Another Media Company is Target of Activists

Another media company has become the target of an activist hedge fund manager.

Spanish Broadcasting System Inc., a Coconut Grove, Fla.-based operator of 21 radio stations and 2 television stations, is the target of activist fund Discovery Equity Partners LP and a “just vote no” campaign it launched Wednesday against the media company’s board and CEO Raul Alarcon.

“We are being regularly contacted by shareholders wishing to share their concern over the management of the company and, in many cases, to express their skepticism with respect to the board’s willingness to confront Mr. Alarcon with our recommendations,” the activists wrote in its letter which was attached to a Securities and Exchange Commission filing on Thursday.

Discovery Equity’s foray at Spanish Broadcasting, a company with a $121 million stock market capitalization, is just the latest in a string of recent activist campaigns against media companies. Other more high profile targets include: New York Times, Knight Ridder, The Chicago Sun-Times, Media General Inc. and Reuters

The activist investors, which own a 9.8% Spanish Broadcasting stake, want to see the company’s board set up a special committee, strike a contract with an investment bank and consider either a going-private transaction or a sale to a strategic buyer. Discovery Equity Partners wants Spanish Broadcasting to give it a list of shareholders so other investors can be contacted for their just vote no campaign. “The purpose of the inspection demand set forth above is to enable Discovery to contact other record and/or beneficial owners of SBS’s shares for the purpose of communicating with those owners regarding the withholding of their votes in the election of directors at SBS’s 2008 annual meeting of Stockholders and other matters pertinent to that meeting,” the activists wrote. . -- Ron Orol