<PAGE>
As filed with the Securities and Exchange Commission on February 4, 1997
Registration No. 333-______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES EXCHANGE ACT OF 1933
----------------------
SFX BROADCASTING, INC
(Exact Name of Registrant as Specified in Its Charter)
----------------------
<TABLE>
<CAPTION>
<S> <C> <C>
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
DELAWARE (212) 407-9191 13-3649750
(State or Other Jurisdiction of (Address, Including Zip Code, and Telephone Number, (IRS Employer
Incorporation or Organization) Including Area Code, of Registrant's Principal Executive Offices) Identification No.)
</TABLE>
----------------------
ROBERT F.X. SILLERMAN
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
(212) 407-9191
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
----------------------
Copies to:
HOWARD M. BERKOWER, ESQ.
BAKER & MCKENZIE
805 THIRD AVENUE
NEW YORK, NEW YORK 10122
(212) 751-5700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box. [ ]
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, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum
Title of Securities Amount to be Aggregate Price Aggregate Offering Amount of
to be Registered Registered Per Unit Price Registration Fee
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<S> <C> <C> <C> <C>
Class A Common Stock, $.01
par value................... 747,441(1) $32.875(2) $24,572,122.88 $7,446.10
Class A Warrants............ 160,000(3) -- -- --
Class B Warrants............ 160,000(3) -- -- --
Total $7,446.10
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<PAGE>
(1) Represents the number of shares of Class A Common Stock that may be
issued upon exercise of (i) the Class B Warrants (223,564 shares), (ii)
the Unit Purchase Options, including the shares of Class A Common Stock
issuable upon exercise of the warrants underlying the Unit Purchase
Options (an aggregate of 143,184 shares), (iii) the Common Stock Purchase
Warrants (29,830 shares), (iv) the Huff Warrants (269,427 shares), and
(v) the Stock Options (81,436 shares), as such terms are used in the
Prospectus included in this Registration Statement. In addition, such
additional indeterminable number of shares of Class A Common Stock are
hereby registered as may be required by reason of the anti-dilution
provisions of the warrants and options referred to in the previous
sentence.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average of the high ($33.00)
and low ($32.75) prices of the Class A Common Stock on January 30, 1997,
as reported by The Nasdaq Stock Market, Inc.'s National Market System.
(3) Represents warrants issuable upon exercise of the Unit Purchase Options.
Upon exercise of each Unit Purchase Option, the holder thereof is
entitled to receive .2983 of a share of Class A Common Stock, one Class A
Warrant and one Class B Warrant. The shares of Class A Common Stock
underlying the Class A Warrants and the Class B Warrants have been
included in the calculation set forth in footnote (1).
----------------------
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, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
==============================================================================
<PAGE>
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 FEBRUARY 4, 1997
SFX Broadcasting, Inc.
------------------------------------------------------
747,441 SHARES OF CLASS A COMMON STOCK
160,000 CLASS A WARRANTS
160,000 CLASS B WARRANTS
This Prospectus relates to up to 747,441 shares of Class A Common Stock,
par value $.01 per share, of SFX Broadcasting, Inc., a Delaware corporation
(the "Company"), that may be issued upon the exercise of outstanding (i) Class
B Warrants, (ii) Unit Purchase Options dated March 30, 1994, including the
shares of Class A Common Stock issuable upon exercise of the warrants
underlying the Unit Purchase Options, (iii) Common Stock Purchase Warrants
dated July 29, 1993, (iv) warrants issued to The Huff Alternative Income Fund,
L.P. (the "Huff Warrants"), and (v) stock options (the "Stock Options") issued
pursuant to stock option plans. (The Class B Warrants, Unit Purchase Options,
Common Stock Purchase Warrants and Huff Warrants are collectively referred to
in this Prospectus as the "Warrants.") In addition, this Prospectus relates to
up to 160,000 Class A Warrants and 160,000 Class B Warrants that may be issued
upon the exercise of the Unit Purchase Options.
The Warrants (other than certain of the Huff Warrants) and the Stock
Options were originally issued by Multi-Market Radio, Inc. ("MMR"). On
November 22, 1996, a wholly-owned subsidiary of the Company was merged with
and into MMR (the "Merger"), as a result of which MMR became a wholly-owned
subsidiary of the Company. As a result of the Merger, (i) each outstanding
share of Class A Common Stock, par value $.01 per share, and Series B
Convertible Preferred Stock Share, par value $.01 per share, of MMR was
converted into the right to receive .2983 of a share of Class A Common Stock
of the Company (and cash in lieu of any fractional share of Class A Common
Stock of the Company), (ii) each outstanding share of Class B Common Stock,
par value $.01 per share, and Original Preferred Stock, par value $.01 per
share, of MMR was converted into the right to receive .2983 of a share of
Class B Common Stock of the Company, par value $.01 per share (and cash in
lieu of any fractional share of Class B Common Stock of the Company), and
(iii) each outstanding Warrant and Stock Option of MMR was assumed by the
Company and, as assumed, adjusted so that (a) each Warrant and Stock Option
shall be exercisable for .2983 of a share of Class A Common Stock of the
Company and (b) the per share exercise price or strike price for the shares of
Class A Common Stock of the Company issuable upon the exercise of such assumed
Warrants and Stock Options shall be equal to the quotient obtained by dividing
the exercise price per share of Class A Common Stock of MMR under such Warrant
and Stock Option immediately prior to the consummation of the Merger by .2983,
and rounding the resulting exercising price down to the nearest whole cent.
The economic rights of shares of Class A Common Stock and shares of
Class B Common Stock of the Company are identical, but the voting rights
differ in that each share of Class A Common Stock is entitled to one vote and
each share of Class B Common Stock is generally entitled to ten votes. See
"Description of Common Stock." As of January 31, 1997, Robert F.X. Sillerman,
a Director of the Company and the Executive Chairman of the Company, may be
deemed to be the beneficial owner of approximately 56.4% of the combined
voting power of the Company, and Mr. Sillerman and other members of management
of the Company may be deemed to be the beneficial owners of approximately
58.1% of the combined voting power of the Company. See "Risk Factors--Control
by Management."
The shares of Class A Common Stock and the Class B Warrants of the
Company are traded on The Nasdaq Stock Market, Inc.'s National Market System
(the "Nasdaq National Market") under the symbols "SFXBA" and "SFXBW,"
respectively. On February __, 1997, the last reported sales price of a share of
Class A Common Stock and a Class B Warrant of the Company on the Nasdaq
National Market was $_____ and $_____, respectively.
SEE "RISK FACTORS," BEGINNING ON PAGE 5, FOR A DISCUSSION OF CERTAIN
RISK FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS.
(cover page continued on next page)
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(cover page continued)
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES 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 AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is , 1997.
--------------------
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<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities being offered by this Prospectus. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,
certain items of which are contained in exhibits and schedules to the
Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and the financial statements and notes filed
as a part thereof. Statements made in this Prospectus concerning the contents
of any contract, agreement or other document filed with the Commission as an
exhibit are not necessarily complete. With respect to each such contract,
agreement or other document filed with the Commission as an exhibit, reference
is made to the exhibit for a more complete description of the matter involved,
and each such statement shall be deemed qualified in its entirety by such
reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
(the "Exchange Act"), and, in accordance therewith, files reports, proxy
statements and other information with the Commission. The reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act 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 Commission's Regional Offices at 7 World Trade Center, 13th Floor,
New York, New York 10048 and the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such documents can also
be obtained at prescribed rates from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company is an electronic filer under the EDGAR (Electronic Data Gathering,
Analysis and Retrieval) system maintained by the Commission. The Commission
maintains a Web site (http://www.sec.gov) on the Internet that contains
reports, proxy and information statements and other information regarding
companies that file electronically with the Commission. In addition, documents
filed by the Company can be inspected at the offices of The Nasdaq Stock
Market, Inc., Reports Section, 1735 K Street, N.W., Washington, D.C.
20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with
the Commission, are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K, as amended, for
the year ended December 31 1995;
(ii) the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1996, June 30, 1996,
and September 30, 1996;
(iii) the Company's Current Reports on Form 8-K dated April
18, 1996, May 8, 1996, May 16, 1996, May 29, 1996, June
21, 1996, July 10, 1996 (as amended), August 8, 1996,
October 3, 1996, October 30, 1996, November 1, 1996,
November 27, 1996, January 17, 1996, and January 21,
1997;
(iv) the description of the Company's Class A Common Stock
contained in the Company's Registration Statement on
Form 8-A (File No. 0-22486) filed with the Commission on
September 27, 1993, as amended; and
(iv) the description of the Company's Class B Warrants
contained in the Company's Registration Statement on
Form 8-A (File No. 0-22486) filed with the Commission on
January 9, 1997.
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<PAGE>
All documents and reports filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the shares of Class
A Common Stock of the Company to which this Prospectus relates shall be deemed
to be incorporated by reference into this Prospectus and to be a part thereof
from the date of filing of such documents or reports.
Any statement contained in a document which is, or is deemed to be,
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein (or in any other subsequently filed document which also is, or is
deemed to be, incorporated by reference herein) modifies or supersedes the
previous statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any document incorporated by reference in this Prospectus (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference herein). Requests for such documents should be directed to the
principal executive offices of the Company at 150 East 58th Street, 19th
Floor, New York, New York 10155, Attention: Timothy Klahs, Director of
Investor Relations; telephone number (212) 407-9191.
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<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION...................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 2
RISK FACTORS............................................................... 5
DESCRIPTION OF CLASS A WARRANTS AND CLASS B WARRANTS...................... 12
DESCRIPTION OF COMMON STOCK............................................... 13
USE OF PROCEEDS........................................................... 14
PLAN OF DISTRIBUTION...................................................... 14
LEGAL MATTERS............................................................. 16
EXPERTS................................................................... 16
------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE IN CONNECTION WITH THE OFFERING
MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR ANY OFFER TO OR SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE UNDER THIS PROSPECTUS SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS.
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<PAGE>
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully by prospective investors in evaluating the Company before purchasing
any of the securities offered hereby. The information contained or
incorporated by reference in this Prospectus includes forward-looking
statements that involve risks and uncertainties, a number of which are
identified in this "Risk Factors" section. These risks and uncertainties
include, without limitation, risks related to the consummation of acquisitions
and dispositions, integration of acquired stations, leverage, regulation of
radio broadcasting and other matters. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, due
to such risks and uncertainties.
RISKS RELATED TO PENDING ACQUISITIONS AND DISPOSITIONS
Consummation of the Company's pending acquisitions and dispositions
of radio stations is subject to a number of factors, certain of which are
beyond the Company's control. In particular, consummation of the acquisitions
and the dispositions is subject to the prior approval by the Federal
Communications Commission (the "FCC") of the assignments or transfers of
control of operating licenses issued by the FCC, the continued operating
performance of the stations to be acquired or disposed such that there is no
material adverse change in such stations that would prevent consummation of
any such transactions and the prior approval of the lenders under the
Company's senior credit facility. As a result of the elimination of the
national ownership limits and the liberalization of the local ownership limits
effected by the Telecommunications Act of 1996 (the "Recent Legislation"),
acquisitions and dispositions will be subject to antitrust review by the
Federal Trade Commission and the Department of Justice, Antitrust Division
(the "Antitrust Agencies"). The Antitrust Agencies have indicated their
intention to review matters related to the concentration of ownership within
markets even when the ownership in question is in compliance with the
provisions of the Recent Legislation. While the Company believes that none of
its pending acquisitions or dispositions of radio stations substantially
lessens competition, there can be no assurance that the Antitrust Agencies
will not take a contrary position, which could delay or prevent the
consummation of any or all of the Company's pending acquisitions or
dispositions of radio stations or require the Company to restructure its
ownership in the relevant market or markets. See "--Extensive Regulation of
Radio Broadcasting."
The Company will also require financing in order to consummate the
pending acquisitions, which the Company may obtain through the issuance of
additional securities, borrowings under its senior credit facility and
proceeds from pending dispositions of radio stations. The ability of the
Company to issue certain securities or borrow under its senior credit facility
will be subject to meeting certain financial tests. In addition, consummation
of certain acquisitions is subject to the prior approval of the lenders under
the Company's senior credit facility. There can be no assurance that the
Company's existing stations, and the stations which the Company will acquire,
will achieve the cash flow levels required to issue certain securities or
borrow under its senior credit facility. As a result of the foregoing, there
can be no assurance as to when the Company's pending acquisitions or
dispositions of radio stations will be consummated or that they will be
consummated at all.
RISKS ASSOCIATED WITH INTEGRATION OF THE STATIONS
As of January 1, 1996, the Company owned and operated, provided
programming to or sold advertising on behalf of 22 radio stations located in
eight markets. Since that time, the number of stations has more than tripled.
The Company's plans with respect to radio stations it has acquired and plans
to acquire involve, to a substantial degree, strategies to increase net
revenue while at the same time reducing operating expenses, as well as the
implementation of a new regional management structure and a modified senior
management team. Although the Company believes that its strategies are
reasonable, there can be no assurance that it will be able to implement its
plans without delay or that, when implemented, its efforts will result in the
increased net revenues or other benefits currently anticipated by the Company.
In addition, there can be no assurance that the Company will not encounter
unanticipated problems or liabilities in connection with the implementation of
the new management changes or the operation of the radio stations to be
acquired. The integration of the newly acquired stations into the Company will
require substantial attention from
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members of the Company's senior management, which will limit the amount of
time such members have available to devote to the Company's existing
operations. The Company currently anticipates realizing certain cost savings
and eliminating certain non-recurring expenses as a result of the
acquisitions. While management believes that the anticipated cost savings and
elimination of non-recurring expenses are reasonably achievable, the Company's
ability to achieve such cost savings and to eliminate such non-recurring
expenses is subject to numerous factors, many of which are beyond the
Company's control. There can be no assurance that the Company will realize any
such cost savings or will be able to eliminate such non-recurring expenses.
EXTENSIVE REGULATION OF RADIO BROADCASTING
Adoption of the Recent Legislation in February 1996 eliminated the
national limits and liberalized the local limits on radio station ownership by
a single company. However, the Antitrust Agencies are increasingly
scrutinizing acquisitions of radio stations and the entering into of joint
sales agreements ("JSAs") and local market agreements ("LMAs"). There can be
no assurance that policy and rule-making activities of the Antitrust Agencies
will not impact the Company's operations (including existing stations or
markets), expansion strategy or its ability to realize the benefits which
management had anticipated obtaining following the adoption of the Recent
Legislation.
The radio broadcasting industry is subject to extensive regulation by
the FCC. In particular, the Company's business depends on it continuing to
hold, and, in connection with acquisitions of radio stations, on it obtaining
prior FCC consent to assignments or transfers of control of, broadcast station
operating licenses issued by the FCC. There can be no assurance that the
Company's licenses will be renewed or that the FCC will approve future
acquisitions or dispositions. In addition, the number and locations of radio
stations the Company may acquire is limited by FCC rules and will vary
depending upon whether the interests in other radio stations or certain other
media properties of certain individuals affiliated with the Company are
attributable to those individuals. The issuance of shares of Class A Common
Stock of the Company, including those issuable pursuant to the conversion of
other securities of the Company and pursuant to all other rights, options or
warrants to purchase Class A Common Stock of the Company, that would cause
Robert F.X. Sillerman, a Director of the Company and the Executive Chairman of
the Company, to hold directly voting stock of the Company representing less
than 50% of the total voting power of the Company will require the Company to
seek and obtain the consent of the FCC.
The Congress and/or 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 broadcast
stations, result in the loss of audience share and advertising revenues for
the Company's radio broadcasting stations, and affect the ability of the
Company to acquire additional radio broadcast stations or finance such
acquisitions. In particular, the FCC recently released a notice of proposed
rulemaking that, among other things, seeks comment on whether the FCC should
modify its attribution rules by (i) restricting the availability of the single
majority stockholder exemption, (ii) increasing the amount of stock an
investment company can own without attribution, (iii) attributing, under
certain circumstances, certain interests such as non-voting stock or debt, and
(iv) attributing, under certain circumstances, JSAs.
SUBSTANTIAL LEVERAGE; INABILITY TO SERVICE OBLIGATIONS
In connection with its acquisitions of radio stations, the Company
has incurred and will incur significant amounts of indebtedness. Subject to
certain restrictions contained in the Company's debt instruments, the Company
may incur additional indebtedness from time to time to finance acquisitions,
for capital expenditures or for other purposes. See "--Expansion Strategy;
Need for Additional Funds."
The degree to which the Company is and may become leveraged could
have material consequences to the Company and the holders of the Company's
securities, including, but not limited to, the following: (i) the Company's
ability to obtain additional financing in the future for acquisitions, working
capital, capital expenditures, general corporate or other purposes may be
impaired, (ii) a substantial portion of the Company's cash flow from
operations will be dedicated to the payment of the principal and interest on
its debt and dividends on capital stock and will not be
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available for other purposes, (iii) the agreements governing the Company's
debt contain or are expected to contain restrictive financial and operating
covenants, and the failure by the Company to comply with such covenants could
result in an event of default under the applicable instruments, which could
permit acceleration of the debt under such instrument and in some cases
acceleration of debt under other instruments that contain cross-default or
cross-acceleration provisions and (iv) the Company's level of indebtedness
could make it more vulnerable to economic downturns, limit its ability to
withstand competitive pressures and limit its flexibility in reacting to
changes in its industry and general economic conditions. Certain of the
Company's competitors operate on a less leveraged basis, and have
significantly greater operating and financial flexibility, than the Company.
The Company's ability to make scheduled payments of principal of, to
pay interest on or to refinance, its debt and to make dividend and redemption
payments on its capital stock depends on its future financial performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors beyond its control, as
well as the success of the radio stations to be acquired by the Company and
the integration of these stations into the Company's operations. The Company's
borrowings under its senior credit facility will be, and other future
borrowings may be, at variable rates of interest, which will result in higher
interest expense in the event of increases in interest rates. There can be no
assurance that the Company's business will generate sufficient cash flow from
operations or that future working capital borrowings will be available in an
amount which enables the Company to service its debt, to make dividend,
conversion and redemption payments and to make necessary capital or other
expenditures. The Company may be required to refinance a portion of the
principal amount of its debt or the aggregate liquidation preference of its
preferred stock prior to their maturities. There can be no assurance that the
Company will be able to raise additional capital through the sale of
securities, the disposition of radio stations or otherwise for any such
refinancing.
HISTORICAL LOSSES
Although the Company had net income of $1.8 million for the year
ended December 31, 1994, the Company had net losses of $45.3 million, $4.4
million and $17.8 million for the nine months ended September 30, 1996, and
the years ended December 31, 1995 and 1993, respectively. Depreciation and
amortization relating to past acquisitions and future acquisitions, interest
expenses under the Company's debt and dividend payments will continue to
affect the Company's net income (loss) in the future. There is no assurance
that losses will not continue or that the Company will become profitable in
the future.
CHANGE OF CONTROL
Upon the occurrence of a change of control (as defined in the
applicable document) of the Company, the holders of certain preferred stock or
certain debt instruments will have the right, subject to certain conditions
and restrictions, to require the Company to repurchase their securities at a
price equal to 101% of the aggregate liquidation preference or the aggregate
principal amount thereof, as applicable, plus accrued and unpaid dividends or
interest, as applicable, to the date of repurchase. The repurchase price is
payable in cash. In addition, a change of control may constitute a default
under the Company's senior credit facility. If a change of control were to
occur, due to the highly leveraged nature of the Company, the Company might
not have the financial resources to repay all of its obligations under any
indebtedness that would become payable upon the occurrence of such change of
control. In addition, the Communications Act of 1934, as amended (the
"Communications Act"), and FCC rules require the prior consent of the FCC to
any change of control of the Company. See "--Extensive Regulation of Radio
Broadcasting" and "--Substantial Leverage; Inability to Service Obligations."
EXPANSION STRATEGY; NEED FOR ADDITIONAL FUNDS
The Company's principal growth strategy is to operate and acquire
highly-ranked radio stations with attractive audience demographics in major
and medium-sized markets located throughout the United States. The Company
regularly explores acquisition opportunities; however, there can be no
assurance that the Company will consummate any acquisitions or be able to
identify stations to acquire in the future. Each acquisition will be subject
to the prior
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approval of the FCC and certain acquisitions will be subject to the prior
approval of the lenders under the Company's senior credit facility.
Furthermore, as a result of the Recent Legislation, future acquisitions may be
subject to antitrust review by the Antitrust Agencies, even if approved by the
FCC. In addition, the Company may require additional debt or equity financing
to finance properties it may seek to acquire in the future. The availability
of additional acquisition financing cannot be assured, and depending on the
terms of such acquisitions and financings, could be restricted by the terms of
certain debt instruments and preferred stock. There can be no assurance that
any future acquisitions will be successfully integrated into the Company's
operations or that such acquisitions will not have a material adverse effect
on the Company's financial condition and results of operations. See
"--Extensive Regulation of Radio Broadcasting" and "--Risks Associated with
Integration of the Stations."
COMPETITION
The radio broadcasting industry is highly competitive and the
Company's stations are located in highly competitive markets. Each of the
Company's stations competes for audience share and advertising revenue
directly with other FM and AM radio stations, as well as with other media,
within its respective market. The financial results of each of the Company's
stations are dependent to a significant degree upon its audience ratings and
its share of the overall advertising revenue within the station's geographic
market. The Company's audience ratings and market share are subject to change,
and any adverse change in audience rating or market share in any particular
market could have a material and adverse effect on the Company's net revenues.
Although the Company competes with other radio stations with comparable
programming formats in most of its markets, if another station in the market
were to convert its programming format to a format similar to one of the
Company's radio stations, if a new radio station were to adopt a competitive
format, or if an existing competitor were to strengthen its operations, the
Company's stations could suffer a reduction in ratings or advertising revenue
and could require the Company to incur increased promotional and other
expenses. In addition, certain of the Company's stations compete, and in the
future other stations may compete, with groups of stations in a market
operated by a single operator. As a result of the Recent Legislation, the
radio broadcasting industry has become increasingly consolidated, resulting in
the existence of radio broadcasting companies which are significantly larger,
with greater financial resources, than the Company. Furthermore, the Recent
Legislation will permit other radio broadcasting companies to enter the
markets in which the Company operates or may operate in the future. Although
the Company believes that each of its stations is able to compete effectively
in its market, there can be no assurance that any of the Company's stations
will be able to maintain or increase its current audience ratings and
advertising revenue market share. The Company's stations also compete with
other advertising media such as newspapers, television, magazines, billboard
advertising, transit advertising and direct mail advertising. Radio
broadcasting is also subject to competition from new media technologies that
are being developed or introduced, such as the delivery of audio programming
by cable television systems or the introduction of digital audio broadcasting.
The Company cannot predict the effect, if any, that any of these new
technologies may have on the radio broadcasting industry.
DEPENDENCE ON ECONOMIC FACTORS
Because the Company derives substantially all of its revenue from the
sale of advertising time, its revenues may be adversely affected by economic
conditions which affect advertisers. In particular, because approximately 75%
of the Company's revenue has generally been derived from local advertisers,
operating results in individual geographic markets will be adversely affected
by local or regional economic downturns. These economic downturns might have
an adverse impact on the Company's financial condition and results of
operations. In addition, revenues of radio stations may be affected by many
other factors, including: (i) the popularity of programming, including
programming such as sports programming where the Company makes long-term
commitments; (ii) regulatory restrictions on types of programming or
advertising; (iii) competition within national regional or local markets from
programming on other stations or from other media; (iv) loss of market share
of other technologies; and (v) challenges to license renewals.
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CONTROL BY MANAGEMENT
As of January 31, 1997, Mr. Sillerman, a Director of the Company and
the Company's Executive Chairman, may be deemed to be the beneficial owner of
approximately 56.4% of the combined voting power of the Company, and Mr.
Sillerman and other members of the Company's management may be deemed to be
the beneficial owners of approximately 58.1% of the combined voting power of
the Company.
The Class A Common Stock of the Company has one vote per share on all
matters, whereas the Class B Common Stock, par value $.01 per share, of the
Company has ten votes per share except in certain matters. Accordingly,
management currently is able to control the vote on all matters except (i) in
the election of directors, with respect to which the holders of the Class A
Common Stock of the Company are entitled to elect, by a class vote, two-
sevenths (2/7ths) of the Company's directors (or if such number of directors
is not a whole number, the next higher whole number), (ii) in connection with
any proposed "going private" transaction between the Company and Mr. Sillerman
or his affiliates, with respect to which the holders of the Class A Common
Stock and the Class B Common Stock of the Company vote as a single class, with
each share of Class A Common Stock and of Class B Common Stock entitled to one
vote per share and (iii) as otherwise provided by law. In addition, if
dividends on the 6 1/2% Series D Cumulative Convertible Exchangeable Preferred
Stock due May 31, 2007 (the "Series D Preferred Stock") are unpaid in an
aggregate amount equal to six full quarterly dividends and in certain other
circumstances, the holders of the Series D Preferred Stock will be entitled to
elect two additional members of the Board of Directors of the Company. The
control of the Company by management may have the effect of discouraging
certain types of change-of-control transactions, including transactions in
which the holders of capital stock of the Company might otherwise receive a
premium for their shares over the then-current market price. See "Description
of Common Stock."
POTENTIAL CONFLICTS OF INTEREST; TRANSACTIONS WITH AFFILIATES
Mr. Sillerman and other members of the Company's management have
direct and indirect investments and interests in Triathlon Broadcasting
Company ("Triathlon"), a publicly-traded company which owns and operates radio
stations, including stations which are in the same market as certain of the
Company's radio stations. These investments and interests (and any similar
investments and interests in the future) may give rise to certain conflicts of
interest as well as to potential attribution under FCC rules or invocation of
the FCC's cross-interest policy, which could restrict the Company's ability to
acquire radio stations in certain markets. See "--Extensive Regulation of
Radio Broadcasting." Pursuant to a consulting and marketing agreement with
Triathlon, Sillerman Communications Management Corporation ("SCMC"), an
affiliate of Mr. Sillerman and Howard J. Tytel, a Director of the Company and
an Executive Vice President of the Company, is obligated to offer to Triathlon
any radio broadcasting opportunities that come to its attention in medium and
small markets located west of the Mississippi River. The Company does not
intend to pursue acquisitions in the medium and small markets in the Midwest
and Western regions of the United Stations on which Triathlon primarily
focuses, except for three radio stations owned by the Company in the Wichita,
Kansas market, a market in which Triathlon has radio station ownership
interests. The Company has entered into a JSA with Triathlon whereby Triathlon
sells advertising time on the Company's stations operating in the Wichita
market. On April 15, 1996, the Company and SCMC entered into an agreement (the
"SCMC Termination Agreement"), pursuant to which SCMC assigned to the Company
its rights to receive fees for consulting and marketing services payable by
Triathlon, except for fees relating to certain transactions pending at the
date of such agreement, and the Company and SCMC terminated an arrangement
pursuant to which SCMC performed financial consulting services for the
Company.
SCMC has acted from time to time as the Company's financial advisor
since the Company's inception. SCMC is controlled by Mr. Sillerman, and
Messrs. Sillerman and Tytel are officers and directors of SCMC. SCMC acts in
similar capacities for Triathlon, which may seek to participate in business
opportunities which may be suitable for the Company.
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RELIANCE ON KEY PERSONNEL
The Company's business is dependent to a significant extent upon the
performance of certain key individuals, including Mr. Sillerman, Michael G.
Ferrel, a Director of the Company and the Company's Chief Executive Officer,
and D. Geoffrey Armstrong, a Director of the Company, the Company's Chief
Operating Officer and an Executive Vice President of the Company. The Company
entered into a five-year employment agreement with each of Messrs. Sillerman
and Armstrong in April 1995 and a five-year employment agreement with Mr.
Ferrel in November 1996. The Company has agreed to enter into a new employment
agreement with Mr. Sillerman pursuant to which Mr. Sillerman will continue in
his position with the Company for a five-year term, subject to renewal for an
additional five-year term. There can be no assurance that the services of
Messrs. Sillerman, Ferrel or Armstrong will continue to be provided for the
term of such agreements. Pursuant to Mr. Armstrong's employment agreement, he
has the right to terminate the agreement under certain circumstances, and, in
connection with such termination, to receive substantial payments from the
Company. Messrs. Sillerman's and Armstrong's employment agreements require
that they devote substantially all of their business time to the business and
affairs of the Company, except that Mr. Sillerman's agreement permits him to
fulfill his obligations as a director and officer of companies in which he
currently serves in such capacities and to devote a portion of his business
time to personal, non-broadcast investments or commitments or to certain
broadcast investments. The loss of the services of Messrs. Sillerman,
Armstrong or Ferrel could have a material adverse effect on the Company.
In addition, the Company has entered into employment agreements with
certain of the high-profile on-air personalities. However, there can be no
assurance that the Company will be able to retain any of these employees or
prevent them from competing with the Company in the event of their departure.
NO TRANSFER OF CAPITAL STOCK TO ALIENS
The Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), restricts the ownership, voting and transfer
of the Company's capital stock in accordance with the Communications Act and
the rules of the FCC to prohibit ownership of more than 25% of the Company's
outstanding capital stock, or more than 25% of the voting rights it represents
(this percentage, however, is 20% in the case of those subsidiaries of the
Company that are direct holders of FCC licenses), by or for the account of
non-U.S. citizens or their representatives or a foreign government or a
representative thereof or a corporation organized under the laws of a foreign
country ("Aliens") or corporations otherwise subject to domination or control
by Aliens. As of January 31, 1997, based upon reports filed with the
Commission, the Company believes that there are 1,071,429 shares of Class A
Common Stock held by Nomura Holdings America, Inc. ("Nomura"), representing
13.3% of the outstanding shares of Class A Common Stock and 5.7% of the
combined voting power of the Company. Because a substantial portion of the
common stock of Nomura is owned and voted by Aliens, the Company, in order to
comply with the requirements of the Communications Act and the rules and
regulations of the FCC promulgated thereunder, may decide not to permit or
recognize any issuance or transfer of its common stock to an Alien. Failure to
comply with these rules and regulations could result in the imposition of
penalties on the Company. This restriction on transfers to Aliens may
adversely affect the market for the Company's securities. In addition, the
Certificate of Incorporation provides that shares of capital stock of the
Company determined by the Board of Directors to be owned beneficially by an
Alien shall always 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 the alien ownership restrictions of the
Communications Act and the FCC rules and regulations.
DIVIDEND POLICY; RESTRICTIONS ON PAYMENT OF DIVIDENDS
The Company has not paid any dividends on its common stock since its
inception in 1992 and does not anticipate that it will pay any dividends on
its common stock in the foreseeable future. Earnings, if any, will be retained
by the Company to fund its growth. Certain of the Company's debt instruments
include covenants restricting the Company's ability to pay dividends or to
make certain other distributions to stockholders. The Company is a holding
company, substantially all of the operations of which are conducted through
subsidiaries. The ability of such subsidiaries to pay dividends is subject to
applicable state law and certain other restrictions.
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MARKET RISK WITH RESPECT TO COMMON STOCK; CERTAIN INVESTMENT LIMITATIONS
The shares of Class A Common Stock of the Company are quoted on the
Nasdaq National Market. However, the prices at which the shares of Class A
Common Stock trade may depend upon many factors, including markets for similar
securities, industry conditions, and the performance of, and investor
expectations for, the Company. No assurance can be given that a holder of the
shares of Class A Common Stock of the Company will be able to sell such shares
at any particular price. Certain institutional investors may invest only in
dividend-paying equity securities or may operate under other restrictions that
may prohibit or limit their ability to invest in the shares of Class A Common
Stock of the Company.
SHARES ELIGIBLE FOR FUTURE SALE AND POSSIBLE ADVERSE EFFECT THEREOF
As of January 31, 1997 there were approximately 8,063,347 shares on
Class A Common Stock and approximately 1,064,936 shares of Class B Common
Stock of the Company issued and outstanding. Of these outstanding shares,
approximately 1,281,897 shares of Class A Common Stock and approximately
856,126 shares of Class B Common Stock are "Restricted Securities," as that
term is defined in Rule 144 ("Rule 144") promulgated under the Securities Act.
Of such shares, the Company believes that 1,281,897 shares of Class A Common
Stock and the 856,126 shares of Class A Common Stock issuable upon conversion
of the Class B Common Stock are currently eligible for sale in the open market
under Rule 144 (subject to the limitations set forth therein). In addition,
the shares of Class A Common Stock held by Nomura have one demand and certain
piggy-back registration rights which expire on October 7, 2000. Approximately
77,944 shares of Class A Common Stock (including shares of Class A Common
Stock issuable upon the exercise of options and warrants) and approximately
208,810 shares of Class B Common Stock issued in the Merger are subject to
restrictions on resale under Rule 145 ("Rule 145") promulgated under the
Securities Act. In addition, each of the 2,990,000 outstanding shares of
Series D Preferred Stock is convertible at the option of the holder thereof
into 1.0987 shares of Class A Common Stock (subject to adjustments in certain
events) at any time prior to the close of business on May 31, 2007, the
maturity date of the Series D Preferred Stock. The Company has filed a
registration statement with the Commission with respect to the resale by the
holders thereof of the shares of Series D Preferred Stock, the shares of Class
A Common Stock issuable upon conversion thereof and the Exchange Notes
issuable upon the exchange thereof. Such registration statement was declared
effective in July 1996. The sale, or availability for sale, of substantial
amounts of shares of stock of the Company in the public market pursuant to
Rule 144, Rule 145 or otherwise 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.
POSSIBLE ADVERSE IMPACT OF AUTHORIZED BUT UNISSUED SHARES OF CAPITAL STOCK AND
DELAWARE LAW
The Company has 100,000,000 shares of Class A Common Stock,
10,000,000 shares of Class B Common Stock, 1,200,000 shares of Class C Common
Stock, par value $.01 share, and 10,010,000 shares of preferred stock, par
value $.01 per share, authorized, of which approximately 8,063,347 shares of
Class A Common Stock, 1,064,936 shares of Class B Common Stock, no shares of
Class C Common Stock and 5,243,000 shares of preferred stock are outstanding
as of January 31, 1997. Pursuant to the Certificate of Incorporation, the
unissued shares of preferred stock shall have such designations, rights and
preferences as may be determined from time to time by the Board of Directors
of the Company. Accordingly, the Board of Directors of the Company is
empowered, without stockholder approval, to issue stock preferred stock with
liquidation, conversion, voting or other rights which could adversely affect
the voting power or other rights of the holders of the then outstanding shares
of stock of the Company. In addition, the Board of Directors of the Company
may authorize the issuance of substantial amounts of shares of common or
preferred stock, as a financing technique or otherwise, the effect of which
would be to dilute the economic and voting rights of existing stockholders and
might adversely affect the prices at which the shares of Class A Common Stock
trade. The Board of Directors of the Company could use the issuance of
additional shares of capital stock of the Company as a method of discouraging,
delaying or preventing a change in control of the Company.
The Company is subject to the "business combination" statute of
Section 203 of the General Corporation Law of the State of Delaware (the
"DGCL"). In general, Section 203 prohibits a publicly-held Delaware
corporation from
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engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an "interested stockholder," with certain specified exceptions. A
"business combination" includes mergers, stock or asset sales and other
transactions resulting in a financial benefit to the "interested stockholder."
An "interested stockholder" is a person who, together with affiliates and
associates, owns (or, within three years, owned) 15% or more of the
corporation's voting stock. The effect of Section 203 of the DGCL may be to
make it more difficult to effect a change in control of the Company.
DESCRIPTION OF CLASS A WARRANTS AND CLASS B WARRANTS
The following statements are qualified by reference to the Warrant
Agreement, dated as of March 23, 1994, among MMR, American Stock Transfer &
Trust Company, as warrant agent, D.H. Blair Investment Banking Corp. and
Americorp Securities, Inc. (the "Warrant Agreement") governing the Class A
Warrants and the Class B Warrants. A copy of the Warrant Agreement has been
incorporated by reference as an exhibit to the Registration Statement.
ChaseMellon Shareholder Services, L.L.C., the Company's transfer agent for its
common stock, has assumed the rights, duties and obligations of the warrant
agent under the Warrant Agreement.
As of the date of this Prospectus, the Company has no Class A
Warrants and 749,460 Class B Warrants outstanding. An additional 160,000 Class
A Warrants and 160,000 Class B Warrants are issuable upon exercise of the Unit
Purchase Options. Each Class A Warrant (including the Class A Warrants
underlying the Unit Purchase Options) entitles the registered holder to
purchase .2983 of a share of Class A Common Stock for $7.75 (a per share
exercise price of $25.98), subject to adjustment as described below, from the
date of issuance until March 22, 1999. Each Class B Warrant (including the
Class B Warrants underlying the Unit Purchase Options) entitles the holder to
purchase .2893 of a share of Class A Common Stock for $11.50 (a per share
exercise price of $38.55), subject to adjustment as described below, from the
date of issuance until March 22, 1999.
The Class A Warrants and the Class B Warrants may be exercised upon
surrender of the certificates therefor on or prior to the expiration or
redemption date at the offices of the Company's warrant agent with the
"Subscription Form" on the reverse side of the certificate filled out and
executed as indicated, accompanied by payment of the full exercise price for
the number of Class A Warrants or Class B Warrants being exercised.
The Class A Warrants and the Class B Warrants are subject to
redemption by the Company, on not less than 30 days' written notice, at a
redemption price of $.01 per warrant, if the average trading price of the
Class A Common Stock of the Company for any period of 20 consecutive business
days ending within five business days of the date on which the notice of
redemption is given shall have exceeded $36.04 per share (subject to
adjustment) with respect to the Class A Warrants and $53.64 per share (subject
to adjustment) with respect to the Class B Warrants. However, the Class A
Warrants and the Class B Warrants underlying the Unit Purchase Options may not
be redeemed by the Company unless at the redemption date the Unit Purchase
Options have been exercised and the underlying warrants are outstanding.
Holders of warrants will automatically forfeit their rights to purchase the
shares of Class A Common Stock issuable upon exercise of the warrants unless
the warrants are exercised before they are to be redeemed. All of the
outstanding warrants of a class, except for those underlying the Unit Purchase
Options, must be redeemed if any portion of that class are to be redeemed. A
notice of redemption will be mailed to each of the registered holders of the
warrants no later than 30 days before the date fixed for redemption. The
notice of redemption shall specify the redemption price, the date fixed for
redemption, the place where the warrant certificates shall be delivered and
the date of expiration of the right to exercise the warrants.
The Class A Warrants and the Class B Warrants contain provisions that
protect the holders thereof against dilution by adjustment of the exercise
price and shares issuable upon exercise in certain events, such as stock
dividends, stock splits, mergers, sales of all or substantially all of the
Company's assets at less than the market value, sales of stock at below market
price and other unusual events.
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The applicable warrant exercise price may be reduced and the
applicable warrant expiration date may be extended upon notice to the holders
of the Class A Warrants and the Class B Warrants.
The Company is not required to issue fractional warrants upon
adjustment or fractional shares of Class A Common Stock upon exercise of the
Class A Warrants or the Class B Warrants. In lieu thereof, an amount of each
equal to the same fraction of the then current market value of a share of
Class A Common Stock or a warrant, as the case may be, may be paid.
The ownership of a Class A Warrant or a Class B Warrant does not
entitle the holder thereof to any of the rights of a holder of shares of Class
A Common Stock of the Company.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 100,000,000 shares of Class A
Stock, 10,000,000 shares of Class B Common Stock and 1,200,000 shares of Class
C Common Stock (collectively, the "SFX Common Stock"). In addition, the
Company is authorized to issue shares of preferred stock. See "Risk
Factors--Possible Adverse Impact of Authorized but Unissued Shares of Capital
Stock and Delaware Law."
DIVIDENDS. Holders of shares of SFX Common Stock are entitled to
receive such dividends as may be declared by the 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 SFX Common Stock, however,
unless simultaneously the same dividend is declared or paid on each share of
the other classes of SFX Common Stock. In the case of any stock dividend,
holders of shares of Class A Common Stock of the Company are entitled to
receive the same percentage dividend (payable in shares of Class A Common
Stock) as the holders of shares of Class B Common Stock (payable in shares of
Class B Common Stock) and shares of Class C Common Stock (payable in shares of
Class C Common Stock). The payment of dividends is limited by certain
agreements to which the Company is a party and is expected to be limited by
other indebtedness which may be incurred in the future.
VOTING RIGHTS. Holders of shares of Class A Common Stock and shares
of Class B Common Stock of the Company vote as a single class on all matters
submitted to a vote of the stockholders, with each share of Class A Common
Stock entitled to one vote and each share of Class B Common Stock entitled to
ten votes, except (i) for the election of directors, (ii) with respect to any
"going private" transaction between the Company and Mr. Sillerman or any of
his affiliates and (iii) as otherwise provided by law. The holders of shares
of Class C Common Stock have no voting rights except as otherwise provided by
law.
In the election of directors, the holders of shares of Class A Common
Stock of the Company, voting as a separate class, are entitled to elect
two-sevenths (2/7ths) of the Company's directors (or, if such number of
directors is not a whole number, the next higher whole number). The holders of
Class A Common Stock of the Company are currently entitled to elect three of
the Company's nine directors. Any person nominated by the Board of Directors
for election by the holders of shares of Class A Common Stock as a director of
the Company must be qualified to be an "Independent Director," as such term is
used in the Certificate of Incorporation. In general, an Independent Director
is a director who is not (i) an officer, employee or affiliate of the Company
or any of its subsidiaries or any affiliate of Mr. Sillerman, (ii) an
affiliate of Mr. Sillerman or (iii) an individual having a relationship with
the Company which, in the opinion of the Board of Directors, would interfere
with such person's exercise of independent judgment in carrying out the
responsibilities of a director). In the event of the death, removal or
resignation of a director elected by the holders of shares of Class A Common
Stock prior to the expiration of his term, the vacancy on the Board of
Directors created thereby may be filled by a person appointed by a majority of
the directors then in office, although less than a quorum. Any person
appointed to fill any such vacancy must, however, be qualified to be an
Independent Director. The holders of shares of Class A Common Stock and the
holders of shares of Class B Common Stock of the Company, voting as a single
class, with each share of Class A Common Stock entitled to one vote and each
shares of Class B
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<PAGE>
Common Stock entitled to ten votes, are entitled to elect the remaining
directors. The holders of Class A Common Stock or Class B Common Stock of the
Company are not entitled to cumulative votes in the election of directors.
Each of Mr. Sillerman and SCMC has agreed to abstain, and has agreed
to cause each of his and its respective affiliated transferees to abstain,
from voting in any election of directors elected by the shares of Class A
Common Stock voting separately as a class.
The holders of shares of Class A Common Stock and Class B Common
Stock vote as a single class with respect to any proposed "going private"
transaction with Mr. Sillerman or any of is affiliates, with each share of
Class A Common Stock and each share of Class B Common Stock entitled to one
vote.
Under Delaware law, the affirmative vote of the holders of a majority
outstanding shares of any class of SFX Common Stock is required to approve,
among other things, a change in the designations, preferences or limitations
of the shares of such class of SFX Common Stock.
LIQUIDATION RIGHTS. Upon the liquidation, dissolution, or winding-up
of the Company, the holders of shares of SFX Common Stock are entitled to
share ratably in all assets available for distribution after payment in full
of creditors.
OTHER PROVISIONS. Each share of Class B Common Stock of the Company
is convertible, subject to compliance with FCC rules and regulations, at the
option of its holder, into one share of Class A Common Stock of the Company at
any time. Each share of Class B Common Stock and each share of Class C Common
Stock converts automatically into one share of Class A Common Stock upon its
sale or other transfer to a party not affiliated with the Company, subject to
compliance with FCC rules and regulations. The holders of SFX Common Stock are
not entitled to preemptive or subscription rights. The shares of SFX Common
Stock presently outstanding are validly issued, fully-paid and nonassessable.
In any merger, consolidation or business combination, the consideration to be
received per share by holders of shares of Class A Common Stocks, Class B
Common Stock and Class Common Stock must be identical, except that in any such
transaction in which shares of common stock are distributed to the
stockholders of the Company, such shares may differ as to voting rights to the
extent that voting rights now differ among the classes of SFX Common Stock. No
class of SFX Common Stock may be subdivided, consolidated, reclassified or
otherwise changed unless concurrently the other classes of SFX Common Stock
are subdivided, consolidated, reclassified or otherwise changed in the same
proportion and in the same manner.
USE OF PROCEEDS
To the extent that any Warrants and Stock Options are exercised, the
Company plans to use the proceeds therefrom for working capital and other
general corporate purposes.
PLAN OF DISTRIBUTION
Pursuant to that certain Amended and Restated Agreement and Plan of
Merger, dated as of April 15, 1996, as amended (the "Merger Agreement"), among
SFX, MMR and SFX Merger Company, a Delaware corporation and a wholly-owned
subsidiary of SFX, on November 22, 1996 (the "Effective Time"), SFX Merger
Company merged with and into MMR (the "Merger") and MMR became a wholly-owned
subsidiary of the Company. As a result of the Merger, (i) each outstanding
share of Class A Common Stock and Series B Convertible Preferred Stock of MMR
was converted into the right to receive .2983 of a share of Class A Common
Stock of the Company (and cash in lieu of any fractional share of Class A
Common Stock of the Company), (ii) each outstanding share of Class B Common
Stock and Original Preferred Stock of MMR was converted into the right to
receive .2983 of a share of Class B Common Stock of the Company (and cash in
lieu of any fractional share of Class B Common Stock of the Company), and
(iii) each outstanding Warrant and Stock Option was assumed by the Company
and, as assumed, adjusted so that (a) each Warrant
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<PAGE>
and Stock Option shall be exercisable for .2983 of a share of Class A Common
Stock of the Company and (b) the per share exercise price or strike price for
the shares of Class A Common Stock of the Company issuable upon the exercise
of such assumed Warrants and Stock Options shall be equal to the quotient
obtained by dividing the exercise price per share of Class A Common Stock of
MMR under such Warrant or Stock Option immediately prior to the consummation
of the Merger by .2983, and rounding the resulting exercising price down to
the nearest whole cent.
The following is a description of the Warrants and the Stock Options.
All of the Warrants and Stock Options contain provisions that protect the
holders thereof against dilution by adjustment of the exercise price and
shares issuable upon exercise in certain events, such as stock dividends,
stock splits or sales of stock at below certain specified prices.
CLASS B WARRANTS. At the Effective Time, MMR had outstanding 749,460
Class B Warrants, each of which entitled the holder to purchase one share of
Class A Common Stock of MMR for $11.50 per share, subject to the terms and
conditions of the Warrant Agreement. The Class B Warrants expire on March 22,
1999. Pursuant to the Merger Agreement, each Class B Warrant was assumed by
SFX and, as assumed, entitles the holder to purchase .2983 of a share of Class
A Common Stock of the Company for $11.50 (which is equal to an exercise price
per share of Class A Common Stock of the Company of $38.55). The 749,460
outstanding Class B Warrants of the Company entitle the holders thereof to
purchase an aggregate of approximately 223,564 shares of Class A Common Stock
of the Company. Pursuant to the Warrant Agreement, upon the consummation of
the Merger, the Company agreed in writing to assume the obligations, rights
and duties of MMR with respect to the Class B Warrants. In addition, the
parties to the Warrant Agreement, as well as the Company and ChaseMellon
Shareholder Services, L.L.C., the Company's transfer agent, executed an
agreement, dated as of the Effective Time, pursuant to which ChaseMellon
Shareholder Service, L.L.C. assumed the rights, obligations and duties of
warrant agent under the Warrant Agreement.
The Class B Warrants of the Company have traded on the Nasdaq
National Market since November 25, 1996. From November 25, 1996 to December
31, 1996, the high and low bids for the Class B Warrants were $5.875 and
$1.625, respectively. From January 1, 1997 to __________, 1997, the high and
low bids for the Class B Warrants were $_____ and $_____, respectively.
UNIT PURCHASE OPTIONS. At the Effective Time, MMR had outstanding
160,000 Unit Purchase Options, each of which entitled the holder thereof to
purchase one unit ("Unit"), each Unit consisting of one share of Class A
Common Stock of MMR, one Class A Warrant of MMR and one Class B Warrant of
MMR, at an exercise price of $7.75 per Unit, subject to the terms and
conditions of those certain Unit Purchase Options, dated March 23, 1994,
issued by MMR to certain of its underwriters and their designees. Pursuant to
the Merger Agreement, each Unit Purchase Option was assumed by SFX and, as
assumed, entitles the holder to purchase .2983 of a share of Class A Common
Stock of the Company, one Class A Warrant and one Class B Warrant at an
exercise price per Unit of $25.98. The Unit Purchase Options expire on March
22, 1999. The Class A Warrants and the Class B Warrants underlying the Units
have the terms described above under "Description of Class A Warrants and
Class B Warrants."
COMMON STOCK PURCHASE WARRANTS. At the Effective Time, MMR had
outstanding 100,000 Common Stock Purchase Warrants, each of which entitled the
holder to purchase one share of Class A Common Stock of MMR at an exercise
price of $9.10 per share, subject to the terms and conditions contained in
those certain Common Stock Purchase Warrants, dated July 29, 1993, issued by
MMR to certain of its underwriters and their designees. Pursuant to the Merger
Agreement, each Common Stock Purchase Warrant was assumed by SFX and, as
assumed, entitles the holder to purchase .2983 of a share of Class A Common
Stock of the Company for $9.10 (which is equal to an exercise price per share
of Class A Common Stock of the Company of $30.51). The Common Stock Purchase
Warrants expire on July 28, 1999. The 100,000 outstanding Common Stock
Purchase Warrants entitle the holders thereof to purchase an aggregate of
approximately 29,830 shares of Class A Common Stock of the Company.
HUFF WARRANTS. The Merger Agreement required MMR, on or prior to the
Effective Time, to repay all amounts outstanding under certain debentures of
MMR issued to The Huff Alternative Income Fund, L.P. ("Huff") and to redeem
all shares of preferred stock of MMR held by Huff. In connection with such
repayment and redemption and obtaining Huff's consent to the consummation of
the Merger, at the Effective Time SFX issued to Huff the Huff
- 15 -
<PAGE>
Warrants, which entitle Huff to purchase an aggregate of 269,427 shares of
Class A Common Stock at exercise prices per share which range from $25.98 to
$41.90. The Huff Warrants expire on November 22, 2006, subject to early
termination under certain circumstances. The Company has granted the holders
of the Huff Warrants certain demand and piggyback registration rights with
respect to the shares of Common Stock underlying the Huff Warrants.
STOCK OPTIONS. At the Effective Time, MMR had outstanding an
aggregate of 273,000 options under its 1993 Stock Option Plan, 1994 Stock
Option Plan and 1995 Stock Option Plan, which entitled the holders thereof to
purchase an aggregate of 273,000 shares of Class A Common Stock of MMR at
various prices. Pursuant to the Merger Agreement, each Stock Option was
assumed by SFX and, as assumed, entitles the holder thereof to purchase .2983
of a share of Class A Common Stock of the Company at the exercise price set
out in the Stock Option. (The exercise price per share of Class A Common Stock
of the Company is equal to the quotient obtained by dividing the exercise
price per share of Class A Common Stock of MMR under such Stock Option
immediately prior to the consummation of the Merger by .2983, and rounding the
resulting exercise price down to the nearest whole cent.) The 273,000
outstanding Stock Options entitle the holders to purchase an aggregate of
approximately 81,436 shares of Class A Common Stock of the Company.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Baker & McKenzie, New York, New York. Howard J. Tytel, who has
an equity interest in and is an executive officer and a Director of the
Company, is Of Counsel to Baker & McKenzie. Fisher Wayland Cooper Leader &
Zaragoza LLP, Washington D.C., has represented the Company with respect to
legal matters under the Communications Act and the rules and regulations
promulgated thereunder by the FCC.
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries at December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, and the consolidated financial statements
of MMR at December 31, 1995 and 1994, and for the years then ended,
incorporated by reference herein, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports with respect thereto, and
are incorporated by reference herein in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Liberty Broadcasting, Inc.,
at December 31, 1995 and 1994, and for the years ended December 31,1995 and
1994, and the nine months ended December 31, 1993, incorporated by reference
herein, have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their reports with respect thereto, and are
incorporated by reference herein in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of Prism Radio Partners, L.P. as of December
31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, incorporated by reference herein, have been audited by KPMG
Peat Marwick L.L.P., independent certified public accountants, to the extent
and for the period indicated in their report with respect thereto and are
incorporated by reference herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The combined balance sheets of the Secret Communications Stations:
Indianapolis, Indiana, and Pittsburgh, Pennsylvania at June 30, 1996, and the
related combined statements of operations and cash flows for the year then
ended, incorporated by reference herein, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference in reliance upon the authority of
said firm as experts in giving said reports.
- 16 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth the best estimate of the Company as to its
anticipated expenses and costs expected to be incurred in connection with the
issuance and distribution of the securities registered hereby (except for the
Commission registration fee and the Nasdaq listing fee, all amounts are
estimates):
Commission registration fee.................................... $ 7,446.10
Nasdaq listing fee............................................. 5,200.00
Printing expenses.............................................. 3,000.00
Legal fees and expenses........................................ 15,000.00
Miscellaneous.................................................. 1,353.90
----------
Total................................................. $32,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was an officer or director of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. A Delaware corporation may indemnify officers and directors against
expenses (including attorneys' fees) in an action by or in the right of the
corporation under similar conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to
be liable to the corporation. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which he actually and
reasonably incurred in connection therewith.
The Certificate of Incorporation of the Company provides that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of Delaware or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Company's Bylaws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is, was or has agreed to
become a director or officer of the Company, or is or was serving or has
agreed to serve at the request of the Company as a director or officer of
another company, partnership, joint venture, trust or other enterprise,
against costs, charges, expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or on
his behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a
II-1
<PAGE>
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Bylaws also provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is, was or has
agreed to become a director or officer of the Company, or is or was serving at
the request of the Company as a director or officer of another company,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, against costs,
charges and expenses (including attorneys' fees) actually and reasonably
incurred by him or on his behalf in connection with the defense or settlement
of such action or suit and any appeal therefrom, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and except that no such indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Company unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
such liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
The Company's Bylaws state that, to the extent that a director or
officer of the Company shall be successful on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice,
in defense of any action, suit or proceeding referred to above, or in the
defense of any claim, issue or matter therein, he shall be indemnified against
all costs, charges and expenses (including attorneys' fees) actually and
reasonably incurred by him or on his behalf in connection therewith.
The Bylaws further provide that any indemnification (unless ordered
by a court) shall be paid by the Company as authorized in the specific case
upon a determination that indemnification of the director or officer is proper
in the circumstances because he has met the applicable standard of conduct set
forth in the Bylaws unless a determination is made that indemnification of the
director or officer is not proper in the circumstances because he has not met
the applicable standard of conduct set forth in the Bylaws. Such determination
shall be made (i) by the Board of Directors of the Company by a majority vote
of a quorum consisting of directors who were not parties to such action, suit
or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
The Company's Bylaws further require that expenses incurred by an
officer or director 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 he is not entitled to be indemnified by the Company as
authorized in the Bylaws.
The Bylaws require the Board of Directors of the Company to purchase
and maintain insurance on behalf of any person who is or was or has agreed to
become a director or officer of the Company, or is or was serving at the
request of the Company as a director or officer of another company,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or on his behalf in any such
capacity, or arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under the
provisions of the Bylaws, provided that such insurance is available on
acceptable terms, which determination shall be made by a vote of a majority of
the Board of Directors.
The Bylaws also provide that the indemnification and advancement of
expenses provided by, or granted pursuant to, the Bylaws shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the estate, heirs, executors and administrators of such person.
II-2
<PAGE>
ITEM 16. EXHIBITS.
2.1. Amended and Restated Agreement and Plan of Merger, dated as
of April 15, 1996, as amended on May 6, 1996, July 30, 1996
and September 26, 1996, among SFX Broadcasting, Inc., SFX
Merger Company and Multi-Market Radio, Inc. (composite
version incorporated by reference to Annex B to the Joint
Proxy Statement/Prospectus included in the Form S-4 of SFX
(Registration No. 333-13337) filed with the Commission on
October 3, 1996).
4.1. Warrant Agreement, dated as of March 23, 1994, by and among
Multi-Market Radio, Inc., American Stock Transfer & Trust
Company, as warrant agent, D. H. Blair Investment Banking
Corp. and Americorp Securities, Inc. (incorporated by
reference to Exhibit 4.2 to Amendment No. 2 to the
Registration Statement on Form SB-2 (Registration No.
33-74526) of Multi-Market Radio, Inc. filed with the
Commission on March 18, 1994).
4.2. Agreement, dated as of November 22, 1996, by and among SFX
Broadcasting, Inc., Multi-Market Radio Inc., American Stock
Transfer & Trust Company, D.H. Blair Investment Banking
Corporation Americorp Securities, Inc. and ChaseMellon
Shareholder Services, L.L.C. relating to the March 23, 1994
Warrant Agreement.
4.3 Assumption of Warrants, dated November 22, 1996, executed by
SFX Broadcasting, Inc. (incorporated by reference to Exhibit
4.6 of the Form 8-K (Commission File No. 0-22486) of SFX
Broadcasting, Inc. filed with the Commission on November 27,
1996).
4.4 Unit Purchase Options, dated March 30, 1994, issued by
Multi-Market Radio, Inc. to certain of its underwriters and
their designees (incorporated by reference to Exhibit 4.1 to
Amendment No. 2 to the Registration Statement on Form SB-2
(Registration No. 33-74526) of Multi-Market Radio, Inc.
filed with the Commission on March 18, 1994).
4.5 Common Stock Purchase Warrants, dated June 29, 1993
(incorporated by reference to Exhibit 10.38 to Form 10-KSB
(Commission File No. 0-22080) of Multi-Market Radio, Inc.
for the year ended December 31, 1994).
4.6 Common Stock Purchase Warrants, dated November 22, 1996,
executed by SFX Broadcasting, Inc. and issued to The Huff
Alternative Income Fund, L.P. (incorporated by reference to
Exhibit 4.5 of the Form 8-K (Commission File No. 0-22486) of
SFX Broadcasting, Inc. filed with the Commission on November
27, 1996).
5.1 Opinion of Baker & McKenzie.
10.1 Restated 1993 Stock Option Plan of Multi-Market Radio, Inc.
(incorporated by reference to Exhibit 10.13 to Amendment No.
1 to the Registration Statement on Form SB-2 (Registration
No. 33-74526) of Multi-Market Radio, Inc. filed with the
Commission on March 15, 1994).
10.2 1994 Stock Option Plan of Multi-Market Radio, Inc.
(incorporated by reference to Exhibit C to the Proxy
Statement of Multi-Market Radio, Inc. prepared in connection
with its 1994 Annual Meeting of Stockholders).
10.3 1995 Stock Option Plan of Multi-Market Radio, Inc.
(incorporated by reference to Exhibit 10.63 of the Form SB-2
(Registration No. 333-1712) of Multi-Market Radio, Inc.
filed on February 27, 1996).
23.1 Consent of Baker & McKenzie (included in Exhibit 5.1).
II-3
<PAGE>
23.2 Consent of Ernst & Young LLP.
23.3. Consent of KPMG Peat Marwick L.L.P.
23.4 Consent of Coopers & Lybrand L.L.P.
23.5 Consent of Arthur Andersen LLP.
23.6 Consent of Fisher Wayland Cooper Leader & Zaragoza LLP.
24.1 Powers of Attorney (included on page II-5).
ITEM 17. UNDERTAKINGS.
(a) 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
provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) 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
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) to reflect in the Prospectus any facts of
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed
with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes
in volume and price represent no more than
a 20% change in the maximum aggregate
offering price set forth in the
"Calculation of Registration Fee" table in
the effective Registration Statement; and
II-4
<PAGE>
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a
new registration statement relating to the
securities offered therein, and the offering of
such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 31st day of
January, 1997.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
-------------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement on Form S-3 has been signed by the following
persons in the capacities and on the dates indicated. Each person whose
signature to this Registration Statement appears below hereby appoints Robert
F.X. Sillerman or Howard J. Tytel as his attorney-in-fact to sign on his
behalf, individually and in the capacities stated below, and to file (i) any
and all amendments and post-effective amendments to this Registration
Statement and (ii) any registration statement relating to the same offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, which
amendment or amendments or registration statement may make such changes and
additions as such attorney-in-fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert F.X. Sillerman Executive Chairman and Director January 31, 1997
- ---------------------------- (principal executive officer)
Robert F.X. Sillerman
/s/ Michael G. Ferrel Chief Executive Officer and Director January 31, 1997
- ----------------------------
Michael G. Ferrel
/s/ D. Geoffrey Armstrong Chief Operating Officer, Executive January 31, 1997
- ---------------------------- Vice President and Director
D. Geoffrey Armstrong
/s/ Thomas P. Benson Chief Financial Officer, Treasurer January 31, 1997
- ---------------------------- and Director (principal financial
Thomas P. Benson and accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary January 31, 1997
- ---------------------------- and Director
Howard J. Tytel
/s/ James F. O'Grady, Jr. Director January 9, 1997
- ----------------------------
James F. O'Grady, Jr.
/s/ Paul Kramer Director January 31, 1997
- ----------------------------
Paul Kramer
/s/ Richard A. Liese Director January 31, 1997
- ----------------------------
Richard A. Liese
/s/ Edward F. Dugan Director January 7, 1997
- ----------------------------
Edward F. Dugan
</TABLE>
II-6
<PAGE>
Baker & McKenzie
805 Third Avenue
New York, New York 10022
February 4, 1997
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
Gentlemen:
We have acted as counsel to SFX Broadcasting, Inc., a
Delaware corporation (the "Company") in connection with its filing of a
registration statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering up to (i)
747,441 shares of Class A Common Stock, par value $.01 per share ("Common
Stock"), (ii) 160,000 Class A Warrants (the "Class A Warrants") and (iii)
160,000 Class B Warrants (the "Class B Warrants"), each Class A Warrant
entitling the holder to purchase .2983 of a share of Common Stock at $7.75,
resulting in an exercise price of $25.98 per share of Common Stock, subject to
adjustment, and each Class B Warrant entitling the holder to purchase .2983 of
a share of Common Stock at $11.50, resulting in an exercise price of $38.55
per share of Common Stock, subject to adjustment.
We have examined the originals, or photostatic or certified
copies, of such records of the Company, certificates of officers of the
Company and of public officials, and such other documents as we have deemed
relevant and necessary as the basis of the opinion set forth below. In such
examination we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as photostatic or
certified copies and the authenticity of the originals of such copies.
Based upon our examination, we are of the opinion that:
(i) the shares of Common Stock covered by the Registration
Statement will, when issued as contemplated by the Registration Statement, be
legally issued, fully paid and non-assessable; and
(ii) the Class A Warrants and the Class B Warrants issuable
upon exercise of the Unit Purchase Options will, when issued as contemplated
by the Registration Statement, constitute legal, valid and binding obligations
of the Company.
<PAGE>
SFX Broadcasting, Inc.
February 4, 1997
Page 2
We hereby consent to the use of our opinion as herein set
forth as an exhibit to the Registration Statement and to the use of our name
under the caption "Legal Matters" in the prospectus forming a part of the
Registration Statement. This consent is not to be construed as and admission
that we are a person whose consent is required to be filed with the
Registration Statement under the provisions of the Securities Act.
Very truly yours,
/s/ Baker & McKenzie
HMB/AB/GG
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of SFX Broadcasting,
Inc. to be filed on or about February 4, 1997 and to the incorporation by
reference therein of our reports dated (i) February 20, 1996, except for the
fourth paragraph of Note 14 as to which the date is March 19, 1996, with
respect to the consolidated financial statements of SFX Broadcasting, Inc. and
Subsidiaries at December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995 and (ii) February 14, 1996 with respect to
the consolidated financial statements of Multi-Market Radio, Inc. at December
31, 1995 and 1994 and for the years then ended.
/s/ ERNST & YOUNG LLP
New York, New York
February 3, 1997
<PAGE>
EXHIBIT 23.3
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the registration statement
filed on Form S-3 of SFX Broadcasting, Inc., of our report dated March 29,
1996 relating to the balance sheets of Prism Radio Partners L.P. as of
December 31, 1995 and 1994, and the related statements of operations,
partners' capital and cash flows for each of the years in the three-year
period ended December 31, 1995, which report appears in SFX Broadcasting,
Inc.'s Form 8-K dated May 9, 1996, and to the reference to our firm appearing
under the heading "Experts" in the registration statement.
/s/ KPMG PEAT MARWICK LLP
Phoenix, Arizona
February 3, 1997
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
SFX Broadcasting, Inc., on Form S-3 of our report dated March 13, 1996, except
as to Note 14 for which the date is March 26, 1996, on our audits of the
consolidated financial statements of Liberty Broadcasting, Inc., as of
December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994
and for the nine months ended December 31, 1993, which report is included in
SFX Broadcasting, Inc.'s current report on Form 8-K dated May 9, 1996. We also
consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 3, 1997
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated January
17, 1997, relating to the combined financial statements of The Secret
Stations: Indianapolis and Pittsburgh, included in SFX Broadcasting, Inc.'s
Form 8-K dated January 21, 1997, and to all references to our Firm included in
this Registration Statement for SFX Broadcasting, Inc.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois,
February 3, 1997
<PAGE>
EXHIBIT 23.6
CONSENT
We hereby consent to the use of our firm name in SFX Broadcasting,
Inc.'s Registration Statement on Form S-3 and in the Prospectus forming a part
of such Registration Statement as filed with the Securities and Exchange
Commission on February 4, 1997. In giving this consent, we do not concede that
we come within the category of persons whose consent is required by Section 7
of the Securities Act of 1933, as amended.
/s/ FISHER WAYLAND COOPER LEADER & ZARAGOZA L.L.P.
Dated: February 4,1997
