ISS Supports Discovery Group Recommendation That Stockholders Withhold Votes For All Director Nominees of Spanish Broadcasting System

Business Wire, May 28, 2008

CHICAGO -- Discovery Group announced today that Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, issued a report recommending that stockholders of Spanish Broadcasting System Inc. (OTC: SBSA) withhold their votes for all the Company's 2008 director nominees. SBSA's annual stockholder meeting is scheduled for June 3, 2008.

Discovery Group is one of the largest stockholders in Spanish Broadcasting System Inc. holding 9.8% of the Class A shares outstanding. On May 6, 2008, Discovery sent a letter to all stockholders urging them to join Discovery in expressing dissatisfaction with the Company's long history of mismanagement, poor operating performance, excessive executive compensation and weak corporate governance. "The recommendation by ISS is yet another clear message to the Spanish Broadcasting Board of Directors that the status quo is unacceptable," said Daniel J. Donoghue, a Managing Partner of Discovery Group

In its report to institutional investment clients, ISS concluded that "change is needed at the company," specifically citing a corporate governance structure that insulates management from accountability and perpetuates a disconnect between executive compensation and company performance. Further, ISS expressed concerns regarding the numerous related party transactions that lead ISS to question "whether the interests of the Class A common shareholders are subordinate to the interest of the Alarcon family." As part of its evaluation of SBSA governance practices, ISS met with representatives of Discovery while SBSA officials declined to meet with ISS. The specific criteria ISS provided for its "Withhold" recommendation on SBSA director nominees is as follows:

* Failure to establish sound corporate governance practices

* Failure to link compensation to performance

* Failure to establish an independent nominating committee

* Failure to establish a majority independent board

* Poor board meeting attendance, in the case of the CEO's father

Despite the critical need for change, SBSA announced on an earnings call with analysts and investors, held on May 8, 2008, that it would not pursue, nor even discuss, any of the recommendations made to the Board of Directors by Discovery. Earlier this year, Discovery formally recommended that the SBSA Board address the situation by establishing a Special Committee to hire an investment bank and consider three specific options; going private, a sale of the company, and a revamping of the Company's corporate governance. SBSA's public investors had been anxious for the Board's response. "We were stunned by the outward and blatant expression of disdain for public investors shown by the Board of Spanish Broadcasting in dismissing these legitimate suggestions," said Donoghue.

Due to a super-majority voting structure that effectively grants control of the election of directors to SBSA's Chairman, Chief Executive Officer and President, Mr. Raul Alarcon, stockholders cannot prevent the reelection of the Company's nominees. Still, Discovery maintains that the effort will be victorious if a large percentage of the unaffiliated stockholders withhold their votes for the Company's nominees. According to Discovery, that assessment should exclude the votes of CBS Corporation which does not own shares but holds voting rights equivalent to 15.5% of the Class A common shares as a result of a convertible preferred stock CBS was issued when SBSA acquired CBS's San Francisco radio station in 2004. At that time of that deal, the current President of CBS Radio, Mr. Dan Mason, was on the SBSA Board of Directors.

Where to Find Additional Information

Discovery's "Just Vote No" slides, its Letter to Stockholders urging them to withhold their votes for directors at the 2008 Annual Stockholders' Meeting, "Background To The Investor Crisis At Spanish Broadcasting System", and Discovery's previous letters to the Board of Directors of Spanish Broadcasting are available at no charge at the SEC's website www.sec.gov and at Discovery's website www.thediscoverygroup.com/sbsa.htm.> Discovery is not asking for stockholders' proxy cards. Stockholders should not send Discovery their proxy card. Stockholders should return their proxy card to the voting agent in the envelope that was provided by SBSA or the stockholder's broker. If a stockholder ignores the proxy card, there is a chance that the stockholder's broker will vote those shares in favor of the company nominees.

About The Discovery Group

Discovery Group is a merchant banking firm that manages private partnerships in highly specialized investment strategies and conducts corporate merger and advisory services. The business was founded in 2002 and is based in Chicago. Affiliates of Discovery Group manage approximately $200 million in assets. Investors in these funds include several large university endowments, nationally-recognized charitable foundations and a variety of trusts, family offices and wealth advisors. Discovery's corporate finance expertise extends to public and private companies in a broad range of industries.

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