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Radio One, Inc celebrating 25 years and focused on the future of urban media annual report 2005 Radio One, Inc. (www.radio-one.com) is the nation’s seventh largest radio broadcasting company (based on 2005 net broadcast revenue) and the largest radio broadcasting company that primarily targets African-American and urban listeners. Including announced acquisitions, Radio One owns and/or operates 71 radio stations located in 22 urban markets in the United States and reaches approximately 14 million listeners every week. Radio One also owns approximately 36% of TV One, LLC (www.tvoneonline.com), a cable/satellite network, programming primarily to African-Americans, which is a joint venture with Comcast Corporation and DIRECTV. Additionally, Radio One owns 51% of Reach Media, Inc. (www.blackamericaweb.com), owner of the Tom Joyner Morning Show and other businesses associated with Tom Joyner, a leading urban media personality. Radio One also syndicates the only national African-American news/talk network on free radio and programs XM 169 The Power, an African-American news/talk channel on XM Satellite Radio. 25 years of experience us to prepare for tomorrow watch TV One in 28 million households listen to Tom Joyner on 116 station affiliates be informed by Al Sharpton, Michael Eric Dyson & The Two Live Stews on 23 station affiliates hear us on 71 radio stations laugh with Russ Parr on 36 station affiliates {the numbers visit us online anywhere at radio-one.com, tell the tale} blackamericaweb.com, and tvoneonline.com people follow us across the country onward and upward Radio One’s net revenue has increased more than 22% since 2003, while net income applicable to common stockholders has increased more than 42% during the same period. net income* $ 371.1 (in millions) net revenue (in millions) $ 47.8 $ 319.7 $ 41.5 $ 303.1 $ 33.6 2005 2004 2003 2005 2004 2003 * net income applicable to common stockholders {bringing it all {this is how we’ll together} make history} a message from our chairperson I am very proud to state that Radio One, Inc. is the as the nation’s foremost authority on marketing and preeminent source of programming focused primarily programming designed to address the diverse needs of on African-American culture, utilizing a multimedia the growing African-American population. approach. Through the combined assets of local radio, Under the leadership of our CEO and President, Alfred syndicated radio, cable television and Internet media, Liggins, I am excited about the future of Radio One. He Radio One has entertained, informed and enhanced and his management team are intensely aware of the the lives of African-Americans throughout the country challenges in today’s radio industry, and are diligently for 25 years. seeking opportunities to enhance shareholder value by How did we become the “Urban Media Specialist?” expanding the scope of our business. We will continue to take strategic steps to maintain Radio One’s position Our journey began in 1980 when I purchased one radio as a significant force in the media industry, while keep- station in Washington, DC, with the purpose of creating an ing our commitment to provide information and enter- “on-air” voice for African-Americans. From the beginning, tainment to the African–American community, as we our Company’s primary focus has been to serve the needs have proudly done for 25 years. of African-Americans every single day—not just sporadi- cally. At the outset, we sought to provide relevant infor- Sincerely, mation and cutting-edge entertainment for our listeners, while offering a platform for this unrepresented popu- lation to be heard. We continue to provide information and assistance that improve and enhance the lifestyles of Catherine L. Hughes African-Americans. I am grateful to God for the opportunity to serve the African-American community as a voice and a vessel through Radio One, and I am also thankful for the sup- port of our loyal listeners and friends through the years. From our humble beginnings in 1980 to now, our story is not over and I believe the best is yet to come. Building from our base of 71 radio stations, our creation of TV One, the acquisition of Reach Media and our recently launched news/talk network, Radio One is positioned 02 {this is how we’ll make history} to our stockholders 2005 was another challenging year for the radio industry, 2005, we realized our first full year of significant Internet as revenue growth was slightly negative in the markets revenues and expect to see that part of our business in which we operate. While Radio One managed to grow continue to grow faster than our core business. Also, as its radio station revenue faster than the industry’s last part of our content acquisition strategy, we are pursuing year, increasing profitability with such small revenue a variety of opportunities to acquire or develop and gains has been, and will continue to be, very difficult. distribute a broad range of urban content, from inde- pendent movies to the recent creation of the nation’s While overall your company achieved net revenue first and only African-American syndicated talk and growth of approximately 16%, this was due primarily information radio network. to the acquisition of 51% of Reach Media in March 2005. We are happy with this acquisition and believe that it The management team of Radio One has spent a lot of represents an important part of our diversification strat- time thinking about the future of your company. While egy going forward—but even this favorable transaction this year’s annual report celebrates the success of our cannot allow us to completely overcome the softness past, know that we are constantly and squarely focused of our core business. on how we can make Radio One a company that we can be even more proud of 25 years from now. In last year’s annual report, we outlined some of the reasons for the slower growth in the radio industry, as This year, I would like to extend a very broad “thank you” well as some of our strategies for transforming Radio to anyone and everyone who has ever helped Radio One One into a diverse media company targeting the African- over the years in both large and small ways. We are sin- American market. The bad news is that we continue cerely grateful for your love, support and advice. We to see the same pressures on radio revenue that were could not have come this far in 25 years without you. identified last year, with no sign of abatement. The good Warmest regards, news is that we remain focused on building other areas of our business to help overcome the weakness in radio. However, none of this will be a quick fix. Our employees and shareholders must be patient and focused on the long-term. Alfred C. Liggins, III As for some of our newer initiatives, our investment in TV One continues to do well, as that network has realized significant growth in both revenue and subscribers. In 03 respecting our history {Radio One was founded on the belief that the African-American market for news and information was not being adequately served by mainstream broadcasters. We set out to change that.} While 25 years does not seem so long ago, America certainly was a different nation back then. Only 12 years had passed since the assassination of Dr. Martin Luther King, Jr., Ronald Reagan had just been elected President, and African-Americans continued their efforts to capitalize on the gains of the civil rights era. It was in this context that Cathy Hughes became committed to the idea of creating a voice for African-Americans on radio— and she wanted to run her own business. Thus, her incredible success story began. Finding the funding to buy that first station, WOL-AM in Washington, DC, was a challenge. Ms. Hughes took on an even greater challenge by making a programming move that at the time was considered radical. She changed the station’s format from R&B music to 24-hour talk, making WOL-AM the nation’s first 24-hour black talk format. Ms. Hughes divided her day among many tasks: being on-air, selling advertising time, advocating for the community, managing financial records, and raising her son. Ms. Hughes’ passion and commitment became legendary and set the standard for how Radio One operates today. It would be seven years before Radio One would acquire its second radio station, WMMJ-FM, also located in Washington, DC. By this time, WOL-AM had become established as the voice of the African-American community in Washington, DC. WMMJ-FM continued Ms. Hughes’ reputation for innovation by becoming one of the first radio stations in the country to broadcast an Urban Adult Contemporary format. 69 radio stations later…Radio One is still innovating…and still providing a voice for African-Americans in the 21st century. 04 a beginning a middle 1980 1999 Catherine Hughes purchases WOL-AM, Initial Public Offering of common stock. Washington, DC. Acquires seven stations in five markets. 1987-1993 Portfolio = 19 Radio One acquires an additional station in 2000-2002 Washington, and four stations in Baltimore. Acquires forty-three stations and agrees to Portfolio = 6 operate one station in nineteen markets. 1995-1998 Portfolio = 63 Acquires two additional stations in Washington, 2003 one station in Philadelphia, and three stations Acquires two stations in two markets. in Detroit. Formed joint venture with Comcast Corporation Alfred C. Liggins, III appointed Chief to launch TV One, a new cable television channel Executive Officer. targeting adult African-American viewers.
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