the consolidated statements of operations from that date. The purchase price for this station was $5,600,000 excluding acquisition related expenses and was paid in cash. The fair value of the assets acquired in this transaction exclusive of acquisition costs is as follows:

Building    $ 8,000
Fixed assets    92,000
FCC broadcast license    5,500,000

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

On September 22, 1999 the Company completed the acquisition of KBZR-FM, Arizona City, Arizona. The operations of this station have been included in the consolidated statements of operations from that date. The purchase price for this station was $3,900,000 excluding acquisition related expenses and was paid in cash. The fair value of the assets acquired in this transaction exclusive of acquisition costs is as follows:

Land    $ 20,000
Fixed assets    73,000
FCC broadcast license    3,807,000

On July 30, 1999 the Company completed the acquisition of the simulcast stations, KEDJ-FM, Sun City, Arizona and KDDJ-FM, Globe, Arizona. The operations of these stations have been included in the consolidated statements of operations from that date. The purchase price for these stations was $22,000,000 excluding acquisition related expenses and was paid in cash. The fair value of the assets acquired in this transaction exclusive of acquisition costs is as follows:

Building    $ 461,000
Fixed assets    227,000
FCC broadcast license    21,312,000

On April 30, 1999 the Company signed an acquisition agreement whereby the assets of radio station KLVA-FM, Casa Grande, Arizona would be exchanged for the assets of radio station KDDJ-FM, Globe, Arizona, subject to the consummation of its purchase which occurred on July 30, 1999. Accordingly, in April 1999 the Company deposited into an escrow account the amount of $275,000 in good faith consideration. In February 2000, the Company paid the balance in the escrow account and an additional amount of $275,000, totaling $550,000, to cancel the signed KLVA-FM acquisition. The decision to abandon the transaction was made in response to a change in the engineering enhancement plan for our Phoenix radio licenses.

On March 26, 1999 the Company sold the assets of radio station WRKL-AM, New City, New York to Polnet Communications, LTD. for a sale price of $1.625 million. A gain of $663,000 on the sale of the station was recognized during the period.

On February 25, 1999 the Company completed the acquisition of WDEK-FM and WLBK-AM, DeKalb, Illinois. The operations of these stations have been included in the consolidated statements of operations from that date. The purchase price for these stations was $4,500,000, excluding acquisition related expenses, of which $450,000 was deposited into an escrow account in April 1998 in anticipation of this purchase. The fair value of the assets acquired in these transactions is as follows:

WDEK-FM

WLBK-AM
Building    $ —      $ 150,000
Fixed assets    165,000    141,000
FCC broadcast license    3,735,000    309,000

~~(5)~~(6) Cash Held in Investment, Restricted

The restricted cash balance collateralizes four letters of credit outstanding at December 31, ~~2001.~~2002. The letters of credit relate to the Chicago, Phoenix, LA office leases and the LA Stations signal upgrade. According to the Chicago lease agreement, the Company agreed to deposit the sum of $1,000,000 as security in the form of an unconditional and irrevocable letter of credit. The amount of the letter of credit will decrease $200,000 each year over 5 years. The balance was ~~$400,000~~$200,000 at December 31, ~~2001.~~2002. According to the Phoenix lease agreement, the Company agreed to deposit the sum of $269,000 as security in the form of an unconditional and irrevocable letter

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

of credit. The amount of the letter of credit will decrease $51,000 each year over 5 years. The balance was ~~$177,000~~$125,000 at December 31, ~~2001.~~2002. On September 14, 2001, the Company entered into a Cash Collateral Agreement with JPMorgan Chase. Under the agreement, the Company agreed to deposit the sum of ~~$759,500~~$760,000 to secure its two existing letters of credit relate to the LA office leases and the LA Stations signal upgrade.

~~(6)~~(7) Property and Equipment

Property and equipment at December 31, ~~2000~~2001 and ~~2001~~2002 were as follows:

2000

2001
Land    $ 245,000    $ 225,000
Building and improvements    1,943,000    1,941,000
Transmitter equipment    6,676,000    5,914,000
Furniture and office equipment    1,871,000    1,987,000
Vehicles    623,000    684,000


   11,358,000    10,751,000
Less accumulated depreciation    4,210,000    5,545,000


   $ 7,148,000    $ 5,206,000

	2001		2002
Land	$	225,000	$	—
Building and improvements		1,941,000		237,000
Transmitter equipment		5,914,000		—
Furniture and office equipment		1,987,000		531,000
Vehicles		709,000		—

		10,776,000		768,000
Less accumulated depreciation		5,570,000		392,000

	$	5,206,000	$	376,000

As discussed more fully in notes 3 and 4, the property and equipment related to the radio stations to be sold are reported as assets held for sale at December 31, 2002.

~~(7)~~BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(8) Intangibles

Intangibles at December 31, ~~2000 and~~ 2001 are as follows:

2000

2001
FCC broadcast licenses    $ 117,916,000    $ 86,839,000
Covenants not to compete    678,000    678,000
Goodwill    1,727,000    132,000


   120,321,000    87,649,000
Less accumulated amortization    9,845,000    10,586,000


   $ 110,476,000    $ 77,063,000

	2001
FCC broadcast licenses	$	86,839,000
Covenants not to compete		678,000
Goodwill		132,000

		87,649,000
Less accumulated amortization		10,586,000

	$	77,063,000

During ~~December 2001,~~June 2002, the Company ~~wrote-off $897,000~~wrote off the remaining $108,000 of goodwill associated with its discontinued publishing operations. The impairment loss on goodwill associated with the internet ~~operations.~~

operations was $897,000 for the year ended December 31, 2001.

As discussed more fully in notes 3 and 4, the FCC broadcast licenses related to the radio stations to be sold are reported as assets held for sale at December 31, 2002.

~~(8)~~(9) Senior Discount Notes

Offering of Senior Discount Notes

On March 17, 1998, ~~(the “issue date”),~~ the Company completed the ~~Note Offering.~~offering of its 11¹/4% Senior Discount Notes due 2005. The ~~$174,000,000~~$174.0 million aggregate principal amount at maturity of Notes were issued at a discount generating gross proceeds to the Company of approximately $125.4 million. They mature on March 15, 2005. The Notes ~~will accrete~~accreted in value until March 15, 2001 at a rate of ~~11.25%~~11¹/4% per annum, compounded semiannually, to an aggregate principal amount of $174.0 million. Commencing on March 16, 2001, interest on the Notes began accruing at a rate of ~~11.25%~~11¹/4% per annum and ~~will be~~is payable semiannually in cash on March 15 and September 15 through March 15, 2005.

The Company may not redeem the Notes prior to March 15, 2002. On or after such date, the Company may redeem the Notes, in whole or in part, at ~~certain~~specified redemption prices together with accrued and unpaid interest, if

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

any, to the date of redemption. The Notes are not subject to any sinking fund requirement. Upon a Change of Control (as such term is defined in the Notes), each holder of Notes has the right to require the Company to make an offer to purchase the Notes at a price equal to ~~101% of~~ the principal amount of such Notes thereafter, together with accrued and unpaid interest, if any, to the date of the purchase.

The Notes are unsecured, senior obligations of the Company and rankpari passu in right of payment to all existing and future senior indebtedness of the Company and senior to all existing and future subordinated indebtedness of the Company. The Notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries. The indenture does not restrict the ability of the Company or its subsidiaries to create, acquire or capitalize subsidiaries in the future. The Notes will be effectively subordinated to all existing and future indebtedness of the Company’s subsidiaries. Approximately $4.6 million of costs associated with the issuance of the Notes, including the underwriters fees and related professional fees are included in deferred financing fees and will be amortized over the term of the Notes.

Simultaneously with the consummation of the issuance of the Notes, the Company entered into the Revolving Credit Facility providing for up to $15 million of availability, subject to certain available borrowing

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

calculations. The Revolving Credit Facility was due to mature on March 17, 2003, the fifth anniversary of the issue date of the Senior Discount Notes, and amounts outstanding under the Revolving Credit Facility bore interest at an applicable margin plus, at the Company’s option, Chase’s prime rate (in which case the applicable margin was 2.00% subject to reduction upon obtaining performance criteria based on the Company’s leverage ratio) or the London Inter-Bank Borrowing Rate (in which case the applicable margin was 3.00% subject to reduction upon obtaining performance criteria based on the Company’s leverage ratio). The Company’s obligations under the Revolving Credit Facility were secured by a pledge of substantially all of the Company and its subsidiaries’ assets. The Company paid fees of .5% per annum, on the aggregate unused portion of the facility.

~~The Revolving Credit Facility contained certain financial~~ As more fully described in notes 3 and ~~operational covenants and other restrictions with which~~10, Big City Radio obtained a bridge loan in October 2001 by arranging for the ~~Company must comply, including, among others, limitations on capital expenditures, limitations on the incurrence~~assignment of additional indebtedness, restrictions on sale of assets, restrictions on the use of borrowings, limitations on paying cash dividends and redeeming or repurchasing capital stock of the Company or the Notes, and requirements to maintain certain financial ratios, maximum total leverage, minimum interest coverage and minimum fixed charge coverage. As of December 31, 2000 no amounts were drawn down on the Revolving Credit Facility. ~~However,~~The Bridge Loan was repaid on October 31, 2001 with a ~~$259,000 letter of credit related to the Century City office lease and a $500,000 letter of credit related to the LA Stations power signal project were issued under the Revolving Credit Facility.~~

The Revolving Credit Facility contained customary events of default, including material misrepresentations, payment defaults and default in the performance of other covenants, certain bankruptcy and ERISA defaults, judgment and cross defaults and revocation of anyportion of the ~~Company’s broadcast licenses. The Revolving Credit Facility also provided that an event of default would occur upon~~proceeds from the ~~occurrence of a “change of control.” For purposes~~sale of the ~~Revolving Credit Facility,~~Phoenix Stations. The Company currently does not have a change of control would occur when (i) any person or group other than the Principal Stockholders and their affiliates obtained the power to elect a majority of the Board of Directors, (ii) the Company failed to own 100% of the capital stock of its subsidiaries owning any of the FCC broadcast licenses or (iii) the Board of Directors did not consist of a majority of continuing directors. On October 12, 2001, the Revolving Credit Facility was assigned and the Bridge Loan obtained (see Note 10).

credit facility.

Subsidiary Guarantors

Pursuant to the terms of the indenture relating to the Notes (the “Indenture”), the direct subsidiaries of Big City Radio, ~~Inc.-consisting~~Inc., consisting of Odyssey Traveling Billboards, Inc., Big City Radio-NYC, L.L.C., Big City Radio-LA, L.L.C., Big City Radio-CHI, L.L.C., and Big City Radio-Phoenix, L.L.C. (collectively, the ~~Subsidiary~~

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Guarantors)~~“Subsidiary Guarantors”), have jointly and severally, fully and unconditionally guaranteed the obligations of Big City Radio, Inc. with respect to the Notes.

All of the then existing Subsidiary Guarantors except Odyssey Traveling Billboards, Inc. (the “Station Subsidiaries”), were created in December 1997 as special purpose Delaware limited liability companies formed at the request of the lenders under the Revolving Credit Facility for the sole purpose of facilitating the Revolving Credit Facility by holding the Company’s Federal Communications Commission (“FCC”) radio licenses. The operating agreements for the Station subsidiaries limit the activities of these companies to holding the FCC radio licenses. Odyssey Traveling Billboards, Inc. (“Odyssey”) owns and operates certain vehicles used to advertise for the Company’s radio stations. Because the Station Subsidiaries have entered into assignment and use agreements with the Company whereby the Company manages and directs the day-to-day operations of the radio stations, pays all expenses and capital costs incurred in operating the radio stations, and retains all advertising and other receipts collected in operating the radio stations, the Station Subsidiaries have no income or expenses other than the amortization of the FCC licenses. Odyssey is similarly a special purpose corporation with no income and only expenses.

The covenants in the Notes and the Indenture do not restrict the ability of the Station Subsidiaries to make cash distributions to the Company.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Set forth below is certain condensed consolidating financial information for the parent company of Big City Radio, Inc. and its Subsidiary Guarantors, as of December 31, ~~2000~~2001 and ~~2001,~~2002, and for the years ended December 31, 2000, 2001 and ~~2001.~~

~~Consolidating Balance Sheet for the year ended December 31, 2000~~

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Assets

Current assets
Cash and cash equivalents $ 862,000 $ —   $ 862,000 $ —   $ 862,000
Cash held in investment, restricted 802,000 —   802,000 —   802,000
Marketable securities 1,895,000 —   1,895,000 —   1,895,000
Accounts receivable, net of allowance 4,716,000 —   4,716,000 —   4,716,000
Interest receivable 38,000 —   38,000 —   38,000
Prepaid expenses and other current assets 981,000 —   981,000 —   981,000

Total current assets 9,294,000 —   9,294,000 —   9,294,000
Property and equipment, net 7,148,000 —   7,148,000 —   7,148,000
Investment in, and advances to, subsidiaries 109,126,000 —   109,126,000 (109,126,000 ) —
Intangibles, net 1,350,000 109,126,000 110,476,000 —   110,476,000
Deferred financing fees, net 2,747,000 —   2,747,000 —   2,747,000
Other assets 181,000 —   181,000 —   181,000

Total assets $ 129,846,000 $ 109,126,000 $ 238,972,000 $ (109,126,000 ) $ 129,846,000

Liabilities and Stockholders’
Equity (Deficiency)

Accounts payable $ 1,337,000 $ —   $ 1,337,000 $ —   $ 1,337,000
Accrued expenses 2,138,000 —   2,138,000 —   2,138,000
Interest payable —   —   —   —   —
Other current liabilities 36,000 —   36,000 —   36,000

Total current liabilities 3,511,000 —   3,511,000 —   3,511,000
Long-term liabilities
Senior discount notes 170,296,000 —   170,296,000 —   170,296,000
Deferred income tax liabilities and other long-term liabilities 2,968,000 —   2,968,000 —   2,968,000
Intercompany balances —   117,916,000 117,916,000 (117,916,000 ) —

Total long-term liabilities 173,264,000 117,916,000 291,180,000 (117,916,000 ) 173,264,000
Stockholders’ equity/(deficit)
Preferred and common stock, and additional paid-in capital 29,637,000 —   29,637,000 —   29,637,000
Other comprehensive loss (9,000 ) —   (9,000 ) —   (9,000 )
Accumulated deficit (76,557,000 ) (8,790,000 ) (85,347,000 ) 8,790,000 (76,557,000 )

(46,929,000 ) (8,790,000 ) (55,719,000 ) 8,790,000 (46,929,000 )

Total liabilities and stockholders’ equity (Deficiency) $ 129,846,000 $ 109,126,000 $ 238,972,000 $ (109,126,000 ) $ 129,846,000

2002.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Consolidating Balance Sheet for the year ended December 31, 2001

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Assets

Current assets
Cash and cash equivalents    $ 3,194,000    $ —      $ 3,194,000    $ —      $ 3,194,000
Cash held in investment, restricted    1,336,000    —      1,336,000    —      1,336,000
Marketable securities    15,000,000    —      15,000,000    —      15,000,000
Accounts receivable, net of allowance    3,817,000    —      3,817,000    —      3,817,000
Interest receivable    21,000    —      21,000    —      21,000
Prepaid expenses and other current assets    602,000    —      602,000    —      602,000





Total current assets    23,970,000    —      23,970,000    —      23,970,000
Property and equipment, net    5,206,000    —      5,206,000    —      5,206,000
Investment in, and advances to, subsidiaries    76,955,000    —      76,955,000    (76,955,000 )    —
Intangibles, net    108,000    76,955,000    77,063,000    —      77,063,000
Deferred financing fees, net    2,094,000    —      2,094,000    —      2,094,000
Other assets    112,000    —      112,000    —      112,000





Total assets    $ 108,445,000    $ 76,955,000    $ 185,400,000    $ (76,955,000 )    $ 108,445,000





Liabilities and Stockholders’
Equity (Deficiency)

Accounts payable    $ 1,428,000    $ —      $ 1,428,000    $ —      $ 1,428,000
Accrued expenses    1,988,000    —      1,988,000    —      1,988,000
Interest payable    5,873,000    —      5,873,000    —      5,873,000
Other current liabilities    79,000    —      79,000    —      79,000





Total current liabilities    9,368,000    —      9,368,000    —      9,368,000
Long-term liabilities
Senior discount notes    174,000,000    —      174,000,000    —      174,000,000
Deferred income tax liabilities and other long-term liabilities    2,704,000    —      2,704,000    —      2,704,000
Intercompany balances    —      88,558,000    88,558,000    (88,558,000 )    —





Total long-term liabilities    176,704,000    88,558,000    265,262,000    (88,558,000 )    176,704,000
Stockholders’ equity/(deficit)
Preferred and common stock, and additional paid-in capital    29,637,000    —      29,637,000    —      29,637,000
Other comprehensive loss    —      —      —      —      —
Accumulated deficit    (107,264,000 )    (11,603,000 )    (118,867,000 )    11,603,000    (107,264,000 )





   (77,627,000 )    (11,603,000 )    (89,230,000 )    11,603,000    (77,627,000 )





Total liabilities and stockholders’ equity (Deficiency)    $ 108,445,000    $ 76,955,000    $ 185,400,000    $ (76,955,000 )    $ 108,445,000

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments			Consolidated
Assets
Current assets
Cash and cash equivalents	$	3,194,000		$	—		$	3,194,000		$	—		$	3,194,000
Cash held in investment, restricted		1,336,000			—			1,336,000			—			1,336,000
Marketable securities		15,000,000			—			15,000,000			—			15,000,000
Accounts receivable, net of allowance		3,817,000			—			3,817,000			—			3,817,000
Interest receivable		21,000			—			21,000			—			21,000
Prepaid expenses and other current assets		602,000			—			602,000			—			602,000

Total current assets		23,970,000			—			23,970,000			—			23,970,000
Property and equipment, net		5,206,000			—			5,206,000			—			5,206,000
Investment in, and advances to, subsidiaries		76,955,000			—			76,955,000			(76,955,000	)		—
Intangibles, net		108,000			76,955,000			77,063,000			—			77,063,000
Deferred financing fees, net		2,094,000			—			2,094,000			—			2,094,000
Other assets		112,000			—			112,000			—			112,000

Total assets	$	108,445,000		$	76,955,000		$	185,400,000		$	(76,955,000	)	$	108,445,000

Liabilities and Stockholders’ Equity (Deficiency)
Accounts payable	$	1,428,000		$	—		$	1,428,000		$	—		$	1,428,000
Accrued expenses		1,988,000			—			1,988,000			—			1,988,000
Interest payable		5,873,000			—			5,873,000			—			5,873,000
Other current liabilities		79,000			—			79,000			—			79,000

Total current liabilities		9,368,000			—			9,368,000			—			9,368,000
Long-term liabilities
Senior discount notes		174,000,000			—			174,000,000			—			174,000,000
Deferred income tax liabilities and other		—			—			—			—			—
Long-term liabilities		2,704,000			—			2,704,000			—			2,704,000
Intercompany balances		—			88,558,000			88,558,000			(88,558,000	)		—

Total long-term liabilities		176,704,000			88,558,000			265,262,000			(88,558,000	)		176,704,000

Stockholders’ equity/(deficit)
Preferred and common stock, and additional paid-in capital		29,637,000			—			29,637,000			—			29,637,000
Other comprehensive loss		—			—			—			—			—
Accumulated deficit		(107,264,000	)		(11,603,000	)		(118,867,000	)		11,603,000			(107,264,000	)

		(77,627,000	)		(11,603,000	)		(89,230,000	)		11,603,000			(77,627,000	)

Total liabilities and stockholders’ equity (Deficiency)	$	108,445,000		$	76,955,000		$	185,400,000		$	(76,955,000	)	$	108,445,000

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Balance Sheet for the year ended December 31, 2002

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments			Consolidated
Assets
Current assets
Cash and cash equivalents	$	732,000		$	—		$	732,000		$	—		$	732,000
Cash held in investment, restricted		1,085,000			—			1,085,000			—			1,085,000
Marketable securities		1,861,000			—			1,861,000			—			1,861,000
Accounts receivable, net of allowance		1,997,000			—			1,997,000			—			1,997,000
Interest receivable		6,000			—			6,000			—			6,000
Assets held for sale		3,246,000			76,325,000			79,571,000			—			79,571,000
Prepaid expenses and other current assets		289,000			—			289,000			—			289,000

Total current assets		9,216,000			76,325,000			85,541,000			—			85,541,000
Property and equipment, net		376,000			—			376,000			—			376,000
Investment in, and advances to, subsidiaries		76,325,000			—			76,325,000			(76,325,000	)		—
Deferred financing fees, net		1,441,000			—			1,441,000			—			1,441,000
Other assets		170,000			—			170,000			—			170,000

Total assets	$	87,528,000		$	76,325,000		$	163,853,000		$	(76,325,000	)	$	87,528,000

Liabilities and Stockholders’ Equity (Deficiency)
Accounts payable	$	883,000		$	—		$	883,000		$	—		$	883,000
Accrued expenses		1,644,000			—			1,644,000			—			1,644,000
Senior discount notes		174,000,000			—			174,000,000			—			174,000,000
Interest payable		15,983,000			—			15,983,000			—			15,983,000
Other current liabilities		74,000			—			74,000			—			74,000

Total current liabilities		192,584,000			—			192,584,000			—			192,584,000
Long-term liabilities
Deferred income tax liabilities and other long term liabilities		301,000			—			301,000			—			301,000
Intercompany balances		—			88,558,000			88,558,000			(88,558,000	)		—

Total long-term liabilities		301,000			88,558,000			88,859,000			(88,558,000	)		301,000
Stockholders’ equity/(deficit)
Preferred and common stock, and additional paid-in capital		29,637,000			—			29,637,000			—			29,637,000
Other comprehensive loss		(8,000	)		—			(8,000	)		—			(8,000	)
Accumulated deficit		(134,986,000	)		(12,233,000	)		(147,219,000	)		12,233,000			(134,986,000	)

		(105,357,000	)		(12,233,000	)		(117,590,000	)		12,233,000			(105,357,000	)

Total liabilities and stockholders’ equity (deficiency)	$	87,528,000		$	76,325,000		$	163,853,000		$	(76,325,000	)	$	87,528,000

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations for the year ended December 31, 2000

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Gross revenues    $ 26,820,000    $ —      $ 26,820,000    $ —      $ 26,820,000
Less commissions and fees    3,054,000    —      3,054,000    —      3,054,000





Net revenues    23,766,000    —      23,766,000    —      23,766,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    26,047,000    —      26,047,000    —      26,047,000
Internet operating expenses, excluding depreciation and amortization    1,457,000    —      1,457,000    —      1,457,000
Corporate, general and administrative expenses    3,845,000    —      3,845,000    —      3,845,000
Cost of abandonment of station acquisition agreement    550,000    —      550,000    —      550,000
Depreciation and amortization    1,894,000    2,969,000    4,863,000    —      4,863,000





Total operating expenses    33,793,000    2,969,000    36,762,000    —      36,762,000





Operating loss    (10,027,000 )    (2,969,000 )    (12,996,000 )    —      (12,996,000 )
Other income (expenses):
Interest income    281,000    —      281,000    —      281,000
Interest expense    (18,392,000 )    —      (18,392,000 )    —      (18,392,000 )
Other, net    (83,000 )    —      (83,000 )    —      (83,000 )





Total other (expenses)    (18,194,000 )    —      (18,194,000 )    —      (18,194,000 )





Loss from continuing operating before income tax benefit, and equity in losses of Subsidiary Guarantors    (28,221,000 )    (2,969,000 )    (31,190,000 )    —      (31,190,000 )
Income tax benefit, net    63,000    —      63,000    —      63,000





Loss from continuing operating before equity in losses of Subsidiary Guarantors    (28,158,000 )    (2,969,000 )    (31,127,000 )    —      (31,127,000 )
Equity in net losses of Subsidiary Guarantors    (2,969,000 )    —      (2,969,000 )    2,969,000    —
Loss on discontinued operations    (41,000 )    —      (41,000 )    —      (41,000 )



��

Net loss    $ (31,168,000 )    $ (2,969,000 )    $ (34,137,000 )    $ 2,969,000    $ (31,168,000 )

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments		Consolidated
Gross revenues	$	6,679,000		$	—		$	6,679,000		$	—	$	6,679,000
Less commissions and fees		713,000			—			713,000			—		713,000

Net revenues		5,966,000			—			5,966,000			—		5,966,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization		5,538,000			—			5,538,000			—		5,538,000
Internet and publishing, excluding depreciation and amortization		1,457,000			—			1,457,000			—		1,457,000
Corporate, general and administrative expenses		3,845,000			—			3,845,000			—		3,845,000
Cost of abandonment of station acquisition agreement		550,000			—			550,000			—		550,000
Depreciation and amortization		1,312,000			—			1,312,000			—		1,312,000

Total operating expenses		12,702,000			—			12,702,000			—		12,702,000

Operating loss		(6,736,000	)		—			(6,736,000	)		—		(6,736,000	)
Other income (expenses):
Interest income		281,000			—			281,000			—		281,000
Other, net		(115,000	)		—			(115,000	)		—		(115,000	)

Total other (expenses)		166,000			—			166,000			—		166,000

Loss before income tax benefit, and equity in losses of Subsidiary Guarantors		(6,570,000	)		—			(6,570,000	)		—		(6,570,000	)
Income tax benefit, net		63,000			—			63,000			—		63,000

Loss before equity in losses of Subsidiary Guarantors		(6,507,000	)		—			(6,507,000	)		—		(6,507,000	)
Equity in net losses of Subsidiary Guarantors		(2,969,000	)		—			(2,969,000	)		2,969,000		—
Loss on discontinued operations		(21,692,000	)		(2,969,000	)		(24,661,000	)		—		(24,661,000	)

Net loss	$	(31,168,000	)	$	(2,969,000	)	$	(34,137,000	)	$	2,969,000	$	(31,168,000	)

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations for the year ended December 31, 2001

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Gross revenues    $ 22,395,000    $ —      $ 22,395,000    $ —      $ 22,395,000
Less commissions and fees    2,309,000    —      2,309,000    —      2,309,000





Net revenues    20,086,000    —      20,086,000    —      20,086,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    21,307,000    —      21,307,000    —      21,307,000
Internet operating expenses, excluding depreciation and amortization    436,000    —      436,000    —      436,000
Corporate, general and administrative expenses    3,610,000    —      3,610,000    —      3,610,000
Impairment loss on goodwill    897,000    —      897,000    —      897,000
Depreciation and amortization    2,005,000    2,813,000    4,818,000       4,818,000





Total operating expenses    28,255,000    2,813,000    31,068,000    —      31,068,000





Operating loss    (8,169,000 )    (2,813,000 )    (10,982,000 )    —      (10,982,000 )
Other income (expenses):
Gain on sale of stations    2,275,000    —      2,275,000    —      2,275,000
Interest income    111,000    —      111,000    —      111,000
Interest expense    (21,540,000 )    —      (21,540,000 )    —      (21,540,000 )
Other, net    11,000    —      11,000    —      11,000





Total other (expenses)    (19,143,000 )    —      (19,143,000 )    —      (19,143,000 )





Loss from continuing operations before income tax benefit, and equity in losses of Subsidiary Guarantors    (27,312,000 )    (2,813,000 )    (30,125,000 )    —      (30,125,000 )
Income tax benefit, net    63,000    —      63,000    —      63,000





Loss from continuing operations before equity in losses of Subsidiary Guarantors    (27,249,000 )    (2,813,000 )    (30,062,000 )    —      (30,062,000 )
Equity in net losses of Subsidiary Guarantors    (2,813,000 )    —      (2,813,000 )    2,813,000    —
Discontinued operations    (645,000 )    —      (645,000 )    —    (645,000 )





Net loss    $ (30,707,000 )    $ (2,813,000 )    $ (33,520,000 )    $ 2,813,000    $ (30,707,000 )

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments		Consolidated
Gross revenues	$	4,622,000		$	—		$	4,622,000		$	—	$	4,622,000
Less commissions and fees		497,000			—			497,000			—		497,000

Net revenues		4,125,000			—			4,125,000			—		4,125,000

Operating expenses:
Station operating expenses, excluding depreciation and amortization		4,272,000			—			4,272,000			—		4,272,000
Internet operating expenses, excluding depreciation and amortization		436,000			—			436,000			—		436,000
Corporate, general and administrative expenses		3,610,000			—			3,610,000			—		3,610,000
Impairment loss on goodwill		897,000			—			897,000			—		897,000
Depreciation and amortization		1,263,000			—			1,263,000			—		1,263,000

Total operating expenses		10,478,000			—			10,478,000			—		10,478,000

Operating loss		(6,353,000	)		—			(6,353,000	)		—		(6,353,000	)
Other income (expenses):
Gain on sale of stations		2,275,000			—			2,275,000			—		2,275,000
Interest income		111,000			—			111,000			—		111,000
Other, net		(173,000	)		—			(173,000	)		—		(173,000	)

Total other income		2,213,000			—			2,213,000			—		2,213,000


Loss before income tax benefit, and equity in losses of Subsidiary Guarantors		(4,140,000	)		—			(4,140,000	)		—		(4,140,000	)
Income tax benefit, net		63,000			—			63,000			—		63,000

Loss before equity in losses of Subsidiary Guarantors		(4,077,000	)		—			(4,077,000	)		—		(4,077,000	)
Equity in net losses of Subsidiary Guarantors		(2,813,000	)		—			(2,813,000	)		2,813,000		—
Loss on discontinued operations		(23,817,000	)		(2,813,000	)		(26,630,000	)		—		(26,630,000	)

Net loss	$	(30,707,000	)	$	(2,813,000	)	$	(33,520,000	)	$	2,813,000	$	(30,707,000	)

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations for the year ended December 31, 2002

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments		Consolidated
Net revenues	$	—		$	—		$	—		$	—	$	—

Operating expenses:
Corporate, general and administrative expenses		4,717,000			—			4,717,000			—		4,717,000
Depreciation and amortization		120,000			—			120,000			—		120,000

Total operating expenses		4,837,000			—			4,837,000			—		4,837,000

Operating loss		(4,837,000	)		—			(4,837,000	)		—		(4,837,000	)
Other income (expenses):
Interest income		152,000			—			152,000			—		152,000
Other, net		(21,000	)		—			(21,000	)		—		(21,000	)

Total other income		131,000			—			131,000			—		131,000

Loss before income tax benefit, and equity in losses of Subsidiary Guarantors		(4,706,000	)		—			(4,706,000	)		—		(4,706,000	)
Income tax benefit, net		4,284,000			—			4,284,000			—		4,284,000

Loss before equity in losses of Subsidiary Guarantors		(422,000	)		—			(422,000	)		—		(422,000	)
Equity in net losses of Subsidiary Guarantors		(630,000	)		—			(630,000	)		630,000		—
Loss on discontinued operations		(26,670,000	)		(630,000	)		(27,300,000	)		—		(27,300,000	)

Net loss	$	(27,722,000	)	$	(630,000	)	$	(28,352,000	)	$	630,000	$	(27,722,000	)

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows for the year ended December 31, 2000

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Net cash used in operating activities    $ (6,550,000 )    $ —      $ (6,550,000 )      $ —    $ (6,550,000 )





Cash flows from investing activities:
Purchase of property and equipment    (1,584,000 )    —      (1,584,000 )      —    (1,584,000 )
Sale of marketable securities    5,964,000    —      5,964,000      —    5,964,000
Decrease (Increase) in cash held in restricted investment    1,132,000    —      1,132,000      —    1,132,000
Cash received for radio stations sold    —      352,000    352,000      —    352,000
Investment in, and advances to, subsidiaries    352,000    (352,000 )    —        —    —
Other    35,000    —      35,000      —    35,000





Net cash provided by (used in) investing activities    5,899,000    —      5,899,000      —    5,899,000
Cash flows from financing activities:
Repayment of promissory notes    (881,000 )    —      (881,000 )      —    (881,000 )
Cash flows from discontinued operations    (37,000 )    —      (37,000 )      —    (37,000 )
Change in cash and cash equivalents    (1,569,000 )    —      (1,569,000 )      —    (1,569,000 )
Cash and cash equivalents at beginning of year    2,431,000    —      2,431,000      —    2,431,000





Cash and cash equivalents at end of year    $ 862,000    $ —      $ 862,000      $ —    $ 862,000

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments		Consolidated
Net cash used in operating activities	$	(4,784,000	)	$	—		$	(4,784,000	)	$	—	$	(4,784,000	)

Cash flows from investing activities:
Purchase of property and equipment		(895,000	)		—			(895,000	)		—		(895,000	)
Sale of marketable securities		5,964,000			—			5,964,000			—		5,964,000
Decrease in cash held in escrow		275,000			—			275,000			—		275,000
Increase in cash held in restricted investment		1,132,000			—			1,132,000			—		1,132,000
Cash received for disposal of fixed assets		10,000			—			10,000			—		10,000
Cash received for radio station sold		—			352,000			352,000			—		352,000
Investment in, and advances to, subsidiaries		352,000			(352,000	)		—			—		—

Net cash provided by investing activities		6,838,000			—			6,838,000			—		6,838,000
Cash flows from financing activities:
Repayment of promissory notes		(881,000	)		—			(881,000	)		—		(881,000	)

Net cash used in financing activities		(881,000	)		—			(881,000	)		—		(881,000	)
Cash flows used in discontinuing operations		(2,742,000	)		—			(2,742,000	)		—		(2,742,000	)

Change in cash and cash equivalents		(1,569,000	)		—			(1,569,000	)		—		(1,569,000	)
Cash and cash equivalents at beginning of year		2,431,000			—			2,431,000			—		2,431,000

Cash and cash equivalents at end of year	$	862,000		$	—		$	862,000		$	—	$	862,000

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows for the year ended December 31, 2001

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Net cash used in operating activities    $ (15,297,000 )    $ —      $ (15,297,000 )      $ —    $ (15,297,000 )





Cash flows from investing activities:
Purchase of property and equipment    (851,000 )    —      (851,000 )      —    (851,000 )
Sale of marketable securities    1,895,000    —      1,895,000      —    1,895,000
Purchase of marketable securities    (15,000,000 )    —      (15,000,000 )      —    (15,000,000 )
Decrease (Increase) in cash held in restricted investment    (534,000 )    —      (534,000 )      —    (534,000 )
Cash received for radio stations sold    —      32,692,000    32,692,000      —    32,692,000
Investment in, and advances to, subsidiaries    32,692,000    (32,692,000 )    —        —    —
Other    22,000    —      22,000      —    22,000





Net cash provided by (used in) investing activities    18,224,000    —      18,224,000         18,224,000
Cash flows from financing activities:
Cash received from bridge loan    15,000,000    —      15,000,000      —    15,000,000
Cash received from issuance of promissory note to related party    2,235,000    —      2,235,000      —    2,235,000
Repayment of bridge loan    (15,000,000 )    —      (15,000,000 )      —    (15,000,000 )
Repayment of promissory notes    (2,235,000 )    —      (2,235,000 )      —    (2,235,000 )





Net cash provided by financing activities    —      —      —        —    —
Cash flows from discontinued operations    (595,000 )    —      (595,000 )      —    (595,000 )
Change in cash and cash equivalents    2,332,000    —      2,332,000      —    2,332,000
Cash and cash equivalents at beginning of year    862,000    —      862,000      —    862,000





Cash and cash equivalents at end of year    $ 3,194,000    $ —      $ 3,194,000      $ —    $ 3,194,000

	Parent			Subsidiary Guarantors			Sub-total			Consolidation Adjustments		Consolidated
Net cash used in operating activities	$	(3,331,000	)	$	—		$	(3,331,000	)	$	—	$	(3,331,000	)

Cash flows from investing activities:
Purchase of property and equipment		(121,000	)		—			(121,000	)		—		(121,000	)
Sale of marketable securities		1,895,000			—			1,895,000			—		1,895,000
Purchase of marketable securities		(15,000,000	)		—			(15,000,000	)		—		(15,000,000	)
Increase in cash held in restricted investment		(534,000	)		—			(534,000	)		—		(534,000	)
Cash received for radio stations sold		—			32,692,000			32,692,000			—		32,692,000
Investment in, and advances to, subsidiaries		32,692,000			(32,692,000	)		—			—		—

Net cash provided by investing activities		18,932,000			—			18,932,000			—		18,932,000
Cash flows from financing activities:
Cash received from bridge loan		15,000,000			—			15,000,000			—		15,000,000
Cash received from issuance of promissory note to related party		2,235,000			—			2,235,000			—		2,235,000
Repayment of bridge loan		(15,000,000	)		—			(15,000,000	)		—		(15,000,000	)
Repayment of promissory notes		(2,235,000	)		—			(2,235,000	)		—		(2,235,000	)

Net cash provided by financing activities		—			—			—			—		—
Cash flows used in discontinuing operations		(13,269,000	)		—			(13,269,000	)		—		(13,269,000	)

Change in cash and cash equivalents		2,332,000			—			2,332,000			—		2,332,000
Cash and cash equivalents at beginning of year		862,000			—			862,000			—		862,000

Cash and cash equivalents at end of year	$	3,194,000		$	—		$	3,194,000		$	—	$	3,194,000

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows for the year ended December 31, 2002

	Parent			Subsidiary Guarantors		Sub-total			Consolidation Adjustments		Consolidated
Net cash used in operating activities	$	(3,857,000	)	$	—	$	(3,857,000	)	$	—	$	(3,857,000	)

Cash flows from investing activities:
Sale of marketable securities		13,139,000			—		13,139,000			—		13,139,000
Decrease in cash held in restricted investment		251,000			—		251,000			—		251,000

Net cash provided by investing activities		13,390,000			—		13,390,000			—		13,390,000

Net cash provided by financing activities		—			—		—			—		—
Cash flows used in discontinuing operations		(11,995,000	)		—		(11,995,000	)		—		(11,995,000	)

Change in cash and cash equivalents		(2,462,000	)		—		(2,462,000	)		—		(2,462,000	)
Cash and cash equivalents at beginning of year		3,194,000			—		3,194,000			—		3,194,000

Cash and cash equivalents at end of year	$	732,000		$	—	$	732,000		$	—	$	732,000

The condensed consolidating financial information has been prepared from the books and records maintained by the Subsidiary Guarantors and the Company. This summarized financial information may not necessarily be indicative of the results of operations or financial position had the Subsidiary Guarantors operated as independent entities.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~(9)~~(10) Promissory Note

During April 2001, the Company made a request of its bank lender that the Company be permitted to draw down on its Revolving Credit Facility. The lender declined to permit the Company to draw on the Revolving Credit Facility due to the Company’s lack of compliance with a covenant that required that the Company’s consolidated financial statements for the year ended December 31, 2000 be reported on by the Company’s independent accountants without a “going concern or like qualification or exception.” As a result of its inability to draw on the Revolving Credit Facility, the Company issued a promissory note (the “Affiliate Promissory Note”) on May 8, 2001 to borrow up to $5,000,000 from an affiliate of the Company in order to meet the Company’s short-term capital needs. The amount outstanding under the Affiliate Promissory Note bore interest equal to the lower of (i) JPMorgan Chase’s prime rate plus 2.0% or (ii) the highest rate permitted by New York ~~Law,~~law, and it was due upon demand. The Company borrowed $2,235,000 under the Affiliate Promissory Note, and interest expense on the Affiliate Promissory Note during 2001 was $51,000. All amounts payable under the Affiliate Promissory Note were repaid on October 12, 2001 ~~(see Note 3).~~

~~(10)~~using the proceeds from the Bridge Loan (see note 11).

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(11) Bridge Loan

On October 12, 2001, the Company obtained a new term loan facility (the “Bridge Loan”) in the amount of $15,000,000. The Bridge Loan was obtained by the assignment of the Company’s Revolving Credit Facility (the “Existing Credit Facility”) from the Company’s existing bank lender to a new lender. The Bridge Loan, which was repaid on October 31, 2001, bore interest at the rate of LIBOR plus 3%, or a Base Rate plus 2%, at the option of the Company. Net proceeds of the Bridge Loan were used to pay the semi-annual interest on its Senior Discount Notes, and to repay indebtedness under the Affiliate Promissory Note (see ~~discussion of liquidity and going concern in Note 3)~~note 10).

On October 31, 2001, the Company completed the sale of its four Phoenix radio station properties, KEDJ-FM, KDDJ-FM, KBZR-FM and KSSL-FM, to Hispanic Broadcasting Corporation for an aggregate cash purchase price of $34,000,000. Proceeds from this sale were used to repay indebtedness under the Bridge Loan. For the year ended December 31, 2001, the Company paid interest and loan fees of $76,000 and $1,300,000, respectively.

~~(11) Impairment Loss on Goodwill~~

The Company intents to utilize all its resources to build a major broadcast group. During 2001, the Company significantly curtailed the development and operation of its bilingual internet portal, TodoAhora.com. The decision was made based upon management’s evaluation of future revenue generation potential and the current resources needed to continue the portal’s development and operation. The Company will now focus on its remaining publishing operations. The impairment loss on internet goodwill was $897,000 for the year ended December 31, 2001.

(12) Contractual Obligations, Commitments and Contingencies

~~Leases~~

~~The Company leases studio~~Contractual Obligations and ~~office space, transmitter tower sites~~Commitments

If Big City Radio is not successful in selling the stations at all or selling the stations at prices sufficient to pay all principal of, and ~~office equipment~~accrued and unpaid interest on, the senior notes, Big City Radio will consider other strategic alternatives, including filing for protection from its creditors under ~~operating leases. Future minimum rental~~the United States bankruptcy code. Because events of default exist under the indenture governing the senior notes, Big City Radio also could be subject to an involuntary filing under the bankruptcy code initiated by noteholders or other creditors.

As of December 31, 2002, Big City Radio’s contractual obligations and commitments ~~for the remainder of the operating leases are~~were as follows:

2002    $ 2,424,000
2003    1,557,000
2004    762,000
2005    303,000
2006    81,000
Thereafter    39,000

   $ 5,166,000

	Senior Notes (Principal and Interest)		Operating Leases		Employment Contracts		Total
2003	$	189,983,000	$	1,652,000	$	804,000	$	192,439,000
2004		—		1,089,000		46,000		1,135,000
2005		—		649,000		—		649,000
2006		—		446,000		—		446,000
Thereafter		—		704,000		—		704,000

	$	189,983,000	$	4,540,000	$	850,000	$	195,373,000

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Rent expense for the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002 was approximately ~~$1,382,000,~~ $1,960,000, $2,267,000 and ~~$2,267,000~~$2,016,000 respectively.

~~Employment Contracts~~

The Company has entered into various employment contracts with 115 individuals comprised mainly of ~~mainly~~ officers and senior management that provide for minimum salaries and incentives based upon specified levels of performance. ~~The minimum payments under these contracts are as follows:~~

2002    $ 1,534,000
2003    150,000

   $ 1,684,000

Contingent Liabilities

The Company has ~~certain~~ contingent liabilities resulting from litigation and claims incident to the ordinary course of business. Management believes that the probable resolution of such contingencies will not materially affect the financial position, results of operations, or liquidity of the Company.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(13) Supplementary Information—Statement of Cash Flows

The Company acquired vehicles during the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002 through issuance of notes payable amounting to $50,000, $78,000 and $0 ~~$50,000, and $78,000~~ respectively.

Barter transactions resulted in sales of ~~$841,000,~~ $1,107,000, $1,046,000 and ~~$1,046,000~~$930,000 and related expenses of ~~$947,000,~~ $1,061,000, $910,000 and ~~$910,000~~$828,000 for the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001,~~2002, respectively.

Cash paid for interest during the years ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002 amounted to ~~$137,000,~~ $40,000, $17,183,000, and ~~$17,183,000,~~$9,807,000 respectively.

(14) Income Taxes

Income tax ~~expense—continuing operations~~expense (benefit) for the year ended December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002 is comprised of the following:

1999

2000

2001

Deferred tax benefit    $ (63,000 )    $ (63,000 )    $ (63,000 )
Other    —      —      —



   $ (63,000 )    $ (63,000 )    $ (63,000 )

	2000			2001			2002
Continuing operations:
Deferred tax benefit	$	(63,000	)	$	(63,000	)	$	(4,284,000	)
Discontinued operations:
Deferred tax expense		—			—			2,000,000

	$	(63,000	)	$	(63,000	)	$	(2,284,000	)

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

The ~~provision for income taxes—~~tax benefit from continuing operations differs from the amount computed by applying the statutory Federal income tax rate in ~~1999,~~ 2000, 2001 and ~~2001 to net loss before income taxes and discontinued operations~~2002 due to the following:

1999

2000

2001

Federal income taxes at the statutory rate    $ (9,055,000 )    $ (10,885,000 )    $ (10,544,000 )
State income taxes net of any amount of Federal income tax benefit    (1,322,000 )    (1,523,000 )    (1,480,000 )
Valuation allowance    10,279,000    12,313,000    11,972,000
Other    35,000    32,000    (11,000 )



   $ (63,000 )    $ (63,000 )    $ (63,000 )

	2000			2001			2002
Federal income taxes at the statutory rate	$	(10,899,000	)	$	(10,770,000	)	$	(10,450,000	)
State income taxes net of any amount of Federal income tax benefit		(1,523,000	)		(1,480,000	)		(1,175,000	)
Valuation allowance		12,327,000			12,198,000			7,307,000
Other		32,000			(11,000	)		34,000

	$	(63,000	)	$	(63,000	)	$	(4,284,000	)

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of deferred taxes at December 31, ~~1999,~~ 2000, 2001 and ~~2001~~2002 are as follows:

1999

2000

2001

Deferred tax assets:
Net operating loss    $ 10,077,000    $ 16,794,000    $ 23,523,000
Other    206,000    240,000    2,615,000
Book interest expense/Tax original issue discount (“OID”) 11.25% Senior Notes    11,950,000    19,823,000    27,695,000



   22,233,000    36,857,000    53,833,000



Deferred tax liabilities:
Deferred gain    (2,831,000 )    (2,679,000 )    (2,619,000 )
Book/Tax basis difference from WRNJ-FM stock purchase    (2,410,000 )    (2,348,000 )    (2,285,000 )
Depreciation and amortization    (2,490,000 )    (4,129,000 )    (3,878,000 )
Payment on Senior Discount Notes    —      —      (4,294,000 )
Other    (1,062,000 )    (1,871,000 )    (2,668,000 )



   (8,793,000 )    (11,027,000 )    (15,774,000 )



Sub-Total before valuation allowance    13,440,000    25,830,000    38,089,000
Valuation Allowance    (15,850,000 )    (28,177,000 )    (40,373,000 )



Net deferred tax asset (liability)    $ (2,410,000 )    $ (2,347,000 )    $ (2,284,000 )

	2000			2001			2002
Deferred tax assets:
Net operating loss	$	16,794,000		$	23,523,000		$	36,192,000
Other		240,000			2,615,000			3,138,000
Book interest expense/Tax original issue discount (“OID”) 11¹/4% Senior Notes		19,823,000			27,695,000			32,987,000

		36,857,000			53,833,000			72,317,000

Deferred tax liabilities:
Deferred gain		(2,679,000	)		(2,619,000	)		(2,532,000	)
Book/Tax basis difference from WRNJ-FM stock purchase		(2,348,000	)		(2,285,000	)		(2,285,000	)
Depreciation and amortization		(4,129,000	)		(3,878,000	)		(8,321,000	)
Payment on Senior Discount Notes		—			(4,294,000	)		(4,294,000	)
Other		(1,871,000	)		(2,668,000	)		(5,154,000	)

		(11,027,000	)		(15,774,000	)		(22,586,000	)

Sub-Total before valuation allowance		25,830,000			38,089,000			49,731,000
Valuation Allowance		(28,177,000	)		(40,373,000	)		(49,731,000	)

Net deferred tax asset (liability)	$	(2,347,000	)	$	(2,284,000	)	$	—

The Company has approximately ~~$57,000,000~~$88,500,000 of net operating loss carryforwards (“NOLs”) for Federal income tax purposes. These NOLs begin to expire in 2017.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. ~~Management considers projected future taxable income~~The sale of its Los Angeles, New York, and ~~tax planning strategies~~Chicago radio stations has not been taken into consideration in ~~making this assessment. At December 31, 2001, based on projections for future taxable income over~~calculating the ~~periods in which the level~~current year statement of ~~deferred tax assets are deductible, management believes that it is unlikely that the Company will realize the benefits of all these deductible differences.~~operations. Accordingly, a valuation allowance of ~~$40,373,000~~$49,731,000 has been provided for the deferred tax assets for the year ended December 31, ~~2001.~~

2002. If the sales described above are consummated, the valuation allowance will be eliminated.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

(15) Capital Stock and Related Transactions

Description of Capital Stock—The authorized capital stock of the Company consists of 120,000,000 shares of capital stock, par value $.01 per share, of which 80,000,000 shares are designated as Class A Common Stock and 20,000,000 shares are designated as Class B Common Stock. At December 31, ~~2001,~~2002, 6,226,817 shares of Class A Common Stock were issued and outstanding and 8,250,458 shares of Class B Common Stock were issued and outstanding. In addition, 8,250,458 shares of Class A Common Stock are reserved for issuance upon conversion of the Class B Common Stock. Immediately prior to the consummation of the ~~Initial Public Offering,~~initial public offering of Big City Radio Common Stock, there was one holder of Class A Common Stock and there were two holders of Class B Common Stock.

The shares of Class A Common Stock and Class B Common Stock are identical in all respects, except for voting rights and certain conversion rights and transfer restrictions in respect to the shares of the Class B Common Stock.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The holders of Class A Common Stock are entitled to one vote per share. Holders of Class B Common Stock are entitled to ten votes per share. Holders of all classes of Common Stock vote together as a single class on all matters presented to the stockholders for their vote or approval except for the election and removal of directors as described below and as otherwise required by applicable law. With respect to the election of directors, the Company’s Amended and Restated Certificate of Incorporation provides that holders of Class B Common Stock vote as a separate class to elect up to 75% of the members of the Company’s Board of Directors. Stockholders have no cumulative voting rights.

~~Employment Incentive~~—On June 18, 1998, the Company issued 93,755 shares of Class A Common Stock to the then Chief Executive Officer an as employment incentive, as required by an agreement executed prior to the Initial Public Offering. The consolidated statement of operations for the year ended December 31, 1998 reflect a charge of $808,000 relating to the award. The charge represents the fair market value of the stock and it has been reflected as a capital contribution in the accompanying consolidated financial statements.

(16) Stock Option Plans

Under the Company’s 1997, 1998 and 1999 Incentive Stock Plan (the “Incentive Stock Plan”), as amended in November 1999, 700,000, 311,500 and 2,500,000 shares, respectively of the Company’s Class A Common Stock are reserved for issuance. The types of awards that may be granted pursuant to the Incentive Stock Plan include (i) incentive stock options (“ISOs”) and (ii) nonqualified stock options (“NQSOs” and together with ISOs, “Stock Options” and “Awards”). Stock Option grants will consist of the maximum number of ISOs that may be granted to a particular grantee under applicable law with the balance of the Stock Options being NQSOs. Incentive stock options granted under both Plans are exercisable for a period of up to ten years. The following is a summary of the material features of the Incentive Stock Plan.

Subject to certain exceptions set forth in the 1997 Incentive Stock Plan, up to 700,000 shares of the Class A Common Stock may be the subject of Awards under the 1997 Incentive Stock Plan. Up to 100,000 shares of Class A Common Stock are available with respect to Awards granted to any one grantee. Shares of Class A Common Stock granted under the 1997 Incentive Stock Plan may either be authorized but unissued shares of Class A Common Stock not reserved for any other purpose or shares of Class A Common Stock held in or acquired for the treasury of the Company.

On January 16, 1998, the Company granted options to purchase an aggregate of 2,500 shares of Class A Common Stock to a certain director of the Company, at an exercise price of $7.125 per share. On April 8, 1998, the Board of Directors approved the Big City Radio, Inc. 1998 Incentive Stock Plan (the “1998 Incentive Stock

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Plan”). Subject to certain adjustments set forth in the 1998 Incentive Stock Plan, up to 300,000 shares of the Class A Common Stock may be the subject of Awards under the 1998 Incentive Stock Plan. Up to 100,000 shares of Class A Common Stock are available with respect to Awards granted to any one grantee. Shares of Class A Common Stock subject to Awards granted under the 1998 Incentive Stock Plan may either be authorized but unissued shares of Class A Common Stock not reserved for any other purpose or shares of Class A Common Stock held in or acquired for the treasury of the Company.

Shares of Class A Common Stock subject to an Award which terminates unexercised may again be subject to an Award under the 1998 Incentive Stock Plan. In addition, shares of Class A Common Stock surrendered to the Company in payment of the exercise price of applicable taxes upon exercise of an Award may also be used thereafter for additional Awards.

On July 6, 1998, the Board of Directors granted stock options to purchase an aggregate of 311,500 shares of Class A Common Stock under the 1998 Incentive Stock Plan to certain employees and officers of the Company, at an exercise price of the then market value of $7.8125 per share. On July 22, 1998, the Company granted stock options to purchase an aggregate of 33,000 shares of Class A Common Stock to certain employees of the Company at an exercise price of $7.8125 per share. On November 30, 1998, the Board of Directors granted stock options to purchase an aggregate of 47,500 shares of Class A Common Stock under the 1998 Incentive Stock Plan to certain employees of the Company, at an exercise price of the then market value of $4.375 per share. The

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

majority of these awards vest over a four-year period, with the first 20% vesting immediately at the date of the grant and the remainder vesting 20% per annum, thereafter.

On January 28, 1999, the Board of Directors granted stock options to purchase an aggregate of 75,000 shares of Class A Common Stock under the 1999 Incentive Stock Plan to certain employees and officers of the Company, at an exercise price of the then market value of $3.4375 per share. On March 11, 1999, the Company granted stock options to purchase an aggregate of 25,000 shares of Class A Common Stock to certain employees of the Company at an exercise price of $4.313 per share. On July 19, 1999, the Board of Directors granted stock options to purchase an aggregate of 6,500 shares of Class A Common Stock under the 1999 Incentive Stock Plan to certain employees of the Company, at an exercise price of the then market value of $3.625 per share. On August 20, 1999, the Board of Directors granted stock options to purchase an aggregate of 10,000 shares of Class A Common Stock under the 1999 Incentive Stock Plan to certain employees and officers of the Company, at an exercise price of the then market value of $4.0625 per share. On October 20, 1999, the Board of Directors granted stock options to purchase an aggregate of 151,000 shares of Class A Common Stock under the 1999 Incentive Stock Plan to certain employees and officers of the Company, at an exercise price of the then market value of $3.4375 per share. The majority of these awards vest over a four-year period, with the first 20% vesting immediately at the date of the grant and the remainder vesting 20% per annum, thereafter. At November 1, 1999, there were only 222,500 shares of common stock available for the grant of options under its 1999 Incentive Stock Plan. After examining the overall employee compensation, the Board of Directors concluded that additional shares of common stock be made available for the grant of options under the plan. Accordingly, the Board approved an amendment to the 1999 Incentive Stock Plan to increase the total number of shares of common stock that may be issued pursuant to options granted under the plan to 2,500,000 and to increase the aggregate number of shares of Class A Common Stock that may be issued to any one optionee under the plan from 100,000 to 1,000,000.

On November 1, 1999, the Board of Directors granted stock options to purchase an aggregate of 770,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to certain employees and officers of the Company and certain other directors and advisors of the Company, at an exercise price of the then market value of $3.5625 per share. Also on November 1, 1999, the Board of Directors granted stock options

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

to purchase an aggregate of 250,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to the new Chief Executive Officer of the Company, at an exercise price of $4.00 per share. On November 22, 1999, the Board of Directors granted stock options to purchase an aggregate of 25,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to a key employee of the Company, at an exercise price of $5 per share. The majority of these awards vest over a four-year period, with the first 20% vesting immediately at the date of the grant and the remainder vesting 20% per annum, thereafter.

On September 6, 2000, the Board of Directors granted stock options to purchase an aggregate of 25,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to a key employee of the Company, at an exercise price of the then market value of $4.00 per share. On October 19, 2000, the Board of Directors granted stock options to purchase an aggregate of 20,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to a key employee of the Company, at an exercise price of the then market value of $3.375 per share. On November 20, 2000, the Board of Directors granted stock options to purchase an aggregate of 100,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to certain employees of the Company, at an exercise price of the then market value of $2.875 per share. The majority of these awards vest over a four-year period, with the first 20% vesting immediately at the date of the grant and the remainder vesting 20% per annum, thereafter.

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On February 15, 2001, the Board of Directors granted stock options to purchase an aggregate of 15,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to certain employees of the Company, at an exercise price of the then market value of $4.50 per share. On July 17, 2001, the Board of Directors granted stock options to purchase an aggregate of 65,000 shares of Class A Common Stock under the amended 1999 Incentive Stock Plan to certain employees of the Company, at an exercise price of the then market value of $3.15 per share. The majority of these awards vest over a four-year period, with the first 20% vesting immediately at the date of the grant and the remainder vesting 20% per annum, ~~thereafter~~

thereafter.

Summary information pertaining to the plan for the year ended December 31, 2002 is as follows:

	Number of Shares		Exercise Price Per Share	Weighted Average Exercise Price
Outstanding at beginning of year	1,870,250		$2.875–7.8125	$	4.49
Cancelled	(550,250	)	2.875–7.8125		4.65

Outstanding at end of year	1,320,000		3.15–7.8125		4.42

Exercisable at end of year	1,161,500		3.15–7.8125		4.54

Available for grant at end of year	2,180,000

At December 31, 2002, the weighted average remaining contractual life of all outstanding options was 6.43 years.

The following table summarizes information concerning currently outstanding and exercisable stock options as of December 31, 2002:

	Options Outstanding at December 31, 2002			Options Exercisable at December 31, 2002
Range of Exercise Prices	Number Outstanding	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$3.15–4.00	985,000	$	3.66	833,000	$	3.68
4.0625–4.50	30,000		4.29	23,500		4.29
6.00–7.8125	305,000		6.92	305,000		6.92

	1,320,000		4.42	1,161,500		4.54

Summary information pertaining to the plan for the year ended December 31, 2001 is as ~~follow:~~

Number of
Shares

Exercise Price
Per Share

Weighted
Average
Exercise Price
Outstanding at beginning of year    1,964,100    $2.875–7.8125      $ 4.67
Granted    80,000    3.15–4.50      3.40
Exercised    —      —      —
Cancelled    173,850    3.4375–7.8125      6.03
Outstanding at end of year    1,870,250    2.875–7.8125      4.49


Exercisable at end of year    1,369,917    2.875–7.8125      4.64


Available for grant at end of year    1,629,750

follows:

	Number of Shares		Exercise Price Per Share	Weighted Average Exercise Price
Outstanding at beginning of year	1,964,100		$2.875–7.8125	$	4.67
Granted	80,000		3.15–4.50		3.40
Cancelled	(173,850	)	3.4375–7.8125		6.03

Outstanding at end of year	1,870,250		2.875–7.8125		4.49

Exercisable at end of year	1,369,917		2.875–7.8125		4.64

Available for grant at end of year	1,629,750

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2001, the weighted average remaining contractual life of all outstanding options was 7.43 years.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~The following table summarizes information concerning currently outstanding and exercisable stock options as of December 31, 2001:~~

Options Outstanding at
December 31, 2001

Options Exercisable at
December 31, 2001
Range of
Exercise Prices

Number Outstanding

Weighted Average Exercise Price

Number Exercisable

Weighted Average Exercise Price
$2.875–4.00    1,305,250      $ 3.56    910,917      $ 3.61
  4.063–5.00    65,000      4.57    38,000      4.60
  6.00–7.813    500,000      6.92    421,000      6.88



   1,870,250      4.49    1,369,917      4.64

Summary information pertaining to the plan for the year ended December 31, 2000 is as follows:

Number of
Shares

Exercise Price
Per Share

Weighted
Average
Exercise Price
Outstanding at beginning of year    2,193,300    $4.375–7.8125      $ 5.00
Granted    145,000    2.875–4.00      3.14
Exercised    8,000    3.5625–4.375      4.17
Cancelled    366,200    3.4375–7.8125      6.02
Outstanding at end of year    1,964,100    2.875–7.8125      4.67


Exercisable at end of year    1,133,400    2.875–7.8125      4.87


Available for grant at end of year    1,535,900

	Number of Shares		Exercise Price Per Share	Weighted Average Exercise Price
Outstanding at beginning of year	2,193,300		$4.375–7.8125	$	5.00
Granted	145,000		2.875–4.00		3.14
Exercised	(8,000	)	3.5625–4.375		4.17
Cancelled	(366,200	)	3.4375–7.8125		6.02

Outstanding at end of year	1,964,100		2.875–7.8125		4.67

Exercisable at end of year	1,133,400		2.875–7.8125		4.87

Available for grant at end of year	1,535,900

At December 31, 2000, the weighted average remaining contractual life of all outstanding options was 8.34 years.

~~Summary information pertaining to the plan for the year ended December 31, 1999 is as follows:~~

Number of
Shares

Exercise Price
Per Share

Weighted
Average
Exercise Price
Outstanding at beginning of year    924,800    $4.375–7.8125      $ 7.00
Granted    1,312,500    3.4375–5.00      3.67
Exercised    —      —      —
Cancelled    44,000    4.375–7.8125      7.42
Outstanding at end of year    2,193,300    3.4375–7.8125      5.00


Exercisable at end of year    1,001,550    3.4375–7.8125      5.15


Available for grant at end of year    1,306,700

~~At December 31, 1999, the weighted average remaining contractual life of all outstanding options was 9.14 years.~~

The Company accounts for its stock option plan in accordance with the provisions of Accounting Principles Board ~~(APB)~~(“APB”) Option No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such,

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. On January 1, 1996, the Company adopted SFAS No. 123, “Accounting for Stock-Based Compensation,” which permits entities to recognize as expense over the vesting period the fair value of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the provisions of APB Opinion No. 25 and provide pro forma net income and pro forma earnings per share disclosures for employee stock option grants made in 1995 and future years as if the fair-value-based method defined in SFAS No. 123 had been applied. The Company has elected to continue to apply the provisions of APB Opinion No. 25 in accounting for its Plan, and accordingly, no compensation cost has been recognized for its stock options granted at fair market value in the consolidated financial statements. Compensation cost will be recorded for options granted below fair market value.

In ~~1999,~~ 2000, 2001 and ~~2001,~~2002, had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Company’s net loss would have been increased to the pro forma amounts indicated below:

1999

2000

2001

Net income (loss):
As reported    $ (25,808,000 )    $ (31,168,000 )    $ (30,707,000 )
Pro forma    (27,825,000 )    (32,869,000 )    (32,804,000 )
Earnings (loss) per share:
As reported    (1.83 )    (2.15 )    (2.12 )
Pro forma    (1.97 )    (2.27 )    (2.27 )

	2000			2001			2002
Net loss:
As reported	$	(31,168,000	)	$	(30,707,000	)	$	(27,722,000	)
Pro forma		(32,869,000	)		(32,804,000	)		(31,322,000	)
Loss per share:
As reported		(2.15	)		(2.12	)		(1.91	)
Pro forma		(2.27	)		(2.27	)		(2.16	)

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, ~~1999,~~ 2000 and 2001, the per share weighted average fair value of stock options granted was ~~$2.41,~~ $1.99 and $2.14, respectively, on the date of grant using the modified Black-Scholes option-pricing model with the following weighted average assumptions: ~~expected dividend yield of 0%, risk-free interest rate of 5.85%, expected volatility of 50% and an expected life of 10 years for options granted in 1999;~~ expected dividend yield of 0%, risk-free interest rate of 4.93%, expected volatility of 50% and an expected life of 10 years for options granted in 2000; expected dividend yield of 0%, risk-free interest rate of 5.0%, expected volatility of 95% and an expected life of 10 years for options granted in February 2001; expected dividend yield of 0%, risk-free interest rate of 3.25%, expected volatility of 105% and an expected life of 10 years for options granted in July 2001.

There were no options granted during 2002.

(17) Unaudited Quarterly Results

The following tables contain selected unaudited consolidated statement of operations for each quarter of fiscal years 2001 and ~~2000.~~

Fiscal Year 2001


4th
Quarter

3rd
Quarter

2nd
Quarter

1st
Quarter


(in thousands, except per share data)

Net revenues    $ 4,380    $ 5,883    $ 5,700    $ 4,123
Operating loss    (3,035 )    (1,615 )    (2,448 )    (3,884 )
Net loss    (7,189 )    (7,008 )    (7,715 )    (8,795 )
Loss per common share:
Loss from continuing operations    $ (0.49 )    $ (0.48 )    $ (0.51 )    $ (0.60 )
Loss on discontinued operations    (0.01 )    —      (0.02 )    (0.01 )




Net loss    $ (0.50 )    $ (0.48 )    $ (0.53 )    $ (0.61 )
Weighted average shares outstanding:
Basic and diluted    14,477    14,477    14,477    14,477

2002. This quarterly information has been restated to reflect the reclassification of the Company’s radio station assets as discontinued operations (see note 4).

	Fiscal Year 2001
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	(in thousands, except per share data)
Net revenues	$	1,105		$	1,354		$	1,248		$	418
Operating loss		(1,571	)		(1,188	)		(1,479	)		(2,115	)
Loss from discontinued operations		(7,245	)		(6,549	)		(5,387	)		(7,449	)
Net loss		(8,795	)		(7,715	)		(7,008	)		(7,189	)

Loss per common share:
Gain/(loss) from continuing operations	$	(0.11	)	$	(0.08	)	$	(0.11	)	$	0.02
Loss on discontinued operations		(0.50	)		(0.45	)		(0.37	)		(0.52	)

Net loss	$	(0.61	)	$	(0.53	)	$	(0.48	)	$	(0.50	)
Weighted average share outstanding:
Basic and diluted		14,477			14,477			14,477			14,477

	Fiscal Year 2002
	1st Quarter (As Restated)			2nd Quarter (As Restated)			3rd Quarter (As Restated)			4th Quarter
	(in thousands, except per share data)
Net revenues	$	—		$	—		$	—		$	—
Operating loss		(946	)		(1,031	)		(1,124	)		(1,736	)
Loss from discontinued operations		(7,018	)		(6,618	)		(6,364	)		(7,300	)
Net income (loss)		(16,506	)		(7,618	)		(7,469	)		3,869

Loss per common share:
Income (loss) from continuing operations	$	(0.66	)	$	(0.07	)	$	(0.08	)	$	0.78
Loss on discontinued operations		(0.48	)		(0.46	)		(0.44	)		(0.50	)

Net income (loss)	$	(1.14	)	$	(0.53	)	$	(0.52	)	$	0.28
Weighted average share outstanding:
Basic and diluted		14,477			14,477			14,477			14,477

BIG CITY RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fiscal Year 2000


4th
Quarter

3rd
Quarter

2nd
Quarter

1st
Quarter


(in thousands, except per share data)

Net revenues    $ 5,431    $ 6,874    $ 6,815    $ 4,646
Operating loss    (3,370 )    (2,440 )    (2,862 )    (4,324 )
Net loss    (8,199 )    (6,982 )    (7,331 )    (8,656 )
Loss per common share:
Loss from continuing operations    $ (0.57 )    $ (0.48 )    $ (0.51 )    $ (0.60 )
Loss on discontinued operations    —      —      —      —




Net loss    $ (0.57 )    $ (0.48 )    $ (0.51 )    $ (0.60 )
Weighted average shares outstanding:
Basic and diluted    14,477    14,477    14,475    14,469

~~(18) Discontinued Operations~~

During June 2002, the Company discontinued the operation of UPF (which was comprised solely of publishing operations), and wrote off the remaining $108,000 of goodwill associated with its acquisition. The decision to terminate publishing operations was made in response to the continued downturn in the music industry advertising marketplace. As UPF’s publishing operation represented the only publishing operations of Big City Radio, Inc., the Company’s consolidated financial statements for all periods presented have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS 144. Revenues related to the publishing operations, recorded as discontinued operations, were $463,000 and $75,000 for the year ended December 31, 2001 and 2000, respectively.

~~(19) Events (unaudited) subsequent to the date of the Independent Auditor’s Report.~~

On December 23, 2002, Big City Radio, Inc., a Delaware corporation (“Big City”), and its license holding subsidiary, Big City Radio-LA, L.L.C, entered into an asset purchase agreement to sell radio broadcast stations KVYY-FM, licensed to Ventura, California, KLYY-FM, licensed to Arcadia, California and KSYY-FM, licensed to Fallbrook, California (collectively, the “Los Angeles Stations”), to Entravision Communications Corporation, a Delaware corporation (“Entravision”), for $100 million in cash and approximately 3.77 million shares of Entravision’s Class A common stock. The transaction is subject to customary closing conditions, including the receipt of the approval of the Federal Communications Commission (“FCC”) for the transfer of the FCC licenses of the Los Angeles Stations. The shares of Entravision’s Class A common stock when issued and delivered to Big City will be registered under the Securities Act of 1933, as amended, under a Registration Statement on Form S-4. In connection with the asset purchase agreement, Big City Radio-LA, L.L.C. and Entravision agreed to enter into a time brokerage agreement upon the earlier of expiration or termination of any waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The parties received oral notice of early termination of the waiting period on January 10, 2003 and entered into the time brokerage agreement on January 15, 2003. The time brokerage agreement will permit Entravision to broadcast Entravision’s programming over the Los Angeles Stations pending the consummation of the asset sale.

On December 30, 2002, Big City and its license holding subsidiary, Big City Radio-NY, L.L.C., entered into an asset purchase agreement to sell radio broadcast stations WYNY-FM, licensed to Briarcliff Manor, New York, WWZY-FM, licensed to Long Branch, New Jersey, WWXY-FM, licensed to Hampton Bays, New York, and WWYY-FM, licensed to Belvidere, New Jersey, to Nassau Broadcasting Holdings, Inc., a New Jersey corporation, for $43 million in cash. The transaction is subject to customary closing conditions, including the receipt of the approval of the FCC for the transfer of the FCC licenses of the stations.

On December 31, 2002, Big City and its license holding subsidiary, Big City Radio-CHI, L.L.C., entered into an asset purchase agreement to sell radio broadcast stations WDEK-FM, licensed to De Kalb, Illinois, WKIE-FM, licensed to Arlington Heights, Illinois and WKIF-FM, licensed to Kankakee, Illinois (collectively,

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

the “92 Stations”), to Spanish Broadcasting System of Illinois, Inc., a Delaware corporation (“SBS”), for $22 million in cash. Big City Radio-CHI, L.L.C. and Spanish Broadcasting System of Illinois, Inc. entered into a time brokerage agreement which will permit Spanish Broadcasting System of Illinois to broadcast the programming of Spanish Broadcasting System of Illinois over these stations pending consummation of the asset sale. The transaction is subject to customary closing conditions, including the receipt of the approval of the FCC for the transfer of the FCC licenses of the stations.

On January 2, 2003, Big City Radio and its license holding subsidiary, Big City Radio-CHI, L.L.C., entered into an asset purchase agreement to sell radio broadcast station WXXY-FM, licensed to Highland Park, Illinois, to HBC Illinois, Inc., a Delaware corporation and an affiliate of Hispanic Broadcasting Corporation, for $32,875,000 in cash. On January 10, 2003, Big City Radio-CHI, L.L.C. and HBC Illinois entered into a time brokerage agreement, which will permit HBC Illinois to broadcast the programming of HBC Illinois over WXXY-FM pending the consummation of the asset sale. Big City Radio, Big City Radio-CHI, L.L.C. and HBC Illinois also entered into an amendment to the asset purchase agreement to reflect the time brokerage agreement between the parties. HBC Illinois has entered into an agreement with Superior Broadcasting of Chicago, LLC whereby, upon the closing of the asset sale between Big City Radio and HBC Illinois, Superior Broadcasting will hold the FCC licenses and certain other assets of the newly acquired station and HBC Illinois will program the station under a time brokerage agreement. Superior Broadcasting and HBC License Corporation have entered into an option agreement by which HBC License Corporation has an option to purchase the FCC licenses and certain assets used by the station, subject to prior FCC consent. Upon completion of Hispanic Broadcasting Corporation’s proposed merger with Univision Communications Inc., it is anticipated that Superior Broadcasting will file an application with the FCC requesting consent to the assignment of the station’s FCC licenses to HBC License Corporation. The sale contemplated by the asset purchase agreement with HBC Illinois is subject to customary closing conditions, including the receipt of the approval of the FCC for the transfer of the FCC licenses of the stations.

~~(20) Adoption of Statement of Financial Accounting Standards No. 142~~

On January 1, 2002, the Company adopted the provision of SFAS No. 142. The following table presents the net loss (in thousands) and basic and diluted net loss per share as if the broadcast licenses and goodwill had not been amortized during the period presented:

Year Ended December 31,


1999

2000

2001

Reported net loss    $ (25,808 )    $ (31,168 )    $ (30,707 )
Add back: Goodwill amortization    53    321    319
Add back: Broadcast license amortization    2,512    2,970    2,813



Adjusted net loss    $ (23,243 )    $ (27,877 )    $ (27,575 )
Basic and diluted net loss per share:
Reported net loss    $ (1.83 )    $ (2.15 )    $ (2.12 )
Add back: Goodwill amortization    0.00    0.02    0.02
Add back: Broadcast license amortization    0.18    0.21    0.19



Adjusted net loss    $ (1.65 )    $ (1.92 )    $ (1.91 )

~~SCHEDULE II~~

~~BIG CITY RADIO, INC.~~

~~VALUATION AND QUALIFYING ACCOUNTS~~

Balance at
Beginning
of Period

Charged
to Costs and
Purchases

Other
Charges

Deductions/
Write-offs

Balance at
End of Period
Allowances for doubtful accounts, etc. (deducted from current receivables):
Year ended December 31, 1999    $ 119,000    $ 241,000    $ —      $ (125,000 )    $ 235,000
Year ended December 31, 2000    $ 235,000    $ 796,000    $ —      $ (693,000 )    $ 338,000
Year ended December 31, 2001    $ 338,000    $ 704,000    $ —      $ (584,000 )    $ 458,000

~~BIG CITY RADIO, INC.~~

~~CONSOLIDATED BALANCE SHEETS~~

September 30, 2002

December 31, 2001

Assets

Current assets:
Cash and cash equivalents    $ 323,000    $ 3,194,000
Cash held in investment, restricted    1,297,000    1,336,000
Marketable securities    3,079,000    15,000,000
Accounts receivable, net of allowance of $292,000 and $458,000 in 2002 and 2001, respectively    2,269,000    3,817,000
Interest receivable    9,000    21,000
Prepaid expenses and other current assets    640,000    602,000


Total current assets    7,617,000    23,970,000
Property and equipment, net    3,970,000    5,206,000
Intangibles, net    76,955,000    77,063,000
Deferred financing fees, net    1,605,000    2,094,000
Other assets    170,000    112,000


Total assets    $ 90,317,000    $ 108,445,000


Liabilities and Stockholders’ Equity (Deficiency)

Current liabilities:
Accounts payable    $ 696,000    $ 1,428,000
Accrued expenses    1,198,000    1,988,000
Interest payable    10,771,000    5,873,000
Senior discount notes (note 7)    174,000,000    —
Other current liabilities    69,000    79,000


Total current liabilities    186,734,000    9,368,000


Long-term liabilities:
Senior discount notes    —      174,000,000
Other long-term liabilities    389,000    420,000
Deferred income tax liabilities    2,237,000    2,284,000
Commitments, contingencies and going concern
Stockholders’ equity (deficiency):
Preferred stock, $.01 par value. Authorized 20,000,000 shares; zero shares issued and outstanding in 2002 and 2001    —      —
Common stock, Class A, $.01 par value. Authorized 80,000,000 shares; issued and outstanding 6,226,817 shares in 2002 and 2001    62,000    62,000
Common stock, Class B, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 8,250,458 shares in 2002 and 2001    83,000    83,000
Additional paid-in capital    29,492,000    29,492,000
Accumulated deficit    (128,680,000 )    (107,264,000 )


   (99,043,000 )    (77,627,000 )


Total liabilities and stockholders’ equity (deficiency)    $ 90,317,000    $ 108,445,000

~~See accompanying notes to consolidated financial statements~~

~~BIG CITY RADIO, INC.~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

Nine Months Ended September 30,


2002

2001

Gross revenues    $ 11,282,000    $ 17,508,000
Less: commissions and fees    1,055,000    1,803,000


Net revenues    10,227,000    15,705,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    12,026,000    16,731,000
Internet operating expenses, excluding depreciation and amortization    —      421,000
Corporate, general and administrative expenses    2,816,000    2,752,000
Depreciation and amortization    1,126,000    3,748,000


Total operating expenses    15,968,000    23,652,000


Operating loss    (5,741,000 )    (7,947,000 )
Other income (expenses):
Interest income    128,000    42,000
Interest expense    (15,181,000 )    (15,016,000 )
Other, net    (11,000 )    (197,000 )


Total other expenses    (15,064,000 )    (15,171,000 )
Loss from continuing operations before income taxes    (20,805,000 )    (23,118,000 )
Income tax benefit, net    47,000    47,000


Loss from continuing operations    (20,758,000 )    (23,071,000 )
Discontinued operations (Note 6):
Loss on discontinued publishing operations    (658,000 )    (447,000 )


Net loss    $ (21,416,000 )    $ (23,518,000 )


Basic and diluted loss per share:
Loss from continuing operations    $ (1.43 )    $ (1.59 )
Loss on discontinued publishing operations    (0.05 )    (0.03 )


Net loss    $ (1.48 )    $ (1.62 )


Weighted average shares outstanding    14,477,000    14,477,000

~~See accompanying notes to consolidated financial statements~~

~~BIG CITY RADIO, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~Nine months ended September 30, 2002 and 2001~~

2002

2001

Cash flows from operating activities:
Net loss from continuing operations    $ (20,758,000 )    $ (23,071,000 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization    1,126,000    3,748,000
Non cash interest    489,000    4,194,000
Non cash change in other comprehensive loss    —      9,000
Deferred income taxes    (47,000 )    (46,000 )
Impairment loss on goodwill    108,000    —
Loss on sale of fixed assets    28,000    2,000
Disposal of fixed assets    21,000    —
Change in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable    1,548,000    (466,000 )
Interest receivable    12,000    35,000
Prepaid expenses and other current assets    (38,000 )    486,000
Other assets    (58,000 )    (26,000 )
Increase (decrease) in liabilities:
Accounts payable    (732,000 )    827,000
Accrued expenses    (790,000 )    (530,000 )
Interest payable    4,898,000    10,815,000
Other liability    (41,000 )    133,000


Net cash used in operating activities    (14,234,000 )    (3,890,000 )


Cash flows from investing activities:
Purchase of property and equipment    (251,000 )    (552,000 )
Sales of marketable securities    11,921,000    1,895,000
Decrease in cash held in restricted investment    39,000    14,000
Cash received for disposal of fixed assets    295,000    22,000


Net cash provided by investing activities    12,004,000    1,379,000


Cash flows from financing activities:
Cash received from issuance of promissory note to related party    —      2,235,000


Net cash provided by financing activities    —      2,235,000


Cash flows from discontinued operations    (641,000 )    (409,000 )
Change in cash and cash equivalents    (2,871,000 )    (685,000 )
Cash and cash equivalents at beginning of period    3,194,000    862,000


Cash and cash equivalents at end of period    $ 323,000    $ 177,000

~~See accompanying notes to consolidated financial statements.~~

~~BIG CITY RADIO, INC.~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)~~

Common Stock

Additional
Paid-In
Capital

Accumulated Deficit

Total


Shares

Amount

Balance at December 31, 2001    14,477,275    $ 145,000    $ 29,492,000    $ (107,264,000 )    $ (77,627,000 )
Net loss    —      —      —      (21,416,000 )    (21,416,000 )





Balance at September 30, 2002    14,477,275    $ 145,000    $ 29,492,000    $ (128,680,000 )    $ (99,043,000 )

~~See accompanying notes to consolidated financial statements~~

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~1. Basis of Presentation~~

The Company owns and operates radio stations in three of the largest radio markets in the United States. The Company’s radio broadcast properties are located in or adjacent to major metropolitan markets and utilize innovative engineering techniques and low-cost, ratings-driven operating strategies to develop these properties into successful metropolitan radio stations.

The Company owns HIH Acquisition, Inc.(“HIH”) which in turn owns United Publishers of Florida, Inc., (“UPF”) which published the Hispanic music trade magazine, “Disco,” operated a graphic design business and owns the LatinMusicTrends.com website. In response to the continued downturn in the music industry advertising marketplace, during June 2002, the Company ceased the operation of UPF, and wrote-off the remaining $108,000 of goodwill associated with UPF. As discussed in Note 6, this was treated as discontinued operations. The Company also owns Independent Radio Rep, LLC, an in-house rep firm to represent it in generating national Hispanic radio business.

~~The accompanying consolidated financial statements include the accounts of Big City Radio, Inc. and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated.~~

The accompanying interim consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (the “2001 Form 10-K”). In the opinion of management all adjustments, consisting only of normal recurring adjustments, necessary to present fairly in all material respects the financial position of the Company as of September 30, 2002 and the results of its operations for the nine months ended September 30, 2002, and its cash flows for the nine months ended September 30, 2002 and 2001 have been included. The results of operations for the interim period are not necessarily indicative of the results which may be realized for the full year.

~~2. Earnings Per Share~~

Basic earnings per share excludes all dilutive securities. It is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur if securities to issue common stock were exercised or converted into common stock. In calculating diluted earnings per share, no potential shares of common stock are included in the computation when a loss from continuing operations available to common stockholders exists. For the nine months ended September 30, 2002 and 2001, the Company had losses from continuing operations. The Company had antidilutive options amounting to 1,338,000 and 1,833,000 at September 30, 2002 and 2001, respectively, which were not included in the computation of diluted earnings per share. In addition, if an acquisition by any person, group of affiliated persons or entity of all of the stock of the Company or of all or substantially all of the assets of the

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Company occurs on or prior to November 1, 2004 at a price of at least $4.00 per share of Class A Common Stock, the former stockholders of HIH will be entitled to receive 600,000 shares of the Company’s Class A Common Stock.

~~3. Acquired Intangible Assets and Goodwill~~

~~The carrying amount of unamortized intangible assets are as follows (in thousands):~~

December 31, 2001

September 30, 2002
Broadcast licenses    $ 76,955    $ 76,955
Goodwill    108    —


   $ 77,063    $ 76,955

The amortization expense on broadcast license was $0 and $2,207,000 for the nine months ended September 30, 2002 and 2001, respectively. The amortization expense on goodwill was $0 and $239,000 for the nine months ended September 30, 2002 and 2001, respectively.

~~The following table presents net loss (in thousands) and basic and diluted net loss per share as if the broadcast license and goodwill had not been amortized during the periods presented.~~

For the Nine Months
Ended September 30,


2002

2001

Reported net loss    $ (21,416 )    $ (23,518 )
Add back: Goodwill amortization    —      239
Add back: Broadcast license amortization    —      2,207


Adjusted net loss    $ (21,416 )    $ (21,072 )


Basic and diluted net loss per share:
Reported net loss    $ (1.48 )    $ (1.62 )
Add back: Goodwill amortization    —      0.02
Add back: Broadcast license amortization.    —      0.15


Adjusted net loss    $ (1.48 )    $ (1.45 )

~~4. Recent Accounting Pronouncements~~

~~Business Combinations and Goodwill and Other Intangible Assets~~

~~In July 2001, the Financial Accounting Standards Board or FASB issued SFAS No. 141,~~~~Business Combinations~~~~, and SFAS No. 142,~~~~Goodwill and Other Intangible Assets~~. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria that intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS ~~No. 142. SFAS No.~~ 142 ~~requires that~~and stopped amortizing its FCC broadcast licenses as these intangible assets ~~with definite useful lives be amortized over their~~

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS 144,~~~~Accounting for the Impairment or Disposal of Long-Lived Assets.~~

~~The Company adopted SFAS No. 141 and SFAS No. 142 effective January 1, 2002. Any goodwill and any intangible asset~~were determined to have an indefinite useful ~~life that was acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue~~life. Accordingly, deferred tax liabilities related to ~~be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature. Goodwill and~~these intangible assets ~~acquired in business combinations completed before July 1, 2001 have been amortized through December 31, 2001.~~

~~SFAS No. 141 requires that upon adoption~~could no longer be utilized to support the realization of ~~SFAS No. 142, the~~deferred tax benefits. The Company ~~evaluate~~has restated its ~~existing intangible assets and goodwill that was acquired in~~quarterly results to record a ~~prior purchase business combination, and make any necessary reclassifications in order to conform with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon adoption~~deferred tax valuation allowance of SFAS No. 142, the Company reassessed the useful lives and residual values of all intangible assets acquired in business combinations accounted for using the purchase method. In addition, to the extent the Company identified an intangible asset as having an indefinite useful life, the Company was required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142 within the first interim period. Any impairment loss would have been measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle. No significant adjustments or impairment losses resulted from the adoption of SFAS No. 141 and SFAS No. 142.

~~In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill and intangible assets (comprised of broadcast license) effective January 1, 2002. During~~$8.6 million during the quarter ended March 31, 2002 ~~the Company completed the transitional impairment test, which did not result in impairment of recorded intangible assets. In June 2002, the Company ceased the operation of UPF,~~ and wrote off the remaining $108,000 of goodwill associated with UPF. As of September 30, 2002, the Company has no remaining unamortized goodwill, and has unamortized broadcast licenses in the amount of $76,955,000.

~~Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of~~

~~In August 2001, the FASB issued SFAS No. 144,~~~~Accounting for the Impairment or Disposal of Long-Lived Assets~~ ~~(“SFAS No. 144”), which supersedes both SFAS No. 121,~~~~Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of~~ ~~(“SFAS No. 121”), and the accounting and reporting provisions of APB Opinion No. 30,~~~~Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions~~ ~~(“Opinion 30”), for the disposal of a segment of a business (as previously defined in that Opinion). SFAS 144~~

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

retains the fundamental provisions in SFAS No. 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant implementation issues associated with SFAS No. 121. For example, SFAS No. 144 provides guidance on how a long-lived asset that is used as part of a group should be evaluated for impairment, establishes criteria for when a long-lived asset is held for sale, and prescribes the accounting for a long-lived asset that will be disposed of other than by sale. SFAS No. 144 retains the basic provisions of Opinion 30 on how to present discontinued operations in the income statement but broadens that presentation to include a component of an entity (rather than a segment of a business). Unlike SFAS No. 121, an impairment assessment under SFAS No. 144 will never result in a write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS No. 142,~~Goodwill and Other Intangible Assets.~~

~~In June 2002, the Financial Accounting Standards Board issued FASB Statement No. 146,~~~~Accounting for Costs Associated with Exit or Disposal Activities~~~~(“SFAS No. 146”) which nullifies Emerging Issues Task Force (EITF) Issue 94-3~~~~Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity~~ ~~(including Certain Costs Incurred in a Restructuring) (“Issue 94-3”).~~

The Company is required to adopt SFAS No. 146 on exit and disposal activities that are initiated after December 31, 2002, with early application encouraged. The Company will adopt SFAS No. 146 on those transactions after December 31, 2002. As of the present day, the Company does not expect a material impact on the financial position, cash flow or results of operations of the Company in connection with adopting SFAS No. 146.

~~5. Senior Discount Notes~~

~~Offering of Senior Discount Notes~~

The Company completed a private placement of $174.0 million aggregate principal amount, at maturity, of 11.25% Senior Discount Notes due 2005 (the “Notes”) on March 17, 1998 (the “Notes Offering”), generating approximately $125.4 million of gross proceeds for the Company of which the Company used approximately $32.6 million to repay outstanding indebtedness under its previous credit facility. The Company has used the proceeds of the Notes Offering to finance the acquisition costs of radio station properties and the remaining proceeds were used for general working capital purposes. On March 15, 2001, the Notes commenced accruing cash interest at 11.25% per annum. Semi-annual cash interest payments of $9.8 million commenced on September 15, 2001. (For a discussion of the Company’s current liquidity issues, including events of default under the Indenture governing the Notes and the acceleration of the principal of and interest on the Notes, see Note 7 below.)

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Subsidiary Guarantors~~

~~Pursuant to the terms of the indenture~~additional tax expense relating to the Notes (the “Indenture”), the direct subsidiaries of Big City Radio, Inc.—consisting of Odyssey Traveling Billboards, Inc., Big City Radio-NYC, L.L.C., Big City Radio-LA, L.L.C., Big City Radio-CHI, L.L.C. (collectively, the “Subsidiary Guarantors”) have, jointly and severally, fully and unconditionally guaranteed the obligations of Big City Radio, Inc. with respect to the Notes.

All of the then existing Subsidiary Guarantors except Odyssey Traveling Billboards, Inc. (the “Station Subsidiaries”), were created in December 1997 as special purpose Delaware limited liability companies formed for the sole purpose of holding the Company’s Federal Communications Commission (“FCC”) radio licenses. The operating agreements for the Station Subsidiaries limit the activities of these companies to owning the FCC radio licenses. Odyssey Traveling Billboards, Inc. owns and operates certain vehicles used to advertise for the Company’s radio stations. Because the Station Subsidiaries have entered into assignment and use agreements with the Company whereby the Company manages and directs the day-to-day operations of the radio stations, pays all expenses and capital costs incurred in operating the radio stations, and retains all advertising and other receipts collected in operating the radio stations, the Station Subsidiaries have no income or expenses other than the amortization of the FCC licenses. Odyssey Traveling Billboards, Inc. is similarly a special purpose corporation with no income and only expenses.

~~The covenants~~increase in the ~~Notes and~~deferred tax liability of $.5 million during the ~~Indenture do not restrict the ability of the Station Subsidiaries to make cash distributions to the Company.~~

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Set forth below is certain condensed consolidating and consolidated financial information for the parent company, Big City Radio, Inc. and for the Subsidiary Guarantors, with consolidation adjustments, as ofquarters ended March 31, 2002, June 30, 2002, September 30, 2002, and ~~for the nine months ended September 30, 2001 and~~December 31, 2002.

~~Consolidating Balance Sheet~~

~~September 30, 2002~~

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Assets

Current assets:
Cash and cash equivalents    $ 3,402,000    $ —      $ 3,402,000    $ —      $ 3,402,000
Cash held in investment, restricted    1,297,000    —      1,297,000    —      1,297,000
Accounts receivable, net of allowance    2,269,000    —      2,269,000    —      2,269,000
Interest receivable    9,000    —      9,000    —      9,000
Prepaid expenses and other current assets.    640,000    —      640,000    —      640,000





Total current assets    7,617,000    —      7,617,000    —      7,617,000
Property and equipment, net    3,970,000    —      3,970,000    —      3,970,000
Investment in, and advances to subsidiaries.    76,955,000    —      76,955,000    (76,955,000 )    —
Intangibles, net    —      76,955,000    76,955,000    —      76,955,000
Deferred financing fees, net    1,605,000    —      1,605,000    —      1,605,000
Other assets    170,000    —      170,000    —      170,000





Total assets    $ 90,317,000    $ 76,955,000    $ 167,272,000    $ (76,955,000 )    $ 90,317,000





Liabilities and Stockholders’ Equity (Deficiency)

Accounts payable    $ 696,000    $ —      $ 696,000    $ —      $ 696,000
Accrued expenses    1,198,000    —      1,198,000    —      1,198,000
Interest payable    10,771,000    —      10,771,000    —      10,771,000
Senior discount notes    174,000,000    —      174,000,000    —      174,000,000
Other current liabilities    69,000    —      69,000    —      69,000





Total current liabilities    186,734,000    —      186,734,000    —      186,734,000
Long-term liabilities:
Deferred income tax liabilities and other long-term liabilities    2,626,000    —      2,626,000    —      2,626,000
Intercompany balances    —      88,558,000    88,558,000    (88,558,000 )    —





Total long-term liabilities    2,626,000    88,558,000    91,184,000    (88,558,000 )    2,626,000
Stockholders’ equity (deficiency):
Preferred and common stock, and additional paid-in capital    29,637,000    —      29,637,000    —      29,637,000
Accumulated deficit    (128,680,000 )    (11,603,000 )    (140,283,000 )    11,603,000    (128,680,000 )





Total liabilities and stockholders’ equity (deficiency)    $ 90,317,000    $ 76,955,000    $ 167,272,000    $ (76,955,000 )    $ 90,317,000

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Consolidating Statement of Operations~~

~~Nine months ended September 30, 2001~~

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Gross revenues    $ 17,508,000 $ —   $ 17,508,000    $ —   $ 17,508,000
Less commissions and fees    1,803,000 —   1,803,000    —   1,803,000




Net revenues    15,705,000 —   15,705,000    —   15,705,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    16,731,000 —   16,731,000    —   16,731,000
Internet operating expenses, excluding depreciation and amortization    421,000 —   421,000    —   421,000
Corporate, general and administrative expenses    2,752,000 —   2,752,000    —   2,752,000
Depreciation and amortization    1,541,000 2,207,000 3,748,000    —   3,748,000




Total operating expenses    21,445,000 2,207,000 23,652,000    —   23,652,000
Operating loss    (5,740,000 ) (2,207,000 ) (7,947,000 )    —   (7,947,000 )
Other income (expenses):
Interest income    42,000 —   42,000    —   42,000
Interest expense    (15,016,000 ) —   (15,016,000 )    —   (15,016,000 )
Other, net    (197,000 ) —   (197,000 )    —   (197,000 )




Total operating expenses    (15,171,000 ) —   (15,171,000 )    —   (15,171,000 )
Loss from continuing operations before income tax benefit, and equity in losses of Subsidiary Guarantors    (20,911,000 ) (2,207,000 ) (23,118,000 )    —   (23,118,000 )
Income tax benefit, net    47,000 —   47,000    —   47,000




Loss before equity in losses of Subsidiary Guarantors    (20,864,000 ) (2,207,000 ) (23,071,000 )    —   (23,071,000 )
Equity in net losses of Subsidiary Guarantors    (2,207,000 ) —   (2,207,000 )    2,207,000 —
Loss on discontinued publishing operations    (447,000 ) —   (447,000 )    —   (447,000 )




Net loss    $ (23,518,000 ) $ (2,207,000 ) $ (25,725,000 )    $ 2,207,000 $ (23,518,000 )

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Consolidating Statement of Operations~~

~~Nine Months Ended September 30, 2002~~

Parent

Subsidiary Guarantors

Sub-Total

Consolidation Adjustments

Consolidated

Gross revenues    $ 11,282,000      $ —    $ 11,282,000      $   —    $ 11,282,000
Less commissions and fees    1,055,000      —    1,055,000      —    1,055,000





Net revenues    10,227,000      —    10,227,000      —    10,227,000
Operating expenses:
Station operating expenses, excluding depreciation and amortization    12,026,000      —    12,026,000      —    12,026,000
Corporate, general and administrative expenses    2,816,000      —    2,816,000      —    2,816,000
Depreciation and amortization    1,126,000      —    1,126,000      —    1,126,000





Total operating expenses    15,968,000      —    15,968,000      —    15,968,000
Operating loss    (5,741,000 )      —    (5,741,000 )      —    (5,741,000 )
Other income (expenses):
Interest income    128,000      —    128,000      —    128,000
Interest expense    (15,181,000 )      —    (15,181,000 )      —    (15,181,000 )
Other, net    (11,000 )      —    (11,000 )      —    (11,000 )





Total operating expenses    (15,064,000 )      —    (15,064,000 )      —    (15,064,000 )
Loss from continuing operations before income tax benefit, and equity in losses of Subsidiary Guarantors    (20,805,000 )      —    (20,805,000 )      —    (20,805,000 )
Income tax benefit, net    47,000      —    47,000      —    47,000





Loss before equity in losses of Subsidiary Guarantors    (20,758,000 )      —    (20,758,000 )      —    (20,758,000 )
Equity in net losses of Subsidiary Guarantors    —        —    —        —    —
Loss on discontinued publishing operations    (658,000 )      —    (658,000 )      —    (658,000 )





Net loss    $ (21,416,000 )      $ —    $ (21,416,000 )      $ —    $ (21,416,000 )

This summarized financial information for the Subsidiary Guarantors has been prepared from the books and records maintained by the Subsidiary Guarantors and the Company. The summarized financial information may not necessarily be indicative of the results of operations or financial position had the Subsidiary Guarantors operated as independent entities.

~~6. Discontinued Operations~~

During June 2002, the Company discontinued the operation of UPF (which was comprised solely of publishing operations), and wrote off the remaining $108,000 of goodwill associated with its acquisition. The decision to terminate publishing operations was made Late in response to the continued downturn in the music industry advertising marketplace. As UPF’s publishing operation represented the only publishing operations of Big City Radio, Inc., the Company’s consolidated financial statements for all periods presented have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144.

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Summarized financial information for the discontinued operations is as follows:~~

Nine Months Ended September 30,

2002

2001
Revenues    $ 138,000    $ 360,000

September 30, 2002

December 31, 2001
Property and equipment, net      $ —    $ 90,000
Intangible, net      —    108,000


Net assets—discontinued operations      $ —    $ 198,000

~~During~~ the quarter ended ~~June 30,~~December 31, 2002, ~~the Company transferred $78,000 of property and equipment previously from the discontinued operations to the continuing operations, no liabilities of the discontinued operations remained.~~

~~7. Liquidity and Going Concern~~

As is described more fully below, events of default exist under the Indenture governing the Company’s Notes and the Company has entered into a Forbearance Agreement, as amended, with the holders of approximately $128 million principal amount at maturity of the Notes, although the Forbearance Agreement will not prevent the trustee under the Indenture or note-holders that are not parties to the Forbearance Agreement from pursuing remedies under the Indenture, as provided therein.

The Company has incurred substantial net losses since inception primarily due to the broadcast cash flow deficits of the start up of its radio stations. In addition, since the majority of its broadcast properties are in stages of development, either as a result of pending FCC applications or appeals thereof that, if granted, will permit the Company to effect engineering enhancements or upgrades, or as a result of having recently changed formats, the Company expects to generate significant net losses for the foreseeable future. In addition, because of the Company’s substantial indebtedness, a significant portion of the Company’s broadcast cash flow is required for debt service. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Furthermore, on November 4, 2002, the Company announced its intentiondecision to auction its ~~stations. No assurances~~radio stations and its implementation thereof, such deferred tax liabilities can be ~~provided that~~utilized to support the realization of deferred tax benefits, and the Company will be successful in selling the stations at all or selling the stations at prices sufficient to pay the principal of, and accrued and unpaid interest on, the Notes. In the absence of successful sales, the Company will consider other strategic alternatives, including filing for protection under the United States bankruptcy laws. No adjustments have been made in the accompanying unaudited consolidated financial statements asrecorded a ~~result of these uncertainties.~~

During April 2001, the Company made a request of its bank lender that the Company be permitted to draw down on its Revolving Credit Facility. The lender declined to permit the Company to draw on this Revolving Credit Facility due to the Company’s lack of compliance with a covenant that required that the Company’s consolidated financial statements for the year ended December 31, 2000 be reported on by the Company’s independent accountants without a “going concern or like qualification or exception.” As a result of its inability to draw on the Revolving Credit Facility, the Company issued a promissory note (the “Affiliate Promissory Note”) on May 8, 2001 to borrow up to $5,000,000 from Stuart Subotnick, a majority shareholder, in order to meet the Company’s short-term working capital needs. All amounts payable under the Promissory Note were repaid on October 12, 2001 from proceeds available from the Bridge Loan (as defined below).

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Cash interest commenced accruing on the Company’s Notes on March 15, 2001 and semi-annual payments commenced on September 15, 2001. The Company failed to make the initial interest payment on September 15, 2001. However, under the termsreduction of the ~~Indenture, there is a grace period~~deferred tax valuation allowance of thirty days in which to pay the interest due. On October 12, 2001, the Company obtained the Bridge Loan, and used the proceeds from borrowing under the Bridge Loan to pay the September 15, 2001 Note interest payment and applicable additional interest, and to repay the indebtedness and accrued interest on the Affiliate Promissory Note.

~~On October 31, 2001, the Company completed the sale of its four Phoenix radio stations to Hispanic Broadcasting Corporation for a cash purchase price of $34 million, which resulted in a gain of $2.3~~$12.9 million. The Company used a portion of the proceeds from this sale to repay indebtedness under the Bridge Loan and has been using the remainder of the sale proceeds to fund ongoing operations. However, because of the Company’s substantial indebtedness, the remainder of the Phoenix stations sales proceeds was required for the March 15, 2002 semi-annual interest payment and to fund ongoing operations. Moreover, the Company did not have the necessary cash resources to make the September 15, 2002 interest payment of $9.8 million on the Notes. The Company had available approximately $3.4 million of cash, cash equivalents and marketable securities at September 30, 2002. The grace period with respect to the non-payment of interest lapsed on October 15, 2002, thereby resulting in an event of default under the Indenture governing the Notes. On October 17, 2002, certain holders of the Company’s Notes delivered notice to the Company declaring the principal and interest on all of the Notes to be immediately due and payable.

Furthermore, the Indenture permits the Company to reinvest the net proceeds from the sale of the Phoenix stations in broadcast assets for a period of up to one year from the date of this asset sale. Thereafter, any portion of the approximately $18 million of net proceeds which remained after the repayment of the Bridge Loan that were not reinvested in broadcast assets were required to be used to make an offer to repurchase the Notes. As described above, the Company used a portion of the net proceeds to repay indebtedness under the Bridge Loan and has been using the remainder of the sale proceeds to fund the March 15, 2002 semi-annual interest payment and ongoing operations. The Company did not make an offer to repurchase the Notes, because it does not have sufficient cash resources to consummate such an offer. As a result, an event of default has occurred under the Indenture governing the Notes.

The Company has evaluated its strategic alternatives and the most efficient use of its capital, including, without limitation, the sale of the Company’s broadcast assets and, depending on market conditions, debt and/or equity financing and purchasing, restructuring, recapitalizing, refinancing or otherwise retiring certain of the Company’s securities in the open market or by other means, in each case subject to the restrictions contained in the Indenture governing the Notes. As a result, on November 4, 2002 the Company announced it had retained Jorgenson Broadcast Brokerage to market and conduct an auction of all of the Company’s radio stations.

Proceeds from any sales of the stations will be utilized first to pay the principal of, and accrued and unpaid on, the Notes. The sale of any of the stations will be subject to the approval of the Company’s Board of Directors as well as the approval of the FCC. If the sale of the stations constitutes a sale of all or substantially all of the assets of the Company, then the station sale will be subject to shareholder approval.

No assurances can be provided that the Company will be successful in selling the stations at all or selling the stations at prices sufficient to pay the principal of, and accrued and unpaid interest on, the Notes. In the absence of successful sales, the Company will consider other strategic alternatives, including filing for protection under the United States bankruptcy code. In addition, because an event of default exists under the Company’s

~~BIG CITY RADIO, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Indenture, the Company could also be subject to an involuntary filing under the bankruptcy code. No adjustments have been made in the accompanying unaudited consolidated financial statements as a result of these uncertainties.

The Company, the Subsidiary Guarantors and the holders of approximately $128 million principal amount at maturity of the Notes entered into a Forbearance Agreement on November 13, 2002. The Forbearance Agreement was amended as of January 14, 2003. Under the Forbearance Agreement, as amended, the signatory note-holders have agreed to forbear, through March 31, 2003, from taking, initiating or continuing any action to enforce the Company’s payment obligations under the Notes (including, without limitation, any involuntary bankruptcy filing against the Company) or against any property, officers, directors, employees or agents of the Company to collect on or enforce payment of any indebtedness or obligations, or to otherwise assert any claims or causes of action seeking payment under the Notes, in each case arising under or relating to the payment default or the default arising from the failure to make the required offer to repurchase Notes or other existing defaults known to the signatory note-holders as of the date thereof. The Company agreed to conduct the auction of its stations in a good faith manner designed to sell the assets as soon as practicable for cash consideration in an amount at least sufficient to satisfy the Notes. In the event that the signatory note-holders reasonably believe that the Company is not conducting the auction process in good faith or is not operating or managing the business and financial affairs of the Company in good faith in the ordinary course and consistent with past practices, they may notify the Company in writing and may elect to terminate the Forbearance Agreement. The Company further agreed not to pay, discharge or satisfy any liability or obligation except for obligations reflected on the Company’s balance sheet as of December 31, 2001 or incurred in the ordinary course since that date which are paid, discharged or satisfied for fair and equivalent value in the ordinary course of business and consistent with past practices. The Forbearance Agreement will not prevent the trustee under the Indenture or note-holders that are not parties to the Forbearance Agreement from pursuing remedies under the Indenture, as provided therein.

~~8. Other Transactions~~

On December 23, 2002, Big City Radio, Inc., a Delaware corporation (“Big City”), and its license holding subsidiary, Big City Radio-LA, L.L.C, entered into an asset purchase agreement to sell radio broadcast stations KVYY-FM, licensed to Ventura, California, KLYY-FM, licensed to Arcadia, California and KSYY-FM, licensed to Fallbrook, California (collectively, the “Los Angeles Stations”), to Entravision Communications Corporation, a Delaware corporation (“Entravision”), for $100 million in cash and approximately 3.77 million shares of Entravision’s Class A common stock. The transaction is subject to customary closing conditions, including the receipt of the approval of the Federal Communications Commission (“FCC”) for the transfer of the FCC licenses of the Los Angeles Stations. The shares of Entravision’s Class A common stock when issued and delivered to Big City will be registered under the Securities Act of 1933, as amended, under a Registration Statement on Form S-4. In addition, Big City Radio-LA, L.L.C. and Entravision will enter into a time brokerage agreement upon the earlier of expiration or termination of any waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The time brokerage agreement will permit Entravision to broadcast Entravision’s programming over the Los Angeles Stations pending the consummation of the asset sale.

~~COMPANY NAME~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

On December 31, 2002, Big City and its license holding subsidiary, Big City-CHI, L.L.C., entered into an asset purchase agreement to sell radio broadcast stations WDEK-FM, licensed to De Kalb, Illinois, WKIE-FM, licensed to Arlington Heights, Illinois and WKIF-FM, licensed to Kankakee, Illinois (collectively, the “92 Stations”), to Spanish Broadcasting System of Illinois, Inc., a Delaware corporation (“SBS”), for $22 million in cash. Big City Radio-CHI, L.L.C. and Spanish Broadcasting System of Illinois, Inc. entered into a time brokerage agreement which will permit Spanish Broadcasting System of Illinois to broadcast the programming of Spanish Broadcasting System of Illinois over these stations pending consummation of the asset sale. The transaction is subject to customary closing conditions, including the receipt of the approval of the FCC for the transfer of the FCC licenses of the stations.

Annex A

ASSET PURCHASE AGREEMENT

BY AND AMONG

BIG CITY RADIO, INC.,

BIG CITY RADIO-LA, L.L.C.

as Seller,

and

ENTRAVISION COMMUNICATIONS CORPORATION,

as Purchaser

Dated as of December 23, 2002

TABLE OF CONTENTS

			Page
ARTICLE 1. DEFINITIONS AND REFERENCES			A-1

ARTICLE 2. PURCHASE AND SALE			A-1
2.1.	Purchase and Sale of Assets		A-1
	2.1.1.	FCC Licenses	A-1
	2.1.2.	Leased Transmitter Sites	A-1
	2.1.3.	Transmitter Equipment	A-2
	2.1.4.	Studio Sites	A-2
	2.1.5.	Studio Equipment	A-2
	2.1.6.	Certain Intangible Property	A-2
	2.1.7.	Business Records	A-2
2.2.	Excluded Assets		A-2
	2.2.1.	Cash	A-2
	2.2.2.	Accounts Receivables	A-2
	2.2.3.	Deposits and Prepaid Expenses	A-2
	2.2.4.	Certain Books and Records	A-2
	2.2.5.	Securities	A-3
	2.2.6.	Insurance	A-3
	2.2.7.	Time Sales Agreements	A-3
	2.2.8.	Pre-Closing Claims	A-3
	2.2.9.	Rights Under this Agreement	A-3
	2.2.10.	Employee Benefit Plans	A-3
	2.2.11.	Name	A-3
2.3.	Assumed Contracts		A-3
2.4.	No Liabilities		A-3
	2.4.1.	Liabilities Related to the Excluded Assets	A-3
	2.4.2.	Liabilities Prior to the Closing Date	A-3
	2.4.3.	Taxes	A-4
	2.4.4.	Employees	A-4
	2.4.5.	Liabilities Related to this Agreement	A-4
	2.4.6.	Accounts Payable	A-4
	2.4.7.	Litigation	A-4

ARTICLE 3. ESCROW DEPOSIT; PURCHASE PRICE; CLOSING			A-4
3.1.	Escrow Deposit		A-4
3.2.	Purchase Price		A-4
3.3.	Time of Closing		A-5
3.4.	Closing Procedures		A-5
3.5.	Allocation of Purchase Price		A-5
3.6.	Prorations		A-5

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER			A-6
4.1.	Organization; Good Standing		A-6
4.2.	Due Authorization		A-6
4.3.	Execution and Delivery		A-6
4.4.	Governmental Approvals		A-7
4.5.	Title to Personal Property		A-7
4.6.	Transmitter and Studio Sites		A-7
4.7.	Tangible Personal Property		A-7
4.8.	FCC Licenses		A-7

A-i

		Page
4.9.	Reports	A-8
4.10.	Taxes	A-8
4.11.	Environmental Matters	A-8
4.12.	Litigation	A-9
4.13.	Contracts and Agreements	A-9
4.14.	Business Records	A-9
4.15.	Third Party Consents	A-9
4.16.	Finders and Brokers	A-9
4.17.	Disclaimer of Warranties; Limitations of Warranties	A-9
4.18.	Registration Statement and Information Statement	A-10

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER		A-10
5.1.	Organization and Good Standing	A-10
5.2.	Due Authorization	A-10
5.3.	Execution and Delivery	A-10
5.4.	Consents	A-11
5.5.	Finders and Brokers	A-11
5.6.	Qualification	A-11
5.7.	Financial Ability	A-11
5.8.	Issuance of the Shares	A-11
5.9.	Registration Statement and Information Statement	A-12
5.10.	SEC Reports	A-12

ARTICLE 6. CERTAIN COVENANTS AND AGREEMENTS		A-12
6.1.	Regulatory Approvals	A-12
6.2.	Third Party Consents and Notices	A-13
6.3.	Access to Information	A-14
6.4.	Confidentiality	A-14
6.5.	Public Announcements	A-14
6.6.	Ordinary Course of Business	A-15
6.7.	Control of the Station	A-15
6.8.	Risk of Loss	A-15
6.9.	Collection of Receivables	A-15
6.10.	Time Brokerage Agreement	A-16
6.11.	Filings; Other Actions	A-16
6.12.	Employees	A-17
6.13.	KLYY Upgrade	A-17

ARTICLE 7. CONDITIONS TO PURCHASER’S CLOSING		A-17
7.1.	Representations and Warranties	A-17
7.2.	Covenants	A-17
7.3.	FCC Order	A-18
7.4.	HSR Act	A-18
7.5.	No Orders	A-18
7.6.	Third Party Consents	A-18
7.7.	Closing Deliveries	A-18
7.8.	Registration Statement	A-18
7.9.	Information Statement	A-18

ARTICLE 8. CONDITIONS TO SELLER’S CLOSING		A-19
8.1.	Representations and Warranties	A-19
8.2.	Covenants	A-19
8.3.	FCC Order	A-19

A-ii

		Page
8.4.	HSR Act	A-19
8.5.	No Orders	A-19
8.6.	Closing Deliveries	A-19
8.7.	Listing of Shares	A-19
8.8.	Registration Statement	A-19
8.9.	Information Statement	A-20

ARTICLE 9. DOCUMENTS TO BE DELIVERED AT CLOSING		A-20
9.1.	Delivery by Seller	A-20
9.2.	Delivery by Purchaser	A-20

ARTICLE 10. TERMINATION		A-20
10.1.	Termination	A-20
10.2.	Effect of Termination	A-21
10.3.	Release of Deposit	A-21

ARTICLE 11. MISCELLANEOUS PROVISIONS		A-21
11.1.	Survival	A-21
11.2.	Specific Performance	A-21
11.3.	Additional Actions, Documents and Information	A-22
11.4.	Fees and Expenses	A-22
11.5.	Transfer Taxes	A-22
11.6.	Notices	A-22
11.7.	Waiver	A-23
11.8.	Benefit and Assignment	A-23
11.9.	Entire Agreement; Amendment	A-24
11.10.	Severability	A-24
11.11.	Headings	A-24
11.12.	Governing Law; Jurisdiction	A-24
11.13.	Signature in Counterparts	A-24

~~iii~~

A-iii

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of the 23^rd day of December, 2002, by and among BIG CITY RADIO, INC., a Delaware corporation (“BCR”), BIG CITY RADIO-LA, L.L.C., a Delaware limited liability company (“BCR License Sub”; BCR, together with BCR License Sub, “Seller”), and ENTRAVISION COMMUNICATIONS CORPORATION, a Delaware corporation (“Purchaser”).

WHEREAS, Seller is the licensee of the following radio broadcast stations (collectively the “Stations”): KVYY-FM, licensed to Ventura, California; KLYY-FM, licensed to Arcadia, California; and KSYY-FM, licensed to Fallbrook, California;

WHEREAS, Seller owns the assets which are used in the operation of the Stations; and

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, certain of the radio station properties and assets relating to the Stations as described herein under the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE 1.

DEFINITIONS AND REFERENCES

Capitalized terms used herein without definition shall have the respective meanings assigned thereto in Annex I attached hereto and incorporated herein for all purposes of this Agreement (such definitions to be equally applicable to both the singular and plural forms of the terms defined). Unless otherwise specified, all references herein to “Articles” or “Sections” are to Articles or Sections of this Agreement. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

ARTICLE 2.

PURCHASE AND SALE

2.1. Purchase and Sale of Assets.

Subject to the conditions set forth in this Agreement, at the Closing, Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, all right, title and interest of Seller in and to all of the assets relating to the Stations (the “Purchased Assets”), free and clear of all Liens (other than Permitted Liens), including:

2.1.1. FCC Licenses.

All licenses, construction permits or authorizations issued by or pending before the FCC for use in the operation of the Stations that are set forth onSchedule 2.1.1 attached hereto, together with any and all renewals, extensions and modifications thereof (the “FCC Licenses”).

2.1.2. Leased Transmitter Sites.

The leasehold interests of Seller at each of the sites described onSchedule 2.1.2 hereto (the “Leased Transmitter Sites”).

2.1.3. Transmitter Equipment.

The broadcast towers, antennas, main and back-up transmitters and generators, STLs and other tangible personal property owned by Seller and located, or otherwise held for use, at the Leased Transmitter Sites, together with replacements thereof and additions thereto made between the date hereof and the Closing.

2.1.4. Studio Sites.

The leasehold interests of Seller at each of the sites described onSchedule 2.1.4 hereto (the “Studio Sites”).

2.1.5. Studio Equipment.

All studio equipment, production and imaging equipment, office equipment, furniture, vehicles and other items of tangible personal property owned by Seller and used, or held for use, in the operation of the Stations, together with replacements thereof and additions thereto made between the date hereof and the Closing.

2.1.6. Certain Intangible Property.

All intellectual property of Seller related to the operation of the Stations, including promotional materials, tapes, record libraries, the call letters, Marti frequencies trademarks, trade names, copyrights, internet domain names and similar items of intellectual property of the Stations, including all of Seller’s rights to use the trade name “Viva 107.1”, and including all of Seller’s rights to use the trade names “Viva” and “Viva Alternativa” in any of the geographic areas served by the Stations as of the date hereof.

2.1.7. Business Records.

Unless as may be otherwise required by law, the books and records related to the Purchased Assets, such as property tax records, logs, all materials maintained in the FCC public file relating to the Stations, technical data, political advertising records and all other records, correspondence with and documents pertaining to governmental authorities and similar third parties (the “Business Records”).

2.2. Excluded Assets.

Notwithstanding the terms ofSection 2.1, Seller shall not assign, transfer, convey or deliver to Purchaser, and Purchaser shall not purchase and accept, and the Purchased Assets shall not include, any of Seller’s right, title and interest in and to any of the following assets (the “Excluded Assets”):

2.2.1. Cash.

All cash and cash equivalents of Seller or the Stations on hand on the day immediately preceding the Closing Date.

2.2.2. Accounts Receivables.

Any accounts receivable, notes receivable or other receivables of Seller (including Tax refunds).

2.2.3. Deposits and Prepaid Expenses.

All deposits and prepaid expenses of the Stations.

2.2.4. Certain Books and Records.

Seller’s corporate seal, minute books, charter documents corporate stock record books and other books and records that pertain to the organization of Seller.

2.2.5. Securities.

All securities of any kind owned by Seller.

2.2.6. Insurance.

All insurance contracts or proceeds thereof.

2.2.7. Time Sales Agreements.

All time sales agreements or barter rights of the Stations.

2.2.8. Pre-Closing Claims.

All claims arising out of acts occurring prior to the Closing Date, or claims that relate to the period prior to the Closing Date.

2.2.9. Rights Under this Agreement.

All of the rights of Seller under or pursuant to this Agreement or any other rights in favor of Seller pursuant to the other agreements contemplated hereby or thereby.

2.2.10. Employee Benefit Plans.

All pension, profit sharing, retirement, bonus, medical, dental, life, accident insurance, disability, executive or deferred compensation, and other similar fringe or employee benefit plans.

2.2.11. Name.

All rights to the name “Big City” and “Big City Radio” and any logo or variation thereof and the goodwill associated therewith, and all rights of Seller to the trade name “Viva” and any derivatives thereof except to the extent set forth inSection 2.1.6.

2.3. Assumed Contracts.

At the Closing, Purchaser shall assume the obligations of Seller for periods on and after the Closing Date under the agreements set forth onSchedule 2.3 hereof (the “Assumed Contracts”), and Purchaser agrees to pay and perform the Assumed Contracts from and after the Closing Date.

2.4. No Liabilities.

Except as specifically set forth inSection 2.3 above, Purchaser does not assume, and shall in no event be liable for, any Liability of the Stations or Seller, including the following Liabilities:

2.4.1. Liabilities Related to the Excluded Assets.

Any Liabilities of Seller incurred, arising from or out of, in connection with or as a result of claims made by or against Seller with respect to the Excluded Assets.

2.4.2. Liabilities Prior to the Closing Date.

Except as provided in the Time Brokerage Agreement, any Liabilities incurred, arising from or out of, in connection with or as a result of the operation of the Stations or the ownership or use of the Purchased Assets

prior to the Closing Date, and any Liabilities incurred, arising from or out of, in connection with or as a result of Seller’s operations of any assets other than the Stations, the condition of Seller’s other assets or places of business prior to the Closing Date.

2.4.3. Taxes.

Any Liabilities of Seller for any Taxes.

2.4.4. Employees.

Any Liabilities to former or current officers, directors, employees, shareholders or Affiliates of Seller, including any Liabilities of Seller in connection with any employment agreements or contracts, employee benefit plans or collective bargaining, labor or employment agreements or other similar arrangements or obligations in respect of retiree health benefits.

2.4.5. Liabilities Related to this Agreement.

Any Liabilities of Seller incurred, arising from or out of, or in connection with this Agreement, the transactions contemplated hereby, or the events or negotiations leading up to this Agreement.

2.4.6. Accounts Payable.

Seller’s accounts payable as of the Closing.

2.4.7. Litigation.

Any existing, pending or future litigation of Seller related to any of the Liabilities set forth in thisSection 2.4 or otherwise incurred, arising out of, or related to events occurring prior to the Closing Date, including the litigation set forth onSchedule 4.12.

ARTICLE 3.

ESCROW DEPOSIT; PURCHASE PRICE; CLOSING

3.1. Escrow Deposit.

For and in partial consideration of the execution and delivery of this Agreement, within one (1) Business Day after the execution and delivery of this Agreement, Purchaser shall deposit in escrow with United Bank, 1667 K Street, N.W., Washington, D.C. 20006 (the “Deposit Escrow Agent”), an amount equal to One Million Dollars ($1,000,000) in cash, said amount to be held as an earnest money deposit (the “Deposit”), in accordance with the terms and conditions of this Agreement and the Deposit Escrow Agreement dated as of the date hereof among Purchaser, Seller and the Deposit Escrow Agent (the “Deposit Escrow Agreement”).

3.2. Purchase Price.

3.2.1. The aggregate consideration to be paid by Purchaser for the Purchased Assets shall consist of the Cash Payment and the Shares (collectively, the “Purchase Price”). Purchaser shall pay the Purchase Price to Seller at Closing in the manner set forth inSection 3.2.2.

3.2.2. At the Closing, (a) Purchaser shall pay One Hundred Million Dollars ($100,000,000) in cash (the “Cash Payment”) to Seller by wire transfer of immediately available funds to an account or accounts identified by Seller in writing at least three (3) Business Days prior to Closing; and (b) Purchaser shall deliver to Seller a

stock certificate or stock certificates evidencing Three Million Seven Hundred Sixty-Six Thousand Four Hundred Seventy-Eight (3,766,478) shares of Class A Common Stock, par value $.0001 per share, of Purchaser (the “Shares”) free and clear of all Liens and restrictions on transfer; provided, however, that the number of Shares shall be adjusted to reflect any stock dividends, combinations, splits or similar recapitalization events occurring or having occurred between the date of this Agreement and the Closing with respect to the Class A Common Stock of Purchaser.

3.3. Time of Closing.

The closing for the sale and purchase of the Purchased Assets (the “Closing”) shall be held at the offices of Hogan & Hartson L.L.P., 8300 Greensboro Drive, Suite 1100, McLean, Virginia 22102 (or such other place as may be agreed upon by the parties in writing). Subject to the satisfaction or waiver of the conditions precedent set forth inArticle 7 andArticle 8 of this Agreement, the Closing shall occur on such date (the “Closing Date”) that is the fifth (5^th) Business Day after the date on which the FCC Order shall have been granted. The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date.

3.4. Closing Procedures.

At the Closing, Seller shall deliver to Purchaser such bills of sale, instruments of assignment, transfer and conveyance and similar documents as Purchaser shall reasonably request. Against such delivery, Purchaser shall (a) pay the Cash Payment to Seller in accordance withSection 3.2 above, (b) deliver a stock certificate or stock certificates evidencing the Shares to Seller in accordance withSection 3.2 above, and (c) execute and deliver an assumption agreement with respect to the Assumed Contracts in a form reasonably acceptable to both Seller and Purchaser. Each party will cause to be prepared, executed and delivered all other documents required to be delivered by such party pursuant to this Agreement and all other appropriate and customary documents as another party or its counsel may reasonably request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed.

3.5. Allocation of Purchase Price.

3.5.1. Seller and Purchaser each represent, warrant, covenant, and agree with each other that the Purchase Price shall be allocated among the classes of Purchased Assets for each Station for all purposes (including financial, accounting and Tax purposes), as agreed by the parties within sixty (60) days after the date hereof. If Seller and Purchaser are unable to agree on such allocation within sixty (60) days following execution of this Agreement, Seller and Purchaser agree to retain a nationally recognized appraisal firm experienced in valuing radio broadcast properties which is mutually acceptable to Seller and Purchaser (the “Appraisal Firm”) to appraise the classes of Purchased Assets of each Station. The Appraisal Firm shall be instructed to perform an appraisal of the classes of Purchased Assets of each Station and to deliver a report to Seller and Purchaser as soon as reasonably practicable. Purchaser shall pay the fees, costs and expenses of the Appraisal Firm whether or not the transactions contemplated hereby are consummated.

3.5.2. Seller and Purchaser agree, pursuant to Section 1060 of the Code, that the Purchase Price shall be allocated in accordance with thisSection 3.5, and that all Tax returns and reports shall be filed consistent with such allocation. Notwithstanding any other provision of this Agreement, the provisions of thisSection 3.5 shall survive the Closing Date without limitation.

3.6. Prorations.

3.6.1. Subject to the terms and conditions of the Time Brokerage Agreement, all items of income and expense arising directly from the operation of the Stations with respect to the Purchased Assets and the Assumed Contracts on or before the close of business on the Closing Date shall be for the account of Seller and thereafter

shall be for the account of Purchaser. Proration of the items described below between Seller and Purchaser shall be effective as of 11:59 p.m., local time, on such date and shall occur as follows with respect to those rights, liabilities and obligations of Seller transferred to and assumed by Purchaser hereunder.

3.6.2. Subject to the terms and conditions of the Time Brokerage Agreement, liability for state and local Taxes assessed on the Purchased Assets payable with respect to the tax year in which the Closing Date falls and the annual FCC regulatory fees for the Stations payable with respect to the year in which the Closing Date falls shall each be prorated as between Seller and Purchaser on the basis of the number of days of the Tax year elapsed to and including the Closing Date.

3.6.3. Subject to the terms and conditions of the Time Brokerage Agreement, prepaid items, deposits, credits and accruals such as water, electricity, telephone, other utility and service charges, lease expenses, license fees (if any) and payments under any contracts or utility services to be assumed by Purchaser shall be prorated between Seller and Purchaser on the basis of the period of time to which such liabilities, prepaid items and accruals apply.

3.6.4. All prorations shall be made and paid insofar as feasible on the Closing Date; any prorations not made on such date shall be made as soon as practicable (not to exceed ninety (90) days) thereafter. Seller and Purchaser agree to assume, pay and perform all costs, liabilities and expenses allocated to each of them pursuant to thisSection 3.6.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser as follows:

4.1. Organization; Good Standing.

BCR License Sub is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. BCR is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has all requisite power and authority to own and lease its properties and carry on its business as currently conducted.

4.2. Due Authorization.

Subject to the FCC Order and any requisite approval of BCR’s stockholders, Seller has full power and authority to enter into and perform this Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement and to carry out the transactions contemplated hereby and thereby. Subject to obtaining any requisite approval of BCR’s stockholders, Seller has taken all necessary action to approve the execution and delivery of this Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement and the transactions contemplated hereby and thereby. This Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement each constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as may be limited by the availability of equitable remedies or by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally. All approvals of Seller’s stockholders required to be obtained by Seller in connection with the execution, delivery and performance by Seller of this Agreement and the transactions contemplated hereby, will be obtained in compliance in all material respects with applicable Laws, including the Delaware General Corporation Law.

4.3. Execution and Delivery.

Except as set forth onSchedule 4.3 hereto, neither the execution and delivery by Seller of this Agreement, the Deposit Escrow Agreement or the Time Brokerage Agreement nor the consummation by Seller of the

transactions contemplated hereby or thereby will: (a) conflict with or result in a breach of any provisions of Seller’s organizational documents; (b) subject to the FCC Order and compliance with the HSR Act, violate any Law or Order of any court or Governmental Authority, which violation would have a Material Adverse Effect; or (c) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under), or result in the creation of any Lien on any of the Purchased Assets pursuant to, any material agreement, indenture, mortgage or other instrument to which Seller is a party or by which it or its assets may be bound or affected.

4.4. Governmental Approvals.

No approval, authorization, consent, order or other action of, or filing with, any court or Governmental Authority is required in connection with the execution and delivery by Seller of this Agreement, the Deposit Escrow Agreement or the Time Brokerage Agreement or the consummation of the transactions contemplated hereby or thereby, other than those of the FCC and those required under the HSR Act.

4.5. Title to Personal Property.

Except for leased property, Seller is the sole and exclusive legal owner of all right, title and interest in, and has good and marketable title to, all of the Purchased Assets constituting personal property, free and clear of all Liens except (a) Permitted Liens, (b) Liens which will be released on or prior to the Closing, or (c) the Assumed Contracts. To Seller’s knowledge, there are no Liens on the Purchased Assets which will need to be released on or prior to the Closing Date.

4.6. Transmitter and Studio Sites.

4.6.1. Seller has valid, binding and enforceable leasehold interests, which are free and clear of all Liens except for Permitted Liens, in and to the Leased Transmitter Sites and Studio Sites.

4.6.2. Seller has not received any notice of, and has no knowledge of, any violation of any zoning, building, health, fire, water use or similar Law in connection with the Leased Transmitter Sites or Studio Sites. To the knowledge of Seller, no fact or condition exists which would result in the termination or impairment of access of the Stations to the Leased Transmitter Sites or the Studio Sites or discontinuation of necessary sewer, water, electrical, gas, telephone or other utilities or services.

4.7. Tangible Personal Property.

Schedule 4.7 sets forth a list, complete and accurate in all material respects, of the Purchased Assets which consist of tangible personal property. All of such tangible personal property, viewed as a whole and not on an asset by asset basis, are in good condition and working order, ordinary wear and tear excepted, and are suitable for the uses for which intended, free from any known defects except such minor defects that do not interfere with the continued present use thereof by Seller.

4.8. FCC Licenses.

Schedule 2.1.1 lists and accurately describes all of the material FCC Licenses necessary for the lawful ownership and operation of the Stations as currently conducted. Seller has furnished to Purchaser true and accurate copies of all of the FCC Licenses. Each such FCC License is in full force and effect and is valid under applicable Laws; the Stations are being operated in compliance in all material respects with the Communications Act, and all rules, regulations and policies of the FCC; and to the knowledge of Seller, no event has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) is reasonably likely to result in the revocation or termination of any FCC License or the imposition of any material fine, forfeiture or penalty, except for proceedings of a legislative or rule-making nature intended to affect the

broadcasting industry generally. The Stations, each of their physical facilities, electrical and mechanical systems and transmitting and studio equipment are being operated in all material respects in accordance with the specifications of the FCC Licenses. The FCC Licenses are unimpaired by any act or omission of Seller or any of Seller’s officers, directors or employees and, Seller has fulfilled and performed all of Seller’s material obligations with respect to the FCC Licenses and has full power and authority thereunder. Except as set forth onSchedule 4.8, no application, action or proceeding is pending for the renewal or modification of any of the FCC Licenses. No event has occurred which, individually or in the aggregate, and with or without the giving of notice or the lapse of time or both, would constitute grounds for revocation of any of the FCC Licenses.

4.9. Reports.

Seller has duly filed all reports required to be filed by any Law or Order of any court or Governmental Authority and has made payment of all charges and other payments, if any, shown by such reports to be due and payable, except where the failure to so file or make payment would not, individually or in the aggregate, have a Material Adverse Effect. All reports required to be filed by Seller with the FCC with respect to the Stations have been filed, except where the failure to so file would not have a Material Adverse Effect. Such reports and disclosures are complete and accurate in all material respects.

4.10. Taxes.

All Tax reports and returns required to be filed by or relating to the Purchased Assets have been filed with the appropriate Governmental Authority, and there have been paid all Taxes, penalties, interest, deficiencies, assessments or other charges due with respect to such Taxes, as reflected on the filed returns or claimed to be due by such federal, state or local taxing authorities (other than Taxes, deficiencies, assessments or claims which are being contested in good faith and which in the aggregate are not material). Seller has not received any written notice of any examinations or audits pending or unresolved examinations or audit issues with respect to Seller’s federal, state or local Tax returns that could adversely affect the Purchased Assets. All additional Taxes, if any, assessed as a result of such examinations or audits have been paid, and to Seller’s knowledge, there are no pending claims or proceedings relating to, or asserted for, Taxes, penalties, interest, deficiencies or assessments against the Purchased Assets.

4.11. Environmental Matters.

4.11.1. Except as would not reasonably be expected to have a Material Adverse Effect, with respect to the Purchased Assets, Seller is in compliance with all Environmental Laws.

4.11.2. Except as would not reasonably be expected to have a Material Adverse Effect, there are no pending or, to the knowledge of Seller, threatened actions, suits, claims, or other legal proceedings based on (and Seller has not received any written notice of any complaint, order, directive, citation, notice of responsibility, notice of potential responsibility, or information request from any Governmental Authority arising out of or attributable to): (a) the current or past presence at any part of the Leased Transmitter Sites of Hazardous Materials; (b) the current or past release or threatened release into the environment from the Leased Transmitter Sites (including into any storm drain, sewer, septic system or publicly owned treatment works) of any Hazardous Materials; (c) the off-site disposal of Hazardous Materials originating on or from the Leased Transmitter Sites or the businesses or Purchased Assets of Seller; (d) any violation of Environmental Laws at any part of the Leased Transmitter Sites arising from Seller’s activities involving Hazardous Materials.

4.11.3. Except as would not reasonably be expected to have a Material Adverse Effect, Seller has been duly issued all permits, licenses, certificates and approvals required under any Environmental Law to operate the Purchased Assets as they are currently operated.

4.11.4. Seller has made available to Purchaser all environmental assessments, reports, audits and other documents in its possession or under its control that relate to the Leased Transmitter Sites or Seller’s compliance with Environmental Laws with respect to the Purchased Assets.

4.11.5. Notwithstanding any other provision of this Agreement, thisSection 4.11 sets forth Seller’s exclusive representations and warranties with respect to the environmental condition of the Purchased Assets, Seller’s compliance with Environmental Laws, Hazardous Materials, Environmental Laws or other environmental matters. Notwithstanding any other provision of this Agreement, Purchaser hereby waives and releases all claims against Seller arising under Environmental Laws, including any statutory rights to contribution, with respect to the Purchased Assets.

4.12. Litigation.

Except as set forth onSchedule 4.12, there is no Order of any court or Governmental Authority and no action, suit, proceeding or investigation, judicial, administrative or otherwise that is pending or, to Seller’s knowledge, threatened against or affecting the Stations which, if adversely determined would have a Material Adverse Effect or which challenges the validity of any of the transactions contemplated by this Agreement.

4.13. Contracts and Agreements.

Seller is not in default in any respect under any of the Assumed Contracts, and, as of the Closing Date, Seller will have paid all sums and performed in all material respects all obligations under the Assumed Contracts which are required to be paid or performed prior to the Closing Date.

4.14. Business Records.

Seller has, and after the Closing, Purchaser will have, the right to use the Business Records included in the Purchased Assets, free and clear of any royalty or other payment obligations.

4.15. Third Party Consents.

Except as set forth inSection 4.4, the only consents from any Person which are required to be obtained by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby are set forth onSchedule 4.15 (the “Third Party Consents”).

4.16. Finders and Brokers.

Except for Jorgenson Broadcast Brokerage (the fees and expenses of which shall be borne solely by Seller), no person has as a result of any agreement entered into by Seller any valid claim against any of the parties hereto for a brokerage commission, finder’s fee or other like payment.

4.17. Disclaimer of Warranties; Limitations of Warranties.

EXCEPT WITH RESPECT TO THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY AS TO THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.

4.18. Registration Statement and Information Statement.

None of the information to be supplied by Seller for inclusion or incorporation by reference in the Registration Statement or the information statement included therein (together with any amendments or supplements thereto, and including all information incorporated by reference therein, the “Information Statement”) will (a) in the case of the Registration Statement, at the time it becomes effective, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (b) in the case of the Information Statement, at the time of the mailing of the Information Statement and at the Closing Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. If at any time prior to the Closing Date any event with respect to Seller, its officers and directors or any of its subsidiaries shall occur that is required to be described in the Information Statement or the Registration Statement, such event shall be so described, and an appropriate amendment or supplement shall be promptly filed with the SEC and, as required by law, disseminated to ~~Seller’s~~Seller��s stockholders. The Registration Statement will comply (with respect to Seller) as to form in all material respects with the provisions of the Securities Act, and the Information Statement will comply (with respect to Seller) as to form in all material respects with the provisions of the Exchange Act.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows:

5.1. Organization and Good Standing.

Entravision License Sub is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of California. Entravision is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

5.2. Due Authorization.

Subject to the FCC Order, Purchaser has full power and authority to enter into this Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement and to carry out Purchaser’s obligations hereunder and thereunder. The execution and delivery of this Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement by Purchaser and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action, if any, on the part of Purchaser and Entravision License Sub. This Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement have been duly executed and delivered by Purchaser and each constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally or general equitable principles.

5.3. Execution and Delivery.

Neither the execution and delivery by Purchaser of this Agreement, the Deposit Escrow Agreement or the Time Brokerage Agreement nor the consummation of the transactions contemplated hereby or thereby will: (a) conflict with or result in a breach of the certificate of incorporation or bylaws of Purchaser or the organizational documents of Entravision License Sub; (b) subject to the FCC Order and compliance with the HSR Act, violate any Law or Order of any court or Governmental Authority; or (c) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any indenture, mortgage, lease, contract or other instrument to which Purchaser or Entravision License Sub is a party or by which Purchaser or Entravision License Sub is bound or affected.

5.4. Consents.

No consent, approval, authorization, license, exemption of, filing or registration with any court or Governmental Authority is required in connection with the execution and delivery of this Agreement, the Deposit Escrow Agreement or the Time Brokerage Agreement by Purchaser or the consummation by Purchaser or Entravision License Sub of any transaction contemplated hereby or thereby, other than the consent of the FCC and those required under the HSR Act. No approval, authorization or consent of any other Person is required in connection with the execution and delivery by Purchaser of this Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement and the consummation of the transactions contemplated hereby or thereby, except as may have been previously obtained by Purchaser.

5.5. Finders and Brokers.

Except for UBS Warburg (the fees and expenses of which shall be borne solely by Purchaser), no person has as a result of any agreement entered into by Purchaser any valid claim against any of the parties hereto for a brokerage commission, finder’s fee or other like payment.

5.6. Qualification.

5.6.1. Entravision License Sub is legally, financially and otherwise qualified to be the assignee of the FCC Licenses, and no waivers shall be required by the FCC for the consummation of the transactions contemplated hereby or the grant of the FCC Order. To Purchaser’s knowledge, there are no facts or proceedings which would reasonably be expected (a) to disqualify Entravision License Sub under the Communications Act from holding the FCC Licenses, (b) to cause the FCC to flag the FCC Application and/or initiate a review of the potential effects on competition of the transaction, or (c) to cause the FCC not to consent to the assignment of the FCC Licenses to Entravision License Sub.

5.6.2. To the knowledge of Purchaser, Purchaser or any Affiliate of Purchaser shall not be required to sell, dispose of or surrender any FCC license held by Purchaser or any such Affiliate with respect to any broadcast properties, or any other properties or businesses of Purchaser or such Affiliate, as may be required under the Communications Act or the antitrust laws in order to consummate the sale and purchase of the Purchased Assets contemplated by this Agreement or the consummation and performance of the Time Brokerage Agreement. Except as set forth onSchedule 5.6.2, neither Purchaser nor any Affiliate of Purchaser owns or possesses, and has not entered into any agreement (other than this Agreement) to acquire, any media interests (including the right to program any broadcast stations) in any of the markets in which the Stations operate.

5.7. Financial Ability.

Purchaser on the Closing Date will have cash and Class A Common Stock available that is sufficient to enable Purchaser to consummate the transactions contemplated by this Agreement.

5.8. Issuance of the Shares.

The Shares, when issued, sold and delivered to Seller at Closing, will be (a) duly and validly issued, fully paid and nonassessable and not subject to preemptive or similar rights, (b) free and clear of all Liens, (c) duly registered under the Securities Act under a Registration Statement on Form S-4 (as the same may be amended, the“Registration Statement”), (d) freely and immediately transferable and distributable, in whole or in part, at any time by Seller, (e) free of all restrictions on transfer under applicable federal and state securities Laws or otherwise, and (f) issued in compliance with all applicable federal and state securities Laws. The Shares will be listed on the New York Stock Exchange, subject only to official notice of issuance. No approval of the stockholders of Purchaser is required to issue the Shares to Seller pursuant to this Agreement. Notwithstanding anything to the contrary contained in this Agreement, Purchaser makes no representation or warranty whatsoever as to fluctuations in the market price of Purchaser’s securities, including the Shares.

5.9. Registration Statement and Information Statement.

None of the information to be supplied by Purchaser for inclusion or incorporation by reference in the Registration Statement or the Information Statement will (a) in the case of the Registration Statement, at the time it becomes effective, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (b) in the case of the Information Statement, at the time of the mailing of the Information Statement and at the Closing Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. If at any time prior to the Closing Date any event with respect to Purchaser, its officers and directors or any of its subsidiaries shall occur that is required to be described in the Information Statement or the Registration Statement, such event shall be so described, and an appropriate amendment or supplement shall be promptly filed with the SEC and, as required by law, disseminated to Seller’s stockholders. The Registration Statement will comply (with respect to Purchaser) as to form in all material respects with the provisions of the Securities Act, and the Information Statement will comply (with respect to Purchaser) as to form in all material respects with the provisions of the Exchange Act.

5.10. SEC Reports.

Purchaser has heretofore filed with the SEC all forms, statements, reports and documents (together with all exhibits, amendments and supplements thereto) required to be filed by Purchaser under each of the Securities Act and the Exchange Act and the SEC rules and regulations thereunder, including an Annual Report on Form 10-K for the year ended December 31, 2001.

ARTICLE 6.

CERTAIN COVENANTS AND AGREEMENTS

6.1. Regulatory Approvals.

6.1.1. As promptly as practicable and no later than five (5) Business Days following the execution of this Agreement, Seller and Purchaser shall complete any filing that may be required pursuant to the HSR Act (each an “HSR Filing”), or shall mutually agree that no such filing is required. Seller and Purchaser shall diligently take, or fully cooperate in the taking of, all necessary and proper steps, and provide any additional information reasonably requested in order to comply with, the requirements of the HSR Act. Each party shall pay its own expenses in connection with the HSR Filings and any other similar filings required in any other jurisdiction, and shall share equally any filing fees associated with the HSR Filings.

6.1.2. No later than one (1) Business Day after the date hereof, Seller and Purchaser shall jointly cause to be filed by Seller’s FCC counsel one or more applications with the FCC requesting its consent to the assignment of the FCC Licenses from BCR License Sub to Entravision License Sub, which applications are attached hereto atExhibit A (the “FCC Application”). Each party shall pay its own expenses in connection with the preparation and prosecution of the FCC Application and shall share equally any filing fees associated with the FCC Application.

6.1.3. Upon the terms and subject to the conditions set forth in this Agreement, Seller and Purchaser shall each use their respective reasonable best efforts to promptly (a) take, or to cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement; (b) obtain from any Governmental Authority or other Person any actions, non-actions, clearances, waivers, consents, approvals, permits or Orders required to be obtained by Seller, Purchaser or any of their respective Affiliates in connection with the authorization, execution, delivery and performance of this

Agreement, the consummation of the other transactions contemplated hereby and thereby and the assignment of the FCC Licenses from BCR License Sub to Entravision License Sub; (c) furnish all information required for any application or other filing to be made pursuant to any applicable Law or any applicable regulations of any Governmental Authority in connection with the transactions contemplated by this Agreement, including the Registration Statement and filings in connection with the HSR Act and the FCC Application, and to supply promptly any additional information and documentary material that may be requested in connection with such filings or applications; (d) avoid the entry of, or have vacated or terminated, any Order that would restrain, prevent or delay the Closing or the FCC Order, including defending against and opposing any lawsuits or other proceedings (including any FCC reconsideration or review), whether judicial or administrative, reviewing or challenging this Agreement, the consummation of the other transactions contemplated hereby and thereby or the assignment of the FCC Licenses from BCR License Sub to Entravision License Sub; and (e) execute and deliver any additional instruments necessary to assign the FCC Licenses from BCR License Sub to Entravision License Sub or to consummate any other transactions contemplated by this Agreement. No party to this Agreement shall consent to any voluntary delay of the assignment of the FCC Licenses from BCR License Sub to Entravision License Sub or the consummation of the other transactions contemplated hereby at the behest of any Governmental Authority or other Person without the consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed. Without limiting thisSection 6.1.3, Purchaser agrees to take any and all reasonable steps and to make any and all reasonable undertakings to (i) avoid or eliminate each and every impediment under any antitrust, merger control, competition, or trade regulation Law, including the Communications Act, that may be asserted by any Governmental Authority with respect to consummation of the transactions contemplated by this Agreement and (ii) resolve any objection that may be asserted by the FCC or any other Person in order to obtain promptly the FCC Order or satisfy or comply with any conditions imposed by the FCC Order, in all events so as to enable the Closing to occur as soon as reasonably possible. Notwithstanding the foregoing, the parties agree that neither party shall be obligated, in complying with thisSection 6.1.3, to take any actions to cause any third party to take any actions, in regard to any Governmental Authority. It is understood and agreed that third parties that may have interests in Seller or Purchaser, including the interest of Univision Communications Inc. in Purchaser, are beyond the control of Seller or Purchaser (except to the extent of any agreements between Purchaser, Seller and any such third party, as applicable), and cannot be required to take or cooperate in actions that would result in obtaining necessary Governmental Authority action with respect to the consummation of the transactions contemplated by this Agreement. In no event shall either party be responsible for adverse actions of a Governmental Authority, with respect to the consummation of the transactions contemplated by this Agreement, resulting from the actions or lack of cooperation of any third parties.

6.1.4. Notwithstanding anything in this Agreement to the contrary, if the Closing occurs before the FCC Order becomes a Final Order, the terms ofSection 6.1.3 shall survive the Closing until the FCC Order becomes a Final Order;provided,however, that such terms shall only survive as applied to actions relating to the obtaining of the FCC Order and such FCC Order becoming a Final Order. No assignment of the FCC Licenses shall occur prior to obtaining the FCC Order.

6.2. Third Party Consents and Notices.

6.2.1. Seller will use its reasonable best efforts to obtain all Third Party Consents and customary estoppel certificates as promptly as practicable after the date of this Agreement. All Third Party Consents shall be in form reasonably satisfactory to Purchaser, and none shall provide for any increase in cost or other change in terms and conditions after the Closing which would be materially adverse to Purchaser.

6.2.2. If any Third Party Consent has not been obtained prior to Closing and prior to Closing an Alternative Arrangement has been obtained with respect to the Assumed Contract to which such Third Party Consent pertains (in each case, a “Deferred Contract”), then Seller shall retain, until such time as such Third Party Consent shall have been obtained by Seller, all rights to and liabilities under the Deferred Contract. Until the assignment of the Deferred Contract, (a) Seller shall continue to use reasonable best efforts and Purchaser shall cooperate with Seller to obtain all required consents or approvals to remove any other impediments to such

assignment, and (b) Seller shall cooperate with Purchaser (and Purchaser shall cooperate with Seller) in any lawful arrangement to provide (to the extent permitted without breach of such Deferred Contract) that Purchaser shall receive the benefits of such Deferred Contract after the Closing Date to the same extent, and without any additional cost or expense to Purchaser, as if such Deferred Contract had been assigned to Purchaser (such arrangement, an “Alternative Arrangement”). To the extent that Purchaser receives such benefits, Purchaser shall assume Seller’s Liabilities thereunder arising on or after the Closing Date with respect to such Alternative Arrangement and Purchaser shall perform any such obligations of Seller arising under such Alternative Arrangement. If, subsequent to the Closing, Seller shall obtain all required consents or approvals required to assign any Deferred Contract, the Deferred Contract for which consent or approval to assign has been obtained shall at that time be deemed to be conveyed, granted, bargained, sold, transferred, setover, assigned, released, delivered and confirmed to Purchaser and assumed by Purchaser, without need of further action by Seller or of further documentation except for notice from Seller to Purchaser that such consent or approval has been obtained; and from and after the effective date such Deferred Contract is assigned to Purchaser, (i) no party shall have any further liability under the Alternative Arrangement related thereto, and (ii) the Deferred Contract shall be deemed to be an Assumed Contract.

6.2.3. Prior to Closing, Seller shall provide written notice to third parties which have entered into material contracts with any of the Stations (other than the Assumed Contracts) regarding (a) the existence of this Agreement and the transactions contemplated hereby and (b) that Purchaser is not assuming any obligations of Seller or the Stations in respect of the contracts with such third parties. Seller shall promptly provide copies of these written notices to Purchaser.

6.3. Access to Information.

From the date hereof until the Closing (upon reasonable notice to Seller), during normal business hours, Seller shall, and shall cause its officers, directors, employees, auditors and agents to, (a) afford the officers, employees and authorized agents and representatives of Purchaser reasonable access to the offices, properties, books and records of Seller to the extent related to the Purchased Assets, and (b) furnish to the officers, employees and authorized agents and representatives of Purchaser such additional information regarding the Purchased Assets as Purchaser may from time to time reasonably request in order to assist Purchaser in fulfilling its obligations under this Agreement and to facilitate the consummation of the transactions contemplated hereby, including all engineering reports relating to the upgrade of KLYY-FM described inSchedule 2.1.1 hereto (the “KLYY Upgrade”);provided,however, that such investigation shall not unreasonably interfere with any of the businesses or operations of Seller or any Station.

6.4. Confidentiality.

The terms of the confidentiality agreement dated as of December 4, 2002 (the “Confidentiality Agreement”) between Seller and Purchaser are hereby incorporated herein by reference and shall continue in full force and effect until the Closing, at which time such Confidentiality Agreement and the obligations of Purchaser under thisSection 6.4 shall terminate;provided,however, that the Confidentiality Agreement shall terminate only in respect of that portion of the Evaluation Material (as defined in the Confidentiality Agreement) exclusively relating to the transactions contemplated by this Agreement and the Purchased Assets. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect.

6.5. Public Announcements.

Seller and Purchaser shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the transactions contemplated herein and shall not issue any such press release or make any such public statement without the prior written consent of the other party, which shall not be unreasonably withheld;provided,however, that a party may, without the prior written consent of the

other party, issue such press release or make such public statement as may, in the reasonable opinion of counsel, be advisable or required by Law or any listing agreement with a national securities exchange to which Seller or Purchaser is a party if it has used all reasonable efforts to consult with the other party and to obtain such party’s consent but has been unable to do so in a timely manner.

6.6. Ordinary Course of Business.

Subject to the terms of the Time Brokerage Agreement and the obligations of the parties thereunder, during the period from the date hereof to the Closing Date, unless the prior consent of Purchaser is first obtained, Seller shall cause the Stations to not knowingly take any action which would cause the conditions set forth inSection 7.1 andSection 7.2 not to be satisfied as of the Closing Date.

6.7. Control of the Station.

Prior to the Closing, Purchaser shall not, directly or indirectly, control, supervise, direct, or attempt to control, supervise, or direct, the operations of the Stations; such operations, including complete control and supervision of all of the Stations programs, employees, and policies, shall be the sole responsibility of Seller until the Closing, except as contemplated by the Time Brokerage Agreement.

6.8. Risk of Loss.

Seller shall bear the risk of all damage to, loss of or destruction of any of the Purchased Assets between the date of this Agreement and the Closing Date. If any material portion of the Purchased Assets (other than items that are obsolete and not necessary for the continued operations of the Stations) shall suffer any material damage or destruction prior to the Closing Date, Seller shall promptly notify Purchaser in writing of such damage or destruction, shall promptly take all necessary steps to restore, repair or replace such assets at Seller’s sole expense, and shall advise Purchaser in writing of the estimated cost to complete such restoration, repair or replacement and all amounts actually paid as of the date of the estimate. If necessary and provided that Seller is diligently pursuing such restoration, repair or replacement, the Closing Date shall be extended for a period up to the Outside Date to accomplish such restoration, repair or replacement. If such restoration, repair or replacement does not exceed One Hundred Thousand Dollars ($100,000) and is not accomplished prior to the Closing Date, as the same may be extended as provided herein, the parties shall consummate the Closing and Purchaser shall receive all insurance proceeds paid or payable to Seller and Purchaser shall thereafter complete such restoration, repair or replacement at its sole expense;provided,however, Seller shall have no further liabilities with respect to such damage or destruction after payment to Purchaser of such insurance proceeds. If such restoration, repair or replacement exceed One Hundred Thousand Dollars ($100,000) and is not accomplished prior to the Outside Date, Purchaser may terminate this Agreement in Purchaser’s sole and absolute discretion.

6.9. Collection of Receivables.

Within three (3) Business Days after the effective date of the Time Brokerage Agreement (the “TBA Date”), Seller shall deliver to Purchaser a complete and detailed list of all the Stations’ accounts receivable arising from the broadcast of advertising time on the Stations’ prior to the TBA Date (“Seller’s AR”). For a period of one hundred eighty (180) days following the TBA Date (the “Collection Period”), Purchaser will promptly forward to the address for Seller set forth inSection 11.6 below, any amounts received by Purchaser at the Stations or otherwise representing any Seller’s AR. Purchaser shall not be required to institute any legal proceedings to enforce the collection of Seller’s AR or to refer any of Seller’s AR to a collection agency. Any Account Receivable not collected by Purchaser within the Collection Period shall revert to Seller. Purchaser shall reassign, without recourse to Purchaser, each Account Receivable and deliver to Seller, all records relating thereto on the same day as it remits to Seller the collections received. Purchaser shall have no right to set-off any amounts collected for Accounts Receivable for any amounts owed to Purchaser by Seller. Purchaser shall incur no liability to Seller for any uncollected account.

6.10. Time Brokerage Agreement.

Within one (1) Business Day of the earlier of expiration or termination of any waiting periods (and any extensions thereof) under the HSR Act, Seller and Purchaser shall enter into a time brokerage agreement in substantially the form attached hereto asExhibit B (the “Time Brokerage Agreement”). The Time Brokerage Agreement shall remain in effect during the remainder of the term of this Agreement and shall terminate upon termination of this Agreement or consummation of the acquisition of the Purchased Assets by Purchaser hereunder. Notwithstanding anything to the contrary contained in this Agreement or otherwise, Seller shall not be deemed to have breached or failed to comply with any representations, warranties, covenants, or agreements with respect to the Stations or the Purchased Assets if such breach or failure is due or caused directly by any act, omission or instruction of Purchaser under or in connection with the Time Brokerage Agreement or any activities or transactions by Purchaser in furtherance thereof or in connection therewith or any actions of Seller in accordance with the terms of the Time Brokerage Agreement.

6.11. Filings; Other Actions.

6.11.1. Seller shall, as soon as practicable after the date hereof, prepare and file with the SEC the Information Statement and Purchaser shall prepare and file with the SEC the Registration Statement (including the prospectus of Purchaser), in which the Information Statement will be included. Purchaser and BCR shall share equally any filing fees associated with the filing of the Registration Statement. The Registration Statement shall include a plan of distribution providing for both the distribution of the Shares from BCR to BCR’s stockholders (“Stockholder Distribution”), and the sale of the Shares into the public market by BCR and any Person deemed to be an “underwriter” within the meaning of Rule 145(c) under the Securities Act with respect to the Shares (collectively, the “Selling Stockholders”) (any such sale, a “Public Sale”). Each of Purchaser and Seller shall use all reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing. As promptly as practicable after the Registration Statement shall have become effective, BCR shall mail the Information Statement to BCR’s stockholders. Purchaser shall also take any action (other than qualifying to do business in any jurisdiction in which it is currently not so qualified) required to be taken under any applicable state securities laws in connection with the issuance of the Shares, and Seller shall furnish all information concerning Seller and BCR’s stockholders as may reasonably be requested in connection with any such action.

6.11.2. If at any time after the Closing, BCR shall desire to effect either a Stockholder Distribution or BCR or the Selling Stockholders shall desire to effect a Public Sale, and BCR or the Selling Stockholders, as the case may be, are not able to do so pursuant to the Registration Statement because the information contained in the Registration Statement shall no longer be current or for any other reason, then Purchaser shall use reasonable best efforts to reasonably promptly amend the Registration Statement pursuant to which BCR may effect such Stockholder Distribution or BCR and the Selling Stockholders may effect such Public Sale, as applicable. With respect to the information to be included in any such amendment, Seller shall be deemed to have made, as of the date of such amendment, the representations and warranties set forth inSection 4.18 with respect to the information supplied by Seller, and Purchaser shall be deemed to have made, as of the date of such amendment, the representations and warranties set forth inSection 5.9 with respect to the information supplied by Purchaser. Purchaser shall use reasonable best efforts to maintain the effectiveness of such Registration Statement, as so amended, until such time as BCR shall have completed such Stockholder Distribution or BCR and the Selling Stockholders shall have completed such Public Sale, provided that Purchaser shall have no obligation hereunder to maintain the effectiveness of the Registration Statement beyond the date which is the fifteen (15) month anniversary of the Closing Date. Notwithstanding anything contained in thisSection 6.11.2 to the contrary, BCR acknowledges that, from time to time, there may be circumstances under which Purchaser may notify BCR that BCR and the Selling Stockholders may be required to suspend temporarily the use of the Registration Statement, and any prospectus forming a part thereof, to effect transactions as part of a Stockholder Distribution or Public Sale, and BCR covenants and agrees (for itself and on behalf of the Selling Stockholders) to cooperate fully with all such requests and notices from Purchaser; provided, that Purchaser shall not have the right to require any

such suspension for more than a total of five (5) Business Days on any occasion or on more than a total of two (2) occasions during the fifteen (15) month period referred to above, for a maximum aggregate period of suspension during such fifteen (15) month period of not in excess of ten (10) Business Days.

6.11.3. Each party hereto agrees, subject to applicable laws relating to the exchange of information, promptly to furnish the other parties hereto with copies of written communications (and memoranda setting forth the substance of all oral communications) received by such party, or any of its subsidiaries, affiliates or associates (as such terms are defined in Rule 12b-2 under the Exchange Act as in effect on the date hereof), from, or delivered by any of the foregoing to, any Governmental Authority in respect of the transactions contemplated hereby.

6.11.4. Prior to the Closing Date, Purchaser shall cause the Shares to be approved for listing on the New York Stock Exchange, subject to official notice of issuance.

6.12. Employees.

As of the Closing Date, Purchaser may, at Purchaser’s option, offer employment to any employee of Seller who works primarily at or for the Stations on such terms and conditions as may be mutually agreed upon by Purchaser and such employee. Notwithstanding any possible inferences to the contrary, neither Seller nor Purchaser intends for thisSection 6.12 to create any rights or obligations except as between Seller and Purchaser, and no past, present or future employees of Seller or Purchaser will be treated as third-party beneficiaries of thisSection 6.12.

6.13. KLYY Upgrade.

Prior to the Closing, Seller shall consult with Purchaser and obtain Purchaser’s consent (which consent shall not be unreasonably withheld, delayed or conditioned) prior to making any material changes to facilities in connection with the KLYY Upgrade.

ARTICLE 7.

CONDITIONS TO PURCHASER’S CLOSING

The obligations of Purchaser to purchase the Purchased Assets and to proceed with the Closing are subject to the satisfaction (or waiver in writing by Purchaser) at or prior to the Closing of each of the following conditions:

7.1. Representations and Warranties.

The representations and warranties of Seller contained in this Agreement shall be true and correct as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement), except in all cases where the failure of any representation or warranty to be true and correct would not have a Material Adverse Effect.

7.2. Covenants.

Seller shall have performed the covenants and agreements contained in this Agreement that are to be performed by Seller at or prior to the Closing, except in all cases where the failure to perform such covenants and agreements would not have a Material Adverse Effect.

7.3. FCC Order.

The FCC Order shall be in full force and effect (it being understood that Purchaser’s obligations to consummate the transactions contemplated by this Agreement shall not be subject to the condition that the FCC Order be a Final Order).

7.4. HSR Act.

Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the Purchased Assets contemplated hereby shall have expired or shall have been terminated.

7.5. No Orders.

No Order or temporary, preliminary or permanent injunction or restraining order shall have been entered by any Governmental Authority which expressly prohibits or materially restrains the transactions contemplated by this Agreement.

7.6. Third Party Consents.

The Third Party Consents set forth onSchedule 7.6 shall have been obtained without the imposition of any conditions materially adverse to Purchaser; provided, that if an Alternative Arrangement has been entered into in lieu of the receipt of any such Third Party Consent for an Assumed Contract as contemplated bySection 6.2.2, no consents or approvals with respect to such Assumed Contract shall be required to be obtained under thisSection 7.6.

7.7. Closing Deliveries.

Purchaser shall have received each of the documents or items required to be delivered to it pursuant toSection 9.1 hereof.

7.8. Registration Statement.

The Registration Statement shall have become effective in accordance with the provisions of the Securities Act. No stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings for that purpose shall have been initiated or, to the knowledge of Purchaser or Seller, threatened by the SEC. All necessary state securities or blue sky authorizations shall have been received.

7.9. Information Statement.

At least twenty (20) calendar days shall have elapsed from the mailing of the Information Statement to the stockholders of Seller.

ARTICLE 8.

CONDITIONS TO SELLER’S CLOSING

The obligations of Seller to sell, transfer, convey and deliver the Purchased Assets and to proceed with the Closing are subject to the satisfaction (or waiver in writing by Seller) at or prior to the Closing of the following conditions:

8.1. Representations and Warranties.

The representations and warranties of Purchaser contained in this Agreement (except for the representations and warranties set forth inSection 5.8) shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement); and the representations and warranties of Purchaser set forth inSection 5.8 shall be true and correct in all respects as of the Closing Date.

8.2. Covenants.

Purchaser shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by Purchaser as of the Closing.

8.3. FCC Order.

The FCC Order shall be in full force and effect (it being agreed and understood that Seller’s obligations to consummate the transactions contemplated by this Agreement shall not be subject to the condition that the FCC Order be a Final Order).

8.4. HSR Act.

Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the Purchased Assets contemplated hereby shall have expired or shall have been terminated.

8.5. No Orders.

8.6. Closing Deliveries.

Seller shall have received each of the documents or items required to be delivered to it pursuant toSection 9.2.

8.7 Listing of Shares.

The Shares shall be listed on the New York Stock Exchange, subject only to official notice of issuance.

8.8. Registration Statement.

8.9. Information Statement.

At least twenty (20) calendar days shall have elapsed from the mailing of the Information Statement to the stockholders of Seller.

ARTICLE 9.

DOCUMENTS TO BE DELIVERED AT CLOSING

9.1. Delivery by Seller.

At the Closing, Seller shall deliver to Purchaser the following:

9.1.1. The deeds, bills of sale, agreements of assignment and similar instruments of transfer to the Purchased Assets contemplated bySection 3.4 hereto.

9.1.2. A certificate, signed by an executive officer of Seller, as to the fulfillment of the conditions set forth inSection 7.1 andSection 7.2 hereof.

9.1.3. The Business Records.

9.1.4. Instructions to the Deposit Escrow Agent in writing and duly executed by Seller to return the Deposit to Purchaser.

9.2. Delivery by Purchaser.

At the Closing, Purchaser shall deliver to Seller the following:

9.2.1. The Cash Payment in the amount and manner set forth in Section 3.2.

9.2.2. A stock certificate or stock certificates representing the Shares in the amount and manner set forth inSection 3.2.

9.2.3. A certificate, signed by an executive officer of Purchaser, as to the fulfillment of the conditions set forth inSection 8.1 andSection 8.2 hereof.

9.2.4. An assumption agreement pursuant to which Purchaser shall assume the Assumed Contracts.

ARTICLE 10.

TERMINATION

10.1. Termination.

This Agreement may be terminated by the mutual written agreement of Purchaser and Seller, or, if the terminating party is not then in material breach of its obligations hereunder, upon written notice as follows:

10.1.1. by Purchaser if Seller is in material breach of its obligations hereunder, such that the conditions set forth inSection 7.1 andSection 7.2 would not be satisfied as of the Closing, and such breach has not been cured by Seller within thirty (30) days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within thirty (30) days and Seller is diligently attempting to cure such breach);

10.1.2. by Seller if Purchaser is in material breach of its obligations hereunder, such that the conditions set forth inSection 8.1 andSection 8.2 would not be satisfied as of the Closing, and such breach has not been cured by Purchaser within thirty (30) days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within thirty (30) days and Purchaser is diligently attempting to cure such breach);provided, however, that no such cure period shall apply in the case of a breach by Purchaser of Purchaser’s representations and warranties set forth inSection 5.8 hereof;

10.1.3. by either Purchaser or Seller if the FCC denies the FCC Application in an order that has become a Final Order, or has designated the FCC Application for a hearing; or

10.1.4. by either Purchaser or Seller if the Closing has not occurred on or before such date which is nine (9) months after the date of this Agreement (the ‘‘Outside Date”).

10.2. Effect of Termination.

In the event of termination of this Agreement pursuant toSection 10.1 above, all rights and obligations of the parties under this Agreement shall terminate without any liability of any party to any other party (except for any liability of any party for any material breach of this Agreement, in which case any non-breaching party shall have all rights and remedies available at law or in equity). Notwithstanding anything to the contrary contained herein, the provisionsof Sections 6.4, 10.3 and 11.4 shall expressly survive the termination of this Agreement.

10.3. Release of Deposit.

10.3.1. If this Agreement is terminated by Seller pursuant toSection 10.1.2, then within five (5) Business Days after such termination, the Deposit (excluding all accrued interest thereon) shall be paid to Seller by wire transfer of immediately available funds pursuant to written instructions provided by Seller and Purchaser to the Deposit Escrow Agent. The parties acknowledge and agree that payment of the Deposit to Seller pursuant to thisSection 10.3.1 shall not constitute liquidated damages, and Seller shall be entitled to any and all rights and remedies available at law or in equity.

10.3.2. If this Agreement is terminated for any reason other than as set forth inSection 10.3.1 above, then and in that event, within five (5) Business Days after such termination, the Deposit (and all accrued interest thereon) shall be refunded to Purchaser by wire transfer of immediately available funds pursuant to instructions provided by Seller and Purchaser to the Deposit Escrow Agent.

ARTICLE 11.

MISCELLANEOUS PROVISIONS

11.1. Survival.

The representations and warranties in this Agreement shall terminate at, and will have no further force and effect after, the Closing. No covenants or agreements of the parties contained in this Agreement shall survive the Closing, except that covenants that contemplate or may involve actions to be taken or obligations in effect after the Closing shall survive in accordance with their terms.

11.2. Specific Performance.

The parties acknowledge that the Purchased Assets and the transactions contemplated hereby are unique, that a failure by Seller or Purchaser to complete such transactions will cause irreparable injury to the other, and that actual damages for any such failure may be difficult to ascertain and may be inadequate. Consequently, Seller and Purchaser agree that each shall be entitled, in the event of a default by the other, to specific

performance of any of the provisions of this Agreement in addition to any other legal or equitable remedies to which the non-defaulting party may otherwise be entitled. In the event any action is brought, the prevailing party shall be entitled to recover court costs and reasonable attorneys’ fees.

11.3. Additional Actions, Documents and Information.

Purchaser agrees that it will, at any time, prior to, at or after the Closing Date, take or cause to be taken such further actions, and execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments and obtain such consents, as may be reasonably requested by Seller in connection with the consummation of the transactions contemplated by this Agreement. Seller agrees that it will, at any time, prior to, at or after the Closing Date, take or cause to be taken such further actions, and execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments and obtain such consents, as may be reasonably requested by Purchaser in connection with the consummation of the transactions contemplated by this Agreement.

11.4. Fees and Expenses.

Except as otherwise expressly provided in this Agreement, all fees and expenses, including fees and expenses of counsel, financial advisors, and accountants incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fee or expense, whether or not the Closing shall have occurred.

11.5. Transfer Taxes.

All sales, use, transfer, filing, recordation, registration and similar Taxes and fees arising from or associated with the transactions contemplated hereunder, whether levied on Purchaser or Seller, shall be borne by Purchaser. Purchaser or Seller, as required by Law, shall file all necessary documentation with respect to, and make all payments of, such taxes and fees on a timely basis;provided that Purchaser shall remit any funds necessary to pay such taxes and fees under thisSection 11.5 in sufficient time to allow timely payment of any such taxes and fees.

11.6. Notices.

All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by telegram, telex, or facsimile transmission addressed as follows:

If to Purchaser:

Entravision Communications Corporation

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, CA 90404

Attention: Walter F. Ulloa

Telephone: (310) 447-3870

Facsimile: (310) 447-3899

with a copy (which shall not constitute notice) to:

Entravision Communications Corporation

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, CA 90404

Attention: Michael G. Rowles

Telephone: (310) 447-3873

Facsimile: (310) 453-9919

If to Seller:

Big City Radio, Inc.

c/o Metromedia Company

One Meadowlands Plaza

East Rutherford, New Jersey 07073-2137

Attention: David A. Persing

Telephone: (201) 531-8022

Facsimile: (201) 531-2803

with a copy (which shall not constitute notice) to:

Hogan & Hartson L.L.P.

8300 Greensboro Drive

Suite 1100

McLean, Virginia 22102

Attention: Thomas E. Repke

Richard T. Horan, Jr.

Telephone: (703) 610-6138

(703) 610-6111

Facsimile: (703) 610-6200

or such other address as the addressee may indicate by written notice to the other parties.

Each notice, demand, request, or communication which shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the affidavit of messenger or (with respect to a telex) the answerback being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

11.7. Waiver.

No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other instrument or document given in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

11.8. Benefit and Assignment.

11.8.1. No party hereto shall assign this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto.

11.8.2. Any purported assignment contrary to the terms hereof shall be null, void and of no force and effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns as permitted hereunder. No Person, other than the parties hereto, is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors and assigns as permitted hereunder.

11.9. Entire Agreement; Amendment.

This Agreement, the Deposit Escrow Agreement and the Time Brokerage Agreement, including the Schedules and Exhibits hereto and thereto and the other instruments and documents referred to herein or therein or delivered pursuant hereto or thereto contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior oral or written agreements, commitments or understandings with respect to such matters. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by the party or parties against whom enforcement of the amendment, modification or discharge is sought.

11.10. Severability.

If any part of any provision of this Agreement or any other contract, agreement, document or writing given pursuant to or in connection with this Agreement shall be invalid or unenforceable under applicable law, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provisions or the remaining provisions of said contract, agreement, document or writing.

11.11. Headings.

The headings of the sections and subsections contained in this Agreement are inserted for convenience only and do not form a part or affect the meaning, construction or scope thereof.

11.12. Governing Law; Jurisdiction.

This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed under and in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law). The parties hereto hereby waive personal service of any process in connection with any such action, suit or proceeding and agree that the service thereof may be made by certified or registered mail addressed to or by personal delivery to the other party, at such other party’s address set forth pursuant toSection 11.6 hereof. In the alternative, in its discretion, any of the parties hereto may effect service upon any other party in any other form or manner permitted by law.

11.13. Signature in Counterparts.

This Agreement may be executed in separate counterparts, none of which need contain the signatures of all parties, each of which shall be deemed to be an original, and all of which taken together constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than the number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

[The remainder of this page intentionally left blank.]

IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date first above written.

SELLER

BIG CITY RADIO, INC.

By:		/s/ P. R. THOMSON
Name:		P. R. Thomson
Title:		VP and CFO

BIG CITY RADIO-LA, L.L.C

By:		/s/ P. R. THOMSON
Name:		P. R. Thomson
Title:		VP and CFO

PURCHASER

ENTRAVISION COMMUNICATIONS CORPORATION

By:		/s/ WALTER F. ULLOA
Name:		Walter F. Ulloa
Title:		Chairman and CEO

ANNEX I

DEFINITIONS

“Accounts Receivable”shall mean all accounts receivable with respect to the Stations as of the end of the broadcast day immediately preceding the Closing Date.

“Affiliates” of a party shall mean persons or entities that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, such party.

“Agreement” shall have the meaning set forth in the Preamble.

“Alternative Arrangement” shall have the meaning set forth inSection 6.2.2.

“Appraisal Firm” shall have the meaning set forth inSection 3.5.1.

“Assumed Contracts” shall have the meaning set forth inSection 2.3.

“BCR” shall have the meaning set forth in the Preamble.

“BCR License Sub” shall have the meaning set forth in the Preamble.

“Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

“Business Records” shall have the meaning set forth inSection 2.1.7.

“Cash Payment” shall have the meaning set forth inSection 3.2.2.

“Closing” shall have the meaning set forth inSection 3.3.

“Closing Date” shall have the meaning set forth inSection 3.3.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and all Laws promulgated pursuant thereto or in connection therewith.

“Collection Period” shall have the meaning set forth inSection 6.9.

“Communications Act” shall mean the Communications Act of 1934, as amended.

“Confidentiality Agreement” shall have the meaning set forth inSection 6.4.

“Deferred Contract” shall have the meaning set forth inSection 6.2.2.

“Deposit” shall have the meaning set forth inSection 3.1.

“Deposit Escrow Agent” shall have the meaning set forth inSection 3.1.

“Deposit Escrow Agreement” shall have the meaning set forth inSection 3.1.

“Entravision License Sub” shall mean Entravision Holdings, LLC, a California limited liability company and a wholly-owned subsidiary of Purchaser.

“Environmental Laws” shall mean the applicable provisions of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, (“CERCLA”); 42 U.S.C. § 9601et seq.; the Toxic Substances Control Act (“TSCA”), 15 U.S.C. § 2601et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 5101et seq.; the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901et seq.; the Clean Water Act (“CWA”), 33 U.S.C. § 1251et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300fet seq.; the Clean Air Act (“CAA”), 42 U.S.C. § 7401et seq.; or any other applicable federal, state, or local laws relating to Hazardous Materials generation, production, use, storage, treatment, transportation or disposal, or the protection of the environment.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Excluded Assets” shall have the meaning set forth inSection 2.2.

“FCC” shall mean the Federal Communications Commission.

“FCC Application” shall have the meaning set forth inSection 6.1.2.

“FCC Licenses” shall have the meaning set forth inSection 2.1.1.

“FCC Order” shall mean that the FCC (including the Media Bureau pursuant to delegated authority) has granted or given consent, without any condition materially adverse to Purchaser or Seller, to the assignment of the FCC Licenses from Seller to Purchaser.

“Final Order” shall mean that the FCC Order shall have become final, that is, that the time period for filing any protests or requests or petitions for stay, reconsideration, rehearing, review or appeal by the FCC or a court of competent jurisdiction of such order and the time period for the FCC or its staff to have taken any actions to reconsider or review such order shall have expired, and that no timely protest or request or petition for stay, reconsideration, rehearing, review or appeal by the FCC or a court of competent jurisdiction or action by the FCC or its staff to reconsider or review such order shall be pending.

“Governmental Authority” shall mean any court, arbitrator, department, commission, board, bureau, agency, authority, instrumentality or other body, whether federal, state, municipal, foreign or other.

“Hazardous Materials” shall mean any wastes, substances, or materials (whether solids, liquids or gases) that are deemed hazardous, toxic, pollutants, or contaminants, including without limitation, substances defined as “hazardous wastes”, “hazardous substances”, “toxic substances”, “radioactive materials” or other similar designations in, or otherwise subject to regulation under, any Environmental Laws.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

“HSR Filing” shall have the meaning set forth inSection 6.1.1.

“Information Statement” shall have the meaning set forth inSection 4.18.

“KLYY Upgrade” shall have the meaning set forth inSection 6.3.

“Law” shall mean any statute, law, ordinance, rule or regulation.

“Leased Transmitter Sites” shall have the meaning set forth inSection 2.1.2.

~~Annex I-2~~

“Liabilities” shall mean, as to any Person, all debts, adverse claims, liabilities and obligations, direct, indirect, absolute or contingent of such Person, whether accrued, vested or otherwise, known or unknown, whether in contract, tort, strict liability or otherwise and whether or not actually reflected, or required by generally accepted accounting principles to be reflected, in such Person’s balance sheets or other books and records.

“Liens” shall mean, statutory or otherwise, any liens, easements, security interests, claims, pledges, licenses, equities, options, conditional sales contracts, assessments, levies, charges, rights of others or restrictions (whether on voting, sale, transfer, disposition or otherwise) or encumbrances of any nature whatsoever, whether imposed by agreement, understanding, law or equity.

“Material Adverse Effect” or “material adverse effect” shall mean a material adverse effect on the Purchased Assets taken as a whole, but shall specifically exclude any material adverse effect caused by (a) factors affecting the radio industry generally or the market in which the Stations operate, (b) general, national, regional or local economic or financial conditions, (c) new governmental Laws, (d) the failure to achieve any financial or operational targets, projections or milestones set forth in any Seller business plan or budget, or (e) liquidity or cash flow deficiencies affecting Seller’s business, properties, assets, liabilities, financial condition, results of operations, properties or prospects.

“Order” shall mean any order, writ, injunction, judgment, plan or decree of any Governmental Authority.

“Outside Date” shall have the meaning set forth inSection 10.1.4.

“Permitted Liens” shall mean (a) Liens for taxes not yet accrued; (b) landlord’s Liens and Liens for property taxes not delinquent; (c) statutory Liens that were created in the ordinary course of business and which are not delinquent; (d) restrictions or rights granted to Governmental Authorities under applicable Law to the extent not arising pursuant to any defaults thereunder; (e) zoning, building, or similar restrictions relating to or affecting property which do not arise in connection with a violation of applicable Law; (f) Liens on the Leased Transmitter Sites and the Studio Sites that do not materially affect the current use and enjoyment thereof in the operation of the Stations or the value of such Leased Transmitter Sites and Studio Sites; (g) customary utility and similar easements affecting property; and (h) Liens for which a proration adjustment is made pursuant toSection 3.6 of this Agreement.

“Person” or “person” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, other form of business or legal entity or Governmental Authority.

“Public Sale” shall have the meaning set forth inSection 6.11.1.

“Purchased Assets” shall have the meaning set forth inSection 2.1.

“Purchase Price” shall have the meaning set forth inSection 3.2.

“Purchaser” shall have the meaning set forth in the Preamble.

“Registration Statement” shall have the meaning set forth inSection 5.8.

“SEC” shall mean the Securities and Exchange Commission and any other similar or successor agency of the federal government then administering the Securities Act or the Exchange Act.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Seller” shall have the meaning set forth in the Preamble.

~~Annex I-3~~

“Seller’s AR” shall have the meaning set forth inSection 6.9.

“Selling Stockholders” shall have the meaning set forth inSection 6.11.1.

“Shares” shall have the meaning set forth inSection 3.2.2.

“Stations” shall have the meaning set forth in the Recitals.

“Stockholder Distribution” shall have the meaning set forth inSection 6.11.1.

“Studio Sites” shall have the meaning set forth inSection 2.1.4.

“Taxes” shall mean all federal, state and local taxes (including income, profit, franchise, sales, use, real property, personal property, ad valorem, excise, employment, social security and wage withholding taxes) and installments of estimated taxes, assessments, deficiencies, levies, imports, duties, license fees, registration fees, withholdings, or other similar charges of every kind, character or description imposed by any Governmental Authorities.

“TBA Date” shall have the meaning set forth inSection 6.9.

“Third Party Consents” shall have the meaning set forth inSection 4.15.

“Time Brokerage Agreement” shall have the meaning set forth inSection 6.10.

~~Annex I-4~~

~~EXHIBITS~~SCHEDULES

~~Exhibit A~~ Schedule 2.1.1		FCC ~~Application~~Licenses

~~Exhibit B~~ Schedule 2.1.2		~~Time Brokerage Agreement~~

Leased Transmitter Sites

~~SCHEDULES~~

~~Schedule 2.1.1~~		~~FCC Licenses~~

Schedule ~~2.1.2~~2.1.4		~~Leased Transmitter~~ Studio Sites

Schedule ~~2.1.4~~2.3		~~Studio Sites~~ Assumed Contracts

Schedule ~~2.3~~4.3		~~Assumed Contracts~~ Consents and Approvals

Schedule ~~4.3~~4.7		~~Consents and Approvals~~ Tangible Personal Property

Schedule ~~4.7~~4.8		~~Tangible Personal Property~~ Pending FCC Matters

Schedule ~~4.8~~4.12		~~Pending FCC Matters~~ Litigation

Schedule ~~4.12~~4.15		~~Litigation~~ Third Party Consents

Schedule ~~4.15~~5.6.2		~~Third Party Consents~~ Purchaser’s Media Interests

Schedule ~~5.6.2~~7.6		~~Purchaser’s Media Interests~~

~~Schedule 7.6~~		Required Third Party Consents For Closing

EXHIBITS

Exhibit A		FCC Application

Exhibit B		Time Brokerage Agreement

Annex B

TIME BROKERAGE AGREEMENT

THIS TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of the 15^th day of January, 2003 (the“Effective Date”), by and between ENTRAVISION COMMUNICATIONS CORPORATION, a Delaware corporation (“Programmer”), and BIG CITY RADIO-LA, L.L.C., a Delaware limited liability company (“Licensee”).

RECITALS:

WHEREAS, Licensee is the licensee pursuant to authorizations by the Federal Communications Commission (“FCC”) of radio broadcast stations KVYY-FM, licensed to Ventura, California, KLYY-FM, licensed to Arcadia, California and KSYY-FM, licensed to Fallbrook, California (collectively, the “Stations”);

WHEREAS, during the term of this Agreement, Licensee wishes to retain Programmer to provide programming and related services for the Stations, all in conformity with Licensee’s policies and procedures, FCC rules, regulations and policies for time brokerage arrangements, and the provisions hereof;

WHEREAS, Programmer agrees to use the Stations to broadcast such programming of Programmer’s selection that is in conformity with the Communications Act of 1934, as amended and all rules, regulations and policies of the FCC (collectively, the “FCC Requirements”), subject to Licensee’s full authority to manage and control the operation of the Stations;

WHEREAS, Programmer and Licensee have entered into that certain Asset Purchase Agreement dated as of December 23, 2002 (the “Purchase Agreement”), pursuant to which Licensee has agreed to sell to Programmer, and Programmer has agreed to purchase from Licensee, certain of the radio station properties and assets relating to the Stations as described therein under the terms and conditions set forth in the Purchase Agreement; and

WHEREAS, Programmer and Licensee agree to cooperate to make this Agreement work to the benefit of the public and both parties and as contemplated by the terms set forth herein.

AGREEMENT:

NOW, THEREFORE, in consideration of the above recitals, and mutual promises and covenants contained herein, the parties intending to be legally bound, agree as follows:

SECTION 1 USE OF STATION AIR TIME.

1.1 Scope. During the Term (as defined inSection 1.2 below), Licensee shall make available to Programmer broadcast time on the Stations as set forth in this Agreement. Programmer shall deliver such programming, at Programmer’s expense, to the Stations’ transmitters or other authorized remote control points mutually agreed to by the parties. Programmer shall provide such programming of Programmer’s selection complete with commercial matter, news, public service announcements and other programming to the Stations. Except as otherwise provided in this Agreement, Licensee agrees to broadcast such programming in its entirety, including commercials at the times specified, on the facilities of the Stations without interruption, deletion, or addition of any kind. Licensee may use such time as Licensee may require up to two (2) hours per week, for the broadcast of Licensee’s own regularly-scheduled news, public affairs, and other non-entertainment programming on the Stations, to be scheduled at mutually agreeable times. Licensee agrees that during the Term, Programmer shall have the exclusive right to sell, or engage a third party to sell, commercial time during the programming provided by Programmer to the Stations for Programmer’s account.

1.2 Term. The term of this Agreement (the “Term”) shall commence on the date hereof, and end on the Closing Date (as defined in the Purchase Agreement), unless terminated earlier pursuant to any of the provisions ofSection 5 hereof.

SECTION 2 STATION OPERATIONS.

2.1 Licensee Control Over Station Operations.

(a) Licensee shall retain ultimate authority, power and control over the operations of the Stations during the Term, including specifically, control over the personnel, programming and finances of the Stations.

(b) Subject to Licensee’s ultimate authority, power and control over the operations of the Stations, Programmer agrees to provide programming and related services to the Stations at Programmer’s sole cost and expense. Such related services shall include: (i) the sale of advertising time on the Stations; (ii) coordination of traffic and billing functions; (iii) ordinary maintenance of the Stations’ transmitting or studio equipment and the other assets used or held for use in the business and operation of the Stations, other than the FCC Licenses (as such term is defined in the Purchase Agreement) and (iv) other administrative or operational functions as Licensee and Programmer may agree to, consistent with FCC Requirements relating to time brokerage agreements. Programmer shall provide and perform Programmer’s obligations hereunder, including all related services, diligently and in a manner consistent in all material respects with customary broadcast industry practices.

(c) When on the Licensee’s premises, all employees of Programmer used to provide Programmer’s programming or other services to the Stations shall be subject to the overall supervision of management personnel under Licensee’s control. Subject to Licensee’s ultimate authority, power and control over the operations of the Station, Programmer’s employees shall be solely accountable to Programmer.

2.2 Station Expenses.

(a) During the Term, Programmer shall, at the direction of Licensee, reimburse Licensee and/or pay on an ongoing basis the expenses set forth inSchedule 2.2 hereto (and no other expenses of Licensee). Payment and/or reimbursement of such expenses (to the extent such expenses are not of a recurring nature in which such event they shall be paid and/or reimbursed consistent with past practice) shall be made by Programmer within fifteen (15) days after presentation by Licensee of written evidence of such expenses. In the event that Programmer disputes any such expense, Programmer shall timely pay those amounts that are not disputed and simultaneously advise Licensee of the basis for the disputed amounts. If the dispute cannot be resolved within thirty (30) days after delivery of a dispute notice to Licensee, the parties shall refer the matter to a mutually agreeable independent certified public accounting firm located in Los Angeles, California (the “Arbitrator”) for resolution. The decision of the Arbitrator shall be rendered within thirty (30) days of its being selected and shall be final and binding on the parties. The fees and expenses of the Arbitrator shall be borne equally by Programmer and Licensee.

(b) The parties acknowledge and agree that if during the Term there shall occur any material loss, damage or destruction to any of the Stations’ transmitting or studio equipment or to any of the other assets used or held for use in the business and operation of the Stations, Licensee shall make any repairs or replacements necessary to restore such piece of equipment or asset to its condition on the date hereof. Programmer shall reimburse Licensee for the expenses associated with such repair and/or replacement within fifteen (15) days after presentation by Licensee of written evidence of such expenses. In the event that Programmer disputes any such expense, such dispute shall be settled in accordance with the procedures described inSection 2.2(a) of this Agreement. Notwithstanding the foregoing, to the extent that the expense of repair and/or replacement for a single item of equipment or asset described in the first sentence of thisSection 2.2(b) exceeds $5,000 during the Term, such excess expense shall be the sole responsibility of Licensee, and Programmer shall have no obligation under the terms of this Agreement to reimburse Licensee for such excess amount.

2.3 Fee. The fee payable by Programmer to Licensee in consideration for the airtime made available hereunder and the other agreements of the parties made hereunder, shall be in the amount and manner as set forth inSchedule 2.3 hereto.

SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.

3.1 Licensee Authority. Subject to Programmer’s obligations hereunder, Licensee shall be responsible for the Stations’ compliance with all FCC Requirements and all other applicable laws. Programmer shall cooperate with Licensee, in taking such actions as Licensee may reasonably request to assist Licensee in maintaining the Stations’ compliance with the FCC Requirements and all other applicable laws. Notwithstanding any other provision of this Agreement, Programmer recognizes that Licensee has certain obligations to operate the Stations in the public interest, to staff the Stations’ studios and to broadcast programming to meet the needs and interests of the Stations’ communities of license and service areas. Nothing in this Agreement shall abrogate or limit the unrestricted authority of Licensee to discharge Licensee’s obligations to the public and to comply with the FCC Requirements, and Licensee shall have no liability or obligation to Programmer, for taking any action that Licensee reasonably and in good faith believes to be necessary or appropriate to discharge such obligations or comply with such laws, rules, regulations or policies.

3.2 Additional Licensee Obligations. Although both Licensee and Programmer shall cooperate in the broadcast of emergency information over the Stations, Licensee shall retain the right, without any liability or obligation to Programmer, to interrupt Programmer’s programming in case of an emergency or for programming which, in the good faith judgment of Licensee, is of greater local or national public importance. In all such cases, Licensee shall use Licensee’s commercially reasonable efforts to provide Programmer prior written notice of Licensee’s intention to interrupt Programmer’s programming. Licensee shall coordinate with Programmer each Station’s hourly station identification and any other announcements required to be aired by FCC Requirements. Licensee shall (a) maintain each Station’s local public inspection file within each Station’s community of license or at each Station’s main studio, and (b) prepare and place in such inspection file in a timely manner all material required by Section 73.3526 of the FCC’s Requirements, including each Station’s quarterly issues and program lists. Programmer shall, upon request by Licensee, promptly provide Licensee with such information concerning Programmer’s programs and advertising as is necessary to assist Licensee in the preparation of such information or to enable Licensee to verify independently the Stations’ compliance with any other laws, rules, regulations or policies applicable to the Stations’ operation.

SECTION 4 STATION PROGRAMMING & OPERATIONAL POLICIES.

4.1 Broadcast Station Programming Policy Statement. Licensee has adopted a Broadcast Station Programming Policy Statement (the “Policy Statement”), a copy of which appears asSchedule 4.1 hereto and which may be amended from time to time in order to comply with FCC Requirements by Licensee upon written notice to Programmer. Programmer agrees and covenants to comply in all material respects with the Policy Statement, with all FCC Requirements, and with all changes subsequently made by Licensee (in good faith) or the FCC. Programmer shall furnish or cause to be furnished the artistic personnel and material for the programs as provided by this Agreement and all programs shall be prepared and presented in conformity in all material respects with FCC Requirements and with the Policy Statement. All advertising spots and promotional material or announcements shall comply in all material respects with all applicable federal, state and local laws, regulations and policies and the Policy Statement, and shall be produced in accordance with quality standards established by Programmer. If Licensee determines that a program, commercial announcement or promotional material supplied by Programmer is for any reason, in Licensee’s reasonable discretion, contrary to the public interest, or does not comply with the Policy Statement, Licensee may, upon written notice to Programmer (to the extent time permits such notice), and without any liability or obligation to Programmer, suspend or cancel such program, commercial announcement or promotional material and substitute its own programming or, if Licensee requests, Programmer shall use commercially reasonable efforts to provide promptly suitable programming, commercial announcement or other announcement or promotional material.

4.2 Licensee Control of Station Programming. Notwithstanding any contrary provision contained in this Agreement, and consistent with Licensee’s obligations pursuant to the FCC Requirements, Licensee shall have the right, without any liability or obligation to Programmer, to delete or preempt any material contained in any

programming or commercial matter furnished by Programmer for broadcast over the Stations that Licensee reasonably and in good faith believes to be unsuitable for broadcast or the broadcast of which Licensee reasonably and in good faith believes would be contrary to the public interest. Licensee shall have the right, without any liability or obligation to Programmer, to broadcast Licensee’s own programming in place of such deleted or preempted material. Licensee expressly agrees that Licensee’s right to reject or preempt any of the programming will be exercised only for cause and will not be exercised in an arbitrary manner, for the commercial advantage of Licensee, or to cause harm to the business or operations of Programmer.

4.3 Political Advertising. Licensee shall oversee and shall take ultimate responsibility for the Stations’ compliance with the political broadcasting rules of the FCC and Sections 312 and 315 of the Communications Act of 1934, as amended (the “Act”), including the provision of equal opportunities, compliance with lowest unit charge requirements, and the provision of reasonable access to federal political candidates. Programmer shall cooperate with Licensee in complying with the political broadcasting rules of the FCC. Programmer shall supply such information promptly to Licensee as may be necessary to comply with the lowest unit charge and other applicable political broadcast requirements of federal law. To the extent that Licensee reasonably and in good faith believes necessary or appropriate, Programmer shall release advertising availabilities to Licensee to permit Licensee to comply with the political broadcasting rules of the FCC and Sections 312 and 315 of the Act. Programmer shall be entitled to all revenues received by Licensee for such advertising.

4.4 Advertising of Credit Terms. To the extent prohibited by the rules of the Federal Trade Commission, no advertising of credit terms shall be made over broadcast material supplied hereunder by Programmer beyond mention of the fact that credit terms are available.

4.5 Payola/Plugola. In order to enable Licensee to fulfill Licensee’s obligations under Section 317 of the Act, Programmer, in compliance with Section 507 of the Act, will, in advance of any scheduled broadcast by the Station, disclose to Licensee any information of which Programmer has knowledge or which has been disclosed to Programmer as to any money, service, or other valuable consideration that any person has paid or accepted, or has agreed to pay or to accept, for the inclusion of any matter as a part of the programming or commercial matter to be supplied to Licensee pursuant to this Agreement. Programmer will cooperate with Licensee, at Programmer’s expense, as necessary to ensure compliance with this provision. Commercial matter with obvious sponsorship identifications shall not require disclosure in addition to that contained in the commercial copy.

4.6 Programmer Compliance with Copyright Act. Programmer represents and warrants that Programmer will have full authority to broadcast the programming on the Stations; that Programmer shall not knowingly broadcast any material in violation of the Copyright Act; and the performing rights to all music contained in broadcast material supplied hereunder by Programmer are licensed by BMI, ASCAP, or SESAC, are in the public domain, are controlled by Programmer, or are cleared at the source by Programmer.

SECTION 5 TERMINATION.

5.1 Termination by Programmer. This Agreement may be terminated by Programmer by written notice to Licensee, if Programmer is not then in material default or breach hereof or of the Purchase Agreement, if Licensee is in material breach of Licensee’s representations or Licensee’s material obligations hereunder and has failed to cure such breach within thirty (30) days of written notice of the breach from Programmer. Notwithstanding the foregoing, the failure of any of the Stations to broadcast the Programmer’s programming for two (2) consecutive days or one-half hour for five (5) consecutive days as a result of Licensee’s preemption of such programming, shall constitute an independent basis for Programmer to immediately terminate this Agreement, without notice to or cure by Licensee.

5.2 Termination by Licensee. This Agreement may be terminated by Licensee by written notice to Programmer, if Licensee is not then in material default or breach hereof or of the Purchase Agreement, if Programmer is in material breach of Programmer’s representations or Programmer’s material obligations

hereunder and Programmer has failed to cure such breach within thirty (30) days of written notice of the breach from Licensee.

5.3 Termination. If not otherwise earlier terminated, this Agreement will terminate upon the first to occur of any of the following:

(a) this Agreement is declared invalid or illegal in whole or material part by an order or decree of an administrative agency or court of competent jurisdiction the effect of which would be to materially curtail Programmer’s activities hereunder and such order or decree has become final and no longer subject to further administrative or judicial review;

(b) there has been a material change in FCC Requirements that would cause this Agreement to be in material violation thereof and such change is in effect and not the subject of an appeal or further administrative review;

(d) the termination of the Purchase Agreement in accordance with the terms thereof.

5.4 Severability. The parties hereto intend that the transactions contemplated hereunder comply in all respects with FCC Requirements. If any provision of this Agreement shall be declared void, illegal, or invalid by any governmental authority with jurisdiction thereof, the remainder of this Agreement shall remain in full force and effect without such offending provision so long as such remainder substantially reflects the intent and economic or other benefits of the original agreement of the parties hereunder. Furthermore, in such event, the parties shall use their commercially reasonable efforts to reach agreement promptly on lawful substitute provisions in place of said offending provision so as to effectuate more closely their intent as expressed hereunder. If any governmental authority grants to any other entity or individual rights which are not contained in this Agreement, then the parties shall use their commercially reasonable efforts to amend this Agreement to provide the parties hereto such lawful provisions which comport with any rules, regulations and policies adopted after the date of this Agreement.

5.5 Force Majeure. Any failure or impairment of the assets of the Stations or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to acts of God, restrictions by any governmental authority, civil riot, fire, strike, labor unrest, floods or any other similar cause not reasonably within the control of Licensee or Programmer, shall not constitute a breach of this Agreement and Licensee will not be liable to Programmer nor will Programmer be liable to Licensee for any liability or obligation with respect thereto. In the event of a force majeure event, the affected party shall use its commercially reasonable efforts to resume its performance under this Agreement.

5.6 Insurance; Risk of Loss. From the Effective Date through the end of the Term, Programmer shall maintain with reputable insurance companies reasonably acceptable to Licensee, insurance in such amounts and with respect to such risks reasonably acceptable to Licensee, including broadcast liability insurance and general comprehensive insurance each with a commercially reasonable amount of coverage as is conventionally carried by broadcasters comparable to Programmer. The risk of any loss, damage, impairment, confiscation, or condemnation of any equipment or other personal property owned or leased and used by Programmer in the performance of its obligations hereunder shall be borne by Programmer at all times throughout the Term.

SECTION 6 INDEMNIFICATION.

6.1 Indemnification by Programmer. Programmer shall indemnify and hold harmless Licensee from and against any and all claims, losses, costs, liabilities, damages, expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto), of every kind, nature and description (collectively “Damages”) arising or resulting from or relating to (a) Programmer’s breach of any representation, covenant, agreement or other obligation of Programmer contained in this Agreement, (b) any action taken by

Programmer or Programmer’s employees and agents with respect to the Stations, or any failure by Programmer or Programmer’s employees and agents to take any action with respect to the Stations, including Damages relating to violations of FCC Requirements, slander, libel, defamation or other claims relating to programming provided by Programmer or Programmer’s broadcast and sale of advertising time on the Stations, except to the extent directed by or caused by Licensee or its officers, employees, agents or Affiliates, or (c) the business or operations of the Stations conducted by Programmer from and after the date of this Agreement.

6.2 Indemnification by Licensee. Licensee shall indemnify and hold harmless Programmer from and against any and all Damages arising or resulting from or relating to (a) Licensee’s breach of any representation, covenant, agreement or other obligation of Licensee contained in this Agreement, or (b) any action taken by Licensee or Licensee’s employees and agents with respect to the Stations, or any failure by Licensee or Licensee’s employees and agents to take any action with respect to the Stations, including Damages relating to violations of FCC Requirements, slander, libel, defamation or other claims relating to programming provided by Licensee or (c) the business or operations of the Stations conducted by Licensee from and after the date of this Agreement.

SECTION 7 REPRESENTATIONS, WARRANTIES, AND COVENANTS.

7.1 Representations, Warranties, and Covenants of Licensee. Licensee represents, warrants and covenants that:

(a) The execution, delivery and performance by Licensee of this Agreement, the fulfillment of and the compliance with the terms and provisions hereof, and the consummation by Licensee of the transactions contemplated hereby have been duly authorized by all requisite corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not: (i) conflict with, or violate any provision of, any Law having applicability to Licensee or any affiliate of Licensee or any provision of the organizational documents of Licensee; (ii) conflict with, or result in any breach of, or constitute a default under, any agreement to which Licensee is a party or by which Licensee is bound; or (iii) result in or require the creation or imposition of or result in the acceleration of any indebtedness, or of any mortgage, lien, pledge, encumbrance, security interest, deed of trust, option, encroachment, reservation, order, decree, judgment, restriction, charge, agreement, claim or equity of any kind (“Encumbrance”) of any nature upon, or with respect to, Licensee or any of the assets now owned or hereafter acquired by Licensee. No other action is necessary for Licensee to enter into this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of Licensee, enforceable in accordance with its terms.

(c) Licensee currently is the holder of the authorizations related to each of the Stations listed onSchedule 7.1 attached hereto.

7.2 Representations, Warranties and Covenants of Programmer. Programmer represents, warrants, and covenants that:

(a) The execution, delivery and performance by Programmer of this Agreement, the fulfillment of and the compliance with the terms and provisions hereof, and the consummation by Programmer of the transactions contemplated hereby have been duly authorized by all necessary corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not: (i) conflict with, or violate any provision of, any Law having applicability to Programmer or any affiliate of Programmer or any provision of the organizational documents of Programmer; (ii) conflict with, or result in any breach of, or constitute a default under, any agreement to which Programmer is a party or by which Programmer is bound; or (iii) result in or require the creation or imposition of or result in the acceleration of any indebtedness, or of any Encumbrance of any nature upon, or with respect to, Programmer or any of the assets now owned or hereafter acquired by Programmer. No other corporate action is necessary for Programmer to enter into this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of Programmer, enforceable in accordance with its terms.

SECTION 8 MISCELLANEOUS.

8.1 Further Assurances. Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

8.2 Expenses; Attorney’s Fees. Each party hereto will pay its own expenses incurred by such party in connection with the negotiation, preparation, execution and consummation of this Agreement and the transactions contemplated hereby, including all legal and accounting fees and disbursements. The prevailing party in any proceeding relating to the enforceability or interpretation of this Agreement may recover from the unsuccessful party all out-of-pocket costs, expenses and reasonable attorney’s fees relating to any proceeding, including any post-judgment or post-award and judgment enforcement proceedings.

8.3 Assignment. No party shall assign its rights and obligations under this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto, and any such assignment contrary to the terms hereof shall be null and void and of no force and effect. In no event shall the assignment by any party of its respective rights or obligations under this Agreement release such party from its respective liabilities and obligations hereunder.

8.4 Entire Agreement; Amendments. This Agreement constitutes the entire agreement among the parties hereto with respect to the transactions contemplated herein and, except for the Purchase Agreement, and documents delivered pursuant thereto, supersede all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed and delivered by the party against whom enforcement of the amendment, modification, or discharge is sought.

8.5 Waiver. No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other documents furnished in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

8.6 Consent to Jurisdiction.

(a) This Agreement and the duties and obligations of the parties hereunder and under each of the documents referred to herein shall be enforceable against any party in the courts of the United States of America and of the State of New York. For such purpose, each party hereto hereby irrevocably submits to the jurisdiction of such courts, and agrees that all claims in respect of this Agreement and such other documents may be heard and determined in any of such courts.

(b) Each party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating to this Agreement or to any of the other documents referred to herein or therein shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

8.7 Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of New York (excluding the choice of law rules thereof).

8.8 Notices. All notices, demands, requests, or other communications which may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, sent by overnight courier or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telegram, telecopy or telex, addressed as follows:

(a) If the notice is to Programmer:

Entravision Communications Corporation

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

Attention: Walter F. Ulloa

Facsimile: (310) 447-3899

with a copy (which shall not constitute notice) to:

Entravision Communications Corporation

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

Attention: Michael G. Rowles

Facsimile: (310) 453-9919

(b) If to Licensee:

Big City Radio, Inc.

c/o Metromedia Company

One Meadowlands Plaza

East Rutherford, New Jersey 07073-2137

Attention: David A. Persing

Telephone: (201) 531-8022

Facsimile: (201) 531-2803

with a copy (which shall not constitute notice) to:

Hogan & Hartson L.L.P.

8300 Greensboro Drive

Suite 1100

McLean, Virginia 22102

Attention: Thomas E. Repke

Telephone: (703) 610-6138

Facsimile: (703) 610-6200

or to such other address as Licensee may from time to time designate.

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be hand delivered, sent, mailed or faxed in the manner described above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt or the delivery receipt, being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

8.9 Interpretation. Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

8.10 Counterparts. To facilitate execution, this Agreement may be executed in as many counterparts as may be required. It shall not be necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

8.11 Limitation on Benefits. The covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto and their respective successors and permitted assigns.

8.12 Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and assigns.

8.13 Taxes. Licensee and Programmer shall each pay its own ad valorem taxes, if any, which may be assessed on such party’s personal property for the periods that such items are owned by such party.

8.14 No Joint Venture or Partnership. Programmer shall act as an independent contractor in rendering its services hereunder. Neither party shall have any power or authority to act for or on behalf of the other or to bind the other in any manner whatsoever, except as and to the extent expressly provided for in this Agreement. The parties hereto agree that nothing herein shall constitute a joint venture or partnership between them.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have executed this Time Brokerage Agreement as of the date first above written.

PROGRAMMER: ENTRAVISION COMMUNICATIONS CORPORATION

By:		/S/ WALTER F. ULLOA

Name:		WALTER F. ULLOA

Title:		CHAIRMAN/CEO

LICENSEE: BIG CITY RADIO-LA, L.L.C.

By:		/S/ P. R. THOMSON

Name:		P. R. THOMSON

Title:		VP CFO

SCHEDULE 2.2

Station Expenses Categories

Facility:

Orion Pictures—1888 Century Park East #200, Los Angeles, CA

Fellow Management—Portola Plaza, Ventura, CA

Thompson Mullin & Sides—120 Main St, Fallbrook, CA

USDA Forestry—Santa Anita Canyon, Sierra Madre, CA

UA Corporation—450 Yucca Dr, Fallbrook, CA

Fox Loe Properties—Red Mountain, Ventura, CA

Dan T Paulson—46752 Rainbow Canyon, Temecula, CA

Arden/SpectraSite—303 N. Glenoaks, Burbank, CA

Central Parking System—Promotion Vehicle Parking

Norman Switzer—1630 Cotner, Los Angeles, CA

Equipment Rental/Lease:

Ford Credit NA—2000 Explorer

Ford Credit NA—2001 E150 Van

Ford Credit NA—1999 Explorer

GMAC—2001 GMC Yukon

QI Exchange—2001 Ford Explorer Sport

Service Agreement:

Arbitron—Scarborough

Arbitron—Standard

Arbitron—Arbitrends

Arbitron—Tapscan

Arbitron—Salescan

Arbitron—Maximizer

Copiers ETC—Konica Copier 3135

GE Capital—Copier & Fax Machine

Utilities:

Intermedia Communications—T1 Fallbrook

Southern California Disposal - 1630 Cotner

Bentall—HVAC—1888 Century Park East

LA DWP—1630 S.Cotner / Promotion Office

Pacific Bell—Fallbrook Transmitter Line

Pacific Bell—Fallbrook ISDN Line

Pacific Bell—Ventura Transmitter Line

Pacific Bell—Business Office—ISDN & Remote Line

Pacific Bell—Business Office—Listenter Line

Pacific Bell—Business Office Line

Pacific Bell—Listener Call-In Line

Southern California Edison—4882 McGrath St, Ventura Site

Southern California Edison—2180 Casutas Vista, Ventura Site

Verizon California—Arcadia Transmitter Backup Line

Verizon California—Directory Service

AT&T—ISDN Line Ventura

AT&T—ISDN Circuit

AT&T—Ventura Line

Employee Expense:

Engineering Manager

Employee Benefits for Engineering Manager (Health/Dental/Life)

SCHEDULE 2.3

Fee

During the Term, Programmer shall pay to Licensee a fee, as follows: (i) on the Effective Date, Programmer shall pay $1,000 (the “Base Fee”) to Licensee, and (ii) on each succeeding monthly anniversary of the Effective Date, Programmer shall pay the Base Fee to Licensee. In the event that the final month of the Term shall be less than a full calendar month, the Base Fee for such month shall be pro-rated by the ratio of the number of days of the month falling within the Term divided by the total number of calendar days in that month of the Term.

SCHEDULE 4.1

Broadcast Station Programming Policy Statement

I. No Plugola or Payola. Except for commercial messages aired in compliance with 47 C.F.R. §73.1212, Programmer shall not receive any consideration in money, goods, services, or otherwise, directly or indirectly (including to relatives) from any persons or company for the presentation of any programming over the Stations without reporting the same to Licensee’s station managers. The commercial mention of any business activity or “plug” for any commercial, professional, or other related endeavor, except where contained in an actual commercial message of a sponsor, is prohibited.

II. No Lotteries. Announcements giving any information about lotteries or games prohibited by applicable federal or state law or regulation are prohibited.

III. Election Procedures. At least fifteen (15) days before the start of any primary or election campaign, Programmer will clear with Licensee’s station managers the rates Programmer will charge for the time to be sold for use by qualified candidates for the public office and/or their supporters to make certain that the rates charged are in conformance with applicable law and the Stations’ policies.

IV. Required Announcements. Programmer shall broadcast (i) an announcement in a form satisfactory to Licensee at the beginning of each hour to identify the Stations and (ii) any other announcements that may be required by law or regulation.

V. No Illegal Announcements. No announcements or promotion prohibited by applicable federal, state law or regulation shall be made over the Stations. Any game, contest, or promotion relating to or to be presented over the Stations must be fully stated and explained in advance to Licensee, which reserves the right in its sole discretion to reject any game, contest, or promotion.

VI. Licensee Discretion Paramount. In accordance with the Licensee’s responsibility under the Communications Act of 1934, as amended, and the FCC Requirements, Licensee reserves the right to reject or terminate any advertising proposed to be presented or being presented over the Stations which is in conflict with established policies of the Stations or which in Licensee’s or its station managers’ reasonable judgment would be contrary to the public interest.

Licensee may waive any of the foregoing regulations in specific instances, if, in its opinion, the Stations will remain in compliance with all applicable laws, rules, regulations and policies and broadcasting in the public interest is served. In any case where questions of policy or interpretation arise, Programmer should submit the same to Licensee for decision before making any commitments in connection therewith.

SCHEDULE 7.1

Main Station FCC Licenses:

Call Sign	Facility ID	Location	FCC File No.	License Expiration Date
KLYY(FM)*	35113	Arcadia, California	BMLH-20000927ABW	12/01/2005
KSYY(FM)*	35139	Fallbrook, California	BLH-19850508KA	12/01/2005
KVYY(FM)	33567	Ventura, California	BLH-20010102AAI	12/01/2005

FM Translator FCC License:

Call Sign		Facility ID		Location		FCC File No.		License Expiration Date
K252BF		35138		Temecula, California		BLFT-19961120TG		12/01/2005

FM Booster FCC License:

Call Sign		Facility ID		Location		FCC File No.		License Expiration Date
KLYY-FM1		35114		Burbank, California		BLFTB-19980902TK		12/01/2005

Auxiliary FCC Licenses:None

Pending FCC Applications:

KLYY-FM1: Form 349 for construction permit for minor change in licensed facility, accepted for filing October 8, 2002. FCC File No. BPFTB-20021007ABI. A December 16, 2002 letter regarding this application was received from the FCC concerning a coordinate discrepancy; a responsive amendment is due by January 15, 2003.

FCC Antenna Structure Registration:None

Big City Radio filed a rulemaking proposal at the FCC seeking to upgrade KLYY(FM) (from Class A to Class B1) and to make a change in the allotted Channel for KSYY(FM). The FCC’s staff denied the proposal on October 9, 2002. On November 8, 2002, Big City filed an Application for Review of the staff’s action. The Application for Review remains pending.

Annex C

BIG CITY RADIO, INC.

WRITTEN CONSENT OF MAJORITY STOCKHOLDERS

~~December 23, 2002~~

March 5, 2003

The undersigned, being the holders of record of a majority of the outstanding shares of Class B common stock, par value $.01 per share of Big City Radio, Inc., a Delaware corporation (the “Corporation”), which constitute a majority of the voting power of the outstanding shares of common stock of the Corporation, including the outstanding shares of Class A common stock, par value $.01 per share, of the Corporation, entitled to vote, in accordance with Section 228(a) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby consent to the adoption of the following resolutions in accordance with Section 271 of the DGCL:

WHEREAS, the Board of Directors of the Corporation (the “Board”) has approved and adopted, and recommended for approval by the stockholders of the Corporation that certain Asset Purchase Agreement, dated as of December 23, 2002 (the “Entravision Purchase Agreement”), by and among the Corporation, Big City Radio-LA, L.L.C., a wholly-owned subsidiary of the Corporation (“BCR-LA” and together with the Corporation, “Seller”), and Entravision Communications Corporation (“~~Purchaser”~~Entravision”), pursuant to which Seller desires to sell, and ~~Purchaser~~Entravision desires to purchase, substantially all of Seller’s assets related to radio broadcast stations KVVY-FM, licensed to Ventura, California, KLYY-FM, licensed to Arcadia, California, and KSYY-FM, licensed to Fallbrook, California ~~(the “Entravision Purchase Agreement”~~(each such radio broadcast station, a “Station”);

WHEREAS, the Board ~~of Directors of the Corporation~~ believes and resolved that it is expedient, advisable and in the best interests of the Corporation, its stockholders and creditors for the Corporation to execute and deliver the ~~proposed~~ Entravision Purchase Agreement and to consummate the transactions ~~described therein and~~ contemplated thereunder, subject to the terms and conditions set forth in the Entravision Purchase Agreement and consistent with these resolutions;

WHEREAS, the Corporation and

its subsidiaries have entered into certain definitive asset purchase agreements and may enter into other definitive asset purchase agreements and/or amendments thereto or assignments thereof (collectively, the “Other Asset Purchase Agreements”), to sell to other persons or entities the assets related to radio broadcast stations of the Corporation other than the Stations (collectively, the “Other Station Assets”);

WHEREAS, the Board ~~of Directors of the Corporation~~ resolved that to the extent that the consummation of the transactions contemplated by the Entravision Purchase Agreement may constitute, by itself or in connection with other transactions of the Corporation (including sales of Other Station Assets pursuant to Other Asset Purchase Agreements), a plan to sell all or substantially all of the assets of the Corporation pursuant to Section 271 of the DGCL, the Board ~~of Directors~~ deemed the transactions contemplated by the Entravision Purchase Agreement to be expedient and in the best interests of the Corporation and recommended that the stockholders of the Corporation authorize, adopt and approve the Entravision Purchase Agreement and any other agreements referred to therein or contemplated thereby and all the transactions described therein and contemplated ~~thereunder.~~

thereunder;

WHEREAS, after the date hereof, the Corporation may seek to enter into one or more amendments or modifications to, or provide one or more waivers of the provisions of, the Entravision Purchase Agreement;

NOW THEREFORE, BE IT RESOLVED, that the Entravision Purchase Agreement and the transactions contemplated thereby are hereby approved, adopted, ratified and confirmed;

RESOLVED FURTHER, that to the extent that the consummation of the transactions contemplated by the Entravision Purchase Agreement may constitute, by itself or in connection with other transactions of the Corporation (including sales of Other Station Assets pursuant to Other Asset Purchase Agreements), a plan to sell all or substantially all of the assets of the Corporation pursuant to Section 271 of the DGCL, this Written Consent shall satisfy the requirement of stockholder approval as contemplated by Section 271 of the DGCL;

RESOLVED FURTHER, if any of the terms and conditions of the Entravision Purchase Agreement shall be amended, modified or waived (any such amendment, modification or waiver, an “Amendment”), the undersigned hereby approve, adopt, ratify and confirm any such Amendment as the Board, any duly authorized committee thereof or any duly authorized officer(s) of the Corporation, shall approve and adopt and, to the extent required under the DGCL, deem expedient and in the best interests of the Corporation, which Amendment may contain such terms and conditions as the Board, any duly authorized committee thereof or any duly authorized officer(s) of the Corporation, shall approve and adopt;providedhowever, that the foregoing resolution shall not apply to any Amendment pursuant to which the purchase price to be paid by Entravision for the Stations under the Entravision Purchase Agreement, as amended by any such Amendment, shall be decreased (with the value of any capital stock and any other form of non-cash consideration payable as the purchase price to be determined for such purposes by the Board, whose determination thereof shall be conclusive);

RESOLVED FURTHER, that consistent with the foregoing resolution, the appropriate officers of the Corporation, or any one or more of them, hereby are authorized and directed, in the name and on behalf of the Corporation, to do all things, to take all such actions and to execute, deliver and file all such other agreements, amendments, instruments, reports, documents and regulatory and other notices as may be determined by such officer(s) to be necessary or appropriate in effecting the forgoing resolutions (such determination to be

conclusively, but not exclusively, evidenced by the taking of such actions or the execution, delivery and filing of such agreements, amendments, instruments, reports, documents or regulatory or other notices by such officer(s)); ~~and~~

RESOLVED FURTHER, that all actions taken and all agreements, amendments, instruments, reports, documents and regulatory and other notices executed delivered or filed through the date hereof, and all actions to be taken and all agreements, amendments, instruments, reports, documents and regulatory and other notices to be executed, delivered or filed after the date hereof, by the appropriate officers of the Corporation, or any agents, attorneys, accountants and outside consultants of the Corporation, in the name and on behalf of the Corporation, in connection with the Entravision Purchase Agreement (and any subsequent Amendment), and the transactions contemplated thereunder are hereby authorized, approved, ratified and confirmed in all ~~respects.~~

respects; and

RESOLVED FURTHER, that this Written Consent of Majority Stockholders shall supplement, ratify and supersede that certain Written Consent of Majority Stockholders executed and delivered to the Corporation on December 23, 2002.

* * *

IN WITNESS WHEREOF, each of the undersigned ~~have~~has executed and delivered to the Corporation this Written Consent of Majority Stockholders as of ~~the 23rd day of December, 2002.~~

March 5, 2003.

~~Date: 12/23/02~~
	/s/ STUART SUBOTNICK
		Stuart Subotnick


~~Date: 12/23/02~~		/s/ ANITA SUBOTNICK
Anita Subotnick


SUBOTNICK PARTNERS, L.P.
		~~Anita Subotnick~~


		~~SUBOTNICK PARTNERS, L.P.~~

~~Date: 12/23/02~~		/s/ ANITA SUBOTNICK
		Anita Subotnick,
		General Partner

PART II

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (“Section 145”), as the same exists or may hereafter be amended, provides that a Delaware corporation may indemnify any persons who were, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer, director, employee or agent is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such officer or director has actually and reasonably incurred.

Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him or her and incurred by him or her in any such capacity, arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him or her under Section 145.

Entravision’s first restated certificate of incorporation provides that, to the fullest extent permitted by Delaware law, as it may be amended from time to time, none of Entravision’s directors will be personally liable to Entravision or Entravision’s stockholders for monetary damages resulting from a breach of fiduciary duty as a director, except for (i) liability resulting from a breach of the director’s duty of loyalty to Entravision or its stockholders, (ii) acts or omissions which are not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) unlawful payment of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law or (iv) a transaction from which the director derived an improper personal benefit.

Entravision’s certificate of incorporation also provides mandatory indemnification for the benefit of Entravision’s directors and officers and discretionary indemnification for the benefit of Entravision’s employees and agents, in each instance to the fullest extent permitted by Delaware law, as it may be amended from time to time. In addition, Entravision has entered into individual indemnification agreements with each of its directors and officers providing additional indemnification benefits. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to Entravision’s directors or officers or persons controlling us pursuant to the foregoing provisions, Entravision has been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Entravision provides directors’ and officers’ liability insurance coverage for its directors and officers.

II-1

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

The following exhibits are attached hereto and incorporated herein by reference:

Exhibit Number		Exhibit Description
2.1		Asset Purchase Agreement dated as of December 23, 2002 by and among Big City Radio, Inc., Big City Radio-LA, L.L.C., as Big City Radio, and Entravision Communications, Inc., as Purchaser (attached as Annex A to the joint information statement/prospectus contained in this registration statement).
3.1(1)		First Restated Certificate of Incorporation.
3.2(2)		Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock.
3.3* 3.3(3)		Second Amended and Restated Bylaws, as adopted on July 11, 2002.
5**		Opinion of Foley & Lardner.
10.1		Time Brokerage Agreement dated as of January 15, 2003 by and between Entravision Communications Corporation and Big City Radio - LA, L.L.C. (attached as Annex B to the joint information statement/prospectus contained in this registration statement).
21.1* 21.1(3)		Subsidiaries of the Registrant.
23.1**		Consent of Foley & Lardner (included in Exhibit 5).
23.2*		Consent of Independent Accountants for Entravision.
23.3*		Consent of Independent Accountants for Big City Radio.
24* 24(4)		Power of ~~Attorney (included on the Signature Page to this registration statement).~~Attorney.
99.1* 99.1(3)		FCC Application (Exhibit B to Exhibit 2.1, not included as part of Annex A to the joint information statement/prospectus contained in this registration statement).

*	Filed herewith

**	~~To be filed by amendment~~

(1)

Incorporated by reference from Entravision’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000, filed with the SEC on September 15, 2000.

(2)

Incorporated by reference from Entravision’s Annual Report on Form 10-K for the year ended December 31, 2000, filed with the SEC on March 28, 2001.

(3)

Previously filed as an exhibit to Entravision’s registration statement on Form S-4 (SEC File No. 333-102553), filed with the SEC on January 16, 2003.

(4)

Previously included on the signature page to Entravision’s registration statement on Form S-4 (SEC File No. 333-102553), filed with the SEC on January 16, 2003.

(b) Financial Statement Schedules:

None.

ITEM 22. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(b) The undersigned registrant hereby undertakes as follows:

(1) that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form; and

II-2

(2) that every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(d) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(e) The undersigned registrant undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(f) The undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Monica, State of California, on ~~January 16,~~March 18, 2003.

ENTRAVISION COMMUNICATIONS CORPORATION

By:		/s/ WALTER F. ULLOA
		Walter F. Ulloa Chairman and Chief Executive Officer

~~POWER OF ATTORNEY~~

~~KNOW ALL PERSONS BY THESE PRESENTS:~~

That the undersigned officers and directors of Entravision Communications Corporation, a Delaware corporation, do hereby constitute and appoint Walter F. Ulloa and John F. DeLorenzo, and either of them, the lawful attorneys-in-fact and agents with full power and authority to do any and all acts and things and to execute any and all instruments which said attorneys and agents, and either one of them, determine may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulations or requirements of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to this Registration Statement, to any and all amendments, both pre-effective and post-effective, and supplements to this Registration Statement, and to any and all instruments or documents filed as part of or in conjunction with this Registration Statement or amendments or supplements thereof, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or either one of them, will do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts.

~~II-4~~

~~IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated.~~

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

Signature	Title	Date

/s/ WALTER F. ULLOA Walter F. Ulloa	Chairman, Chief Executive Officer and Director (principal executive officer)	~~January 16,~~ March 18, 2003

/s/ PHILIP C. WILKINSON* Philip C. Wilkinson	President, Chief Operating Officer and Director	~~January 16,~~ March 18, 2003

/s/ JOHN F. DELORENZO* John F. DeLorenzo	Executive Vice President, Treasurer and Chief Financial Officer (principal financial officer and principal accounting officer)	~~January 16,~~ March 18, 2003

/s/ PAUL A. ZEVNIK* Paul A. Zevnik	Secretary and Director	~~January 16,~~ March 18, 2003

/s/ DARRYL B. THOMPSON* Darryl B. Thompson	Director	~~January 16,~~ March 18, 2003

/s/ AMADOR S. BUSTOS* Amador S. Bustos	Director	~~January 16,~~ March 18, 2003

/s/ MICHAEL S. ROSEN* Michael S. Rosen	Director	~~January 16,~~ March 18, 2003

/s/ ESTEBAN E. TORRES* Esteban E. Torres	Director	~~January 16,~~ March 18, 2003

/s/ PATRICIA DIAZ DENNIS* Patricia Diaz Dennis	Director	~~January 16,~~ March 18, 2003

~~II-5~~

* By:

/s/ WALTER F. ULLOA

Walter F. Ulloa

Attorney-in-fact

II-4

Exhibit Index

Exhibit Number		Exhibit Description
2.1		Asset Purchase Agreement dated as of December 23, 2002 by and among Big City Radio, Inc., Big City Radio-LA, L.L.C., as Big City Radio, and Entravision Communications, Inc., as Purchaser (attached as Annex A to the joint information statement/prospectus contained in this registration statement).
3.1(1)		First Restated Certificate of Incorporation.
3.2(2)		Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock.
3.3* 3.3(3)		Second Amended and Restated Bylaws, as adopted on July 11, 2002.
5**		Opinion of Foley & Lardner.
10.1		Time Brokerage Agreement dated as of January 15, 2003 by and between Entravision Communications Corporation and Big City Radio - LA, L.L.C. (attached as Annex B to the joint information statement/prospectus contained in this registration statement).
21.1* 21.1(3)		Subsidiaries of the Registrant.
23.1**		Consent of Foley & Lardner (included in Exhibit 5).
23.2*		Consent of Independent Accountants for Entravision.
23.3*		Consent of Independent Accountants for Big City Radio.
24* 24(4)		Power of ~~Attorney (included on the Signature Page to this registration statement).~~Attorney.
99.1* 99.1(3)		FCC Application (Exhibit B to Exhibit 2.1, not included as part of Annex A to the joint information statement/prospectus contained in this registration statement).

*	Filed herewith

**	~~To be filed by amendment~~

(1)

Incorporated by reference from Entravision’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000, filed with the SEC on September 15, 2000.

(2)

Incorporated by reference from Entravision’s Annual Report on Form 10-K for the year ended December 31, 2000, filed with the SEC on March 28, 2001.

(3)

Previously filed as an exhibit to Entravision’s registration statement on Form S-4 (SEC File No. 333-102553) filed with the SEC on January 16, 2003.

(4)

Previously included on the signature page to Entravision’s registration statement on Form S-4 (SEC File No. 333-102553) filed with the SEC on January 16, 2003.

Delaware		4833		95-4783236
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Lance Jon Kimmel, Esq.		Richard J. Parrino, Esq.
Foley & Lardner		Richard T. Horan, Jr., Esq.
2029 Century Park East, 35^th Floor ~~Floor~~		Hogan & Hartson L.L.P.
Los Angeles, California 90067		8300 Greensboro Drive
(310) 277-2223; Fax: (310) 557-8475		McLean, Virginia 22102
		(703) 610-6100; Fax: (703) 610-6200




Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Share(1)	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee

Class A common stock, par value $0.0001 per share	3,766,478	$9.27	$34,915,251	$3,212

		~~Page~~
Recent Developments		51 55
Selected Historical Financial Data		52 56
Security Ownership of Certain Beneficial Owners and Management		55 59
INFORMATION ABOUT BIG CITY RADIO		57 61
Business		57 61
Possible Delisting of Big City Radio Class A Common Stock		70 75
Selected Historical Financial Data		71 76
Management’s Discussion and Analysis of Financial Condition and Results of Operations		74 79
Quantitative and Qualitative Disclosures About Market Risk		86 90
Security Ownership of Certain Beneficial Owners and Management		86 91
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF BIG CITY RADIO		89 94
Unaudited Pro Forma Balance Sheet		89 94
Unaudited Pro Forma Statement of Operations		91 96
DILUTION		93 97
PLAN OF DISTRIBUTION OF ENTRAVISION CLASS A COMMON STOCK		94 98
Restriction on Resale of Entravision’s Class A Common Stock		94 98
Plan of Distribution		94 98
DESCRIPTION OF ENTRAVISION CAPITAL STOCK		97 101
Common Stock		97 101
Preferred Stock		98 102
Foreign Ownership		99 104
Delaware Anti-Takeover Law and Charter Provisions		~~100~~ 104
Registration Rights		~~101~~ 106
Transfer Agent and Registrar		~~101~~ 106
Listing		~~101~~ 106
COMPARATIVE RIGHTS OF ENTRAVISION AND BIG CITY RADIO STOCKHOLDERS		~~102~~ 107
General		~~102~~ 107
Authorized Shares of Capital Stock; Dividend Rights		~~102~~ 107
Voting Rights		~~103~~ 108
Supermajority Voting Requirements; Business Combinations		~~104~~ 109
Appraisal Rights		~~105~~ 110
Special Meetings of Stockholders		~~105~~ 110
Stockholder Action Without a Meeting		~~105~~ 111
Stockholder Proposal Procedures		~~106~~ 111
Classified Board of Directors		~~107~~ 112
Nominations of Directors		~~107~~ 112
Removal of Directors		~~108~~ 113
Vacancies on the Board of Directors		~~108~~ 114
Indemnification		~~109~~ 114
Limitation of Personal Liability of Directors		~~109~~ 115
Amendment of Certificate of Incorporation		~~110~~ 115
Amendment of Bylaws		~~110~~ 116
LEGAL MATTERS		~~111~~ 116
EXPERTS		~~111~~ 116
WHERE YOU CAN FIND MORE INFORMATION		~~112~~ 117
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF BIG CITY RADIO		F-1
ANNEX A: ASSET PURCHASE AGREEMENT		A-1
ANNEX B: TIME BROKERAGE AGREEMENT		B-1
ANNEX C: WRITTEN CONSENT OF BIG CITY RADIO STOCKHOLDERS		C-1

	High		Low
Year Ended December 31, 2001
First Quarter	$	20.50	$	7.00
Second Quarter	$	14.80	$	8.70
Third Quarter	$	13.70	$	7.25
Fourth Quarter	$	12.66	$	8.11
Year Ended December 31, 2002
First Quarter	$	16.50	$	10.40
Second Quarter	$	17.25	$	11.50
Third Quarter	$	13.25	$	8.55
Fourth Quarter	$	13.60	$	9.30
Year Ending December 31, 2003
First Quarter (through , 2003)	$		$

		Page
QUESTIONS AND ANSWERS ABOUT THE ASSET SALE		1
SUMMARY		3
The Companies		3
The Asset Sale		4 3
Reasons for the Asset Sale		4
Other Big City Radio Station Sales		4
Regulatory Approvals		4
Conditions to the Asset Sale		4
Interests of Big City Radio Executive Officers and Directors		5 4
Comparison of Stockholder Rights		5 4
Material Federal Income Tax ~~Consequences~~Considerations		5 4
Accounting Treatment		5 4
Termination		5
Consequences of Termination to Big City Radio		6 5
Listing of Entravision Shares		6 5
Risk Factors		6 5
Summary Historical Financial Data of Entravision		7 6
Summary Historical Financial Data of Big City Radio		9 8
Market Price and Dividend Information		11 10
RISK FACTORS		13 12
Risks Related to the Asset Sale		13 12
Risks Related to Entravision’s Business		15
Risks Related to Entravision’s Capital Structure		20
FORWARD-LOOKING STATEMENTS		22
APPROVAL OF THE ASSET SALE BY BIG CITY RADIO STOCKHOLDERS		23
THE ASSET SALE		24
General		24
Background of the Asset Sale		24
Big City Radio’s Reasons for the Asset Sale		28 30
Entravision’s Reasons for Entering Into the Asset Sale		30 32
Absence of a Fairness Opinion for Big City Radio		32 33
Interests of Big City Radio Executive Officers and Directors		32 34
Other Big City Radio Station Sales		33 35
Application of Asset Sale Proceeds; Future Operations of Big City Radio		34 36
Regulatory Approvals Required to Complete the Asset Sale		36 39
Material Federal Income Tax Considerations		38 41
Accounting Treatment		38 42
Absence of Dissenters’ Rights		38 42
TERMS OF THE ASSET PURCHASE AGREEMENT		39 43
The Asset Sale		39 43
Consideration to be Paid by Entravision		40 44
Closing		41 45
Representations and Warranties		41 45
Covenants and Agreements		42 46
Securities Matters		44 48
Conditions to Closing		44 48
Termination of the Asset Purchase Agreement		45 49
Waiver, Assignment and Amendment		46 50
Miscellaneous Provisions		46 50
OTHER PRINCIPAL AGREEMENTS BETWEEN ENTRAVISION AND BIG CITY RADIO		47 51
Time Brokerage Agreement		47 51
Agreement of Principal Stockholders of Big City Radio to Consent to Asset Sale		49 53

	Year Ended December 31,									Nine-Month Period Ended September 30,
	2001			2000			1999			2002			2001
										(unaudited)
Statement of Operations Data:
Net revenue:
Television	$	91,902		$	82,417		$	56,846		$	82,672		$	67,163
Radio		65,479			43,338			2,153			56,348			48,936
Outdoor and publishing		51,527			28,266			—			36,950			39,187

Total net revenue		208,908			154,021			58,999			175,970			155,286

Operating, selling, general and administrative expenses (excluding non-cash stock-based compensation)		142,832			97,587			36,052			121,381			106,827
Corporate expenses		15,636			12,741			5,809			12,076			11,673
Non-cash stock-based compensation(1)		3,243			5,822			29,143			2,499			2,418
Depreciation and amortization		120,017			69,238			15,982			28,292			87,964

Operating income (loss)		(72,820	)		(31,367	)		(27,987	)		11,722			(53,596	)

Interest expense, net		(20,978	)		(23,916	)		(9,591	)		(18,491	)		(16,842	)
Non-cash interest expense relating to related-party beneficial conversion options(2)		—			(39,677	)		(2,500	)		—			—
Gain (loss) on sale of assets		4,977			—			—			(707	)		1,668
Income tax (expense) benefit		22,999			2,934			121			(300	)		24,757
Equity in earnings (loss) of nonconsolidated affiliates		27			(214	)		—			95			67

Net loss		(65,795	)		(92,240	)		(39,957	)		(7,681	)		(43,946	)
Accretion of preferred stock redemption value		(10,117	)		(2,449	)		—			(7,548	)		(4,532	)

Net loss applicable to common stock	$	(75,912	)	$	(94,689	)	$	(39,957	)	$	(15,229	)	$	(48,478	)

Net loss per share, basic and diluted	$	(0.66	)	$	(0.27	)				$	(0.13	)	$	(0.42	)

Pro forma net loss applicable to common stock(3)				$	(88,785	)	$	(37,579	)

Pro forma net loss per share, basic and diluted(3)				$	(1.34	)	$	(1.16	)

Other Financial Data:
Broadcast cash flow(4)	$	66,076		$	56,434		$	22,947		$	54,589		$	48,459
EBITDA as adjusted(4)		50,440			43,693			17,138			42,513			36,786
Cash interest expense		20,946			29,526			9,690			14,371			17,071
Capital expenditures		28,941			23,675			12,825			16,194			21,666
Cash flows from operating activities		11,998			10,608			6,128			21,924			7,407
Cash flows from investing activities		(63,733	)		(1,002,300	)		(59,063	)		(118,748	)		(61,774	)
Cash flows from financing activities		1,524			1,058,559			51,631			89,985			2,112

	As of December 31,						As of September 30,
	2001		2000		1999		2002		2001
							(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	19,013	$	69,224	$	2,357	$	12,174	$	16,969
Intangible assets, including goodwill		1,273,419		1,255,386		152,387		1,370,860		1,297,069
Total assets		1,535,517		1,560,493		205,017		1,641,930		1,557,295
Total long-term debt, including current portion		252,769		254,947		167,306		310,045		253,354
Total stockholders’ equity		987,395		1,055,377		28,011		1,018,577		1,013,370

	Year Ended December 31,															Nine-Months Ended September 30,
	1997 (1)(9)			1998 (2)(3)(9)			1999 (4)(5)(9)			2000 (6)(9)			2001 (7)(8)(9)			2001 (9)			2002 (9)
																(unaudited)
Statement of Operations Data:
Gross revenues	$	11,731		$	15,883		$	23,296		$	26,820		$	22,395		$	17,508		$	11,282
Net revenues		10,460			14,202			20,604			23,766			20,086			15,705			10,227
Station operating expenses		12,979			17,525			23,566			26,047			21,307			16,731			12,026
Internet operating expenses		—			—			51			1,457			436			421			—
Corporate, general and administrative expenses		1,745			2,527			4,371			3,845			3,610			2,752			2,816
Employment incentives		3,863			808			—			—			—			—			—
Cost of abandonment of station acquisition		—			—			—			550			—			—			—
Impairment loss on goodwill		—			—			—			—			897			—			—
Depreciation and amortization		1,791			2,528			3,812			4,863			4,818			3,748			1,126
Operating loss		(9,918	)		(9,186	)		(11,196	)		(12,966	)		(10,982	)		(7,947	)		(5,741	)
Gain on sale of stations		—			—			663			—			2,275			—			—
Interest expense		(4,488	)		(12,608	)		(16,953	)		(18,392	)		(21,540	)		(15,016	)		(15,181	)
Other, net		81			(224	)		(337	)		(83	)		11			(197	)		(11	)
Loss from continuing operations before income taxes		(14,305	)		(18,942	)		(25,871	)		(31,190	)		(30,125	)		(23,118	)		(20,805	)
Income tax benefit, net		1,050			1,988			63			63			63			47			47
Deferred income taxes resulting from conversion to C corporation status		(3,350	)		—			—			—			—			—			—
Loss from continuing operations before discontinued operations and extraordinary loss		(16,605	)		(16,954	)		(25,808	)		(31,127	)		(30,062	)		(23,071	)		(20,758	)
Loss on discontinued operations		—			—			—			(41	)		(645	)		(447	)		(658	)
Extraordinary loss on extinguishment of debt, net of income taxes		(313	)		(495	)		—			—			—			—			—
Net loss	$	(16,918	)	$	(17,449	)	$	(25,808	)	$	(31,168	)	$	(30,707	)	$	(23,518	)	$	(21,416	)
Basic and dilutive loss per common share:
Continuing operations	$	(1.74	)	$	(1.21	)	$	(1.83	)	$	(2.15	)	$	(2.08	)	$	(1.59	)	$	(1.43	)
Discontinued operations		—			—			—			—			(0.04	)		(0.03	)		(0.05	)
Extraordinary loss		(0.03	)		(0.03	)		—			—			—			—			—

Net loss	$	(1.77	)	$	(1.24	)	$	(1.83	)	$	(2.15	)	$	(2.12	)	$	(1.62	)	$	(1.48	)

	As of December 31,													As of September 30,
	1997		1998		1999			2000			2001			2001			2002
														(unaudited)
Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	80	$	54.151	$	10.565		$	2,757		$	18,194		$	177		$	3,402
Intangibles, net		54,115		80,309		113,873			110,476			77,063			108,011			76,955
Total assets		60,108		152,082		144,511			129,846			108,445			123,475			90,317
Interest payable		—		—		—			—			5,873			10,815			10,771
Short-term debt		326		1,287		974			36			79			2,275			174,069	(10)
Long-term liabilities		30,142		138,227		153,094			170,917			174,420			174,750			389
Stockholders’ equity (deficiency)		25,032		8,391		(15,935	)		(46,929	)		(77,627	)		(70,438	)		(99,043	)

	Year Ended December 31,
	2000 (1)(2)(3)			2001 (1)(2)(4)(5)			2002 (1)(2)

Statement of Operations Data:
Gross revenues	$	6,679		$	4,622		$	—
Net revenues		5,966			4,125			—
Station operating expenses		5,538			4,272			—
Internet operating expenses		1,457			436			—
Corporate, general and administrative expenses		3,845			3,610			4,717
Employment incentives		—			—			—
Cost of abandonment of station acquisition agreement		550			—			—
Impairment loss on goodwill		—			897			—
Depreciation and amortization		1,312			1,263			120
Operating loss from continuing operations		(6,736	)		(6,353	)		(4,837	)
Gain on sale of stations		—			2,275			—
Other, net		(115	)		(173	)		(21	)
Loss from continuing operations before income taxes		(6,570	)		(4,140	)		(4,706	)
Income tax benefit, net		63			63			4,284
Income (loss) from continuing operations before discontinued operations and extraordinary loss		(6,507	)		(4,077	)		(422	)
Loss from discontinued operations, net of income tax expense of $2,000 in 2002		(24,661	)		(26,630	)		(27,300	)
Extraordinary loss on extinguishment of debt, net of income taxes		—			—			—
Net loss	$	(31,168	)	$	(30,707	)	$	(27,722	)
Basic and dilutive income (loss) per common share:
Continuing operations	$	(0.45	)	$	(0.28	)	$	(0.03	)
Discontinued operations		(1.70	)		(1.84	)		(1.88	)
Extraordinary loss		—			—			—

Net loss	$	(2.15	)	$	(2.12	)	$	(1.91	)

	As of December 31,
	2000			2001(5)			2002(6)
Balance Sheet Data:
Cash	$	862		$	3,194		$	732
Assets held for sale		—			—			79,571
Intangibles, net		110,476			77,063			—
Total assets		129,846			108,445			87,528
Interest payable		—			5,873			15,983
Short-term Debt		36			79			174,074
Long-term liabilities		170,917			174,420			301
Stockholders’ equity (deficiency)		(46,929	)		(77,627	)		(105,357	)

	Entravision Class A Common Stock		Big City Radio Class A Common Stock
December 23, 2002	$	10.35	$	0.32	(1)
December 31, 2002	$	9.98	$	1.70
, 2003	$		$

	Year Ended December 31,															Nine Months Ended September 30,
	1997 (1)(9)			1998 (2)(3)(9)			1999 (4)(5)(9)			2000 (6)(9)			2001 (7)(8)(9)			2001 (9)			2002 (9)
																(unaudited)
Statement of Operations Data:
Gross revenues	$	11,731		$	15,883		$	23,296		$	26,820		$	22,395		$	17,508		$	11,282
Net revenues		10,460			14,202			20,604			23,766			20,086			15,705			10,227
Station operating expenses		12,979			17,525			23,566			26,047			21,307			16,731			12,026
Internet operating expenses		—			—			51			1,457			436			421			—
Corporate, general and administrative expenses		1,745			2,527			4,371			3,845			3,610			2,752			2,816
Employment incentives		3,863			808			—			—			—			—			—
Cost of abandonment of station acquisition		—			—			—			550			—			—			—
Impairment loss on goodwill		—			—			—			—			897			—			—
Depreciation and amortization		1,791			2,528			3,812			4,863			4,818			3,748			1,126
Operating loss		(9,918	)		(9,186	)		(11,196	)		(12,966	)		(10,982	)		(7,947	)		(5,741	)
Gain on sale of stations		—			—			663			—			2,275			—			—
Interest expense		(4,488	)		(12,608	)		(16,953	)		(18,392	)		(21,540	)		(15,016	)		(15,181	)
Other, net		81			(224	)		(337	)		(83	)		11			(197	)		(11	)
Loss from continuing operations before income taxes		(14,305	)		(18,942	)		(25,871	)		(31,190	)		(30,125	)		(23,118	)		(20,805	)
Income tax benefit, net		1,050			1,988			63			63			63			47			47
Deferred income taxes resulting from conversion to C corporation status		(3,350	)		—			—			—			—			—			—
Loss from continuing operations before discontinued operations and extraordinary loss		(16,605	)		(16,954	)		(25,808	)		(31,127	)		(30,062	)		(23,071	)		(20,758	)
Loss on discontinued operations		—			—			—			(41	)		(645	)		(447	)		(658	)
Extraordinary loss on extinguishment of debt, net of income taxes		(313	)		(495	)		—			—			—			—			—
Net loss	$	(16,918	)	$	(17,449	)	$	(25,808	)	$	(31,168	)	$	(30,707	)	$	(23,518	)	$	(21,416	)
Basic and dilutive loss per common share:
Continuing operations	$	(1.74	)	$	(1.21	)	$	(1.83	)	$	(2.15	)	$	(2.08	)	$	(1.59	)	$	(1.43	)
Discontinued operations		—			—			—			—			(0.04	)		(0.03	)		(0.05	)
Extraordinary loss		(0.03	)		(0.03	)		—			—			—			—			—

Net loss	$	(1.77	)	$	(1.24	)	$	(1.83	)	$	(2.15	)	$	(2.12	)	$	(1.62	)	$	(1.48	)

	Year Ended December 31,									Nine Months Ended September 30,
	1999			2000			2001			2001			2002
										(unaudited)
Reported net loss	$	(25,808	)	$	(31,168	)	$	(30,707	)	$	(23,518	)	$	(21,416	)
Add back: Goodwill amortization		53			321			319			239			—
Add back: Broadcast license amortization		2,512			2,970			2,813			2,207			—

Adjusted net loss	$	(23,243	)	$	(27,877	)	$	(27,575	)	$	(21,072	)	$	(21,416	)

Basic and diluted net loss per share:
Reported net loss	$	(1.83	)	$	(2.15	)	$	(2.12	)	$	(1.62	)	$	(1.48	)
Add back: Goodwill amortization		0.00			0.02			0.02			0.02			—
Add back: Broadcast license amortization		0.18			0.21			0.19			0.15			—

Adjusted net loss	$	(1.65	)	$	(1.92	)	$	(1.91	)	$	(1.45	)	$	(1.48	)

	Senior Notes		Operating Leases		Employment Contracts		Total
2003	$	174,000,000		1,652,000		804,000		176,456,000
2004		—		1,089,000		—		1,089,000
2005		—		649,000		—		649,000
2006		—		446,000		—		446,000
Thereafter		—		422,000		—		422,000

	$	174,000,000	$	4,258,000	$	804,000	$	179,062,000

	Historical			Sale of Stations			Pro Forma Adjustments			Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	323,000		$	199,875,000	(1)	$	(184,771,000	)(4)	$	15,427,000
Investment-Entravision Class A Common		—			40,000,000	(1)		—			40,000,000
Cash held in investment, restricted		1,297,000			—			—			1,297,000
Marketable securities		3,079,000			—			—			3,079,000
Accounts receivable, net		2,269,000			—			—			2,269,000
Interest receivable		9,000			—			—			9,000
Prepaid expenses and other current assets		640,000			—			—			640,000

Total current assets		7,617,000			239,875,000			(184,771,000	)		62,721,000
Property and equipment, net		3,970,000			(3,557,000	)(1)		—			413,000
Intangibles, net		76,955,000			(76,955,000	)(1)		—			—
Deferred financing fees, net		1,605,000			—			(1,605,000	)(5)		—
Other assets		170,000			—			—			170,000

Total assets	$	90,317,000		$	159,363,000		$	(186,376,000	)	$	63,304,000

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	696,000		$	—		$	—		$	696,000
Accrued expenses		1,198,000			2,500,000	(2)		—			3,698,000
Interest payable		10,771,000			—			(10,771,000	)(4)		—
Senior discount notes		174,000,000			—			(174,000,000	)(4)		—
Other current liabilities		69,000			(69,000	)(1)		—			—

Total current liabilities		186,734,000			2,431,000			(184,771,000	)		4,394,000

Long-term liabilities:
Other long-term liabilities		389,000			(353,000	)(1)		—			36,000
Deferred income tax liabilities		2,237,000			12,163,000	(3)		—			14,400,000
Stockholders’ equity (deficiency):
Stockholders’ equity and additional paid-in capital		29,637,000			—			—			29,637,000
Accumulated deficit		(128,680,000	)		145,122,000	(1)(2)(3)		(1,605,000	)(5)		14,837,000

		(99,043,000	)		145,122,000			(1,605,000	)		42,237,000

Total liabilities and stockholders’ equity (deficiency)	$	90,317,000		$	159,363,000		$	(186,376,000	)	$	63,304,000