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TWST: What are the trends and issues over the past 12 months that have set the table for the broadcasting stocks for the next 12 months?

Mr. Sweeney: 2000 has been a very difficult year for broadcasting stocks. The average radio stock is down about 55% year to date, and the average television stock is down about 36% year to date. Concerns that impact the broadcasting stocks, radio in particular, are primarily the slowing rate of growth of ad spending in 2000 versus 1999. In particular the second half of 1999 and the first half of 2000 were periods of extremely strong radio advertising growth driven in part by dot-com advertisers as well as a very strong macroeconomic environment. As the economy has weakened in the second half of 2000 and as the dot-com advertisers have become less of a factor in the advertising world, the growth rate in radio ad spending has slowed dramatically. What had been a 20% growth rate has declined to a more normalized (by historical standards) 7%-8% growth rate. That deceleration in radio ad spending that began in the second half of this year has caused the radio stocks to decline dramatically. As we look out for the next 12 months, the radio industry will have difficult comparisons through the second quarter of 2001, primarily due to the negative dot-com comparisons in addition to a softer overall advertising environment. Therefore, in the short term, radio stock price performance could be sluggish. Beyond that, beginning in the third quarter of next year, the comparisons get much easier. Assuming that the economy does in fact achieve a soft landing (we assume 2-4% GDP growth), we believe radio companies in 2001 can post revenue growth of 7%-9%, and aftertax cash flow per share growth of approximately 20%. If those growth rates do come through, these radio stocks over the next 12 to 24 months will offer excellent returns for shareholders.

TWST: Both Radio One (Nasdaq:ROIA) and Hispanic Broadcasting (NYSE:HSP) have relatively higher margins. Why is that? Is it better use of their capacity? Is it efficiencies in their cost structure?

Mr. Sweeney: Both of those companies typically operate in the larger markets, and the larger radio markets typically enjoy higher margins. Both of those companies operate very lean operations and they operate very strong stations in typically larger markets.

TWST: Hispanic Broadcasting, in your estimates, recently has had almost double the growth rate of others in this group. What factors contribute to that growth rate?

Mr. Sweeney: Their growth has been driven primarily by the growth of the Hispanic demographic. Again, they are tremendously well positioned for that. In addition, their growth has been driven by, and will continue to be driven by, the development of a number of their recently acquired stations. This is a company that’s grown significantly through acquisition. Oftentimes they buy English language radio stations which they then convert to Spanish. That process is typically dilutive to earnings for the first year, but then as the station turns cash flow positive, typically after 12 months, the cash flow growth of that station is pretty extraordinary. Hispanic has had a very good track record of developing new Spanish language radio stations.

TWST: What is your outlook for Hispanic Broadcasting?

Mr. Sweeney: Hispanic is rated a buy with a price target of 55 based on 2001 estimates of broadcast and aftertax cash flow.