ENTERCOM COMMUNICATIONS CORP, S-1, 1998-08-13

ENTERCOM COMMUNICATIONS CORP
S-1, 1998-08-13

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1998

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ENTERCOM COMMUNICATIONS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
PENNSYLVANIA 4832 23-1701044
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

401 CITY AVENUE, SUITE 409
BALA CYNWYD, PENNSYLVANIA 19004
(610) 660-5610
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

JOSEPH M. FIELD
CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE OFFICER AND PRESIDENT
ENTERCOM COMMUNICATIONS CORP.
401 CITY AVENUE, SUITE 409
BALA CYNWYD, PENNSYLVANIA 19004
(610) 660-5610
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:

<TABLE>
<S> <C> <C>
JAMES W. MCKENZIE, JR., ESQ. JOHN C. DONLEVIE, ESQ. JEREMY W. DICKENS, ESQ.
MORGAN, LEWIS & BOCKIUS LLP EXECUTIVE VICE PRESIDENT WEIL, GOTSHAL & MANGES LLP
2000 ONE LOGAN SQUARE AND GENERAL COUNSEL 100 CRESCENT COURT, SUITE 1300
PHILADELPHIA, PENNSYLVANIA 19103 ENTERCOM COMMUNICATIONS CORP. DALLAS, TEXAS 75201
(215) 963-5000 401 CITY AVENUE, SUITE 409 (214) 746-7700
BALA CYNWYD, PENNSYLVANIA 19004
(610) 660-5610
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- ---------------

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A Common Stock, par value $.01 per share.......... $241,500,000 $71,242.50
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee; based
on a bona fide estimate of the maximum offering price of the securities
being registered in accordance with Rule 457(o).
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED AUGUST 13, 1998
Shares

[ENTERCOM LOGO]
Entercom Communications Corp.
CLASS A COMMON STOCK
($.01 par value)
------------------

Of the shares of Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), of Entercom Communications Corp., a Pennsylvania corporation
(the "Company" or "Entercom"), offered hereby, shares are being sold by
the Company and shares are being sold by the Selling Shareholder named
herein under "Principal and Selling Shareholders" (the "Offering"). The Company
will not receive any of the proceeds from the shares of Class A Common Stock
sold by the Selling Shareholder. Prior to the Offering, there has been no public
market for the Class A Common Stock. It is anticipated that the initial public
offering price per share will be between $ and $ per share. For
information relating to the factors to be considered in determining the initial
public offering price to the public, see "Underwriting."

The Company's authorized common stock consists of Class A Common Stock, Class B
Common Stock, par value $.01 per share ("Class B Common Stock"), and Class C
Common Stock, par value $.01 per share ("Class C Common Stock" and, together
with the Class A Common Stock and the Class B Common Stock, the "Common
Stock"). The rights of each share of Common Stock are essentially identical
other than with respect to voting rights. The Class A Common Stock
entitles the holders thereof to one vote per share, the Class B Common
Stock entitles the holders thereof to ten votes per share subject to
certain exceptions and the Class C Common Stock has no voting rights,
except as otherwise required by law. Upon completion of the Offering
(assuming no exercise of the over-allotment option), (i) the holders
of Class A Common Stock will have approximately % of the total
voting power of the outstanding Common Stock, (ii) Joseph M.
Field, the Company's Chairman of the Board, Chief Executive
Officer and President, and David J. Field, the Company's Chief
Operating Officer and Chief Financial Officer, will beneficially
own all the outstanding shares of Class B Common Stock,
representing approximately % of the total voting power of the
outstanding Common Stock and (iii) the Selling Shareholder,
which is an affiliate of Chase Capital Partners, will own %
of the outstanding Class A Common Stock, representing
approximately % of the total voting power of the
outstanding Common Stock. See "Recapitalization, Chase
Conversion and Former S Corporation Status." Subject to
any necessary approval of the Federal Communications
Commission (the "FCC"), the Class B Common Stock and the
Class C Common Stock are convertible in whole or in
part at any time into Class A Common Stock on a
share-for-share basis. See "Description of Capital
Stock."

Application will be made to list the Class A Common Stock on the New York Stock
Exchange.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE
14 HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS COMPANY(1) SHAREHOLDER
-------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share............................................ $ $ $ $
Total(2)............................................. $ $ $ $
</TABLE>

- ---------------
(1) Before deduction of expenses, all of which are payable by the Company,
estimated at $ .

(2) The Company and the Selling Shareholder have granted to the Underwriters an
option, exercisable by Credit Suisse First Boston Corporation for 30 days
from the date of this Prospectus, to purchase a maximum of
additional shares of Class A Common Stock from the Company and
additional outstanding shares of Class A Common Stock from the Selling
Shareholder at the Price to Public less underwriting discounts and
commissions to cover over-allotments, if any. If the option is exercised in
full, the total Price to Public will be $ , Underwriting Discounts
and Commissions will be $ , Proceeds to Company will be $ and
Proceeds to Selling Shareholder will be $ . See "Underwriting."

The shares of Class A Common Stock are offered by the several Underwriters
when, as and if delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. It is expected that the shares
will be ready for delivery on or about , 1998 against payment in
immediately available funds.

Credit Suisse First Boston
BT Alex. Brown
Goldman, Sachs & Co.
Morgan Stanley Dean Witter

Prospectus dated , 1998
<PAGE> 3

[INSIDE COVER ART]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
------------------
<PAGE> 4

CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA

Unless otherwise indicated herein, (i) market ranking by radio advertising
revenue, market radio advertising revenue, market revenue share and the number
of viable radio stations per market have been obtained from Duncan's Radio
Market Guide (1998 ed.) ("Duncan's"); (ii) the Company's revenue rank in the
radio broadcasting industry is derived from Duncan's, as adjusted to reflect the
CBS Transactions (as defined) and (iii) all audience share data and audience
rankings, except where specifically stated to the contrary, have been derived
from surveys of persons, listening Monday through Sunday, 6 a.m. to 12 midnight,
in the indicated demographic, as reported by 1998 Winter Arbitron, Radio Market
Reports, The Arbitron Company (copyright 1998) ("Arbitron"). Duncan's defines
"viable stations" as stations which are active and viable competitors for
advertising dollars in their market.

Unless otherwise indicated herein, (i) "broadcast cash flow" consists of
operating income before depreciation, amortization, net expenses (income) of any
time brokerage agreement (a "TBA") and corporate expenses, (ii) "EBITDA"
consists of operating income before depreciation, amortization and net TBA
expenses (income), (iii) "pro forma income before extraordinary items" consists
of the Company's income before extraordinary items as adjusted to reflect the
Company's income during the relevant periods as if the Company had been a
corporation subject to taxation under Subchapter C (a "C Corporation") of the
Internal Revenue Code of 1986, as amended (the "Code"), assuming an effective
tax rate of 38% per annum, instead of a corporation subject to Subchapter S of
the Code (an "S Corporation"), such taxes hereinafter referred to as "pro forma
income taxes" and (iv) "after-tax cash flow" consists of pro forma income before
extraordinary items minus net gain on sale of assets (net of tax) and plus
depreciation, amortization, and the deferred tax provision (or minus the
deferred tax benefit). Although broadcast cash flow, EBITDA and after-tax cash
flow are not measures of performance or liquidity calculated in accordance with
generally accepted accounting principles ("GAAP"), management believes that
these measures are useful to an investor in evaluating the Company because they
are widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, none of these measures should be considered in
isolation or as a substitute for operating income, cash flows from operating
activities or any other measure for determining the Company's operating
performance or liquidity that is calculated in accordance with GAAP. Moreover,
because these measures are not calculated in accordance with GAAP, they are not
necessarily comparable to similarly titled measures employed by other companies.

Unless otherwise indicated, pro forma results of operations for the year
ended September 30, 1997 and for the six months ended March 31, 1997 and 1998
give effect to the Recapitalization (as defined), the Completed Transactions (as
defined), the CBS Transactions (as defined), the S Corporation Distribution (as
defined), the Chase Conversion (as defined), the Offering and the application of
the net proceeds to the Company therefrom as described in "Use of Proceeds," as
if each had occurred on October 1, 1996. Pro forma balance sheet data as of
March 31, 1998 give effect to any such events not yet consummated on that date
as if each had occurred on that date.

2
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless
otherwise specified, this Prospectus assumes that (i) the Company consummates
the Recapitalization prior to the closing of the Offering, (ii) the Company
consummates all of the Completed Transactions, the CBS Transactions and the
acquisition of KSLM-AM prior to the closing of the Offering and (iii) the
Underwriters do not exercise their over-allotment option. Unless the context
otherwise indicates or requires, the "Company" and "Entercom" refer to Entercom
Communications Corp. and its consolidated subsidiaries, collectively.

THE COMPANY

Entercom, founded in 1968, is the eighth largest radio broadcasting company
in the United States, based on pro forma 1997 gross revenues. The Company owns
and operates 41 stations, 25 FM and 16 AM, in eight markets, including five of
the country's top 30 radio advertising markets. The Company has built the
largest radio station clusters, based on gross revenues, in Seattle and Kansas
City, and one of the three largest clusters in Boston, Portland, Sacramento and
Rochester. On a pro forma basis, the Company had net revenues of $159.8 million
and broadcast cash flow of $46.9 million for the twelve months ended March 31,
1998.

The Company's net revenues and broadcast cash flow have grown significantly
on both a total and same-station basis. Over the past three fiscal years ending
September 30, net revenues grew at a compound annual rate of 75.1% from an
actual $29.1 million in fiscal 1994 to a pro forma $156.3 million in fiscal
1997. Broadcast cash flow grew at a compound annual rate of 81.8% from an actual
$7.6 million in fiscal 1994 to a pro forma $45.8 million in fiscal 1997. During
this same period, the Company's after-tax cash flow grew at a compound annual
rate of 94.0%, and the Company's same station net revenues and broadcast cash
flow grew at average annual rates of 15.3% and 38.1%, respectively.

The Company has built a highly consolidated portfolio of radio stations
concentrated primarily in top 30 markets with above average growth
characteristics. The Company generated 93.5% of its pro forma fiscal 1997 net
revenues from the five top 30 markets in which it operates. Radio advertising
revenues in these five markets have grown at an average annual rate of 10.8%
from 1993 to 1997, which exceeded the average annual growth rate of both the
aggregate radio industry and the top 30 markets. Furthermore, the Company
generated 97.6% of its pro forma fiscal 1997 net revenues from superduopolies,
which the Company defines as clusters of four or more stations in one market.
Management believes that Entercom's superduopolies enable the Company to (i)
amass greater resources to penetrate and capture additional local radio
advertising revenues, (ii) consolidate administrative, engineering and
management functions to reduce costs and (iii) be more flexible in adjusting
formats to serve changing listener needs. In addition, the Company believes that
superduopolies enhance its stations' ability to compete for advertising and
promotional dollars with other media, including television and newspaper.

3
<PAGE> 6

The following table sets forth certain information about the markets in
which the Company operates:

<TABLE>
<CAPTION>
1993-1997 1997
1997 RADIO MARKET COMPANY'S STATIONS COMPANY
RADIO MARKET AVERAGE ------------------- MARKET
MARKET(1) REVENUE RANK(2) REVENUE GROWTH(2) FM AM TOTAL REVENUE SHARE(2)
- --------- --------------- ----------------- -- -- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Boston................ 10 13.7% 2 3 5 19.4%(3)
Seattle(4)............ 13 10.5 5(4) 3 8(4) 40.4(4)
Portland.............. 21 11.8 4 3 7 25.8
Sacramento............ 28 6.7 4 1 5 20.9
Kansas City........... 29 11.3 3 3 6 33.8
--- --- --
Top 30 Markets...... 18 13 31
Rochester............. 55 8.1 3 1 4 21.7
Gainesville/Ocala..... 124 6.5 2 0 2 23.8
Longview/Kelso........ n/a n/a 2 2 4 n/a
--- --- --
All Markets......... 25 16 41
</TABLE>

- ---------------
(1) The Company's stations are in some instances licensed to communities other
than the named principal community for the market.

(2) Source: Duncan's.

(3) Does not include the revenues of WWTM-AM, which competes in the adjacent
Worcester market.

(4) The Company also sells substantially all the advertising time of a sixth FM
station under a joint sales agreement and the revenue from such sales are
included in the Company's Market Revenue Share.

ACQUISITION STRATEGY

The Company, through a disciplined acquisition strategy, seeks to (i) build
market leading clusters of stations principally in large growth markets and (ii)
acquire underdeveloped properties that offer the potential for significant
improvements in revenues and broadcast cash flow through the application of the
Company's operational, administrative and/or engineering expertise. As part of
its strategy, the Company has strategically redeployed its asset base by
swapping relatively mature stations in markets where the Company believed it
would be difficult to build leading station clusters in exchange for
underperforming stations in other markets that management believed offered
stronger growth and clustering opportunities. For example, in 1997 the Company
exchanged one station in Houston plus $5 million for three stations in Seattle
and four stations in Kansas City. The Seattle acquisitions solidified the
Company's position as the leading radio operator in that market while the four
stations acquired in Kansas City enabled the Company to enter a new large market
with a significant presence.

The Company has a track record of structuring acquisitions in creative
ways, including being a pioneer of multi-party station swaps. Since October 1,
1996, the Company, in 18 transactions, has acquired or agreed to acquire 36
radio stations and has divested or agreed to divest, for strategic reasons, nine
radio stations. These transactions have involved many of the leading radio
broadcast companies or their predecessors, including CBS Radio, Viacom Inc.,
American Radio Systems Corporation, Citicasters Inc., Jacor Communications,
Inc., Sinclair Broadcast Group, Inc., Bonneville International Corp. and
Susquehanna Radio Corp. As a result of these transactions, the Company has
divested its stand-alone stations while establishing the largest clusters in
Seattle and Kansas City and building superduopolies in Boston, Portland,
Sacramento and Rochester. The Company believes that its proven record of
consummating creative transactions with many of the leading radio broadcast
companies positions it well to continue to participate in the consolidation
occurring in its industry.

4
<PAGE> 7

OPERATING STRATEGY

The principal components of the Company's operating strategy are set forth
below.

- DEVELOP MARKET LEADING STATION CLUSTERS. The Company has built one of
the three leading clusters in each of its eight markets. To enhance its
competitive position, the Company strategically aligns its stations
within each market to optimize their performance, both individually and
collectively. The Company seeks to maximize the ratings, revenue and
broadcast cash flow of its radio stations by tailoring their programming
to optimize aggregate audience delivery. For example, in Kansas City,
Entercom acquired two stations that had been engaged in a lengthy battle
in the Adult Contemporary format. Largely as a result of that
competition, these stations were the 10th and 12th ranked stations among
Adults 25-54 in the market. Shortly after acquiring the stations, the
Company reformatted one of the stations to an Album Oriented Rock format.
As a result of this strategy, the stations now rank 1st and 3rd in the
Adults 25-54 demographic target.

- ENHANCE OPERATIONS OF NEWLY ACQUIRED UNDERPERFORMING STATIONS. The
Company has built a long-term track record of acquiring and developing
underperforming stations. This has enabled the Company to achieve
superior same-station revenue and broadcast cash flow growth over the
past several years. The Company utilizes a variety of techniques to
develop underachieving properties, including: strategic market research
and analysis; management enhancements; expenditure reductions; facility
consolidations; technical upgrades; programming and marketing
enhancements; and improved sales training and techniques. The Company's
current portfolio includes a significant number of recently acquired
stations which management believes are underdeveloped. Among the 31
stations which the Company acquired or commenced operations under TBAs
since January 1, 1997, 14 operated with broadcast cash flow margins below
20%, 11 with margins between 20% and 40% and six with margins over 40%
during calendar 1997. By comparison, among the nine stations which the
Company owned or operated prior to 1997, two operated with margins under
20%, one between 20% and 40% and six over 40% during calendar 1997.

- BUILD STRONGLY-BRANDED FRANCHISES. The Company analyzes market research
and competitive factors to identify the format opportunity, music
selection and rotation, presentation and other key programming attributes
that it believes will best position each station to maximize its audience
share and consequently, its revenues and broadcast cash flow. The
Company's stations pursue a variety of programming and marketing
initiatives designed to develop a distinctive identity and to strengthen
the stations' local "brand" or "franchise" value. For example, the
Company's "endfest(TM)" festival in Seattle attracts 20,000 listeners to
a day-long festival with live music and other attractions, solidifying
KNDD's ("The End(TM)") brand image in Seattle. The Company has also been
on the leading edge of several national programming trends during the
past decade including Modern Rock, Young Adult Country and Adult Album
Alternative.

- LEVERAGE STATION CLUSTERS TO CAPTURE GREATER SHARE OF ADVERTISING
REVENUE. The Company believes radio will continue to gain revenue share
from other media by capitalizing on its enhanced competitive platform. As
a result of deregulation in the radio broadcasting industry, operators
can now create radio station clusters that have the critical mass of
audience reach and marketing resources necessary to pursue incremental
advertising and promotional revenues more aggressively. The Company has
begun to capitalize on this opportunity by developing specialized teams
in Seattle, Portland, Sacramento and Kansas City to work with
non-traditional radio advertisers to create and develop marketing
programs and solutions.

- MAXIMIZE TECHNICAL CAPABILITIES. The Company seeks to operate stations
with the strongest signals in their respective markets. In addition, the
Company, on various occasions, has identified opportunities to acquire
and upgrade low-powered or out-of-market stations and transform them into
competitive signals, thus increasing their value significantly. For
example, the Company recently agreed to sell its two Tampa FM stations,
which it had purchased for an aggregate of $4.9 million, for $75 million
after upgrading their respective license classes. In addition, the
Company upgraded the FCC license class of

5
<PAGE> 8

KMTT-FM in Seattle, KNRK-FM in Portland and KRXQ-FM in Sacramento. Today each of
these stations has a competitive signal in its respective market.

- RECRUIT, DEVELOP, MOTIVATE AND RETAIN SUPERIOR EMPLOYEES. The Company
believes that station operators differentiate themselves from their peers
primarily through their ability to recruit, develop, motivate and retain
superior management, programming and sales talent. Accordingly, the
Company strives to establish a creative and collegial working environment
in which talented employees are able to thrive. The Company encourages
its stations to build strong community bonds through local and
company-wide community service programs, which facilitate strong local
business relationships and provide employees with opportunities for
enhanced job fulfillment. The Company offers competitive pay packages
with performance-based incentives for its key employees. In addition, the
Company provides employees with opportunities for personal growth and
advancement through extensive training, seminars and other educational
programs.

RECAPITALIZATION, CHASE CONVERSION AND FORMER S CORPORATION STATUS

Prior to the consummation of the Offering, the Company will engage in a
series of transactions (collectively, the "Recapitalization") that will result
in the Company having Class A Common Stock, Class B Common Stock, Class C Common
Stock and Preferred Stock authorized, and Class A Common Stock and Class B
Common Stock issued and outstanding. Prior to the Offering, the Company was an S
Corporation with voting and non-voting Common Stock, par value $0.05 per share
(the "Prior Common Stock"), authorized and issued. In connection with the
Recapitalization, (i) the Company will effect a for one stock split of
the outstanding shares of Prior Common Stock, (ii) each share of Prior Common
Stock held by Joseph M. Field, the Company's Chairman of the Board, Chief
Executive Officer and President, and David J. Field, the Company's Chief
Operating Officer and Chief Financial Officer, will be exchanged for one share
of Class B Common Stock, (iii) each share of Prior Common Stock held by all
other shareholders will be exchanged for one share of Class A Common Stock and
(iv) the Company will revoke its S Corporation status.

Chase Equity Associates, L.P., an affiliate of Chase Capital Partners
("Chase Capital"), currently holds a 7% Subordinated Convertible Promissory Note
of the Company (the "7% Subordinated Convertible Note") in the principal amount
of $25 million. Chase Capital, a global private equity organization with
approximately $5 billion under management, is an affiliate of The Chase
Manhattan Corporation. Chase Capital has substantial investment experience in
the radio broadcasting sector, including having co-founded American Radio
Systems Corporation in 1993, and currently has approximately 20% of its
portfolio committed to the media and telecommunications industry. A general
partner of Chase Capital serves on the Company's Board of Directors. Chase
Capital has agreed with the Underwriters and the Company that immediately prior
to the Offering it will convert the 7% Subordinated Convertible Note into Class
A Common Stock (the "Chase Conversion"). Upon the Chase Conversion, Chase
Capital will receive shares of Class A Common Stock. After giving
effect to the Offering, including Chase Capital's sale of shares of Class A
Common Stock therein, Chase Capital will beneficially own approximately %
of the Company's Class A Common Stock, representing % of the total voting
power of the Company's outstanding Common Stock (approximately % of the
Company's Class A Common Stock, representing % of the total voting power of
the Company's outstanding Common Stock, if the over-allotment option is
exercised in full). See "Principal and Selling Shareholders."

The Company has been an S Corporation since October 1, 1987. In connection
with the Offering, the Company will revoke its S Corporation status. In
connection with this revocation, the Company intends to make the S Corporation
Distribution to its existing shareholders. See "Recapitalization, Chase
Conversion and Former S Corporation Status" and "Risk Factors -- Benefits to
Existing Shareholders and Affiliates."

6
<PAGE> 9

COMPLETED AND CBS TRANSACTIONS

Since October 1, 1996, the Company, in 18 transactions, has acquired or
agreed to acquire 36 radio stations and, for strategic reasons, has divested or
agreed to divest, nine radio stations. These transactions consist of the
Completed Transactions, the CBS Transactions and the acquisition of KSLM-AM. See
"Completed Transactions" for a complete list of the Completed Transactions.

In August 1998, the Company entered into three agreements with CBS Radio,
Inc. ("CBS") under which it will: (i) purchase WRKO-AM and WEEI-AM in Boston for
$82.0 million in cash (the "First Boston Transaction"); (ii) sell WLLD-FM and
WYUU-FM in Tampa for $75.0 million in cash (the "Tampa Transaction"); and (iii)
purchase WAAF-AM and WEGQ-FM in Boston and WWTM-AM in Worchester for $58.0
million in cash (the "Second Boston Transaction" and, together with the First
Boston Transaction, the "Boston Transactions"). Collectively, the Tampa
Transaction and the Boston Transactions are referred to as the "CBS
Transactions." The Boston Transactions will enable the Company to establish a
strong Boston presence with a 19.4% market share. The Company anticipates
closing the First Boston Transaction and the Tampa Transaction prior to the
consummation of the Offering. The Company anticipates that the Second Boston
Transaction will close within one year. However, the Company expects to begin
operating and selling radio advertising time on the Boston stations in September
1998 pursuant to TBAs. See "CBS Transactions."

7
<PAGE> 10

THE OFFERING

<TABLE>
<S> <C> <C>
Class A Common Stock offered hereby....... shares by the Company(1)
shares by the Selling Shareholder
---------
shares of Class A Common Stock
=========
Common Stock to be outstanding after the
Offering................................ shares of Class A Common Stock(1)(2)
shares of Class B Common Stock
---------
shares of Common Stock
=========
</TABLE>

Voting Rights................. The Class A Common Stock and the Class B Common
Stock vote together as a single class on all
matters submitted to a vote of shareholders.
Each share of Class A Common Stock is entitled
to one vote and each share of Class B Common
Stock is entitled to ten votes, except (i) any
share of Class B Common Stock not voted by
either Joseph M. Field or David J. Field is
entitled to only one vote, (ii) the holders of
Class A Common Stock, voting as a separate
class, are entitled to elect two directors (the
"Class A Directors"), (iii) with respect to any
proposed "going private" transaction (as
defined in Rule 13e-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange
Act")), each share of Class A Common Stock and
Class B Common Stock shall be entitled to one
vote and (iv) as otherwise required by law. The
Class C Common Stock has no voting rights
except as otherwise required by law. Upon
completion of the Offering, the holders of the
Class A Common Stock will have approximately
% of the total voting power of the
outstanding Common Stock, and the Class B
Common Stock will be held solely by Joseph M.
Field and David J. Field, who will have
approximately % of the total voting power
of the outstanding Common Stock. See "Risk
Factors -- Control of the Company,"
"Description of Capital Stock" and "Principal
and Selling Shareholders."

Other Rights.................. Each class of Common Stock has the same rights
to dividends and distributions upon
liquidation. Subject to prior FCC approval in
certain circumstances, shares of Class B Common
Stock and Class C Common Stock are convertible
in whole or in part at any time into shares of
Class A Common Stock on a share-for-share
basis. Shares of Class B Common Stock
automatically convert into shares of Class A
Common Stock on a share-for-share basis upon a
transfer to any person other than Joseph M.
Field, David J. Field or a Field Shareholder
(as defined). Any shares of Class A Common
Stock owned by a Regulated Entity (as defined)
may be converted at the option of the holder
into shares of Class C Common Stock on a
share-for-share basis. See "Description of
Capital Stock."
- ---------------
(1) Excludes shares of Class A Common Stock issuable pursuant to the
Underwriters' over-allotment option.

(2) Includes shares of Class A Common Stock issued in the Chase
Conversion. Excludes shares of Class A Common Stock currently
issuable upon exercise of the outstanding stock options issued under the
Company's 1998 Equity Compensation Plan (as defined) at a weighted average
exercise price of $ per share. See "Management -- 1998 Equity
Compensation Plan."

8
<PAGE> 11

Dividend Policy............... The Company intends to retain future earnings
for use in the Company's business and does not
anticipate declaring or paying any cash or
stock dividends on shares of its Common Stock
in the foreseeable future. In addition, the
Company's ability to declare dividends is
restricted under the Credit Facility (as
defined).

Use of Proceeds............... To repay revolving indebtedness of the Company.
See "Use of Proceeds."

Proposed NYSE Ticker Symbol... "ETM"

RISK FACTORS

Prospective purchasers of Class A Common Stock should consider carefully
all of the information set forth in this Prospectus and, in particular, should
evaluate the specific factors set forth under the caption "Risk Factors"
beginning on page 14 of this Prospectus.

9
<PAGE> 12

SUMMARY HISTORICAL FINANCIAL DATA

The following table presents summary historical financial data of the
Company for the periods indicated. The following financial information should be
read in conjunction with the Consolidated Financial Statements of the Company
and the related notes included elsewhere in this Prospectus.

The comparability of the historical financial data reflected herein has
been significantly impacted by acquisitions and dispositions. The information
presented below is qualified in its entirety by, and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and "Unaudited Pro Forma Financial Information,"
and, in each case, the related notes included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, MARCH 31,
-------------------------------- --------------------
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Net revenues................................ $ 35,893 $ 48,675 $ 93,862 $ 36,145 $ 53,377
Station operating expenses.................. 24,061 31,659 61,280 22,888 37,231
Depreciation and amortization............... 2,225 2,960 7,685 2,632 5,845
Corporate general and administrative
expenses.................................. 2,535 2,872 3,249 1,457 1,947
Net TBA expenses (income)................... 603 (879) (476) (927) 632
Operating income............................ 6,469 12,063 22,124 10,095 7,722
Interest expense............................ 1,992 5,196 11,388 5,515 5,935
Gain on sale of assets...................... 228 119 197,097 91,981 335
Income before income taxes and extraordinary
items..................................... 4,805 7,053 206,329 96,628 2,244
Pro forma income taxes(1)................... 1,826 2,680 78,405 36,719 853
Pro forma income before extraordinary
items(1).................................. 2,979 4,373 127,924 59,909 1,391
Pro forma earnings per share before
extraordinary items(1)....................
Pro forma weighted average common shares
outstanding(2)............................
OTHER DATA:
Broadcast cash flow(3)...................... $ 11,832 $ 17,016 $ 32,582 $ 13,257 $ 16,146
Broadcast cash flow margin(4)............... 33.0% 35.0% 34.7% 36.7% 30.2%
EBITDA(5)................................... $ 9,297 $ 14,144 $ 29,333 $ 11,800 $ 14,199
After-tax cash flow(6)...................... 4,172 7,923 14,947 4,179 7,370
Cash flows related to:
Operating activities...................... 1,182 12,773 8,859 3,368 13,844
Investing activities...................... (28,636) (96,502) (13,695) (8,219) (21,677)
Financing activities...................... 27,505 87,457 3,170 2,889 9,856
</TABLE>

<TABLE>
<S> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents................................................................... $ 5,649
Intangibles and other assets................................................................ 305,328
Total assets................................................................................ 376,916
Long-term debt, including current portion................................................... 156,659
Total shareholders' equity.................................................................. 206,432
</TABLE>

- ---------------
(1) Throughout the periods presented, the Company had elected to be taxed under
Subchapter S of the Code, and comparable provisions of certain state tax
laws. The amounts shown reflect pro forma provisions for state and federal
income taxes (at an assumed combined rate of 38% per annum) as if the
Company had been taxed under Subchapter C of the Code throughout the periods
presented. The Company intends to revoke its election to be taxed as an S
Corporation immediately prior to the consummation of the Offering.

(2) Reflects the effect of the for one stock split to be effected as part of
the Recapitalization.

10
<PAGE> 13

(3) Broadcast cash flow consists of operating income before depreciation,
amortization, net TBA expenses (income) and corporate expenses. Although
broadcast cash flow is not a measure of performance or liquidity calculated
in accordance with GAAP, management believes that it is useful to an
investor in evaluating the Company because it is a measure widely used in
the broadcast industry to measure a radio company's operating performance.
Nevertheless, it should not be considered in isolation or as a substitute
for operating income, cash flows from operating activities or any other
measure for determining the Company's operating performance or liquidity
that is calculated in accordance with GAAP. Moreover, because broadcast cash
flow is not a measure calculated in accordance with GAAP, this measure is
not necessarily comparable to similarly titled measures employed by other
companies.

(4) Broadcast cash flow margin represents broadcast cash flow as a percentage of
net revenue.

(5) EBITDA consists of operating income before depreciation, amortization and
net TBA expenses (income). Although EBITDA is not a measure of performance
or liquidity calculated in accordance with GAAP, management believes that it
is useful to an investor in evaluating the Company because it is a measure
widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, it should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or any
other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP. Moreover, because
EBITDA is not a measure calculated in accordance with GAAP, this measure is
not necessarily comparable to similarly titled measures employed by other
companies.

(6) After-tax cash flow consists of pro forma income before extraordinary items
minus net gain on sale of assets (net of tax) and plus depreciation,
amortization, and the deferred tax provision (or minus the deferred tax
benefit). Although after-tax cash flow is not a measure of performance or
liquidity calculated in accordance with GAAP, management believes that it is
useful to an investor in evaluating the Company because it is a measure
widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, it should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or any
other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP. Moreover, because
after-tax cash flow is not a measure calculated in accordance with GAAP,
this measure is not necessarily comparable to similarly titled measures
employed by other companies.

11
<PAGE> 14

SUMMARY PRO FORMA FINANCIAL DATA

The following table presents summary historical and pro forma financial
data of the Company as of and for the year ended September 30, 1997 and the six
months ended March 31, 1997 and 1998. The pro forma operating and other data
reflect adjustments to the summary historical data of the Company to illustrate
the effects of the Recapitalization, the Completed and CBS Transactions, the S
Corporation Distribution, the Chase Conversion, the Offering and the application
of the net proceeds therefrom as described in "Use of Proceeds" as if each had
occurred on October 1, 1996. The pro forma balance sheet data as of March 31,
1998 give effect to any such events not yet consummated on that date as if each
had occurred on that date. The summary pro forma financial data are not
necessarily indicative of either future results of operations or the results
that would have occurred if those transactions had been consummated on the
indicated dates. The following financial information should be read in
conjunction with the Consolidated Financial Statements, the Unaudited Pro Forma
Financial Information and, in each case, the related notes included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997 MARCH 31, 1998
---------------------- ---------------------- ----------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- --------- ---------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net revenues.............................. $ 93,862 $156,305 $ 36,145 $ 71,021 $ 53,377 $ 74,509
Station operating expenses................ 61,280 110,523 22,888 51,145 37,231 53,505
Depreciation and amortization............. 7,685 18,751 2,632 9,693 5,845 9,845
Corporate general and administrative
expenses................................ 3,249 2,895 1,457 1,359 1,947 2,174
Net TBA expenses (income)................. (476) (927) 632
Operating income.......................... 22,124 24,136 10,095 8,824 7,722 8,985
Interest expense.......................... 11,388 15,010 5,515 7,505 5,935 7,505
Gain on sale of assets.................... 197,097 205,565 91,981 100,469 335 327
Income before income taxes and
extraordinary items..................... 206,329 215,026 96,628 102,009 2,244 1,979
Pro forma income taxes(1)................. 78,405 81,709 36,719 38,763 853 752
Pro forma income before extraordinary
items(1)................................ 127,924 133,317 59,909 63,246 1,391 1,227
Pro forma earnings per share before
extraordinary items(1).................. $ $ $ $ $ $
Pro forma weighted average common shares
outstanding(2)..........................
OTHER DATA:
Broadcast cash flow(3).................... $ 32,582 $ 45,782 $ 13,257 $ 19,876 $ 16,146 $ 21,004
Broadcast cash flow margin(4)............. 34.7% 29.3% 36.7% 28.0% 30.2% 28.2%
EBITDA(5)................................. $ 29,333 $ 42,887 $ 11,800 $ 18,517 $ 14,199 $ 18,830
After-tax cash flow(6).................... 14,947 4,179 7,370
Cash flows related to:
Operating activities.................... 8,859 3,368 13,844
Investing activities.................... (13,695) (8,219) (21,677)
Financing activities.................... 3,170 2,889 9,856
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents.................................................................. $ 5,649 $ 10,553
Intangibles and other assets............................................................... 305,328 564,221
Total assets............................................................................... 376,916 649,276
Long-term debt, including current portion.................................................. 156,659 214,585
Total shareholders' equity................................................................. 206,432 343,459
</TABLE>

12
<PAGE> 15

(2) Reflects the effect of the for one stock split to be effected as
part of the Recapitalization.

(4) Broadcast cash flow margin represents broadcast cash flow as a percentage of
net revenue.

(6) After-tax cash flow consists of pro forma income before extraordinary items
minus net gain on sale of assets (net of tax) and plus depreciation,
amortization and the deferred tax provision (or minus the deferred tax
benefit). Although after-tax cash flow is not a measure of performance or
liquidity calculated in accordance with GAAP, management believes that it is
useful to an investor in evaluating the Company because it is a measure
widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, it should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or any
other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP. Moreover, because
after-tax cash flow is not a measure calculated in accordance with GAAP,
this measure is not necessarily comparable to similarly titled measures
employed by other companies.

13
<PAGE> 16

RISK FACTORS

This Prospectus contains forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"foresee," "will," "could," "may" and similar expressions are intended to
identify forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"). Such statements
reflect the Company's current views with respect to future events and financial
performance and involve risks and uncertainties, including without limitation
the risks described in "Risk Factors." Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, actual
results may vary materially from those indicated. Investors should consider
carefully the following risk factors, in addition to the other information
contained in this Prospectus, before purchasing the shares of Class A Common
Stock offered hereby.

COMPETITION; BUSINESS RISKS; NEW TECHNOLOGIES

Radio broadcasting is a highly competitive business. The Company's radio
stations compete for audiences and advertising revenues within their respective
markets directly with other radio stations, as well as with other media, such as
newspapers, magazines, television, outdoor advertising and direct mail. Audience
ratings and market shares are subject to change, and any adverse change in a
particular market could have a material adverse effect on the revenue of
stations located in that market. While the Company already competes in some of
its markets with other stations with similar programming formats, if another
radio station in a market were to convert its programming format to a format
similar to one of the Company's stations, if a new station were to adopt a
comparable format or if an existing competitor were to strengthen its
operations, the Company's stations could suffer a reduction in ratings and/or
advertising revenue and could incur increased promotional and other expenses.
Other radio broadcasting companies may enter into the markets in which the
Company operates or may operate in the future. Such companies may be larger and
have more financial resources than the Company. Future operations are further
subject to many variables which could have a material adverse effect on the
Company. These variables include the following: economic conditions, both
generally and relative to the radio broadcasting industry; shifts in population
and other demographics; the level of competition for advertising dollars with
other radio stations, television stations and other entertainment and
communications media; fluctuations in operating costs; technological changes and
innovations; changes in labor conditions; and changes in governmental
regulations and policies and actions of federal regulatory bodies, including the
United States Department of Justice ("DOJ"), the Federal Trade Commission (the
"FTC") and the FCC. Although the Company believes that substantially all of its
radio stations are positioned to compete effectively in their respective
markets, there can be no assurance that any such station will be able to
maintain or increase its current audience ratings and advertising revenues.

Radio broadcasting is also subject to competition from new media technology
that are being developed or introduced, including, without limitation, the
delivery of audio programming by cable television systems, digital audio radio
services ("DARS"), the Internet, satellite, television, personal communications
services ("PCS") and the possible authorization by the FCC of a new service of
microbroadcasting (low powered, limited coverage radio stations). DARS plans to
deliver by satellite to nationwide and regional audiences multi-channel,
multi-format digital radio services with sound quality equivalent to compact
discs. The Company cannot predict the effect, if any, that any such new
technology may have on the radio broadcasting industry or the Company. See
"Business -- Competition; Changes in Broadcasting Industry."

IMPORTANCE OF SEATTLE RADIO STATIONS

In the fiscal year ended September 30, 1997, the Company's eight radio
stations in Seattle and the activities of the Company pursuant to a joint sales
agreement ("JSA") for a ninth radio station generated approximately 49.2% of the
Company's net revenues and 54.6% of the Company's broadcast cash flow. On a pro
forma basis after giving effect to the Completed and CBS Transactions, the
Seattle radio stations would have generated approximately 34.9% of the Company's
net revenues and 39.5% of the Company's broadcast cash flow in the fiscal year
ended September 30, 1997. A significant decline in net revenues and broadcast
cash flow from the Company's stations in this market, as a result of a ratings
decline or otherwise, could have a material adverse effect on the Company's
financial position and results of operations. In addition, given the
14
<PAGE> 17

relatively high percentage of the Company's total revenue and broadcast cash
flow derived from the Seattle area, adverse events or conditions that affect the
Seattle economy could have a more adverse effect on the profitability of the
Company than if the Company's operations were more geographically diverse.

RISKS OF ACQUISITION STRATEGY

The Company pursues growth, in part, through the acquisition of individual
radio stations and groups of radio stations. Consummation of future acquisitions
is subject to various conditions, including the FCC and other regulatory
approval, and intense scrutiny under federal and state antitrust laws. The
Company cannot predict whether it will be successful in identifying future
acquisition opportunities, consummating such acquisitions or what the
consequences of any acquisitions will be. Accordingly, no assurances can be
given that any pending or future acquisitions (including the CBS Transactions)
will be consummated or that, if completed, they will be successful. The
Company's acquisition strategy involves numerous risks, including increasing
debt service requirements, difficulties in the integration of operations and
systems and the management of a large and geographically diverse group of
stations, the diversion of management's attention from other business concerns
and the potential loss of key employees of acquired stations. There can be no
assurance that the Company's management will be able to manage effectively the
resulting business or that such acquisitions will benefit the Company. Depending
on the nature, size and timing of future acquisitions, the Company may be
required to raise additional financing necessary to consummate the future
acquisitions. There can be no assurance that such financing will be permitted
under the agreements that govern the outstanding indebtedness of the Company or
any other loan agreements or indebtedness to which the Company may become a
party. Moreover, there can be no assurance that such additional financing will
be available to the Company on terms acceptable to its management. Radio
broadcasting is a rapidly consolidating industry, with many companies seeking to
consummate acquisitions and increase their market share. In this environment,
the Company competes and will continue to compete with many other buyers for the
acquisition of radio stations. Some of those competitors may be able to outbid
the Company for acquisitions because they have greater financial resources. As a
result of these and other factors, there can be no assurance that future
acquisitions will be available on attractive terms. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

CONTROL OF THE COMPANY

Upon completion of the Offering, the purchasers of the Class A Common Stock
offered hereby will own approximately % of the outstanding Class A Common
Stock, representing approximately % of the total voting power of the
outstanding Common Stock ( % of the outstanding Class A Common Stock,
representing % of the total voting power if the Underwriters'
over-allotment option is exercised in full). Upon completion of the Offering,
Joseph M. Field, the Company's Chairman of the Board, Chief Executive Officer
and President, and David J. Field, the Company's Chief Operating Officer and
Chief Financial Officer, will beneficially own all of the outstanding Class B
Common Stock, representing approximately % of the total voting power of the
outstanding Common Stock ( % of the total voting power if the Underwriters'
over-allotment option is exercised in full). Shares of Class B Common Stock are
transferable only to Field Shareholders, and upon any other transfer they
convert automatically into shares of Class A Common Stock on a share-for-share
basis. Shares of Class B Common Stock shall be entitled to ten votes only when
they are voted by Joseph M. Field or David J. Field, subject to certain
exceptions where they are entitled to one vote. Accordingly, Joseph M. Field
will be able to control the vote on all matters submitted to the vote of
shareholders and therefore, will be able to direct the management and policies
of the Company, except with respect to those matters where the shares of Class B
Common Stock are only entitled to one vote and those matters requiring a class
vote under the provisions of the Company's Articles of Incorporation, bylaws or
applicable law, including, without limitation, the election of the two Class A
directors. In addition, without the approval of Joseph M. Field, the Company
will be unable to consummate transactions involving an actual or potential
change of control of the Company, including transactions in which the holders of
Class A Common Stock might otherwise receive a premium for their shares over
then current market prices. See "Principal and Selling Shareholders," and
"Description of Capital Stock."

15
<PAGE> 18

ABILITY TO INCUR SUBSTANTIAL INDEBTEDNESS; EFFECT OF RESTRICTIVE COVENANTS

The Company has the ability to incur indebtedness that is substantial in
relation to its shareholders' equity. As of March 31, 1998, on a pro forma basis
after giving effect to the Offering, the Company had approximately $214.6
million in long-term indebtedness (less current portions) and shareholders'
equity of approximately $343.5 million. However, under the Credit Facility, the
Company, under certain circumstances, can increase its long-term indebtedness up
to $350 million, subject to syndication. See "Capitalization," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

If the Company were to incur a substantial amount of indebtedness under the
Credit Facility, it could have several important consequences to the holders of
Class A Common Stock, including, but not limited to, the following: (i) a
substantial portion of the Company's cash flow from operations could be
dedicated to debt service and would not be available for other purposes; (ii)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions and general corporate or other purposes could
be impaired; (iii) the Company's leveraged position and the covenants contained
in the Credit Facility could limit the Company's ability to compete, expand and
make capital improvements; (iv) the Company's level of indebtedness could make
it more vulnerable to economic downturns, limit its ability to withstand
competitive pressures and reduce its flexibility in responding to changing
business and economic conditions and (v) certain restrictive covenants contained
in the Credit Facility could limit the ability of the Company to pay dividends
and make other distributions to its shareholders.

The Company's ability to satisfy its debt service and other obligations
will depend upon its future financial and operating performance, which, in turn,
is subject to prevailing economic conditions and financial, business and other
factors, certain of which are beyond its control. If the Company's cash flow
from operations and capital resources is insufficient to fund its debt service
and other obligations, the Company may be forced to reduce or delay planned
expansion and capital expenditures, sell assets, obtain additional equity
capital or restructure its debt. There can be no assurance as to the timing of
any asset sales or the proceeds that the Company could realize therefrom or that
such sales or other capital raising or debt restructuring activities can be
effected on terms satisfactory to the Company or at all.

The Credit Facility contains certain covenants that restrict, among other
things, the ability of the Company to incur additional indebtedness, derive over
60% of its aggregate broadcast cash flow from any one market, acquire radio
stations that are not located in either one of the top 75 markets or in a market
in which the Company has existing operations, incur capital expenditures, invest
in non-related industries, pay dividends or make certain other restricted
payments, incur liens, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. In addition, all of the assets
and the stock of the Company's subsidiaries are pledged to secure the debt under
the Credit Facility. The Credit Facility requires that the Company maintain
specified financial ratios; the ability of the Company to meet these financial
ratios can be affected by events beyond its control and there can be no
assurance that the Company will meet those ratios. A breach of any of these
covenants could result in a default under the Credit Facility. Upon an event of
default under the Credit Facility, the lenders thereunder could elect to declare
all amounts outstanding thereunder, together with accrued interest, to be
immediately due and payable. If the Company were unable to repay those amounts,
the lenders thereunder could proceed against the collateral granted to them to
secure that indebtedness. Any such event of default, therefore, could have a
material adverse effect on the Company. In addition, the Credit Facility, in
certain circumstances, requires that the Company apply excess cash flow from
operations, net proceeds from asset sales, net equity proceeds and insurance
proceeds to reduce permanently the amount available under the Credit Facility.
Pursuant to the terms of the Credit Facility, the Offering would constitute an
event requiring a permanent reduction in the principal amount of the Credit
Facility. The Company has requested a waiver of this provision. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources," and "Description of Capital
Stock."

16
<PAGE> 19

RADIO BROADCASTING INDUSTRY AND ECONOMIC CONDITIONS

The profitability of the Company's radio stations is subject to various
factors that influence the radio broadcasting industry as a whole. The Company's
radio stations may be affected by numerous factors, including changes in
audience tastes, competition from other radio stations and other communications
and entertainment media, priorities of advertisers, new laws, governmental
regulations and policies, changes in broadcast technical requirements,
technological changes and proposals to eliminate the tax deductibility of
expenses incurred by advertisers. The Company cannot predict which, if any, of
these or other factors might have a significant impact on the radio broadcasting
industry in the future, nor can it predict what impact, if any, the occurrence
of these or other events might have on the Company's operations. Generally,
advertising tends to decline during economic recession or downturn.
Consequently, the Company's advertising revenue is likely to be adversely
affected by a recession or downturn in the United States economy, the economy of
an individual geographic market in which the Company owns or operates radio
stations or other events or circumstances that adversely affect advertising
activity. See "-- Importance of Seattle Radio Stations."

GOVERNMENTAL REGULATION OF BROADCASTING INDUSTRY

The radio broadcasting industry is subject to extensive federal regulation
by the FCC under the Communications Act of 1934, as amended (the "Communications
Act"), that, among other things, requires approval by the FCC for the issuance,
renewal, transfer of control and assignment of broadcasting station operating
licenses and limits the number of broadcasting properties that the Company may
acquire in any market. In addition, the Communications Act and FCC rules impose
limitations on alien ownership and voting of the capital stock of, and
participation in the affairs of, the Company. The Company's business is
dependent upon maintaining its broadcasting licenses issued by the FCC, which
are ordinarily issued for a maximum term of eight years. Although it is rare for
the FCC to deny a license renewal application, there can be no assurance that
the future renewal applications of the Company will be approved or that such
renewals will not include conditions or qualifications that could adversely
affect the Company. The non-renewal, or renewal with substantial conditions or
modifications, of one or more of the Company's licenses could have a material
adverse effect on the Company. Moreover, governmental regulations and policies
may change over time and there can be no assurance that such changes would not
have a material adverse impact upon the Company.

As a result of the passage of the Telecommunications Act of 1996 (the
"Telecom Act"), radio broadcasting companies were permitted to increase their
ownership of stations within a single market from a maximum of four to a maximum
of between five and eight stations, depending on market size. The Telecom Act
creates significant new opportunities for broadcasting companies but also
creates uncertainties as to how the FCC and the courts will enforce and
interpret the Telecom Act. Compliance with the FCC's multiple ownership rules
may cause the Company and other radio broadcasters to forego acquisition
opportunities that they might otherwise wish to pursue. Compliance with these
rules by third parties may also have a significant impact on the Company by, for
example, precluding the consummation of swap transactions that would cause such
third parties to violate multiple ownership limitations. The consummation of
radio broadcasting acquisitions requires prior approval of the FCC with respect
to the transfer of control or assignment of the broadcast licenses of the
acquired stations. There can be no assurance that the FCC will approve future or
pending acquisitions or dispositions by the Company or will not impose
conditions or qualifications in connection with such acquisitions or
dispositions (including the CBS Transactions) by the Company. As a result of the
recent consolidation of ownership in the radio broadcast industry, the DOJ has
been giving closer scrutiny to acquisitions in the industry. The DOJ has stated
publicly that it has established certain revenue and audience share
concentration benchmarks with respect to radio station acquisitions, above which
a transaction may receive additional antitrust scrutiny. However, to date, the
DOJ has also investigated transactions that do not meet or exceed these
benchmarks and has cleared transactions that do exceed the benchmarks. The FCC
is currently considering the adoption of a similar policy of review in instances
where a proposed transaction would result in a high degree of revenue
concentration and may now be reviewing revenue concentration in connection with
some transfer and assignment applications. Although the Company has not
encountered any problems in receiving clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as

17
<PAGE> 20

amended (the "HSR Act") and does not believe that its acquisition strategy as a
whole will be adversely affected in any material respect by antitrust review or
by divestitures that the Company may have to make as a result of antitrust
review, there can be no assurance that this will continue to be the case.

The number of radio stations the Company may acquire in any market under
FCC rules may also vary depending upon whether the interests in other radio
stations or certain other media properties of certain persons or entities
affiliated with the Company are attributable to those persons or entities under
FCC rules. Under the FCC's cross-interest policy, the FCC in certain instances
may prohibit one party from acquiring an attributable interest in one media
outlet and a substantial non-attributable economic interest in another media
outlet in the same market, thereby prohibiting a particular acquisition by the
Company. The FCC generally applies its ownership limits to "attributable"
interests held by an individual, corporation, partnership or other association.
The interests of the Company's officers, directors, and shareholders who have
the right to vote 5% or more of the Company's voting stock are generally
attributable to the Company. If any such attributable broadcast interests
overlap with the Company's directly-held radio broadcast interests in the
Company's markets, such interests are combined with the Company's interests in
such markets when determining compliance with the multiple ownership
limitations. In addition, under the FCC's "one-to-a-market" rule, a party may
not have attributable interests in radio stations and a television station in
the same market unless a waiver is granted by the FCC. Although the Company's
current officers, directors and shareholders who have the right to vote 5% or
more of the Company's voting stock do not have attributable broadcast interests
limiting the number of radio stations that the Company may acquire or own, there
can be no assurance that such persons will not in the future hold such
attributable interests. The FCC's attribution and ownership rules are currently
under review and changes in those rules could affect the ability of the Company
to acquire stations in certain markets in the future. See "Business -- Federal
Regulation of Radio Broadcasting -- Proposed and Recent Changes."

DEPENDENCE ON KEY PERSONNEL

The Company's business depends upon the continued efforts, abilities and
expertise of its executive officers and other key executives, including Joseph
M. Field, its Chairman of the Board, Chief Executive Officer and President;
David J. Field, its Chief Operating Officer and Chief Financial Officer; and
John C. Donlevie, Esq., its Executive Vice President and General Counsel. The
Company believes that the loss of any of these individuals could have a material
adverse effect on the Company. See "Management."

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Upon completion of the Offering, the Company will have
shares of Class A Common Stock and shares of Class B Common Stock
issued and outstanding. Of these shares, the shares of Class A
Common Stock sold in the Offering ( shares if the Underwriters'
over-allotment option is exercised in full) will be freely transferable without
restriction under the Securities Act by persons other than "affiliates" of the
Company within the meaning of Rule 144 promulgated under the Securities Act
("Rule 144"). The remaining shares of Class A Common Stock and
all shares of Class B Common Stock were issued in reliance on exemptions from
the registration requirements of the Securities Act, and those shares are
"restricted" securities under Rule 144. The number of such "restricted" shares
of Common Stock available for sale in the public market is limited by
restrictions under the Securities Act and lock-up agreements under which all of
the holders of such shares have agreed not to sell or otherwise dispose of their
shares for a period of 180 days after the date of this Prospectus (the "Lock-Up
Period") without the prior written consent of Credit Suisse First Boston
Corporation. Because of these restrictions, on the date of this Prospectus, no
shares other than those offered hereby will be eligible for sale. Upon
expiration of the Lock-Up Period, all of the restricted securities will be
eligible for sale in the public market, subject to compliance with the
manner-of-sale, volume and other limitations of Rule 144.

Notwithstanding the foregoing, the Company executed a Registration Rights
Agreement, dated as of May 21, 1996, with Chase Capital (the "Registration
Rights Agreement") which grants Chase Capital the right to require the Company,
subject to certain limitations, to effect up to two "demand" registrations under
18
<PAGE> 21

the Securities Act for the sale of Chase Capital's shares of Common Stock. In
connection with the Offering, however, Chase Capital has entered into a lock-up
agreement, under which it has agreed not to sell or otherwise dispose of its
shares or demand registration of such shares during the Lock-Up Period.

Future sales of substantial amounts of Class A Common Stock, or the
perception that such sales could occur, may affect the market price of the Class
A Common Stock prevailing from time to time. See "Shares Eligible for Future
Sale" and "Underwriting."

DILUTION

Persons purchasing shares of Class A Common Stock in the Offering will
incur immediate dilution in the pro forma net tangible book value per share of
Class A Common Stock of approximately $ per share. In addition, the exercise
of vested stock options, if any, would result in further dilution. This dilution
is calculated based on an assumed initial public offering price of $ per
share (the midpoint of the estimated offering range). Dilution for this purpose
represents the difference between the per share initial public offering price of
the Class A Common Stock and the pro forma net tangible book value per share of
Class A Common Stock after giving effect to the Recapitalization, the Completed
and CBS Transactions, the S Corporation Distribution, the Chase Conversion, the
consummation of the Offering and the application of the net proceeds therefrom.
See "Dilution."

BENEFITS TO EXISTING SHAREHOLDERS AND AFFILIATES

In connection with the Offering and associated termination of the Company's
S Corporation status, the existing shareholders of the Company will receive an
aggregate cash distribution of approximately $
million, consisting of the Company's estimate of $ million in taxes owed by
such shareholders on the income of the Company through the Revocation Date (as
defined) and $ million of taxed but undistributed income of the Company
through the Revocation Date. In addition, an affiliate of Chase Capital, the
Selling Shareholder in the Offering, will receive aggregate net proceeds of
approximately $ from the sale of shares of Class A Common Stock
therein, constituting approximately % of the shares of Class A Common Stock
beneficially owned by Chase Capital following the Chase Conversion. A general
partner of Chase Capital, Michael R. Hannon, is also a director of the Company.
See "Recapitalization, Chase Conversion and Former S Corporation Status" and
"Principal and Selling Shareholders."

NO PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Class A
Common Stock and there can be no assurance that an active public market will
develop or be sustained after the Offering or that the initial public offering
price will correspond to the price at which the Class A Common Stock will trade
in the public market subsequent to the Offering. The initial public offering
price for the Class A Common Stock will be determined by negotiations among the
Company and the representatives of the Underwriters based upon the consideration
of certain factors set forth herein under "Underwriting." Market conditions in
the radio broadcasting industry, the Company's future operating results and
fluctuations in the stock market generally may have an adverse impact on the
market price of the Class A Common Stock.

CERTAIN ANTITAKEOVER PROVISIONS

Certain provisions of Pennsylvania law could also make more difficult a
merger, tender offer or proxy contest involving the Company, even if such events
could be beneficial to the interests of the shareholders. Such provisions could
limit the price that certain investors might be willing to pay in the future for
shares of the Company's Class A Common Stock. See "Description of Capital
Stock -- Certain Provisions of the Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws of the Company."

IMPACT OF THE YEAR 2000 ISSUE

19
<PAGE> 22

material adverse effect on the operations of the Company. Accordingly, the
Company is taking measures to ensure that its computer systems properly
recognize and process date sensitive information when the year changes to 2000
or "00" (the "Year 2000 Issue"). Systems that do not properly recognize such
information could generate erroneous data or cause a computer program to fail.
Therefore, the Company is analyzing and testing Year 2000 compliance for the
software programs as well as individual work stations. The Company believes that
with respect to these programs: (i) they are either Year 2000 compliant, (ii)
the supplier has a replacement program available that is Year 2000 compliant, or
(iii) in a few cases the supplier has indicated that a revision to the program
to make it Year 2000 compliant will be issued in time to avoid operational
problems. Any of the Company's individual work stations that are not Year 2000
compliant are not material to the Company's operations. There can be no
assurance that the Company will resolve its Year 2000 Issue prior to the year
2000, or that the cost of remedying its Year 2000 Issue will not have a material
adverse effect on the Company's business, nor can there be any assurance that
the systems of other companies with which the Company's systems interact will be
timely converted and, if not timely converted, would not have an adverse effect
on the Company's business.

20
<PAGE> 23

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Class A
Common Stock offered by it after deducting underwriting discounts and other
offering expenses, all of which are payable by the Company, are estimated to be
approximately $ million (approximately $ million if the
Underwriters' over-allotment option is exercised in full), assuming an initial
public offering price of $ per share. The net proceeds of the Offering will
be used to repay revolving indebtedness of the Company. Prior to the
consummation of the Offering, the Company will have revolving indebtedness
outstanding of approximately $ million; approximately $77.0 million of
such indebtedness was incurred in connection with the First Boston Transaction
and the remainder was incurred to fund the Sinclair Transaction, other
acquisitions and general corporate purposes. Following the Offering, the Company
will fund the Second Boston Transaction and a portion of the S Corporation
Distribution with revolving indebtedness under the Credit Facility.

As of March 31, 1998, on a pro forma basis, the Company had approximately
$214.6 million of indebtedness outstanding under the Credit Facility. The final
maturity date for the Credit Facility is February 13, 2006. Interest on any
outstanding principal accrues at a rate based, at the Company's election, on
either LIBOR plus a spread which ranges from 0.5% to 2.125%, or on KeyBank
N.A.'s base rate, plus a spread of up to 0.875%, in either case, depending on
the Company's total outstanding indebtedness. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

RECAPITALIZATION, CHASE CONVERSION AND FORMER S CORPORATION STATUS

Prior to the consummation of the Offering, the Company will engage in a
Recapitalization that will result in the Company having Class A Common Stock,
Class B Common Stock, Class C Common Stock and Preferred Stock authorized, and
Class A Common Stock and Class B Common Stock issued and outstanding. Prior to
the Offering, the Company was an S Corporation with voting and non-voting Prior
Common Stock authorized and issued. In connection with the Recapitalization, (i)
the Company will effect a for one stock split of the outstanding shares of
Prior Common Stock, (ii) each share of Prior Common Stock held by Joseph M.
Field, the Company's Chairman of the Board, Chief Executive Officer and
President, and David J. Field, the Company's Chief Operating Officer and Chief
Financial Officer, will be exchanged for one share of Class B Common Stock,
(iii) each share of Prior Common Stock held by all other shareholders will be
exchanged for one share of Class A Common Stock and (iv) the Company will revoke
its S Corporation status.

Chase Capital currently owns the 7% Subordinated Convertible Note. Chase
Capital, a global private equity organization with approximately $5 billion
under management, is an affiliate of The Chase Manhattan Corporation. Chase
Capital has substantial investment experience in the radio broadcasting sector,
including having co-founded American Radio Systems, Inc. in 1993, and currently
has approximately 20% of its portfolio committed to the media and
telecommunications industry. A general partner of Chase Capital serves on the
Company's Board of Directors. Chase Capital has agreed with the Underwriters and
the Company that immediately prior to the Offering it will convert the 7%
Subordinated Convertible Note into Class A Common Stock. Upon the Chase
Conversion, Chase Capital will receive shares of Class A Common Stock.
After giving effect to the Offering, including Chase Capital's sale of shares of
Class A Common Stock therein, Chase Capital will beneficially own approximately
% of the Company's Class A Common Stock, representing % of the total voting
power of the Company's outstanding Common Stock (approximately % of the
Company's Class A Common Stock, representing % of the total voting power of
the Company's outstanding Common Stock, if the over-allotment option is
exercised in full).

The Company has been an S Corporation subject to taxation under Subchapter
S of the Code since October 1, 1987. As a result, the net income of the Company,
for federal and certain state and local tax purposes, has been reported by and
taxed directly to the Company's shareholders, rather than to the Company. In
connection with the Recapitalization and shortly before the consummation of the
Offering, the Company will file a notice with the Internal Revenue Service
revoking its S Corporation status as of a date preceding the Offering (the
"Revocation Date").
21
<PAGE> 24

In connection with the revocation of the Company's S Corporation status and
prior to the Offering, the Company intends to declare a dividend payable to its
existing shareholders approximately sixty days after the Offering. This dividend
distribution will be comprised of (i) $ million, which is estimated to be
the taxes due by existing shareholders as a result of the Tampa Transaction and
on other income of the Company through the Revocation Date, net of prior
distributions to the shareholders for such taxes and (ii) $
million, which is the estimated amount of the Company's remaining taxed but
undistributed income (including the income from the Tampa Transaction) through
the Revocation Date (collectively, the "S Corporation Distribution"). From this
S Corporation Distribution, the existing shareholders will fund their pending
tax liability attributable to the Company's S Corporation income through the
Revocation Date. As of March 31, 1998, on a pro forma basis, the amount of the S
Corporation Distribution would have been approximately $15.3 million for taxes
(including any state income tax payable thereon by the Company on behalf of its
existing shareholders) due by the existing shareholders and $68.2 million for
gain, net of taxes, on the Tampa Transaction and the remaining taxed but
undistributed income of the Company. The S Corporation Distribution will be
funded from the net proceeds of the Tampa Transaction and under the Credit
Facility. After the S Corporation Distribution, the amounts distributed will not
be adjusted to reflect any difference between actual and estimated amounts;
provided however, if the Company subsequently realizes an economic benefit in
connection with a reassessment of the Company's tax returns which results in an
increase in the tax liability of shareholders, then the Company shall reimburse
the existing shareholders pursuant to an indemnification agreement to the extent
of such economic benefit. See "Risk Factors -- Benefits to Existing Shareholders
and Affiliates."

In addition, as a result of the revocation of its S Corporation status, the
Company will record a net deferred income tax liability and corresponding income
tax expense (the "Deferred Tax Liability"), effective upon the Revocation Date.
The amount of the Deferred Tax Liability would have been approximately $74.8
million if the Revocation Date had been March 31, 1998, but the actual amount
will be adjusted to reflect the Company's actual financial position at the
Revocation Date.

DIVIDEND POLICY

The Company does not anticipate paying cash dividends on its Common Stock
in the foreseeable future because it intends to retain its earnings, if any, to
finance the expansion of its business and for general corporate purposes. Any
payment of future dividends will be at the discretion of the Board of Directors
and will depend upon, among other factors, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual restrictions
with respect to the payment of dividends, including, without limitation, the
provisions of the Credit Facility that limit the Company's ability to pay
dividends and other considerations that the Board of Directors deems relevant.

22
<PAGE> 25

DILUTION

Dilution is the amount by which the initial public offering price paid by
the purchasers of the shares of Class A Common Stock will exceed the net
tangible book value per share of Common Stock after the Offering. The net
tangible book value per share of Common Stock is determined by subtracting the
total liabilities of the Company from the total book value of the tangible
assets of the Company and dividing the difference by the number of shares of
Common Stock deemed to be outstanding on the date as of which such book value is
determined.

At March 31, 1998, on a pro forma basis to reflect the Recapitalization,
the Completed and CBS Transactions, the S Corporation Distribution and the Chase
Conversion, the Company had a net tangible book value (deficit) of approximately
$ or $ per share (excluding intangible book value of $ per
share). After giving effect to the sale by the Company of shares
of Class A Common Stock offered hereby at an assumed initial public offering
price of $ per share (the mid-point of the range set forth on the cover page
of this Prospectus), and the application of the estimated net proceeds
therefrom, the pro forma net tangible book value (deficit) of the Company as of
March 31, 1998 would have been approximately $ or $ per share. This
represents an immediate increase in such net tangible book value of $ per
share to existing shareholders and an immediate dilution to new investors of
$ per share. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Net tangible book value per share after the
Recapitalization....................................... $
Decrease in net tangible book value from base conversion,
revocation of S Corporation status and S Corporation
Distribution...........................................
Increase in net tangible book value per share resulting
from Completed Transactions after March 31, 1998 and
the CBS Transactions...................................
Increase in net tangible book value per share resulting
from the Offering......................................
-------
Pro forma net tangible book value per share.................
-------
Dilution per share to new investors(1)...................... $
=======
</TABLE>

- ---------------
(1) Determined by subtracting the pro forma as adjusted net tangible book value
per share after the Offering from the assumed initial public offering price
per share.

If the Underwriters' over-allotment option is exercised in full, the
increase in net tangible book value per share resulting from the Offering, pro
forma net tangible book value per share after the Offering, and dilution per
share to new investors would be $ , $ and $ ,
respectively.

The following table sets forth at March 31, 1998 after giving effect to the
Recapitalization, the Chase Conversion and the sale of the Class A Common Stock
offered by the Company in the Offering: (i) the number of shares of Class A
Common Stock purchased by existing shareholders from the Company and the total
consideration and the average price per share paid to the Company for such
shares; (ii) the number of shares received by Chase Capital in connection with
the Chase Conversion and the total consideration and the price per share paid by
it for such shares; (iii) the number of shares of Class A Common Stock purchased
by new investors in the Offering from the Company and the total consideration
and the price per share paid by them for such shares; and (iv) the percentage of
shares purchased from the Company by existing shareholders, Chase Capital and
the new investors and the percentages of consideration paid to the Company for
such shares by existing shareholders and new investors.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- -------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Existing shareholders (1)................. % $ % $
Chase Capital.............................
New investors.............................
-------- -------- -------- --------
Total........................... % $ %
======== ======== ======== ========
</TABLE>

- ---------------
(1) Does not include shares of Common Stock equal to % of the shares of
Class A Common Stock outstanding from time to time that are reserved for
issuance under the Company's 1998 Equity Compensation Plan, of which options
to purchase shares of Class A Common Stock are issued and
outstanding. See "Management -- 1998 Equity Compensation Plan" and
"Principal and Selling Shareholders."

23
<PAGE> 26

CAPITALIZATION

The following table sets forth (i) the historical capitalization of the
Company at March 31, 1998 as adjusted for the Recapitalization, (ii) the
unaudited pro forma capitalization of the Company after giving effect to the
those Completed Transactions not yet consummated on that date and the CBS
Transactions and (iii) the unaudited pro forma capitalization of the Company
after giving effect to the foregoing transactions and the S Corporation
Distribution, the Chase Conversion, the Offering and the application of the
estimated net proceeds therefrom as described in "Use of Proceeds." This table
should be read in conjunction with the Company's Consolidated Financial
Statements and the Unaudited Pro Forma Financial Information and the notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
----------------------------------------------
PRO FORMA FOR THE
COMPLETED
AND CBS
TRANSACTIONS,
THE S CORPORATION
PRO FORMA FOR DISTRIBUTION,
THE COMPLETED THE CHASE
AND CBS CONVERSION AND
ACTUAL TRANSACTIONS THE OFFERING(1)
-------- ------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents: $ 5,649 $ 10,553 $ 10,553
======== ======== ========
Short-term debt and current portion of long-term
debt.............................................. $ 10 $ 10 $ 10
Long-term debt, less current portion:
Credit Facility................................... 128,000 316,718 214,292
7% Subordinated Convertible Note.................. 28,366 28,366
Other............................................. 283 283 283
-------- -------- --------
Total long-term debt...................... 156,649 345,367 214,575
Shareholders' equity:
Preferred Stock, $.01 par value per share,
25,000,000 shares authorized, no shares issued
and outstanding................................
Class A Common Stock, $.01 par value per share,
200,000,000 shares authorized, shares
issued and outstanding actual and pro forma,
shares issued and outstanding pro forma as
adjusted....................................... 3 3
Class B Common Stock, $.01 per value per share,
75,000,000 shares authorized, shares
issued and outstanding actual and pro forma,
shares issued and outstanding pro forma
as adjusted.................................... 3 3
Class C Common Stock, $.01 per value per share,
50,000,000 shares authorized, no shares issued
and outstanding................................
Additional paid-in capital........................ 710 710 214,682
Retained earnings................................. 205,716 284,379 128,377
-------- -------- --------
Total shareholders' equity................ 206,432 285,095 343,459
-------- -------- --------
Total capitalization................. $363,091 $630,472 $558,044
======== ======== ========
</TABLE>

- ---------------
(1) Does not include shares of Common Stock equal to 10% of the shares of Class
A Common Stock outstanding from time to time that are reserved for issuance
under the Company's 1998 Equity Compensation Plan, of which options to
purchase shares of Class A Common Stock are issued and
outstanding. See "Management -- 1998 Equity Compensation Plan."

24
<PAGE> 27

CBS TRANSACTIONS

In August 1998, the Company entered into three agreements with CBS, the CBS
Transactions, pursuant to which it will (i) purchase WRKO-AM and WEEI-AM in
Boston for $82.0 million in cash, (ii) sell WLLD-FM and WYUU-FM in Tampa for
$75.0 million in cash and (iii) purchase WAAF-FM and WEGQ-FM in Boston and
WWTM-AM in Worchester for $58.0 million. Subject to satisfaction of necessary
conditions to closing, the Company currently anticipates that the First Boston
Transaction and the Tampa Transaction will close prior to the consummation of
the Offering, and that the Second Boston Transaction will close within one year.
As each of the three agreements with CBS has separate conditions to closing and
none of the transactions is conditioned on the closing of the other two, there
can be no certainty concerning when or whether each of the transactions will
close or the order in which they will close. Upon completion of the Boston
Transactions, the Company will have a strong presence in the Boston market with
a 19.4% market share.

COMPLETED TRANSACTIONS

In March 1997, the Company acquired three stations in Seattle, KIRO-AM/FM
and KNWX-AM, and four stations in Kansas City, KCMO-AM/FM, KYYS-FM (formerly
KLTH-FM) and KMBZ-AM, from Bonneville International Corp. ("Bonneville") in
exchange for KLDE-FM in Houston plus $5 million (the "Bonneville Transaction").
The three Seattle stations and a JSA for KING-FM in Seattle complemented the
Company's pre-existing holdings of five stations in Seattle, provided the
Company with the maximum permissible ownership in that market and solidified the
Company as the leading radio operator in Seattle. In addition, the Bonneville
Transaction enabled the Company to enter the Kansas City market with a
four-station cluster.

In April 1997, the Company acquired KLYK-FM and KEDO-AM in Longview/Kelso,
Washington from Rodney J. Etherton ("Etherton") for $1.8 million (the "Etherton
Transaction"). Longview/Kelso is a market located north of Portland, Oregon,
which management considers to be of strategic importance because of its
influence over the potential upgrade of certain Portland stations.

In May 1997, the Company acquired KLOU-FM in St. Louis plus $39.7 million
from Group W Broadcasting, Inc. ("Group W") in exchange for KITS-FM in San
Francisco (the "Group W Transaction").

In May 1997, the Company acquired KISW-FM in Seattle plus $32.5 million in
exchange for WDSY-FM and WJJJ-FM (formerly WNRQ-FM) in Pittsburgh in a three-way
transaction (the "Nationwide-Secret Transaction") with Nationwide
Communications, Inc. ("Nationwide") and Secret Communications L.P. ("Secret").
Prior thereto, in June 1996, the Company began operating and selling radio
advertising time on KISW-FM pursuant to a TBA. This acquisition added a third
rock station to the Company's Seattle cluster.

In June 1997, the Company acquired KRXQ-FM and KSEG-FM in Sacramento from
Citicasters Inc. ("Citicasters") for $45 million (the "Citicasters Transaction")
and KDND-FM (formerly KXOA-FM) in Sacramento from American Radio Systems
Corporation ("ARS") for $27.2 million (the "ARS-KXOA Transaction"). Prior
thereto, in January 1997, the Company began operating and selling radio
advertising time on all three stations pursuant to TBAs. By purchasing three
stations, the Company gained a substantial share of the Sacramento market and
established a platform for further acquisitions.

In October 1997, the Company exchanged the broadcast frequency and
transmission facilities of its Kansas City station, KCMO-AM, for those of Kanza
Inc.'s ("Kanza") Kansas City station, WHB-AM (the "Kanza Transaction"). Each
party retained its call letters, formats and studio facilities. The signal swap
allowed the Company to enhance the 24-hour metro signal of KCMO-AM by providing
nighttime and winter drive time coverage of Johnson County, Kansas, in the
affluent and growing southwestern section of Kansas City.

In November 1997, the Company acquired KSSJ-FM (formerly KBYA-FM) in
Sacramento from Susquehanna Radio Corp ("Susquehanna") for $15.9 million (the
"Susquehanna Transaction"). KSSJ-FM was not on-the-air when the Company
announced the acquisition but became operational in December 1997.

25
<PAGE> 28

In January 1998, the Company acquired WDAF-AM and KUDL-FM in Kansas City
plus $7 million from ARS in exchange for the Company's sole station in St.
Louis, KLOU-FM (the "ARS-Kansas City Transaction"). As a result of this
transaction, the Company became the leading radio station operator in Kansas
City.

In January 1998, the Company acquired KCTC-AM in Sacramento from ARS for $4
million (the "ARS-KCTC Transaction") in order to make it possible, under FCC
ownership rules, for the Company to acquire a fifth FM station in that market.

In May 1998, the Company acquired WSKY-FM (formerly WRRX-FM) in the
Gainesville/Ocala market from Gator Broadcasting, Inc. ("Gator") for $2.0
million, plus an additional payment of up to $1.0 million payable once the
authorized upgrade of the station from a Class A license to a Class C-2 license
becomes final (the "Gator Transaction"). The Company believes that this second
Gainesville station will permit it to solidify its leadership position in the
Gainesville/Ocala market.

In May 1998, the Company sold its rights to participate in a FCC licensing
procedure in the Vancouver, Washington radio market to Jacor for $10.0 million
(the "Vancouver Transaction").

In May 1998, the Company acquired KBAM-AM and KRQT-FM in the Longview/Kelso
market from Armak Broadcasters, Inc. ("Armak") for $1.0 million to bolster the
Company's competitive position in that market (the "Armak Transaction").

In June 1998, the Company acquired three stations, KKRH-FM, KKSN-FM and
KKSN-AM in Portland, and four stations, WBBF-FM (formerly WKLX-FM), WBEE-FM,
WEZO-AM (formerly WBBF-AM) and WQRV-FM in Rochester, from Sinclair Broadcasting
Group ("Sinclair") for $126.5 million (the "Sinclair Transaction"). Prior
thereto, in March 1998, the Company began operating and selling the radio
advertising time of these stations under TBAs. The Portland stations
significantly enhanced the Company's position in that market by increasing the
number of the Company's stations to six and its market share to approximately
25.8%. The acquisition of the Rochester stations enabled the Company to enter
that market with a 21.7% market share.

It is anticipated that in August 1998, the Company will exchange the
broadcast frequency and transmission facilities of KRXQ-FM, a Class B-1 station
in Sacramento, plus $3.8 million with ARS for the broadcast frequency and
transmission facilities of KRAK-FM, a full Class B station in that market (the
"Sacramento Frequency Exchange"). Each station will retain its call letters,
formats and studio facilities.

It is anticipated that in September 1998, the Company will acquire from
Capital Broadcasting, Inc. the assets and rental leases used in connection with
the operation of a tower facility serving the Kansas City market for $2.1
million (the "Kansas City Tower Transaction").

The Bonneville Transaction, the Etherton Transaction, the Group W
Transaction, the Nationwide-Secret Transaction, the Citicasters Transaction, the
ARS-KXOA Transaction, the Kanza Transaction, the Susquehanna Transaction, the
ARS-Kansas City Transaction, the ARS-KCTC Transaction, the Gator Transaction,
the Vancouver Transaction, the Armak Transaction, the Sinclair Transaction, the
Sacramento Frequency Exchange and the Kansas City Tower Transaction are referred
to collectively as the "Completed Transactions."

In addition to the foregoing Completed Transactions, it is anticipated that
in September 1998, the Company will acquire from Willamette Broadcasting Co.
KSLM-AM, serving the Salem, Oregon portion of the Portland radio market for $0.6
million. The purchase of this radio station is not included in the definition of
"Completed Transactions" or in the pro forma financial statements as the effect
would be immaterial.

26
<PAGE> 29

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information (the "Pro Forma
Financial Information") is based on the audited historical financial statements
of the Company and the related notes included elsewhere in this Prospectus and
the unaudited historical financial information of Bonneville, Etherton, Group W,
Nationwide, Secret, Citicasters, ARS, Susquehanna, Armak, Gator, Sinclair,
Capital and CBS.

The pro forma statement of income for the year ended September 30, 1997 and
for the six months ended March 31, 1997 and 1998 have been prepared to
illustrate the effects of the Recapitalization, the Completed and CBS
Transactions, the S Corporation Distribution, the Chase Conversion, the Offering
and the application of the net proceeds thereof as described in "Use of
Proceeds" as if each had occurred on October 1, 1996. The pro forma balance
sheet data as of March 31, 1998 give effect to any such events not yet
consummated on that date as if each had occurred on that date. The Pro Forma
Financial Information and accompanying notes should be read in conjunction with
the consolidated financial statements and other financial information included
elsewhere herein pertaining to the Company, including "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The Pro Forma Financial Information is not necessarily indicative
of either future results of operations or the results that might have been
achieved if such transactions had been completed on the indicated dates.

The Pro Forma Financial Information has been prepared as if the Credit
Facility was entered into on October 1, 1996 at the terms currently in effect.
Additionally, it has been assumed that the Company's conversion from an S
Corporation to a C Corporation became effective on October 1, 1996.

All acquisitions given effect in the Pro Forma Financial Information are
accounted for using the purchase method of accounting. The aggregate purchase
price of each transaction is allocated to the tangible and intangible assets
acquired and liabilities assumed based on their respective fair values. The
allocation of the aggregate purchase price reflected in the Pro Forma Financial
Information is preliminary for transactions to be closed subsequent to March 31,
1998. The final allocation of the purchase price is contingent upon the receipt
of final appraisals of the acquired assets and the revision of other estimates.
Management does not expect such allocations to differ materially from the
preliminary allocation.

27
<PAGE> 30

ENTERCOM COMMUNICATIONS CORP.
UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA ADJUSTMENTS FOR
COMPLETED FOR THE FOR THE THE OFFERING,
AND CBS COMPLETED COMPLETED THE S CORPORATION
THE TRANSACTIONS AND CBS AND CBS DISTRIBUTION AND
COMPANY COMBINED(A) TRANSACTIONS TRANSACTIONS CHASE CONVERSION TOTAL PRO FORMA
-------- ------------ ------------ ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................. $ 93,862 $62,443 $156,305 $156,305
Station operating expenses.... 60,024 52,533 $ (2,034)(B) 110,523 110,523
Depreciation and
amortization................ 7,685 9,192 1,874(C) 18,751 18,751
Corporate general and
administrative expenses..... 3,249 (354) 2,895 2,895
Net TBA expenses (income)..... (476) 3,054 (2,578)(D)
Other operating expenses...... 1,256 (1,256)
-------- ------- -------- -------- -------- --------
Operating income (loss)..... 22,124 (726) 2,738 24,136 24,136
Interest expense.............. 11,388 41 15,317(E) 26,746 $(11,736)(F) 15,010
Gain on sale of assets........ 197,097 8,468 205,565 205,565
Other (income) expense........ 1,504 147 1,651 (1,986)(G) (335)
-------- ------- -------- -------- -------- --------
Income before income taxes
and extraordinary items... 206,329 7,554 (12,579) 201,304 13,722 215,026
Income taxes.................. 489 489 489
-------- ------- -------- -------- -------- --------
Income (loss) before
extraordinary items......... $205,840 $ 7,554 $(12,579) $200,815 $ 13,722 $214,537
======== ======= ======== ======== ======== ========
Income before income taxes and
extraordinary items......... $206,329 $ 7,554 $(12,579) $201,304 $ 13,722 $215,026
Pro forma income taxes(H)..... 78,405 2,870 (4,780) 76,495 5,214 81,709
-------- ------- -------- -------- -------- --------
Pro forma income (loss) before
extraordinary items......... $127,924 $ 4,684 $ (7,799) $124,809 $ 8,508 $133,317
======== ======= ======== ======== ======== ========
Pro forma earnings per share
before extraordinary
items.......................
Shares used to compute pro
forma earnings per share....
</TABLE>

See accompanying notes to pro forma financial information.

28
<PAGE> 31

ENTERCOM COMMUNICATIONS CORP.
UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS FOR
ADJUSTMENTS PRO FORMA THE OFFERING, THE
COMPLETED FOR THE FOR THE S CORPORATION
AND CBS COMPLETED COMPLETED DISTRIBUTION
THE TRANSACTIONS AND CBS AND CBS AND CHASE
COMPANY COMBINED(I) TRANSACTIONS TRANSACTIONS CONVERSION TOTAL PRO FORMA
------- ------------ ------------ ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues..................... $36,145 $34,876 $ 71,021 $ 71,021
Station operating expenses....... 22,385 30,423 $(1,663)(B) 51,145 51,145
Depreciation and amortization.... 2,632 5,573 1,488(C) 9,693 9,693
Corporate general and
administrative expenses........ 1,457 (98) 1,359 1,359
Net TBA expenses (income)........ (929) 2,091 (1,162)(D)
Other operating expenses......... 505 (505)
------- ------- ------- -------- ------- --------
Operating income (loss)........ 10,095 (2,608) 1,337 8,824 8,824
Interest expense................. 5,515 17 7,841(J) 13,373 $(5,868)(K) 7,505
Gain on sale of assets........... 91,981 8,488 100,469 100,469
Other (income) expense........... (67) (221) (288) 67(G) (221)
------- ------- ------- -------- ------- --------
Income before income taxes and
extraordinary items.......... 96,628 6,084 (6,504) 96,208 5,801 102,009
Income taxes..................... 198 198 198
------- ------- ------- -------- ------- --------
Income (loss) before
extraordinary items............ $96,430 $ 6,084 $(6,504) $ 96,010 $ 5,801 $101,811
======= ======= ======= ======== ======= ========
Income before income taxes and
extraordinary items............ $96,628 $ 6,084 $(6,504) $ 96,208 $ 5,801 $102,009
Pro forma income taxes(H)........ 36,719 2,312 (2,472) 36,559 2,204 38,763
------- ------- ------- -------- ------- --------
Pro forma income (loss) before
extraordinary items............ $59,909 $ 3,772 $(4,032) $ 59,649 $ 3,597 $ 63,246
======= ======= ======= ======== ======= ========
Pro forma earnings per share
before extraordinary items.....
Shares used to compute pro forma
earnings per share.............
</TABLE>

See accompanying notes to pro forma financial information.

29
<PAGE> 32

ENTERCOM COMMUNICATIONS CORP.
UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS FOR
THE OFFERING,
ADJUSTMENTS PRO FORMA THE
COMPLETED FOR THE FOR THE S CORPORATION
AND CBS COMPLETED COMPLETED DISTRIBUTION
THE TRANSACTIONS AND CBS AND CBS AND THE CHASE
COMPANY COMBINED(L) TRANSACTIONS TRANSACTIONS CONVERSION TOTAL PRO FORMA
------- ------------ ------------ ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................. $53,377 $21,132 $74,509 $74,509
Station operating expenses.... 37,122 18,045 $(1,662)(B) 53,505 53,505
Depreciation and
amortization................ 5,845 6,030 (2,030)(C) 9,845 9,845
Corporate general and
administrative expenses..... 1,947 227 2,174 2,174
Net TBA expenses (income)..... 632 (632)(D)
Other operating expenses...... 109 (109)
------- ------- ------- ------- ------- -------
Operating income (loss)..... 7,722 (3,061) 4,324 8,985 8,985
Interest expense.............. 5,935 12 7,489(M) 13,436 $(5,931)(N) 7,505
Gain (loss) on sale of
assets...................... 335 (8) 327 327
Other (income) expense........ (122) (122) (50)(G) (172)
------- ------- ------- ------- ------- -------
Income (loss) before income
taxes and extraordinary
items..................... 2,244 (3,081) (3,165) (4,002) 5,981 1,979
Income taxes.................. 64 64 64
------- ------- ------- ------- ------- -------
Income (loss) before
extraordinary items......... $ 2,180 $(3,081) $(3,165) $(4,066) $ 5,981 $ 1,915
======= ======= ======= ======= ======= =======
Income before income taxes and
extraordinary items......... $ 2,244 $(3,081) $(3,165) $(4,002) $ 5,981 $ 1,979
Pro forma income taxes(H)..... 853 (1,171) (1,203) (1,521) 2,273 752
------- ------- ------- ------- ------- -------
Pro forma income (loss) before
extraordinary items......... $ 1,391 $(1,910) $(1,962) $(2,481) $ 3,708 $ 1,227
======= ======= ======= ======= ======= =======
Pro forma earnings per share
before extraordinary
items.......................
Shares used to compute pro
forma earnings per share....
</TABLE>

See accompanying notes to pro forma financial information.

30
<PAGE> 33

ENTERCOM COMMUNICATIONS CORP.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1998
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA ADJUSTMENTS FOR
COMPLETED FOR THE FOR THE THE OFFERING,
AND CBS COMPLETED COMPLETED THE S CORPORATION
THE TRANSACTIONS AND CBS AND CBS DISTRIBUTION AND
COMPANY COMBINED(O) TRANSACTIONS TRANSACTIONS CHASE CONVERSION TOTAL PRO FORMA
-------- ------------ ------------ ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.... $ 5,649 $ 511 $ (594)(P) $ 10,553 $ 10,553
5,000(Q)
(13)(R)
Accounts receivable, net..... 21,009 9,948 (3,384)(P) 20,055 20,055
(7,518)(R)
Prepaid expenses and other... 7,068 9,075 (11,632)(S) 3,691 $ 1,120(Y) 4,811
(218)(P)
(602)(R)
-------- -------- --------- -------- --------- --------
Total current assets....... 33,726 19,534 (18,961) 34,299 1,120 35,419
Property and equipment, net.... 37,862 11,540 103(T) 49,636 49,636
131(U)
Intangible and other assets,
net.......................... 305,328 162,283 4,005(T) 565,191 (970)(Z) 564,221
93,575(U)
-------- -------- --------- -------- --------- --------
Total Assets............... $376,916 $193,357 $ 78,853 $649,126 $ 150 $649,276
======== ======== ========= ======== ========= ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable and other
accrued expenses........... $ 11,609 $ 2,969 $ (1,055)(P) $ 16,438 $ 16,438
(2,085)(R)
5,000(Q)
Current portion of long-term
debt....................... 10 65 (65)(R) 10 10
-------- -------- --------- -------- --------- --------
Total current
liabilities.............. 11,619 3,034 1,795 16,448 16,448
Long-term debt, less current
portion...................... 156,649 8,850 (11,632)(S) 345,367 $(186,000)(AA) 214,575
126,500(V) (28,366)(Z)
140,000(W) 68,216(BB)
(75,000)(X) 15,358(CC)
Other long-term liabilities.... 2,216 407 (390)(P) 2,216 74,794(Y) 74,794
(17)(R) (2,216)(DD)
-------- -------- --------- -------- --------- --------
Total liabilities.......... 170,484 12,291 181,256 364,031 (58,214) 305,817
Shareholders' equity........... 206,432 181,066 (125,143)(P) 285,095 (73,674)(Y) 343,459
(52,260)(R) 186,000(AA)
75,000(X) 27,396(Z)
(68,216)(BB)
(15,358)(CC)
2,216(DD)
-------- -------- --------- -------- --------- --------
Total liabilities and
shareholders' equity..... $376,916 $193,357 $ 78,853 $649,126 $ 150 $649,276
======== ======== ========= ======== ========= ========
</TABLE>

See accompanying notes to pro forma financial information.

31
<PAGE> 34

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)

(A) The schedule below gives effect to the Completed and CBS Transactions for
the period from October 1, 1996 through September 30, 1997.

COMPLETED AND CBS TRANSACTIONS COMBINED
<TABLE>
<CAPTION>
COMPLETED TRANSACTIONS
---------------------------------------------------------------------------
HISTORICAL
OTHER
HISTORICAL HISTORICAL HISTORICAL HISTORICAL TRANSACTIONS
SINCLAIR(1) ARS(2) BONNEVILLE(3) CITICASTERS(4) COMBINED(5)
------------ ---------- -------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net revenues......... $16,423 $8,330 $12,665 $1,781 $(10,350)
Station operating
expenses............ 8,763 7,015 12,398 1,369 (5,664)
Depreciation and
amortization........ 2,328 1,135 1,478 926 571
Corporate general and
administrative
expenses............ (11)
Net TBA expenses..... 2,669
Other operating
expenses............ (1,256)
------- ------ ------- ------ --------
Operating income
(loss)............ 5,332 180 (1,211) (514) (6,659)
Interest expense.....
Gain (loss) on sale
of assets........... 8,500
Other expense........ 147
------- ------ ------- ------ --------
Income (loss) before
income tax
expense........... 5,332 180 (1,211) (514) 1,694
Income taxes.........
------- ------ ------- ------ --------
Net income (loss)... $ 5,332 $ 180 $(1,211) $ (514) $ 1,694
======= ====== ======= ====== ========

<CAPTION>
CBS TRANSACTIONS
-----------------------
COMPLETED
AND CBS
HISTORICAL HISTORICAL TRANSACTIONS
BOSTON (6) TAMPA (7) COMBINED
---------- ---------- ------------
<S> <C> <C> <C>
Net revenues......... $38,375 $(4,781) $62,443
Station operating
expenses............ 32,309 (3,657) 52,533
Depreciation and
amortization........ 2,985 (231) 9,192
Corporate general and
administrative
expenses............ (364) 21 (354)
Net TBA expenses..... 385 3,054
Other operating
expenses............ (1,256)
------- ------- -------
Operating income
(loss)............ 3,060 (914) (726)
Interest expense..... 41 41
Gain (loss) on sale
of assets........... (20) (12) 8,468
Other expense........ 147
------- ------- -------
Income (loss) before
income tax
expense........... 2,999 (926) 7,554
Income taxes.........
------- ------- -------
Net income (loss)... $ 2,999 $ (926) $ 7,554
======= ======= =======
</TABLE>

- ---------------
(1) The column represents the results of operations of KKSN-AM/FM and
KKRH-FM in Portland and WBBF-FM (formerly WKLX-FM), WBEE-FM, WQRV-FM
and WEZO-AM (formerly WBBF-AM) in Rochester from October 1, 1996
through September 30, 1997, prior to the date of the Sinclair
Transaction.

(2) The column represents the results of operations of KDND-FM (formerly
KXOA-FM) in Sacramento from October 1, 1996 through December 31, 1996,
prior to the date of the TBA with ARS, and of WDAF-AM and KUDL-FM in
Kansas City, and KCTC-AM in Sacramento from October 1, 1996 through
September 30, 1997, prior to the dates of the ARS-Kansas City
Transaction and the ARS-KCTC Transaction, respectively.

(3) The column represents the results of operations of KIRO-AM/FM and
KNWX-AM in Seattle and KCMO-AM/FM, KYYS-FM (formerly KLTH-FM) and
KMBZ-AM in Kansas City from October 1, 1996 through February 28, 1997,
prior to the date of the TBA with Bonneville.

(4) The column represents the results of operations of KSEG-FM and KRXQ-FM
in Sacramento from October 1, 1996 through December 31, 1996, prior to
the date of the TBA with Citicasters.

(5) The column represents the historical results of operations for the
following transactions which were consummated prior to the date of the
Offering: (i) the acquisitions of WSKY-FM (formerly WRRX-FM) in
Gainesville, KSSJ-FM (formerly KBYA-FM) in Sacramento and KBAM-AM,
KRQT-FM, KEDO-AM, and KLYK-FM in Longview/Kelso, (ii) the disposition
of KITS-FM in San Francisco, KLDE-FM in Houston, KLOU-FM in St. Louis,
KEGE-AM in Minneapolis and

32
<PAGE> 35
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

WDSY-FM and WJJJ-FM (formerly WNRQ-FM) in Pittsburgh, (iii) the Kansas City
Tower Transaction, (iv) the Sacramento Frequency Exchange and (v) the Vancouver
Transaction.

(6) The column represents the results of operations of WEEI-AM, WRKO-AM,
WEGQ-FM and WAAF-FM in Boston and WWTM-AM in Worcester from October 1,
1996 through September 30, 1997, prior to the date of the Boston
Transactions.

(7) The column represents the results of operations of WYUU-FM and WLLD-FM
in Tampa from October 1, 1996 through September 30, 1997, prior to the
date of the Tampa Transaction.

(B) The adjustment reflects the estimated amortization of the liability assumed
for certain loss contracts acquired in the transaction.

(C) The adjustment reflects (i) the additional depreciation and amortization
expense resulting from the allocation of the purchase price of the acquired
properties including an increase in property and equipment, FCC licenses and
intangible assets to their estimated fair market value and (ii) the change
in depreciation and amortization resulting from establishing, as of October
1, 1996, the estimated useful lives of the acquired properties.

(D) The adjustment reflects the TBA expenses (income) received or paid related
to the operations of the stations under TBAs while pending the consummation
of purchase or sale of the Completed Transactions.

(E) The adjustment reflects interest expense under the current Credit Facility,
based on the rate of 7.86%, and the 7% Subordinated Convertible Note as if
the Completed and CBS Transactions were completed on October 1, 1996, net
of the historical interest expense.

<TABLE>
<S> <C>
Credit Facility............................................. $ 24,932
7% Subordinated Convertible Note............................ 1,794
Other Indebtedness.......................................... 20
--------
Pro forma interest expense................................ 26,746
Historical interest expense................................. (11,429)
--------
Net adjustment............................................ $ 15,317
========
</TABLE>

(F) The adjustment reflects (i) the interest expense benefit resulting from the
use of proceeds from the Offering, (ii) the Chase Conversion and (iii) the
increase in outstanding indebtedness as a result of the S Corporation
Distribution, all net of pro forma interest expense as adjusted for the
Completed and CBS Transactions. The remaining indebtedness incurs assumed
interest expense at a rate of 6.90%, based on the current terms of the
Credit Facility.

<TABLE>
<S> <C>
Credit Facility............................................. $ 15,010
7% Subordinated Convertible Note............................ 0
--------
Pro forma interest expense................................ 15,010
Pro forma interest expense as adjusted for the Completed and
CBS Transactions.......................................... (26,746)
--------
Net adjustment............................................ $(11,736)
========
</TABLE>

(G) The adjustment reflects the elimination of the income attributable to a 1%
limited partnership interest held by an affiliate of the Company, ECI
Investors Corporation ("Investors"), as a result of the merger of the
Company with such affiliate, which occurred on August , 1998.

(H) The adjustment reflects the income tax expense (benefit) related to the
income (loss) that would have been generated by the Company during the pro
forma period based on the assumption that the conversion from an S
Corporation to a C Corporation occurred on October 1, 1996. A combined
federal and state income tax rate of 38% was used for this calculation.

33
<PAGE> 36
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

(I) The schedule below gives effect to the Completed and CBS Transactions for
the period from October 1, 1996 through March 31, 1997.

COMPLETED AND CBS TRANSACTIONS COMBINED
<TABLE>
<CAPTION>
COMPLETED TRANSACTIONS
----------------------------------------------------------------------------
HISTORICAL
OTHER
HISTORICAL HISTORICAL HISTORICAL HISTORICAL TRANSACTIONS
SINCLAIR(1) ARS(2) BONNEVILLE(3) CITICASTERS(4) COMBINED(5)
------------ ---------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Net revenues.................. $7,965 $4,611 $12,665 $1,781 $(7,584)
Station operating expenses.... 4,428 3,887 12,398 1,369 (4,030)
Depreciation and
amortization................ 878 805 1,478 926 379
Corporate general and
administrative expenses.....
Net TBA expenses (income)..... 2,091
Other operating expenses...... (505)
------ ------ ------- ------ -------
Operating income (loss)....... 2,659 (81) (1,211) (514) (5,519)
Interest expense..............
Gain (loss) on sale of
assets...................... 8,500
Other expense................. (221)
------ ------ ------- ------ -------
Income (loss) before income
tax expense................. 2,659 (81) (1,211) (514) 3,202
Income taxes..................
------ ------ ------- ------ -------
Net income (loss)............. $2,659 $ (81) $(1,211) $ (514) $ 3,202
====== ====== ======= ====== =======

<CAPTION>
CBS TRANSACTIONS
-----------------------
COMPLETED
AND CBS
HISTORICAL HISTORICAL TRANSACTIONS
BOSTON(6) TAMPA(7) COMBINED
---------- ---------- ------------
<S> <C> <C> <C>
Net revenues.................. $17,890 $(2,452) $34,876
Station operating expenses.... 14,182 (1,811) 30,423
Depreciation and
amortization................ 1,227 (120) 5,573
Corporate general and
administrative expenses..... (98) (98)
Net TBA expenses (income)..... 2,091
Other operating expenses...... (505)
------- ------- -------
Operating income (loss)....... 2,579 (521) (2,608)
Interest expense.............. 17 17
Gain (loss) on sale of
assets...................... (12) 8,488
Other expense................. (221)
------- ------- -------
Income (loss) before income
tax expense................. 2,562 (533) 6,084
Income taxes..................
------- ------- -------
Net income (loss)............. $ 2,562 $ (533) $ 6,084
======= ======= =======
</TABLE>

--------------------
(1) The column represents the results of operations of KKSN-AM/FM and
KKRH-FM in Portland and WBBF-FM (formerly WKLX-FM), WBEE-FM, WQRV-FM
and WEZO-AM (formerly WBBF-AM) in Rochester from October 1, 1996
through March 31, 1997, prior to the date of the Sinclair Transaction.

(2) The column represents the results of operations of KDND-FM (formerly
KXOA-FM) in Sacramento from October 1, 1996 through December 31, 1996,
prior to the date of the TBA with ARS, and of WDAF-AM and KUDL-FM in
Kansas City, and KCTC-AM in Sacramento from October 1, 1996 through
March 31, 1997, prior to the dates of the ARS-Kansas City Transaction
and the ARS-KCTC Transaction, respectively.

(3) The column represents the results of operations of KIRO-AM/FM and
KNWX-AM in Seattle and KCMO-AM/FM, KYYS-FM (formerly KLTH-FM), and
KMBZ-AM in Kansas City from October 1, 1996 through February 28, 1997,
prior to the date of the TBA with Bonneville.

(4) The column represents the results of operations of KSEG-FM and KRXQ-FM
in Sacramento from October 1, 1996 through December 31, 1996, prior to
the date of the TBA with Citicasters.

(5) The column represents the historical results of operations for the
following transactions which were consummated prior to the date of the
Offering: (i) the acquisitions of WSKY-FM (formerly WRRX-FM) in
Gainesville, KSSJ-FM (formerly KBYA-FM) in Sacramento and KBAM-AM,
KRQT-FM, KEDO-AM, and KLYK-FM in Longview/Kelso, (ii) the dispositions
of KITS-FM in San Francisco, KLDE-FM in Houston, KLOU-FM in St. Louis,
KEGE-AM in Minneapolis and WDSY-FM and WJJJ-FM (formerly WNRQ-FM) in
Pittsburgh, (iii) the Kansas City Tower Transaction, (iv) the
Sacramento Frequency Exchange and (v) the Vancouver Transaction.

(6) The column represents the results of operations of WEEI-AM, WRKO-AM,
WEGQ-FM, and WAAF-FM in Boston and WWTM-AM in Worcester from October 1,
1996 through March 31, 1997, prior to the date of the Boston
Transactions.

34
<PAGE> 37
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

(7) The column represents the results of operations of WYUU-FM and WLLD-FM
in Tampa from October 1, 1996 through March 31, 1997, prior to the date
of the Tampa Transaction.

(J) The adjustment reflects interest expense under the current Credit Facility,
based on the rate of 7.86%, and 7% Subordinated Convertible Note as if the
Completed and CBS Transactions were completed on October 1, 1996, net of the
historical interest expense.

<TABLE>
<S> <C>
Credit Facility............................................. $12,466
7% Subordinated Convertible Note............................ 897
Other indebtedness.......................................... 10
-------
Pro forma interest expense................................ 13,373
Historical interest expense................................. (5,532)
-------
Net adjustment............................................ $ 7,841
=======
</TABLE>

(K) The adjustment reflects (i) the interest expense savings resulting from the
use of proceeds from the Offering, (ii) the Chase Conversion and (iii) the
increase in outstanding indebtedness as a result of the S Corporation
Distribution, all net of pro forma interest expense as adjusted for the
Completed and CBS Transactions. The remaining indebtedness incurs assumed
interest expense at a rate of 6.90%, based on the current terms of the
Credit Facility.

<TABLE>
<S> <C>
Credit Facility............................................. $ 7,505
7% Subordinated Convertible Note............................ 0
--------
Pro forma interest expense................................ 7,505
Pro forma interest expense as adjusted for the Completed and
CBS Transactions.......................................... (13,373)
--------
Net adjustment............................................ $ (5,868)
========
</TABLE>

(L) The schedule below gives effect to the Completed and CBS Transactions for
the period from October 1, 1997 through March 31, 1998.

35
<PAGE> 38
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

COMPLETED AND CBS TRANSACTIONS COMBINED

<TABLE>
<CAPTION>
COMPLETED TRANSACTIONS CBS TRANSACTIONS
--------------------------------------- -----------------------
HISTORICAL COMPLETED
OTHER AND CBS
HISTORICAL HISTORICAL TRANSACTIONS HISTORICAL HISTORICAL TRANSACTIONS
SINCLAIR(1) ARS(2) COMBINED(3) BOSTON(4) TAMPA(5) COMBINED
----------- ---------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues...................... $ 6,460 $1,847 $ (899) $16,265 $(2,541) $21,132
Station operating expenses........ 3,498 1,554 (306) 15,002 (1,703) 18,045
Depreciation and amortization..... 4,316 165 531 1,164 (146) 6,030
Corporate general and
administrative expenses......... 227 227
Net TBA expenses (income).........
Other operating expenses.......... (109) (109)
------- ------ ------- ------- ------- -------
Operating income (loss)......... (1,354) 128 (1,015) (128) (692) (3,061)
Interest expense.................. 12 12
Gain (loss) on sale of assets..... (8) (8)
Other expense.....................
------- ------ ------- ------- ------- -------
Income (loss) before income tax
expense....................... (1,354) 128 (1,015) (148) (692) (3,081)
Income taxes......................
------- ------ ------- ------- ------- -------
Net income (loss)............... $(1,354) $ 128 $(1,015) $ (148) $ (692) $(3,081)
======= ====== ======= ======= ======= =======
</TABLE>

- ---------------
(1) The column represents the results of operations of KKSN-AM/FM and
KKRH-FM in Portland and WBBF-FM (formerly WKLX-FM), WBEE-FM, WQRV-FM
and WKLX-FM in Rochester from October 1, 1997 through February 28,
1998, prior to the date of the Sinclair Transaction.

(2) The column represents the results of operations of WDAF-AM and KUDL-FM
in Kansas City and KCTC-AM in Sacramento from October 1, 1997 through
December 31, 1997, prior to the dates of the ARS-Kansas City
Transaction and the ARS-KCTC Transaction, respectively.

(3) The column represents the historical results of operations for the
following transactions which were consummated prior to the date of the
Offering: (i) the acquisitions of WSKY-FM (formerly WRRX-FM) in
Gainesville, KSSJ-FM (formerly KBYA-FM) in Sacramento and KBAM-AM and
KRQT-FM in Longview/Kelso, (ii) the disposition of KLOU-FM in St.
Louis, (iii) the Kansas City Tower Transaction and (iv) the Sacramento
Frequency Exchange.

(4) The column represents the results of operations of WEEI-AM, WRKO-AM,
WEGQ-FM and WAAF-FM in Boston and WWTM-AM in Worcester from October 1,
1997 through March 31, 1998, prior to the date of the Boston
Transactions.

(5) The column represents the results of operations of WYUU-FM and WLLD-FM
in Tampa from October 1, 1997 through March 31, 1998, prior to the date
of the Tampa Transaction.

(M) The adjustment reflects interest expense under the current Credit Facility,
based on the rate of 7.86%, and 7% Subordinated Convertible Note as if the
Completed and CBS Transactions were completed on October 1, 1997, net of the
historical interest expense.

<TABLE>
<S> <C>
Credit Facility............................................. $12,466
7% Subordinated Convertible Note............................ 960
Other indebtedness.......................................... 10
-------
Pro forma interest expense................................ 13,436
Historical interest expense................................. (5,947)
-------
Net adjustment............................................ $ 7,489
=======
</TABLE>

36
<PAGE> 39
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

(N) The adjustment reflects (i) the interest expense savings resulting from the
use of proceeds from the Offering, (ii) the Chase Conversion and (iii) the
increase in outstanding indebtedness as a result of the S Corporation
Distribution, all net of pro forma interest expense as adjusted for the
Completed and CBS Transactions. The remaining indebtedness incurs assumed
interest expense at a rate of 6.90%, based on the current terms of the
Credit Facility.

<TABLE>
<S> <C>
Credit Facility............................................. $ 7,505
7% Subordinated Convertible Note............................ 0
--------
Pro forma interest expense................................ 7,505
Pro forma interest expense as adjusted for the Completed and
CBS Transactions.......................................... (13,436)
--------
Net adjustment............................................ $ (5,931)
========
</TABLE>

(O) The column represents the combined balance sheets as of March 31, 1998 of
those Completed Transactions not yet consummated on that date and the CBS
Transactions as if all such transactions were consummated on that date.

COMPLETED AND CBS TRANSACTIONS COMBINED

<TABLE>
<CAPTION>
COMPLETED TRANSACTIONS
--------------------------
HISTORICAL CBS TRANSACTIONS
OTHER ----------------------- COMPLETED AND
HISTORICAL TRANSACTIONS HISTORICAL HISTORICAL CBS TRANSACTIONS
SINCLAIR(1) COMBINED(2) BOSTON(3) TAMPA(4) COMBINED
----------- ------------ ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash....................... $ 594 $ 13 $ (96) $ 511
Accounts receivable, net... 3,384 7,518 (954) 9,948
Prepaid expenses and
other................... 218 $ 8,500 602 (245) 9,075
-------- ------- ------- ------- --------
Total current assets.... 4,196 8,500 8,133 (1,295) 19,534
Property and equipment,
net..................... 4,497 1,162 9,369 (3,488) 11,540
Intangible and other
assets, net............. 117,895 7,688 36,925 (225) 162,283
-------- ------- ------- ------- --------
Total assets....... $126,588 $17,350 $54,427 $(5,008) $193,357
======== ======= ======= ======= ========
</TABLE>

37
<PAGE> 40
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

<TABLE>
<CAPTION>
COMPLETED TRANSACTIONS
--------------------------
HISTORICAL CBS TRANSACTIONS
OTHER ----------------------- COMPLETED AND
HISTORICAL TRANSACTIONS HISTORICAL HISTORICAL CBS TRANSACTIONS
SINCLAIR(1) COMBINED(2) BOSTON(3) TAMPA(4) COMBINED
----------- ------------ ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable and other
accrued liabilities..... $ 1,055 $ 2,085 $ (171) $ 2,969
Long-term debt, current
portion................. 65 65
-------- ------- ------- ------- --------
Total current
liabilities........... 1,055 2,150 (171) 3,034
Long-term debt, less
current portion......... $ 8,850 8,850
Other long-term
liabilities............. 390 17 407
-------- ------- ------- ------- --------
Total liabilities....... 1,445 8,850 2,167 (171) 12,291
Shareholders' equity....... 125,143 8,500 52,260 (4,837) 181,066
-------- ------- ------- ------- --------
Total liabilities
and shareholders'
equity........... $126,588 $17,350 $54,427 $(5,008) $193,357
======== ======= ======= ======= ========
</TABLE>

- ---------------
(1) The column represents the combined balance sheet of KKSN-AM/FM and
KKRH-FM in Portland and WBBF-FM (formerly WKLX-FM), WBEE-FM, WQRV-FM
and WEZO-AM (formerly WBBF-AM) in Rochester as the Sinclair Transaction
was consummated subsequent to March 31, 1998, but prior to the
Offering.

(2) The column reflects the combined balance sheets of the following
transactions consummated subsequent to March 31, 1998, but prior to the
Offering: (i) the acquisitions of WSKY-FM (formerly WRRX-FM) in
Gainesville and KBAM-AM and KRQT-FM in Longview/Kelso, (ii) the Kansas
City Tower Transaction, (iii) the Sacramento Frequency Exchange and
(iv) the Vancouver Transaction.

(3) The column represents the combined balance sheet of WEEI-AM, WRKO-AM,
WEGQ-FM, WAAF-FM and WWTM-AM in Boston as the Boston Transactions will
be consummated subsequent to March 31, 1998.

(4) The column represents the combined balance sheet of WYUU-FM and WLLD-FM
in Tampa as the Tampa Transaction will be consummated subsequent to
March 31, 1998.

(P) The adjustment represents the elimination of the historical Sinclair
balance as this amount was not acquired or assumed by the Company, as the
case may be, in the asset purchase agreement.

(Q) The adjustment reflects the amount to be received from CBS to offset
prospective losses from certain contracts acquired in the CBS Transactions.

(R) The adjustment represents the elimination of the historical CBS balance as
this amount will not be acquired or assumed by the Company, as the case may
be, in the asset purchase agreement.

(S) The adjustment represents funds held in escrow related to (i) the
disposition of KLOU-FM in St. Louis and (ii) the Vancouver Transaction.

38
<PAGE> 41
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION -- (CONTINUED)

(T) The adjustment reflects the estimated allocation of the Sinclair purchase
price to the assets acquired resulting in adjustments to property and
equipment and intangibles and other assets to their estimated fair values
associated with the acquisition as follows:

<TABLE>
<CAPTION>
ESTIMATED
ALLOCATION OF CARRYING
PURCHASE PRICE VALUE ADJUSTMENTS
-------------- -------- -----------
<S> <C> <C> <C>
Property and equipment, net.................. $ 4,600 $ 4,497 $ 103
Intangible and other assets, net............. 121,900 117,895 4,005
--------
Total purchase price............... $126,500
========
</TABLE>

(U) The adjustment reflects the estimated allocation of the purchase price of
the Boston Transactions to the assets acquired resulting in adjustments to
property and equipment and intangibles and other assets to their estimated
fair values associated with the acquisition as follows:

<TABLE>
<CAPTION>
ESTIMATED
ALLOCATION OF CARRYING
PURCHASE PRICE VALUE ADJUSTMENTS
-------------- -------- -----------
<S> <C> <C> <C>
Property and equipment, net................... $ 9,500 $ 9,369 $ 131
Intangible and other assets, net.............. 130,500 36,925 93,575
--------
Total purchase price................ $140,000
========
</TABLE>

(V) The adjustment reflects the increase in debt necessary to fund the Sinclair
Transaction.

(W) The adjustment reflects the increase in debt necessary to fund the Boston
Transactions.

(X) The adjustment reflects the proceeds received for WYUU-FM and WLLD-FM in the
Tampa Transaction.

(Y) The adjustment represents the recording of the current deferred tax assets
and the deferred tax liabilities related to the conversion from an S
Corporation to a C Corporation.

(Z) The adjustment reflects the Chase Conversion.

(AA) The adjustment reflects assumed proceeds to the Company of $186 million
from the Offering, net of estimated fees and expenses.

(BB) The adjustment reflects the portion of the S Corporation Distribution
related to the estimated amount of the Company's taxed but undistributed
income (including the income from the Tampa Transaction) through the
Revocation Date.

(CC) The adjustment reflects the portion of the S Corporation Distribution which
is estimated to be the taxes due by existing shareholders as a result of
the Tampa Transaction and on the other income of the Company through the
Revocation Date, net of prior distributions to the shareholders for such
taxes.

(DD) The adjustment reflects the effect of the merger with Investors, which
occurred on August , 1998.

39
<PAGE> 42

SELECTED HISTORICAL FINANCIAL DATA

The operating and other data in the following table have been derived from
audited financial statements of the Company for the years ended September 30,
1995, 1996 and 1997 and from unaudited financial statements of the Company for
the six months ended March 31, 1997 and 1998, all of which are included
elsewhere in this Prospectus, and from audited financial statements for the
years ended September 30, 1993 and 1994. The selected balance sheet data in the
following table have been derived from audited financial statements of the
Company as of September 30, 1996 and 1997 and from unaudited financial
statements of the Company as of March 31, 1998, all of which are included
elsewhere in this Prospectus, and from audited financial statements of the
Company as of September 30, 1993, 1994 and 1995.

In management's opinion, the unaudited financial statements from which such
data have been derived include all adjustments (consisting only of normal,
recurring adjustments) necessary to present fairly, in all material respects,
the results of operations and financial condition of the Company as of and for
the periods presented.

The comparability of the historical financial data reflected herein has
been significantly impacted by acquisitions and dispositions. The information
presented below is qualified in its entirety by, and should be read in
conjunction with the "Audited Financial Statements," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and the
"Unaudited Pro Forma Financial Information," and, in each case, the related
notes included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, MARCH 31,
-------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
------- -------- ------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net revenues....................... $30,065 $ 29,137 $35,893 $ 48,675 $ 93,862 $ 36,145 $ 53,377
Station operating expenses......... 22,478 21,520 24,061 31,659 61,280 22,888 37,231
Depreciation and amortization...... 2,182 2,248 2,225 2,960 7,685 2,632 5,845
Corporate general and
administrative expenses.......... 2,015 2,300 2,535 2,872 3,249 1,457 1,947
Net TBA expenses (income).......... 603 (879) (476) (927) 632
Operating income................... 3,390 3,069 6,469 12,063 22,124 10,095 7,722
Interest expense................... 1,740 1,648 1,992 5,196 11,388 5,515 5,935
Gain on sale of assets............. 22 20,545 228 119 197,097 91,981 335
Income before income taxes and
extraordinary items.............. 1,657 21,531 4,805 7,053 206,329 96,628 2,244
Pro forma income taxes(1).......... 630 8,182 1,826 2,680 78,405 36,719 853
Pro forma income before
extraordinary items(1)........... 1,027 13,349 2,979 4,373 127,924 59,909 1,391
Pro forma earnings per share before
extraordinary items(1)...........
Pro forma weighted average common
shares outstanding(2)............
OTHER DATA:
Broadcast cash flow(3)............. $ 7,587 $ 7,617 $11,832 $ 17,016 $ 32,582 $ 13,257 $ 16,146
Broadcast cash flow margin(4)...... 25.2% 26.1% 33.0% 35.0% 34.7% 36.7% 30.2%
EBITDA(5).......................... $ 5,572 $ 5,317 $ 9,297 $ 14,144 $ 29,333 $ 11,800 $ 14,199
After-tax cash flow(6)............. 2,591 2,047 4,172 7,923 14,947 4,179 7,370
Cash flows related to:
Operating activities............. 3,461 3,950 1,182 12,773 8,859 3,368 13,844
Investing activities............. (5,352) 23,787 (28,636) (96,502) (13,695) (8,219) (21,677)
Financing activities............. 1,599 (27,161) 27,505 87,457 3,170 2,889 9,856
</TABLE>

40
<PAGE> 43

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
------------------------------------------------- ---------
1993 1994 1995 1996 1997 1998
------- ------- ------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents.................... $ 938 $ 1,513 $ 1,564 $ 5,292 $ 3,626 $ 5,649
Intangibles and other assets................. 8,986 5,552 29,548 119,269 300,029 305,328
Total assets................................. 24,879 19,368 52,209 150,575 364,743 376,916
Long-term debt, including current portion.... 19,250 15,250 46,554 136,642 144,427 156,659
Total shareholders' equity................... 2,057 427 828 5,079 208,089 206,432
</TABLE>

(2) Reflects the effect of the for one stock split to be effected as part
of the Recapitalization.

(3) Broadcast cash flow consists of operating income before depreciation,
amortization, net TBA expense (income) and corporate expenses. Although
broadcast cash flow is not a measure of performance or liquidity calculated
in accordance with GAAP, management believes that it is useful to an
investor in evaluating the Company because it is a measure widely used in
the broadcast industry to measure a radio company's operating performance.
Nevertheless, it should not be considered in isolation or as a substitute
for operating income, cash flows from operating activities or any other
measure for determining the Company's operating performance or liquidity
that is calculated in accordance with GAAP. Moreover, because broadcast cash
flow is not a measure calculated in accordance with GAAP, this measure is
not necessarily comparable to similarly titled measures employed by other
companies.

(4) Broadcast cash flow margin represents broadcast cash flow as a percentage of
net revenue.

(5) EBITDA consists of operating income before depreciation, amortization and
net TBA expense (income). Although EBITDA is not a measure of performance or
liquidity calculated in accordance with GAAP, management believes that it is
useful to an investor in evaluating the Company because it is a measure
widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, it should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or any
other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP. Moreover, because
EBITDA is not a measure calculated in accordance with GAAP, this measure is
not necessarily comparable to similarly titled measures employed by other
companies.

(6) After-tax cash flow consists of pro forma income before extraordinary items
minus net gain on sale of assets (net of tax) and plus depreciation,
amortization, and the deferred tax provision (or minus the deferred tax
benefit). Although after-tax cash flow is not a measure of performance or
liquidity calculated in accordance with GAAP, Management believes that it is
useful to an investor in evaluating the Company because it is a measure
widely used in the broadcast industry to measure a radio company's operating
performance. Nevertheless, it should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or any
other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP. Moreover, because
after-tax cash flow is not a measure calculated in accordance with GAAP,
this measure is not necessarily comparable to similarly titled measures
employed by other companies.

41
<PAGE> 44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto of the Company included elsewhere
in this Prospectus. Periodically, the Company may make statements about trends,
future plans and the Company's prospects. Actual results may differ materially
from those described in such forward looking statements based on the risks and
uncertainties facing the Company, including but not limited to, the following:
business conditions, competition and growth in the radio broadcasting industry
and the general economy; changes in interest rates; the failure or inability to
renew one or more of the Company's broadcasting licenses; and the factors
described in "Risk Factors."

Historically, the Company has operated with an October 1st to September
30th fiscal year. All references herein, with the exception of specific
references to calendar year periods, are based on the Company's fiscal year.

A radio broadcasting company's revenues are derived primarily from the sale
of broadcasting time to local and national advertisers. Those revenues are
largely determined by the advertising rates that a radio station is able to
charge and the number of advertisements that can be broadcast without
jeopardizing listener levels. Advertising rates are primarily based on three
factors: (i) a station's audience share in the demographic groups targeted by
advertisers, as measured principally by quarterly reports issued by Arbitron;
(ii) the number of radio stations in the market competing for the same
demographic groups; and (iii) the supply of and demand for radio advertising
time. In 1997, 73.6% of the Company's revenues were generated from local
advertising (which is sold primarily by each individual local radio station's
sales staff), and 22.8% were generated from national spot advertising (which is
sold by independent advertising sales representatives). The balance of 1997
revenues were generated principally by network advertising and rental income
from tower sites.

Several factors may adversely affect a radio broadcasting company's
performance in any given period. In the radio broadcasting industry, seasonal
revenue fluctuations are common and are due primarily to variations in
advertising expenditures by local and national advertisers. Typically, revenues
are lowest in the first calendar quarter of the year. The Company generally
incurs advertising and promotional expenses to increase "listenership" and
Arbitron ratings. However, since Arbitron reports ratings quarterly, any
increased ratings and therefore increased advertising revenues tend to lag
behind the incurrence of such advertising and promotional spending.

In the broadcasting industry, radio stations often utilize trade (or
barter) agreements to reduce expenses by exchanging advertising time for goods
or services. The Company, in order to maximize cash revenue from its spot
inventory, minimizes its use of trade agreements and during the past five years
has held barter revenues under 2.0% of the Company's gross revenues and barter
related broadcast cash flow under 0.4% of the Company's broadcast cash flow.

In the following analysis, management discusses broadcast cash flow and
EBITDA. Broadcast cash flow consists of operating income before depreciation,
amortization, net TBA expenses (income) and corporate expenses. EBITDA consists
of operating income before depreciation, amortization and net TBA expenses
(income). In part due to the non-capital intensive nature of the radio
broadcasting industry and the high level of non-cash depreciation and
amortization expense, broadcast cash flow and EBITDA are frequently used as
bases for evaluating radio broadcasting businesses, although the Company's
measures of broadcast cash flow and EBITDA may not be comparable to similarly
titled measures of other companies. Neither broadcast cash flow nor EBITDA
purports to represent net income, operating income or net cash provided by
operating activities, as those terms are defined under GAAP, and they should not
be considered in isolation or as a substitute for such measurements.

42
<PAGE> 45

The Company calculates "same station" growth by (i) comparing the
performance of stations operated by the Company throughout a relevant quarter to
the performance of those same stations (whether or not operated by the Company)
in the prior year's corresponding quarter, excluding the effect of barter
revenues and expenses and discontinued operations and (ii) averaging such growth
rates for the period presented. "Same station broadcast cash flow margin" is the
broadcast cash flow margin of the stations included in the Company's same
station calculations. For purposes of the following discussion, pro forma net
income before extraordinary items represents historical net income before
extraordinary items adjusted as if the Company were treated as a C Corporation
during all relevant periods at an effective tax rate of 38%.

Because of the Company's significant acquisition and divestiture activities
in 1997, Entercom's actual 1997 results of operation do not reflect a full year
of operations of the Company's current portfolio of radio stations. Therefore,
the Company's pro forma 1997 results of operation differ materially from its
actual 1997 results. In addition, due to acquisition and divestiture activities,
the Company's pro forma results of operation for the first six months of 1998
differ materially from its actual results for the first six months of 1998.
Entercom's actual results for the first six months of 1998 do not reflect a full
six months of operations of the Company's current portfolio of radio stations;
however, the actual results include a partial year of operating results for a
station in St. Louis which the Company has since divested. In fiscal 1997, the
Company's pro forma net revenues were $156.3 million and pro forma broadcast
cash flow was $45.8 million. For the six months ended March 31, 1998, pro forma
net revenues were $74.5 million and pro forma broadcast cash flow was $21.0
million. Pro forma broadcast cash flow margin was 28.2% for the six months ended
March 31, 1998.

RESULTS OF OPERATIONS

Six Months Ended March 31, 1998 Compared to Six Months Ended March 31, 1997

Net Revenues. Net revenues increased 47.7% to $53.4 million for the six
months ended March 31, 1998 from $36.1 million for the six months ended March
31, 1997. The increase in net revenues was primarily attributable to stations
acquired, net of stations divested during that period. On a same station basis,
net revenues for the period increased 13.5% to $51.6 million in 1998 from $45.4
million in 1997, largely due to stronger selling efforts and radio advertising
market growth. Same station revenue growth was led by substantial increases in
Seattle, Kansas City, Portland and St. Louis.

Station Operating Expenses. Station operating expenses increased 62.7% to
$37.2 million for the six months ended March 31, 1998 from $22.9 million for the
six months ended March 31, 1997. The increase was primarily attributable to
stations acquired, net of stations divested during that period. On a same
station basis, station operating expenses increased 4.4% to $36.0 million for
the six months ended March 31, 1998 from $34.4 million for the six months ended
March 31, 1997.

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased 21.8% to $16.1 million for the six months ended March 31,
1998 from $13.3 million for the six months ended March 31, 1997, notwithstanding
a loss of $1.3 million relating to radio broadcasts of the Seattle Seahawks.
Such loss was primarily attributable to the attempt by the team's ownership to
relocate the franchise out of the Seattle market. However, the recent purchase
of the Seattle Seahawks by Paul Allen, a Seattle financier, has resolved these
uncertainties. On a same station basis, broadcast cash flow increased 42.2% to
$15.6 million for the six months ended March 31, 1998 from $11.0 million for the
six months ended March 31, 1997.

The Company's broadcast cash flow margin (defined as broadcast cash flow as
a percentage of net revenues) declined to 30.2% for the six months ended March
31, 1998 from 36.7% for the six months ended March 31, 1997. This decline was
primarily attributable to the Company's 1997 exchange of relatively mature
stations in San Francisco and Houston, which operated at higher broadcast cash
flow margins but were located in markets where management believed there were
limited growth and clustering opportunities, for less developed properties in
Seattle, Kansas City and Sacramento, which collectively operated with lower
broadcast cash flow margins but offered stronger growth and clustering
opportunities. On a same station basis, the Company's broadcast cash flow margin
increased to 30.3% for the six months ended March 31, 1998 from 24.2% for the
six months ended March 31, 1997.

43
<PAGE> 46

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased 33.6% to $1.9 million for the six months ended
March 31, 1998 from $1.5 million for the six months ended March 31, 1997. This
increase was primarily due to the higher administrative expenses associated with
supporting the Company's growth.

Depreciation and Amortization. Depreciation and amortization increased
122.1% to $5.8 million for the six months ended March 31, 1998 from $2.6 million
for the six months ended March 31, 1997. This increase was primarily
attributable to the Company's acquisitions during 1997 and 1998.

EBITDA. As a result of the factors described above, EBITDA increased 20.3%
to $14.2 million for the six months ended March 31, 1998, from $11.8 million for
the six months ended March 31, 1997.

Interest Expense. Interest expense increased 7.6% to $5.9 million for the
six months ended March 31, 1998, from $5.5 million for the six months ended
March 31, 1997. This increase was primarily due to indebtedness incurred in
connection with the Company's acquisitions.

Pro Forma Income Before Extraordinary Items. As a result of the factors
described above, pro forma income before extraordinary items for the six months
ended March 31, 1998, was $1.4 million including a gain of $0.2 million, net of
taxes, on the sale of assets. This compares to pro forma income of $59.9 million
for the six months ended March 31, 1997, which included a prior year gain of
$57.0 million, net of taxes, on the sale of assets.

Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended September
30, 1996

Net Revenues. Net revenues increased 92.8% to $93.9 million for the year
ended September 30, 1997 from $48.7 million for the year ended September 30,
1996. The increase in net revenues was primarily attributable to stations
acquired, net of stations divested during that period. On a same station basis,
net revenues increased 14.2% to $86.6 million for the year ended September 30,
1997 from $75.8 million for the year ended September 30, 1996. Same station
revenue growth was led by substantial increases in Seattle, Kansas City,
Portland, Houston and St. Louis.

Station Operating Expense. Station operating expenses increased 93.6% to
$61.3 million for the year ended September 30, 1997 from $31.7 million for the
year ended September 30, 1996. The increase was primarily attributable to a net
increase in the number of stations operated during the period. On a same station
basis, station operating expenses decreased 0.4% to $55.0 million for the year
ended September 30, 1997 from $55.2 million for the year ended September 30,
1996. This decrease was attributable to cost savings measures implemented by the
Company in connection with its acquisitions.

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased 91.5% to $32.6 million for the year ended September 30, 1997
from $17.0 million for the year ended September 30, 1996. On a same station
basis, broadcast cash flow increased 53.3% to $31.6 million for the year ended
September 30, 1997 from $20.6 million for the year ended September 30, 1996.
Broadcast cash flow margin declined to 34.7% for fiscal 1997 from 35.0% for
fiscal 1996. This decline was primarily attributable to the Company's exchange
in fiscal 1997 of relatively mature stations in San Francisco and Houston, which
operated at higher broadcast cash flow margins but were located in markets where
management believed there were limited growth and clustering opportunities, for
less developed properties in Seattle, Kansas City and Sacramento, which
collectively operated with lower broadcast cash flow margins, but offered
stronger growth and clustering opportunities. On a same station basis, broadcast
cash flow margins increased to 36.5% for the year ended September 30, 1997 from
27.2% for the year ended September 30, 1996.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased 13.1% to $3.2 million for the year ended
September 30, 1997 from $2.9 million for the year ended September 30, 1996. This
increase was primarily due to higher administrative expenses associated with
supporting the Company's growth.

EBITDA. As a result of the factors described above, EBITDA increased
107.4% to $29.3 million for the year ended September 30, 1997, from $14.1
million for the year ended September 30, 1996.

44
<PAGE> 47

Depreciation and Amortization. Depreciation and amortization increased
159.6% to $7.7 million for the year ended September 30, 1997 from $3.0 million
for the year ended September 30, 1996. This increase was primarily attributable
to the Company's 1996 and 1997 acquisitions and was partially offset by the net
effect of stations sold during the same period.

Interest Expense. Interest expense increased 119.2% to $11.4 million for
the year ended September 30, 1997 from $5.2 million for the year ended September
30, 1996. This increase was primarily due to indebtedness incurred in connection
with the Company's acquisitions.

Pro Forma Income Before Extraordinary Items. As a result of the factors
described above, pro forma income before extraordinary items for the year ended
September 30, 1997 was $127.9 million, including a $122.2 million gain, net of
taxes, on the sale of assets. This compares to pro forma income before
extraordinary items of $4.4 million for the year ended September 30, 1996, which
included a $0.1 million gain, net of taxes, on the sale of assets.

Fiscal Year Ended September 30, 1996 Compared to Fiscal Year Ended September
30, 1995

Net Revenues. Net revenues increased 35.6% to $48.7 million for the year
ended September 30, 1996 from $35.9 million for the year ended September 30,
1995. The increase in net revenues was primarily attributable to stations
acquired, net of stations divested during that period. On a same station basis,
net revenues increased 15.3% to $44.7 million for the year ended September 30,
1996 from $38.8 million for the year ended September 30, 1995. Same station
revenue growth was led by substantial increases in Portland, Tampa, Houston,
Seattle and San Francisco.

Station Operating Expenses. Station operating expenses increased 31.6% to
$31.7 million for the year ended September 30, 1996 from $24.1 million for the
year ended September 30, 1995. The increase was primarily attributable to a net
increase in the number of stations operated during the period.

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased 43.8% to $17.0 million for the year ended September 30, 1996
from $11.8 million for the year ended September 30, 1995. On a same station
basis, broadcast cash flow increased 27.2% to $15.4 million for the year ended
September 30, 1996 from $12.1 million for the year ended September 30, 1995.
Broadcast cash flow margin increased from 33.0% for the year ended 1995 to 35.0%
for the year ended 1996. Same station broadcast cash flow margin rose from 31.3%
to 34.5%.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased 13.3% to $2.9 million for the year ended
September 30, 1996 from $2.5 million for the year ended September 30, 1995. This
increase was primarily due to higher administrative expenses associated with
supporting the Company's growth.

EBITDA. As a result of the factors described above, EBITDA increased 52.1%
to $14.1 million for the year ended September 30, 1996, from $9.3 million for
the year ended September 30, 1995.

Depreciation and Amortization. Depreciation and amortization increased
33.0% to $3.0 million for the year ended September 30, 1996 from $2.2 million
for the year ended September 30, 1995. This increase was primarily attributable
to the Company's 1995 and 1996 acquisitions.

Interest Expense. Interest expense increased 160.8% to $5.2 million for
the year ended September 30, 1996 from $2.0 million for the year ended September
30, 1995. The increase was primarily due to indebtedness incurred in connection
with the Company's acquisitions.

Pro Forma Income Before Extraordinary Items. As a result of the factors
described above, pro forma income before extraordinary items for the year ended
September 30, 1996 was $4.4 million. This compares to pro forma income before
extraordinary items for the year ended September 30, 1995 of $3.0 million.

45
<PAGE> 48

LIQUIDITY AND CAPITAL RESOURCES

The Company has used a significant portion of its capital resources to
consummate acquisitions. These acquisitions were or will be funded from one or a
combination of the following sources: (i) the Credit Facility (described below),
(ii) the 7% Subordinated Convertible Note (described below), (iii) the swapping
of Company owned radio stations in qualified sec.1031 transactions and (iv)
internally-generated cash flow. Net proceeds from the Offering will be used to
repay a portion of the Company's outstanding indebtedness under the Credit
Facility. See "Use of Proceeds."

Net cash flows from operating activities were $8.9 million, $12.8 million
and $1.2 million for the twelve months ended September 30, 1997, 1996 and 1995,
respectively, and $13.8 million for the six months ended March 31, 1998. Changes
in the Company's net cash flow from operating activities are primarily a result
of changes in advertising revenues and station operating expenses which are
affected by the acquisition and dispositions of stations during those periods.

Net cash flows used in investing activities were $13.7 million, $96.5
million and $28.6 million for the twelve months ended September 30, 1997, 1996
and 1995, respectively, and $21.7 million for the six months ended March 31,
1998. Net cash flows from financing activities were $3.2 million, $87.5 million
and $27.5 million for the twelve months ended September 30, 1997, 1996 and 1995,
respectively, and $9.9 million for the six months ended March 31, 1998. These
cash flows reflect the acquisitions consummated in the relevant periods and the
related borrowings.

In addition to debt service, the Company's principal liquidity requirements
will be for working capital and general corporate purposes, including capital
expenditures, and, if appropriate opportunities arise, acquisitions of
additional radio stations. For fiscal 1998, management anticipates that
maintenance capital expenditures will be approximately $1.0 million while total
capital expenditures will be approximately $11.0 million, including
approximately $6.7 million for one-time expenditures associated with studio
consolidations related to the Company's acquisition activity and $1.5 million
for one-time expenditures for signal upgrades. For calendar 1999, management
anticipates maintenance capital expenditures to be between $1.0 million and $1.5
million and total capital expenditures to be between $3.5 million and $5.0
million. Management believes that cash from operating activities, together with
available revolving credit borrowings under the Credit Facility, should be
sufficient to permit the Company to meet its financial obligations and fund its
operations. The Company may require additional financing for future
acquisitions, if any, and there can be no assurance that it would be able to
obtain such financing on terms considered to be favorable by management.

The Company entered into a Loan Agreement, dated as of February 13, 1998,
with several banks, including Key Corporate Capital, Inc. and Bank of America
NT&SA for a $300 million revolving credit facility (the "Credit Facility").
Prior to June 30, 2000, the total amount available under the Credit Facility can
be increased to $350 million, subject to syndication. The Credit Facility was
established to: (i) refinance existing indebtedness of the Company, (ii) provide
working capital and (iii) fund corporate acquisitions. At the Company's
election, interest on any outstanding principal accrues at a rate based on
either LIBOR plus a spread which ranges from 0.5% to 2.125% or on KeyBank N.A.'s
base rate plus a spread of up to 0.875%, depending on the Company's leverage
ratio. Although the Company may borrow, repay and reborrow under the Credit
Facility, the aggregate maximum amount that the Company can have outstanding at
any one time is reduced throughout the term of the Credit Facility. The final
maturity date for the Credit Facility is February 13, 2006. As of March 31,
1998, on a pro forma basis after giving effect to the Offering, the Company had
approximately $214.6 million of borrowings outstanding under the Credit
Facility.

The Company entered into the Chase Agreement with Chase Capital on May 21,
1996 pursuant to which the Company issued the 7% Subordinated Convertible Note
in the original principal amount of $25 million. Interest accrues on the 7%
Subordinated Convertible Note at a rate of seven percent. However, payment of
interest is deferred until May 21, 2003. As of March 31, 1998, the total amount
of principal and interest owed by the Company under the Chase Agreement was
$28.4 million.

Chase Capital has agreed with the Underwriters and the Company that,
immediately prior to the Offering, it will convert the 7% Subordinated
Convertible Note into Class A Common Stock. Upon the Chase

46
<PAGE> 49

Conversion, Chase Capital will receive shares of Class A Common
Stock. After giving effect to the Offering, including Chase Capital's sale of
shares of Class A Common Stock therein, Chase Capital will beneficially own
approximately % of the Company's Class A Common Stock, representing %
of the total voting power of the Company's outstanding Common Stock
(approximately % of the Company's Class A Common Stock, representing %
of the total voting power of the Company's outstanding Common Stock, if the
over-allotment option is exercised in full). See "Principal and Selling
Shareholders" and "Risk Factors -- Benefits to Existing Shareholders and
Affiliates."

RECENT PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133 entitled "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
"derivatives") and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management has not yet determined what effect, if any, this statement will have
on the Company.

IMPACT OF THE YEAR 2000 ISSUE

The Company relies on information systems to carry out its operations
effectively and efficiently. For example, the Company utilizes software programs
for a variety of purposes, including maintaining database systems for general
ledger, payroll, accounts payable, accounts receivable and advertiser spot
scheduling and invoicing functions. Errors or failures in the maintenance or
handling of such information could have a material adverse effect on the
operations of the Company. Accordingly, the Company is taking measures to ensure
that its computer systems properly recognize and process date sensitive
information when the year changes to 2000 or "00". Systems that do not properly
recognize such information could generate erroneous data or cause a computer
program to fail. Therefore, the Company is analyzing and testing Year 2000
compliance for the software programs as well as individual work stations. The
Company believes that with respect to these programs: (i) they are either Year
2000 compliant, (ii) the supplier has a replacement program available that is
Year 2000 compliant, or (iii) in a few cases the supplier has indicated that a
revision to the program to make it Year 2000 compliant will be issued in time to
avoid operational problems. Any of the Company's individual work stations that
are not Year 2000 compliant are not material to the Company's operations.

47
<PAGE> 50

BUSINESS

OVERVIEW

CORPORATE HISTORY

Throughout its 30 year history of operations, Entercom has experienced
sustained growth by adapting its acquisition and operating strategies to
capitalize on changes occurring in the radio broadcasting industry. Entercom's
Chairman of the Board, Chief Executive Officer and President, Joseph M. Field,
founded the Company in 1968 on the conviction that FM broadcasting, then in its
infancy, would surpass AM broadcasting as the leading aural medium. The
Company's strategy from inception through the 1970's was to acquire FM stations
in the top 20 radio advertising markets at a fraction of prevailing prices for
AM stations and to operate those stations economically and profitably by
utilizing niche formats not being offered by major AM stations. The Company
continued this strategy until FM's technical superiority and the availability of
inexpensive AM/ FM receivers drove FM's penetration of the radio advertising
market to critical mass and FM stations began to compete successfully with the
dominant AM stations of the time for control of mass market audiences. In
addition, Entercom pursued a strategy of purchasing technically underdeveloped
FM stations and upgrading them so that they could become competitive stations in
their markets.

The Company adjusted its strategic plan in the mid-1980's. With FM at
critical mass, the Company began a deliberate multi-year effort to enhance its
operations at both the corporate and station levels to compete for greater
shares of audience and advertising dollars in its markets. With the advent of
the duopoly rules in 1992 (permitting expansion of ownership in a market from
one to two stations in each radio medium), Entercom began to "double up" in its
markets. Since the passage of the Telecom Act, which permitted ownership of up
to eight radio stations in most major markets, the Company has pursued a
creative acquisition and development strategy pursuant to which it has swapped
stand-alone FM stations in various markets to build market leading clusters in
large growth markets where the Company could develop a significant presence.

ACQUISITION STRATEGY

48
<PAGE> 51

market while the four stations acquired in Kansas City enabled the Company to
enter a new large market with a significant presence.

OPERATING STRATEGY

The principal components of the Company's operating strategy are set forth
below.

- DEVELOP MARKET LEADING STATION CLUSTERS. The Company has built one of
the three leading clusters in each of its eight markets. To enhance its
competitive position, the Company strategically aligns its stations
within each market to optimize their performance, both individually and
collectively. The Company seeks to maximize the ratings, revenue and
broadcast cash flow of its radio stations by tailoring their programming
to optimize aggregate audience delivery. For example, in Kansas City,
Entercom acquired two stations that had been engaged in a lengthy battle
in the Adult Contemporary format. Largely as a result of that
competition, these stations were the 10(th) and 12(th) ranked stations
among Adults 25-54 in the market. Shortly after acquiring the stations,
the Company reformatted one of the stations to an Album Oriented Rock
format. As a result of this strategy, the stations now rank 1(st) and
3(rd) in the Adults 25-54 demographic target.

- BUILD STRONGLY-BRANDED FRANCHISES. The Company analyzes market research
and competitive factors to identify the format opportunity, music
selection and rotation, presentation and other key programming attributes
that it believes will best position each station to maximize its audience
share and, consequently, its revenues and broadcast cash flow. The
Company's stations pursue a variety of programming and marketing
initiatives designed to develop a distinctive identity and to strengthen
the stations' local "brand" or "franchise" value. For example, the
Company's "endfest(TM)" festival in Seattle attracts 20,000 listeners to
a day-long festival with live music and other attractions, solidifying
KNDD's ("The End(TM)") brand image in Seattle. The Company has also been
on the leading edge of several national programming trends during the
past decade including Modern Rock, Young Adult Country and Adult Album
Alternative.

49
<PAGE> 52

- RECRUIT, DEVELOP, MOTIVATE AND RETAIN SUPERIOR EMPLOYEES. The Company
believes that station operators differentiate themselves from their peers
primarily through their ability to recruit, develop, motivate and retain
superior management, programming, and sales talent. Accordingly, the
Company strives to establish a creative and collegial working environment
in which talented employees are able to thrive. The Company encourages
its stations to build strong community bonds through local and
company-wide community service programs, which facilitate strong local
business relationships and provide employees with opportunities for
enhanced job fulfillment. The Company offers competitive pay packages
with performance-based incentives for its key employees. In addition, the
Company provides employees with opportunities for personal growth and
advancement through extensive training, seminars and other educational
programs.

STATION PORTFOLIO

The Company has built a highly consolidated portfolio of radio stations
concentrated primarily in top 30 markets with above average growth
characteristics. The Company generated 93.5% of its pro forma fiscal 1997 net
revenues from the five top 30 markets in which it operates. Radio advertising
revenues in these five markets have grown at an average annual rate of 10.8%
from 1993 to 1997, which exceeded the average annual growth rate of both the
aggregate radio industry and top 30 markets. Furthermore, the Company generated
97.6% of its pro forma fiscal 1997 net revenues from superduopolies, which the
Company defines as clusters of four or more stations in one market. Management
believes that Entercom's superduopolies enable the Company to (i) amass greater
resources to penetrate and capture additional local radio advertising revenues,
(ii) consolidate administrative, engineering and management functions to reduce
costs and (iii) be more flexible in adjusting formats to serve changing listener
needs. In addition, the Company believes that superduopolies enhance its
stations' ability to compete for advertising and promotional dollars with other
media, including television and newspaper.

50
<PAGE> 53

The following table sets forth certain information about the markets in
which the Company operates:

<TABLE>
<CAPTION>
1993-1997 1997
1997 RADIO MARKET Company's Stations COMPANY
RADIO MARKET AVERAGE ------------------- MARKET
MARKET(1) REVENUE RANK(2) REVENUE GROWTH(2) FM AM TOTAL REVENUE SHARE(2)
- --------- ---------------- ------------------ --- --- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Boston................. 10 13.7% 2 3 5 19.4%(3)
Seattle(4)............. 13 10.5 5(4) 3 8(4) 40.4(4)
Portland............... 21 11.8 4 3 7 25.8
Sacramento............. 28 6.7 4 1 5 20.9
Kansas City............ 29 11.3 3 3 6 33.8
-- -- --
Top 30 Markets....... 18 13 31

Rochester.............. 55 8.1 3 1 4 21.7
Gainesville/Ocala...... 124 6.5 2 0 2 23.8
Longview/Kelso......... n/a n/a 2 2 4 n/a
-- -- --
All Markets.......... 25 16 41
</TABLE>

- ---------------
(1) The Company's stations are in some instances licensed to communities other
than the named principal community for the market.
(2) Source: Duncan's.
(3) Does not include the revenues of WWTM-AM, which competes in the adjacent
Worcester market.
(4) The Company also sells substantially all the advertising time of a sixth FM
station under a joint sales agreement and the revenue from such sales are
included in the Company's Market Revenue Share.

The following is a general description of each of the Company's stations
and the markets served by those stations. The Audience Share and Audience Rank
in Target Demographic figures are shown as reported by Arbitron, and the 1997
Radio Market Revenue Rank for each market figure is shown as reported by
Duncan's.

BOSTON
1997 Radio Market Revenue Rank: 10

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- ------------ -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
WEEI-AM Sports Talk pending Men 25-54 6.2 2
WRKO-AM Talk pending Adults 25-54 4.4 9
Men 25-54 4.9 5
WAAF-FM Active Rock pending Men 18-34 8.0 3
WEGQ-FM Classic Hits pending Adults 25-54 3.1 15 (tie)
WWTM-AM(1) Sports Talk pending Men 25-54 n/a n/a
</TABLE>

- ---------------
(1) Station competes in the adjacent community of Worcester, Massachusetts and
simulcasts virtually all of the programming of WEEI-AM.

Market Overview

Boston is the tenth largest radio market in the United States based on 1997
radio advertising revenue. Radio advertising revenues in the Boston market have
grown from approximately $115.6 million in 1992 to approximately $219.0 million
in 1997 at a compound annual rate of 13.7%. Market radio advertising revenue in
1997 grew 12.9% over 1996 revenue. There are currently 20 viable stations in the
Boston market, according to Duncan's.

Boston Stations

The Company will own and operate five stations, 2 FM and 3 AM, in Boston,
including one AM station in the adjacent Worcester market, upon consummation of
the CBS Transactions. The Company's cluster is the second largest in Boston with
a 19.4% market revenue share. Of the Company's four Boston stations, one ranks
second and an additional two rank in the top five for their respective target
demographic audiences.

51
<PAGE> 54

The Entercom cluster in Boston features two of the market's three major AM
stations. WEEI-AM, Boston's all-sports station, is the flagship for the radio
networks of the Boston Red Sox, Boston Celtics and Boston College's football and
basketball teams. The station also features a highly rated line-up of talk show
hosts which has enabled WEEI-AM to rank consistently as one of the leaders among
Men 25-54. WRKO-AM is Boston's principal talk station, featuring major
nationally syndicated and local personalities such as Dr. Laura and Howie Carr,
whose afternoon show is syndicated by WRKO-AM to several other stations
throughout New England.

The Company will also own and operate two FM rock stations in the Boston
market, WAAF-FM and WEGQ-FM. WAAF-FM, a heritage rock station, features an
Active Rock format that appeals to the Men 18-34 demographic. WEGQ-FM is a
Classic Hits station featuring music from the 70's and 80's that is targeted to
Adults 25-54.

SEATTLE
1997 Radio Market Revenue Rank: 13

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- ---------------- -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
KBSG-AM/FM Oldies August 1996 Adults 25-54 6.0 1
KIRO-AM News/Talk/Sports March 1997 Adults 25-54 4.5 5(tie)
Men 25-54 5.5 4
KIRO-FM Talk March 1997 Adults 25-54 3.5 14
KISW-FM Active Rock May 1997(1) Men 18-34 11.6 1
Men 25-54 7.3 1
KMTT-FM Adult Rock 1973 Adults 25-54 4.5 5(tie)
KNWX-AM News/Business March 1997 Adults 25-54 0.7 24
KNDD-FM Modern Rock August 1996 Men 18-34 9.9 2
Adults 18-34 8.0 3
</TABLE>

- ---------------
(1) TBA commenced June 1996

Market Overview

Seattle is the thirteenth largest radio market in the United States based
on 1997 radio advertising revenue. Radio advertising revenues in the Seattle
market have grown from approximately $91.9 million in 1992 to approximately
$150.5 million in 1997 at a compound annual rate of 10.5%. Market radio
advertising revenue in 1997 grew 13.8% over 1996 revenue. There are currently 22
viable stations in the Seattle market, according to Duncan's.

Seattle Stations

The Company owns and operates eight stations, 5 FM and 3 AM, in Seattle,
and sells advertising on a sixth FM station pursuant to a joint sales agreement.
The nine station group is the market's largest radio cluster with a 40.4% market
revenue share according to Duncan's. Of the Company's eight Seattle stations,
two rank first and an additional three rank in the top five for their respective
target demographic audiences.

A cornerstone of Entercom's Seattle cluster is KIRO-AM, the market's
leading radio news and information source. KIRO Newsradio 710 AM broadcasts
up-to-the-minute news and popular local talk-shows and serves as the flagship
station for the Seattle Mariners and the Seattle Seahawks radio networks. The
station has ranked first in five of the last eight Arbitron quarterly reports
among Men 25-54 and Adults 25-54. The Company recently negotiated a five-year
extension through the 2002 season of its exclusive radio broadcasting rights
agreement with the Seattle Mariners. The Company's agreement with the Seattle
Seahawks runs through the 1999 season. Complementing KIRO-AM, the Company owns
and operates KNWX-AM, a business-oriented news radio station, and KIRO-FM,
Seattle's only FM talk station.

In addition, the Company owns and operates three of the four major rock
stations in the Seattle market including KNDD-FM ("The End(TM)"), KMTT-FM ("The
Mountain(R)") and KISW-FM. The Company has refined the programming of each of
these rock stations so that each station targets a distinct segment of the

52
<PAGE> 55

Adults 18-54 market. As a result, the Company's rock stations rank first and
second with Men 18-34. The Company's Seattle cluster also includes KBSG-AM/FM,
Seattle's only Oldies station, which has ranked first or second among Adults
25-54 in eleven of the last twelve Arbitron quarterly reports.

In connection with the Bonneville Transaction in March 1997, the Company
assumed the obligations of Bonneville under a JSA pursuant to which it sells all
the commercial air time for KING-FM, Seattle's only classical radio station. On
July 1, 1997 the Company and Classic Radio, Inc. extended the JSA through June
2002.

PORTLAND
1997 Radio Market Revenue Rank: 21

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
STATION TARGET IN TARGET IN TARGET
CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- ------------ ---------------------- ----------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
KFXX-AM Sports Talk August 1995(1) Men 25-54 4.1 11
KGON-FM Classic Rock August 1995(1) Men 25-54 9.9 1
Adults 7.3 3
25-54
KKRH-FM Hot Adult Contemporary June 1998(2) Women 18-49 n/a(3) n/a(3)
KKSN-AM Nostalgia June 1998(2) Adults 2.3 14
35-64
KKSN-FM Oldies June 1998(2) Adults 6.3 4
25-54
KNRK-FM Modern Rock August 1995(1) Men 18-34 6.5 4(tie)
Adults 6.2 5
18-34
KSLM-AM Sports Talk September 1998(4) Men 25-54 n/a(4) n/a(4)
</TABLE>

- ---------------
(1) TBA commenced April 1995.

(2) TBA commenced March 1998.

(3) KKRH-FM recently changed its format. Accordingly, prior Arbitron ratings are
not meaningful.

(4) KSLM-AM is licensed to Salem, Oregon within the Portland market and will
simulcast KFXX-AM programming. The Salem market is not surveyed by Arbitron.

Market Overview

Portland is the twenty-first largest radio market in the United States
based on 1997 radio advertising revenue. Radio advertising revenues in the
Portland market have grown from approximately $52.5 million in 1992 to
approximately $91.8 million in 1997 at a compound annual rate of 11.8%. Market
radio advertising revenue in 1997 grew 6.3% over 1996 revenue. There are
currently 18.5 viable stations in the Portland market, according to Duncan's.

Portland Stations

The Company owns and operates seven stations, 4 FM and 3 AM, in the
Portland market. The Company's seven-station cluster is one of the three largest
clusters in the market with a 25.8% market revenue share. Of the Company's seven
stations, one ranks first and an additional two rank in the top five stations
for their respective demographic audiences.

The Company entered the Portland market in 1995, as a result of an internal
study that identified Portland as the Company's primary target market for
expansion. In 1995, the Company acquired three stations in Portland, including
KGON-FM, the market's Classic Rock station. The Company recently increased the
size of its Portland cluster by acquiring three additional stations, including
KKSN-FM, the market's only Oldies station and KKSN-AM, the market's only
Nostalgia station. The Company also acquired KKRH-FM, a Classic Hits station,
which competed directly with KGON-FM. In June 1998, the Company changed
KKRH-FM's format to Hot Adult Contemporary to pursue a different demographic
target, Women 18-49.

The Company also owns and operates KFXX-AM, an all-sports station. KFXX-AM
is an affiliate of the Seattle Mariners radio network and carries popular local
and nationally-syndicated programming. To increase the nighttime strength and
coverage of KFXX-AM's signal, the Company recently exchanged the broadcast
frequency and technical facilities of KFXX-AM with those of KKSN-AM and agreed
to acquire KSLM-AM in Salem, Oregon to expand the coverage of KFXX-AM to the
south through a simulcast of its programming.

53
<PAGE> 56

SACRAMENTO
1997 Radio Market Revenue Rank: 28

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- -------------- ---------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
KCTC-AM Nostalgia January 1998 Adults 35-64 2.5 13(tie)
KRXQ-FM Active Rock June 1997(1) Men 18-34 14.4 1
Adults 18-34 9.8 2
KSEG-FM Classic Rock June 1997(1) Men 25-54 6.4 4
KSSJ-FM Smooth Jazz November 1997 Adults 25-54 2.8 16
KDND-FM Contemporary June 1997(1) Women 18-34 n/a(2) n/a(2)
Hit Radio
</TABLE>

- ---------------
(1) TBA commenced January 1997.

(2) KDND-FM (formerly KXOA-FM) recently changed its format. Accordingly, prior
Arbitron ratings are not meaningful.

Market Overview

Sacramento is the twenty-eighth largest radio market in the United States
based on 1997 radio advertising revenue. Radio advertising revenues in the
Sacramento market have grown from approximately $54.4 million in 1992 to
approximately $75 million in 1997 at a compound annual rate of 6.7%. Market
radio advertising revenue in 1997 grew 5.0% over 1996 revenue. There are
currently 17 viable stations in the Sacramento radio market, according to
Duncan's.

Sacramento Stations

The Company owns and operates five stations, 4 FM and 1 AM, in Sacramento.
The five-station group is one of the three largest clusters in the market with a
20.9% market revenue share. Of the Company's five stations, one ranks first and
an additional station ranks in the top five in their respective target
demographic audiences.

Two of the Company's FM stations, KSEG-FM and KDND-FM (formerly KXOA-FM),
have been direct competitors. In July 1998, the Company changed KDND-FM's format
from Classic Hits to Contemporary Hit Radio to pursue a different demographic
target, Women 18-34. Management believes that KSEG-FM, Sacramento's exclusive
Classic Rock station, should benefit from this format change.

KRXQ-FM, an Active Rock station, has been the market's consistent leader
among Men 18-34 and a leading competitor among Adults 18-34 as well. Entercom
recently completed a frequency exchange with ARS, through which KRXQ-FM has
upgraded its current class B1 facility at 93.7 FM to a full class B signal at
98.5 FM, which has expanded KRXQ-FM's signal coverage, and therefore, its
competitive position. KSSJ-FM (formerly KBYA-FM) commenced operations from a new
tower site in December 1997 with a Smooth Jazz format.

54
<PAGE> 57

KANSAS CITY
1997 Radio Market Revenue Rank: 29

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- ------------------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
KCMO-AM Talk March 1997 Adults 3.6 13
25-54
KCMO-FM Oldies March 1997 Adults 6.0 9(tie)
25-54
KMBZ-AM News/Talk/Sports March 1997 Men 25-54 6.1 5
Adults 4.4 11
25-54
KUDL-FM Adult Contemporary January 1998 Women 25-54 10.4 1
Adults 8.2 1
25-54
KYYS-FM Album Oriented Rock March 1997 Adults 7.1 3(tie)
25-54
Men 25-54 8.7 1
WDAF-AM Country January 1998 Adults 3.3 14(tie)
25-54 7.6 4
Adults
35-64
</TABLE>

Market Overview

Kansas City is the twenty-ninth largest radio market in the United States
based on 1997 radio advertising revenue. Radio advertising revenues in the
Kansas City market have grown from approximately $42.0 million in 1992 to
approximately $71.4 million in 1997 at a compound annual rate of 11.3%. Market
radio advertising revenue in 1997 grew 7.5% over 1996 revenue. There are
currently 16 viable stations in the Kansas City market, according to Duncan's.

Kansas City Stations

The Company owns and operates six stations, 3 FM and 3 AM, in the Kansas
City market. The six-station group is the market's largest radio cluster with a
33.8% market revenue share. The Company's cluster includes three well-branded FM
stations and the market's three strongest AM signals. Of the Company's six
stations, two rank first and an additional two rank in the top five in their
respective target demographic audiences.

The Company's Kansas City FM stations illustrate the Company's ability to
react to local market conditions and tailor its stations' programming to broaden
their collective audience reach and, consequently, their revenue and broadcast
cash flow potential. Prior to their recent acquisition by the Company, KYYS-FM
(formerly KLTH-FM) and KUDL-FM had been engaged in a lengthy battle in the Adult
Contemporary format. Largely as result of that competition, these stations were
the 10th and 12th ranked adult stations in the market. Shortly after acquiring
the stations, the Company took advantage of the opportunity created when a new
operator dropped the format and call-letters of KYYS-FM, the Kansas City
heritage rock station. To capitalize on this opportunity, the Company replaced
the Adult Contemporary format on KLTH-FM with an Album Oriented Rock format,
changed KLTH-FM's call letters to KYYS-FM and emerged as the heritage rock
station in the market. As a result of this strategy, KUDL-FM and KYYS-FM rank
1st and 3rd in the Adults 25-54 demographic target. The Company's third FM
station in Kansas City, KCMO-FM, is the market's exclusive Oldies station and
targets the Adults 25-54 demographic.

The cornerstone of the Company's Kansas City AM presence is KMBZ-AM, the
market's news/talk/sports leader. In addition to featuring successful talk-shows
such as the Rush Limbaugh Show, KMBZ-AM is the new flagship of the Kansas City
Royals Radio Network and carries sports coverage of the University of Kansas and
the University of Missouri. The Company's exclusive radio broadcasting rights
agreement with the Kansas City Royals runs through the 2000 season. In addition,
the Company owns and operates KCMO-AM, the market's leading Talk Radio station,
and WDAF-AM, one of the most listened to AM Country stations in the United
States. Traditionally known as the "voice of the heartland," WDAF-AM possesses
the Kansas City radio market's best AM signal and a multi-decade heritage of
Country music programming.

55
<PAGE> 58

ROCHESTER
1997 Radio Market Revenue Rank: 55

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- ------------ ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
WBBF-FM Oldies June 1998 (1) Adults 25-54 5.8 7
WBEE-FM Country June 1998 (1) Adults 25-54 10.1 1
WEZO-AM Nostalgia June 1998 (1) Adults 35-64 1.0 16
WQRV-FM Classic Hits June 1998 (1) Adults 25-54 3.3 11
</TABLE>

- ---------------
(1) TBA commenced March 1998.

Market Overview

Rochester, New York is the fifty-fifth largest radio market in the United
States based on 1997 radio advertising revenue. Radio advertising revenues in
the Rochester market have grown from approximately $23.5 million in 1992 to
approximately $34.5 million in 1997 at a compound annual rate of 8.1%. Market
radio advertising revenue in 1997 grew 6.8% over 1996 revenue. There are
currently 13.5 viable stations in the Rochester market, according to Duncan's.

Rochester Stations

In June 1998, the Company acquired the four stations, 3 FM and 1 AM,
comprising its Rochester cluster. The four-station group is one of the three
largest clusters in the market with a 21.7% market revenue share. Of the
Company's four stations, one ranks first in its target demographic.

The Rochester market has only seven full-powered FM stations, of which the
Company owns two. One is WBEE-FM which features Country music and is Rochester's
leading station among Adults 25-54. The second is WBBF-FM (formerly WKLX-FM),
Rochester's exclusive Oldies station. Prior to its acquisition by Entercom,
WBBF-FM relied on nationally syndicated programing, without the benefit of
locally-targeted music or personalities. Management believes that this approach
limited the station's financial potential. The Company has recently modified the
station's programming focusing on locally programmed music and live
personalities, and utilizing significantly enhanced audience marketing and
research. The Company's third FM station in Rochester is WQRV-FM, a Class A
station that commenced operations in 1997 as a Classic Hits station.

56
<PAGE> 59

GAINESVILLE / OCALA
1997 Radio Market Revenue Rank: 124

- ---------------
(1) WSKY-FM (formerly WRRX-FM) recently changed its format. Accordingly, prior
Arbitron ratings are not meaningful.

Market Overview

Gainesville/Ocala is the 124th largest radio market in the United States
based on 1997 radio advertising revenue. Radio advertising revenues in the
Gainesville/Ocala market have grown from approximately $8.9 million in 1992 to
approximately $12.2 million in 1997 at a compound annual rate of 6.5%. Market
radio advertising revenue in 1997 grew 8.0% over 1996 revenue. There are
currently 13 viable stations in the Gainesville/Ocala market, according to
Duncan's.

Gainesville/Ocala Stations

The Company owns and operates two FM stations in Gainesville/Ocala. With
WKTK-FM and WSKY-FM (formerly WRRX-FM), the Company has a 23.8% market revenue
share. Although the Gainesville/Ocala market's size is outside of the Company's
target parameters, the acquisition presented the opportunity to acquire the
dominant station in a fast growing area of the country. WKTK-FM broadcasts an
Adult Contemporary format and has been a ratings leader in this northern Florida
market for many years. In May 1998, the Company acquired WSKY-FM and management
believes that Entercom can now begin capitalizing on the benefits of multiple
station ownership in this market.

LONGVIEW/KELSO
1997 Radio Market Revenue Rank: N/A

<TABLE>
<CAPTION>
AUDIENCE SHARE AUDIENCE RANK
TARGET IN TARGET IN TARGET
STATION CALL LETTERS FORMAT DATE ACQUIRED DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
- -------------------- ------------------ ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
KBAM-AM Country May 1998 Adults 25-54 n/a n/a
KEDO-AM Oldies April 1997 Adults 25-54 n/a n/a
KLYK-FM Adult Contemporary April 1997 Adults 25-54 n/a n/a
KRQT-FM Classic Rock May 1998 Men 25-54 n/a n/a
</TABLE>

Market Overview

The Longview/Kelso market is located between the Seattle and Portland
markets. The market is not surveyed by Arbitron or Duncan's.

Longview/Kelso Stations

The Company owns and operates four stations, 2 FM and 2 AM, in the
Longview/Kelso market. These stations serve two important functions for the
Company. First these stations, which the Company acquired at relatively low
capital costs, are strategically significant because of their impact on the
potential upgrade of certain Portland radio stations. Second, these stations
also permit the Company to capitalize on some regional revenue and cost saving
opportunities.

57
<PAGE> 60

COMPETITION; CHANGES IN BROADCASTING INDUSTRY

The radio broadcasting industry is highly competitive. The success of each
of the Company's stations depends largely upon its audience ratings and its
share of the overall advertising revenue within its market. The Company's
stations compete for listeners and advertising revenue directly with other radio
stations within their respective markets. Radio stations compete for listeners
primarily on the basis of program content that appeals to a particular
demographic group. By building a strong listener base consisting of a specific
demographic group in each of its markets, the Company is able to attract
advertisers seeking to reach those listeners.

Factors that are material to a radio station's competitive position include
management experience, the station's local audience rank in its market,
transmitter power, assigned frequency, audience characteristics, local program
acceptance and the number and characteristics of other radio stations and other
advertising media in the market area. The Company attempts to improve its
competitive position with promotional campaigns aimed at the demographic groups
targeted by its stations and by sales efforts designed to attract advertisers.
Recent changes in the FCC's policies and rules permit increased ownership and
operation of multiple local radio stations. Management believes that radio
stations that elect to take advantage of joint arrangements such as local
marketing agreements or joint sales agreements may in certain circumstances have
lower operating costs and may be able to offer advertisers more attractive rates
and services. Although the Company currently operates several multiple station
groups and intends to pursue the creation of additional multiple station groups,
the Company's competitors in certain markets include operators of multiple
stations or operators who already have entered into local marketing agreements
or joint sales agreements.

Despite the competitiveness within the radio broadcasting industry, some
barriers to entry exist. The operation of a radio broadcast station requires a
license from the FCC. The number of radio stations that can operate in a given
market is limited by strict AM interference criteria and the availability of FM
radio frequencies allotted by the FCC to communities in that market, as well as
by the FCC's multiple ownership rules that regulate the number of stations
serving the same area that may be owned and controlled by a single entity. See
"-- Federal Regulation of Radio Broadcasting."

The Company's stations also compete for audiences and advertising revenues
within their respective markets directly with other radio stations, as well as
with other media such as newspapers, magazines, cable television, outdoor
advertising and direct mail. In addition, the radio broadcasting industry is
subject to competition from new media technologies that are being developed or
introduced, such as the delivery of audio programming by cable television
systems, DARS, the Internet, satellite, television and PCS. DARS plans to
deliver by satellite to nationwide and regional audiences, multi-channel,
multi-format, digital radio services with sound quality equivalent to compact
discs. The FCC is also considering proposals for the establishment of
"microbroadcasting" stations, low-powered AM or FM stations that would be
designed to serve small localized areas. The delivery of information or
entertainment programming through the presently unregulated Internet also could
create a new form of competition. The radio broadcasting industry historically
has grown despite the introduction of new technologies for the delivery of
entertainment and information, such as television broadcasting, cable
television, audio tapes and compact discs. A growing population and greater
availability of radios, particularly car and portable radios, have contributed
to this growth. There can be no assurance, however, that the development or
introduction in the future of any new media technology will not have an adverse
effect on the radio broadcasting industry.

The FCC has adopted licensing and operating rules for DARS and in April
1997 awarded two licenses for this service. DARS may provide a medium for the
delivery by satellite or terrestrial means of multiple new audio programming
formats to local and/or national audiences. Digital technology also may be used
in the future by terrestrial radio broadcast stations either on existing or
alternate broadcasting frequencies, and the FCC has stated that it will consider
making changes to its rules to permit AM and FM radio stations to offer digital
sound following industry analysis of technical standards. In addition, the FCC
has authorized an additional 100 kHz of bandwidth for the AM band and has
allotted frequencies in this new band to certain existing AM station licensees
that applied for migration to the expanded AM band, subject to the requirement

58
<PAGE> 61

that at the end of a transition period, those licensees return to the FCC either
the license for their existing AM band station or the license for the expanded
AM band station.

The Company cannot predict what other matters might be considered in the
future by the FCC, nor can it assess in advance what impact, if any, the
implementation of any of these proposals or changes might have on its business.

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

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 operating
power of stations; issues, renews, revokes and modifies station licenses;
determines whether to approve changes in ownership or control of station
licenses; regulates equipment used by stations; and adopts and implements
regulations and policies that directly affect the ownership, operation and
employment practices of stations. The FCC has the power to impose penalties for
violation of its rules or the Communications Act, including the imposition of
monetary forfeitures, the issuance of short-term licenses, the imposition of a
condition on the renewal of a license, and the revocation of operating
authority.

The following is a brief summary of certain provisions of the
Communications Act and of specific FCC regulations and policies. Reference
should be made to the Communications Act, FCC rules and the public notices and
rulings of the FCC for further information concerning the nature and extent of
federal regulation of radio stations.

FCC Licenses. Radio stations operate pursuant to broadcasting licenses
that are ordinarily granted by the FCC for maximum terms of eight years and are
subject to renewal upon application to the FCC. The FCC licenses for the
Company's stations are held by certain of the Company's subsidiaries. During
certain periods when renewal applications are pending, petitions to deny license
renewals can be filed by interested parties, including members of the public.
Historically, the Company's management has not experienced any material
difficulty in renewing any licenses for stations under its control. The FCC is
required to hold hearings on a station's renewal application if a substantial or
material question of fact exists as to whether (i) the station has served the
public interest, convenience and necessity, (ii) there have been serious
violations by the licensee of the Communications Act or the FCC rules thereunder
or (iii) there have been other violations by the licensee of the Communications
Act or the FCC rules thereunder that, taken together, constitute a pattern of
abuse. Historically, FCC licenses have generally been renewed. The Company has
no reason to believe that its licenses will not be renewed in the ordinary
course, although there can be no assurance to that effect. The non-renewal of
one or more of the Company's licenses could have a material adverse effect on
the Company.

The FCC classifies each AM and FM station. An AM station operates on either
a clear channel, regional channel or local channel. A clear channel is one on
which AM stations are assigned to serve wide areas. Clear channel AM stations
are classified as either: Class A stations, which operate on an unlimited time
basis and are designated to render primary and secondary service over an
extended area; Class B stations, which operate on an unlimited time basis and
are designed to render service only over a primary service area; or Class D
stations, which operate either during daytime hours only, during limited times
only or on an unlimited time basis with low nighttime power. A regional channel
is one on which Class B and Class D AM stations may operate and serve primarily
a principal center of population and the rural areas contiguous to it. A local
channel is one on which AM stations operate on an unlimited time basis and serve
primarily a community and the suburban and rural areas immediately contiguous
thereto. Class C AM stations operate on a local channel and are designed to
render service only over a primary service area that may be reduced as a
consequence of interference.

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<PAGE> 62

The minimum and maximum facilities requirements for an FM station are
determined by its class. FM class designations depend, in part, upon the
geographic zone in which the transmitter of the FM station is located. In
general, commercial FM stations are classified as follows, in order of
increasing power and antenna height: Class A, B1, C3, B, C2, C1 and C. The FCC
is considering dividing Class C stations into two subclasses, Class C and Class
C0. Stations would be categorized into one of the two classes depending on the
antenna height of each station.

The following table sets forth the market, call letters, FCC license
classification, antenna height above average terrain ("HAAT"), power and
frequency, of each of the stations owned or operated by the Company, and the
date on which each station's FCC license expires (a station may continue to
operate beyond the expiration date if a timely filed license application is
pending):

<TABLE>
<CAPTION>
FCC HAAT POWER IN EXPIRATION DATE OF
MARKET(1) STATION CLASS (IN METERS) FREQUENCY KILOWATTS(2) FCC LICENSE
- --------- ------- ----- ----------- --------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Boston
WEEI-AM B * 850 KHZ 50 June 1, 2006
WRKO-AM B * 680 KHZ 50 June 1, 2006
WWTM-AM B * 1440 KHZ 5 June 1, 2006
WAAF-FM B 250 107.3 MHZ 18.5 June 1, 2006
WEGQ-FM B 179 98.7 MHZ 34.0 June 1, 2006
Seattle KIRO-AM A * 710 KHZ 50 February 1, 2006
KNWX-AM B * 770 KHZ 50-D February 1, 2006
5-N
KBSG-AM B * 1210 KHZ 27.5-D February 1, 2006
10.0-N
KBSG-FM C 729 97.3 MHZ 55 February 1, 2006
KISW-FM C 350 99.9 MHZ 100 February 1, 2006
KIRO-FM C 714 100.7 MHZ 58 February 1, 2006
KMTT-FM C 714 103.7 MHZ 58 February 1, 2006
KNDD-FM C 714 107.7 MHZ 58 February 1, 2006
Portland
KKSN-AM B * 1520 KHZ 50-D February 1, 2006
15-N
KFXX-AM B * 910 KHZ 5 February 1, 2006
KKSN- FM C 386 97.1 MHZ 100 February 1, 2006
KGON-FM C 386 92.3 MHZ 100 February 1, 2006
KNRK-FM C2 259 94.7 MHZ 17 February 1, 2006
KKRH-FM C 561 105.1 MHZ 100 February 1, 2006
KSLM-AM B * 1390 KHZ 5-D February 1, 2006
0.69-N
Sacramento
KCTC-AM B * 1320 KHZ 5 December 1, 2005
KRXQ-FM B 151 98.5 MHZ 50 December 1, 2005
KSSJ-FM B1 99 94.7 MHZ 25 December 1, 2005
KSEG-FM B 152 96.9 MHZ 50 December 1, 2005
KDND-FM B 123 107.9 MHZ 50 December 1, 2005
Kansas City
WDAF-AM B * 610 KHZ 5 February 1, 2005
KCMO-AM B * 710 KHZ 10-D February 1, 2005
5-N
KMBZ-AM B * 980 KHZ 5 February 1, 2005
KCMO-FM C 322 94.9 MHZ 100 February 1, 2005
KUDL-FM C 303 98.1 MHZ 100 February 1, 2005
KYYS-FM C 308 99.7 MHZ 100 February 1, 2005
</TABLE>

60
<PAGE> 63

- ---------------
* Not applicable for AM transmission facilities.
(1) Metropolitan market served; city of license may differ.
(2) Pursuant to FCC rules and regulations, many AM radio stations are licensed
to operate at a reduced power during the nighttime broadcasting hours, which
results in reducing the radio station's coverage during the nighttime hours
of operation. Both power ratings are shown, where applicable. For FM
stations, the effective radiated power is given.
(3) Station is currently operating pursuant to Program Test Authority.

Ownership Matters. The Communications Act prohibits the assignment of a
broadcast license or the transfer of control of a broadcast licensee without the
prior approval of the FCC. In determining whether to grant such approval, the
FCC considers a number of factors pertaining to the licensee, including
compliance with the various rules limiting common ownership of media properties
in a given market, the "character" of the licensee and those persons holding
"attributable" interests therein, and compliance with the Communications Act's
limitations on alien ownership as well as compliance with other FCC policies,
including FCC equal employment opportunity requirements. The equal opportunity
requirements have been declared unconstitutional by the U.S. Court of Appeals
for the District of Columbia but the FCC has requested a rehearing en banc. See
"-- Programming and Operation."

A transfer of control of a corporation holding a broadcast license may
occur in various ways. For example, a transfer of control occurs if an
individual stockholder gains or loses "affirmative" or "negative" control of
such corporation through issuance, redemption or conversion of stock.
"Affirmative" control would consist of control of more than 50% of such
corporation's outstanding voting power and "negative" control would consist of
control of exactly 50% of such voting power. To obtain the FCC's prior consent
to assign or transfer control of a broadcast license, appropriate applications
must be filed with the FCC. If the application involves a "substantial change"
in ownership or control, in that new individuals approved by the FCC propose to
acquire "affirmative" or "negative" control, the application must be placed on
public notice for a period of not less than 30 days during which petitions to
deny or other objections against the application may be filed by interested
parties, including members of the public. If the application does not involve a
"substantial change" in ownership or control, it is a "pro forma" application.
The "pro forma" application is nevertheless subject to having informal
objections filed against it. If the FCC grants an assignment or transfer
application, interested parties have not less than 30 days from public notice of
the grant to seek reconsideration of that grant. Generally, parties that do not
file initial petitions to deny or informal objections against the application
face a high hurdle in seeking reconsideration of the grant. The FCC normally has
approximately an additional ten days to set aside on its own motion any grant
made by the FCC staff acting pursuant to delegated authority. When passing on an
assignment or transfer application, the FCC is prohibited from considering
whether the public interest might be served by an assignment or transfer of the
broadcast license to any party other than the assignee or transferee specified
in the application.

In response to the Telecom Act, the FCC amended its multiple ownership
rules to eliminate the national limits on the ownership of AM and FM stations.
Additionally, it established new local ownership rules that use

61
<PAGE> 64

a sliding scale of permissible ownership, depending on market size. In radio
markets with 45 or more commercial radio stations, a licensee may own up to
eight stations, no more than five of which can be in a single radio service
(i.e., no more than five AM or five FM). In radio markets with 30 to 44
commercial radio stations, a licensee may own up to seven stations, no more than
four of which can be in a single radio service. In radio markets having 15 to 29
commercial radio stations, a licensee may own up to six radio stations, no more
than four of which can be in a single radio service. Finally, in radio markets
having 14 or fewer commercial radio stations, a licensee may own up to five
radio stations, no more than three of which can be in the same service; provided
that the licensee may not own more than one half of the total number of radio
stations in the market. FCC ownership rules continue to permit an entity to own
one FM and one AM station in a local market regardless of market size. In
addition to the numerical limitations on ownership depending on market size, the
FCC is considering adopting a policy that would review a proposed transaction if
it would enable a single owner to attain a high degree of revenue concentration
in a market.

The FCC's "one-to-a-market" rule prohibits the common ownership, operation
or control of a radio broadcast station and a television broadcast station
serving the same geographic market (subject to a waiver of such prohibition if
certain conditions are satisfied) and the common ownership, operation or control
of a radio broadcast station and a daily newspaper serving the same geographic
market. Under these rules, absent waivers, the Company would not be permitted to
acquire any daily newspaper or television broadcast station (other than
low-power television) in any geographic market in which it now owns radio
broadcast properties. On October 1, 1996, the FCC commenced a proceeding to
explore possible revisions of its policies concerning waiver of the
newspaper/radio cross-ownership restrictions.

The FCC generally applies its ownership limits to "attributable" interests
held by an individual, corporation, partnership or other association. In the
case of corporations holding, or through subsidiaries controlling, broadcast
licenses, the interests of officers, directors and those who, directly or
indirectly, have the right to vote 5% or more of the corporation's voting stock
(or 10% or more of such stock in the case of insurance companies, investment
companies and bank trust departments that are passive investors) are generally
attributable. If a single individual or entity controls more than 50% of a
corporation's voting stock, that individual or entity is viewed as a single
majority shareholder. In this case, the interests of other shareholders are not
attributable unless the shareholders are also officers or directors of the
corporation. The FCC is currently reviewing its attribution rules to determine
whether changes in those rules are appropriate.

In determining whether the Company is in compliance with the local
ownership limits on AM and FM stations, the FCC will consider the Company's AM
and FM holdings, as well as the attributable broadcast interests of the
Company's officers, directors and attributable shareholders. Accordingly, the
attributable broadcast interests of the Company's officers and directors
described in the preceding paragraph will limit the number of radio stations the
Company may acquire or own in any market in which such officers or directors
hold or acquire attributable broadcast interests. In addition, the Company's
officers and directors may from time to time hold various nonattributable
interests in media properties, which, under certain circumstances, may also
limit the number of radio stations the Company may acquire or own in a given
market.

Under its "cross-interest" policy, the FCC considers certain "meaningful"
relationships among competing media outlets in the same market, even if the
ownership rules do not specifically prohibit the relationship. Under the
cross-interest policy, the FCC in certain instances may prohibit one party from
holding an attributable interest in one media outlet and a substantial
non-attributable economic interest in another media outlet in the same market.
Under this policy, the FCC may consider significant equity interests combined
with an attributable interest in a media outlet in the same market, joint
ventures, and common key employees among competitors. The cross-interest policy
does not necessarily prohibit all of these interests, but requires that the FCC
consider whether, in a particular market, the "meaningful" relationships between
competitors could have a significant adverse effect upon economic competition
and program diversity. Heretofore, the FCC has not applied its cross-interest
policy to TBAs and JSAs between broadcast stations. In its ongoing rulemaking
proceeding concerning the attribution rules described below, the FCC has sought
comment on, among other things, (i) whether the cross-interest policy should be
applied only in smaller markets and (ii) whether non-equity financial
relationships such as debt, when combined with multiple business
interrelationships such as TBAs and JSAs, raise concerns under the
cross-interest policy.

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<PAGE> 65

The Communications Act prohibits the issuance of broadcast licenses to, or
the holding of broadcast licenses by, any corporation of which more than 20% of
the capital stock is owned of record or voted by non-U.S. citizens or their
representatives or by a foreign government or a representative thereof, or by
any corporation organized under the laws of a foreign country (collectively,
"Aliens"). The Communications Act also authorizes the FCC, if the FCC determines
that it would be in the public interest, to prohibit the issuance of a broadcast
license to, or the holding of a broadcast license by, any corporation directly
or indirectly controlled by any other corporation of which more than 25% of the
capital stock is owned of record or voted by Aliens. The FCC staff has
interpreted this provision to require a public interest finding in favor of such
a grant or holding before a broadcast license may be granted to or held by any
such corporation and has made such a finding only in limited circumstances
generally involving licenses other than broadcast licenses. The FCC has issued
interpretations of existing law (i) under which these restrictions in modified
form apply to other forms of business organizations, including partnerships and
(ii) indicating how alien interests in a company that are held directly through
intermediate entities should be considered in determining whether that company
is in compliance with these alien ownership restrictions. As a result of these
provisions, the licenses granted to the radio station subsidiaries of the
Company by the FCC could be revoked if, among other restrictions imposed by the
FCC, more than 25% of the Company's stock were directly or indirectly owned or
voted by Aliens. The Company's Amended and Restated Articles of Incorporation
restrict the ownership, voting and transfer of the Company's capital stock in
accordance with the Communications Act and the rules of the FCC, and prohibit
the issuance of more than 25% of the Company's outstanding capital stock (or
more than 25% of the voting rights it represents) to or for the account of
Aliens or corporations otherwise subject to domination or control by Aliens. The
Amended and Restated Articles of Incorporation authorize the Company's Board of
Directors to enforce these prohibitions. In addition, the Amended and Restated
Articles of Incorporation provide that shares of capital stock of the Company
determined by the Company's Board of Directors to be owned beneficially by an
Alien or an entity directly or indirectly owned by Aliens in whole or in part
shall be subject to redemption by the Company by action of the Board of
Directors to the extent necessary, in the judgment of the Board of Directors, to
comply with these alien ownership restrictions. See "Description of Capital
Stock."

Time Brokerage Agreements. Over the past few years, a number of radio
stations have entered into what have commonly been referred to TBAs. While these
agreements may take varying forms, under a typical TBA, separately owned and
licensed radio stations agree to enter into cooperative arrangements of varying
sorts, subject to compliance with the requirements of antitrust laws and with
the FCC's rules and policies. Under these arrangements, separately-owned
stations could agree to function cooperatively in programming, advertising sales
and similar matters, subject to the requirement that the licensee of each
station maintain independent control over the programming and operations of its
own station. One typical type of TBA is a programming agreement between two
separately-owned radio stations serving a common service area, whereby the
licensee of one station provides substantial portions of the broadcast
programming for airing on the other licensee's station, subject to ultimate
editorial and other controls being exercised by the latter licensee, and sells
advertising time during those program segments.

The FCC has specifically revised its "cross-interest" policy to make that
policy inapplicable to TBAs. Furthermore, the staff of the FCC's Mass Media
Bureau has held that TBAs are not contrary to the Communications Act provided
that the licensee of the station that is being substantially programmed by
another entity maintains complete responsibility for, and control over,
programming and operations of its broadcast station and assures compliance with
applicable FCC rules and policies.

The FCC's multiple ownership rules specifically permit radio station TBAs
to continue to be entered into and implemented, but provide that a licensee or a
radio station that brokers more than 15% of the weekly broadcast time on another
station serving the same market will be considered to have an attributable
ownership interest in the brokered station for purposes of the FCC's multiple
ownership rules. As a result, in a market where it owns a radio station, the
Company would not be permitted to enter into a TBA with another local radio
station in the same market that it could not own under the local ownership
rules, unless the Company's programming on the brokered station constituted 15%
or less of the other local station's programming time on a weekly basis. The FCC
rules also prohibit a broadcast licensee from simulcasting more than 25% of its
programming on another station in the same broadcast service (i.e., AM-AM or FM-
FM) through a TBA where the brokered and brokering stations which it owns or
programs serve substantially

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the same area. Such 25% simulcasting limitation also applies to commonly owned
stations in the same broadcast service that serve substantially the same area.

Joint Sales Agreements. Over the past few years, a number of radio
stations have entered into cooperative arrangements commonly known as JSAs.
While these agreements may take varying forms, under the typical JSA, a station
licensee obtains, for a fee, the right to sell substantially all of the
commercial advertising on a separately-owned and licensed station in the same
market. The typical JSA also customarily involves the provision by the selling
party of certain sales, accounting and "back office" services to the station
whose advertising is being sold. The typical JSA is distinct from a TBA in that
a JSA normally does not involve programming.

The FCC has determined that issues of joint advertising sales should be
left to enforcement by antitrust authorities, and therefore does not generally
regulate joint sales practices between stations. Currently, stations for which
another licensee sells time under a JSA are not deemed by the FCC to be
attributable interests of that licensee. However, in connection with its ongoing
rulemaking proceeding concerning the attribution rules, the FCC is considering
whether JSAs should be considered attributable interests or within the scope of
the FCC's cross-interest policy, particularly when JSAs contain provisions for
the supply of programming services and/or other elements typically associated
with TBAs. If JSAs become attributable interests as a result of changes in the
FCC rules, the Company may be required to terminate any JSA it might have with a
radio station which the Company could not own under the FCC's multiple ownership
rules.

Programming and Operation. The Communications Act requires broadcasters to
serve the "public interest." The FCC gradually has relaxed or eliminated many of
the more formalized procedures it had developed in the past to promote the
broadcast of certain types of programming responsive to the needs of a station's
community of license. A licensee continues to be required, however, to present
programming that is responsive to issues of the station's community of license
and to maintain certain records demonstrating such responsiveness. Complaints
from listeners concerning a station's programming often will be considered by
the FCC when it evaluates renewal applications of a licensee, although listener
complaints may be filed at any time, are required to be maintained in the
stations public file and generally may be considered by the FCC at any time.
Stations also must pay regulatory and application fees and follow various rules
promulgated under the Communications Act that regulate, among other things,
political advertising, sponsorship identifications, the advertisement of
contests and lotteries, obscene and indecent broadcasts, and technical
operations, including limits on human exposure to radio frequency radiation. In
addition, the FCC rules require that licensees must develop and implement
affirmative action programs designed to promote equal employment opportunities
and must submit reports to the FCC with respect to these matters on an annual
basis and in connection with a renewal application. The U.S. Court of Appeals
for the District of Columbia has declared these rules unconstitutional. However,
the FCC has requested that the U.S. Court of Appeals review that decision en
banc. The FCC has announced that it will continue to enforce its equal
employment opportunity regulations pending final judicial review.

Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
"short term" (less than the full term) license renewal, the imposition of a
condition on the renewal of a license or, for particularly egregious violations,
the denial of a license renewal application or the revocation of a license.

Proposed and Recent Changes. The FCC has pending a rulemaking proceeding
that seeks, among other things, comment on whether the FCC should modify its
radio and television broadcast ownership "attribution" rules by (i) raising the
basic benchmark for attributing ownership in a corporate licensee from 5% to 10%
of the licensee's outstanding voting power, (ii) increasing from 10% to 20% of
the licensee's outstanding voting power the attribution benchmark for
institutional investors in corporate licensees holding interests deemed
"passive" in nature, (iii) attributing certain minority stockholdings in
corporations with a single majority shareholder and (iv) attributing certain
local marketing agreements ("LMA"), TBAs, JSAs, debt or non-voting stock
interests that have heretofore been non-attributable.

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<PAGE> 67

Moreover, Congress and the FCC have under consideration, and in the future
may consider and adopt, new laws, regulations and policies regarding a wide
variety of matters that could affect, directly or indirectly, the operation,
ownership and profitability of the Company's radio stations, result in the loss
of audience share and advertising revenues for the Company's radio stations, and
affect the ability of the Company to acquire additional radio stations or to
finance those acquisitions. Such matters may include spectrum use or other fees
on FCC licenses; foreign ownership of broadcast licenses; revisions to the FCC's
equal employment opportunity rules and rules relating to political broadcasting;
technical and frequency allocation matters; proposals to restrict or prohibit
the advertising of beer, wine and other alcoholic beverages on radio; changes in
the FCC's cross-interest, multiple ownership and attribution policies; new
technologies such as DARS and microbroadcasting; and the development of rules to
govern auctions for the right to use the radio broadcast spectrum. Finally, as
required by the Telecom Act, the FCC has instituted a proceeding to investigate,
among other things, the effect of the revised ownership rules for radio stations
adopted through the Telecom Act, and the resulting consolidation in the radio
industry, on the diversity of programming and ownership, and on programming and
advertising competition. The FCC may conclude, as a consequence of this review,
to modify the radio ownership rules.

The Company cannot predict what other matters might be considered in the
future by the FCC or Congress, nor can it judge in advance what impact, if any,
the implementation of any of these proposals or changes might have on its
business.

Federal Antitrust Laws. In addition to the risks associated with the
acquisition of radio stations, the Company is also aware of the possibility that
certain acquisitions it proposes to make may be investigated by the FTC or the
DOJ, which are the agencies responsible for enforcing the federal antitrust
laws. The Company cannot predict the outcome of any specific DOJ or FTC
investigation, which is necessarily fact specific. Any decision by the FTC or
the DOJ to challenge a proposed acquisition could affect the ability of the
Company to consummate the acquisition or to consummate it on the proposed terms.

For an acquisition meeting certain size thresholds, the HSR Act and the
rules promulgated thereunder require the parties to file Notification and Report
Forms with the FTC and the DOJ and to observe specified waiting period
requirements before consummating the acquisition. During the initial 30-day
period after the filing, the agencies decide which of them will investigate the
transaction. If the investigating agency determines that the transaction does
not raise significant antitrust issues, then it will either terminate the
waiting period or allow it to expire after the initial 30 days. On the other
hand, if the agency determines that the transaction requires a more detailed
investigation, then prior to the conclusion of the initial 30-day period, it
will issue a formal request for additional information ("Second Request"). The
issuance of a Second Request extends the waiting period until the twentieth
calendar day after the date of substantial compliance with the Second Request by
all parties to the acquisition. Thereafter, such waiting period may only be
extended by court order or with the consent of the parties. In practice,
complying with a Second Request can take a significant amount of time. In
addition, if the investigating agency raises substantive issues in connection
with a proposed transaction, then the parties frequently engage in lengthy
discussions or negotiations with the investigating agency concerning possible
means of addressing those issues, including but not limited to persuading the
agency that the proposed acquisition would not violate the antitrust laws,
restructuring the proposed acquisition, divestiture of other assets of one or
more parties, or abandonment of the transaction. Such discussions and
negotiations can be time-consuming and expensive, and the parties may agree to
delay consummation of the acquisition during their pendency.

At any time before or after the consummation of a proposed acquisition, the
FTC or the DOJ could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
acquisition or seeking divestiture of the business acquired or other assets of
the Company. Acquisitions that are not required to be reported under the HSR Act
may be investigated by the FTC or the DOJ under the antitrust laws before or
after consummation. In addition, private parties may under certain circumstances
bring legal action to challenge an acquisition under the antitrust laws.

As part of its increased scrutiny of radio station acquisitions, the DOJ
has stated publicly that it believes that LMAs, JSAs, TBAs and other similar
agreements customarily entered into in connection with radio station transfers
could violate the HSR Act if such agreements take effect prior to the expiration
of the waiting

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period under the HSR Act. Furthermore, the DOJ has noted that JSAs may raise
antitrust concerns under Section 1 of the Sherman Act and has challenged JSAs in
certain locations.

EMPLOYEES

On May 15, 1998, the Company had a staff of 684 full-time employees and 250
part-time employees. The Company is a party to interim collective bargaining
agreements with the American Federation of Television and Radio Artists
("AFTRA") which apply to certain of the Company's programming personnel in
Seattle and Kansas City. Under the interim agreements the Company has agreed to
recognize AFTRA as the collective bargaining unit and to not lock out its
employees, and AFTRA has agreed to recognize management's rights and to refrain
from taking a strike vote. The interim agreements are terminable, by either
party, upon seven days notice. The Company is currently negotiating the terms of
longer-term comprehensive agreements with these unions. In addition, certain
personnel in the stations included in the Boston Transactions are members of
AFTRA and the International Brotherhood of Electrical Workers. Upon completion
of either of the Boston Transactions, the Company will be required to either
assume the existing collective bargaining agreements or negotiate a new
collective bargaining agreement with such personnel. The Company believes that
its relations with its employees are good.

SEASONALITY

Seasonal revenue fluctuations are common in the radio broadcasting industry
and are due primarily to fluctuations in advertising expenditures by retailers.
The Company's revenues and broadcast cash flows are typically lowest in the
first calendar quarter.

PROPERTIES AND FACILITIES

The types of properties required to support each of the Company's radio
stations include offices, studios and transmitter/antenna sites. The Company
typically leases its studio and office space with lease terms that expire in
five to ten years, although the Company does own certain of its facilities. A
station's studios are generally housed with its offices in downtown or business
districts. The Company generally considers its facilities to be suitable and of
adequate size for its current and intended purposes. The Company owns a majority
of its main transmitter and antenna sites and leases the remainder of its
transmitter/antenna sites with lease terms that expire, including renewal
options, in periods ranging up to twenty years. The transmitter/antenna site for
each station is generally located so as to provide maximum market coverage,
consistent with the station's FCC license. In general, the Company does not
anticipate difficulties in renewing facility or transmitter/antenna site leases
or in leasing additional space or sites if required.

The Company owns substantially all of its other equipment, consisting
principally of transmitting antennae, transmitters, studio equipment and general
office equipment. The towers, antennae and other transmission equipment used by
the Company's stations are generally in good condition, although opportunities
to upgrade facilities are continuously reviewed. Substantially all of the
property owned by the Company secures the Company's borrowings under the Credit
Facility.

The principal executive offices of the Company are located at 401 City
Avenue, Suite 409, Bala Cynwyd, Pennsylvania 19004. The telephone number of the
Company is (610) 660-5610.

LEGAL PROCEEDINGS

The Company currently and from time to time is involved in litigation
incidental to the conduct of its business, but the Company is not a party to any
lawsuit or proceeding which, in the opinion of management, is likely to have a
material adverse effect on the Company.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table provides information concerning the directors and
executive officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Joseph M. Field........................... 66 Chairman of the Board, Chief Executive
Officer and President
David J. Field............................ 36 Chief Operating Officer, Chief Financial
Officer and Director
John C. Donlevie.......................... 51 Executive Vice President, General Counsel
and Director
Eugene D. Levin........................... 47 Treasurer and Controller
Deborah Kane.............................. 43 Vice President - Sales
Herbert Kean, M.D......................... 66 Director
S. Gordon Elkins.......................... 67 Director
Thomas H. Ginley, M.D..................... 74 Director
Lee Hague................................. 52 Director
Marie H. Field............................ 61 Director
Michael R. Hannon......................... 38 Director
</TABLE>

Joseph M. Field founded Entercom in 1968 and has served as Chairman of the
Board, Chief Executive Officer and President since the Company's inception. Mr.
Field served on the Board of Directors of the National Association of
Broadcasters for four years as a representative of the major radio group
broadcasters. Mr. Field is a graduate of the University of Pennsylvania and of
Yale Law School and practiced law in New York and Philadelphia before entering
the broadcasting business. Mr. Field currently serves on the Boards of Directors
of The Curtis Institute of Music, the Settlement Music School, the American
Interfaith Institute, the Liberty Museum, the Jewish Educational Vocational
Service (JEVS) and the Philadelphia Chamber Music Society in Philadelphia.
Joseph M. Field is the spouse of Marie H. Field and the father of David J.
Field.

David J. Field has served as Chief Operating Officer and Chief Financial
Officer of Entercom since April 1996 and as director since November 1995. Mr.
Field joined the Company in 1987 and served as Director of Finance and Corporate
Development from 1987 to 1988, Vice President - Finance and Corporate
Development from 1988 to 1992, Vice President - Operations and Chief Financial
Officer from 1992 to 1995 and Senior Vice President - Operations and Chief
Financial Officer from 1995 to 1996. Prior to joining the Company, Mr. Field was
an investment banker with Goldman, Sachs & Co. Mr. Field has a B.A. from Amherst
College and an M.B.A. from the Wharton School of the University of Pennsylvania.
Mr. Field currently serves on the Board of Directors of The Wilderness Society
in Washington, D.C. David J. Field is the son of Joseph M. Field and Marie H.
Field.

John C. Donlevie has served as Executive Vice President and director since
1989 and as General Counsel of the Company since 1984 when he joined the
Company. In addition, Mr. Donlevie served as Vice President - Legal and
Administrative from 1984 through 1989. Prior to joining the Company, Mr.
Donlevie practiced law for eleven years, most recently as Corporate Counsel of
Ecolaire Incorporated in Malvern, Pennsylvania. Mr. Donlevie has a B.S. in
engineering from Drexel University and a J.D. from Temple University School of
Law.

Eugene D. Levin has served as Controller of the Company since 1977 when he
joined the Company, and as Treasurer since 1988. Prior to joining the Company,
Mr. Levin was a senior accountant for Laventhal and Horwath, and an
operational/financial auditor and divisional controller for After-Six Inc. Mr.
Levin has a B.S. from Pennsylvania State University and is a certified public
accountant.

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Deborah Kane has served as Vice President - Sales of the Company since June
1996. Ms. Kane joined the Company in 1990 and served as the Local Sales Manager
for Entercom's previously owned San Francisco station KITS-FM from 1990 to 1994.
From 1994 to 1996, Ms. Kane served as the Company's Director of Strategic Sales.
Ms. Kane has over 20 years of experience in the radio industry. Ms. Kane has a
B.A. in Radio, Television and Film from the University of Maryland.

Herbert Kean, M.D. has served as a director of the Company since its
inception and as secretary from its inception until February 1984. Dr. Kean is
currently a medical physician in private practice in the Philadelphia area. Dr.
Kean has a B.S. from the University of Pennsylvania and a M.D. from Hanneman
University.

S. Gordon Elkins has served as a director of the Company since February
1978. Mr. Elkins is a partner in the law firm of Stradley, Ronon, Stevens &
Young. Mr. Elkins has a B.S. from Temple University and an L.L.B. from Yale Law
School.

Thomas H. Ginley, M.D. has served as a director of the Company since
January 1971 and as Secretary of the Company since February 1984. Dr. Ginley is
currently a medical physician in private practice in the Philadelphia area. Mr.
Ginley serves on the Board of Directors of A & T Development Corporation, Vanesa
Noel Couture, Inc. and GEM Treasury International Corporation. Dr. Ginley has a
M.D. from Georgetown University.

Lee Hague has served as a director of the Company since March 1980. Mr.
Hague has served as an independent consultant to various broadcasting groups and
provides financial advisory and media brokering services to the industry. Mr.
Hague has over 20 years' experience in the radio industry. Mr. Hague has a B.S.
in Economics from Northwestern University and a M.M. from the J.L. Kellogg
Graduate School of Management, Northwestern University.

Marie H. Field has served as a director of the Company since 1989. Mrs.
Field served for over 25 years as a teacher in public and private schools in New
York and Philadelphia. Mrs. Field serves on the Board of Directors of the
Ovarian Cancer Research Fund in New York and the Board of Overseers of the
University of Pennsylvania School of Social Work. Mrs. Field has a B.A. from
Barnard College. Mrs. Field is the spouse of Joseph M. Field and the mother of
David J. Field.

Michael R. Hannon was elected to serve as a director of the Company in
1998. Mr. Hannon is a general partner of Chase Capital, a general
partnership which invests in international private equity opportunities with a
significant concentration on the media and telecommunications industries. Prior
to joining Chase Capital in 1988, Mr. Hannon held various positions at Morgan
Stanley & Co. Incorporated. Mr. Hannon currently serves as Chairman of Telecorp
PCS, Inc. and as a director of Formus Communications, Financial Equity Partners
and Bell Sports. Mr. Hannon has a B.A. from Yale University and an M.B.A. from
Columbia Business School.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established an Audit Committee and a
Compensation Committee.

The responsibilities of the Audit Committee include recommending to the
Board of Directors independent public accountants to conduct the annual audit of
the financial statements of the Company, reviewing the proposed scope of such
audit and approving the audit fees to be paid, reviewing accounting and
financial controls of the Company with the independent public accountants and
the Company's financial and accounting staff and reviewing and approving
transactions, other than compensation matters, between the Company and its
directors, officers and affiliates. Prior to the consummation of the Offering,
the Board will appoint two or more non-employee directors to be the initial
members of the Audit Committee.

The Compensation Committee provides a general review of the Company's
compensation plans to ensure that they meet corporate objectives. The
responsibilities of the Compensation Committee also include administering and
interpreting the Company's 1998 Equity Compensation Plan, including selecting
the officers

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and salaried employees to whom awards will be granted. Messrs. Ginley, Hague and
Kean serve as the initial members of the Compensation Committee.

DIRECTOR COMPENSATION

During the last fiscal year, all directors of the Company were compensated
$200 for each meeting of the Board that they attended in person. Upon
consummation of the Offering, all directors who are not currently receiving
compensation as officers, employees or consultants of the Company will be
entitled to receive an annual retainer fee of $ , plus $ and
reimbursement of expenses for each meeting of the Board and each committee
meeting that they attend in person. Directors who serve as officers, employees
or consultants of the Company will not receive additional compensation for their
services as directors.

SUMMARY COMPENSATION TABLE

The following table sets forth certain information concerning compensation
paid to or earned by the Chief Executive Officer of the Company and the
Company's other most highly compensated executive officers for services rendered
during the year ended September 30, 1997 (the "Named Executive Officers").

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------- OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION
--------------------------- ---- -------- -------- ------------
<S> <C> <C> <C> <C>
Joseph M. Field, Chairman of the Board, Chief
Executive Officer and President................. 1997 $542,335 0 *
David J. Field, Chief Operating Officer and Chief
Financial Officer............................... 1997 $257,250 $89,500 *
John C. Donlevie, Executive Vice President and
General Counsel................................. 1997 $178,071 $89,500 *
Deborah Kane, Vice President - Sales.............. 1997 $117,500 $68,800 *
Eugene D. Levin, Treasurer and Controller......... 1997 $ 97,130 $44,750 *
</TABLE>

- ---------------
* Value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
the executive officer and, therefore, is not required to be disclosed
pursuant to rules of the Securities and Exchange Commission (the
"Commission").

(1) Includes amounts accrued during year presented but paid in the subsequent
year.

1998 EQUITY COMPENSATION PLAN

The Company has adopted the 1998 Equity Compensation Plan, effective as of
June 24, 1998. The 1998 Equity Compensation Plan provides for grants of (i)
options intended to qualify as incentive stock options ("ISOs") within the
meaning of Section 422 of the Code, (ii) "nonqualified stock options" that are
not intended to so qualify ("NQSOs"), (iii) restricted stock and (iv) stock
appreciation rights ("SARs"). Such grants may be made to employees of the
Company and its subsidiaries (including employees who are officers or
directors), non-employee directors of the Company and certain advisors and
consultants who perform services for the Company and its subsidiaries (the
"Participants"). Only shares of Class A Common Stock may be issued under the
1998 Equity Compensation Plan. By encouraging stock ownership, the Company seeks
to motivate such individuals and to encourage such individuals to devote their
best efforts to the business and financial success of the Company.

General. Subject to adjustment in certain circumstances as discussed
below, up to 10% of the outstanding Class A Common Stock of the Company may be
issued under the 1998 Equity Compensation Plan. The number of shares for which
ISOs may be issued under the 1998 Equity Compensation Plan may not exceed
shares (subject to adjustment as described below), and the number of
shares of restricted stock that may be issued under the 1998 Equity Compensation
Plan may not exceed shares (subject to adjustment as described
below). If and to the extent grants awarded under the 1998 Equity Compensation
Plan expire or are terminated for any reason without being exercised, the shares
of Class A

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<PAGE> 72

Common Stock subject to such grant again will be available for purposes of the
1998 Equity Compensation Plan.

Administration of the 1998 Equity Compensation Plan. The 1998 Equity
Compensation Plan is administered and interpreted by the Compensation Committee
(the "Committee") of the Board of Directors consisting of not less than two
persons appointed by the Board of Directors from among its members, each of whom
may be a "disinterested person" as defined by Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside director"
as defined by Section 162(m) of the Code. Subject to the ratification or
approval by the Board of Directors, if the Board retains such right, the
Committee has the sole authority to (i) determine the individuals to whom awards
shall be made under the 1998 Equity Compensation Plan, (ii) determine the type,
size and terms of the awards to be made to each such individual, (iii) determine
the time when the grants will be made and the duration of any applicable
exercise or restriction period, including the criteria for vesting and the
acceleration of vesting, (iv) delegate to the Chief Executive Officer of the
Company the authority to make grants under the 1998 Equity Compensation Plan to
employees of the Company who are not subject to the limitations of Section 16(b)
of the Exchange Act and who are not expected to be subject to the limitations of
Section 162(m) of the Code and (v) deal with any other matters arising under the
Plan. See "-- Committees of the Board of Directors."

Eligibility for Participation. Awards may only be made to Participants.
During any calendar year, no Participant may receive awards for more than
1,000,000 shares of Class A Common Stock issued or available for issuance under
the 1998 Equity Compensation Plan. As of June 1998, no options were outstanding
under the 1998 Equity Compensation Plan.

Options. The exercise price of any ISO granted under the 1998 Equity
Compensation Plan will not be less than the fair market value of the underlying
shares of Common Stock on the date of grant. The exercise price of an ISO
granted to an employee who owns more than 10% of the Common Stock may not be
less than 110% of the fair market value of the underlying shares of Common Stock
on the date of grant. The exercise price of an NQSO may be greater than, equal
to or less than the fair market value of the underlying shares of Common Stock
on the date of grant. The Committee will determine the term of each option;
provided, however, that the exercise period may not exceed ten years from the
date of grant, and the exercise period of an ISO granted to an employee who owns
more than 10% of the Common Stock may not exceed five years from the date of
grant. The Participant may pay the exercise price (i) in cash, (ii) with the
approval of the Committee, by delivering shares of Common Stock owned by the
Participant and having a fair market value on the date of exercise equal to the
exercise price or (iii) by such other method as the Committee approves. The
participant may instruct the Company to deliver the shares of Common Stock due
upon the exercise to a designated broker instead of to the Participant.

Restricted Stock. The Committee may issue shares of restricted Common
Stock to a Participant pursuant to the 1998 Equity Compensation Plan. Shares may
be issued for consideration or for no consideration, as the Committee
determines. The number of shares of Common Stock granted to each Participant
shall be determined by the Committee, subject to the maximum limit described
above. Grants of restricted stock will be made subject to such performance
requirements, vesting provisions, transfer restrictions or other restrictions
and conditions as the Committee may determine in its sole discretion.

Stock Appreciation Rights. The Committee may grant SARs alone or in tandem
with any stock option pursuant to the 1998 Equity Compensation Plan. Unless the
Committee determines otherwise, the exercise price of an SAR will be either (i)
the exercise price of the related stock option or (ii) the fair market value of
a share of Common Stock on the date of grant of the SAR. When the Participant
exercises a SAR, the Participant will receive the amount by which the fair
market value of the Common Stock on the date of exercise exceeds the exercise
price of the SAR. The appreciation shall be paid in cash or in shares of Common
Stock, as the Committee determines. To the extent a Participant exercises a
tandem SAR, the related option shall terminate. Similarly, upon exercise of a
stock option, the related SAR, if any, shall terminate.

Amendment and Termination of the 1998 Equity Compensation Plan. The Board
of Directors may amend or terminate the 1998 Equity Compensation Plan at any
time; provided, however, that, the Board of Directors may not amend, without
stockholder approval, the 1998 Equity Compensation Plan to make any
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amendment that requires stockholder approval pursuant to Rule 16b-3 of the
Exchange Act, Section 162(m) of the Code or Section 422 of the Code. The 1998
Equity Compensation Plan will terminate on the day immediately preceding the
tenth anniversary of its effective date, unless terminated earlier by the Board
of Directors or extended by the Board of Directors with approval of the
stockholders.

Adjustment Provisions. Subject to the change of control provisions below,
in the event of certain transactions identified in the 1998 Equity Compensation
Plan, the Committee may appropriately adjust (i) the number and kind of shares
of Class A Common Stock (and the option price per share) subject to awards, (ii)
the number and kind of shares for which awards may be made under the 1998 Equity
Compensation Plan and (iii) the maximum number of shares that may be awarded to
an individual, and such adjustments shall be effective and binding for all
purposes of the 1998 Equity Compensation Plan.

Change of Control of the Company. In the event of a change of control,
unless the Committee determines otherwise, all grants shall become fully vested
and all restrictions and conditions on restricted stock shall lapse. If the
Company is not the surviving corporation, unless the Committee determines
otherwise, outstanding options and SARs will be replaced by options and SARs or
equivalent rights of the surviving corporation. The Committee may also provide
for a cashout or termination of outstanding options and SARs.

A change of control is defined as (i) any person or group becomes the owner
of more than 50% of the votes required to elect a majority of the Board of
Directors, except if such change in control results from the death of a
shareholder, (ii) a liquidation or a sale of substantially all the Company's
assets or (iii) a merger in which the shareholders of the Company immediately
before the merger do not own, after the merger, more than 50% of all votes
required to elect a majority of the Board of Directors of the surviving
corporation.

Section 162(m). Under Section 162(m) of the Code, the Company may be
precluded from claiming a federal income tax deduction for total remuneration in
excess of $1,000,000 paid to the chief executive officer or to any of the other
four most highly compensated officers in any one year. Total remuneration would
include amounts received upon the exercise of stock options or SARs granted
under the 1998 Equity Compensation Plan and the value of shares received when
the shares of restricted stock became transferable (or such other time when
income is recognized). An exception exists, however, for "performance-based
compensation," including amounts received upon the exercise of stock options or
SARs pursuant to a plan approved by shareholders that meets certain
requirements. The 1998 Equity Compensation Plan has been approved by
shareholders and is intended to make grants of options thereunder that meet the
requirements of "performance- based compensation." Awards of restricted stock
will not qualify as "performance-based compensation."

New Plan Benefits. Prior to the effective date of the Offering, the
Company will grant certain options under the 1998 Equity Compensation Plan. The
Company anticipates that these options will vest one-fourth each year over the
next four years. All options expire on the tenth anniversary of the date of
grant. The following table sets forth certain information with respect to such
contemplated Option grants.

<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS (1)
- ----------------- ------------ -------------------
<S> <C> <C>
Joseph M. Field, Chairman of the Board, Chief Executive
Officer and President.....................................
David J. Field, Chief Operating Officer and Chief Financial
Officer...................................................
John C. Donlevie, Executive Vice President and General
Counsel...................................................
Deborah Kane, Vice-President - Sales........................
Eugene D. Levin, Treasurer and Controller...................
All current executive officers as a group...................
All current directors who are not executive officers as a
group.....................................................
All employees, including all current officers who are not
executive officers, as a group............................
</TABLE>

- ---------------
(1) The number of units represents the number of shares of Class A Common Stock
underlying the options expected to be granted.

71
<PAGE> 74

EMPLOYEE STOCK PURCHASE PLAN

The Company's Employee Stock Purchase Plan (the "ESP Plan") was adopted in
June 1998 and will become effective after the Offering on such date as the Board
of Directors or the committee established to administer the ESP Plan (the
"Committee") designates. The purpose of the ESP Plan is to provide eligible
employees of the Company an opportunity to purchase Common Stock of the Company.
The Company believes that employee participation in stock ownership will be to
the mutual benefit of both the employees and the Company. The ESP Plan is
intended to constitute an employee stock purchase plan within the meaning of
Section 423 of the Code. The ESP Plan is not intended to constitute an employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Security Act of 1974, as amended. A total of up to shares of Class A
Common Stock of the Company may be issued under the ESP Plan (subject to
adjustment in the event of certain changes in the Common Stock). The ESP Plan
will terminate after a term of 10 years, unless it is terminated earlier
pursuant to its terms or by action of the Board of Directors. All funds received
or held by the Company under the ESP Plan are general assets of the Company,
shall be held free of any trust or other restriction and may be used for any
corporate purpose.

In order to be eligible to participate in the ESP Plan, an employee must
(i) be classified by the Company as a full or part-time employee, (ii) be
employed by the Company for more than 20 hours per week and for more than five
months per year, (iii) have completed at least one year of service with the
Company or a predecessor and (iv) not be deemed for purposes of Section
423(b)(3) of the Code to own stock representing five percent or more of the
total combined voting power of all classes of stock of the Company or any
subsidiary of the Company. Employees who are covered by a collective bargaining
agreement will not participate during any period in which the union has
determined that such employees will not participate in the ESP Plan. Under the
ESP Plan, the Company will withhold a specified percentage (not to exceed 10%)
of the compensation paid to each participant, and the amount withheld (and any
additional amount contributed by the participant) will be used to purchase Class
A Common Stock from the Company on the last day of each purchase period. The
price at which the Class A Common Stock will be purchased under the ESP Plan
will be determined by the Committee and shall not be less than 85% of the value
of the stock on the last day of the purchase period. The length of each purchase
period shall be specified by the Committee, with the first purchase period to
begin on a date subsequent to the effective date of this Prospectus.

Employees may end their participation in a purchase period at any time, and
participation ends automatically upon termination of employment with the
Company. The maximum value of shares that a participant in the ESP Plan may
purchase during any calendar year is $25,000. In the event of a dissolution or
liquidation of the Company or of a merger or consolidation in which the Company
is not the surviving corporation, the ESP Plan and any purchase periods then in
progress will terminate upon the effective date of such event.

The Board of Directors has the right to amend or terminate the ESP Plan.
However, any amendment that requires shareholder approval under Section 423 of
the Code shall be approved by the Company's shareholders.

EMPLOYMENT AGREEMENTS

Joseph M. Field Employment Agreement. The Company has entered into an
employment agreement with Joseph M. Field pursuant to which Mr. Field serves as
Chief Executive Officer and President. The employment agreement with Mr. Field
may be terminated upon written notice no less than 30 days prior to the end of
any calendar year. Absent such written notice, the employment agreement is
automatically renewed for a period of one year. In the event of Mr. Field's
death during the term of the employment agreement, the Company will pay his
survivors Mr. Field's compensation for one year at the then current rate. In the
event of the total disability of Mr. Field, the Company will pay Mr. Field
compensation for the lesser of the period of his disability or one year at the
then applicable rate. Mr. Field's current base salary is $544,800 and is
increased or decreased annually by a percentage equal to the percentage of
inflation or deflation over the immediately preceding twelve month period,
provided that the base salary shall never be less than $500,000. The Board of
Directors may approve additional salary, bonuses, fees, or other compensation
for Mr. Field.

72
<PAGE> 75

Mr. Field is entitled to participate in any bonus, profit sharing, retirement,
insurance or other plan or program adopted by the Company. Absent the express
prior written consent of the Company, Mr. Field is prohibited, in the event of
his termination by resignation or for cause, for a period of two years following
the termination of the employment agreement, from engaging in any broadcast
business in competition with the Company in any standard metropolitan
statistical area in which the Company is then operating a broadcast property.

Executive Officer Employment Agreements. The Company has entered into
employment agreements with David J. Field, John C. Donlevie and Eugene D. Levin.
Each of the employment agreements provides that the employee may be terminated
at will by either party (i) immediately if good cause for termination exists, or
(ii) upon thirty days notice in the absence of good cause. Each of the
employment agreements provides for a salary which is adjusted each year by an
inflation index and an annual incentive bonus based on the increased real cash
flow (as defined in the agreement) of the Company. In addition, Mr. Donlevie and
Mr. Levin may collect a percentage of any special or liquidating distributions
made by the Company.

Deborah Kane Employment Agreement. The Company has entered into an
employment agreement with Deborah Kane pursuant to which Ms. Kane serves as Vice
President - Sales. The employment agreement with Ms. Kane may be terminated at
will by either party with or without cause or notice. Ms. Kane is paid an annual
base salary under the employment agreement and is entitled to receive certain
quarterly and annual incentive bonuses based on the completion of several
performance related objectives.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

S. Gordon Elkins, a director of the Company, is a partner at the law firm
of Stradley, Ronon, Stevens & Young, that has served as the Company's outside
counsel on various matters.

Michael R. Hannon, a director of the Company, is a general partner of Chase
Capital. In May 1996, Chase Equity Associates, L.P., an affiliate of Chase
Capital, acquired the 7% Subordinated Convertible Note for $25 million. The 7%
Subordinated Convertible Note will be converted in the Chase Conversion into
shares of Class A Common Stock. Chase Equity Associates, L.P. is the
Selling Shareholder in the Offering and will receive net proceeds of $
from the sale of shares of Class A Common Stock in the Offering. Upon
completion of the Offering, Chase Capital will beneficially own approximately
% of the Company's Class A Common Stock.

73
<PAGE> 76

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of May 31, 1998, by: (i) each person (or group
of affiliated persons) known by the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock; (ii) each Named Executive
Officer of the Company; (iii) each director of the Company; (iv) the Selling
Shareholder and (v) all of the Company's directors and executive officers as a
group. Each shareholder possesses sole voting and investment power with respect
to the shares listed, unless otherwise noted.
<TABLE>
<CAPTION>
CLASS B
CLASS A COMMON STOCK(1) COMMON STOCK(2)
--------------------------------------------------------- -------------------------------------
PERCENT OF CLASS NUMBER OF PERCENT OF
SHARES ---------------------- SHARES CLASS
NAME OF BEFORE BEING AFTER BEFORE AFTER AFTER AFTER
BENEFICIAL OWNER OFFERING OFFERED OFFERING(3) OFFERING OFFERING(3) OFFERING(3) OFFERING(3)
- ----------------------- -------- ------- ----------- -------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Field (4)....
David J. Field (4).....
John C. Donlevie.......
Eugene D. Levin........
Deborah Kane...........
Herbert Kean, M.D......
S. Gordon Elkins.......
Thomas H. Ginley,
M.D. ................
Lee Hague..............
Marie H. Field(4)......
Michael R. Hannon(5)...
Nancy E. Field(4)......
Chase Equity
Associates, L.P.(5)
380 Madison Avenue
New York, NY 10017....
All directors, and
executive officers,
as a group
("persons")..........

PERCENT OF PERCENT OF
NAME OF TOTAL ECONOMIC TOTAL VOTING
BENEFICIAL OWNER INTEREST POWER
- ----------------------- -------------- ------------
<S> <C> <C>
Joseph M. Field (4)....
David J. Field (4).....
John C. Donlevie.......
Eugene D. Levin........
Deborah Kane...........
Herbert Kean, M.D......
S. Gordon Elkins.......
Thomas H. Ginley,
M.D. ................
Lee Hague..............
Marie H. Field(4)......
Michael R. Hannon(5)...
Nancy E. Field(4)......
Chase Equity
Associates, L.P.(5)
380 Madison Avenue
New York, NY 10017....
All directors, and
executive officers,
as a group
("persons")..........
</TABLE>

- ---------------
* Less than one percent.

(1) The number of shares of Class A Common Stock does not include the shares of
Class A Common Stock issuable upon conversion of the outstanding shares of
Class B Common Stock.

(2) The holders of the Class B Common Stock are entitled to vote with the
holders of the Class A Common Stock on all matters submitted to a vote of
shareholders of the Company, except with respect to the election of Class A
Directors and as otherwise required by law. Each share of Class B Common
Stock that is voted by Joseph M. Field and David J. Field is entitled to ten
votes per share on all matters submitted to a vote of shareholders, except
certain "going private" transactions or as otherwise required by law. The
shares of Class B Common Stock are convertible in whole or in part, at the
option of the holder or holders thereof, subject to certain conditions, into
the same number of shares of Class A Common Stock. See "Description of
Capital Stock."

(3) Shares beneficially owned and percentage ownership are based on
shares of Class A Common Stock and shares of Class B Common Stock
outstanding after the Offering.

(4) The address of these shareholders is 401 City Avenue, Suite 409, Bala
Cynwyd, Pennsylvania 19004.

(5) The amounts shown consist of shares held of record by Chase Equity
Associates, L.P. to be received upon the Chase Conversion. Michael Hannon is
a general partner of Chase Capital, which is an affiliate of Chase Equity
Associates, L.P. Mr. Hannon exercises shared investment and voting power
with respect to such shares, but disclaims beneficial ownership of such
shares.

74
<PAGE> 77

DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of the Company gives effect
to the Recapitalization and the Chase Conversion, which will occur immediately
prior to the Offering, and to the proposed sale of shares of Class A
Common Stock in the Offering. The Company's authorized capital stock consists of
(i) 200,000,000 shares of Class A Common Stock, of which shares are
issued and outstanding; (ii) 75,000,000 shares of Class B Common Stock, of which
shares are issued and outstanding; (iii) 50,000,000 shares of Class C
Common Stock, none of which are issued or outstanding; and (iv) 25,000,000
shares of preferred stock, none of which are issued or outstanding. In addition,
the Company has reserved for issuance shares of Class A Common Stock
under the 1998 Equity Compensation Plan. See "Management -- 1998 Equity
Compensation Plan."

The following summary description of the capital stock of the Company does
not purport to be complete and is subject to the detailed provisions of, and
qualified in its entirety by reference to, the Company's Amended and Restated
Articles of Incorporation and Amended and Restated Bylaws, copies of which have
been filed as exhibits to the registration statement of which this Prospectus
forms a part, and to the applicable provisions of the Pennsylvania Business
Corporation Law of 1988 (the "PBCL").

Common Stock

The rights of holders of the Common Stock are identical in all respects,
except as discussed below. All the outstanding shares of Class A Common Stock
and Class B Common Stock and the shares of Class A Common Stock sold in the
Offering will be, upon issuance and payment of the purchase price therefor,
validly issued, fully paid and nonassessable.

Dividends. Subject to the right of the holders of any class of preferred
stock, holders of shares of Common Stock are entitled to receive such dividends
as may be declared by the Company's Board of Directors out of funds legally
available for such purpose. No dividend may be declared or paid in cash or
property on any share of any class of Common Stock unless simultaneously the
same dividend is declared or paid on each share of that and every other class of
Common Stock; provided that, in the event of stock dividends, holders of a
specific class of Common Stock shall be entitled to receive only additional
shares of such class.

Voting Rights. The Class A Common Stock and the Class B Common Stock vote
together as a single class on all matters submitted to a vote of shareholders,
with each share of Class A Common Stock entitling the holder thereof to one vote
and each share of Class B Common Stock entitling the holder thereof to ten
votes, except that (i) beginning with the Company's first annual meeting
following the Offering, the holders of Class A Common Stock, voting as a
separate class, shall be entitled to elect two Class A Directors, (ii) with
respect to a Going Private Transaction (defined as a "Rule 13e-3 transaction"
under the Exchange Act), each share of Class A Common Stock and Class B Common
Stock shall be entitled to one vote, (iii) any share of Class B Common Stock
shall only be entitled to ten votes if it is voted by either Joseph M. Field, or
David J. Field, in their own right or pursuant to a proxy and (iv) as otherwise
required by law. The Class C Common Stock has no voting rights except as
otherwise required by law.

The first two Class A Directors will be appointed by the Company's Board of
Directors as soon as practicable after the consummation of the Offering and will
serve until the Company's next annual meeting of shareholders, when the holders
of the Class A Common Stock will elect the Class A Directors. The Class A
Directors serve one-year terms and must be "independent directors." For this
purpose, an "independent director" means a person who is not an officer or
employee of the Company or its subsidiaries, and who does not have a
relationship which, in the opinion of the Board of Directors, would interfere
with the exercise of independent judgment in carrying out the responsibilities
of a director. Holders of Common Stock are not entitled to cumulate votes in the
election of directors.

Liquidation Rights. Upon liquidation, dissolution or winding-up of the
Company, the holders of the Common Stock are entitled to share ratably in all
assets available for distribution after payment in full of creditors and holders
of the preferred stock of the Company, if any.

75
<PAGE> 78

Conversion of Class A Common Stock. Shares of Class A Common Stock owned
by a Regulated Entity (defined as either an entity that is a "bank holding
company" under the Bank Holding Company Act of 1956 (the "BHC Act") or a
non-bank subsidiary of such an entity, or an entity that, pursuant to Section
8(a) of the International Banking Act of 1978, as amended, is subject to the
provisions of the BHC Act, or any non-bank subsidiary of such an entity), are
convertible at any time, at the option of the holder thereof, into an equal
number of fully paid and non-assessable shares of Class C Common Stock. All
conversion rights of Class A Common Stock are subject to any necessary FCC
approval.

Conversion, Transferability of Class B Common Stock. Shares of Class B
Common Stock are convertible at any time, at the option of the holder thereof,
into an equal number of fully paid and non-assessable shares of Class A Common
Stock. All conversion rights of Class B Common Stock are subject to any
necessary FCC approval. Shares of Class B Common Stock transferred to a party
other than a Field Shareholder are automatically converted into an equal number
of fully paid and non-assessable shares of Class A Common Stock.

Conversion, Transferability of Class C Common Stock. Shares of Class C
Common Stock are convertible at any time, at the option of the holder thereof,
into an equal number of fully paid and non-assessable shares of Class A Common
Stock. All conversion rights of Class C Common Stock are subject to any
necessary FCC approval. Shares of Class C Common Stock may only be transferred
by a Regulated Entity (i) in a widely distributed public offering; (ii) in a
transfer pursuant to Rule 144 under the Exchange Act or any similar rule then in
force; (iii) in a transfer to the Company; (iv) in a transfer to an affiliate of
such Regulated Entity or to any other Regulated Entity or (v) in any method of
transfer permitted by the Board of Governors of the Federal Reserve System.

Other Provisions. The holders of Common Stock are not entitled to
preemptive or similar rights.

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock,
par value $.01 per share. The Board of Directors of the Company, in its sole
discretion, may designate and issue one or more series of preferred stock from
the authorized and unissued shares of preferred stock. Subject to limitations
imposed by law or the Amended and Restated Articles of Incorporation of the
Company, the Board of Directors is empowered to determine the designation of and
the number of shares constituting a series of preferred stock, the dividend
rate, if any, for the series, the terms and conditions of any voting and
conversion rights for the series, if any, the number of directors, if any, which
the series shall be entitled to elect, the amounts payable on the series upon
the liquidation, dissolution or winding-up of the Company, the redemption prices
and terms applicable to the series, if any, and the preferences and relative
rights among the series of preferred stock. Such rights, preferences, privileges
and limitations of preferred stock could adversely affect the rights of holders
of Common Stock. There are currently no shares of preferred stock outstanding.

FOREIGN OWNERSHIP

The Amended and Restated Articles of Incorporation of the Company restrict
the ownership, voting and transfer of the Company's capital stock, including the
Common Stock, in accordance with the Communications Act and the rules of the
FCC, which prohibit the issuance of more than 25% of the Company's outstanding
capital stock (or more than 25% of the voting rights it represents) to or for
the account of Aliens or corporations otherwise subject to domination or control
by Aliens. The Company's Amended and Restated Articles of Incorporation prohibit
any transfer of the Company's capital stock that would cause a violation of this
prohibition. In addition, the Amended and Restated Articles authorize the Board
of Directors of the Company to take action to enforce these prohibitions,
including requiring redemptions of Common Stock and placing a legend regarding
restrictions on foreign ownership on the certificates representing the Common
Stock. See "Business -- Federal Regulation of Radio Broadcasting -- Ownership
Matters."

76
<PAGE> 79

CERTAIN PROVISIONS OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION AND
AMENDED AND RESTATED BYLAWS OF THE COMPANY

The Company's Amended and Restated Articles of Incorporation and Amended
and Restated Bylaws include certain provisions that could have an anti-takeover
effect. These provisions are intended to preserve the continuity and stability
of the Board of Directors and the policies formulated by the Board of Directors.
These provisions are also intended to help ensure that the Board of Directors,
if confronted by a surprise proposal from a third party which has acquired a
block of stock of the Company, will have sufficient time to review the proposal,
to consider appropriate alternatives to the proposal and to act in what it
believes to be the best interests of the shareholders.

The following is a summary of the provisions included in the Amended and
Restated Articles of Incorporation and is qualified in its entirety by reference
to such documents, copies of which will be filed as exhibits to the Registration
Statement, of which this Prospectus forms a part. The Board of Directors has no
current plans to formulate or effect additional measures that could have an
anti-takeover effect.

Exculpation. The Amended and Restated Articles of Incorporation of the
Company provide that a director or officer of the Corporation shall not be
personally liable for monetary damages as such (including, without limitation,
any judgment, amount paid in settlement, penalty, punitive damages or expense of
any nature (including, without limitation, attorneys' fees and disbursements))
for any action taken, or any failure to take any action, unless (i) the director
has breached or failed to perform the duties of his or her office under the
Amended and Restated Articles of Incorporation of the Company, the Amended and
Restated Bylaws of the Company or applicable provisions of law and (ii) the
breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness.

Indemnification. The Amended and Restated Articles of Incorporation of the
Company provide that, to the fullest extent permitted by the PBCL, the Company
will indemnify any person who was, is, or is threatened to be made, a party to a
proceeding by reason of the fact that he or she (i) is or was a director or
officer of the Company or (ii) while a director or officer of the Company, is or
was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise.

Blank Check Preferred Stock. The Company's Amended and Restated Articles
of Incorporation will provide that the Board of Directors of the Company may
authorize the issuance of up to 25,000,000 shares of preferred stock in one or
more classes or series and may designate the dividend rate, voting rights and
other rights, preferences and restrictions of each such class or series. The
Board of Directors of the Company has no present intention to issue any
preferred stock; however, the Board of Directors of the Company has the
authority, without further shareholder approval, to issue one or more series of
preferred stock that could, depending on the terms of such series, either impede
or facilitate the completion of a merger, tender offer or other takeover
attempt. Although the Board of Directors of the Company is required to make any
determination to issue such stock based on its judgment as to the best interests
of the shareholders of the Company, the Board of Directors of the Company could
act in a manner that would discourage an acquisition attempt or other
transaction that some, or a majority, of the shareholders might believe to be in
their best interests or in which shareholders might receive a premium for their
stock over the then market price of such stock. The Board of Directors of the
Company does not intend to seek shareholder approval prior to any issuance of
such stock, unless otherwise required by law.

PENNSYLVANIA CONTROL-SHARE ACQUISITIONS LAW

Generally, subchapters 25E, F, G, H, I and J of the PBCL place certain
procedural requirements and establish certain restrictions upon the acquisition
of voting shares of a corporation which would entitle the acquiring person to
cast or direct the casting of a certain percentage of votes in an election of
directors. Subchapter 25E of the PBCL provides generally that, if the Company
were involved in a "control transaction," shareholders of the Company would have
the right to demand from a "controlling person or group" payment of the fair
value of their shares. For purposes of subchapter 25E, a "controlling person or
77
<PAGE> 80

group" is a person or group of persons acting in concert that, through voting
shares, has voting power over at least 20% of the votes which shareholders of
the Company would be entitled to cast in the election of directors. A control
transaction arises, in general, when a person or group acquires the status of a
controlling person or group.

In general, Subchapter 25F of the PBCL delays for five years and imposes
conditions upon "business combinations" between an "interested shareholder" and
the Company. The term "business combination" is defined broadly to include
various merger, consolidation, division, exchange or sale transactions,
including transactions utilizing the Company's assets for purchase price
amortization or refinancing purposes. An "interested shareholder," in general,
would be a beneficial owner of at least 20% of the Company's voting shares.

In general, Subchapter 25G of the PBCL suspends the voting rights of the
"control shares" of a shareholder that acquires for the first time 20% or more,
33 1/3% or more or 50% or more of the Company's shares entitled to be voted in
an election of directors. The voting rights of the control shares generally
remain suspended until such time as the "disinterested" shareholders of the
Company vote to restore the voting power of the acquiring shareholder.

Subchapter 25H of the PBCL provides in certain circumstances for the
recovery by the Company of profits made upon the sale of its common stock by a
"controlling person or group" if the sale occurs within 18 months after the
controlling person or group became such and the common stock was acquired during
such 18 month period or within 24 months prior thereto. In general, for purposes
of Subchapter 25H, a "controlling person or group" is a person or group that (i)
has acquired, (ii) offered to acquire or (iii) publicly disclosed or caused to
be disclosed an intention to acquire voting power over shares that would entitle
such person or group to cast at least 20% of the votes that shareholders of the
Company would be entitled to cast in the election of directors.

If the disinterested shareholders of the Company vote to restore the voting
power of a shareholder who acquires control shares subject to Subchapter 25G,
the Company would then be subject to subchapters 25I and J of the PBCL.
Subchapter 25I generally provides for a minimum severance payment to certain
employees terminated within two years of such approval. Subchapter 25J, in
general, prohibits the abrogation of certain labor contracts prior to their
stated date of expiration.

The foregoing descriptions of certain subchapters of the PBCL do not
purport to be complete.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is .

78
<PAGE> 81

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no public market for the Class A
Common Stock of the Company. The sale, or availability for sale, of substantial
amounts of Class A Common Stock in the public market subsequent to the Offering,
could adversely affect the prevailing market price of the shares of Class A
Common Stock and could impair the Company's ability to raise additional capital
through the sale of equity securities.

Upon completion of the Offering, the Company will have outstanding
shares of Class A Common Stock and shares of Class B Common
Stock. Of these outstanding shares, the shares of Class A Common Stock
sold in the Offering will be freely transferable without restriction under the
Securities Act, except for any such shares purchased by an "affiliate" (as
defined in Rule 144 under the Securities Act) of the Company, which shares may
generally only be sold in compliance with the limitations of Rule 144 described
below. The remaining shares of Class A Common Stock and all of Class B
Common Stock will be "restricted securities" for purposes of Rule 144 and may
not be resold unless registered under the Securities Act or sold pursuant to an
applicable exemption thereunder, including the exemption contained in Rule 144.

The number of shares of Common Stock available for sale in the public
market is limited by restrictions under the Securities Act and lock-up
agreements under which all of the holders of such shares have agreed not to sell
or otherwise dispose of their shares during the Lock-Up Period without the prior
written consent of Credit Suisse First Boston Corporation. Because of these
restrictions, on the date of this Prospectus, no shares other than those offered
hereby will be eligible for sale. Upon expiration of the Lock-Up Period, all of
the restricted securities will be eligible for sale in the public market,
subject to compliance with the manner-of-sale, volume and other limitations of
Rule 144.

In general, under Rule 144, as currently in effect, a shareholder (or
shareholders whose shares are aggregated) who has beneficially owned restricted
securities for at least one year (including persons who may be deemed
"affiliates" of the Company under Rule 144) is entitled to sell a number of
shares within any three-month period that does not exceed the greater of 1% of
the then outstanding shares of the class of Common Stock or the average weekly
trading volume of such stock during the four calendar weeks preceding such sale,
subject to certain manner of sale limitations. A shareholder who is deemed not
to have been an affiliate of the Company for at least three months prior to the
date of sale and who has beneficially owned restricted securities for at least
two years would be entitled to sell such shares under Rule 144 without regard to
the volume or manner of sale limitations described above.

79
<PAGE> 82

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1998 (the "Underwriting Agreement"), the
underwriters named below (the "Underwriters"), for whom Credit Suisse First
Boston Corporation, BT Alex. Brown Incorporated, Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated, acting as representatives (the "Representatives"),
have severally but not jointly agreed to purchase from the Company and the
Selling Shareholder the following respective numbers of shares of Class A Common
Stock:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Credit Suisse First Boston Corporation......................
BT Alex. Brown Incorporated.................................
Goldman, Sachs & Co. .......................................
Morgan Stanley & Co. Incorporated...........................

-------
Total.............................................
=======
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Class A Common
Stock offered hereby (other than those shares covered by the over-allotment
option described below) if any are purchased. The Underwriting Agreement
provides that, in the event of a default by an Underwriter, in certain
circumstances the purchase commitments of non-defaulting Underwriters may be
increased or the Underwriting Agreement may be terminated.

The Company and the Selling Shareholder have granted to the Underwriters an
option, expiring at the close of business on the 30th day after the date of this
Prospectus, to purchase up to additional shares from the Company
and additional outstanding shares from the Selling Shareholder at the
initial public offering price less the underwriting discounts and commissions,
all as set forth on the cover page of this Prospectus. Such option may be
exercised only to cover over-allotments in the sale of the shares of Class A
Common Stock. To the extent such option is exercised, each Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares of Class A Common Stock as it was
obligated to purchase pursuant to the Underwriting Agreement.

The Company and the Selling Shareholder have been advised by the
Representatives that the Underwriters propose to offer the shares of Class A
Common Stock to the public initially at the public offering price set forth on
the cover page of this Prospectus and, through the Representatives, to certain
dealers at such price less a concession of $ per share of Class A Common
Stock, and the Underwriters and such dealers may allow a discount of $
per share of Class A Common Stock on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Representatives.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5% of the shares of Class A
Common Stock being offered hereby.

The Company has agreed that it will not offer, sell, contract to sell,
announce its intention to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Securities Act relating to, any additional shares of its Class A Common Stock or
securities convertible into or exchangeable or exercisable for any shares of
capital stock of the Company without the prior written consent of Credit Suisse
First Boston Corporation for a period of 180 days after the date of this
Prospectus (the "Lock-Up Period"), except (i) pursuant to or in connection with
employee stock option plans or other

80
<PAGE> 83

employee or non-employee director or key advisor compensation arrangements or
agreements, in each case in effect on the date of this Prospectus, and (ii) in
connection with the conversion of shares of Class A Common Stock, Class B Common
Stock or Class C Common Stock solely into another class of Common Stock. Each of
the Company's officers, directors and the Selling Shareholder have agreed not to
sell, offer, or otherwise dispose of any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock, except for the
conversion of the Class A Common Stock, Class B Common Stock and Class C Common
Stock solely into shares of another class of Common Stock, without the prior
written consent of Credit Suisse First Boston Corporation during the Lock-Up
Period, except for certain limited exceptions.

The Underwriters have reserved for sale, at the initial public offering
price up to shares of the Class A Common Stock for employees,
directors and certain other persons associated with the Company or with its
officers or directors, who have expressed an interest in purchasing such shares
of Class A Common Stock in the Offering. The number of shares available for sale
to the general public in the Offering will be reduced to the extent such persons
purchase such reserved shares. Any reserved shares not so purchased will be
offered by the Underwriters to the general public on the same terms as the other
shares offered hereby.

The Company and the Selling Shareholder have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or contribute to payments which the Underwriters may be required
to make in respect thereof.

Application will be made to list the shares of Class A Common Stock on the
New York Stock Exchange. In connection with the listing of the Class A Common
Stock on The New York Stock Exchange, the Underwriters will undertake to sell
round lots of 100 shares or more to a minimum of 2,000 beneficial owners.

Prior to this Offering, there has been no public market for the Class A
Common Stock. Accordingly, the initial public offering price for the Class A
Common Stock will be determined by negotiations between the Company and the
Representatives. Among the factors considered in determining the initial public
offering price will be the history of, and the prospects for, the Company's
business and the industry in which it competes, an assessment of the Company's
management, its past and present operations, its past and present earnings and
the trend of such earnings, the prospects for earnings of the Company, the
present state of the Company's development, the general condition of the
securities markets at the time of the Offering and the market prices and the
earnings of similar securities of comparable companies at the time of the
Offering.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of the
Class A Common Stock in the open market after the distribution has been
completed in order to cover syndicate short positions. Penalty bids permit the
Representatives to reclaim a selling concession from a syndicate member when the
shares of Class A Common Stock originally sold by such syndicate member are
purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Class A Common Stock to be higher than
it would otherwise be in the absence of such transactions. These transactions
may be effected on the New York Stock Exchange or otherwise and, if commenced,
may be discontinued at any time.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the shares of Class A Common Stock in Canada is being
made only on a private placement basis exempt from the requirement that the
Company and the Selling Shareholder prepare and file a prospectus with the
securities regulatory authorities in each province where trades of shares of
Class A Common Stock are effected. Accordingly, any resale of the shares of
Class A Common Stock in Canada must

81
<PAGE> 84

be made in accordance with applicable securities laws which will vary depending
on the relevant jurisdiction, and which may require resales to be made in
accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the shares of
Class A Common Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of shares of Class A Common Stock in Canada who receives a
purchase confirmation will be deemed to represent to the Company, the Selling
Shareholder and the dealer from whom such purchase confirmation is received that
(i) such purchaser is entitled under applicable provincial securities laws to
purchase such shares of Class A Common Stock without the benefit of a prospectus
qualified under such securities laws, (ii) where required by law, that such
purchaser is purchasing as principal and not as agent and (iii) such purchaser
has reviewed the text above under "Resale Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulations under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein and the Selling Shareholder may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of shares of Class A Common Stock to whom the Securities Act
(British Columbia) applies is advised that such purchaser is required to file
with the British Columbia Securities Commission a report within ten days of the
sale of any shares of Class A Common Stock acquired by such purchaser pursuant
to this offering. Such report must be in the form attached to British Columbia
Securities Commission Blanket Order (BOR) #95/17, a copy of which may be
obtained from the Company. Only one such report must be filed in respect of
Class A Common Stock acquired on the same date and under the same prospectus
exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of shares of Class A Common Stock should consult their
own legal and tax advisers with respect to the tax consequences of an investment
in the shares of Class A Common Stock in their particular circumstances and with
respect to the eligibility of the shares of Class A Common Stock for investment
by the purchaser under relevant Canadian Legislation.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.
Certain legal matters will be passed upon for the Underwriters by Weil, Gotshal
& Manges LLP, Dallas, Texas and New York, New York.

82
<PAGE> 85

EXPERTS

The financial statements of Entercom Communications Corp. as of September
30, 1996 and 1997 and for each of the three years in the period ended September
30, 1997 included in this Prospectus and the related financial statement
schedule included elsewhere in the registration statement have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein and elsewhere in the registration statement, and have been so
included in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.

The combined financial statements of KMBZ-AM, KLTH-FM, KCMO-AM/FM,
KIRO-AM/FM, KNWX-AM and KING-FM for each of the three years in the period ended
December 31, 1996 included in this Prospectus have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report appearing herein,
and have been so included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

The financial statements of the Sacramento Station Group for the periods
January 1, 1996 to September 18, 1996 and September 19, 1996 to December 31,
1996 included in this Prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein, and have been
so included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

The combined financial statements of KBSG, Inc. and KNDD, Inc. for the
period ended December 31, 1995 included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and have been so included in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.

The combined financial statements of the Portland, Oregon and Rochester,
New York Radio Groups of Heritage Media Services, Inc. - Broadcasting Segment as
of December 31, 1997 and for the eight month period ended August 31, 1997 and
the four month period ended December 31, 1997 included in this Prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as stated
in their report appearing herein, and have been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act and the rules and
regulations promulgated thereunder, covering the Common Stock offered hereby.
This Prospectus omits certain information contained in the Registration
Statement, and reference is made to the Registration Statement, and the exhibits
and schedules thereto for further information with respect to the Company and
the Common Stock offered hereby. Statements contained in this Prospectus as to
the contents of any contract, agreement or other document filed as an exhibit to
the Registration Statement are not necessarily complete, and in each instance,
reference is made to the exhibit for a more complete description of the matter
involved, each such statement being qualified in its entirety by such reference.
The Registration Statement may be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the Commission
maintained at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such
materials may be obtained from the Public Reference Section of the Commission,
Room 10124, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, registration statements and certain other filings
made with the Commission through its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system are publicly available through the Commission's site
on the Internet's World Wide Web, located at http://www.sec.gov. The
Registration Statement, including all exhibits thereto and amendments thereof,
has been filed with the Commission through EDGAR.

83
<PAGE> 86

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ENTERCOM COMMUNICATIONS CORP.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report.............................. F-3
Balance Sheets as of September 30, 1996 and 1997.......... F-4 - F-5
Statements of Income for the Years Ended September 30,
1995, 1996 and 1997.................................... F-6
Statements of Retained Earnings for the Years Ended
September 30, 1995, 1996 and 1997...................... F-7
Statements of Cash Flows for the Years Ended September 30,
1995, 1996 and 1997.................................... F-8
Notes to the Consolidated Financial Statements............ F-9 - F-21

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheets as of September 30, 1997 and March 31,
1998................................................... F-22 - F-23
Statements of Income for the Six Months Ended March 31,
1997 and 1998.......................................... F-24
Statements of Cash Flows for the Six Months Ended March
31, 1997 and 1998...................................... F-25
Notes to Consolidated Financial Statements................ F-26 - F-29

THE BONNEVILLE TRANSACTION

KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND
KING-FM
Independent Auditors' Report........................... F-30
Combined Statements of Operations for the Years Ended
December 31, 1994, 1995 and 1996 and for the Three
Months Ended March 27, 1996 and 1997 (Unaudited)...... F-31
Combined Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996 and for the Three
Months Ended March 27, 1996 and 1997 (Unaudited)...... F-32
Notes to Combined Statements of Operations and of Cash
Flows................................................. F-33 - F-36

THE CITICASTERS TRANSACTION

SACRAMENTO STATION GROUP (KSEG-FM AND KRXQ-FM)
Independent Auditors' Report........................... F-37
Statements of Operations for the Periods January 1,
1996 to September 18, 1996 (Predecessor) and September
19, 1996 to December 31, 1996 and for the Five Months
Ended May 31, 1996 (Predecessor) and 1997
(Unaudited)........................................... F-38
Statements of Cash flows for the Periods January 1,
1996 to September 18, 1996 (Predecessor) and September
19, 1996 to December 31, 1996 and for the Five Months
Ended May 31, 1996 (Predecessor) and 1997
(Unaudited)........................................... F-39
Notes to Financial Statements.......................... F-40 - F-41

KBSG, INC. AND KNDD, INC. (KBSG-FM AND KNDD-FM)
Independent Auditors' Report.............................. F-42
Combined Statements of Operations for the Year Ended
December 31, 1995 and for the Seven-Month Periods Ended
July 31, 1995 and 1996 (Unaudited)..................... F-43
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Seven-Month Periods Ended
July 31, 1995 and 1996 (Unaudited)..................... F-44
Notes to Combined Financial Statements.................... F-45 - F-47
</TABLE>

F-1
<PAGE> 87

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE SINCLAIR TRANSACTION

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING
SEGMENT
Audited Financial Statements
Independent Auditors' Report........................... F-48
Combined Balance Sheet as of December 31, 1997......... F-49
Combined Statements of Operations for the Eight-Month
Period Ended August 31, 1997 (Predecessor) and for the
Four-Month Period Ended December 31, 1997............. F-50
Combined Statements of Stockholders' Equity for the
Eight-Month Period Ended August 31, 1997 (Predecessor)
and for the Four-Month Period Ended December 31,
1997.................................................. F-51
Combined Statements of Cash Flows for the Eight-Month
Period Ended August 31, 1997 (Predecessor) and for the
Four-Month Period Ended December 31, 1997............. F-52
Notes to Combined Financial Statements................. F-53 - F-57
Unaudited Financial Statements
Combined Balance Sheets as of December 31, 1997 and
March 31, 1998........................................ F-58
Combined Statements of Operations for the Three Months
Ended March 31, 1997, the Two-Month Period Ended
February 28, 1998 and the One-Month Period Ended March
31, 1998.............................................. F-59
Combined Statements of Cash Flows for the Three Months
Ended March 31, 1997, the Two-Month Period Ended
February 28, 1998 and the One-Month Period Ended March
31, 1998.............................................. F-60
Notes to Combined Financial Statements................. F-61
</TABLE>

F-2
<PAGE> 88

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Entercom Communications Corp.:

We have audited the accompanying consolidated balance sheets of Entercom
Communications Corp. (formerly Entertainment Communications, Inc.) (the
"Company") as of September 30, 1996 and 1997, and the related consolidated
statements of income, retained earnings, and cash flows for each of the three
years in the period ended September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Entercom Communications Corp. at
September 30, 1996 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1997 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
December 12, 1997 except for
Note 11 as to which the date is August 13, 1998

F-3
<PAGE> 89

ENTERCOM COMMUNICATIONS CORP.

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1997
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 2)........................ $ 5,292 $ 3,626
Accounts receivable (net of allowance for doubtful
accounts of $117 in 1996 and $292 in 1997)............. 12,998 24,796
Prepaid expenses and deposits............................. 735 1,691
Station acquisition deposits.............................. 131 4,957
IRS deposit............................................... 517 490
-------- --------
Total current assets.............................. 19,673 35,560
-------- --------
PROPERTY AND EQUIPMENT -- At cost (Note 2):
Land and land easements................................... 1,495 4,445
Land improvements......................................... 109 139
Building.................................................. 970 2,454
Equipment................................................. 15,634 22,784
Furniture and fixtures.................................... 2,831 5,064
Leasehold improvements.................................... 864 1,047
-------- --------
21,903 35,933
Accumulated depreciation.................................. (10,403) (8,158)
-------- --------
11,500 27,775
Capital improvements in progress.......................... 133 1,379
-------- --------
Net property and equipment........................ 11,633 29,154
-------- --------
RADIO BROADCASTING LICENSES AND OTHER INTANGIBLES
Net of accumulated amortization of $1,864 in 1996 and
$6,307 in 1997 (Notes 2 and 3)......................... 114,754 295,419
DEFERRED CHARGES AND OTHER ASSETS -- Net (Notes 2, 3 and
4)........................................................ 4,515 4,610
-------- --------
TOTAL....................................................... $150,575 $364,743
======== ========
</TABLE>

See notes to consolidated financial statements.
F-4
<PAGE> 90

ENTERCOM COMMUNICATIONS CORP.

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1997
-------- --------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 5,788 $ 7,128
Accrued liabilities:
Salaries............................................... 1,629 2,422
Interest............................................... 993 109
Taxes other than income................................ 40 69
Barter (Note 2)........................................ 120 5
Corporate state income taxes (Note 2)..................... 23 323
-------- --------
Total current liabilities......................... 8,593 10,056
LONG-TERM DEBT (Note 5)..................................... 136,000 142,000
ACCRUED INTEREST (Note 5)................................... 642 2,427
MINORITY INTEREST IN EQUITY OF PARTNERSHIP (Notes 2 and 7).. 261 2,171
-------- --------
Total liabilities................................. 145,496 156,654
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDERS' EQUITY (Note 9):
Common stock $.05 par value; nonvoting; authorized 180,000
shares; issued 46,260 and 43,650 shares in 1996 and
1997, respectively..................................... 2 2
Common stock $.05 par value; voting; authorized 180,000
shares; issued 80,580 and 72,750 shares in 1996 and
1997, respectively..................................... 4 4
Capital in excess of par value............................ 710 710
Retained earnings......................................... 5,407 207,373
-------- --------
6,123 208,089
Treasury stock consisting of 2,610 shares nonvoting common
stock and 7,830 shares voting common stock at cost..... (1,044)
-------- --------
Total shareholders' equity........................ 5,079 208,089
-------- --------
TOTAL....................................................... $150,575 $364,743
======== ========
</TABLE>

See notes to consolidated financial statements.
F-5
<PAGE> 91

ENTERCOM COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-------------------------------
1995 1996 1997
------- ------- ---------
<S> <C> <C> <C>
NET REVENUES................................................ $35,893 $48,675 $ 93,862
OPERATING EXPENSES:
Station operating expenses................................ 24,061 31,659 61,280
Depreciation and amortization............................. 2,225 2,960 7,685
Corporate general and administrative expenses............. 2,535 2,872 3,249
Net time brokerage agreement expenses (income)............ 603 (879) (476)
------- ------- ---------
29,424 36,612 71,738
------- ------- ---------
OPERATING INCOME............................................ 6,469 12,063 22,124

OTHER EXPENSE (INCOME) ITEMS:
Interest expense.......................................... 1,992 5,196 11,388
Interest income........................................... (104) (95) (482)
Other nonoperating expenses............................... 4 28 1,986
Gains on sale of assets and other......................... (228) (119) (197,097)
------- ------- ---------
Total other expenses (income)..................... 1,664 5,010 (184,205)
------- ------- ---------
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EXTRAORDINARY
ITEMS..................................................... 4,805 7,053 206,329
INCOME TAXES................................................ 270 274 489
------- ------- ---------
INCOME BEFORE EXTRAORDINARY ITEMS........................... 4,535 6,779 205,840
EXTRAORDINARY ITEMS:
Debt extinguishment (net of taxes of $20 and $23 in 1995 and
1996, respectively) (Note 5).............................. 334 539
------- ------- ---------
NET INCOME.................................................. $ 4,201 $ 6,240 $ 205,840
======= ======= =========
PRO FORMA DATA (UNAUDITED)
PRO FORMA NET INCOME DATA:
Income before income taxes and extraordinary items........ 4,805 7,053 206,329
Pro forma income taxes (Note 1)........................... 1,826 2,680 78,405
------- ------- ---------
Pro forma income before extraordinary items............... 2,979 4,373 127,924
Extraordinary items, net of pro forma taxes............... 219 348
------- ------- ---------
PRO FORMA NET INCOME........................................ $ 2,760 $ 4,025 $ 127,924
======= ======= =========
PRO FORMA EARNINGS PER SHARE (Note 1):
Basic:
Pro forma earnings before extraordinary items.......... $ 25.59 $ 37.57 $1,099.00
Extraordinary items, net of pro forma taxes............ 1.88 2.99
------- ------- ---------
Pro forma earnings per share........................... $ 23.71 $ 34.58 $1,099.00
======= ======= =========
Diluted:
Pro forma earnings before extraordinary items.......... $ 25.59 $ 31.93 $ 934.08
Extraordinary items, net of pro forma taxes............ 1.88 2.54
------- ------- ---------
Pro forma earnings per share........................... $ 23.71 $ 29.39 $ 934.08
======= ======= =========
WEIGHTED AVERAGE SHARES:
Basic..................................................... 116,400 116,400 116,400
Diluted................................................... 116,400 136,952 136,952
</TABLE>

See notes to consolidated financial statements.
F-6
<PAGE> 92

ENTERCOM COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
------------------------------
1995 1996 1997
------- ------- --------
<S> <C> <C> <C>
RETAINED EARNINGS, BEGINNING OF YEAR........................ $ 754 $ 1,155 $ 5,407
NET INCOME.................................................. 4,201 6,240 205,840
RETIREMENT OF TREASURY STOCK................................ (1,044)
DIVIDENDS (Note 9).......................................... (3,800) (1,988) (2,830)
------- ------- --------
RETAINED EARNINGS, END OF YEAR.............................. $ 1,155 $ 5,407 $207,373
======= ======= ========
</TABLE>

See notes to consolidated financial statements
F-7
<PAGE> 93

ENTERCOM COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
---------------------------------
1995 1996 1997
-------- -------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.............................................. $ 4,201 $ 6,240 $ 205,840
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation......................................... 1,163 1,554 2,141
Amortization of:
Covenant not to compete............................ 296 50 25
Radio broadcasting licenses, other intangible and
deferred charges................................ 766 1,919 5,519
Gains on dispositions and exchanges of assets........ (228) (119) (197,097)
Interest accrued..................................... 642 1,785
Changes in assets and liabilities which provided
(used) cash:
Other liabilities.................................. (257)
Accounts receivable................................ (3,863) (3,336) (11,798)
Prepaid expenses................................... (51) (150) (956)
Accounts payable, accrued liabilities and corporate
state income taxes.............................. 1,148 4,048 1,463
Minority interest.................................. 244 (21) 1,910
IRS deposit........................................ (2,237) 1,946 27
-------- -------- ---------
Net cash provided by operating activities....... 1,182 12,773 8,859
-------- -------- ---------
INVESTING ACTIVITIES:
Additions to property and equipment..................... (733) (1,493) (4,373)
Proceeds from sale of property and equipment,
intangibles and other assets......................... 310 560 3,750
Proceeds from exchanges of radio stations............... 72,200
Payments for exchanges of radio stations................ (5,304)
Purchases of radio station assets (Note 3).............. (27,962) (91,519) (74,498)
Deferred charges and other assets....................... (251) (4,050) (644)
Station acquisition deposits............................ (4,826)
-------- -------- ---------
Net cash used in investing activities........... (28,636) (96,502) (13,695)
-------- -------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt................ 68,307 137,500 20,000
Payments of long-term debt.............................. (37,002) (48,055) (14,000)
Dividends paid.......................................... (3,800) (1,988) (2,830)
-------- -------- ---------
Net cash provided by financing activities....... 27,505 87,457 3,170
-------- -------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... 51 3,728 (1,666)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR.................................................... 1,513 1,564 5,292
-------- -------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR.................... $ 1,564 $ 5,292 $ 3,626
======== ======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION --
Cash paid during the year for:
Interest............................................. $ 2,050 $ 3,688 $ 10,203
======== ======== =========
Income taxes......................................... $ 622 $ 148 $ 211
======== ======== =========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES --
In connection with the radio station exchange transactions completed by the Company in
1997, the noncash portion of assets recorded was $127,000.
</TABLE>

See notes to consolidated financial statements.
F-8
<PAGE> 94

ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

1. BASIS OF PRESENTATION AND ORGANIZATION

Operations -- Entercom Communications Corp. (formerly Entertainment
Communications, Inc.) (the "Company") is principally engaged in the management
and operation of radio broadcast stations throughout the United States. The
Company has three or more radio stations in the following markets: Seattle,
Kansas City, Portland, and Sacramento.

Pro Forma Adjustments -- The Company intends to offer shares of its Class A
Common Stock to the public during fiscal year 1998 (the "Offering"). Upon
completion of the Offering of Class A Common Stock, the Company will be subject
to federal and state income taxes from the date of termination of the Company's
S corporation status (the "Termination Date"). The pro forma net income data for
each of the three years in the period ended September 30, 1997 reflects
adjustments for income taxes based upon income before income taxes as if the
Company had been subject to additional federal and state income taxes based upon
a pro forma effective tax rate of 38%.

In addition, the Company will be required to provide a deferred tax
liability for cumulative temporary differences between financial statement and
income tax bases of the Company's assets and liabilities by recording an expense
for such deferred tax liabilities in its consolidated statement of income for
the period following the effective date of the Offering. Such deferred tax
liabilities will be based on the cumulative temporary differences upon the
conversion from an S Corporation to a C Corporation on the Termination Date. The
net difference between the financial statement and income tax bases of the
Company's assets and liabilities resulted in a deferred tax liability of
approximately $74.8 million at September 30, 1997. In addition, prior to the
conversion from an S Corporation to a C Corporation, distributions of
approximately $83.6 million will be made to the Company's existing S Corporation
shareholders.

Pro Forma Earnings Per Share -- Pro forma earnings per share is calculated
in accordance with Statement of Financial Accounting Standards No. 128 and, as
such, is based on the weighted average number of shares of Common Stock
outstanding and dilutive common equivalent shares from convertible debt (using
the if-converted method).

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-----------------------------
1995 1996 1997
------- ------- -------
<S> <C> <C> <C>
Weighted average shares -- basic............ 116,400 116,400 116,400
Common Stock equivalent -- convertible
debt...................................... 20,552 20,552
Weighted average shares -- diluted.......... 116,400 136,952 136,952
</TABLE>

2. SIGNIFICANT ACCOUNTING POLICIES

Income Tax Status -- The shareholders of the Company elected to change the
tax status of the Company from a C Corporation to an S Corporation beginning
October 1, 1987 for federal and certain state income tax purposes. For certain
other states for which an S Corporation election has not been made, the Company
incurs state income taxes.

The shareholders' election to be taxed as an S Corporation relieves the
Company of the obligation to pay federal and certain state corporate income
taxes but results in shareholders being directly liable for payment of such
income taxes on their pro rata share of the Company's taxable income, including
taxable income which has been deferred as a result of the Company's use of
different accounting methods for financial reporting and income tax reporting.

Principles of Consolidation -- The Company is the general partner of, and
owns a 99% interest in, a limited partnership, ECI License Company, LP (see
Notes 5 and 7). The accompanying consolidated

F-9
<PAGE> 95
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

financial statements include the accounts of the Company and the limited
partnership. All intercompany transactions and balances have been eliminated in
consolidation.

Management's Use of Estimates -- The preparation of consolidated financial
statements, in accordance with generally accepted accounting principles,
requires the Company to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and the disclosure of contingent assets and
liabilities, as of the date of the consolidated financial statements, and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Depreciation -- Depreciation is determined on a straight-line basis. The
estimated useful lives for depreciation are as follows:

<TABLE>
<S> <C>
Land improvements.................................... 10 years
Building............................................. 20 years
Equipment............................................ 5-20 years
Furniture and fixtures............................... 5-10 years
Leasehold improvements............................... Various
</TABLE>

Revenue Recognition -- Revenue from the sale of commercial broadcast time
to advertisers is recognized when the commercials are broadcast. Promotional
fees are recognized as services are rendered.

Concentration of Credit Risk -- The Company's revenues and accounts
receivable relate primarily to the sale of advertising within the radio
stations' broadcast areas. Credit is extended based on an evaluation of the
customers' financial condition, and generally, collateral is not required.
Credit losses are provided for in the financial statements and consistently have
been within management's expectations.

Advertising Costs -- Advertising costs are expensed as incurred and
approximated $3.9 million, $4.3 million and $6.0 million in 1995, 1996 and 1997,
respectively.

Radio Broadcasting Licenses and Other Intangibles -- Broadcasting licenses
and other intangibles are being amortized on a straight-line basis over 40
years.

Long-Lived Assets -- The Company periodically evaluates the recoverability
of its long-lived assets which include broadcasting licenses, other intangibles,
deferred charges and other assets using objective methodologies. Such
methodologies may include evaluations based on the cash flows generated by the
underlying assets or other determinants of fair value.

Deferred Charges -- The Company defers and amortizes debt issuance costs
and leasehold premiums over the term of the debt and life of the lease,
respectively. Costs of program format changes are expensed when incurred.
Covenants not to compete are being amortized over the lives of the respective
contracts.

Time Brokerage Agreements for Acquisitions -- With respect to its
acquisitions as described in Note 3, the Company programmed certain radio
stations under Time Brokerage Agreements ("TBAs") for the periods prior to
consummation of the purchase transactions. Under these TBAs, revenues and
expenses were approximately $3.7 million and $3.3 million, $2.4 million and $1.7
million, and $12.3 million and $11.2 million for the years ended September 30,
1995, 1996 and 1997, respectively. These amounts are included in net
broadcasting revenues and operating costs and expenses.

Time Brokerage Agreements for Dispositions and Disposition Expenses -- The
Company has received TBA fees for the right granted to other broadcasters to
program certain stations that the Company had agreed to exchange (Pittsburgh in
1996, and Houston and Pittsburgh in 1997) for the periods prior to consummation
of the exchange transactions. The Company also incurred certain expenses related
to the dispositions of radio stations KMTT-AM in Tacoma, Washington, in 1996,
and KITS-FM in San Francisco and KEGE-AM in Minneapolis, in 1997. Under these
TBAs and the related disposition expenses, revenues and expenses, during

F-10
<PAGE> 96
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the relevant periods, were approximately $1.2 million and $.6 million, and $2.7
million and $1.3 million for the years ended September 30, 1996 and 1997,
respectively, with the net amount of $.6 million and $1.4 million in 1996 and
1997, respectively, accounted for as income from other broadcasting companies.

Interests in Transmitting Facilities -- The Company shares transmitting
facilities with other broadcasters and records its proportionate interests in
such facilities. The Company's share of the assets, liabilities and net income
(loss) of these facilities is included in the Company's consolidated financial
statements and was approximately $465,000, $11,000 and $(58,000), respectively,
for 1995, $388,000, $11,000 and $(62,000), respectively, for 1996 and $90,000,
$0 and $(20,000), respectively, for 1997.

Barter Transactions -- The Company provides advertising broadcast time in
exchange for certain products, supplies and services. The terms of the exchanges
generally permit the Company to preempt such broadcast time in favor of
advertisers who purchase time on regular terms. The Company includes the value
of such exchanges in both broadcasting revenues and operating costs and
expenses. Barter valuation is based upon management's estimate of the fair value
of the products, supplies and services received. For the years ended September
30, 1995, 1996 and 1997, barter transactions amounted to approximately $684,000,
$632,000 and $822,000, respectively. The Company accrues as a liability the
amount by which the value of broadcasting time to be provided exceeds the value
of products, supplies and services to be received. At September 30, 1996 and
1997, such amounts were approximately $120,000 and $5,000, respectively.

Cash and Cash Equivalents -- Cash and cash equivalents consist primarily of
amounts held on deposit with financial institutions in immediately available
money market accounts.

Derivative Financial Instruments -- The Company uses derivative financial
instruments, including interest rate exchange agreements ("Swaps") and interest
rate cap agreements ("Caps"), to manage its exposure to fluctuations in interest
rates. Swaps and Caps are matched with debt and periodic cash payments and are
accrued on a net basis as an adjustment to interest expense. Any fees associated
with these instruments are amortized over their term.

Recently Adopted Accounting Pronouncement -- In February 1997, the
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standard ("SFAS") No. 128, "Earnings per Share", which was effective
for the Company beginning October 1, 1997. SFAS No. 128 establishes standards
for computing and presenting earnings per share ("EPS") and applies to entities
with publicly held common stock or potential common stock. It replaces the
presentation of primary EPS with a presentation of basic EPS and requires the
dual presentation of basic and diluted EPS on the face of the income statement.
This statement requires restatement of all prior period EPS data presented. The
Company had a simple capital structure in 1995. Diluted EPS for 1996 and 1997
includes the effect of convertible debt.

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 disclosure 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.

Reclassifications -- Certain reclassifications have been made to the
consolidated financial statements for the years ended September 30, 1996 and
1995 in order to conform to the current year presentation.

3. ACQUISITIONS AND OTHER SIGNIFICANT TRANSACTIONS

During each of the three years in the period ended September 30, 1997, the
Company consummated acquisitions of radio stations. All of these acquisitions
were accounted for under the purchase method of accounting, and the purchase
prices, including transaction costs, were allocated to the assets based upon
their respective fair values as determined by independent appraisal as of the
purchase dates.

F-11
<PAGE> 97
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1995 Acquisitions

On April 17, 1995, the Company acquired the assets of WLLD-FM (formerly
WISP-FM), a radio station serving the Sarasota/Bradenton, Florida radio market.
The assets were acquired from Alpalm Broadcasting Corporation for a price of
$2.9 million. In addition, the Company paid $100,000 for a two-year covenant not
to compete by the Seller. The Company incurred approximately $118,000 in
transaction costs related to the acquisition. Broadcasting licenses and other
intangibles totaling approximately $2.4 million were recorded in connection with
this transaction.

On September 1, 1995, the Company acquired the assets of three radio
stations, KGON-FM, KFXX-AM and KNRK-FM, serving the Portland, Oregon market. The
assets were acquired from Apogee Communications, Inc. and related Apogee
entities for a price of $24.5 million. The Company incurred approximately
$343,000 in transaction costs related to the acquisitions. Broadcasting licenses
and other intangibles totaling approximately $21.6 million were recorded in
connection with this transaction.

1996 Acquisitions

The Company completed a three party Asset Purchase Agreement on August 1,
1996, whereby the Company acquired WAXQ-FM, New York City, from GAF Corporation
for a cash purchase price of $90 million and simultaneously exchanged WAXQ-FM
and $1.2 million in cash to Viacom, Inc. for all of Viacom's broadcast assets of
three radio stations, KBSG-FM, KBSG-AM and KNDD-FM, and two tower facilities,
all serving the Seattle, Washington radio market. The Company incurred
approximately $319,000 in transaction costs related to the acquisition.
Broadcasting licenses and other intangibles totaling approximately $87.5 million
were recorded in connection with this transaction.

1997 Acquisitions

On March 27, 1997, the Company acquired the assets of KMBZ-AM, KYYS-FM
(formerly KLTH-FM), KCMO-AM and KCMO-FM, serving the Kansas City,
Kansas/Missouri radio market, from Bonneville International Corporation and
Bonneville Holding Corporation (collectively referred to hereafter as
"Bonneville"). The Company also acquired the assets of KIRO-AM, KIRO-FM and
KNWX-AM, serving the Seattle, Washington radio market, from KIRO, Inc., a wholly
owned subsidiary of Bonneville International Corporation ("KIRO"). As
consideration for the assets received, the Company transferred the assets of
KLDE-FM serving the Houston, Texas radio market, plus $5 million, to Bonneville
and KIRO resulting in a gain of $88.7 million. The Company incurred transaction
costs of $246,000 related to these acquisitions. Broadcasting licenses and other
intangibles in the amount of $85.8 million were recorded in connection with
these transactions.

On April 28, 1997, the Company acquired the assets of KEDO-AM and KLYK-FM,
serving the Longview/Kelso, Washington radio market, for $1.8 million from
Longview Broadcasting Company and Premier Development Company. The Company
incurred transaction costs of $38,000 related to these acquisitions.
Broadcasting licenses and other intangibles in the amount of $733,000 were
recorded in connection with this transaction.

On May 30, 1997, the Company completed an Asset Exchange Agreement with
Nationwide Communications, Inc. ("Nationwide") and Secret Communications, LP
("Secret"). In this three party agreement, in exchange for the transfer to
Secret of the Company's two FM radio stations in Pittsburgh, WDSY and WNRQ, the
Company received Nationwide's FM radio station in Seattle, KISW, plus $32.5
million, resulting in a gain of $43.9 million. Broadcasting licenses and other
intangibles in the amount of $12.1 million were recorded in connection with this
transaction.

On May 30, 1997, the Company acquired the assets of KLOU-FM, serving the
St. Louis, Missouri radio market, from Group W Broadcasting, Inc., plus $39.7
million, in exchange for the assets of KITS-FM, resulting in a gain of $61.2
million. The Company incurred transaction costs of $58,000 related to this
F-12
<PAGE> 98
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

acquisition. Broadcasting licenses and other intangibles in the amount of $21.6
million were recorded in connection with this transaction.

On June 3, 1997, the Company acquired the assets of KDND-FM (formerly
KXOA-FM), serving the Sacramento, California radio market, from American Radio
Systems Corporation for $27.2 million. The Company incurred transaction costs of
$192,000 related to this acquisition. Broadcasting licenses and other
intangibles in the amount of $26.9 million were recorded in connection with this
transaction.

On June 4, 1997, the Company acquired the assets of KRXQ-FM and KSEG-FM,
serving the Sacramento, California radio market, from Citicasters Co. for $45.0
million. The Company incurred transaction costs of $268,000 related to these
acquisitions. Broadcasting licenses and other intangibles in the amount of $40.7
million were recorded in connection with this transaction.

Other Transactions

On March 6, 1996, the Company sold all of the assets of KMTT-AM, Tacoma,
Washington, including assignment of the FCC license, to Southwave Wireless
Communications, Inc. LLC for a cash purchase price of $500,000, resulting in a
gain of approximately $140,000.

On December 6, 1996, the Company sold certain assets of KEGE-AM,
Minneapolis, Minnesota, including assignment of the FCC license, to Salem Media
of Minnesota, Inc. for $3.0 million, resulting in a gain of approximately $2.6
million.

On February 6, 1997, the Company sold all of the assets of WDSY-AM,
Pittsburgh, Pennsylvania, including assignment of the FCC license, to Mortenson
Broadcasting Company for a cash purchase price of $750,000, resulting in a gain
of approximately $700,000.

On May 12, 1997, the Company entered into an agreement with McKenzie River
Broadcasting Company ("McKenzie") whereby McKenzie would seek FCC approval of an
application to reclassify the broadcast license of its KMGE-FM station, serving
the Eugene, Oregon radio market, from a Class C to a Class C-1. Such a
reclassification of that station would allow the Company to seek approval from
the FCC for construction and operation of an enhanced transmission facility for
its KNRK-FM station serving the Portland, Oregon radio market. In consideration
for its agreement, McKenzie will be paid approximately $1.1 million by the
Company, subject to escalation of 10% per annum on the unpaid balance beginning
January 1, 1997 and continuing until all amounts are paid. As of September 30,
1997, $140,000 had been paid under this agreement.

Effective July 1, 1997, the Company entered into a Joint Sales Agreement
("JSA") with Classic Radio, Inc. ("Classic"), whereby the Company will be the
exclusive sales agent for the Classic-owned KING-FM radio station, located in
Seattle, Washington. This agreement is a continuation of a relationship under a
prior JSA which expired on June 30, 1997. Under the new JSA, which continues
through June 30, 2002, the Company will be entitled to all revenues from the
sale of advertising time broadcast on KING-FM, but will be required to pay a
monthly fee to Classic based upon calculations as defined in the agreement.
Under the terms of the JSA, the Company will be responsible for all costs
incurred in selling the advertising time. Classic will be responsible for all
costs incurred in operating the station.

The following unaudited pro forma summary presents the consolidated results
of operations as if the transactions which occurred within either the 1996 or
1997 fiscal years had all occurred at the beginning of the 1996 fiscal year,
after giving effect to certain adjustments, including depreciation and
amortization of assets and interest expense on any debt incurred to fund the
acquisitions which would have been incurred had such acquisitions and other
transactions occurred at the beginning of the 1996 fiscal year. These unaudited
pro forma results have been prepared for comparative purposes only and do not
purport to be indicative of what

F-13
<PAGE> 99
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

would have occurred had the acquisitions and other transactions been made as of
that date or results which may occur in the future.

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
--------------------------
1996 1997
---------- ----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Net revenues................................................ $ 92,100 $105,700
======== ========
Income before extraordinary items and gains on sales of
assets.................................................... $ 9,400 $ 4,600
======== ========
Net income.................................................. $206,100 $ 4,600
======== ========
</TABLE>

4. DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets (which are amortized principally on the
straight-line method) consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------
1996 1997
------ ------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Covenant not to compete, less accumulated amortization of
$75,000 in 1996........................................... $ 25
Debt issuance costs, less accumulated amortization of
$123,000 and $715,000 in 1996 and 1997, respectively...... 3,667 $3,629
Leasehold premium, less accumulated amortization of $90,000
and $125,000 in 1996 and 1997, respectively............... 700 862
Other deferred charges, less accumulated amortization of
$45,000 and $77,000 in 1996 and 1997, respectively........ 123 119
------ ------
$4,515 $4,610
====== ======
</TABLE>

5. DEBT

(A) Long-term debt consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------
1996 1997
--------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Note payable, due June 30, 2003 ((A)(2) in 1996)(A)(3)(a) in
1997...................................................... $ 86,000 $ 92,000
Note payable, due June 30, 2003 ((A)(2) in 1996)(A)(3)(b) in
1997...................................................... 25,000 25,000
Note payable, subordinated, due May 21, 2003(A)(1).......... 25,000 25,000
-------- --------
Total............................................. 136,000 142,000
Amounts due within one year.................................
-------- --------
$136,000 $142,000
======== ========
</TABLE>

(1) On May 21, 1996, the Company entered into a convertible subordinated note
purchase agreement with an investment partnership in the principal amount of
$25 million. Interest on the note accrues at the rate of 7% per annum. Such
interest compounds annually and is deferred and payable with principal in
one installment on May 21, 2003. The payment due date can be deferred by one
year under certain circumstances. The obligations of the Company under the
note are subordinate to the obligations of the notes payable to the banks as
noted in (A)(3)(a) and (A)(3)(b) below.

F-14
<PAGE> 100
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The convertible subordinated note is convertible by the holder under certain
events and circumstances such as a public offering of the Company's capital
stock, a change of control of the Company, a sale of substantially all of
the Company's assets, a merger or consolidation into a publicly traded
company or the company's ceasing to be an S Corporation. In the event of
conversion, the holders would receive shares of the common stock of the
Company representing an ownership interest of approximately 15% of the
Company prior to such event in lieu of all outstanding principal and
interest. If the note is not converted by May 21, 2003, then the holder of
the note has the option to put the convertible subordinated note to the
Company and receive, at the option of the Company, either cash or a new note
(Put Note). The amount of cash or principal of the Put Note will equal the
fair market value of the shares of common stock into which the convertible
subordinated notes were convertible. The Put Note would accrue interest at
prime plus 2% and would be due May 21, 2004.

In the event that the note is not converted or put to the Company by May 21,
2003, then the Company can redeem the convertible subordinated note by
either paying cash or issuing a new note (Redemption Note). The amount of
cash or principal of the Redemption Note will equal the original principal
amount of the convertible subordinated note ($25 million) plus interest
accrued through the Date of Redemption at an interest rate of 7% per annum .
The Redemption Note would also accrue interest at 7% per annum and would be
due on May 21, 2004.

(2) On August 1, 1996, the Company entered into a $100 million reducing
revolving credit agreement and a $25 million amortizing term loan with a
group of banks. At September 30, 1996, outstanding balances against these
credit facilities were $86 million and $25 million, respectively. The
Company used proceeds from borrowings against these credit facilities to
retire existing debt, finance the acquisition from Viacom of three stations
serving the Seattle market (KBSG-AM/FM, KNDD-FM, see Note 3), and provide
for capital expenditures and working capital. These debt facilities were
replaced with the debt facilities described in paragraph (A)(3).

(3) On March 25, 1997, the Company expanded its existing credit facility with a
group of banks to $165 million. The credit facility consists of a $140
million reducing revolving credit and a $25 million amortizing term loan. At
September 30, 1997, outstanding balances against these credit facilities
were $92 million and $25 million, respectively. The Company expects to use
borrowings against these credit facilities to finance future acquisitions,
and provide for capital expenditures and working capital. Under the loan
agreement, the Company has provided the banks with a pledge of its 99%
interest in ECI License Company LP, a pledge of all of the outstanding stock
of the Company, and a pledge of all the Company's other assets. The
agreement includes certain restrictive covenants, including a limitation on
dividends.

(a) The reducing revolving credit agreement, which matures on June 30,
2003, reduces on a quarterly basis beginning September 30, 1997 in
amounts which vary from $3.5 million to $12.4 million. The Company
has the option under this agreement to elect to pay interest at a
rate equal to LIBOR (in increments with durations of 1,2,3 or 6
months) plus 1.25% or the prime rate. Under certain events, the
Company's borrowing costs can increase to a maximum of LIBOR plus
3.25% or prime plus 2%. The interest payable on LIBOR rates is
payable at the end of the selected duration but not less frequently
than every three months and on prime rates is payable at the end of
each calendar quarter. The weighted average interest rate under this
agreement at September 30, 1997 was 7.46%. The Company is required
to maintain a minimum of $1 million in cash, cash equivalents, or
cash available under this facility.

(b) The $25 million amortizing term loan, which matures on June 30,
2003, reduces in ten equal quarterly payments of $625,000, beginning
December 31, 2000 with a final payment of $18.75 million due June
30, 2003. The Company has the option to pay interest at a rate of
LIBOR plus 3.25% or prime plus 2%. The interest payment is due in
the same manner as
F-15
<PAGE> 101
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

described in (A)(3)(a) above. The interest rate under this agreement
at September 30, 1997 was 8.91%.

(B) The Company has entered into several interest rate transactions as hedges
against the variable rate debt discussed in 5(A) above:

(1) In June 1987, the Company entered into an interest rate agreement or
"swap" for a notional amount of $6 million which concluded in June
1996. The Company paid a fixed rate of 9.55% on the notional amount to
a bank and the bank paid to the Company a variable rate equal to
three-month LIBOR as determined from time to time on a quarterly basis
through June 30, 1996. The amounts the Company paid under this
agreement were $214,000 and $175,000 for the years ended September 30,
1995 and 1996, respectively, and have been accounted for as interest
expense.

(2) In May 1995, the Company entered into an interest rate swap agreement
for a notional amount of $20 million through May 16, 2000. Under this
agreement, the Company pays a fixed rate of 6.77% on the notional
amount to a bank and the bank pays to the Company a variable rate equal
to three-month LIBOR as determined from time to time on a quarterly
basis through May 16, 2000. The variable rate was 5.9%, 5.5%, and 5.7%
at September 30, 1995, 1996, and 1997, respectively. The amount the
Company paid under this agreement was $54,000, $240,000 and $235,000
for the years ended September 30, 1995, 1996 and 1997, respectively.
These amounts have been accounted for as interest expense.

(3) In July 1996, the Company entered into a convertible rate cap
transaction in the amount of $25 million to hedge a portion of its
variable rate debt. Pursuant to this transaction, which expires on July
30, 2001, the Company's base LIBOR rate cannot exceed 8.24% at the time
of each quarterly reset date. Upon any quarterly reset date prior to
July 29, 1999, the bank may make an election to enter into a swap for a
notional amount of $25 million in which the Company pays a fixed rate
of 6% on the notional amount to a bank and the bank pays to the Company
a variable rate equal to three-month LIBOR through July 30, 2001. Such
election would terminate the rate cap transaction. No amounts were paid
relating to this transaction during the years ended September 30, 1996
and 1997.

(4) In August 1996, the Company simultaneously entered into a rate cap
transaction and a swap option transaction in the amount of $25 million
to hedge a portion of its variable rate debt. Under the rate cap
transaction, which expires August 8, 2000, the Company's base LIBOR
rate cannot exceed 7.5% at the time of any quarterly reset date. Under
the swap option transaction, the bank may make an election prior to
August 8, 2000 to enter into a swap in which the Company pays a fixed
rate of 6.05% on the notional amount to a bank and the bank pays to the
Company a variable rate equal to three-month LIBOR. If the bank
exercises its election, then the swap will terminate on August 8, 2002.
Any election by the bank will not terminate the rate cap transaction
described above. No amounts were paid related to these transactions
during the years ended September 30, 1996 and 1997.

F-16
<PAGE> 102
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<S> <C>
Fiscal years ending September 30:
1998..........................................
1999.......................................... $ 13,400
2000.......................................... 20,300
2001.......................................... 23,500
2002.......................................... 27,700
Thereafter.................................... 57,100
--------
Total...................................... $142,000
========
</TABLE>

The extraordinary charges for 1995 and 1996 are the result of the
write-off's ($334,000 and $539,000, respectively, net of tax benefits) of
unamortized finance charges resulting from the early extinguishment of long-term
debt.

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments, which
consist of notes receivable from a related party, debt and interest rate hedges,
have been determined by the Company using available market information and
appropriate valuation methodologies. At September 30, 1996 and 1997, the fair
value of notes receivable from a related party and debt approximate their
carrying value. At September 30, 1996 and 1997, respectively, unrealized gains
(losses) on interest rate hedges described under Note 5(B) (2), (3) and (4) are
$(208,000), $(117,000), and $15,000 for 1996, and $(351,000), $(212,000), and
$(103,000), for 1997.

7. MINORITY INTEREST

On December 2, 1992, in connection with a financing transaction, the
Company created a wholly owned subsidiary, ECI Investors Corporation
("Investors"), with a capital of $50,000. Upon creation, the Company immediately
distributed the stock of Investors to the Company's shareholders. On December
23, 1992, the Company formed a limited partnership, ECI License Company, LP
("Partnership") with Investors. The Company is the sole general partner of the
Partnership. The Company contributed its Federal Communications Commission (FCC)
licenses and authorizations to the Partnership in exchange for a 99% interest in
the Partnership, and Investors acquired its 1% interest in the Partnership for
cash.

On all subsequent occasions when the Company acquired FCC licenses and
authorizations it has contributed them to the Partnership for its 99% interest
and Investors has contributed its matching 1% interest. On each such occasion,
as well as on the dispositions of FCC licenses and authorizations, excluding
those FCC licenses and authorizations used to acquire new FCC licenses and
authorizations which qualify under IRC Section 1031, commonly known as "SWAPS,"
the book value of the Partnership has been adjusted to reflect such transaction.
The book value of the Partnership at September 30, 1996, after reflecting all
acquisitions and dispositions described in Note 3 is approximately $113.7
million (net of accumulated amortization of approximately $1.6 million) and at
September 30, 1997, the book value is approximately $114.2 million (net of
accumulated amortization of approximately $4.5 million). The Company's 99%
interest in the Partnership is pledged as collateral for the debt described in
Note 5A(3). The Company pays a licensing fee to the Partnership in exchange for
the right to utilize the Partnership's licenses and authorizations in connection
with the operation of the stations. As discussed in Note 2, the financial impact
of such transactions is substantially eliminated in consolidation. The minority
interest at September 30, 1996 and 1997 included in the accompanying
consolidated balance sheets represents the 1% interest of Investors in the
Partnership, net of two notes receivable by the Partnership from Investors.
These notes were in the amounts of approximately $884,000 and $34,000 at
September 30, 1996 and $875,000 and $7,000 at September 30, 1997.

F-17
<PAGE> 103
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

These notes bear interest at 7.21% per annum and 6.65% per annum, and were
issued to the Partnership by Investors for Investors' share of the FCC licenses
and authorizations acquired by the Company during 1996. These notes are due in
ten equal annual installments, plus accrued interest.

8. COMMITMENTS AND CONTINGENCIES

Acquisitions

The Company entered into a preliminary agreement on February 6, 1996 for
the Company to acquire the assets of radio station KWOD-FM, Sacramento,
California, from Royce International Broadcasting Corporation subject to
approval by the FCC for a purchase price of $25 million. Notwithstanding efforts
by the Company to pursue this transaction, the seller has been nonresponsive.
Accordingly, the Company cannot determine if and when the transaction might
occur.

On September 18, 1997, the Company entered into an Asset Purchase Agreement
with Capital Broadcasting, Inc. whereby the Company will acquire the assets and
rental leases used in connection with the operation of a tower facility serving
the Kansas City, Kansas/Missouri radio market for a purchase price of $2.1
million. The Company anticipates closing on this transaction in the fourth
quarter of fiscal year 1998.

Other

The Company's employment agreement with its president renews automatically
each calendar year unless terminated by either party in accordance with the
contract. Under the terms of the agreement, compensation is calculated annually
by utilizing the gross national product implicit price deflator issued by the
Bureau of Economic Analysis to determine the equivalent of 1993 base
compensation of $500,000. Total compensation for the years ended September 30,
1995, 1996 and 1997 was approximately $519,000, $540,000 and $554,000,
respectively.

Rental expense is incurred principally for office and broadcasting
facilities. Rental expense during the years ended September 30, 1995, 1996 and
1997 was approximately $822,000, $1,208,000 and $2,190,000, respectively. The
Company also has various contracts for sports programming and on-air
personalities with terms ranging from one to five years.

The aggregate minimum annual commitments as of September 30, 1997 for
operating leases, sports programming and on-air personalities are as follows:

<TABLE>
<CAPTION>
OPERATING SPORTS ON-AIR
LEASES PROGRAMMING PERSONALITIES
--------- ----------- -------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Fiscal years ending September 30:
1998..................................... $ 2,100 $ 9,305 $3,230
1999..................................... 2,187 10,080 1,756
2000..................................... 1,580 10,960 565
2001..................................... 1,367 6,703 82
2002..................................... 1,049 6,718
Thereafter............................... 6,501
------- ------- ------
$14,784 $43,766 $5,633
======= ======= ======
</TABLE>

The Company is subject to various outstanding claims which arose in the
ordinary course of business and to other legal proceedings. In the opinion of
management, any liability of the Company which may arise out of or with respect
to these matters will not materially affect the financial position, results of
operations or cash flows of the Company.

F-18
<PAGE> 104
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. SHAREHOLDERS' EQUITY

During 1997, the Company retired treasury stock consisting of 2,610 shares
of nonvoting common stock and 7,830 shares of voting common stock.

For the fiscal years ended September 30, 1995, 1996, and 1997 the Company
paid total dividends of $3,800,000, $1,988,000, and $2,830,000, respectively.
These amounts include special dividends paid to the Company's shareholders to
compensate them for federal and state tax obligations attributable to
pass-through taxable income generated by the Company.

10. EMPLOYEE SAVINGS PLAN

The Company sponsors a 401(k) savings plan which includes a provision under
which the Company contributes 50% of the amount of any eligible employee's
contribution to the plan up to a maximum employer contribution of 3% of an
employee's compensation. The maximum eligible employee contribution under the
plan was $9,240, $9,500, and $9,500 for the plan years ended December 31, 1995,
1996, and 1997. The Company may at its discretion suspend future matching
contributions. The Company contributed approximately $193,000, $232,000 and
$485,000 under the 401(k) plan for the years ended September 30, 1995, 1996 and
1997, respectively.

11. SUBSEQUENT EVENTS

a. On October 7, 1997, the Company, in a transaction with Kanza Inc.,
exchanged the broadcasting frequency and the transmitter related assets of
KCMO-AM, Kansas City, Missouri for the broadcasting frequency and transmitter
related assets of WHB-AM, Kansas City, Missouri. The Company incurred
transaction costs of $233,000 related to this acquisition. This transaction was
accounted for as a nonmonetary exchange and as such, no gain or loss was
recognized in the transaction.

b. On November 26, 1997, the Company acquired the assets of KSSJ-FM
(formerly KBYA-FM), serving the Sacramento, California radio market, from
Susquehanna Radio Corp., KTHX License Investment Co. and KTHX Radio Inc. for
$15.9 million. The Company incurred transaction costs of $87,000 related to this
acquisition. Broadcasting licenses and other intangibles in the amount of $15.8
million were recorded in connection with this transaction. The transaction has
been accounted for as a purchase.

c. During November 1997, the Company entered into a letter of intent with
American Radio Systems, Inc. and American Radio Systems License Corp.,
(collectively referred to as "ARS") to exchange certain assets used in the
operation of radio stations serving the Sacramento radio market. ARS will
provide KRAK-FM's license and transmission facility to the Company in exchange
for KRXQ's license and transmission facility and $4.5 million. Each of those
stations will retain its own call letters, programming format and studio and
office property and equipment, and the parties will provide each other
reciprocal covenants against programming competition on the respective
frequencies for a period of two years after closing. As part of that
transaction, ARS will also transfer the intellectual property comprising the
programming format of its KSSJ-FM (which station it is transferring to another
party in a separate transaction) for use by the Company on its recently acquired
KBYA-FM in that market. In a related transaction the Company will sell the
KRXQ-FM transmitter site, including broadcast tower facilities, to ARS for
$750,000. Closing is expected during September 1998.

d. On January 1, 1998, the Company acquired the assets of KCTC-AM, serving
the Sacramento, California radio market, from ARS for $4.0 million. The Company
incurred transaction costs of $13,000 related to this acquisition. Broadcasting
licenses and other intangibles in the amount of $2.7 million were recorded in
connection with this transaction. The transaction has been accounted for as a
purchase.

F-19
<PAGE> 105
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

e. On January 1, 1998, the Company acquired the assets of KUDL-FM and
WDAF-AM, serving the Kansas City, Kansas/Missouri radio market from ARS. As
consideration for the assets received, which included the receipt of $7.1
million in cash from ARS, the Company transferred the assets of KLOU-FM, serving
the St. Louis radio market, to ARS resulting in a gain of $300,000. The Company
incurred transaction costs of $294,000 related to this acquisition. Broadcasting
licenses and other intangibles in the amount of $12.8 million were recorded in
connection with this transaction. The transaction has been accounted for as a
purchase.

f. The Company's term and revolving credit facilities were refinanced on
February 13, 1998, under a new bank credit agreement (the "New Credit
Agreement") with Key Corporate Capital Inc., as administrative agent, and other
institutions. The New Credit Agreement provides for a $300 million Senior
Secured Revolving Credit Facility (the "New Bank Facility"). In connection with
the refinancing, the Company incurred an extraordinary charge to write-off
deferred finance costs of approximately $1.5 million (net of taxes of $0.9
million on a pro forma basis).

g. On May 7, 1998, the Company acquired the assets of WSKY-FM (formerly
WRRX-FM), serving the Gainesville/Ocala, Florida radio market, from Gator
Broadcasting Co. for $2.0 million. The Company incurred transaction costs of
$6,000 related to this acquisition. Broadcasting licenses and other intangibles
in the amount of $1.4 million were recorded in connection with this transaction.
The transaction has been accounted for as a purchase.

h. On May 7, 1998, the Company sold certain rights in a license for the
Vancouver, Washington radio market to Jacor Communications and Smith
Broadcasting, Inc. for $10 million. The Company acquired an interest in these
rights at a cost of $1.3 million through an agreement with Q Prime Inc.,
Clifford Burnstein and Peter D. Mensch. The sale resulted in a gain of $8.5
million.

i. On May 15, 1998, the Company acquired the assets of KBAM-AM and KRQT-FM,
serving the Longview/Kelso, Washington radio market, from Armak Broadcasters
Inc. for $1.0 million. The Company incurred transaction costs of $75,000 related
to this acquisition. Broadcasting licenses and other intangibles in the amount
of $394,000 were recorded in connection with this transaction. The transaction
has been accounted for as a purchase.

j. On June 19, 1998, the Company acquired from Sinclair Broadcast Group the
assets of KKSN-AM, KKSN-FM, and KKRH-FM, all serving the Portland, Oregon radio
market and WBEE-FM, WBBF-FM (formerly WKLX-FM), WQRV-FM and WEZO-AM (formerly
WBBF-AM) all serving the Rochester, New York radio market. The purchase price
for the stations was $126.5 million. The Company began programming and sales
operations at these stations on March 1, 1998 under a time brokerage agreement
("TBA"). The Company incurred transaction costs of $0.3 million related to this
acquisition. Broadcast license and other intangibles in the amount of $121.9
million were recorded in connection with this transaction. The transaction has
been accounted for as a purchase.

k. On June 24, 1998, the Board of Directors and the shareholders of the
Company approved the Company's Amended and Restated Articles of Incorporation to
provide for, among other things, the aggregate number of shares which the
Company has authority to issue has been increased to 350,000,000, par value $.01
per share, consisting of the following (i) 200,000,000 shares of Class A Common
Stock; (ii) 75,000,000 shares of Class B Common Stock; (iii) 50,000,000 share of
Class C Common Stock; and (iv) 25,000,000 shares of Preferred Stock.

l. On June 24, 1998, the Company adopted an Equity Compensation Plan (the
"Compensation Plan"). The Compensation Plan will allow officers (including those
also serving as directors) and other employees, non-employee directors and key
advisors or consultants, selected by a Committee of the Board of Directors, to
receive incentive stock options, nonqualified stock options, restricted stock,
and stock appreciation rights in the Class A Common Stock of the Company.

F-20
<PAGE> 106
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

m. On June 24, 1998, the Company adopted an Employee Stock Purchase Plan
(the "Purchase Plan"). The Purchase Plan will allow the participants to purchase
shares of the Company's Class A Common Stock at a purchase price equal to 85% of
the Market Value of such shares on the Purchase Date.

n. Effective July 2, 1998, the name of the Company was changed from
Entertainment Communications, Inc. to Entercom Communications Corp.

o. On July 13, 1998, the Company entered into a preliminary agreement with
Willamette Broadcasting Co. to acquire KSLM-AM, serving the Salem, Oregon radio
market. The purchase price for the station is $605,000. The Company anticipates
that this transaction will close in the fourth quarter of fiscal year 1998.

p. On August 13, 1998, the Company entered into three agreements with CBS
Radio, Inc. pursuant to which it will (i) purchase WRKO-AM and WEEI-AM in Boston
for $82.0 million in cash (the "First Boston Transaction"), (ii) sell WLLD-FM
and WYUU-FM in Tampa for $75.0 million in cash (the "Tampa Transaction") and
(iii) purchase WAAF-AM and WEGQ-FM in Boston and WWTM-AM in Worchester for $58.0
million (the "Second Boston Transaction"). The Company anticipates that the
First Boston Transaction and the Tampa Transaction will close in the fourth
quarter of fiscal year 1998 and that the Second Boston Transaction will close
within one year.

F-21
<PAGE> 107

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1998
------------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 3,626 $ 5,649
Accounts receivable, net of allowance for doubtful
accounts of $292 and $381, respectively................ 24,796 21,009
Prepaid expenses and deposits............................. 1,691 5,371
Station acquisition deposits.............................. 4,957 1,207
IRS deposit............................................... 490 490
-------- --------
Total current assets.............................. 35,560 33,726
-------- --------
PROPERTY AND EQUIPMENT -- At cost
Land and land easements................................... 4,445 5,758
Land improvements......................................... 139 472
Building.................................................. 2,454 3,196
Equipment................................................. 22,784 26,913
Furniture and fixtures.................................... 5,064 5,904
Leasehold improvements.................................... 1,047 1,798
-------- --------
35,933 44,041
Accumulated depreciation.................................. (8,158) (9,694)
-------- --------
27,775 34,347
Capital improvements in progress.......................... 1,379 3,515
-------- --------
Net property and equipment........................ 29,154 37,862
-------- --------
RADIO BROADCASTING LICENSES AND OTHER INTANGIBLES
Net of accumulated amortization of $6,307 and $9,860,
respectively........................................... 295,419 302,101
DEFERRED CHARGES AND OTHER ASSETS -- Net.................... 4,610 3,227
-------- --------
TOTAL....................................................... $364,743 $376,916
======== ========
</TABLE>

See notes to consolidated financial statements.
F-22
<PAGE> 108

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31, MARCH 31, 1998
1997 1998 PRO FORMA
------------- --------- --------------
(NOTE 1)
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................... $ 7,128 $ 7,484 $ 7,484
Accrued liabilities:
Salaries......................................... 2,422 3,122 3,122
Interest......................................... 109 475 475
Taxes other than income.......................... 69 306 306
Barter........................................... 5 18 18
Corporate state income taxes........................ 323 204 204
Long-term debt -- current........................... 10 10
-------- -------- --------
Total current liabilities................... 10,056 11,619 11,619
LONG-TERM DEBT........................................ 142,000 153,283 166,694
ACCRUED INTEREST...................................... 2,427 3,366 3,366
DEFERRED TAX LIABILITY................................ 74,794
MINORITY INTEREST IN EQUITY OF PARTNERSHIP............ 2,171 2,216 2,216
-------- -------- --------
Total liabilities........................... 156,654 170,484 258,689
-------- -------- --------
SHAREHOLDERS' EQUITY:
Common stock $.05 par value; nonvoting; authorized
180,000 shares; issued 43,650 shares............. 2 2 2
Common stock $.05 par value; voting; authorized
180,000 shares; issued 72,750 shares............. 4 4 4
Capital in excess of par value...................... 710 710 710
Retained earnings................................... 207,373 205,716 117,511
-------- -------- --------
Total shareholders' equity.................. 208,089 206,432 118,227
-------- -------- --------
TOTAL................................................. $364,743 $376,916 $376,916
======== ======== ========
</TABLE>

See notes to consolidated financial statements.
F-23
<PAGE> 109

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
-------------------
1997 1998
------- -------
<S> <C> <C>
NET REVENUES................................................ $36,145 $53,377
OPERATING EXPENSES:
Station operating expenses................................ 22,888 37,231
Depreciation and amortization............................. 2,632 5,845
Corporate general and administrative expenses............. 1,457 1,947
Net time brokerage agreement expenses (income)............ (927) 632
------- -------
26,050 45,655
------- -------
OPERATING INCOME............................................ 10,095 7,722
OTHER INCOME (EXPENSE) ITEMS:
Interest expense.......................................... (5,515) (5,935)
Interest income........................................... 67 171
Other nonoperating expenses............................... (49)
Gains on sale of assets and other......................... 91,981 335
------- -------
Total other income (expenses)..................... 86,533 (5,478)
------- -------
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EXTRAORDINARY
ITEM...................................................... 96,628 2,244
INCOME TAXES................................................ 198 88
------- -------
INCOME BEFORE EXTRAORDINARY ITEM............................ 96,430 2,156
EXTRAORDINARY ITEM
Debt extinguishment (net of taxes of $24) (Note 3)........ (2,376)
------- -------
NET INCOME (LOSS)........................................... $96,430 $ (220)
======= =======
PRO FORMA DATA
PRO FORMA NET INCOME DATA:
Income before income taxes and extraordinary item......... 96,628 2,244
Pro forma income taxes.................................... 36,719 853
------- -------
Pro forma income before extraordinary item................ 59,909 1,391
Extraordinary item, net of pro forma taxes................ (1,488)
------- -------
PRO FORMA NET INCOME (LOSS)................................. $59,909 $ (97)
======= =======
PRO FORMA EARNINGS PER SHARE:
Basic
Pro forma earnings before extraordinary item........... $514.68 $ 11.95
Extraordinary item, net of pro forma taxes............. (12.78)
------- -------
Pro forma earnings (losses) per share.................. $514.68 $ (.83)
======= =======
Diluted
Pro forma earnings before extraordinary item........... $437.45 $ 10.16
Extraordinary item, net of pro forma taxes............. (10.87)
------- -------
Pro forma earnings (losses) per share.................. $437.45 $ (.71)
======= =======
WEIGHTED AVERAGE SHARES:
Basic..................................................... 116,400 116,400
Diluted................................................... 136,952 136,952
</TABLE>

See notes to the consolidated financial statements.
F-24
<PAGE> 110

ENTERCOM COMMUNICATIONS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997 AND 1998
(AMOUNTS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
---------------------
1997 1998
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)......................................... $ 96,430 $ (220)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation........................................... 832 1,628
Amortization of:
Covenant not to compete.............................. 25
Radio broadcasting licenses, other intangible and
deferred charges.................................... 1,775 4,217
Extraordinary items.................................... 2,400
Gains on dispositions and exchanges of assets.......... (91,981) (335)
Interest accrued....................................... 864 939
Changes in assets and liabilities which provided (used)
cash:
Accounts receivable.................................. (2,748) 3,787
Prepaid expenses..................................... (4,568) (169)
Accounts payable, accrued liabilities and corporate
state income taxes.................................. 2,752 1,553
Minority interest.................................... (13) 44
-------- ---------
Net cash provided by operating activities......... 3,368 13,844
-------- ---------
INVESTING ACTIVITIES:
Additions to property and equipment....................... (1,197) (7,431)
Proceeds from sale of property and equipment, intangibles
and other assets....................................... 3,741 74
Proceeds from exchanges of radio stations................. 3,132
Payments for exchanges of radio stations.................. (5,000) (306)
Purchases of radio station assets......................... (15,987)
Deferred charges and other assets......................... (635) (1,398)
Station acquisition deposits.............................. (5,128) 239
-------- ---------
Net cash used in investing activities............. (8,219) (21,677)
-------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt.................. 11,000 144,293
Payments of long-term debt................................ (7,500) (133,000)
Dividends paid............................................ (611) (1,437)
-------- ---------
Net cash provided by financing activities......... 2,889 9,856
-------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........ (1,962) 2,023
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 5,292 3,626
-------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 3,330 $ 5,649
======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION --
Cash paid during the period for:
Interest............................................... $ 5,560 $ 4,503
======== =========
Income taxes........................................... $ 96 $ 193
======== =========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES --
In connection with the radio station exchange transactions completed by the
Company during the six months ended March 31, 1997 and 1998, the noncash
portion of assets recorded was $90,000 and $22,500, respectively.
</TABLE>

See notes to consolidated financial statements.
F-25
<PAGE> 111

ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED MARCH 31, 1997 AND 1998

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements of Entercom Communications
Corp. (previously Entertainment Communications, Inc.) (the "Company") have been
prepared in accordance with generally accepted accounting principles ("GAAP")
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting of only normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the six month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 1998. Certain prior year amounts have been reclassified to conform
with the current year's presentation, which had no effect on net income or
shareholders' equity.

Pro Forma Adjustments -- The Company intends to offer shares of its Common
Stock to the public during fiscal year 1998 (the "Offering"). Upon completion of
the Offering, the Company will be subject to federal and state income taxes from
the date of termination of the Company's S Corporation status (the "Termination
Date"). The pro forma net income data for each of the three years in the period
ended September 30, 1997 reflects adjustments for income taxes based upon income
before income taxes as if the Company had been subject to additional federal and
state income taxes based upon a pro forma effective tax rate of 38%. In
addition, the Company will be required to provide a deferred tax liability for
cumulative temporary differences between financial statement and income tax
basis of the Company's assets and liabilities by recording an expense for such
deferred tax liabilities in its consolidated statement of income for the period
following the effective date of the Offering. Such deferred tax liabilities will
be based on the cumulative temporary differences upon the conversion from an S
Corporation to a C Corporation on the Termination Date. The net difference
between the financial statement and income tax bases of the Company's assets and
liabilities resulted in a deferred tax liability of approximately $74.8 million
at March 31, 1998. In addition, prior to the conversion from an S Corporation to
a C Corporation, distributions of approximately $83.6 million will be made to
the S Corporation shareholders.

Pro Forma Earnings Per Share -- Pro forma earnings per share is calculated
in accordance with Statement of Financial Accounting Standard No. 128 and, as
such, is based on the weighted average number of shares of Common Stock
outstanding and dilutive common equivalents shares from convertible debt (using
the if -- converted method).

<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Weighted average shares -- basic............................ 116,400 116,400
Common Stock equivalent -- convertible debt................. 20,552 20,552
-------- --------
Weighted average shares -- diluted.......................... 136,952 136,952
======== ========
</TABLE>

2. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

Completed Acquisitions

On October 7, 1997, the Company, in a transaction with Kanza Inc.,
exchanged the broadcasting frequency and the transmitter related assets of
KCMO-AM, Kansas City, Missouri for the broadcasting frequency and transmitter
related assets of WHB-AM, Kansas City, Missouri. The Company incurred
transaction costs of $233,000 related to this acquisition. The transaction was
accounted for as a non-monetary exchange.

F-26
<PAGE> 112
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On November 26, 1997, the Company acquired the assets of KSSJ-FM (formerly
KBYA-FM), serving the Sacramento, California radio market, from Susquehanna
Radio Corp., KTHX License Investment Co. and KTHX Radio Inc. for $15.9 million.
The Company incurred transaction costs of $87,000 related to this acquisition.
Broadcasting licenses and other intangibles in the amount of $15.8 million were
recorded in connection with this transaction. This transaction has been
accounted for as a purchase.

On January 1, 1998, the Company acquired the assets of KCTC-AM, serving the
Sacramento, California radio market, from ARS for $4.0 million. The Company
incurred transaction costs of $13,000 related to this acquisition. Broadcasting
licenses and other intangibles in the amount of $2.7 million were recorded in
connection with this transaction. This transaction has been accounted for as a
purchase.

On January 1, 1998, the Company acquired the assets of KUDL-FM and WDAF-AM,
serving the Kansas City, Kansas/Missouri radio market from ARS. As consideration
for the assets received, which included the receipt of $7.1 million in cash from
ARS, the Company transferred the assets of KLOU-FM, serving the St. Louis radio
market, to ARS resulting in a gain of $300,000. The Company incurred transaction
costs of $294,000 related to this acquisition. Broadcasting licenses and other
intangibles in the amount of $12.8 million were recorded in connection with this
transaction. This transaction has been accounted for as a purchase.

Pending Acquisitions

During November 1997, the Company entered into a letter of intent with
American Radio Systems, Inc. and American Radio Systems License Corp.,
(collectively referred to as "ARS") to exchange certain assets used in the
operation of radio stations serving the Sacramento radio market. ARS will
provide KRAK-FM's license and transmission facility to the Company in exchange
for KRXQ's license and transmission facility and $4.5 million. Each of those
stations will retain its own call letters, programming format and studio and
office property and equipment, and the parties will provide each other
reciprocal covenants against programming competition on the respective
frequencies for a period of two years after closing. As part of that
transaction, ARS will also transfer the intellectual property comprising the
programming format of its KSSJ-FM (which station it is transferring to another
party in a separate transaction) for use by the Company on its recently acquired
KBYA-FM in that market. In a related transaction the Company will sell the KRXQ-
FM transmitter site, including broadcast tower facilities, to ARS for $750,000.
Closing is expected during September 1998.

3. DEBT

The Company's term and revolving credit facilities were refinanced on
February 13, 1998, under a new bank credit agreement (the "New Credit
Agreement") with Key Corporate Capital Inc., as administrative agent. The New
Credit Agreement provides for a $300 million Senior Secured Revolving Credit
Facility (the "New Bank Facility"). In connection with the refinancing, the
Company incurred an extraordinary charge to write-off deferred finance costs of
approximately $2.4 million.

The New Bank Facility is secured by (i) a pledge of 100% of the Company's
interest in ECI License LP ("ECI"), (ii) a security interest in substantially
all of the assets of ECI, (iii) a pledge of 100% of the outstanding stock of the
Company; provided, however, that this pledge will be released if the Company
restructures by forming subsidiaries to hold the station assets and licenses (in
such a restructuring, the Company will pledge the stock of all such subsidiaries
which will become Guarantors, and ECI will be dissolved, further, upon such
restructuring and pledge of stock, the pledges under (i) and (ii) above will be
terminated and released), (iv) a security interest in all major tangible and
intangible personal property assets of the Company and any future subsidiaries
as well as a negative pledge on all real property, and (v) an assignment of all
major leases, rights, etc. as appropriate.

F-27
<PAGE> 113
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Scheduled debt maturities for the Company's outstanding long-term debt at
March 31, 1998 for each of the next five fiscal years and thereafter are as
follows, in thousands:

<TABLE>
<S> <C>
1998............................................ $ 10
1999............................................ 10
2000............................................ 10
2001............................................ 10
2002............................................ 10
Thereafter...................................... 156,609
--------
Total................................. $156,659
========
</TABLE>

4. COMMITMENTS AND CONTINGENCIES

Acquisitions

5. SUBSEQUENT EVENTS

a. On May 7, 1998, the Company acquired the assets of WSKY-FM (formerly
WRRX-FM), serving the Gainesville/Ocala, Florida radio market, from Gator
Broadcasting Co. for $2.0 million. The Company incurred transaction costs of
$6,000 related to this acquisition. Broadcasting licenses and other intangibles
in the amount of $1.4 million were recorded in connection with this transaction.
This transaction has been accounted for as a purchase.

b. On May 7, 1998, the Company sold certain rights in a license for the
Vancouver, Washington radio market to Jacor Communications and Smith
Broadcasting, Inc. $10 million. The Company acquired an interest in these rights
at a cost of $1.3 million through an agreement with Q Prime Inc., Clifford
Burnstein and Peter D. Mensch. The sale resulted in a gain of $8.5 million.

c. On May 15, 1998, the Company acquired the assets of KBAM-AM and KRQT-FM,
serving the Longview, Washington radio market, from Armak Broadcasters Inc. for
$1.0 million. The Company incurred transaction costs of $75,000 related to this
acquisition. Broadcasting licenses and other intangibles in the amount of
$394,000 were recorded in connection with this transaction. This transaction has
been accounted for as a purchase.

d. On June 19, 1998, the Company acquired from Sinclair Broadcast Group the
assets of KKSN-AM, KKSN-FM, and KKRH-FM, all serving the Portland, Oregon radio
market, and WBEE-FM, WBBF-FM (formerly WKLX-FM), WQRV-FM and WEZO-AM (formerly
WBBF-AM) all serving the Rochester, New York radio market. The purchase price
for the stations was $126.5 million. The Company began operations at these
stations on March 1, 1998 under a time brokerage agreement ("TBA"). This
transaction has been accounted for as a purchase.

F-28
<PAGE> 114
ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

e. On June 24, 1998, the Board of Directors and the shareholders of the
Company approved the Company's amended and restated Articles of Incorporation to
provide for, among other things, the aggregate number of shares which the
Company has authority to issue has been increased to 350,000,000, par value $.01
per share, consisting of the following (i) 200,000,000 shares of Class A Common
Stock; (ii) 75,000,000 shares of Class B Common Stock; (iii) 50,000,000 shares
of Class C Common Stock; and (iv) 25,000,000 shares of Preferred Stock.

f. On June 24, 1998, the Company adopted an Equity Compensation Plan (the
"Compensation Plan"). The Compensation Plan will allow officers (including those
also serving as directors) and other employees, non-employee directors and key
advisors or consultants, selected by a Committee of the Board of Directors, to
receive incentive stock options, nonqualified stock options, restricted stock,
and stock appreciation rights in the Common Stock of the Company. There are
5,000,000 shares of Common Stock reserved for issuance under the Compensation
Plan.

g. On June 24, 1998, the Company adopted an Employee Stock Purchase Plan
(the "Purchase Plan"). The Purchase Plan will allow the participants to purchase
shares of the Company's Common Stock at a purchase price equal to 85% of the
Market Value of such shares on the Purchase Date. There are 1,000,000 shares of
Common Stock reserved for issuance under the Purchase Plan.

h. On July 2, 1998, the name of the Company was changed from Entertainment
Communications, Inc. to Entercom Communications Corp.

i. On July 13, 1998, the Company entered into a preliminary agreement with
Willamette Broadcasting Co. to acquire KSLM-AM, serving the Salem, Oregon radio
markets. The purchase price for the station is $605,000. The Company anticipates
that this transaction will close in the fourth quarter of fiscal year 1998.

j. On August 13, 1998, the Company entered into three agreements with CBS
Radio, Inc. pursuant to which it will (i) purchase WRKO-AM and WEEI-AM in Boston
for $82.0 million in cash (the "First Boston Transaction"), (ii) sell WLLD-FM
and WYUU-FM in Tampa for $75.0 million in cash (the "Tampa Transaction") and
(iii) purchase WAAF-AM and WEGQ-FM in Boston and WWTM-AM in Worchester for $58.0
million (the "Second Boston Transaction"). The Company anticipates that the
First Boston Transaction and the Tampa Transaction will close in the fourth
quarter of fiscal year 1998 and that the Second Boston Transaction will close
within one year.

* * * * * *

F-29
<PAGE> 115

INDEPENDENT AUDITORS' REPORT

Entercom Communications Corp.:

We have audited the accompanying combined statements of operations and of cash
flows of KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, and KING-FM (the
Stations) for the years ended December 31, 1994, 1995, and 1996. These combined
financial statements are the responsibility of the Stations' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined 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, such combined financial statements present fairly, in all
material respects, the results of operations and cash flows of the Stations for
the years ended December 31, 1994, 1995, and 1996 in conformity with generally
accepted accounting principles.

The accompanying combined financial statements have been prepared from the
separate records maintained by the Stations and may not be indicative of the
conditions that would have existed or the results of operations had the Stations
been operated as an unaffiliated company. As discussed in Note 1, certain
corporate overhead expenses represent allocations made by the Stations' parent.

DELOITTE & TOUCHE LLP

Salt Lake City, Utah
June 10, 1998

F-30
<PAGE> 116

KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996 AND
FOR THE THREE MONTHS ENDED MARCH 27, 1996 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 27,
--------------------------------------- -----------------------
1994 1995 1996 1996 1997
----------- ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
GROSS REVENUE..................... $33,030,947 $35,313,323 $39,508,602 $6,882,991 $4,804,521
AGENCY AND REPRESENTATIVE
COMMISSIONS AND REVENUE SHARING
FEES............................ 5,854,857 6,863,145 7,847,095 1,519,908 1,090,028
----------- ----------- ----------- ---------- ----------
NET REVENUES...................... 27,176,090 28,450,178 31,661,507 5,363,083 3,714,493
OPERATING EXPENSES................ 11,827,214 15,046,401 16,666,152 2,120,720 1,246,577
SELLING AND PROMOTIONAL
EXPENSES........................ 7,381,684 9,121,858 9,395,272 2,139,418 1,469,538
GENERAL AND ADMINISTRATIVE
EXPENSES........................ 5,011,439 4,603,611 4,986,714 1,349,394 872,442
ALLOCATED CORPORATE EXPENSES...... 355,553 458,364 452,288 86,414 58,657
----------- ----------- ----------- ---------- ----------
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION... 2,600,200 (780,056) 161,081 (332,863) 67,279
DEPRECIATION AND AMORTIZATION..... 1,291,220 1,517,720 1,421,065 405,676 338,826
----------- ----------- ----------- ---------- ----------
NET OPERATING INCOME (LOSS)....... 1,308,980 (2,297,776) (1,259,984) (738,539) (271,547)
OTHER EXPENSE:
Interest expense................ (72,566) (28,223)
Other -- net.................... (19,781) (41,309) (139,216)
----------- ----------- ----------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
TAXES........................... 1,216,633 (2,367,308) (1,399,200) (738,539) (271,547)
INCOME TAX (EXPENSE) BENEFIT...... (456,000) 888,000 525,000 277,000 102,000
----------- ----------- ----------- ---------- ----------
NET INCOME (LOSS)................. $ 760,633 $(1,479,308) $ (874,200) $ (461,539) $ (169,547)
=========== =========== =========== ========== ==========
</TABLE>

See notes to combined statements of operations and of cash flows.
F-31
<PAGE> 117

KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996 AND
FOR THE THREE MONTHS ENDED MARCH 27, 1996 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 27,
--------------------------------------- -------------------------
1994 1995 1996 1996 1997
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...................... $ 760,633 $(1,479,308) $ (874,200) $ (461,539) $ (169,547)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Depreciation and amortization....... 1,291,220 1,517,720 1,421,065 405,676 338,826
Loss (gain) on disposal of property
and equipment..................... 2,750 (32,549) 114,134 675 (3,545)
Changes in operating assets and
liabilities:
Receivables....................... (1,172,491) (1,741,557) (1,440) 2,258,629 1,977,565
Prepaid expenses and other current
assets......................... 196,719 (498,815) 213,850 (249,871) 366,198
Other assets...................... (67,730) 62,741 (12,619) (4,185) 5,490
Accounts payable.................. (331,108) 227,182 (416,504) 331,145 (304,234)
Accrued expenses.................. (19,759) (357,472) (405,954) 58,362 399,655
Due to parent -- current.......... 394,680 (3,974,049) 202,305 (1,908,945) (1,317,870)
----------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities......... 1,054,914 (6,276,107) 240,637 429,947 1,292,538
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment..... (951,151) (3,227,605) (3,637,864) (1,145,450) (546,944)
Proceeds from sale of property and
equipment........................... 8,024 390,439 25,294 17,647
----------- ----------- ----------- ----------- -----------
Net cash (used in) investing
activities................... (943,127) (2,837,166) (3,612,570) (1,127,803) (546,944)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES --
Net interdivisional transfers from (to)
parent.............................. 71,514 9,408,614 3,030,472 (86,398) (1,123,328)
----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................ 183,301 295,341 (341,461) (784,254) (377,734)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD................................. 504,233 687,534 982,875 982,875 641,414
----------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF
PERIOD................................. $ 687,534 $ 982,875 $ 641,414 $ 198,621 $ 263,680
=========== =========== =========== =========== ===========
</TABLE>

See notes to combined statements of operations and of cash flows.
F-32
<PAGE> 118

KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

NOTES TO COMBINED STATEMENTS OF OPERATIONS AND OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996
(INFORMATION PERTAINING TO THE THREE MONTHS ENDED
MARCH 27, 1996 AND 1997 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business -- The radio stations, KMBZ-AM, KLTH-FM, and KCMO-AM/FM are
broadcast in the Kansas City, Missouri area. The radio stations KIRO-AM/FM,
KNWX-AM, and KING-FM are broadcast in the Seattle, Washington area. Through
March 27, 1997, KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, and KING-FM
(the Stations) were operated by Bonneville International Corporation (BIC) with
the FCC broadcasting licenses for all Stations except KING-FM being owned by
Bonneville Holding Company (BHC), an affiliate of BIC, and the operating assets
for all Stations except KING-FM being owned by BIC.

BIC marketed and sold advertising for KING-FM under a Joint Sales Agreement
(the "KING Agreement") whereby BIC, through its wholly-owned subsidiary, KIRO,
Inc., acted as the exclusive sales agent for KING-FM. Under the KING Agreement,
BIC was required to pay to the Licensee an advertising revenue sharing fee equal
to the greater of 70% of net sales or an annual fixed dollar amount that varied
for each ratings share level. In addition, the KING Agreement required BIC to
pay costs of selling advertising time other than agency fees while the Licensee
paid for costs of operating the station. The accompanying statements of
operations include both the gross advertising revenues of KIRO-FM and the
advertising revenue sharing fees paid by BIC under the KING Agreement.

On March 27, 1997, BIC and BHC entered into an agreement (the "Exchange
Agreement") with Entercom Communications Corp., formerly Entertainment
Communications, Inc. ("Entercom"), whereby BIC and BHC agreed to transfer title
to the net assets and related FCC licenses of the Stations and BIC's sales agent
claim under the KING Agreement to Entercom in exchange for Entercom transferring
title to the assets and related FCC license of a radio station located in
Houston, Texas to BIC and BHC, respectively. In addition to the assets
exchanged, BIC received an additional $5.0 million in cash from Entercom under
the Exchange Agreement. For income tax purposes, the exchange was structured as
a "like-kind exchange" through a Qualified Intermediary under the provisions of
Section 1031 of the Internal Revenue Code. The parties to the Exchange Agreement
operated each other's stations under a time brokerage agreement ("TBA") for the
period March 1, 1997 through March 27, 1997, the closing date.

The accompanying statement of operations for the period January 1, 1997
through March 27, 1997 does not include the revenues or expenses of the Stations
during the TBA period, March 1, 1997 through March 27, 1997. However, the
accompanying statement of operations for the period January 1, 1997 through
March 27, 1997 does include as revenue, TBA fees received from Entercom in the
amount of $104,000, and as expense, TBA fees paid to Entercom in the amount of
$71,000.

Basis of Accounting -- The combined statements of operations and net assets
and of cash flows include the historical accounts and transactions of the
Stations, as operated by BIC, including the FCC licenses owned by BHC.
Historically, BIC did not charge the Stations for certain corporate overhead
expenses; however, for purposes of the accompanying statements of operations,
such expenses have been charged as described below. All inter-station
transactions have been eliminated in combination.

Use of Estimates in Preparing Financial Statements -- 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 disclosure 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.

F-33
<PAGE> 119
KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

NOTES TO COMBINED STATEMENTS OF OPERATIONS AND OF CASH FLOWS -- (CONTINUED)

Transactions with BIC -- The Stations are charged for certain corporate
services received from BIC based upon the percentage of revenue of each station
to total revenue of all stations operated by BIC. Although management is of the
opinion that the allocations used are reasonable and appropriate, other
allocations might be used that could produce results substantially different
from those reflected herein and these cost allocations might not be indicative
of amounts which might be paid to unrelated parties for similar services. The
following BIC corporate departmental expenses have been charged to the Stations'
accompanying statements of operations:

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED MARCH 27
-------------------------------- ------------------
1994 1995 1996 1996 1997
-------- -------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Management............................ $110,588 $137,140 $115,079 $29,805 $19,072
Finance............................... 72,503 97,982 99,146 18,425 12,993
Information systems................... 57,327 85,556 66,436 11,453 8,551
Human resources....................... 71,928 84,571 113,088 16,532 11,488
Engineering........................... 19,034 24,871 27,160 4,532 3,822
Legal................................. 24,173 28,244 31,379 5,667 2,731
-------- -------- -------- ------- -------
Total....................... $355,553 $458,364 $452,288 $86,414 $58,657
======== ======== ======== ======= =======
</TABLE>

Revenue Recognition -- Revenues are recognized when advertisements are
broadcast. Included in revenue are nonmonetary transactions arising from the
trading of advertising time for merchandise and services. These transactions are
recorded as the advertising is broadcast at the fair market value of the
merchandise and services received. Advertising time exchanged for merchandise
and services amounted to approximately $1,253,000, $1,975,000, and $1,619,000 in
1994, 1995, and 1996 and $134,000 and $20,000 for the three months ended March
27, 1996 and 1997, respectively.

Depreciation and Amortization -- Depreciation and amortization are computed
using the straight-line method, based on historical costs, over estimated useful
lives, as follows:

<TABLE>
<CAPTION>
ESTIMATED
LIVES (YEARS)
-------------
<S> <C>
Buildings.............................................. 8 - 40
Furniture and fixtures................................. 5 - 8
Equipment.............................................. 3 - 15
Leasehold improvements................................. Life of lease
</TABLE>

Intangible Assets -- Intangible assets (primarily the FCC licenses owned by
BHC) acquired prior to November 1, 1970 are not being amortized because
management believes there has been no decline in their values nor evidence of
limited lives. Amortization expense related to intangible assets acquired
subsequent to October 31, 1970 (effective date of the adoption by the Accounting
Principles Board of principles relating to the accounting for intangible assets)
has been included in the accompanying statements of operations. The intangible
assets are being amortized over various periods not exceeding forty years.

Income Taxes -- Through March 27, 1997, the results of the Stations'
operations are included in consolidated Federal, Utah, and Kansas income tax
returns filed by the parent corporation of BIC, Deseret Management Corporation
("DMC"). The Stations' portion of the income tax provision (benefit) is
allocated at a Federal and state computed statutory rate of 37.5%. The Stations'
Federal and Kansas income taxes are generally paid to, or refunded from, DMC.

Concentration of Credit Risk -- The Stations extend credit to customers on
an unsecured basis in the normal course of business. The customers are generally
located in the greater Seattle, Washington and Kansas

F-34
<PAGE> 120
KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

NOTES TO COMBINED STATEMENTS OF OPERATIONS AND OF CASH FLOWS -- (CONTINUED)

City, Missouri areas, and no individual industry or industry segment is
significant to the Stations' customer base. The Stations have policies governing
the extension of credit and collection of amounts due from customers.

Statements of Cash Flows -- For purposes of the statements of cash flows,
the Stations consider all highly liquid, short-term investments purchased with
remaining maturities of three months or less to be cash equivalents.

Interim Results (Unaudited) -- In the opinion of management, the
accompanying unaudited interim financial statements for the periods January 1 to
March 27, 1996 and 1997 (referred to as the three months ended March 27, 1996
and 1997) have been prepared on the same basis as the audited financial
statements and include all adjustments, consisting of only normal recurring
adjustments, necessary for a fair presentation of operating results and cash
flows for such periods.

2. EMPLOYEE BENEFIT PLANS

Defined Benefit Plan -- Through March 27, 1997, the Stations participated
in a defined benefit plan of BIC which covered all employees who worked at least
1,000 hours in a year, had one year or more of service, and were at least 21
years of age. The plan was sponsored by BIC. Retirement benefits were based on
years of service and an average of the employee's highest five years of
compensation during the last ten years of employment. BIC's policy is to fund
the maximum amounts required by the Employee Retirement Income Security Act of
1974. Contributions were intended to provide not only for benefits attributed
for service to date but also for those expected to be earned in the future. The
Stations have included in the accompanying statements of operations, pension
expense (benefit) under this plan of approximately $113,000, $(42,000), and
$21,000 for the years ended December 31, 1994, 1995, and 1996, respectively, and
$5,000 and $(21,000) for the three months ended March 27, 1996 and 1997,
respectively.

Thrift Plan -- The Stations also participated in a Section 401(k) defined
contribution plan (the Thrift Plan) of BIC in which employees age 21 or older
could participate. Under provisions of the Thrift Plan, participants could
contribute up to 17% of their pre-tax compensation to either a savings option
(based on after tax earnings) or a deferred option (based on pre-tax earnings),
subject to the "excess contribution" limitations defined in the Internal Revenue
Code. For each participating employee, the Stations provided a matching
contribution of up to 3% of a participant's annual salary. The Stations'
contributions to the Thrift Plan were approximately $372,000, $295,000, and
$263,000 in 1994, 1995, and 1996, respectively, and $66,000 and $55,000 for the
three months ended March 27, 1996 and 1997, respectively. The plan was sponsored
by BIC.

Postretirement Benefits Other Than Pensions -- BIC provided a
postretirement monetary benefit other than pensions. It consisted of a fixed
monthly dollar contribution toward the purchase of medical, dental, and life
insurance for substantially all of its retired employees. In 1993, BIC began
advance funding for postretirement life benefits for employees retiring on or
after January 1, 1994. Advance funding for medical benefits commenced in 1994.
Medical benefits for employees who retired before January 1, 1994 continue to be
funded on a pay-as-you-go basis. The Stations have included in the accompanying
statements of operations, expense under this plan of approximately $32,000,
$48,000, and $34,000 for the years ended December 31, 1994, 1995, and 1996,
respectively, and $9,000 and $19,000 for the three months ended March 27, 1996
and 1997, respectively.

F-35
<PAGE> 121
KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM, AND KING-FM

NOTES TO COMBINED STATEMENTS OF OPERATIONS AND OF CASH FLOWS -- (CONTINUED)

3. COMMITMENTS AND CONTINGENCIES

Leases -- The Stations lease office and studio space under operating leases
expiring in 2010 and lease antennas under operating leases expiring in 2002.
Rental expense pursuant to the terms of these operating leases was approximately
$354,000, $232,000, and $492,000 for the years ended December 31, 1994, 1995,
and 1996 and $208,000 and $89,000 for the three months ended March 27, 1996 and
1997.

At December 31, 1996, future minimum rental payments required under these
leases are as follows:

<TABLE>
<S> <C>
1997..................................................... $ 509,012
1998..................................................... 498,956
1999..................................................... 502,508
2000..................................................... 433,030
2001..................................................... 459,019
Thereafter............................................... 4,190,178
----------
Total.......................................... $6,592,703
==========
</TABLE>

Contingencies -- The Stations are involved in litigation regarding
transactions conducted in the ordinary course of business and are defending
their positions. The final outcome of litigation is not presently determinable;
however, in the opinion of management, the effects, if any, will not be material
to the net assets or the results of operations and cash flows derived from such
net assets.

F-36
<PAGE> 122

INDEPENDENT AUDITORS' REPORT

Entercom Communications Corp.:

We have audited the accompanying statements of operations and cash flows of the
Sacramento Station Group consisting of stations KSEG-FM and KRXQ-FM (the
"Stations") for the period January 1, 1996 to September 18, 1996 (the
"Predecessor") and for the period September 19, 1996 to December 31, 1996 (the
"Company"). These financial statements are the responsibility of the Station's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the results of operations and cash flows of the Predecessor for the
period January 1, 1996 to September 18, 1996 and of the Company for the period
September 19, 1996 to December 31, 1996 in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared from the separate
records maintained by the Predecessor and the Company and may not be indicative
of the results of operations and cash flows had the Stations been operated as an
unaffiliated company and, as discussed in Note 3, certain expenses represent
allocations made from the Stations' parent.

DELOITTE & TOUCHE LLP
Cincinnati, Ohio
May 21, 1998

F-37
<PAGE> 123

SACRAMENTO STATION GROUP

STATEMENTS OF OPERATIONS
FOR THE PERIODS JANUARY 1, 1996 TO SEPTEMBER 18, 1996 AND SEPTEMBER 19, 1996 TO
DECEMBER 31, 1996 AND THE FIVE MONTHS ENDED MAY 31, 1996 AND 1997

<TABLE>
<CAPTION>
PERIOD JANUARY 1, PERIOD FIVE MONTHS
1996 TO SEPTEMBER 19, ENDED MAY 31,
SEPTEMBER 18, 1996 TO --------------------------
1996 DECEMBER 31, 1996
(PREDECESSOR) 1996 (PREDECESSOR) 1997
----------------- ------------- ------------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET REVENUES.......................... $5,189,461 $1,944,529 $2,638,700
---------- ----------
OPERATING EXPENSES:
Operating expenses, excluding
depreciation and amortization.... 3,765,749 1,572,153 2,052,346
Depreciation and amortization....... 1,136,300 361,936 629,481 $ 580,527
Corporate and general expenses...... 202,000 78,000 112,000 112,000
---------- ---------- ---------- ---------
Total operating expenses.... 5,104,049 2,012,089 2,793,827 692,527
---------- ---------- ---------- ---------
OPERATING INCOME (LOSS)............... 85,412 (67,560) (155,127) (692,527)
OTHER INCOME (EXPENSE) -- Net......... (27,341) 35,361 (27,341) 586,000
---------- ---------- ---------- ---------
INCOME (LOSS) BEFORE INCOME TAXES..... 58,071 (32,199) (182,468) (106,527)
---------- ---------- ---------- ---------
PROVISION FOR INCOME TAXES............ 287,000 75,000 74,000 104,000
---------- ---------- ---------- ---------
NET LOSS.............................. $ (228,929) $ (107,199) $ (256,468) $(210,527)
========== ========== ========== =========
</TABLE>

See notes to financial statements.
F-38
<PAGE> 124

SACRAMENTO STATION GROUP

STATEMENTS OF CASH FLOWS
FOR THE PERIODS JANUARY 1, 1996 TO SEPTEMBER 18, 1996 AND SEPTEMBER 19, 1996 TO
DECEMBER 31, 1996 AND THE FIVE MONTHS ENDED MAY 31, 1996 AND 1997

<TABLE>
<CAPTION>
PERIOD JANUARY 1, PERIOD FIVE MONTHS
1996 TO SEPTEMBER 19, ENDED MAY 31,
SEPTEMBER 18, 1996 TO ---------------------------
1996 DECEMBER 31, 1996
(PREDECESSOR) 1996 (PREDECESSOR) 1997
----------------- ------------- ------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................. $ (228,929) $(107,199) $(256,458) $ (210,527)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization......... 1,136,300 361,936 629,481 580,527
Loss on disposal of property and
equipment........................... 32,341 32,341
Change in assets and liabilities:
Accounts receivable................. (245,215) (56,840) 68,087 1,755,043
Prepaid expenses and other assets... 11,698 138,711 (22,673) 31,768
Accounts payable and accrued
expenses......................... (13,569) (264,917) (224,392) (119,146)
---------- --------- --------- -----------
Cash provided by operating
activities..................... 692,626 71,691 226,376 2,037,665
---------- --------- --------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES -- Purchase of property and
equipment................................ (298,383) (17,348) (239,717) --
---------- --------- --------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES -- Change in due to Parent.... (336,450) (186,679) (57,374) (2,122,203)
---------- --------- --------- -----------
INCREASE (DECREASE) IN CASH................ 57,793 (132,336) (70,715) (84,538)
CASH, BEGINNING OF PERIOD.................. 159,081 216,874 159,081 84,538
---------- --------- --------- -----------
CASH, END OF PERIOD........................ $ 216,874 $ 84,538 $ 88,366 $ --
========== ========= ========= ===========
</TABLE>

See notes to financial statements.
F-39
<PAGE> 125

SACRAMENTO STATION GROUP

NOTES TO FINANCIAL STATEMENTS
(INFORMATION PERTAINING TO THE FIVE-MONTH PERIODS ENDED
MAY 31, 1996 AND 1997 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business -- The Sacramento Station Group consists of radio stations KSEG-FM
and KRXQ-FM (the "Stations") which broadcast in the Sacramento, California area.
The stations were an operating unit of Jacor Communication, Inc. (the "Parent")
during the period September 19, 1996 through June 4, 1997. During the period
January 1, 1996 to September 18, 1996 ("Predecessor Period"), the Stations were
owned and operated by Citicasters, Inc. ("Predecessor Parent").

Basis of Presentation -- The accompanying statements of operations and cash
flows have been prepared from the separate records of the Stations and may not
be indicative of the results of operations and cash flows had the Stations been
operated as an unaffiliated entity. The accompanying statements of operations
and cash flows for the period from January 1, 1996 to September 18, 1996
represent the results of direct revenues and expenses and cash flows generated
from the historical basis of assets and liabilities of the Predecessor Parent.
On September 18, 1996, Citicasters, Inc. was acquired by Jacor Communications,
Inc. and in accordance with the purchase method of accounting the assets and
liabilities of the Stations were adjusted to fair value on the date of the
acquisition. Accordingly, the statements of operations and cash flows for the
period from September 19, 1996 to December 31, 1996 represent the results of
revenues and expenses and cash flows generated from the revalued assets and
liabilities. A vertical black line is shown in the accompanying financial
statements to separate the post acquisition operations from those prior
September 19, 1996 since they have not been prepared on a comparable basis.

Effective January 1997, the Parent entered into a time brokerage agreement
with Entercom Communications Corp. ("Entercom"), formerly Entertainment
Communications, Inc. whereby Entercom operated the Stations and remitted to the
Parent a monthly rental fee totaling approximately $586,000 through June 4,
1997. The time brokerage agreement expired on June 4, 1997 at which time the
Parent sold substantially all of the tangible and intangible assets of the
Stations to Entercom for approximately $45,000,000. The Parent retained the
ownership of the FCC broadcast license for Stations throughout the contract
period of the time brokerage agreement.

Revenue Recognition -- Revenues are recognized when advertisements are
broadcast.

Property and Equipment -- Building, property and equipment are recorded at
cost and depreciation is provided using the straight-line method over estimated
useful lives ranging from 3 to 25 years. Leasehold improvements are depreciated
over the term of the lease.

Intangible Assets -- Intangible assets consisting primarily of goodwill,
FCC licenses and call letters acquired in connection with the acquisition of the
Stations are being amortized over their respective estimated useful lives
(ranging from 19 to 40 years during the period January 1, 1996 to September 18,
1996 and 40 years effective September 19, 1996 and thereafter) using the
straight-line method.

Income Taxes -- The results of operations of the Stations are included in
the consolidated tax returns of the Predecessor Parent and the Parent during
their respective periods of ownership. The Predecessor Parent and the Parent did
not historically allocate taxes to the Stations. However, for purposes of the
accompanying financial statements, a provision for income taxes has been made in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109,
Accounting for Income Taxes, as if the stations filed separate returns. The
effective income tax rate for the periods September 19, 1996 to December 31,
1996 and January 1, 1996 to September 18, 1996 varies from the statutory rate of
35% due to non-deductible amortization.

F-40
<PAGE> 126
SACRAMENTO STATION GROUP

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Interim Financial Statements (Unaudited) -- In the opinion of management,
the accompanying unaudited interim financial statements for the five months
ended May 31, have been prepared on the same basis as the audited financial
statements and include all adjustments, consisting of only normal recurring
adjustments, necessary for a fair presentation of the operating results and cash
flows for such periods. Results of operations for an interim period are not
necessarily indicative of results to be expected for a full year.

2. EMPLOYEE BENEFIT PLAN

The Stations participate in a retirement savings plan (the "Plan") that is
sponsored by the Parent. The Stations' expense for the Plan was approximately
$15,000 for the period September 19, 1996 to December 31, 1996.

A similar plan was sponsored by the Predecessor Parent for which the
Stations expensed approximately $45,000 for the period January 1, 1996 to
September 18, 1996.

3. RELATED-PARTY TRANSACTIONS

Corporate and general expenses consists of corporate overhead costs
including treasury, tax, legal, data processing, risk management and other
administrative services not specifically related to any specific stations.
Management is of the opinion that the allocations used are reasonable and
appropriate.

4. LEASES

The Stations lease office and studio space under operating leases. Total
rent expense was approximately $59,000 for the period September 19, 1996 to
December 31, 1996 and approximately $177,000 for the period January 1, 1996 to
September 18, 1996. Future minimum rental commitments for noncancellable leases
are as follows: 1997, $242,000; 1998, $245,000; 1999, $245,000; 2000, $143,000;
2001, $109,000; thereafter, $290,000.

F-41
<PAGE> 127

INDEPENDENT AUDITORS' REPORT

Entercom Communications Corp.:

We have audited the accompanying combined statements of income and cash flows of
KBSG, Inc. and KNDD, Inc., (wholly owned subsidiaries of Viacom Inc. (the
"Parent"), which businesses were acquired on August 1, 1996 by Entercom
Communications Corp., formerly Entertainment Communications, Inc.) (the
"Companies") for the year ended December 31, 1995. These combined financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined 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 audit provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the combined results of operations and combined cash flows of the
Companies for the year ended December 31, 1995 in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared from the separate
records maintained by the Companies and may not necessarily be indicative of the
conditions that would have existed or the results of operations if the Companies
had been operated as unaffiliated companies. As described in Note 3, portions of
certain expenses represent allocations made from the Companies' Parent.

DELOITTE & TOUCHE LLP
Seattle, Washington
May 29, 1998

F-42
<PAGE> 128

KBSG, INC. AND KNDD, INC.

COMBINED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1995, AND SEVEN-MONTH
PERIODS ENDED JULY 31, 1995 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED SEVEN MONTHS ENDED JULY 31,
DECEMBER 31, ---------------------------
1995 1995 1996
------------ ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
NET REVENUES:
Unaffiliated customers............................. $18,744,926 $8,682,084 $ 9,093,436
Related party...................................... 743,602 431,844 1,028,412
----------- ---------- -----------
19,488,528 9,113,928 10,121,848
OPERATING EXPENSES:
Operating expenses, excluding depreciation and
amortization and corporate, general, and
administrative expenses......................... 10,938,095 4,595,159 4,821,993
Depreciation and amortization...................... 1,532,665 889,813 902,825
Provision for doubtful accounts.................... 163,379 107,827 27,735
General and administrative......................... 1,505,255 976,678 578,459
----------- ---------- -----------
Total operating expenses................... 14,139,394 6,569,477 6,331,012
----------- ---------- -----------
Operating income........................... 5,349,134 2,544,451 3,790,836
OTHER INCOME......................................... 343,164 173,129 181,781
INTEREST EXPENSE, related party...................... (1,365,000) (796,250) (630,287)
----------- ---------- -----------
Income before income taxes................. 4,327,298 1,921,330 3,342,330
INCOME TAXES......................................... 1,745,960 813,482 1,296,621
----------- ---------- -----------
NET INCOME........................................... $ 2,581,338 $1,107,848 $ 2,045,709
=========== ========== ===========
</TABLE>

See notes to combined financial statements.
F-43
<PAGE> 129

KBSG, INC. AND KNDD, INC.

STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995, AND SEVEN-MONTH

PERIODS ENDED JULY 31, 1995 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED SEVEN MONTHS ENDED JULY 31,
DECEMBER 31, ---------------------------
1995 1995 1996
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income............................................ $ 2,581,338 $ 1,107,848 $ 2,045,709
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization...................... 1,532,665 889,813 902,825
Loss (gain) on sale of property and equipment...... 7,655 (3,219)
Cash provided (used) by changes in operating assets
and liabilities:
Accounts receivable.............................. (117,162) 303,582 (14,244)
Prepaid expenses and other assets................ 11,651 10,436 34,222
Accounts payable and accrued expenses............ 284,600 (258,713) 185,407
----------- ----------- -----------
Net cash provided by operating activities..... 4,300,747 2,052,966 3,150,700
INVESTING ACTIVITIES:
Purchase of property and equipment.................... (225,615) (158,778) (92,076)
Proceeds from sale of property and equipment.......... 14,711 12,366 8,255
Net change in due from Parent......................... (4,116,170) (1,932,962) (3,073,980)
----------- ----------- -----------
Net cash used by investing activities......... (4,327,074) (2,079,374) (3,157,801)
----------- ----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS............... (26,327) (26,408) (7,101)
CASH AND CASH EQUIVALENTS:
Beginning of period................................... 51,760 51,760 25,433
----------- ----------- -----------
End of period......................................... $ 25,433 $ 25,352 $ 18,332
=========== =========== ===========
</TABLE>

See notes to combined financial statements.
F-44
<PAGE> 130

KBSG, INC. AND KNDD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995, AND SEVEN-MONTH
PERIODS ENDED JULY 31, 1995 AND 1996 (UNAUDITED)

NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION: KBSG, Inc. and KNDD,
Inc. (the "Companies") own and operate radio stations KBSG-AM and -FM, and
KNDD-FM, respectively (the "Stations"), which broadcast in the greater Seattle,
Washington area. The Companies are wholly owned subsidiaries of Viacom Inc. (the
"Parent"). Effective August 1, 1996, the Stations were acquired by Entercom
Communications Corp., formerly Entertainment Communications, Inc. Accordingly,
the accompanying statements of income and cash flows include the accounts of the
Companies on a combined basis for 1995, and the unaudited interim seven-month
periods ended July 31, 1995 and 1996. Intercompany transactions are eliminated
in combination.

UNAUDITED INTERIM FINANCIAL INFORMATION: The accompanying unaudited
interim statements of income and cash flows for the seven-month periods ended
July 31, 1995 and 1996 are unaudited. In the opinion of management, such
unaudited interim financial statements have been prepared on a basis
substantially consistent with the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the statements of income and cash flows for those periods.

REVENUE RECOGNITION: Revenues consist primarily of sales of advertising
time and are recognized when advertisements are broadcast. Revenues from the
Stations' exchange of advertising time for goods or services (barter revenue)
are recognized based on the estimated value of advertising time provided, which
approximates the estimated fair value of the items received or to be received.
The value assigned to the goods and services received is charged to expense when
used. Barter revenue was approximately $1,035,800 for 1995.

DEPRECIATION AND AMORTIZATION: Depreciation of property and equipment is
provided using the straight-line method over their estimated useful lives
ranging from three to 20 years. Amortization of intangible assets, consisting
primarily of FCC licenses and goodwill is provided using the straight-line
method over 30 years.

ADVERTISING EXPENSES: Advertising costs are expensed as incurred and
totalled approximately $1,426,187 for 1995.

INCOME TAXES: The Companies are included in the consolidated federal
income tax return of the Parent. Income taxes have not historically been
allocated to the Companies. However, for purposes of the accompanying financial
statements, a provision for income taxes has been made in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for
Income Taxes, as if the Companies filed separate tax returns. Information
regarding deferred income taxes is not available. The effective income tax rate
for the year ended December 31, 1995, varies from the statutory income tax rate
of 34% due to nondeductible amortization.

STATEMENTS OF CASH FLOWS: For purposes of the statements of cash flow, the
Companies consider highly liquid, short-term investments purchased with
remaining maturities of 90 days or less to be cash equivalents. Interest on
Parent debt and income taxes are deemed paid when accrued and credited to
amounts due from Parent. Actual payments to creditors and tax authorities are
made by the Parent. Also see Note 3.

PROVISION FOR DOUBTFUL ACCOUNTS: The Companies extend credit to customers
on an unsecured basis in the normal course of business. The customers are
generally located in the greater Seattle, Washington area, and no individual
industry or industry segment is significant to the Company's customer base. The
Companies record a provision for doubtful accounts based on their estimate of
uncollectible accounts receivable. Bad debt write-offs, net of recoveries, were
$193,000 for the year ended December 31, 1995.

F-45
<PAGE> 131
KBSG, INC. AND KNDD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES: 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 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.

NOTE 2: COMMITMENTS

The Companies lease office space under operating leases expiring from 1998
to 2004. Rental expenses pursuant to the terms of these operating leases were
$295,670 for the year ended December 31, 1995.

At December 31, 1995, future minimum rental payments required under these
leases are as follows:

<TABLE>
<S> <C>
1996..................................................... $ 790,548
1997..................................................... 790,548
1998..................................................... 372,548
1999..................................................... 268,482
2000..................................................... 148,848
Thereafter............................................... 58,404
----------
$2,429,378
==========
</TABLE>

NOTE 3: RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Companies enter into transactions
with the Parent which are recorded through a due-from-Parent account. Such
transactions for the year ended December 31, 1995, consist primarily of:

<TABLE>
<S> <C>
Barter revenue.............................................. $ 744,000
Income tax expense payable to Parent........................ 1,746,000
Interest expense on Parent company debt at 9.75%............ 1,365,000
Corporate overhead charges.................................. 806,000
</TABLE>

The corporate overhead charge allocated to the seven month period ended
July 31, 1995 was approximately $470,000. There was no corporate overhead charge
for the seven month period ended July 31, 1996 (unaudited).

Other transactions include immaterial amounts related to employee benefits,
insurance, and other items. Although management is of the opinion that the
allocations used are reasonable, other allocations might be used that could
produce results substantially different from those reflected herein, and these
allocations might not be indicative of amounts which might be incurred with
unrelated parties.

The Companies' cash and financing requirements are managed on a centralized
basis by the Parent. Accordingly, the Companies' available cash is deposited in,
and cash requirements are transferred from, corporate accounts on a regular
basis. Such transactions are recorded through the due-from-Parent account.

The due-from-Parent account is noninterest bearing and has no specified
repayment date, which may not be indicative of arrangements that could be made
with unrelated parties. Arrangements with unrelated parties could produce
results substantially different from these reflected herein.

In June 1996, Parent Company debt of $14,000,000 was retired through
adjustment to the Parent company account.

F-46
<PAGE> 132
KBSG, INC. AND KNDD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4: EMPLOYEE BENEFIT PLANS

The Companies participate in a pension and other employee benefit plans
offered by the Parent covering substantially all employees. The Companies'
expenses related to the plans were not significant for the year ended December
31, 1995.

NOTE 5: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Subsequent to December 31, 1995, SFAS No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of,
became effective. SFAS No. 121 requires the Companies to analyze their
long-lived assets, such as fixed assets, identifiable intangibles, and goodwill,
for impairment when events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. Adoption of this standard
is not expected to have a material effect on the financial statements.

Other subsequently issued pronouncements, such as SFAS No. 123, Stock-based
Compensation, SFAS No. 128, Earnings per Share, SFAS No. 130, Segment
Information, SFAS No. 131, Reporting Comprehensive Income, Statement of Position
(SOP) 98-1, Reporting the Costs of Computer Software Developed or Obtained for
Internal Use, SOP 98-5, Reporting the Costs of Start-up Activities, either do
not apply to the Companies or their adoption is not expected to have a material
effect on the financial statements.

F-47
<PAGE> 133

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of
Entertainment Communications, Inc. and Subsidiaries:

We have audited the accompanying combined balance sheet of the Portland, Oregon
and Rochester, New York Radio Groups of Heritage Media Services,
Inc. -- Broadcasting Segment (the Company) as of December 31, 1997, and the
related combined statements of operations, stockholders' equity and cash flows
of the Portland, Oregon and Rochester, New York Radio Groups of Heritage Media
Services, Inc. -- Broadcasting Segment (the Predecessor) for the eight months
ended August 31, 1997 and of the Company for the four months ended December 31,
1997. These financial statements are the responsibility of the Company's and the
Predecessor's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1997, and the results of operations and cash flows of the
Predecessor for the eight months ended August 31, 1997, and of the Company for
the four months ended December 31, 1997, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP
Baltimore, Maryland,
May 29, 1998

F-48
<PAGE> 134

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
1997
--------
<S> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 594
Accounts receivable, net of allowance for doubtful
accounts of $166....................................... 3,474
Prepaid expenses and other current assets................. 41
Deferred barter costs..................................... 113
Deferred tax asset........................................ 64
--------
Total current assets.............................. 4,286
PROPERTY, PLANT AND EQUIPMENT, net.......................... 4,497
DUE FROM AFFILIATE.......................................... 1,719
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net................ 116,171
--------
Total Assets...................................... $126,673
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................... $ 520
Deferred revenue.......................................... 11
Deferred barter revenue................................... 108
--------
Total current liabilities......................... 639
DEFERRED TAX LIABILITY...................................... 98
OTHER LONG-TERM LIABILITIES................................. 292
--------
Total Liabilities................................. 1,029
--------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 10,000 shares authorized
and 10,000 shares issued and outstanding............... 10
Additional paid-in capital................................ 127,035
Accumulated deficit....................................... (1,401)
--------
Total Stockholders' Equity........................ 125,644
--------
Total Liabilities and Stockholders' Equity........ $126,673
========
</TABLE>

The accompanying notes are an integral part of this combined balance sheet.
F-49
<PAGE> 135

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------ ------------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
AUGUST 31, DECEMBER 31,
1997 1997
------------ ------------
<S> <C> <C>
NET REVENUES:
Station broadcasting revenues, net of agency commissions
of $1,060 and $1,845, respectively..................... $10,449 $ 5,635
Revenues realized from station barter arrangements........ 847 464
------- -------
Total net revenues................................ 11,296 6,099
------- -------
OPERATING EXPENSES:
Programming and production................................ 4,024 2,059
Selling, general and administrative....................... 1,618 830
Corporate overhead allocation............................. 814 478
Expenses realized from station barter arrangements........ 922 411
Depreciation of property and equipment.................... 395 251
Amortization of acquired intangible broadcasting assets
and other assets....................................... 775 2,623
------- -------
Total operating expenses.......................... 8,548 6,652
------- -------
Broadcast operating income (loss)................. 2,748 (553)
------- -------
OTHER INCOME (EXPENSE):
Interest expense.......................................... 651 265
Other expense, net........................................ -- 21
------- -------
Income (loss) before provision for income taxes... 2,097 (839)
PROVISION FOR INCOME TAXES.................................. 1,339 562
------- -------
Net income (loss)................................. $ 758 $(1,401)
======= =======
</TABLE>

The accompanying notes are an integral part of these combined statements.
F-50
<PAGE> 136

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED EARNINGS/
--------------- PAID-IN (ACCUMULATED STOCKHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT) EQUITY
------ ------ ---------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
PREDECESSOR:
BALANCE, January 1, 1997......... 10 $ 10 $ -- $ 7,041 $ 7,051
HMC noncash capital
contributions............... -- -- 1,209 -- 1,209
Net income.................... -- -- -- 758 758
Acquisition by News
Corporation................. -- -- 125,291 (7,799) 117,492
----- ------ -------- ------- --------
BALANCE, August 31, 1997......... 10 $ 10 $126,500 $ -- $126,510
===== ====== ======== ======= ========
COMPANY:
BALANCE, September 1, 1997....... 10 $ 10 $126,500 $ -- $126,510
News Corporation noncash
capital contributions....... -- -- 535 -- 535
Net loss...................... -- -- -- (1,401) (1,401)
----- ------ -------- ------- --------
BALANCE, December 31, 1997....... 10 $ 10 $127,035 $(1,401) $125,644
===== ====== ======== ======= ========
</TABLE>

The accompanying notes are an integral part of these combined statements.
F-51
<PAGE> 137

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------ ------------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
AUGUST 31, DECEMBER 31,
1997 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 758 $(1,401)
Adjustments to reconcile net income (loss) to net cash
flows from operating activities-
Depreciation of property and equipment................. 395 251
Amortization of acquired intangible broadcasting assets
and other assets...................................... 775 2,623
Changes in assets and liabilities, net of effects of
acquisitions-
(Increase) decrease in accounts receivable, net........ 121 (225)
Net effect of change in deferred barter revenue and
deferred barter
costs................................................ 76 (49)
Increase in prepaid expenses and other current
assets................................................ (15) (15)
Increase in deferred tax asset......................... (50) (15)
Increase (decrease) in accounts payable and accrued
expenses.............................................. (826) 150
Increase (decrease) in deferred revenue................ (75) 11
(Decrease) increase in deferred tax liability.......... 99 (1)
Decrease in other long-term liabilities................ (12) (25)
------- -------
Net cash flows from operating activities.......... 1,246 1,304
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment..................... (157) (11)
Acquisitions, net of cash acquired........................ (1,859) --
------- -------
Net cash flows from investing activities.......... (2,016) (11)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in due to affiliates............................. (512) --
Increase in due from affiliates........................... -- (1,719)
Capital contributions made by Parent...................... 1,209 535
------- -------
Net cash flows from financing activities.......... 697 (1,184)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ (73) 109
CASH, beginning of period................................... 558 485
------- -------
CASH, end of period......................................... $ 485 $ 594
======= =======
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest.................................... $ -- $ 21
======= =======
Cash paid for income taxes................................ $ 152 $ 29
======= =======
</TABLE>

The accompanying notes are an integral part of these combined statements.
F-52
<PAGE> 138

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

Heritage Media Services, Inc. ("HMSI") operates in two
segments -- Marketing Services and Broadcasting. Heritage Media Corporation is
the parent company of HMSI, (collectively referred to hereafter as either "HMC"
or the "Parent"). The Broadcasting Segment was wholly-owned and operated by
HMSI, which was owned by HMC through August 31, 1997 (the "Predecessor"). In
July 1997, HMC entered into an asset sale agreement with Sinclair Broadcast
Group, Inc. ("SBG") whereby SBG would acquire 100% of the Broadcasting Segment
(which consisted of six television stations in three markets and 24 radio
stations in seven markets) for $630 million in cash. Effective September 1,
1997, The News Corporation Limited ("News Corporation") acquired all of the
license and nonlicense assets of HMC. Due to certain regulatory requirements,
News Corporation has established a trust to hold all of the license and
nonlicense assets of the Broadcasting Segment until the sale to SBG has closed.
The acquisition was accounted for under the purchase method of accounting
whereby the purchase price was allocated to property and programming assets and
acquired intangible broadcasting assets of $51.4 million and $578.6 million,
respectively.

During January 1998, Entertainment Communications, Inc. ("Entercom")
entered into an Asset Purchase Agreement with Tuscaloosa Broadcasting Inc.,
Sinclair Radio of Portland Licensee, Inc. and Sinclair Radio of Rochester
Licensee, Inc. (collectively referred to hereafter as "Sinclair") to acquire
KKSN-AM, KKSN-FM and KKRH-FM, all serving the Portland, Oregon radio market and
WBBF-AM, WBBF-FM, WKLX-FM and WQRV-FM, all serving the Rochester, New York radio
market for a purchase price of $126.5 million. Simultaneously with the above
agreement, Entercom entered into a Time Brokerage Agreement ("TBA") with
Sinclair whereby, effective March 1, 1998, Entercom programs these stations for
the period prior to consummation of the purchase agreement and Sinclair receives
a monthly TBA fee of $631,500. Closing on this transaction is expected in June
1998. The accompanying combined financial statements include the accounts of the
Portland, Oregon and Rochester, New York Radio Group, which are collectively
referred to hereafter as "the Company."

The accompanying December 31, 1997, balance sheet and related statements of
operations and cash flows for the four-month period ended December 31, 1997, are
presented on a new basis of accounting, reflecting the impact of the News
Corporation acquisition. The accompanying financial statements for the
eight-month period ended August 31, 1997, are presented as "Predecessor"
financial statements.

Disclosure of Certain Significant Risks and Uncertainties

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
disclosure 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.

Concentration of Credit Risk

The Company's revenues and accounts receivable relate primarily to the sale
of advertising within the radio stations' broadcast areas. Credit is extended
based on an evaluation of the customers' financial condition. Credit losses are
provided for in the financial statements.

In the opinion of management, credit risk with respect to trade receivables
is limited due to the large number of diversified customers and the geographic
diversification of the Company's customer base. The Company performs ongoing
credit evaluations of its customers and believes that adequate allowances for
any

F-53
<PAGE> 139
THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

uncollectable trade receivables are maintained. At December 31, 1997, no
receivable from any customer exceeded 5% of stockholders' equity, and no
customer accounted for more than 10% of net revenues for the eight months ended
August 31, 1997 or for the four months ended December 31, 1997.

Acquired Intangible Broadcasting Assets

Acquired intangible broadcasting assets are being amortized over periods of
4 to 40 years. These amounts result from the acquisition of certain radio
station license and nonlicense assets by The News Corporation (see Note 1). The
Company monitors the individual financial performance of each of the stations
and continually evaluates the realizability of intangible and tangible assets
and the existence of any impairment to its recoverability based on the projected
undiscounted cash flows of the respective stations.

Intangible assets consist of the following as of December 31, 1997 (in
thousands):

<TABLE>
<CAPTION>
AMORTIZATION
PERIOD 1997
------------ --------
<S> <C> <C>
Goodwill.......................................... 40 years $1,897
FCC licenses...................................... 15-25 years 52,092
Other............................................. 4-25 years 65,172
--------
119,161
Less: Accumulated amortization.................... 2,626
--------
$116,535
========
</TABLE>

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is recorded on the straight-line basis over the estimated useful
lives of the assets. Property and equipment at December 31, 1997, are summarized
as follows (in thousands):

<TABLE>
<CAPTION>
USEFUL LIFE 1997
----------- ------
<S> <C> <C>
Land........................................................ -- $ 442
Broadcasting equipment...................................... 5-25 years 366
Buildings and improvements.................................. 12-30 years 3,684
Other equipment............................................. 4-8 years 256
------
4,748
Less: Accumulated depreciation.............................. 251
------
$4,497
======
</TABLE>

Barter Transactions

Certain program contracts provide for the exchange of advertising air time
in lieu of cash payments for the rights to such programming. These contracts are
recorded as the programs are aired at the estimated fair value of the
advertising air time given in exchange for the program rights. Network
programming is excluded from these calculations.

The Company broadcasts certain customers' advertising in exchange for
equipment, merchandise and services. The estimated fair value of the equipment,
merchandise or services received is recorded as deferred barter costs and the
corresponding obligation to broadcast advertising is recorded as deferred barter
revenues.

F-54
<PAGE> 140
THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The deferred barter costs are expensed or capitalized as they are used, consumed
or received. Deferred barter revenues are recognized as the related advertising
is aired.

Revenues

Revenue from the sale of commercial broadcast time to advertisers is
recognized when the commercials are broadcast. Promotional fees are recognized
as services are rendered.

2. ACCRUED EXPENSES:

Accrued expenses consist of the following at December 31, 1997, (in
thousands):

<TABLE>
<CAPTION>
1997
----
<S> <C>
Commissions................................................. $193
Payroll and employee benefits............................... 137
Other....................................................... 187
----
$517
====
</TABLE>

3. DUE TO AFFILIATE:

The Predecessor had an arrangement with HMSI whereby HMSI would provide
certain management and other services to the Predecessor. The services provided
included consultation and direct management assistance with respect to
operations and strategic planning. The Predecessor was allocated approximately
$814,000 of corporate overhead expenses for these services for the eight months
ended August 31, 1997.

In order to fund acquisitions and provide operating funds, HMSI entered
into a Bank Credit Agreement. The debt used to finance acquisitions and fund
daily operations of the Predecessor was recorded by the Predecessor as due to
affiliate in the year ending December 31, 1996. HMSI allocated interest at a
rate of approximately 10.0%, which approximated the average rate paid on the
borrowings. Associated with the HMSI debt, the Predecessor was allocated
approximately $0.6 million of deferred financing costs in 1996. The deferred
financing costs were fully amortized in accordance with the acquisition by News
Corporation on September 1, 1997.

4. INCOME TAXES:

The Parent files a consolidated federal tax return and separate state tax
returns for each of its subsidiaries in certain filing jurisdictions. It is the
Parent's policy to pay the federal income tax provision of the Company. The
accompanying financial statements have been prepared in accordance with the
separate return method of FASB 109, whereby the allocation of the federal tax
provision due to the Parent is based on what the Company's current and deferred
federal tax provision would have been had the Company filed a federal income tax
return outside of its consolidated group. The Company is not required to
reimburse the Parent for its federal tax provision. Accordingly, this amount is
recorded as a capital contribution in the accompanying consolidated financial
statements. No federal deferred tax assets or liabilities are recorded because
those amounts are considered currently paid to or received by the Parent. The
federal and state tax provision was calculated based on pretax income, plus or
minus permanent book-to-tax differences, times the statutory tax rate of 40%.
The Company had no alternative minimum tax credit carryforwards as of December
31, 1997. The effective tax rate in the current year exceeds the statutory tax
rate of 40% due to the effects of nondeductible goodwill.

F-55
<PAGE> 141
THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The provision for income taxes consists of the following (in thousands):

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------ ------------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
AUGUST 31, DECEMBER 31,
1997 1997
------------ ------------
<S> <C> <C>
Current:
Federal.................................................. $1,267 $523
State.................................................... 81 33
------ ----
1,348 556
------ ----
Deferred:
Federal.................................................. -- --
State.................................................... (9) 6
------ ----
(9) 6
------ ----
Provision for income taxes................................. $1,339 $562
====== ====
</TABLE>

The following is a reconciliation of federal income taxes at the applicable
statutory rate to the recorded provision (in thousands):

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------ ------------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
AUGUST 31, DECEMBER 31,
1997 1997
------------ ------------
<S> <C> <C>
Statutory federal income taxes............................. $ 703 $ (504)
Adjustments:
State income taxes, net of federal effect................ 82 (59)
Non-deductible goodwill amortization..................... 276 1,125
Other.................................................... 278 --
------ ------
Provision for income taxes................................. $1,339 $ 562
====== ======
</TABLE>

The following table summarizes the state tax effects of the significant
types of temporary differences between financial reporting basis and tax basis
which were generated during the years ended December 31, 1997 (in thousands):

<TABLE>
<CAPTION>
1997
----
<S> <C>
Deferred Tax Assets:
Bad debt reserve.......................................... $14
Accruals.................................................. 27
Other intangibles......................................... 23
---
$64
===
Deferred Tax Liability:
Depreciation.............................................. $98
===
</TABLE>

5. EMPLOYEE BENEFIT PLAN:

Company employees were covered by HMC's Retirement Savings Plan (the Plan)
through December 31, 1997, whereby participants contributed portions of their
annual compensation to the Plan and

F-56
<PAGE> 142
THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

certain contributions were made at the discretion of the Company based on
criteria set forth in the Plan Agreement. Participants are generally 100% vested
in Company contributions after five years of employment with the Company.
Company expenses under the Plan were not material for the year ended December
31, 1997.

6. RELATED PARTY TRANSACTIONS:

The Company received certain advances from HMC during the eight months
ended August 31, 1997, which were evidenced by a subordination agreement. All
advances from HMC were repaid on August 31, 1997.

7. CONTINGENCIES AND OTHER COMMITMENTS:

Leases and Contracts

The Company and its subsidiaries lease certain real property and
transportation and other equipment under noncancellable operating leases
expiring at various dates through 2015. The Company also has long-term
contractual obligations with two major broadcast ratings firms that provide
monthly ratings services and guaranteed store contracts. Rent expense under
these leases for the eight months ended August 31, 1997, and for the four months
ended December 31, 1997, was approximately $210,000 and $105,000, respectively.

Future minimum payments under the leases are as follows (in thousands):

<TABLE>
<S> <C>
1998........................................................ $ 392
1999........................................................ 386
2000........................................................ 386
2001........................................................ 371
2002........................................................ 357
2003 and thereafter......................................... 814
------
$2,706
======
</TABLE>

Litigation

Lawsuits and claims are filed against the Company from time to time in the
ordinary course of business which are generally incidental to its business.
Management of the Company does not believe the resolution of such matters will
have a significant effect on its liquidity, financial position or results of
operations.

F-57
<PAGE> 143

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND MARCH 31, 1998
(IN THOUSANDS)

PREDECESSOR COMPANY
DECEMBER 31, MARCH 31,
1997 1998
------------ --------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 594 $ --
Accounts receivable, net of allowance for doubtful
accounts of $166....................................... 3,474 --
Prepaid expenses and other current assets................. 41 --
Deferred barter costs..................................... 113 --
Deferred tax asset........................................ 64 --
-------- --------
Total current assets.............................. 4,286 --
PROPERTY, PLANT AND EQUIPMENT, net.......................... 4,497 5,152
DUE FROM AFFILIATE.......................................... 1,719 --
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net................ 116,171 116,934
-------- --------
Total Assets...................................... $126,673 $122,086
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................... $ 520 $ --
Deferred revenue.......................................... 11 --
Deferred barter revenue................................... 108 --
Due to parent............................................. -- 70
-------- --------
Total current liabilities......................... 639 70
DEFERRED TAX LIABILITY...................................... 98 --
OTHER LONG-TERM LIABILITIES................................. 292 --
-------- --------
Total Liabilities................................. 1,029 70
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 10,000 shares authorized
and 10,000 and 0 shares issued and outstanding......... 10 --
Additional paid-in capital................................ 127,035 122,827
Accumulated deficit....................................... (1,401) (811)
-------- --------
Total Stockholders' Equity........................ 125,644 122,016
-------- --------
Total Liabilities and Stockholders' Equity........ $126,673 $122,086
======== ========
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.
F-58
<PAGE> 144

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR COMPANY
THREE MONTHS TWO MONTHS ONE MONTH
ENDED ENDED ENDED
MARCH 31, 1997 FEBRUARY 28, 1998 MARCH 31, 1998
-------------- ----------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
NET REVENUES:
Station broadcasting revenue, net of agency
commissions of $611 and $387, respectively.... $3,349 $ 2,169 $ --
Revenues realized from station barter
arrangements.................................. 249 187 --
Time brokerage agreement revenues............... -- -- 635
------ ------- -----
Total net revenues.................... 3,598 2,356 635
OPERATING EXPENSES:
Programming and production...................... 1,303 824 3
Selling, general and administrative............. 885 603 --
Expenses realized from station barter
arrangements.................................. 245 280 --
Depreciation of property and equipment.......... 147 126 78
Amortization of acquired intangible broadcasting
assets and other assets....................... 287 1,503 663
------ ------- -----
Total operating expenses.............. 2,867 3,336 744
------ ------- -----
Broadcast operating income (loss)..... 731 (980) (109)
------ ------- -----
OTHER EXPENSE:
Interest expense................................ 261 -- 702
------ ------- -----
Income (loss) before provision for
income taxes........................ 470 (980) (811)
PROVISION FOR INCOME TAXES...................... 52 40 --
------ ------- -----
Net income (loss)..................... $ 418 $(1,020) $(811)
====== ======= =====
</TABLE>

The accompanying notes are an integral part of these combined statements.
F-59
<PAGE> 145

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR COMPANY
THREE MONTHS TWO MONTHS ONE MONTH
ENDED ENDED ENDED
MARCH 31, 1997 FEBRUARY 28, 1998 MARCH 31, 1998
-------------- ----------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................. $ 418 $(1,020) $(811)
Adjustments to reconcile net income (loss) to
net cash flows from operating activities-
Depreciation of property and equipment...... 147 126 78
Amortization of acquired intangible
broadcasting assets and other assets..... 287 1,503 663
Changes in certain assets and liabilities, net
of effects of acquisitions:
Decrease in accounts receivable, net........ 644 415 --
Net effect of change in deferred barter
revenue and deferred barter costs........ (6) 96 --
Increase in prepaid expenses and other
assets................................... (9) (3) --
(Decrease) increase in accounts payable and
accrued expenses......................... (535) 76 --
Decrease in deferred revenue................ (3) -- --
Decrease in other long-term liabilities..... (1) (70) --
------- ------- -----
Net cash flows from operating
activities........................ 942 1,123 (70)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment......... (82) (7) --
Acquisitions, net of cash acquired............ (1,894) -- --
------- ------- -----
Net cash flows from investing
activities........................ (1,976) (7) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in due to affiliates...... 995 (1,111) 70
------- ------- -----
Net cash flows from financing
activities........................ 995 (1,111) 70
------- ------- -----
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS................................. (39) 5 --
CASH, beginning of period..................... 558 594 --
------- ------- -----
CASH, end of period........................... $ 519 $ 599 $ --
======= ======= =====
</TABLE>

The accompanying notes are an integral part of these combined statements.
F-60
<PAGE> 146

THE PORTLAND, OREGON AND ROCHESTER, NEW YORK RADIO GROUPS
OF HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

Heritage Media Services, Inc. ("HMSI") operates in two
segments -- Marketing Services and Broadcasting. Heritage Media Corporation is
the parent company of HMSI, (collectively referred to hereafter as either "HMC"
or the "Parent"). The Broadcasting Segment was wholly-owned and operated by
HMSI, which was owned by HMC through August 31, 1997 (the "Predecessor"). In
July 1997, HMC entered into an asset sale agreement with Sinclair Broadcast
Group, Inc. ("SBG") whereby SBG would acquire 100% of the Broadcasting Segment
(which consisted of six television stations in three markets and 24 radio
stations in seven markets) for $630 million in cash. Effective September 1,
1997, The News Corporation Limited ("News Corporation") acquired all of the
license and nonlicense assets of HMC. Due to certain regulatory requirements,
News Corporation established a trust to hold all of the license and nonlicense
assets of the Broadcasting Segment until the sale to SBG had closed. The
acquisition was accounted for under the purchase method of accounting whereby
the purchase price was allocated to property and programming assets and acquired
intangible broadcasting assets of $51.4 million and $578.6 million,
respectively.

During January 1998, Entertainment Communications, Inc. ("Entercom")
entered into an Asset Purchase Agreement with Tuscaloosa Broadcasting Inc.,
Sinclair Radio of Portland Licensee, Inc. and Sinclair Radio of Rochester
Licensee, Inc. (collectively referred to hereafter as "Sinclair") to acquire
KKSN-AM, KKSN-FM and KKRH-FM, all serving the Portland, Oregon radio market and
WBBF-AM, WBBF-FM, WKLX-FM and WQRV-FM, all serving the Rochester, New York radio
market for a purchase price of $126.5 million. Simultaneously with the above
agreement, Entercom entered into a Time Brokerage Agreement ("TBA") with
Sinclair whereby, effective March 1, 1998, Entercom programs these stations for
the period prior to consummation of the purchase agreement and Sinclair receives
a monthly TBA fee of $631,500. Effective March 1, 1998, SBG completed its
acquisition of the Portland, Oregon and Rochester, New York Radio Groups from
News Corporation. The acquisition was accounted for under the purchase method of
accounting whereby the purchase price was allocated to the assets to be sold. In
June 1998, Entercom closed its transaction with Sinclair. The accompanying
combined financial statements include the accounts of the Portland, Oregon and
Rochester, New York Radio Group, which are collectively referred to hereafter as
"the Company."

The accompanying March 31, 1998, balance sheet and the related statements
of operations and cash flows for the one-month period ended March 31, 1998, are
presented on a new basis of accounting, reflecting the impact of the acquisition
by SBG. The accompanying financial statements for the three months ended March
31, 1997, and the two months ended February 28, 1998, are presented as
"Predecessor" financial statements.

Interim Financial Statements

The combined financial statements for the period ended March 31, 1997, the
two months ended February 28, 1998, and the one month ended March 31, 1998, are
unaudited, but in the opinion of management, such financial statements have been
presented on the same basis as the audited combined financial statements and
include all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the financial position and results of
operations, and cash flows for these periods. The results of operations
presented in the accompanying financial statements are not necessarily
representative of operations for an entire year.

F-61
<PAGE> 147

- ------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 14
Use of Proceeds....................... 21
Recapitalization, Chase Conversion and
Former S Corporation Status......... 21
Dividend Policy....................... 22
Dilution.............................. 23
Capitalization........................ 24
CBS Transactions...................... 25
Completed Transactions................ 25
Unaudited Pro Forma Financial
Information......................... 27
Selected Historical Financial Data.... 40
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 42
Business.............................. 48
Management............................ 67
Certain Relationships and Related
Party Transactions.................. 73
Principal and Selling Shareholders.... 74
Description of Capital Stock.......... 75
Shares Eligible for Future Sale....... 79
Underwriting.......................... 80
Notice to Canadian Residents.......... 81
Legal Matters......................... 82
Experts............................... 83
Additional Information................ 83
Index to Financial Statements......... F-1
</TABLE>

------------------
UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- ------------------------------------------------------

- ------------------------------------------------------

[ENTERCOM LOGO]

Entercom Communications Corp.

Shares
Class A Common Stock
($.01 par value)

PROSPECTUS
Credit Suisse First Boston

BT Alex. Brown
Goldman, Sachs & Co.
Morgan Stanley Dean Witter
------------------------------------------------------
<PAGE> 148

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc., and other
estimated expenses expected to be incurred in connection with the issuance and
distribution of securities being registered. All such fees and expenses shall be
paid by the Company.

<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee......... $71,242.50
NASD Fee.................................................... *
New York Stock Exchange Listing Fee......................... *
Printing and Engraving Expenses............................. *
Accounting Fees and Expenses................................ *
Legal Fees and Expenses..................................... *
Directors and Officers Insurance............................ *
Transfer Agent Fees and Expenses............................ *
Miscellaneous............................................... *
----------
Total............................................. $
==========
</TABLE>

- ---------------

* To be filed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Amended and Restated Articles of Incorporation provide that
the Company's directors shall not be personally liable to the Company and its
shareholders for monetary damages for any action taken, or any failure to take
any action, unless: (i) the director has breached or failed to perform the
duties of his or her office under applicable provisions of Pennsylvania law, and
(ii) the breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness. This provision does not eliminate the duty of care,
and, in appropriate circumstances, equitable remedies such as an injunction or
other forms of non-monetary relief would remain available under Pennsylvania
law. The provision does not affect a director's responsibilities under any other
law, such as federal securities laws, criminal laws or state or federal
environmental laws. The Company's Amended and Restated Bylaws provide that the
Company shall indemnify its officers and directors to the fullest extent
permitted by Pennsylvania law, including some instances in which indemnification
is otherwise discretionary under Pennsylvania law.

In general, any officer or director of the Company shall be indemnified by
the Company against expenses including attorneys' fees, judgments, fines and
settlements actually and reasonably incurred by that person in connection with a
legal proceeding as a result of such relationship, whether or not the
indemnified liability arises from an action by or in the right of the Company,
if the officer or director acted in good faith and in the manner believed to be
in, or not opposed to, the Company's best interest, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the conduct
was unlawful. Such indemnity is limited to the extent that (i) such person is
not otherwise indemnified and (ii) such indemnifications are not prohibited by
Pennsylvania law or any other applicable law.

Any indemnification under the previous paragraph (unless ordered by a
court) shall be made by the Company only as authorized in the specific case upon
the determination that indemnification of the director or officer is proper in
the circumstances because that person has met the applicable standard of conduct
set forth above. Such determination shall be made (i) by the Board of Directors
by a majority vote of a quorum of disinterested directors who are not parties to
such action or (ii) if such quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion. To the extent that a director or officer of the Company shall
be successful in prosecuting an indemnity claim, the reasonable expenses of any
such person and the fees and expenses of any special legal counsel engaged to
determine the possibility of indemnification shall be borne by the Company.
II-1
<PAGE> 149

Expenses incurred by a director or officer of the Company in defending a
civil or criminal action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that person is not entitled to be
indemnified by the Company under the Bylaws or applicable provisions of
Pennsylvania law.

The indemnification and advancement of expenses provided by, or granted
pursuant to Article VIII of the Bylaws is not deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled, both as to action in that person's official capacity and as to action
in another capacity while holding such office.

To satisfy its indemnification obligations, the Company may maintain
insurance, obtain a letter of credit, act as self-insurer, create a reserve,
trust, escrow, cash collateral or other fund or account, enter into
indemnification agreements, pledge or grant a security interest in any assets or
properties of the Company, or use any other mechanism or arrangement whatsoever
in such amounts, costs, terms and conditions as the Board of Directors shall
deem appropriate. The obligations of the Company to indemnify a director or
officer under Article VIII of the Bylaws is a contract between the Company and
such director or officer and no modification or repeal of the Bylaws shall
detrimentally affect such officer or director with regard to that person's acts
or omissions prior to such amendment or repeal.

Upon consummation of the Offering, the Company will purchase insurance for
its directors and officers for certain losses arising from claims or charges
made against them in their capacities as directors and officers of the Company.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On May 21, 1996, the registrant sold a 7% Subordinated Convertible Note due
2003 in the principal amount of $25 million to Chase Equity Associates, L.P., an
affiliate of Chase Capital Partners, for the aggregate purchase price of $25
million, which is convertible into the registrant's common stock. The
transaction was intended to be exempt from the registration requirements of the
Securities Act by virtue of Section 4(2) thereof.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed as part of this registration
statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.01* Form of Underwriting Agreement.
3.01* Amended and Restated Articles of Incorporation
3.02* Amended and Restated Bylaws
5.01* Opinion of Morgan, Lewis & Bockius LLP as to the legality of
the securities being registered.
10.01* Employment Agreement with Joseph M. Field
10.02* Employment Agreement with David J. Field
10.03* Employment Agreement with John C. Donlevie
10.04* Employment Agreement with Eugene D. Levin
10.05* Employment Agreement with Deborah Kane
10.06* 1998 Equity Compensation Plan
21.01* Subsidiaries of the Registrant
23.01 Consent of Deloitte & Touche LLP, Philadelphia, PA
23.02 Consent of Deloitte & Touche LLP, Salt Lake City, UT
23.03 Consent of Deloitte & Touche LLP, Cincinnati, OH
23.04 Consent of Deloitte & Touche LLP, Seattle, WA
23.05 Consent of Arthur Andersen LLP, Baltimore, MD
23.06 Consent of Morgan, Lewis & Bockius LLP (included in opinion
filed as Exhibit 5.01).
</TABLE>

II-2
<PAGE> 150

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
24.01 Power of Attorney (included on signature page of this
registration statement).
27.01 Financial Data Schedule.
99.01 Consent of Person About to Become a Director from Michael R.
Hannon.
</TABLE>

- ---------------
* To be filed by amendment.

(b) FINANCIAL STATEMENT SCHEDULE

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
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 Commission such indemnification is
against public policy as expressed in the 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.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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.

II-3
<PAGE> 151

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bala Cynwyd,
Pennsylvania, on August 13, 1998.

ENTERCOM COMMUNICATIONS CORP.

By: /s/ JOSEPH M. FIELD
------------------------------------
Joseph M. Field
Chairman, Chief Executive Officer
and President

KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Joseph M. Field and David J. Field, and each of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his person's name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this registration statement and additional
registration statements pursuant to Rule 462(b) of the Securities Act, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>

/s/ JOSEPH M. FIELD Chairman of the Board, Chief August 13, 1998
- ----------------------------------------------------- Executive Officer (Principal
Joseph M. Field Executive Officer), and
President

/s/ DAVID J. FIELD Chief Operating Officer, Chief August 13, 1998
- ----------------------------------------------------- Financial Officer and a
David J. Field Director (Principal Financial
Officer)

/s/ JOHN C. DONLEVIE Executive Vice President, August 13, 1998
- ----------------------------------------------------- General Counsel and a Director
John C. Donlevie

/s/ EUGENE D. LEVIN Treasurer and Controller August 13, 1998
- ----------------------------------------------------- (Principal Accounting Officer)
Eugene D. Levin

/s/ MARIE H. FIELD Director August 13, 1998
- -----------------------------------------------------
Marie H. Field

/s/ HERBERT KEAN, M.D. Director August 13, 1998
- -----------------------------------------------------
Herbert Kean, M.D

/s/ LEE HAGUE Director August 13, 1998
- -----------------------------------------------------
Lee Hague

/s/ THOMAS H. GINLEY, M.D. Director August 13, 1998
- -----------------------------------------------------
Thomas H. Ginley, M.D.

/s/ S. GORDON ELKINS Director August 13, 1998
- -----------------------------------------------------
S. Gordon Elkins
</TABLE>

II-4
<PAGE> 152

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Entercom Communications Corp.:

We have audited the financial statements of Entercom Communications Corp.
(the "Company") as of September 30, 1997 and 1996, and for each of the three
years in the period ended September 30, 1997, and have issued our report thereon
dated December 12, 1997, except for Note 11 as to which the date is August 13,
1998 (included elsewhere in this Registration Statement). Our audits also
included the financial statement schedule listed in Item 16 of this Registration
Statement. This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.

DELOITTE & TOUCHE LLP
Philadelphia, PA
December 12, 1997
<PAGE> 153

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

ENTERCOM COMMUNICATIONS CORP.
YEARS ENDED SEPTEMBER 30, 1995, 1996, AND 1997

<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO DEDUCTIONS
BEGINNING COSTS AND FROM BALANCE AT
ALLOWANCE FOR DOUBTFUL ACCOUNTS OF YEAR EXPENSES RESERVES(A) END OF YEAR
------------------------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
1995.................................... $ 65,964 $225,370 $227,810 $ 63,524
1996.................................... 63,524 318,599 265,283 116,840
1997.................................... 116,840 548,726 373,566 292,000
</TABLE>

- ---------------

(A) Uncollectible accounts written off.
<PAGE> 154

EXHIBIT INDEX

- ---------------
* To be filed by amendment.

<PAGE> 1
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Entercom Communications
Corp. on Form S-1 of our report dated December 12, 1997, except for note 11 as
to which the date is August 13, 1998 relating to the consolidated financial
statements of Entercom Communications Corp., appearing in the Prospectus, which
is part of this Registration Statement, and of our report dated December 12,
1998 relating to the financial statement schedules appearing elsewhere in this
Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Philadelphia, PA

August 13, 1998

<PAGE> 1
Exhibit 23.02

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Entercom Communications
Corp. on Form S-1 of our report dated June 10, 1998 relating to the combined
financial statements of KMBZ-AM, KLTH-FM, KCMO-AM/FM, KIRO-AM/FM, KNWX-AM and
KING-FM appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Salt Lake City, Utah

August 13, 1998

<PAGE> 1
Exhibit 23.03

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Entercom Communications
Corp. on Form S-1 of our report dated May 21, 1998 relating to the financial
statements of the Sacramento Station Group appearing in the Prospectus, which
is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Cincinnati, Ohio

August 13, 1998

<PAGE> 1
Exhibit 23.04

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Entercom Communications
Corp. on Form S-1 of our report dated May 29, 1998 relating to the combined
financial statements of the KBSG, Inc. and KNDD, Inc. appearing in the
Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Seattle, Washington

August 13, 1998

<PAGE> 1
Exhibit 23.05

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement under the Securities Act of 1933.

/s/ ARTHUR ANDERSEN LLP
-----------------------
Baltimore, Maryland,
August 12, 1998

<PAGE> 1
Exhibit 99.01

CONSENT OF PERSON ABOUT TO BECOME A DIRECTOR

I, Michael R. Hannon, hereby consent to the use, in the Registration
Statement on Form S-1 of Entercom Communications Corp., a Pennsylvania
corporation (the "Company"), to which this Consent is filed as an exhibit, of my
name as a person about to become a Director of the Company.

/s/ MICHAEL R. HANNON
----------------------------------
Michael R. Hannon
August 13, 1998

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-1-1997
<PERIOD-END> MAR-31-1998
<CASH> 5,649
<SECURITIES> 0
<RECEIVABLES> 21,390
<ALLOWANCES> 381
<INVENTORY> 0
<CURRENT-ASSETS> 33,726
<PP&E> 44,041
<DEPRECIATION> 9,694
<TOTAL-ASSETS> 376,916
<CURRENT-LIABILITIES> 11,619
<BONDS> 153,283
0
0
<COMMON> 6
<OTHER-SE> 205,716
<TOTAL-LIABILITY-AND-EQUITY> 376,916
<SALES> 0
<TOTAL-REVENUES> 53,377
<CGS> 43,708
<TOTAL-COSTS> 43,708
<OTHER-EXPENSES> 1,947
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,935
<INCOME-PRETAX> 2,244
<INCOME-TAX> 88
<INCOME-CONTINUING> 2,096
<DISCONTINUED> 0
<EXTRAORDINARY> 2,376
<CHANGES> 0
<NET-INCOME> (220)
<EPS-PRIMARY> (.83)
<EPS-DILUTED> (.83)

</TABLE>