INCOME TAXES	6 Months Ended
Jun. 30, 2011
INCOME TAXES	9. INCOME TAXES: The effective tax rate from continuing operations for the six month period ended June 30, 2011 was 69.3%, when combined with the recognition of approximately $810,000 of tax expense for certain discrete items. This rate is principally due to an estimated annual effective tax rate of 68.7% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”). This rate is blended with an estimated annual effective tax rate of 34.9% for Reach Media, which does not have a valuation allowance. For the six month period ended June 30, 2010, the effective tax rate for Radio One was zero percent and a provision of $66,000 related to discrete items was reported. A rate of zero percent was used for Radio One for the three and six month periods ended June 30, 2010 since the application of an effective tax rate to the pre-tax book loss would have resulted in the recording of a tax benefit. Management believed it was more likely than not that the benefit would not be realized by Radio One and accordingly reduced the estimated annual tax rate to zero percent. A tax benefit of approximately $141,000 was recognized for Reach Media, which resulted in a consolidated net tax benefit of $75,000 for the six month period ended June 30, 2010. The Company maintains a full valuation allowance on its deferred tax assets, except as it relates to the deferred tax assets attributable to Reach Media. As part of its assessment of realizability, the Company also determined that it was not appropriate under generally accepted accounting principles to benefit its DTAs based on DTLs related to indefinite-lived intangibles, consisting principally of certain of the Company’s radio broadcasting licenses, which cannot be scheduled to reverse in the same period. Because the DTL in this case would not reverse until some future indefinite period when the intangibles are either sold or impaired, any resulting temporary differences cannot be considered a source of future taxable income to support realization of the DTAs. For the six month period ended June 30, 2011, an additional valuation allowance for the current year anticipated increase to DTAs related to net operating loss carryforwards from the amortization of indefinite-lived intangibles was included in the annual effective tax rate calculation. The Company recorded a non-cash pre-tax gain of approximately $146.9 million resulting from its increased ownership and controlling interest in TV One for the three months ended June 30, 2011. The consolidation of TV One included an adjustment to the DTL related to the partnership investment in TV One. The Company evaluated the DTL and determined that a portion will not reverse within the requisite period and cannot be offset against the DTAs. This item generated a tax expense of $44.5 million for the six month period ended June 30, 2011 and resulted in a 36.6% effective tax rate. The remaining portion of the tax expense of $1.2 million for the six months ended June 30, 2011 consisted principally of discrete items and certain state taxes for Radio One which are based on gross receipts. On January 1, 2007, the Company adopted the provisions of ASC 740, “Income Taxes,” related to accounting for uncertainty in income taxes, which recognizes the impact of a tax position in the financial statements if it is more likely than not that the position would be sustained on audit based on the technical merits of the position. The nature of the uncertainties pertaining to our income tax position is primarily due to various state tax positions. As of June 30, 2011, we had approximately $5.8 million in unrecognized tax benefits. Accrued interest and penalties related to unrecognized tax benefits is recognized as a component of tax expense. During the six months ended June 30, 2011, the Company recorded an expense for interest and penalties of $26,000. As of June 30, 2011, the Company had a liability of $291,000 for unrecognized tax benefits for interest and penalties. The Company estimates the possible change in unrecognized tax benefits prior to June 30, 2011 which could range from $0 to a reduction of $16,000, due to expiring statutes.

9. INCOME TAXES:

The effective tax rate from continuing operations for the six month period ended June 30, 2011 was 69.3%, when combined with the recognition of approximately $810,000 of tax expense for certain discrete items. This rate is principally due to an estimated annual effective tax rate of 68.7% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”). This rate is blended with an estimated annual effective tax rate of 34.9% for Reach Media, which does not have a valuation allowance.

For the six month period ended June 30, 2010, the effective tax rate for Radio One was zero percent and a provision of $66,000 related to discrete items was reported. A rate of zero percent was used for Radio One for the three and six month periods ended June 30, 2010 since the application of an effective tax rate to the pre-tax book loss would have resulted in the recording of a tax benefit. Management believed it was more likely than not that the benefit would not be realized by Radio One and accordingly reduced the estimated annual tax rate to zero percent. A tax benefit of approximately $141,000 was recognized for Reach Media, which resulted in a consolidated net tax benefit of $75,000 for the six month period ended June 30, 2010.

The Company maintains a full valuation allowance on its deferred tax assets, except as it relates to the deferred tax assets attributable to Reach Media. As part of its assessment of realizability, the Company also determined that it was not appropriate under generally accepted accounting principles to benefit its DTAs based on DTLs related to indefinite-lived intangibles, consisting principally of certain of the Company’s radio broadcasting licenses, which cannot be scheduled to reverse in the same period. Because the DTL in this case would not reverse until some future indefinite period when the intangibles are either sold or impaired, any resulting temporary differences cannot be considered a source of future taxable income to support realization of the DTAs. For the six month period ended June 30, 2011, an additional valuation allowance for the current year anticipated increase to DTAs related to net operating loss carryforwards from the amortization of indefinite-lived intangibles was included in the annual effective tax rate calculation.

The Company recorded a non-cash pre-tax gain of approximately $146.9 million resulting from its increased ownership and controlling interest in TV One for the three months ended June 30, 2011. The consolidation of TV One included an adjustment to the DTL related to the partnership investment in TV One. The Company evaluated the DTL and determined that a portion will not reverse within the requisite period and cannot be offset against the DTAs. This item generated a tax expense of $44.5 million for the six month period ended June 30, 2011 and resulted in a 36.6% effective tax rate. The remaining portion of the tax expense of $1.2 million for the six months ended June 30, 2011 consisted principally of discrete items and certain state taxes for Radio One which are based on gross receipts.

On January 1, 2007, the Company adopted the provisions of ASC 740, “Income Taxes,” related to accounting for uncertainty in income taxes, which recognizes the impact of a tax position in the financial statements if it is more likely than not that the position would be sustained on audit based on the technical merits of the position. The nature of the uncertainties pertaining to our income tax position is primarily due to various state tax positions. As of June 30, 2011, we had approximately $5.8 million in unrecognized tax benefits. Accrued interest and penalties related to unrecognized tax benefits is recognized as a component of tax expense. During the six months ended June 30, 2011, the Company recorded an expense for interest and penalties of $26,000. As of June 30, 2011, the Company had a liability of $291,000 for unrecognized tax benefits for interest and penalties. The Company estimates the possible change in unrecognized tax benefits prior to June 30, 2011 which could range from $0 to a reduction of $16,000, due to expiring statutes.