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Four analysts and top management from seven sector firms examine the broadcasting sector in this special 57-page Broadcasting Industry issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info531.htm

TWST: Will you begin by telling us about the performance of the radio stocks and the Spanish language broadcasters in the second half of 2001 and in 2002 year to date?

Ms. Goldwasser: It was a very tough period generally for advertising-based businesses. What we learned throughout the period beginning in the second half of 2000 through the end of last year is that Spanish-language media outperforms general market media in good times and bad. I estimate that Spanish-language media revenues increased 4% in 2001 compared to a decline of 6% for the general ad market. Clearly, there were several things going on in 2001 that made it an unusually difficult advertising environment for all broadcasters. In the beginning of the year, broadcasters struggled with the disappearance of dot-com advertising. Then, the economy proved to be dramatically weaker than we had anticipated at the beginning of the year. Finally, the tragedy of September 11 and the impact it had on advertisers’ willingness to spend took its toll on industry revenue in the fourth quarter. From what I can tell, the ad market did not deteriorate further in the first quarter of 2002, but the recovery will likely be gradual, not robust.

TWST: For the most part, how did the radio stations operators approach the advertising conundrum in the days following the events of September 11?

Ms. Goldwasser: Different broadcasters seemed to handle it in different ways, according to media buyers we’ve spoken with recently. Some broadcasters and stations allowed their advertisers to cancel advertising. They tried to work with their advertising clients, understanding the sensitivity that was necessary in those days following September 11. Other broadcasters were less gracious, and that might come back to haunt some of those stations that didn't treat their advertisers as partners in the last quarter of last year.

TWST: How would you assess the impact of the downturn in ad spending on the broadcasters that you follow?

Ms. Goldwasser: None of the broadcasters was immune. Radio industry revenue declined 7% in 2001 with comparable declines in each quarter of the year. I think September 11 caused what could have been recovery in the fourth quarter to be another trouncing.

TWST: How does that compare to other sectors of the media?

Ms. Goldwasser: Radio did a little worse than the advertising economy overall. Radio advertising spending declined 7% in 2001, versus our estimate of a 6% decline for advertising in general.

TWST: Are there any other stocks that you’d like to talk about, any other stocks you’re following at this time?

Ms. Goldwasser: Yes, my list has become more eclectic recently. I picked up coverage of Martha Stewart Living Omnimedia (NYSE:MSO). It’s not a broadcasting company, although it produces television and radio programs. Most of its revenue comes from its publishing business. In looking for good ideas within the media space, I was intrigued by the company’s success in building a premier franchise and the many opportunities that it has to grow both its media businesses and its merchandise-related divisions.

This special issue includes:

1) Broadcasting Industry - In an in-depth (11,400 words) Analyst Roundtable, Frank Bonechak, Founder of Edge Capital, James Marsh Jr., Managing Director at Robinson Stephens and Leland Westerfield, Director for the Communications Group at UBS Warburg, examine the outlook for the sector including regulatory outlook, cross-ownership rules and share specific stock recommendations.

2) TWST confidential Off-The-Record survey of management performance of seventeen sector firms asked market insiders about the ability of management teams to create shareholder value.

3) Radio & Spanish Language Broadcasters - In an in-depth (3,900 words) Interview, Alissa Goldwasser, Research Analyst at William Blair & Company, examines the outlook for the sector and shares specific stock recommendations.

4) CEO interviews (average 2,500 words). Top management of seven sector firms examine the outlook for their firm and the sector.