FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[x] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 1996 or

[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition period from ______ to ________

Commission file number 0-20065

PREMIERE RADIO NETWORKS, INC.
(Exact name of small business issuer as specified in its charter)

DELAWARE
(State or other jurisdiction of incorporation or organization)

IRS Employer Identification No.: 95-4083971
15260 Ventura Boulevard, Suite 500, Los Angeles, California 91403-5339
(Address of principal executive offices, including ZIP code)

(818)377-5300
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to the filing
requirements for at least the past 90 days.

Yes [x] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:

CLASS NUMBER OF SHARES OUTSTANDING

Common Stock, $0.01 par value At August 9, 1996 3,542,925
Class A Common Stock, $0.01 par value At August 9, 1996 4,021,420

Transitional Small Business disclosure format (check one): Yes [ ] No [x]

PREMIERE RADIO NETWORKS, INC.

June 30, 1996

INDEX

PART I- FINANCIAL INFORMATION Page Number

Item 1. Condensed Consolidated Financial Statements

Index 2

Condensed Consolidated Balance Sheets at June 30, 1996 (Unaudited)
and December 31, 1995 3

Condensed Consolidated Income Statements for the Three Months and
Six Months Ended June 30, 1996 and 1995 (Unaudited) 4

Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1996 and 1995 (Unaudited) 5

Notes to Condensed Consolidated Financial Statements 6 -7

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 13

PART II- OTHER INFORMATION

Item 1. Legal Proceedings 13

Item 6. Exhibits and Reports on Form 8-K 13

Signature Page 14

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,
1996 1995
--------- -----------

ASSETS (Unaudited)
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . $ 26,612,323 $ 5,432,088
Accounts receivable, net . . . . . . . . . . . . . . . . . . . 5,480,512 4,086,623
Notes receivable from officer/employees. . . . . . . . . . . . 30,550 282,279
Recoverable income taxes . . . . . . . . . . . . . . . . . . . -- 250,952
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . 549,000 549,000
Prepaid expenses and other assets. . . . . . . . . . . . . . . 665,653 1,375,805
------------- -------------
Total current assets . . . . . . . . . . . . . . . . 33,338,038 11,976,747

Notes receivable from officer/employees. . . . . . . . . . . . . . 656,673 845,000
Property and equipment, net. . . . . . . . . . . . . . . . . . . . 2,141,748 1,797,337
Acquired program library and program networks , net. . . . . . . . 1,534,101 1,699,971
Intellectual property, net . . . . . . . . . . . . . . . . . . . . 4,676,519 4,858,749
Debt issuance costs, net . . . . . . . . . . . . . . . . . . . . . 2,110,437 2,143,729
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 689,632 711,968
------------- -------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . $ 45,147,148 $ 24,033,501
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses. . . . . . . . . . . . . $ 972,081 $ 1,729,919
Accrued payroll, bonuses and retirement plan
contribution. . . . . . . . . . . . . . . . . . . . . . . 448,172 905,468
Income taxes payable . . . . . . . . . . . . . . . . . . . . . 37,141 25,022
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . -- 83,326
Current portion of note payable. . . . . . . . . . . . . . . . 386,110 400,000
------------- -------------
Total current liabilities. . . . . . . . . . . . . . 1,843,504 3,143,735

Note payable to bank, less current portion . . . . . . . . . . . . -- 1,467,455
Due to related party . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000

Stockholders' equity
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . 35,151 36,417
Class A common stock . . . . . . . . . . . . . . . . . . . . . 40,047 --
Additional paid-in-capital . . . . . . . . . . . . . . . . . . 33,823,170 11,752,595
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . 9,285,276 7,513,299
------------- -------------
Total stockholders' equity. . . . . . . . . . . . . . . . 43,183,644 19,302,311
------------- -------------
Total liabilities and stockholders' equity. . . . . . . . $45,147,148 $24,033,501
------------- -------------

See accompanying notes to unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED
INCOME STATEMENTS

(UNAUDITED)

Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1996 1995 1996 1995
---- ---- ---- ----

Revenue:
Gross revenue. . . . . . . . . . . . . . . . . . . $ 6,524,984 $5,127,289 $ 12,074,114 $ 9,363,225
Less: agency commissions. . . . . . . . . . . . . 829,121 601,143 1,501,321 1,090,237
------------ ---------- ------------ ------------
Net operating revenue. . . . . . . . . . . . . . . . . 5,695,863 4,526,146 10,572,793 8,272,988
Operating expenses:
Production, programming and
promotions. . . . . . . . . . . . . . . . . . 1,713,290 1,276,457 3,383,117 2,560,817
Selling, general and
administrative. . . . . . . . . . . . . . . . 2,389,513 1,981,880 4,763,340 3,735,069
------------ ---------- ------------ ------------
Total operating expenses. . . . . . . . 4,102,803 3,258,337 8,146,457 6,295,886
------------ ---------- ------------ ------------
Operating income . . . . . . . . . . . . . . . . . . . 1,593,060 1,267,809 2,426,336 1,977,102

Other income and expenses:
Gain on sale of radio station. . . . . . . . . . . -- -- -- 387,423
Interest income (expense), net . . . . . . . . . . 275,094 12,672 533,551 (29,656)
Other (loss) income, net . . . . . . . . . . . . . (13,761) (3,614) (1,991) 7,177
------------ ---------- ------------ ------------
Income before minority interest and
income taxes. . . . . . . . . . . . . . . . . . . 1,854,393 1,276,867 2,957,896 2,342,046
Minority interest in (income)loss of joint
venture . . . . . . . . . . . . . . . . . . . . (3,996) -- 5,081 --
------------ ---------- ------------ ------------
Income before income taxes . . . . . . . . . . . . . . 1,850,397 1,276,867 2,962,977 2,342,046
Provision for income taxes . . . . . . . . . . . . . . 744,000 521,000 1,191,000 956,000
------------ ---------- ------------ ------------
Net income . . . . . . . . . . . . . . . . . . . . $ 1,106,397 $ 755,867 $ 1,771,977 $ 1,386,046
------------ ---------- ------------ ------------

Earnings per share:
Primary . . . . . . . . . . . . . . . . . . . . $0.12 $0.16 $0.19 $0.29
Fully diluted. . . . . . . . . . . . . . . . . . . $0.12 $0.15 $0.19 $0.28

See accompanying notes to unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended
June 30
--------------------
1996 1995
---- ----

OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 1,771,977 $ 1,386,046
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of radio station assets. . . . . . . . -- (387,423)
Loss (gain) on sale of fixed assets . . . . . . . . 1,091 (12,636)
Loss on marketable securities . . . . . . . . . . . -- 5,460
Depreciation and amortization . . . . . . . . . . . 827,567 520,333
(Decrease) increase in allowance for doubtful accounts (92,000) 18,000
Deferred compensation . . . . . . . . . . . . . . . -- 41,664
Changes in operating assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . (1,301,889) (554,811)
Income taxes . . . . . . . . . . . . . . . . . . 263,071 (57,555)
Prepaid expenses and other current assets. . . . 661,300 (282,901)
Notes receivable from officer/employees. . . . . 440,056 13,922
Other assets . . . . . . . . . . . . . . . . . . 52,813 71,444
Accounts payable and accrued liabilities . . . . (1,197,979) (81,894)
Deferred income. . . . . . . . . . . . . . . . . (83,326) (258,127)
----------- -----------
Net cash provided by operating activities . . . . . . . . 1,342,681 421,522

INVESTING ACTIVITIES
Acquisition of property and equipment . . . . . . . . . . (691,802) (256,069)
Acquisition of intangible assets. . . . . . . . . . . . . (100,000) --
Net proceeds from sale of radio station assets. . . . . . -- 5,239,929
Net proceeds from sale of property and equipment. . . . . 20,000 88,366
Purchase of marketable securities, net. . . . . . . . . . -- (767,567)
----------- -----------
Net cash (used in) provided by investing activities . . . (771,802) 4,304,659

FINANCING ACTIVITIES
Repayment of note payable to officer. . . . . . . . . . . -- (750,000)
Repayment of borrowings . . . . . . . . . . . . . . . . . (1,500,000) (2,762,500)
Increase in debt and equity placement costs . . . . . . . -- (363,574)
Net proceeds from issuance of Class A common stock. . . . 22,031,304 --
Exercise of stock options . . . . . . . . . . . . . . . . 78,052 46,160
----------- -----------
Net cash provided by (used in) financing activities . . . 20,609,356 (3,829,914)
----------- -----------
Increase in cash and cash equivalents . . . . . . . . . . 21,180,235 896,267
Cash and cash equivalents at beginning of period. . . . . 5,432,088 2,371,314
----------- -----------
Cash and cash equivalents at end of period. . . . . . . . $26,612,323 $ 3,267,581
----------- -----------

See accompanying notes to unaudited condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Premiere
Radio Networks, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions to Form 10-QSB and Article 10 of Regulation
S-B. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the Company's management,
all adjustments (consisting only of normal, recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the
three-month and six-month periods ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996.

It is suggested that the accompanying unaudited condensed consolidated
financial statements be read in conjunction with the consolidated financial
statements and notes included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995.

NOTE 2. EARNINGS PER SHARE

Earnings per share are based upon the combined weighted average number of
shares outstanding during each interim period which include, where appropriate,
the assumed exercise of dilutive stock options and warrants to purchase common
stock. In computing earnings per share for the three months and six months
ended June 30, 1996, the Company utilized the modified treasury stock method
which assumes the exercise of all outstanding options and warrants to purchase
common stock, and the use of the assumed proceeds thereof to purchase up to a
maximum of 20% of the then outstanding common stock of the Company. Excess
proceeds, if any, derived from the assumed purchase of such shares are assumed
to be utilized to first reduce the outstanding balances of notes payable and
second for investment in short term, cash equivalent marketable securities.

Earnings per share for the three month and six month periods ended June 30,
1995 were computed under the treasury stock method. Under the treasury stock
method, the Company reduces the assumed number of common shares issued from the
exercise of stock options and warrants to purchase common stock by the number of
treasury shares assumed to be purchased from the proceeds thereof by utilizing
the average market price of the Company's common stock in computing primary
earnings per share and the closing market price of the Company's common stock in
computing fully diluted earnings per share.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2. EARNINGS PER SHARE (CONTINUED)

Primary earnings per share for the three months ended June 30, 1996 and
1995 are based upon 9,612,899 and 4,813,196 weighted average number of shares
outstanding, respectively, and 9,269,917 and 4,776,351 weighted average number
of shares outstanding for the six months ended June 30, 1996 and 1995,
respectively. Fully diluted earnings per share for the three months and six
months ended June 30, 1995 are based upon 4,923,133 and 4,920,944 weighted
average number of shares outstanding, respectively. The Company did not report
fully diluted earnings per share for the three months and six months ended June
30, 1996. (See Note 3, "Stockholders' Equity--Stock Offering and Stock
Dividend")

NOTE 3. STOCKHOLDERS' EQUITY--STOCK OFFERING AND STOCK DIVIDEND

On January 25, 1996 the Company completed the sale of 1,500,000 shares of
Class A Common Stock (of which 1,360,000 shares were sold by the Company, and
140,000 shares by certain management shareholders of the Company which the
management shareholders had obtained through exchanging 140,000 shares of Common
Stock for 140,000 shares of Class A Common Stock) at $18.25 per share pursuant
to a public offering (the "Offering") and received net proceeds of approximately
$22,031,000 (net of underwriting discounts, commissions and expenses). In
connection with the Offering, the Company paid Archon Communications Inc.
("Archon") fees of $200,000.

On March 13, 1996 the Company declared a one-for-two stock dividend,
effected in the form of a three-for-two stock split, of Class A Common Stock
which was paid on April 1, 1996 to all holders of the Company's Common Stock and
Class A Common Stock on the March 22, 1996 record date for such dividend (the
"Class A Dividend"). Per share earnings in each of the foregoing interim
periods have been adjusted to reflect the Class A Dividend.

ITEM 2.

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

INTRODUCTION

The Company is an independent creator, producer and distributor of
innovative comedy, entertainment and music related programs, and a supplier of
research and other services for the radio industry. Founded in 1987, the
Company's wide array of syndicated programs and research and other services are
utilized by more than 4,600 independently owned radio station affiliates located
in virtually every major market in the United States.

The Company presently produces and distributes 31 syndicated programs and
services which it distributes to radio station affiliates in exchange for
commercial broadcast time. The group of radio stations which contracts with the
Company to broadcast a particular program or utilize one of its services
constitutes a "radio network." The Company derives a significant portion of its
revenues from selling the commercial broadcast time on its radio networks to
advertisers desiring national coverage. The Company also derives a portion of
its revenues by acting as an exclusive sales representative for third-party
network radio program and service producers and distributors.

This discussion should be read in conjunction with the financial
statements, related notes and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1995.

As a result of the Company's growth in its representation of third party
program producers and service providers and the impact of prior acquisitions,
period-to-period results of operations may not be comparable, and the results of
operations for the three months and six months ended June 30, 1996 may not be
indicative of results of operations for any future period.

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 1995

OPERATING REVENUES. Gross revenues for the three months ended June 30,
1996 and 1995 were $6.5 and $5.1 million, respectively, representing an increase
of $1.4 million, or 27.3%. Net operating revenues increased $1.2 million, or
25.8% from $4.5 million for the three months ended June 30, 1995, to $5.7
million for the three months ended June 30, 1996. These increases are
principally due to increased gross advertising revenues related to network
programs and services of $1.5 million ($1.3 million net revenues) offset, in
part, by lower promotions and other revenues. The increased advertising
revenues resulted from the growth in established programming, the launch of new
programming and the continued growth in the Company's Mediabase research
services.

MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)

Gross revenues for the six months ended June 30, 1996 and 1995 were $12.1
and $9.4 million, respectively, representing an increase of $2.7 million, or
29.0%. Net operating revenues increased $2.3 million, or 27.8% from $8.3
million for the six months ended June 30, 1995, to $10.6 million for the six
months ended June 30, 1996. These increases are principally due to increased
gross advertising revenues related to network programs and services of $2.7
million ($2.3 million net revenues). The increased advertising revenues
resulted from the growth in established programming, the launch of new
programming and the continued growth in the Company's Mediabase research
services.

PRODUCTION, PROGRAMMING AND PROMOTIONS EXPENSES. Production, programming
and promotions expenses for the three months ended June 30, 1996 and 1995 were
$1.7 million and $1.3 million, respectively, representing an increase of $0.4
million or 34.2%. The increase in production, programming and promotions
expenses in absolute dollars was principally due to increased costs associated
with the production of new programs and services, production costs associated
with the operations of the Company's Broadcast Results Group ("BRG") division
which was acquired in September 1995, and increased program distribution costs
associated with the expansion of the Company's radio station affiliates, which
were offset, in part, by decreased costs of promotions. As a percentage of net
operating revenues, production, programming and promotion expenses increased
1.9% to 30.1% for the three months ended June 30, 1996 as compared to 28.2% for
the three months ended June 30, 1995. The increased production, programming and
promotions expenses as a percentage of net operating revenues was principally
due to increased costs associated with the production of new programs and
services.

Production, programming and promotions expenses for the six months ended
June 30, 1996 and 1995 were $3.4 million and $2.6 million, respectively,
representing an increase of $0.8 million or 32.1%. The increase in production,
programming and promotions expenses in absolute dollars was principally due to
increased costs associated with the production of new programs and services,
production costs associated with the operations of the Company's Broadcast
Results Group ("BRG") division which was acquired in September 1995, and
increased program distribution costs associated with the expansion of the
Company's radio station affiliates, which were offset, in part, by decreased
costs of promotions. As a percentage of net operating revenues, production,
programming and promotions expenses increased 1.0% to 32.0% for the six months
ended June 30, 1996 as compared to 31.0% for the six months ended June 30, 1995.
The increased production, programming and promotions expenses as a percentage of
net operating revenues was principally due to increased costs associated with
the production of new programs and services.

As the Company expands its programming and services, the Company's income
may, from time to time, be adversely affected because the initial expenses
associated with such new programming and services are typically expensed in the
quarter in which incurred.

MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the three months ended June 30, 1996 and 1995 were
$2.4 and $2.0 million, respectively, representing an increase of $0.4 million or
20.6%. As a percentage of net operating revenues, selling, general and
administrative expenses were 42.0% and 43.8% during the three months ended June
30 1996 and 1995, respectively, representing a decrease as a percentage of net
operating revenues of 1.8%. The increase in selling, general and administrative
expenses in absolute dollars is principally due to the Company's expansion of
its sales and marketing efforts related to the launch of new programs and
services of $0.3 million, and increased amortization expenses related to
acquisitions of intellectual properties and an acquired program network
aggregating $0.1 million. The decreased selling, general and administrative
expenses as a percentage of net operating revenues was principally due to the
effects of higher overall net revenues and the nature of the fixed and variable
components of selling, general and administrative expenses.

Selling, general and administrative expenses for the six months ended June
30, 1996 and 1995 were $4.8 and $3.7 million, respectively, representing an
increase of $1.1 million or 27.5%. As a percentage of net operating revenues,
selling, general and administrative expenses remained flat at 45.0% during each
of the six months ended June 30, 1996 and 1995. The increase in selling,
general and administrative expenses in absolute dollars is principally due to
expenses associated with the operations of BRG which the Company acquired during
the third quarter of 1995 of $0.4 million, the Company's expansion of its sales
and marketing efforts related to the launch of new programs and services of $0.3
million, and increased amortization expenses related to acquisitions of
intellectual properties and an acquired program network aggregating $0.2
million.

OPERATING INCOME. Operating income for the three months ended June 30,
1996 was $1.6 million, an increase of $0.3 million, or 25.6%, over the same
three month period in 1995. Operating income for the six months ended June 30,
1996 was $2.4 million, an increase of $0.4 million, or 22.7%, over the same six
month period in 1995. The increased operating income was principally due to
increased net advertising revenues resulting from the growth in established
programming, the launch of new programming and the continued growth in the
Company's Mediabase research services.

OTHER INCOME. Other income for the three months ended June 30, 1996 was
$0.3 million, an increase of $0.3 million as compared to the same period in
1995. Other income for the six months ended June 30, 1996 was $0.5 million, an
increase of $0.1 million as compared to the same period in 1995. Other income
for the three months and six months ended June 30, 1996 included increased net
interest income of $0.3 and $0.5 million, respectively, attributable to the
Company's investment of the net proceeds derived from the Offering in
short-term, cash equivalent marketable securities and lower overall outstanding
indebtedness. Other income for the six months ended June 30, 1995 included a
one-time gain on the sale of the Company's Denver, Colorado radio station
KZDG-FM ("KZDG") of $0.4 million. See "Liquidity and Capital Resources."

MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)

INCOME TAXES. The provision for income taxes for the three months ended
June 30, 1996 and 1995 was $0.7 million and $0.5 million, respectively. The
provision for income taxes for the six months ended June 30, 1996 and 1995 was
$1.2 million and $1.0 million, respectively. The estimated effective tax rate
utilized by the Company for the three months and six months ended June 30, 1996
was 40.2%, while the estimated effective tax rate for the three months and six
months ended June 30, 1995 was 40.8%.

NET INCOME AND EARNINGS PER SHARE. Net income for the three months ended
June 30, 1996 and 1995 was $1.1 million, or $0.12 per share, and $0.8 million,
or $0.16 per share, respectively. (Fully diluted earnings per share were $0.15
for the three months ended June 30, 1995. The Company did not report fully
diluted earnings per share for three months ended June 30, 1996.) Net income
for the six months ended June 30, 1996 and 1995 was $1.8 million, or $0.19 per
share, and $1.4 million, or $0.29 per share, respectively. (Fully diluted
earnings per share were $0.28 for the six months ended June 30, 1995. The
Company did not report fully diluted earnings per share for the six months ended
June 30, 1996.) The increased net income for the three months and six months
ended June 30, 1996 was principally due to increased operating income and
interest income earned on the Company's investments in short-term, cash
equivalent marketable securities. Primary earnings per share, which includes
the dilutive effects of options and warrants to purchase Common Stock and Class
A Common Stock, are based upon 9,612,899 and 4,813,196 shares for the three
months ended June 30, 1996 and 1995, respectively. Primary earnings per share
for the six months ended June 30, 1996 and 1995 are based upon 9,269,917 and
4,776,351 shares, respectively. Fully diluted earnings per share for the three
months and six months ended June 30, 1995 are based upon 4,923,133 and 4,920,944
weighted average number of shares outstanding, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has financed its cash flow requirements through
cash flows generated from operations and financing activities.

Net cash provided by operating activities for the six months ended June
30, 1996 and 1995 was $1.3 million and $0.4 million, respectively. The increased
cash flows from operations during the 1996 interim period was principally due to
increased operating income, lower prepaid expenses and other current assets, and
payments received or settlements of notes receivable from officers/employees;
offset, in part, by increased accounts receivable associated with the Company's
revenue growth.

MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)

Net cash (used in) provided by investing activities for the six months
ended June 30, 1996 and 1995 was $(0.8) million and $4.3 million, respectively.
The decrease in net cash (used in) provided by investing activities during the
1996 interim period is primarily attributable to the proceeds generated from the
sale of KZDG during the six months ended June 30, 1995.

Net cash provided by (used in) financing activities for the six months
ended June 30, 1996 and 1995 were $20.6 million and $(3.8) million,
respectively. Net cash provided by (used in) financing activities during the
1996 interim period increased principally due to proceeds generated from the
sale of Class A Common Stock in connection with the Offering.

The Company's working capital at June 30, 1996 was $31.5 million as
compared to $8.8 million at December 31, 1995. This increase in working capital
was primarily attributable to an increase in cash and cash equivalents resulting
from the sale of Class A Common Stock in connection with the Offering.

On July 28, 1995, the Company, Archon and certain management stockholders
entered into a Commitment Agreement pursuant to which Archon agreed to purchase
up to $10.8 million principal amount of Debentures and 1,080,000 Class A
Warrants upon the Company's call at any time until October 28, 1996, including
707,000 Class A Warrants which are issuable to Archon whether or not the Company
exercises its call rights with respect to the Debentures.

The Company has recorded, as debt issuance costs, the value of the 707,000
Class A Warrants issuable to Archon whether or not the Debentures are issued as
well as certain legal, professional and other costs directly related to the
Debentures. The Company intends to amortize such debt issuance costs over the
term the Debentures are outstanding. However, should the Company not call on
Archon to purchase all of the Debentures by October 28, 1996, the Company will
write off any unamortized debt issuance costs related to the 707,000 Class A
Warrants and other unamortized debt issuance costs, which would result in a
one-time earnings charge during 1996 of up to approximately $2.0 million. The
Company's management continues to review potential sources of less costly forms
of financing. Should such less costly forms of financing become available, the
Company would be less likely to exercise its call rights with respect to the
Debentures. The Company's management has made no determination as to whether or
not, or to what extent, it will exercise its call rights on the Debentures.
Included in the Company's results of operations is a facility fee payable to
Archon of 0.3% of the unused commitment for each quarter during which the
commitment is outstanding ($32,400 per quarter, assuming none of the commitment
is called).

In connection with the acquisition of BRG, the Company issued a
non-interest bearing note in the face amount of $412,500 due in January 1997. In
addition, the Company has entered into a commitment to acquire the licenses for
three additional production music libraries from affiliates of BRG for a
purchase price that will be based on a specified formula.

On January 25, 1996, the Company completed the sale of 1,500,000 shares (of
which 1,360,000 shares were sold by the Company, and 140,000 shares by certain
management shareholders of the Company which the management shareholders had
obtained through exchanging 140,000 shares of Common Stock for 140,000 shares of
Class A Common Stock) of its Class A Common Stock at $18.25 per share (prior to
the Class A Dividend) pursuant to the Offering and received net proceeds (net of
underwriting discounts, commissions and expenses) of approximately $22.0
million.

Management believes that the net proceeds from the sale of the Offering
together with operating revenues, and Archon's commitment to purchase
Debentures, will be sufficient to fund the Company's working capital
requirements through December 31, 1996.

SEASONALITY

Although not readily detectible because of the impact of acquisitions, the
Company's revenues have historically been highest in the second and third
quarters and lowest in the first and fourth quarters. Other than sales
commissions paid to the Company's sales personnel, costs do not vary
significantly with respect to the seasonal fluctuation of revenues.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may be a party to various legal actions and
complaints arising in the ordinary course of business. In the opinion of the
Company's management, the litigation in which it currently is a party is not
material to the financial condition or results of operations of the Company.

ITEM 6(A). EXHIBITS

11. Computation of Per Share Earnings*

ITEM 6(B). REPORTS ON FORM 8-K

None.

_________________
* Exhibit has been filed herewith.

SIGNATURE(S)

Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

PREMIERE RADIO NETWORKS, INC. (REGISTRANT)

By /s/ STEPHEN C. LEHMAN Date: AUGUST 9, 1996
--------------------------- --------------
Stephen C. Lehman
Chairman of the Board, President
and Chief Executive Officer

By: /s/ DANIEL M. YUKELSON Date: AUGUST 9, 1996
--------------------------- --------------
Daniel M. Yukelson
Vice President/Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)