ML MEDIA PARTNERS LP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
December 25, 1998

0-14871
(Commission File Number)

ML MEDIA PARTNERS, L.P.
(Exact name of registrant as specified in its governing
Securities registered pursuant to Section 12(b)
of the Act:

Delaware
(State or other jurisdiction of organization)

13-3321085
(IRS Employer Identification No.)

World Financial Center
South Tower - 14th Floor
New York, New York 10080-6114
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(212) 236-6577

Securities registered pursuant to Section 12(b) of the Act:

None
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(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest
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(Title of Class)

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 such filing
requirements for the past 90 days.
Yes X No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Part I.

Item 1. Business.

Formation

ML Media Partners, L.P. (the "Registrant" or the "Partnership"), a Delaware
limited partnership, was organized February 1, 1985. Media Management Partners,
a New York general partnership (the "General Partner"), is Registrant's sole
general partner. The General Partner is a joint venture, organized as a general
partnership under New York law, between RP Media Management ("RPMM") and ML
Media Management Inc. ("MLMM"). MLMM is a Delaware corporation and an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc. and an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). RPMM is organized
as a general partnership under New York law, consisting of The Elton H. Rule
Company and IMP Media Management Inc. As a result of the death of Elton H. Rule,
the owner of The Elton H. Rule Company, the general partner interest of the
Elton H. Rule Company may either be redeemed or acquired by a company controlled
by I. Martin Pompadur. The General Partner was formed for the purpose of acting
as general partner of Registrant.

Registrant was formed to acquire, finance, hold, develop, improve, maintain,
operate, lease, sell, exchange, dispose of and otherwise invest in and deal with
media businesses and direct and indirect interests therein.

On February 4, 1986, Registrant commenced the offering through Merrill Lynch of
up to 250,000 units of limited partnership interest ("Units") at $1,000 per
Unit. Registrant held four closings of Units; the first for subscriptions
accepted prior to May 14, 1986 representing 144,990 Units aggregating
$144,990,000; the second for subscriptions accepted thereafter and prior to
October 9, 1986 representing 21,540 Units aggregating $21,540,000; the third for
subscriptions accepted thereafter and prior to November 18, 1986 representing
6,334 Units aggregating $6,334,000; and the fourth and final closing of Units
for subscriptions accepted thereafter and prior to March 2, 1987 representing
15,130 Units aggregating $15,130,000. At these closings, including the initial
limited partner capital contribution, subscriptions for an aggregate of
187,994.1 Units representing the aggregate capital contributions of $187,994,100
were accepted. During 1989, the initial limited partner's capital contribution
of $100 was returned.

The Registration Statement relating to the offering was filed on December 19,
1985 pursuant to the Securities Act of 1933 under Registration Statement No.
33-2290 and was declared effective on February 3, 1986 and amendments thereto
became effective on September 18, 1986, November 4, 1986 and on December 12,
1986 (such Registration Statement, as amended from and after each such date, the
"Registration Statement").

Media Properties

As of December 25, 1998, Registrant's investments in media properties consist
of:

a 50% interest in a joint venture which owns two cable television systems
in Puerto Rico;

an AM and FM radio station combination in Bridgeport, Connecticut;

an AM and FM radio station combination in Anaheim, California (sold on
January 4, 1999; see further discussion below);

a corporation which owns an FM radio station in Cleveland, Ohio (sold on
January 28, 1999; see further discussion below).

As of December 25, 1998, Registrant has completed the sale of the following
media properties:

an AM and FM radio station combination and a background music service in
San Juan, Puerto Rico was sold on June 3, 1998;

four cable television systems located in the California communities of
Anaheim, Hermosa Beach/Manhattan Beach, Rohnert Park/Yountville, and
Fairfield were sold on May 31, 1996;

two VHF television stations, one located in Lafayette, Louisiana and the
other in Rockford, Illinois, were sold on September 30, 1995 and July 31,
1995, respectively;

an AM and FM radio station combination in Indianapolis, Indiana was sold
on October 1, 1993;

the Universal Cable systems were sold on July 8, 1992; and

two radio stations, one located in Tulsa, Oklahoma and the other in
Jacksonville, Florida, were sold on July 31, 1990.

Puerto Rico Investments

Cable Television Investments

Pursuant to the management agreement and joint venture agreement dated December
16, 1986 (the "Joint Venture Agreement"), as amended and restated, between
Registrant and Century Communications Corp. ("Century"), the parties formed a
joint venture under New York law, Century-ML Cable Venture (the "Venture"), in
which each has a 50% ownership interest. Century is a publicly held corporation
unaffiliated with the General Partner or any of its affiliates. On December 16,
1986 the Venture, through its wholly-owned subsidiary corporation, Century-ML
Cable Corporation ("C-ML Cable Corp."), purchased all of the stock of Cable
Television Company of Greater San Juan, Inc. ("San Juan Cable"), and liquidated
San Juan Cable into C-ML Cable Corp. C-ML Cable Corp., as successor to San Juan
Cable, is the operator of the largest cable television system in Puerto Rico.

On September 24, 1987, the Venture acquired all of the assets of Community
Cable-Vision of Puerto Rico, Inc., Community Cablevision of Puerto Rico
Associates, and Community Cablevision Incorporated (collectively, the "Community
Companies"), which consisted of a cable television system serving the
communities of Catano, Toa Baja and Toa Alta, Puerto Rico, which are contiguous
to San Juan Cable.

C-ML Cable Corp. and the Community Companies are herein referred to as C-ML
Cable ("C-ML Cable"). As of December 25, 1998, C-ML Cable serves 130,518 basic
subscribers, passes 293,670 homes and consists of approximately 1,888 linear
miles of cable plant.

During 1998, Registrant's share of the net operating revenues of C-ML Cable
totaled $32,575,174 (59.9% of operating revenues of Registrant).

During 1997, Registrant's share of the net operating revenues of C-ML Cable
totaled $29,404,870 (55.2% of operating revenues of Registrant).

During 1996, Registrant's share of the net operating revenues of C-ML Cable
totaled $26,342,927 (36.7% of operating revenues of Registrant).

Radio Investments

On February 15, 1989, Registrant and Century entered into a Management Agreement
and Joint Venture Agreement whereby a new joint venture, Century-ML Radio
Venture ("C-ML Radio"), was formed under New York law. Responsibility for the
management of radio stations to be acquired by C-ML Radio was assumed by
Registrant.

On March 10, 1989, C-ML Radio acquired all of the issued and outstanding stock
of Acosta Broadcasting Corporation ("Acosta"), Fidelity Broadcasting Corporation
("Fidelity"), and Broadcasting and Background Systems Consultants Corporation
("BBSC"); all located in San Juan, Puerto Rico. The purchase price for the stock
was approximately $7.8 million. At the time of acquisition, Acosta owned radio
stations WUNO-AM and Noti Uno News, Fidelity owned radio station WFID-FM, and
BBSC owned Beautiful Music Services, all serving various communities within
Puerto Rico.

In February 1990, C-ML Radio acquired the assets of Radio Ambiente Musical
Puerto Rico, Inc. ("RAM"), a background music service. The purchase price was
approximately $200,000 and was funded with cash generated by C-ML Radio. The
operations of RAM were consolidated into those of BBSC.

Effective January 1, 1994, all of the assets of C-ML Radio were transferred to
the Venture in exchange for the assumption by the Venture of all the obligations
of C-ML Radio and the issuance to Century and Registrant by the Venture of new
certificates evidencing partnership interests of 50% and 50%, respectively. The
transfer was made pursuant to a Transfer of Assets and Assumption of Liabilities
Agreement. At the time of this transfer, Registrant and Century entered into an
amended and restated management agreement and joint venture agreement (the
"Revised Joint Venture Agreement") governing the affairs of the Venture as
revised.

Under the terms of the Revised Joint Venture Agreement, Century is responsible
for the day-to-day operations of C-ML Cable and until the sale of C-ML Radio
(see below), Registrant was responsible for the day-to-day operations of C-ML
Radio. For providing services of this kind, Century is entitled to receive
annual compensation of 5% of C-ML Cable's net gross revenues (defined as gross
revenues from all sources less monies paid to suppliers of pay TV product, e.g.,
HBO, Cinemax, Disney and Showtime) and Registrant was entitled to receive annual
compensation of 5% of C-ML Radio's gross revenues including the local marketing
agreement ("LMA") revenue (after agency commissions, rebates or discounts and
excluding revenues from barter transactions).

On June 3, 1998, the Venture consummated the sale of C-ML Radio pursuant to a
sales agreement entered into in October 1997 between the Venture and Madifide,
Inc. The base sales price for C-ML Radio was approximately $11.5 million,
approximately $5.8 million of which is Registrant's share, subject to closing
adjustments. Pursuant to an LMA entered into, effective as of October 1, 1997,
the buyer was allowed to program the station from such date through the date of
sale. C-ML Radio collected a monthly LMA fee from the buyer which was equal to
the operating income for that month, provided however, that it not be less than
$50,000 nor more than $105,000. The monthly fee was recognized as revenue during
the LMA period and Registrant did not recognize any operating revenues nor incur
any net operating expenses of C-ML Radio during the LMA period. At the closing,
the Venture and Madifide, Inc. entered into escrow agreements pursuant to which
the Venture deposited, in aggregate, approximately $725,040, $362,520 of which
is Registrant's share, into three separate escrow accounts with respect to which
indemnification, benefit, and chattel mortgage claims may be made by Madifide,
Inc. for a period of one year. The balance of these escrows, which is being
classified on the accompanying Consolidated Balance Sheet as Investments held by
escrow agents, was $321,023 as of December 25, 1998.

Pursuant to the terms of the outstanding senior indebtedness that jointly
finances C-ML Radio and C-ML Cable, the net proceeds, and escrow amounts when
discharged, if any, from the resulting sale of C-ML Radio must be retained by
the Venture and cannot be distributed to Registrant or its partners.

During 1998, until its sale on June 3, 1998, Registrant's share of the net
operating revenues of C-ML Radio totaled $165,004 (0.3% of operating revenues of
Registrant).

During 1997, Registrant's share of the net operating revenues of C-ML Radio
totaled $2,051,576 (3.9% of operating revenues of Registrant).

During 1996, Registrant's share of the net operating revenues of C-ML Radio
totaled $2,951,028 (4.1% of operating revenues of Registrant).

California Cable Systems

In December, 1986, ML California Cable Corporation ("ML California"), a
wholly-owned subsidiary of Registrant, entered into an agreement with SCIPSCO,
Inc. ("SCIPSCO"), a wholly-owned subsidiary of Storer Communications, Inc. for
the acquisition by ML California of four cable television systems servicing the
California communities of Anaheim, Hermosa Beach/Manhattan Beach, Rohnert
Park/Yountville, and Fairfield and surrounding areas. The acquisition was
completed on December 23, 1986 with the purchase by ML California of all of the
stock of four subsidiaries of SCIPSCO which at closing owned all the assets of
the California cable television systems. The term "California Cable Systems" or
"California Cable" as used herein means either the cable systems or the owning
entities, as the context requires.

On December 30, 1986, ML California was liquidated into Registrant and
transferred all of its assets, except its Federal Communications Commission
("Commission" or "FCC") licenses, subject to its liabilities, to Registrant. The
licenses were transferred to ML California Associates, a partnership formed
between Registrant and the General Partner for the purpose of holding the
licenses in which Registrant is Managing General Partner and 99.99% equity
holder.

On November 28, 1994, Registrant entered into an agreement (the "Asset Purchase
Agreement") with Century to sell to Century substantially all of the assets used
in Registrant's California Cable Systems. On May 31, 1996, Registrant
consummated such sale pursuant to the terms of the Asset Purchase Agreement. The
base purchase price for the California Cable Systems was $286 million, subject
to certain adjustments including an operating cash flow as well as a working
capital adjustment as provided in the Asset Purchase Agreement.

On August 15, 1996, Registrant made a cash distribution to limited partners of
record on May 31, 1996, of approximately $108.1 million ($575 per Unit) and
approximately $1.1 million to its General Partner, representing its 1% share,
from net distributable sales proceeds from the sale of the California Cable
Systems.

In addition, upon closing of the sale of the California Cable Systems,
Registrant set aside approximately $40.7 million in a cash reserve to cover
operating liabilities, current litigation, and litigation contingencies relating
to the California Cable Systems' operations prior to and resulting from their
sale, as well as a potential purchase price adjustment. In accordance with the
terms of the Partnership Agreement, any amounts which may be available for
distribution from any unused cash reserves, after accounting for certain other
expenses of Registrant including certain expenses incurred after May 31, 1996,
will be distributed to partners of record as of the date such unused reserves
are released, rather than to the partners of record on May 31, 1996, the date of
the sale.

Effective August 14, 1997, reserves in the amount of approximately $13.2 million
were released and, after accounting for certain expenses of Registrant, in
accordance with the terms of the Partnership Agreement, were included in the
cash distribution that was distributed to partners on November 25, 1997. As of
December 25, 1998, Registrant has approximately $23.2 million remaining in cash
reserves to cover operating liabilities, current litigation, and litigation
contingencies relating to the California Cable Systems prior to and resulting
from their sale. On March 1, 1999, reserves in the amount of approximately $6.1
million were released and, in accordance with the terms of the Partnership
Agreement, have been included in the cash distribution to be made on March 31,
1999.

During 1996, until its sale on May 31, 1996, California Cable Systems
generated operating revenues of $24,085,663 (33.5% of operating revenues of
Registrant).

WREX Television Station

On April 29, 1987, Registrant entered into an acquisition agreement with Gilmore
Broadcasting Corporation, a Delaware corporation ("Gilmore"), for the
acquisition by Registrant of substantially all the assets of television station
WREX-TV, Rockford, Illinois ("WREX-TV" or "WREX"). The acquisition was
consummated on August 31, 1987 for $18 million.

On July 31, 1995, Registrant completed the sale to Quincy Newspapers, Inc.
("Quincy") of substantially all of the assets used in the operations of
Registrant's television station WREX, other than cash and accounts receivable.
The purchase price for the assets was approximately $18.4 million, subject to
certain adjustments. A reserve of approximately $2.3 million was established to
cover certain purchase price adjustments and expenses and liabilities relating
to WREX, and the balance of approximately $16.1 million was applied to repay a
portion of the bank indebtedness secured by the assets of WREX and KATC (as
defined below). Quincy did not assume certain liabilities of WREX and Registrant
remained liable for such liabilities. On the sale of WREX, Registrant recognized
a gain for financial reporting purposes of approximately $8.8 million in 1995.

Effective August 14, 1997 approximately $1.8 million, a portion of the reserve
established at the time of the WREX-TV sale, was released. In accordance with
the terms of the Partnership Agreement, such released reserve amounts, after
accounting for certain expenses of Registrant, were included in the cash
distribution made to partners on November 25, 1997. In addition, effective
December 26, 1997 the remaining reserve established at the time of the WREX sale
of approximately $161,000 was released. Thus, during 1997, Registrant recognized
a gain on sale of WREX of approximately $2.0 million resulting from the release
of reserves and reversal of previous accruals.

KATC Television Station

On September 17, 1986, Registrant entered into an acquisition agreement with
Loyola University, a Louisiana non-profit corporation ("Loyola"), for the
acquisition by Registrant of substantially all the assets of television station
KATC-TV, Lafayette Louisiana ("KATC-TV" or "KATC"). The acquisition was
completed on February 2, 1987 for a purchase price of approximately $26.7
million.

On September 30, 1995, Registrant completed the sale to KATC Communications,
Inc. (the "KATC Buyer") of substantially all of the assets used in the
operations of Registrant's television station KATC, other than cash and accounts
receivable. The KATC Buyer did not assume certain liabilities of KATC and
Registrant remained liable for such liabilities. The purchase price for the
assets was $24.5 million. From the proceeds of the sale, approximately $6.3
million was applied to repay in full the remaining bank indebtedness secured by
the assets of KATC and WREX; a reserve of approximately $2.0 million was
established to cover certain purchase price adjustments and expenses and
liabilities relating to KATC; $1.0 million was deposited into an indemnity
escrow account to secure Registrant's indemnification obligations to the KATC
Buyer; approximately $7.6 million was applied to pay a portion of accrued fees
and expenses owed to the General Partner; and the remaining amount of
approximately $7.6 million ($40 per Unit) was distributed to partners in
December, 1995. Registrant recognized a gain for financial reporting purposes of
approximately $14.0 million on the sale of KATC in 1995.

On June 24, 1997, Registrant received the discharge of escrowed proceeds of $1.0
million (and approximately $100,000 of interest earned thereon) generated from
the sale of KATC. In addition, effective August 14, 1997, approximately $1.5
million, a portion of the reserve established at the time of the KATC sale, was
released. In accordance with the terms of the Partnership Agreement, the amount
of such released reserve and discharged escrowed proceeds, after accounting for
certain expenses of Registrant, were included in the cash distribution made to
partners on November 25, 1997. In addition, effective December 26, 1997, the
remaining reserve established at the time of the KATC sale of approximately
$218,000 was released. Thus, during 1997, Registrant recognized a gain on sale
of KATC of approximately $1.7 million resulting from the release of reserves and
reversal of previous accruals.

WEBE-FM Radio

On August 20, 1987, Registrant entered into an Asset Purchase Agreement with 108
Radio Company, L.P. for the acquisition of the business and assets of radio
station WEBE-FM, Westport, Connecticut ("WEBE-FM" or "WEBE"), which serves
Fairfield and New Haven counties, for $12.0 million.

During 1998, WEBE-FM generated operating revenues of $8,485,300 (15.6% of
operating revenues of Registrant).

During 1997, WEBE-FM generated operating revenues of $7,851,792 (14.8% of
operating revenues of Registrant).

During 1996, WEBE-FM generated operating revenues of $6,519,197 (9.1% of
operating revenues of Registrant).

Wincom

On August 26, 1988, Registrant acquired 100% of the stock of Wincom Broadcasting
Corporation ("Wincom"), an Ohio corporation headquartered in Cleveland for $46.0
million. At acquisition, Wincom and its subsidiaries owned and operated five
radio stations - WQAL-FM, Cleveland, Ohio; WCKN-AM/WRZX-FM, Indianapolis,
Indiana (the "Indianapolis Stations", including the Indiana University Sports
Radio Network, which was discontinued after the first half of 1992); KBEZ-FM,
Tulsa, Oklahoma; and WEJZ-FM, Jacksonville, Florida. On July 31, 1990,
Registrant sold the business and assets of KBEZ-FM and WEJZ-FM to Renda
Broadcasting Corp. for net proceeds of approximately $10.3 million. On October
1, 1993, Registrant sold the Indianapolis stations which generated net proceeds
in the approximate amount of $6.1 million. All proceeds of the sales were paid
to the lender.

On January 28, 1999, Registrant consummated a sale to Chancellor Media
Corporation of Los Angeles ("Chancellor") of the stock of Wincom, pursuant to a
stock purchase agreement (the "Cleveland Agreement") dated August 11, 1998.
Wincom owns all of the outstanding stock of Win Communications, Inc. ("WIN"),
which owns and operates the radio station WQAL-FM, serving Cleveland, Ohio (the
"Cleveland Station").

The base sales price for the Cleveland Station was $51,250,000, subject to
certain adjustments for the apportionment of current assets and liabilities as
of the closing date, as provided for in the Cleveland Agreement, resulting in a
reduction of the base sales price of approximately $1.6 million.

Pursuant to the Cleveland Agreement, Registrant deposited $2.5 million into an
indemnity escrow account against which Chancellor may make indemnification
claims for a period of up to two years after the closing; $1.5 million, less any
claims previously asserted, will be discharged from such escrow on December 31,
1999. Approximately $2.0 million was used to repay in full the remaining
outstanding balance of the Wincom-WEBE-WICC Loan and pursuant to the terms of
the Wincom-WEBE-WICC Loan, an initial amount of approximately $7.3 million was
paid to the Wincom Bank, pursuant to its 15% residual interest in the net sales
proceeds from the sale of Wincom. In addition, Registrant held approximately
$2.5 million of the sales proceeds to pay (or to reserve for payment of)
wind-down expenses and sale-related expenses. The remaining sales proceeds of
$35.4 million will be included in the cash distribution made to partners on
March 30, 1999 in accordance with the terms of the Partnership Agreement. To the
extent any amounts reserved or paid into escrow as described above are
subsequently released or discharged, such amounts will be distributed to
partners of record as of the date of such release from reserve or discharge from
such escrow. The net assets of the Cleveland Station, which were sold pursuant
to the Cleveland Agreement in 1999, have been included in assets held for sale
on the accompanying Consolidated Balance Sheet as of December 25, 1998. In 1999,
Registrant will recognize a gain on the sale of the Cleveland Station.

Additionally, in connection with the Cleveland Agreement, WIN and Chancellor
entered into a Time Brokerage Agreement, pursuant to which WIN made
substantially all of the time on the station available to Chancellor in exchange
for a monthly payment by Chancellor to WIN. The Time Brokerage Agreement became
effective on October 1, 1998.

During 1998, Wincom generated operating revenues of $6,041,783 (11.1% of
operating revenues of Registrant).

During 1997, Wincom generated operating revenues of $6,995,768 (13.1% of
operating revenues of Registrant).

During 1996 Wincom generated operating revenues of $5,428,648 (7.6% of operating
revenues of Registrant).

WICC-AM

On July 19, 1989, Registrant purchased all of the assets of radio station
WICC-AM located in Bridgeport, Connecticut ("WICC-AM" or "WICC") from
Connecticut Broadcasting Company, Inc. The purchase price of $6.25 million was
financed solely from proceeds of the Wincom-WEBE-WICC Loan.

During 1998, WICC-AM generated operating revenues of $3,174,571 (5.8% of
operating revenues of Registrant).

During 1997, WICC-AM generated operating revenues of $2,969,144 (5.6% of
operating revenues of Registrant).

During 1996, WICC-AM generated operating revenues of $2,494,402 (3.5% of
operating revenues of Registrant).

Wincom-WEBE-WICC Loan

On July 19, 1989, Registrant entered into an Amended and Restated Credit
Security and Pledge Agreement which provided for borrowings up to $35.0 million
for use in connection with the Wincom-WEBE-WICC Loan. On July 30, 1993,
Registrant and the Wincom Bank executed an amendment to the Wincom-WEBE-WICC
Loan, effective January 1, 1993, which cured all previously outstanding defaults
pursuant to the Wincom-WEBE-WICC Loan. Since December 26, 1997, Registrant has
been in default on the Wincom-WEBE-WICC Loan. In 1999, Registrant repaid the
remaining outstanding balance of the Wincom-WEBE-WICC Loan in full, however the
default has not been waived by the Wincom Bank. Pursuant to the terms of the
Wincom-WEBE-WICC Loan, an initial amount was paid to the Wincom Bank, pursuant
to its 15% residual interest in the net sales proceeds (see further discussion
under Wincom above).

KEZY-FM and KORG-AM

On November 16, 1989, Registrant acquired an AM ("KORG-AM") and an FM
("KEZY-FM") (jointly the "Anaheim Stations" or "KORG/KEZY") radio station
combination located in Anaheim, California, from Anaheim Broadcasting
Corporation. The total acquisition cost was approximately $15.1 million.

On January 4, 1999, Registrant consummated a sale to Citicasters Co., a
subsidiary of Jacor Communications, Inc. ("Citicasters") of substantially all of
the assets, other than cash and accounts receivable, used in the operations of
Registrant's radio stations, KORG-AM and KEZY-FM, serving Anaheim, California
(the "Anaheim Stations"), pursuant to the asset purchase agreement (the "Anaheim
Agreement") dated September 14, 1998, as amended.

The base sales price for the Anaheim Stations was $30,100,000, subject to
certain adjustments for the apportionment of income and liabilities as of the
closing date, as provided for in the Anaheim Agreement, resulting in a reduction
of the base sales price of approximately $20,000.

Pursuant to the Anaheim Agreement, Registrant deposited $1.0 million into an
indemnity escrow account against which Citicasters may make indemnification
claims for a period of one year after the closing. In addition, Registrant held
approximately $5.2 million of the sales proceeds to pay (or to reserve for
payment of) expenses and liabilities relating to the operations of the Anaheim
Stations prior to the sale as well as wind-down expenses, sale-related expenses
and contingent obligations of the Anaheim Stations. The remaining sales proceeds
of $23,840,000 will be included in the cash distribution made to partners on
March 30, 1999, after accounting for certain expenses of Registrant, in
accordance with the terms of the Partnership Agreement. To the extent any
amounts reserved or paid into escrow as described above are subsequently
released or discharged, such amounts will be distributed to partners of record
as of the date of such release from reserves or discharge from such escrow. The
net assets of the Anaheim Stations, which were sold pursuant to the Anaheim
Agreement in 1999, have been included in assets held for sale on the
accompanying Consolidated Balance Sheet as of December 25, 1998. In 1999,
Registrant will recognize a gain on the sale of the Anaheim Stations.

During 1998, the Anaheim Stations generated operating revenues of $3,989,661
(7.3% of operating revenues of Registrant).

During 1997, the Anaheim Stations generated operating revenues of $3,950,833
(7.4% of operating revenues of Registrant).

During 1996, the Anaheim Stations generated operating revenues of $3,750,442
(5.2% of operating revenues of Registrant).

Employees.

As of December 25, 1998, Registrant and its consolidated subsidiaries employed
approximately 394 persons. The business of Registrant is managed by the General
Partner. RPMM, MLMM and ML Leasing Management Inc., all affiliates of the
General Partner, employ individuals who perform the management and
administrative services for Registrant.

COMPETITION.

Cable Television

Cable television systems compete with other communications and entertainment
media, including off-air television broadcast signals that a viewer is able to
receive directly using the viewer's own television set and antenna. The extent
of such competition is dependent in part upon the quality and quantity of such
off-air signals. In the areas served by Registrant's systems, a substantial
variety of broadcast television programming can be received off-air. In those
areas, the extent to which cable television service is competitive depends
largely upon the system's ability to provide a greater variety of programming
than that available off-air and the rates charged by Registrant's cable systems
for programming. Cable television systems also are susceptible to competition
from other multichannel video programming distribution ("MVPD") systems, from
other forms of home entertainment such as video cassette recorders, and in
varying degrees from other sources of entertainment in the area, including
motion picture theaters, live theater and sporting events.

In recent years, the level of competition in the MVPD market has increased
significantly. Notably, several entities provide high-powered direct broadcast
satellite ("DBS") service in the continental United States. In addition, the FCC
has adopted polices providing for authorization of new technologies and a more
favorable operating environment for certain existing technologies which provide,
or have the potential to provide, substantial additional competition to cable
television systems. For example, the FCC has revised its rules on multi-channel
multi-point distribution service ("MMDS" or "wireless cable") to foster MMDS
services competitive with cable television systems, has authorized telephone
companies to deliver directly to their subscribers video programming and has
authorized a new service, the local multipoint distribution service ("LMDS"),
which can employ technology analogous to that used by cellular telephone systems
to distribute multiple channels of video programming and other data directly to
subscribers. Moreover, the Telecommunications Act of 1996 (the "1996 Act")
substantially reformed the Communications Act of 1934, as amended (the
"Communications Act") by, among other things, permitting telephone companies to
enter the MVPD market through a number of means, including in-region cable
systems. Regulatory initiatives that will result in additional competition for
cable television systems are described in the following sections.

Radio Industry

The radio industry is highly competitive and dynamic, and reaches a larger
portion of the population than any other medium. There are generally several
stations competing in an area and most larger markets have twenty or more viable
stations; however, stations tend to focus on a specific target market by
programming music or other formats that appeal to certain demographically
specific audiences. As a result of these factors, radio is an effective medium
for advertisers as it can have mass appeal or be focused on a specific market.
While radio has not been subject to an erosion in market share such as that
experienced by broadcast television, it was also subject to the depressed
nationwide advertising market at the beginning of this decade. Recent changes in
FCC multiple ownership rules have led to more concentration in some local radio
markets as a single party is permitted to own additional stations or provide
programming and sell advertising on stations it does not own. The provisions of
the 1996 Act eliminating national ownership caps and easing local ownership caps
have accelerated this trend, as described more fully below.

Registrant is subject to significant competition, in many cases from competitors
whose media properties are larger than Registrant's media properties.

LEGISLATION AND REGULATION.

Cable Television Industry

The cable television industry is extensively regulated by the federal
government, some state governments and most local franchising authorities. In
addition, the Copyright Act of 1976 (the "Copyright Act") imposes copyright
liability on all cable television systems for their primary and secondary
transmissions of copyrighted programming. The regulation of cable television
systems at the federal, state and local levels is subject to the political
process and has been in constant flux over the past decade. This process
continues to generate proposals for new laws and for the adoption or deletion of
administrative regulations and policies. Further material changes in the law and
regulatory requirements, especially as a result of both the 1996 Act and the
Cable Television Consumer Protection and Competition Act of 1992 (the "1992
Cable Act"), must be expected. There can be no assurance that the Registrant's
cable systems will not be adversely affected by future legislation, new
regulations or judicial or administrative decisions. The following is a summary
of federal laws and regulations materially affecting the cable television
industry and a description of certain state and local laws with which the cable
industry must comply.

Federal Statutes

The Communications Act imposes certain uniform national standards and guidelines
for the regulation of cable television systems. Among other things, the
Communications Act regulates the provision of cable television service pursuant
to a franchise, specifies a procedure and certain criteria under which a cable
television operator may request modification of its franchise, establishes
criteria for franchise renewal, sets maximum fees payable by cable television
operators to franchising authorities, authorizes a system for regulating certain
subscriber rates and services, outlines signal carriage requirements, imposes
certain ownership restrictions, and sets forth customer service, consumer
protection, and technical standards.

The 1996 Act's cable provisions expanded and in some cases significantly
modified the rules applicable to cable systems. Most significantly, the 1996 Act
took steps to reduce, or in some cases eliminate, rate regulation of cable
systems, while also allowing substantially greater telephone company
participation in the MVPD market, as well as promoting cable operator provision
of telecommunications services.

Violations of the Communications Act or any FCC regulations implementing the
statutory laws can subject a cable operator to substantial monetary penalties
and other sanctions.

Federal Regulations

Federal regulation of cable television systems under the Communications Act is
conducted primarily through the FCC, although, as discussed below, the Copyright
Office also regulates certain aspects of cable television system operation.
Among other things, FCC regulations currently contain detailed provisions
concerning non-duplication of network programming, sports program blackouts,
program origination, ownership of cable television systems and equal employment
opportunities. There are also comprehensive registration and reporting
requirements and various technical standards. Moreover, pursuant to the 1992
Cable Act, the FCC has, among other things, established regulations concerning
mandatory signal carriage and retransmission consent, consumer service
standards, the rates for service, equipment, and installation that may be
charged to subscribers, and the rates and conditions for commercial channel
leasing. The FCC also issues permits, licenses or registrations for microwave
facilities, mobile radios and receive-only satellite earth stations, all of
which are commonly used in the operation of cable systems.

The FCC is authorized to impose monetary fines upon cable television systems for
violations of existing regulations and may also suspend licenses and other
authorizations and issue cease and desist orders. It is likewise authorized to
promulgate various new or modified rules and regulations affecting cable
television, many of which are discussed in the following paragraphs.

The 1992 Cable Act and the 1996 Act

The 1992 Cable Act clarified and modified certain provisions of the Cable
Communications and Policy Act of 1984 ("1984 Cable Act"). It also codified
certain FCC regulations and added a number of new requirements. Subsequent to
the passage of the 1992 Cable Act, the FCC undertook a substantial number of
complicated rulemaking proceedings resulting in a host of new regulatory
requirements or guidelines. Several of the provisions of the 1992 Cable Act and
certain FCC regulations implemented pursuant thereto are still being tested in
court. At the same time, a number of provisions have been modified by the 1996
Act. Registrant cannot predict the result of any pending or future court
challenges or the shape any still-pending or proposed FCC regulations may
ultimately take, nor can Registrant predict the effect of either on its
operations.

As discussed in greater detail elsewhere in this filing, some of the principal
provisions of the 1992 Cable Act include: (1) a mandatory carriage requirement
coupled with alternative provisions for retransmission consent as to
over-the-air television signals; (2) rate regulations that completely replace
the rate provisions of the 1984 Cable Act; (3) consumer protection provisions;
(4) a three-year ownership holding requirement; (5) some clarification of
franchise renewal procedures; and (6) FCC authority to examine and set
limitations on the horizontal and vertical integration of the cable industry. Of
these provisions, the 1996 Act sunset certain of the rate regulations in March
1999 and eliminated the three-year ownership requirement.

Other provisions of the 1992 Cable Act included: (1) a prohibition on
"buy-throughs," an arrangement whereby subscribers are required to subscribe to
a program tier other than basic in order to receive certain per-channel or
per-program services; (2) requiring the FCC to develop minimum signal standards,
rules for the disposition of home wiring upon termination of cable service, and
regulations regarding compatibility of cable service with consumer television
receivers and video cassette recorders; (3) a requirement that the FCC
promulgate rules limiting children's access to indecent programming on access
channels; (4) notification requirements regarding sexually explicit programs;
and (5) more stringent equal employment opportunity rules for cable operators.
Of these provisions, the 1996 Act addresses cable equipment compatibility, as
further discussed below.

The 1992 Cable Act also contained a provision barring both cable operators and
certain vertically integrated program suppliers from engaging in practices which
unfairly impede the availability of programming to other multichannel video
programming distributors. In sum, the 1992 Cable Act established an entirely new
set of regulatory requirements and standards. It is an unusually complicated
legislative enactment that spawned a multitude of FCC enforcement decisions as
well as certain still-to-be concluded FCC proceedings. It also remains subject
to certain pending judicial challenges. Adding to the complexity is the 1996
Act, which in some areas mandates additional regulation to that required by the
1992 Cable Act and in other areas modifies or eliminates extant cable laws.

Pursuant to the 1992 Cable Act, the FCC promulgated rules and regulations
governing the following areas: indecency on leased access channels, obscenity on
public, educational and governmental ("PEG") channels, mandatory carriage and
retransmission consent of over-the-air broadcast signals, home wiring, equal
employment opportunity, tier "buy-throughs," customer service standards, cable
television ownership standards, program access, carriage of home shopping
stations, and rate regulation. Most of these new regulations went into effect by
1994. However, in November 1993, a three-judge panel of the United States Court
of Appeals for the D.C. Circuit found the indecency rules to be unconstitutional
and remanded them to the Commission. Subsequently, the United States Court of
Appeals for the D.C. Circuit vacated the panel decision pending rehearing and a
decision by the full court. On rehearing, the en banc court sustained the
Commission's regulations. The Supreme Court ultimately affirmed the provision
allowing cable operators to decide whether to carry indecent programming on
leased access channels but struck down provisions that would have (i) allowed
cable operators to decide whether to carry such programming on PEG channels; and
(ii) required cable operators to segregate and block indecent programming
allowed on lease access channels. The latter two provisions were struck down on
First Amendment grounds for being insufficiently tailored to achieve the
legitimate governmental objective of protecting children from exposure to
"patently offensive" programming.

On March 31, 1997, the Supreme Court, in a 5-4 decision, upheld the must carry
provisions of the 1992 Cable Act, finding them to be content-neutral regulations
that advance important governmental interests unrelated to the suppression of
free speech. The rules promulgated by the Commission to implement the must carry
provisions were in effect pending the outcome of the appellate process and thus
remained in effect. On a separate matter, in September 1993 the United States
District Court for the District of Columbia found that the horizontal ownership
limits called for by the 1992 Cable Act are unconstitutional. The Commission
voluntarily stayed the effect of its horizontal ownership rules until final
judicial resolution of the issue. Thereafter, petitions for reconsideration were
filed with the Commission. In August 1996, the United States Court of Appeals
for the District of Columbia Circuit consolidated the appeal of the statutory
provision with an appeal of the rules and determined to hold judicial
proceedings in abeyance pending the FCC's action on the petitions for
reconsideration of the rules. In June 1998, the Commission affirmed its rule
that no person or entity can own or have an attributable interest in cable
systems reaching more than 30% of homes passed nationwide, with an exception
permitting ownership of cable systems reaching up to 35% of all homes passed
nationwide (as long as the additional homes passed beyond 30% are served by
minority-controlled cable systems). The Commission also lifted its voluntary
stay on enforcement of the horizontal ownership rules only insofar as it applies
to the information reporting requirements, which compel entities owning cable
systems passing more than 20% of homes nationwide to inform the agency how many
homes that entity will pass both before and after a proposed acquisition prior
to acquiring an attributable interest in any additional cable systems. The FCC
also declined to revise the factors used to calculate a cable system's
compliance with the 30% limit. The Commission, however, has not yet determined
whether the horizontal ownership rules should consider the presence of all MVPDs
in the market rather than cable operators alone; whether the rules should be
based on actual subscribers rather than on homes passed; whether 30% remains the
appropriate limit given evolving market conditions; and whether the
minority-controlled allowance remains an effective way to promote minority
participation in the cable industry. Registrant is unable to predict the
ultimate outcome of these proceedings or the impact upon its operations of
various FCC regulations still being formulated and/or interpreted.

As previously noted, under the broad statutory scheme, cable operators are
subject to a two-level system of regulation with some matters under federal
jurisdiction, others subject strictly to local regulation, and still others
subject to both federal and local regulation. Following are descriptions of some
of the more significant regulatory areas of concern to cable operators.

Franchises

The 1984 Cable Act affirmed the right of franchising authorities to award one or
more franchises within their jurisdictions and prohibited future cable
television systems from operating without a franchise. The 1992 Cable Act
provided that franchising authorities may not grant an exclusive franchise or
unreasonably deny award of a competing franchise. The 1984 Cable Act also
provided that in granting or renewing franchises, franchising authorities may
establish requirements for cable-related facilities and equipment but may not
specify requirements for video programming or information services other than in
broad categories.

Under the 1992 Cable Act, franchising authorities are now exempt from money
damages in cases involving their exercise of regulatory authority, including the
award, renewal, or transfer of a franchise, except for cases involving
discrimination on race, sex, or similar impermissible grounds. Remedies are
limited exclusively to injunctive or declaratory relief. Franchising authorities
may also build and operate their own cable systems without a franchise. The 1996
Act modified the definition of a "cable system" by expanding the so-called
"private cable" exemption so that a system serving subscribers without using any
public rights-of-way is not a cable system, and need not obtain a local
franchise.

The 1984 Cable Act permitted local franchising authorities to require cable
operators to set aside certain channels for PEG access programming and to impose
a franchise fee of up to 5% of gross annual system revenues. The 1984 Cable Act
further required cable television systems with 36 or more channels to designate
a portion of their channel capacity for commercially leased access by third
parties, which generally is available to commercial and non-commercial parties
to provide programming (including programming supported by advertising). As
required by the 1992 Cable Act, the FCC adopted rules setting maximum reasonable
rates and other terms for the use of such leased channels. In January 1997, the
FCC released an order that established a new formula for setting leased access
rates. It is anticipated that the new formula will lower the rates programmers
must pay to lease capacity on cable systems. The FCC has jurisdiction to resolve
disputes over the provision of leased access.

In 1992, the FCC permitted local exchange carriers to engage in so-called "video
dialtone" operations in their local telephone exchange areas pursuant to which
neither they nor the programming entities they serve are required to obtain a
local cable franchise. As discussed more fully below, the 1996 Act repealed the
FCC's video dialtone rules and, among other things, enacted a related "open
video system" regulation regime.

Rate Regulation

Under the 1992 Cable Act, cable systems' rates for service and related
subscriber equipment are subject to regulation by the FCC and local franchising
authorities. However, only the rates of cable systems that are not subject to
"effective competition" may be regulated. A cable system is subject to effective
competition if one of the following conditions is met: (1) fewer than 30% of the
households in the franchise area subscribe to the system; (2) at least 50% of
the households in the franchise area are served by two MVPDs and at least 15% of
the households in the franchise area subscribe to any MVPD other than the
dominant cable system; or (3) a franchising authority for that franchise area
itself serves as an MVPD offering service to at least 50% of the households in
the franchise area. The 1996 Act added a fourth condition: the mere offering
(regardless of penetration) by a local exchange carrier, or an entity using the
local exchange carrier's ("LEC") facilities, of video programming services
(including 12 or more channels of programming, at least some of which are
television broadcasting signals) directly to subscribers by any means (other
than direct-to-home satellite services) in the franchise area of an unaffiliated
cable operator.

Pursuant to FCC rules, the Telecommunications Regulatory Board of Puerto Rico
(the "Board") filed for certification to regulate the rates of the cable system
operated by the Venture. The cable system operator contested the certification,
claiming that it was subject to effective competition, and therefore exempt from
rate regulation, because fewer that 30 percent of the households in the system's
franchise area subscribe to the system. The FCC's Cable Services Bureau upheld
the certification and in November 1998 the Commission denied the operator's
application for review of the decision, as well as a request for stay. The cable
operator filed a petition for reconsideration of the FCC's denial of the
application for review. The petition for reconsideration is pending. Under FCC
rules, a cable system remains subject to rate regulation until the FCC finds
that effective competition exists. The franchising authority for the San Juan
Cable System in Puerto Rico has been authorized by the FCC to regulate the basic
cable service and equipment rates and charges of the system. The franchising
authority has not yet sent a notice to the system to initiate rate regulation.
Regulation may result in reduced revenues going forward and in refunds to
customers for charges above those allowed by the FCC's rate regulations for up
to 12 months retroactively from when the new rates are initiated or the
franchising authority issues a potential refund accounting order. Registrant is
currently assessing the impact of this regulation.

Under the 1992 Cable Act, a local franchising authority may certify with the FCC
to regulate the Basic Service Tier ("BST") and associated subscriber equipment
of a cable system within its jurisdiction. By law, the BST must include all
broadcast signals (with the exception of national "superstations"), including
those required to be carried under the mandatory carriage provisions of the 1992
Cable Act, as well as PEG access channels required by the franchise. The FCC has
jurisdiction over the cable programming service tier ("CPST"), which generally
includes programming other than that carried on the BST or offered on a
per-channel or per-program basis. The 1996 Act, however, confines rate
regulation to the BST after three years: on March 31, 1999, the CPST will be
exempted from regulation. The 1996 Act also modified the rules governing the
filing of complaints for rate increases on the CPST. Under the former
procedures, mandated by the 1992 Cable Act, subscribers were allowed to file
complaints directly with the FCC. Under the new procedure, only a local
franchising authority may file an FCC complaint, and then only if the
franchising authority receives "subscriber complaints" within 90 days of the
effective date of a rate increase. The FCC must issue a final order within 90
days after receiving a franchising authority's complaint.

The FCC's rate regulations generally required regulated cable systems to use an
FCC-prescribed "benchmark" approach to set initial rates for BSTs and CPSTs.
Cable systems ultimately were required to reduce their rates by approximately
17% from the rates in effect on September 30, 1992. Certain modifications of the
rules were made for low-price cable systems and systems owned by small operators
(operators with a total subscriber base of 15,000 or less and not affiliated
with or controlled by another operator). The United States Court of Appeals has
upheld these regulations, but these and other rate regulations may be subject to
further judicial review, and may be altered by ongoing FCC rulemaking and
case-by-case review.

Alternatively, cable operators may seek to have their rates regulated under a
"cost-of-service" approach, which, much like the method historically used to
regulate the rates of local exchange carriers, allows cable system operators to
recover through regulated rates their normal operating expenses, and a
reasonable return on investment. The final cost-of-service rules ultimately
adopted by the FCC: (1) establish an industry-wide 11.25% rate of return, (but
the Commission has proposed to use a cable system's actual debt cost and capital
structure to determine its final rate of return); (2) establish a rebuttable
presumption that 34% of the purchase price of cable systems purchased prior to
May 15, 1994 (and not just the portion of the price allocable to intangibles)
must be excluded from the rate base; and (3) replaced the presumption of a
two-year period for accumulated start-up losses with a case-by-case
determination of the appropriate period. The 1996 Act restricted the FCC from
disallowing certain operator losses for cost-of-service filings. There are no
threshold requirements limiting the cable systems eligible for a cost-of-service
showing except that, once rates have been set pursuant to a cost-of-service
approach, cable systems may not file a new cost-of-service showing to justify
new rates for a period of two years.

Having set an initial permitted rate for regulated service using one of the
above methodologies, a cable system may adjust its rate going forward either
quarterly or annually under the FCC's "price cap" mechanism, which accounts for
inflation, changes in "external costs," and changes in the number of regulated
channels. External costs include state and local taxes applicable to the
provision of cable television service, franchise fees, the costs of complying
with certain franchise requirements, annual FCC regulatory fees and
retransmission consent fees and copyright fees incurred for the carriage of
broadcast signals. In addition, a cable system may treat as external (and thus
pass through to its subscribers) the costs, plus a 20 cent per channel mark-up,
for channels newly added to a CPST. Through 1997, each cable system was subject
to an aggregate cap on the amount it may increase CPST rates due to channel
additions. The FCC has also adopted "tier flexibility" rules that allow cable
operators to reduce BST rates and take a corresponding, revenue neutral,
increase in CPST rates.

Under the 1992 Cable Act, per-channel and per-program offerings ("a la carte"
channels) are exempt from rate regulation. In implementing rules pursuant to the
1992 Cable Act, the FCC likewise exempted from rate regulation packages of a la
carte channels if certain conditions were met. Upon reconsideration, however,
the FCC tightened its regulatory treatment of these a la carte packages by
supplementing its initial conditions with a number of additional criteria
designed to ensure that cable systems creating collective a la carte offerings
do not improperly evade rate regulation. The FCC later reversed its approach to
a la carte packages by ruling that all non-premium packages of channels -- even
if also available on an a la carte basis -- would be treated as a regulated
tier. To ease the negative effect of these policy shifts on cable systems (and
to further mitigate the rate regulations' disincentive for adding new program
services) the FCC at the same time adopted rules allowing systems to create
currently unregulated "new products tiers", provided that the fundamental nature
of preexisting regulated tiers is preserved.

The charges for subscriber equipment and installation also are regulated by the
FCC and local franchising authorities. FCC rules require that charges for
converter boxes, remote control units, connections for additional television
receivers, and cable installations must be based on a cable system's actual
costs, plus an 11.25% rate of return. The regulations further dictate that the
charges for each variety of subscriber equipment or installation charge be
listed individually and "unbundled" from the charges for cable service. Pursuant
to the 1996 Act, the FCC revised its rules to permit cable operators to
aggregate, on a franchise, system, regional, or company level, their equipment
costs into broad categories (except for equipment used only to receive a rate
regulated basic service tier).

Beginning in late 1995, the FCC demonstrated an increased willingness to settle
some or all of the rate cases pending against a multiple system operator ("MSO")
by entering into a "social contract" or rate settlement (collectively "social
contract/settlement"). While the terms of each social contract/settlement vary
according to the underlying facts unique to the relevant cable systems, the
common elements include an agreement by an MSO to make a specified subscriber
refund (generally in the form of in-kind service or a billing credit) in
exchange for the dismissal, with prejudice, of pending complaints and rate
proceedings. In addition, the FCC has adopted or proposed measures that may
mitigate the negative effect of the Commission's rate regulations on cable
systems' revenues and profits, and allow systems to more efficiently market
cable service. The FCC implemented an abbreviated cost-of-service mechanism for
cable systems of all sizes that permits systems to recover the costs of
"significant" upgrades (e.g., expansion of system bandwidth capacity) that
provide benefits to subscribers to regulated cable service. This mechanism could
make it easier for cable systems to raise rates to cover the costs of an
upgrade. The Commission also has proposed an optional rate-setting methodology
under which a cable operator serving multiple franchise areas could establish
uniform rates for uniform cable service tiers offered in multiple franchise
areas.

The 1996 Act also provided operator flexibility for subscriber notification of
rate and service changes, permitting cable operators to use "reasonable" written
means to notify subscribers of rate and service changes; notice need not be
inserted in subscriber bills. Prior notice of a rate change is not required for
any rate change that is the result of regulatory fee, franchise fee, or any
other fee, tax, assessment, or change of any kind imposed by a regulator or on
the transaction between a cable operator and a subscriber. The FCC has adopted
rules implementing a number of provisions of the 1996 Act and is considering the
adoption of others.

The FCC has found that competition has been and continues to be very slow in the
MVPD marketplace - where cable continues to occupy a dominant position. The
Commission's Annual Assessment on the Status of Competition in Markets for the
Delivery of Video Programming ("Annual Report"), released in December 1998,
reported that cable rates rose more than four times the rate of inflation from
June 1997 to June 1998, making rates significantly higher than they were two and
three years ago. The FCC attributed a portion of these rate increases to capital
expenditures for the upgrading of cable facilities, an increase in the number of
video and nonvideo services offered, and increased programming costs. In its
Annual Report, the Commission noted that, where direct competition exists, it
affected the pricing decisions of cable operators, constraining rates below
regulated levels. Accordingly, the FCC urged the removal of barriers to
competition and encouraged a more competitive MVPD marketplace. Long pending
before the Commission is a petition to freeze cable rates and increase rate
regulation. The Chairman of the FCC, who has previously expressed concern that
the March 31, 1999 sunset for regulation of CPST rates may be unrealistic given
the slow growth in competition in the MVPD marketplace, recently stated that the
Commission will continue to take aggressive actions to promote competition and
urged Congress to do the same. Certain members of Congress have also continued
to express concern about cable rates and there can be no assurance that either
the FCC or Congress will not take action in the future with regard to cable
rates.

Renewal and Transfer

The 1984 Cable Act established procedures for the renewal of cable television
franchises. The procedures were designed to provide incumbent franchisees with a
fair hearing on past performances, an opportunity to present a renewal proposal
and to have it fairly and carefully considered, and a right of appeal if the
franchising authority either fails to follow the procedures or denies renewal
unfairly. These procedures were intended to provide an incumbent franchisee with
substantially greater protection than previously available against the denial of
its franchise renewal application. A federal district court in Kentucky,
however, upheld a city's denial of franchise renewal because the incumbent cable
operator's renewal proposal failed to meet community needs and interests, which
the court gave city officials broad discretion in determining. On February 24,
1997, the United States Court of Appeals for the Sixth Circuit upheld the denial
of the franchise.

The 1992 Cable Act sought to address some of the issues left unresolved by the
1984 Cable Act. It established a more definite timetable in which the
franchising authority is to act on a renewal request. It also narrowed the range
of circumstances in which a franchised operator might contend that the
franchising authority had constructively waived non-compliance with its
franchise.

Cable system operators are sometimes confronted by challenges in the form of
proposals for competing cable franchises in the same geographic area, challenges
which may arise in the context of renewal proceedings. In Rolla Cable Systems v.
City of Rolla, a federal district court in Missouri in 1991 upheld a city's
denial of franchise renewal to an operator whose level of technical services was
found deficient under the renewal standards of the 1984 Cable Act. Local
franchising authorities also have, in some circumstances, proposed to construct
their own cable systems or decided to invite other private interests to compete
with the incumbent cable operator. Judicial challenges to such actions by
incumbent system operators have, to date, generally been unsuccessful.
Registrant cannot predict the outcome or ultimate impact of these or similar
franchising and judicial actions.

Pursuant to the 1992 Cable Act, where local consent to a transfer is required,
the franchise authority must act within 120 days of submission of a transfer
request or the transfer is deemed approved. The 120-day period commences upon
the submission to local franchising authorities of information now required on a
new standardized FCC transfer form. The franchise authority may request
additional information beyond that required under FCC rules. Further, the 1992
Cable Act gave local franchising officials the authority to prohibit the sale of
a cable system if the proposed buyer operates another cable system in the
jurisdiction or if such sale would reduce competition in cable service.

Cable/Telephone Competition and Cross-Ownership Restrictions

Prior to the passage of the 1996 Act, an LEC was generally prohibited from
owning a cable television system or offering video programming directly to
subscribers in the LEC's local telephone service area. This cross-ownership ban
had been the subject of a number of successful judicial challenges brought by
LECs claiming that the ban violated their constitutional right of free speech.
The 1996 Act completely revised the law governing cable and telephone company
competition and cross-ownership: the 1996 Act eliminated the cable/telco
cross-ownership ban, 214 certification requirement, and all of the FCC's video
dialtone ("VDT") rules, but retained (in modified form) the prohibitions on
cable/telco buy-outs.

In place of these repealed regulations, the 1996 Act gave telephone companies
four options for entering into the MVPD market, all four of which are subject to
the buy-out provisions: (1) wireless entry (which is not subject to cable
regulation); (2) common carrier entry (which is subject to Title II common
carrier regulation, but not subject to cable regulation); (3) cable system entry
(which is subject to cable regulation); and (4) "open video system" entry, which
is a new mode of entry established by the 1996 Act that allows a common carrier
to program 33% of its video distribution system, while making the rest of its
capacity available to unaffiliated program providers. The open video system
rules generally subject open video system operators to reduced regulation. For
example, such operators are not subject to rate regulation. In City of Dallas v.
FCC, Case No. 60502 (5th Cir. Jan. 19, 1999), however, the Fifth Circuit
reversed the Commission's rule "preempting local franchise requirements for
[open video systems]." The 1996 Act also limited fees that open video system
operators may have to pay to local franchises and clarifies that such operators
are not subject to Title II common carrier requirements. Open video system
operators, which may include entities other than LECs, are required, however, to
comply with certain cable regulations, including the must-carry/retransmission
consent requirements and the rules governing carriage of PEG channels. Cable
companies are, in certain circumstances, also permitted to operate open video
systems.

Although telephone companies may now provide video programming to their
telephone subscribers, the 1996 Act maintains the general prohibition on
cable/telco buy-outs. A LEC or any affiliate may not acquire more than a 10%
financial interest, or any management interest, in a cable operator serving the
LEC's telephone service area. Similarly, a cable operator may not acquire a 10%
financial interest, or any management interest, in a LEC providing telephone
exchange service within the cable operator's franchise area. Joint ventures
between LECs and cable operators to provide video or telecommunications in the
same market are also prohibited. The 1996 Act provided for a number of limited
exceptions to the buy-out and joint venture prohibitions. These exceptions
generally relate to systems in rural areas and small cable systems and LECs. The
1996 Act also authorized the FCC to waive the buy-out and joint venture
prohibitions only: (1) if the cable operator or LEC would otherwise be subject
to undue economic distress or if benefits to the community clearly outweigh the
anticompetitive effects of the proposed transaction; and (2) if the local
franchising authority approves of the waiver.

The 1996 Act also cleared the way for cable provision of telephony. For example,
the 1996 Act preempted cable franchising authority regulation of
telecommunications services. Moreover, under the 1996 Act, Title VI (which
governs cable operators) does not apply to cable operators' provision of
telecommunications services. The 1996 Act also clarified that franchise fees do
not include gross revenue derived from the provision of telecommunications
services. State regulations that may prohibit the ability to provide
telecommunications services are preempted.

Concentration of Ownership: The 1992 Cable Act directed the FCC to establish
reasonable limits on the number of cable subscribers a single company may reach
through cable systems it owns (horizontal concentration) and the number of
system channels that a cable operator could use to carry programming services in
which it holds an ownership interest (vertical concentration). The horizontal
ownership restrictions of the 1992 Cable Act were struck down by a federal
district court as an unconstitutional restriction on speech. Pending final
judicial resolution of this issue, the FCC stayed the effective date of its
horizontal ownership limitations, which would place a 30% nationwide limit on
subscribers served by any one entity. Thereafter, a Motion to lift the Stay and
Petitions for Reconsideration were filed. A challenge was also brought against
the rules in federal court. In August 1996, the United States Court of Appeals
for the District of Columbia Circuit decided to hold court proceedings in
abeyance pending the Commission's reconsideration of the rules. In June 1998,
the Commission issued a Notice of Proposed Rulemaking seeking comment on whether
30% remains the appropriate horizontal ownership limit in light of evolving
market conditions. The FCC's vertical ownership restriction consists of a
"channel occupancy" standard which places a 40% limit on the number of channels
(up to 75 channels) that may be occupied by services from programmers in which
the cable operator has an attributable ownership interest. Further, the 1992
Cable Act and FCC rules restrict the ability of programmers to enter into
exclusive contracts with cable operators.

Video Marketplace: As required by the 1992 Cable Act, the Commission has issued
a series of annual reports assessing the status of competition in the market for
the delivery of video programming. The Commission has found that cable
television continues to dominate the MVPD market in most localities and that
cable rates are increasing. However, the Commission has concluded that cable's
large share of the MVPD market is of concern only to the extent it reflects an
inability of consumers to switch to some comparable, alternative video
programming source. It also has noted that competing distribution technologies
have continued to make substantial strides, in particular DBS (see below). The
Commission identified several steps it has taken to eliminate or minimize
obstacles to competition and will continue to monitor competition in this area.

Cable Ownership and Cross-Ownership: The 1996 Act repealed or curtailed several
cable-related ownership and cross-ownership restrictions. In addition to the
repeal of the anti-trafficking rules (discussed above), the 1996 Act eliminated
the broadcast network/cable cross-ownership ban. Although the FCC is allowed to
adopt regulations necessary to ensure carriage, channel positioning, and
nondiscriminatory treatment of nonaffiliated broadcast stations, it has opted
not to impose any such rules at this time. The 1996 Act also eliminated the
statutory prohibition on broadcast/cable cross-ownership, but left in place the
FCC's rules which continue to restrict the common ownership of cable and
television properties in the same market area. When a cable operator faces
effective competition, the 1996 Act also eliminates the cable/MMDS and
cable/satellite master antenna television facilities ("SMATV") cross-ownership
prohibitions.

Alternative Video Programming Services

Direct Broadcast Satellites: The FCC has authorized the provision of video
programming directly to home subscribers through high-powered direct broadcast
satellites ("DBS"). Currently, several entities, including DirecTV, Inc., an
affiliate of Hughes Communications Galaxy, PrimeStar (a medium-power DBS
provider), and EchoStar Satellite Corporation ("EchoStar"), provide DBS service
to consumers throughout the country. There are, however, two major transactions
pending Commission approval which would: (1) result in a significant
consolidation of the market; and (2) provide the remaining DBS providers with
the increased capacity necessary to offer consumers as many as 500 channels.
First, EchoStar has announced its intention to purchase the DBS authorization
currently held by MCI Telecommunications Corporation. EchoStar has stated that
it intends to use this additional capacity in order to offer consumers a total
of 500 hundred channels, including the signal of local television broadcast
stations ("local-into-local"). Second, DirecTV has announced its plans to
purchase United States Satellite Broadcasting Company, the subscriber base of
PrimeStar, and the DBS authorization of TEMPO Satellite, Inc.

The Satellite Home Viewer Act ("SHVA") established a copyright license for
limited distribution of network television programming to direct broadcast
satellite viewers who lived in "unserved areas." The FCC recently rejected a
proposal by EchoStar to modify the standard for determining whether or not a
particular viewer resides in an "unserved area". Congress is currently
considering legislation to address the issue. In addition, it is expected that
legislation will be introduced in Congress this term that would allow DBS
providers to broadcast local-into-local network signals, and which also could
address the related issue of whether DBS providers will be subject to the same
must-carry/retransmission consent requirements that currently apply to cable
operators.

In a recent rulemaking proceeding, the FCC issued new rules imposing public
interest obligations on DBS operators, including a requirement to set aside 4%
of channel capacity for educational and informational programming. In a
rulemaking proceeding still pending, the Commission is considering other
possible service obligations, as well as imposing cross-ownership limitations on
DBS operators.

Digital Television: On April 3, 1997, the FCC announced that it had adopted
rules that will allow television broadcasters to provide digital television
("DTV") to consumers. The Commission also adopted a table of allotments for DTV,
which provide eligible existing broadcasters with a second channel on which to
provide DTV service. The allotment plan is based on the use of channels 2-51.
Television broadcasters will be allowed to use their channels according to their
best business judgment. Such uses can include data transfer, subscription video,
interactive materials, and audio signals, although broadcasters will be required
to provide a free digital video programming service that is at least comparable
to today's analog service. Broadcasters will not be required to air "high
definition" programming or to simulcast their analog programming on the digital
channel.

Certain stations already have begun to broadcast a digital signal. Affiliates of
the top four networks (ABC, CBS, FOX, and NBC) in the top ten markets are
required to be on the air with a digital signal by May 1, 1999. Affiliates of
those networks in markets 11-30 will be required to be on the air with a digital
signal by November 1, 1999. All other commercial stations are required to
construct their digital facilities by May 1, 2002. The FCC hopes to complete the
full transition to DTV by 2006. Although the FCC has targeted December 1, 2006,
as the date by which all broadcasters must return their analog licenses, the
Balanced Budget Act of 1997 allows broadcasters to keep both their analog and
digital licenses until at least 85 percent of television households in their
respective markets can receive a digital signal. Local zoning laws and the lack
of qualified tall-tower builders to construct the facilities needed for DTV
operations, among other factors, may cause delays in this transition. The FCC is
currently considering a rule which would set strict time limits within which
local zoning authorities must act on zoning petitions by local television
stations. The Commission has announced that it will review the progress of DTV
every two years and make adjustments to the 2006 target date, if necessary.

At the end of the transition period, analog television transmissions will cease,
and DTV channels will be reassigned to a smaller segment of the broadcasting
spectrum. It is likely that some of the vacated spectrum will be allocated to
public safety, while the remainder will be auctioned for use by other
telecommunications services. The FCC has already reallocated the spectrum
comprising channels 60-69 to public safety agencies and other voice and data
services.

The Commission is currently considering whether cable television system
operators should be required to carry stations' DTV signals in addition to the
currently required carriage of stations' analog signals. In July 1998 the
Commission issued a Notice of Proposed Rulemaking posing seven different options
for the carriage of digital signals and solicited comments from all interested
parties. The Commission has yet to issue a decision on this matter.

In December 1998, the Advisory Committee on Public Interest Obligations of
Digital Television Broadcasters, established by the President, released its
findings. The Commission has indicated that it will initiate a rulemaking
proceeding in the future to consider what, if any, public interest obligations
will apply to digital broadcasters .

Wireless Cable: The FCC has expanded the authorization of MMDS services to
provide "wireless cable" via multiple microwave transmissions to home
subscribers. In 1990, the FCC increased the availability of channels for use in
wireless cable systems by eliminating MMDS ownership restrictions and
simplifying various processing and administrative rules. The FCC also modified
equipment and technical standards to increase service capabilities and improve
service quality. Since then, the FCC has resolved certain additional wireless
cable issues, including channel allocations for MMDS, Operational Fixed Service
and Instructional Television Fixed Service ("ITFS") facilities, direct
application by wireless operators for use of certain ITFS channels, and
restrictions on ownership or operation of wireless facilities by cable entities.
The Commission has also amended its rules to facilitate the ability of MMDS
operators to provide two-way transmission of Internet and other digital
high-speed data services.

Local Multipoint Distribution Service: The FCC has allocated a total of 1300 MHZ
of spectrum for LMDS, with one 1150 MHz license and one 150 MHz license
available in each of the 493 Rand McNally-defined Basic Trading Areas ("BTAs").
LMDS licensees are permitted to offer a wide variety of services, although most
LMDS licensees are expected to concentrate on providing fixed,
point-to-multipoint broadband data and video offerings.

Personal Communications Service: The FCC has allocated a total of 120 MHz of
spectrum for the personal communications service ("PCS"). There are a total of
six PCS licenses, three 30 MHz licenses and three 10 MHz licenses. Two of the 20
MHz blocks are licensed over the 49 Rand-McNally defined Major Trading Areas and
the remaining blocks are licensed over BTAs. The FCC has now auctioned off
virtually all of the PCS markets, and is in the midst of reauctioning some
authorizations that were defaulted on or returned. PCS is now available in many
markets through several facilities-based carriers, and PCS licensees generally
compete with cellular and specialized mobile radio carriers for wireless
handheld and mobile two-way voice and data customers.

Other Multichannel Video Programming Technologies: Several additional
technologies exist or have been proposed that also have the potential to
increase competition in the provision of video programming. Currently, many
cable subscribers can receive programming received by C-band home satellite
dishes or via SMATV.

Programming Issues

Mandatory Carriage and Retransmission Consent: The 1992 Cable Act required cable
operators to carry the signals of local commercial and non-commercial television
stations and certain low power television stations. The 1992 Cable Act also
included a retransmission consent provision that prohibits cable operators and
other multichannel video programming distributors from carrying broadcast
stations without obtaining their consent in certain circumstances.

The "must carry" and retransmission consent provisions are related in that
television broadcasters, on a cable system-by-cable system basis, must make a
choice once every three years whether or not to proceed under the must carry
rules or to waive that right to mandatory but uncompensated carriage and
negotiate a grant of retransmission consent to permit the cable system to carry
the station's signal. The most recent required election date was October 1, 1996
with elections taking effect on January 1, 1997. The next required election date
is October 1, 1999 with elections taking effect on January 1, 2000.

While monetary compensation is possible in return for stations granting
retransmission consent, many broadcast station operators have accepted
arrangements that do not require payment but involve other types of
consideration, such as use of a second cable channel, advertising time, and
joint programming efforts.

On March 31, 1997, the Supreme Court, in a 5-4 decision, upheld the
constitutionality of the must carry provisions of the 1992 Cable Act. As a
result, the regulations promulgated by the FCC to implement the must carry
provisions remain in effect.

Program Content Regulation: In contrast to its deregulatory approach to media
ownership, the 1996 Act contained a number of new regulations affecting program
content. For example, a cable operator is required to fully scramble or block
the audio and video programming of each channel primarily dedicated to the
carriage of sexually explicit adult programming or to permit the carriage of
such programming to the hours between 10 p.m. and 6 a.m. After the court order
staying the FCC rules implementing these provisions was lifted, the FCC, in May
1997, notified cable operators of their obligation to begin complying with the
provision and its rules. Recently, a federal district court found the scrambling
provision to be unconstitutional.

Also, the FCC has adopted regulations requiring the "closed captioning" of
programming. The closed captioning rules went into effect January 1, 1998,
although a transition period has been established to enable cable operators and
programmers to achieve full compliance with the rules. The FCC has requested
comment and is considering the appropriate methods and schedules for phasing in
video description. Last, the FCC has adopted an order finding acceptable the
voluntary video programming rating system developed by distributors of video
programming - - including cable operators - - to identify programming that
contains sexual, violent or other indecent material. The Commission has also
established technical requirements for consumer electronic equipment to enable
the blocking of such video programming. Distributors of rated programs are
required to transmit these ratings, thereby permitting parents to block the
programs.

Copyright: Cable television systems are subject to the Copyright Act which,
among other things, covers the carriage of television broadcast signals.
Pursuant to the Copyright Act, cable operators obtain a compulsory license to
retransmit copyrighted programming broadcast by local and distant stations in
exchange for contributing a percentage of their revenues as statutory royalties
to the Copyright Office. The amount of this royalty payment varies depending on
the amount of system revenues from certain sources, the number of distant
signals carried, and the locations of the cable television system with respect
to off-air television stations and markets. Copyright royalty arbitration
panels, to be convened by the Librarian of Congress as necessary, are
responsible for distributing the royalty payments among copyright owners and for
periodically adjusting the royalty rates.

Recently, several types of multichannel video distributors that compete with
cable television systems were successful in gaining compulsory license coverage
of their retransmission of television broadcast signals. Legislation enacted in
1988 and extended in 1994 provided an alternative compulsory license for
satellite distributors through January 1, 2000 and extended permanent coverage
of the cable copyright license to "wireless cable" systems (MMDS). It is
anticipated that legislation to extend the satellite compulsory license will be
introduced this year. Such legislation could also provide satellite distributors
greater flexibility to deliver broadcast network programming to areas served by
broadcast affiliates of those networks. The Copyright Office also has ruled that
some SMATV systems are eligible for the cable compulsory license. Pursuant to a
request by the Chairman of the Senate Judiciary Committee, the Copyright Office
examined the compulsory license scheme and submitted a report to the Committee
in August 1997. The Copyright Office concluded that the statutorily imposed
licensing schemes could not be eliminated at this time, suggested harmonizing
the cable and satellite licenses, and amending the statute to allow satellite
distributors to retransmit local broadcast signals. These recommendations may
serve as the basis for legislation to modify the Copyright Act with respect to
these compulsory licensing schemes.

The FCC has, in the past, recommended that Congress eliminate the compulsory
copyright license for cable retransmission of both local and distant broadcast
programming. In addition, legislative proposals have been and may continue to be
made to simplify or eliminate the compulsory license. As noted, the 1992 Cable
Act required cable systems to obtain permission of certain broadcast licensees
in order to carry their signals ("retransmission consent") should such stations
so elect. (See "Mandatory Carriage and Retransmission Consent" above). This
permission is needed in addition to the copyright permission inherent in the
compulsory license. Without the compulsory license, cable operators would need
to negotiate rights for the copyright ownership of each program carried on each
broadcast station transmitted by the system. Registrant cannot predict whether
Congress will act on the FCC or Copyright Office recommendations or similar
proposals.

Exclusivity: Except for retransmission consent, the FCC imposes no restriction
on the number or type of distant (or "non-local") television signals a system
may carry. FCC regulations, however, require cable television systems serving
more than 1,000 subscribers, at the request of a local network affiliate, to
protect the local affiliate's broadcast of network programs by blacking out
duplicated programs of any distant network-affiliated stations carried by the
system. Similar rules require cable television systems to black out the
broadcast on distant stations of certain local sporting events not broadcast
locally.

The FCC rules also provide exclusivity protection for syndicated programs. Under
these rules, television stations may compel cable operators to black out
syndicated programming broadcast from distant signals where the local
broadcaster has negotiated exclusive local rights to such programming.
Syndicated program suppliers are afforded similar rights for a period of one
year from the first sale of that program to any television broadcast station in
the United States. The FCC rules allow any broadcaster to bargain for and
enforce exclusivity rights. However, exclusivity protection may not be granted
against a station that is generally available over-the-air in the cable system's
market. Cable systems with fewer than 1,000 subscribers are exempt from
compliance with the rules. Although broadcasters generally may, under certain
circumstances, acquire exclusivity only within 35 miles of their community of
license, they may acquire national rights to syndicated programming. The ability
to secure national rights is intended to assist so-called "superstations" whose
local broadcast signals are then distributed nationally via satellite. The
35-mile limitation has been subject to possible re-examination by the FCC the
past several years.

Cable Origination Programming: The FCC also requires that cable origination
programming meet certain standards similar to those imposed on broadcasters.
These standards include regulations governing political advertising and
programming, advertising during children's programming, rules on lottery
information, and sponsorship identification requirements.

Customer Service: Pursuant to the 1992 Cable Act, the FCC has promulgated rules
on customer service standards. The standards govern cable system office hours,
telephone availability, installations, outages, service calls, and
communications between the cable operator and subscriber, including billing and
refund policies. Although the FCC has stated that its standards are "self
effectuating," it has also provided that a franchising authority wishing to
enforce particular customer service standards must give the system at least 90
days advance written notice. Franchise authorities also may agree with cable
operators to adopt stricter standards and may enact any state or municipal law
or regulation which imposes a stricter or different customer service standard
than that set by the FCC. Enforcement of customer service standards, including
those set by the FCC, is entrusted to local franchising authorities.

Pole Attachment Rates, Inside Wiring, and Technical Standards

The FCC currently regulates the rates and conditions imposed by public utilities
for use of their poles, unless, under the Federal Pole Attachments Act, a state
public service commission demonstrates that it is entitled to regulate the pole
attachment rates. The FCC has adopted a specific formula to administer pole
attachment rates under this scheme. The validity of this FCC function was upheld
by the United States Supreme Court. The 1996 Act revised the pole attachment
rules in a number of ways to encourage competition in the provision of
telecommunications services and to address inequity in the current pole
attachment rates. The FCC, in a Report and Order released on February 6, 1998,
revised its pole attachment rules; there are Petitions for Reconsideration of
these changes currently before the Commission. A second proceeding addressing
possible changes to the general pole attachment fee calculations is still
pending.

The FCC also has established procedures for the orderly disposition of multiple
dwelling unit ("MDU") wiring, making it easier for the owners and residents of a
MDU to change video service providers. Petitions seeking reconsideration of
certain aspects of these rules remain pending at the FCC, and at least one
judicial challenge to these rules has been filed in the U.S. Court of Appeals
for the Eighth Circuit.

The FCC also has set forth standards on signal leakage. Like all systems,
Registrant's cable television systems are subject to yearly reporting
requirements regarding compliance with these standards. Further, the FCC has
instituted on-site inspections of cable systems to monitor compliance. Any
failure by Registrant's cable television systems to maintain compliance with
these standards could adversely affect the ability of Registrant's cable
television systems to provide certain services.

The 1992 Cable Act empowered the FCC to set certain technical standards
governing the quality of cable signals and to preempt local authorities from
imposing more stringent technical standards. The FCC's preemptive authority over
technical standards for channels carrying broadcast signals has been affirmed by
the United States Supreme Court. In 1992, the FCC adopted mandatory technical
standards for cable carriage of all video programming, including retransmitted
broadcast material, cable originated programs and pay channels. The 1992 Cable
Act included a provision requiring the FCC to prescribe regulations establishing
minimum technical standards. The FCC has determined that its 1992 rulemaking
proceeding satisfied the mandate of the 1992 Cable Act. Those standards focus
primarily on the quality of the signal delivered to the cable subscriber's
television. In a related vein, the 1996 Act provided that no local franchising
authority may prohibit, condition, or restrict a cable system's use of any type
of subscriber equipment or any transmission technology.

As part of the 1996 Act, the FCC adopted regulations to ensure the commercial
availability of equipment (such as converter boxes and interactive equipment)
used to access services offered over multichannel video programming distribution
systems, from sources that are unaffiliated with any MVPD. These regulations
require that all MVPDs, including cable operators (1) allow customers to attach
their own equipment to their systems, (2) not prevent equipment from being
offered by retailers, manufacturers or other unaffiliated vendors, (3) separate
out security functions from non-security functions of equipment by July 1, 2000
(not applicable to DBS or other systems that operate throughout the U.S. if
equipment is available from independent sources), (4) not offer equipment with
integrated security and non-security functions after January 1, 2005, and (5)
provide, upon request, technical information concerning interface parameters
needed to permit equipment to operate with their systems. MVPDs are allowed to
protect the security of their systems and programming from unauthorized
reception. The rules are subject to sunset after the markets for MVPDs and
equipment become fully competitive in a particular geographic market. The FCC
refused to adopt specific requirements that equipment be made interoperable
between different types of MVPDs. These rules are subject to petitions for
reconsideration, which remain pending at the FCC.

State and Local Regulation

Local Authority: Cable television systems are generally operated pursuant to
non-exclusive franchises, permits or licenses issued by a municipality or other
local governmental entity. The franchises are generally in the nature of a
contract between the cable television system owner and the issuing authority and
typically cover a broad range of provisions and obligations directly affecting
the business of the systems in question. Except as otherwise specified in the
Communications Act or limited by specific FCC rules and regulations, the
Communications Act permits state and local officials to retain their primary
responsibility for selecting franchisees to serve their communities and to
continue regulating other essentially local aspects of cable television. The
constitutionality of franchising cable television systems by local governments
has been challenged as a burden on First Amendment rights but the United States
Supreme Court has declared that while cable activities "plainly implicate First
Amendment interest" they must be balanced against competing societal interests.
The applicability of this broad judicial standard to specific local franchising
activities is subject to continuing interpretation by the federal courts.

Cable television franchises generally contain provisions governing the fees to
be paid to the franchising authority, the length of the franchise term, renewal
and sale or transfer of the franchise, design and technical performance of the
system, use and occupancy of public streets, and the number and types of cable
services provided. The specific terms and conditions of the franchise directly
affect the profitability of the cable television system. Franchises are
generally issued for fixed terms and must be renewed periodically. There can be
no assurance that such renewals will be granted or that renewals will be made on
similar terms and conditions.

Various proposals have been introduced at state and local levels with regard to
the regulation of cable television systems and a number of states have adopted
legislation subjecting cable television systems to the jurisdiction of
centralized state governmental agencies, some of which impose regulation of a
public utility character. Increased state and local regulations may increase
cable television system expenses.

Radio Industry

The radio industry is also subject to extensive regulation by the FCC, which,
among other things, is authorized to issue, renew, revoke and modify
broadcasting licenses; assign frequency bands; determine stations' frequencies,
locations, and power; regulate the equipment used by stations; adopt other
regulations to carry out the provisions of the Communications Act; impose
penalties for violation of such regulations; and impose fees for processing
applications and other administrative functions. The Communications Act
prohibits the assignment of a license or the transfer of control of a licensee
without prior approval of the FCC.

The 1996 Act completely eliminated the national radio ownership restriction. Any
number of AM or FM broadcast stations may be owned or controlled by one entity
nationally. The 1996 Act also greatly eased local radio ownership restrictions.
As with the old rules, the maximum varies depending on the number of radio
stations within the market. In markets with more than 45 stations, one company
may own, operate, or control eight stations, with no more than five in any one
service (AM or FM). In markets of 30-44 stations, one company may own seven
stations, with no more than four in any one service; in markets with 15-29
stations, one entity may own six stations, with no more than four in any one
service. In markets with 14 commercial stations or less, one company may own up
to five stations or 50% of all of the stations, whichever is less, with no more
than three in any one service.

This new regulatory flexibility has engendered aggressive local, regional,
and/or national acquisition campaigns. Removal of previous station ownership
limitations on leading major station groups has increased the competition for
and the prices of attractive stations. In 1992, the FCC placed limitations on
local marketing agreements ("LMAs") through which the licensee of one radio
station provides the programming for another licensee's station in the same
market. Stations operating in the same service (e.g., where both stations are
AM) and in the same market are prohibited from simulcasting more than 25% of
their programming. Moreover, in determining the number of stations that a single
entity may control, an entity programming a station pursuant to an LMA is
required, under certain circumstances, to count that station toward its maximum
even though it does not own the station.

The 1996 Act did not alter the FCC's newspaper/broadcast cross-ownership
restrictions. However, the FCC is considering whether to change the policy
pursuant to which it considers waivers of the radio/newspaper cross-ownership
rule.

License Grant and Renewal

Prior to the passage of the 1996 Act, radio broadcasting licenses generally were
granted or renewed for a period of seven years, upon a finding by the FCC that
the "public interest, convenience, and necessity" would be served thereby. At
the time an application is made for renewal of a radio license, parties in
interest may file petitions to deny the application, and such parties, including
members of the public, may comment upon the service the station has providing
during the preceding license term.

Under the 1996 Act, the statutory restriction on the length of broadcast
licenses has been amended to allow the FCC to grant radio broadcast licenses for
terms of up to eight years. The 1996 Act also requires renewal of a broadcast
license if the FCC finds that (1) the station has served the public interest,
convenience, and necessity; (2) there have been no serious violations of either
the Communications Act or the FCC's rules and regulations by the licensee; and
(3) there have been no other serious violations which taken together constitute
a pattern of abuse. In making its determination, the FCC may consider petitions
to deny but cannot consider whether the public interest would be better served
by a person other than the renewal applicant. Instead, under the 1996 Act,
competing applications for the same frequency may be accepted only after the
Commission has denied an incumbent's application for renewal of license.
Registrant's ability to continue to operate its radio stations remains subject
to its ability to maintain its FCC authorizations.

Alien Ownership Restrictions

The Communications Act restricts the ability of foreign entities or individuals
to own or hold certain interests in broadcast licenses. Foreign governments,
representatives of foreign governments, non-U.S. citizens, representatives of
non-U.S. citizens, and corporations or partnerships organized under the laws of
a foreign nation are barred from holding broadcast licenses. Non-U.S. citizens,
collectively, may directly or indirectly own or vote up to twenty percent of the
capital stock of a licensee. In addition, a broadcast license may not be granted
to or held by any corporation that is controlled, directly or indirectly, by any
other corporation more than one-fourth of whose capital stock is owned or voted
by non-U.S. citizens or their representatives, by foreign governments or their
representatives, or by non-U.S. corporations , if the FCC finds that the public
interest will be served by the refusal or revocation of such license. The FCC
has interpreted this provision of the Communications Act to require an
affirmative public interest finding before a broadcast license may be granted to
or held by any such corporation, and the FCC has made such an affirmative
finding only in limited circumstances.

Alternative Radio Services

In January 1995, the FCC adopted rules to allocate spectrum for satellite
digital audio radio service ("DARS"). Satellite DARS systems potentially could
provide for regional or nationwide distribution of radio programming with
fidelity comparable to compact disks. An auction for satellite DARS spectrum was
held in April 1998, and the Commission has issued two authorizations to launch
and operate satellite DARS service. More recently, a third company has applied
to the FCC to provide satellite DARS. The FCC also has undertaken an inquiry
into the terrestrial broadcast of DARS signals, addressing, among other things,
the need for spectrum outside the existing FM band and the role of existing
broadcasters. Registrant cannot predict the impact of either satellite DARS
service or terrestrial DARS service on its business.

Impact of Legislation and Regulation

As detailed above, the cable and radio industries are subject to significant
regulation. The foregoing, however, does not purport to be a complete summary of
all the provisions of the Communications Act, the 1996 Act, or the 1992 Cable
Act, nor of the regulations and policies of the FCC thereunder. Because
regulation of the broadcast and cable industries is subject to the political
process, it continues to change. Proposals for additional or revised regulations
and requirements are pending before and are being considered by Congress and
federal regulatory agencies and will continue to be generated. Also, various of
the foregoing matters are now, or may become, the subject of court litigation.
Registrant cannot predict the outcome of pending regulatory proposals, any
future proposals, or any such litigation. Nor can Registrant predict the impact
of these on its business.

Item 2. Properties.

A description of the media properties of Registrant is contained in Item 1
above. Registrant owns or leases real estate for certain transmitting equipment
along with space for studios and offices. Registrant believes that the
properties owned by the stations and the other equipment and furniture and
fixtures owned are in reasonably good condition and are adequate for the
operations of the stations.

In addition, the offices of RPMM and MLMM are located at 350 Park Avenue - 16th
Floor, New York, New York 10022 and at The World Financial Center, South Tower -
14th Floor, New York, New York, 10080-6114; respectively.

Item 3. Legal Proceedings.

On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of Registrant, against
Registrant, Registrant's general partner, Media Management Partners (the
"General Partner"), the General Partner's two partners, RP Media Management
("RPMM") and ML Media Management Inc. ("MLMM"), Merrill Lynch & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). The action
concerns Registrant's payment of certain management fees and expenses to the
General Partner and the payment of certain purported fees to an affiliate of
RPMM.

Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million, (2) improperly paid itself
such fees and expenses out of proceeds from sales of Registrant assets, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.

With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants believe that they have good and meritorious
defenses to the action, and vigorously deny any wrongdoing with respect to the
alleged claims. Defendants moved to dismiss the complaint and each claim for
relief therein. On March 3, 1999, the New York Supreme Court issued an order
granting Registrant's and co-defendants' motion and dismissing plaintiffs'
complaint in its entirety, principally on the ground that the claims are
derivative and plaintiffs lack standing to bring suit because they failed to
make a pre-litigation demand on the General Partner. Plaintiffs' time to appeal
has not yet expired.

The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, Registrant has received notices of requests for indemnification from the
following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the years ended December 25, 1998 and
December 26, 1997, Registrant incurred approximately $223,000 and $280,000,
respectively, for legal costs relating to such indemnification. Such cumulative
costs amount to approximately $503,000 through December 25, 1998.

Registrant is not aware of any other material legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders.

There were no matters which required a vote of the limited partners of
Registrant during the fourth quarter of the fiscal year covered by this report.

Part II.

Item 5. Market for Registrant's Common Stock and Stockholder Matters.

An established public market for Registrant's Units does not now exist, and it
is not anticipated that such a market will develop in the future. Accordingly,
accurate information as to the market value of a Unit at any given date is not
available.

As of March 5, 1999, the number of owners of Units was 13,745.

Merrill Lynch has implemented guidelines pursuant to which it reports estimated
values for limited partnership interests originally sold by Merrill Lynch (such
as Registrant's Units) two times per year. Such estimated values will be
provided to Merrill Lynch by independent valuation services based on financial
and other information available to the independent services on (1) the prior
August 15th for reporting on December year-end and subsequent client account
statements through the following May's month-end client account statements, and
on (2) March 31st for reporting on June month-end and subsequent client account
statements through the November month-end client account statements of the same
year. The estimated values provided by the independent services and the
Registrant's current net asset value are not market values and Unit holders may
not be able to sell their Units or realize either amount upon a sale of their
Units. In addition, Unit holders may not realize the independent estimated value
or the Registrant's current net asset value amount upon the liquidation of
Registrant.

Registrant does not distribute dividends, but rather distributes Distributable
Cash From Operations, Distributable Refinancing Proceeds, and Distributable Sale
Proceeds, to the extent available. In 1995, $7.5 million ($40 per Unit) was
distributed to its limited partners and $75,957 to its General Partner from
distributable sales proceeds from the sale of KATC-TV. In 1996, $108.1 million
($575 per Unit) was distributed to its limited partners and $1.1 million to its
General Partner from distributable sales proceeds from the sale of California
Cable Systems. In 1997, $18.8 million ($100 per Unit) was distributed to its
limited partners and $189,893 accrued to its General Partner from the (i)
discharge of certain proceeds that were deposited into escrow upon the sale of
KATC-TV; (ii) discharge of certain proceeds that were deposited into escrow upon
the sale of the California Cable Systems; and (iii) release of certain reserves
previously established upon the sales of KATC-TV, WREX-TV and the California
Cable Systems. In 1998, the $189,893, accrued in 1997, was distributed to its
General Partners. In March 1999, $63.4 million ($337 per Unit) will be
distributed to its limited partners and $639,939 to its General Partner from (i)
distributable sales proceeds from the sale of the Anaheim Stations, (ii)
distributable sales proceeds from the sale of the Cleveland Station and (iii)
the release of certain reserves previously established upon the sale of the
California Cable Systems.

Item 6. Selected Financial Data.

Year Ended Year Ended Year Ended
December 25, 1998 December 26, 1997 December 27, 1996
----------------- ----------------- -----------------

Operating revenues $ 54,431,493 $ 53,223,983 $ 71,831,996
=============== =============== ===============
Gain on sale of the California
Cable Systems $ - $ - $ 185,609,191
=============== =============== ===============

Gain on sale of television
stations $ - $ 3,702,725 $ -
=============== =============== ===============

Gain on sale of C-ML Radio $ 2,752,975 $ - $ -
=============== =============== ===============

Write-off of fixed assets $ 859,078 $ - $ -
=============== =============== ===============

Net Income $ 14,169,444 $ 19,467,688 $ 189,711,304
=============== =============== ===============

Net Income per Unit of Limited
Partnership Interest $ 74.62 $ 102.52 $ 999.04
=============== =============== ===============

Number of Units 187,994 187,994 187,994
=============== =============== ===============

As of As of As of
December 25, 1998 December 26, 1997 December 27, 1996
----------------- ----------------- -----------------

Total Assets $ 161,792,619 $ 156,646,178 $ 160,994,824
=============== =============== ===============
Borrowings $ 41,993,137 $ 54,244,038 $ 60,348,428
=============== =============== ===============

Year Ended Year Ended
December 29, 1995 December 30, 1994
------------------ ------------------

Operating revenues $ 109,214,031 $ 105,910,208
================ ===============

Gain on sale of television stations $ 22,796,454 $ -
================ ===============

Net Income/(Loss) $ 21,490,240 $ (1,450,756)
================ ===============

Net Income/(Loss) per Unit of Limited
Partnership Interest $ 113.17 $ (7.64)
================ ===============

Number of Units 187,994 187,994
================ ===============

As of As of
December 29, 1995 December 30, 1994
----------------- -----------------

Total Assets $ 210,198,496 $ 238,330,358
================ ===============
Borrowings $ 182,821,928 $ 218,170,968
================ ===============

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Liquidity and Capital Resources.

As of December 25, 1998, Registrant had $101,394,305 in cash and cash
equivalents. Of this amount, approximately $42.2 million is restricted for use
at the operating level of the Venture (as defined below) to fund capital
expenditure programs and satisfy future non-recourse debt service requirements
(including annual principal payments of $20 million, $10 million of which is
Registrant's share, which commenced November 30, 1998) and approximately $23.2
million ($6.1 million of which is being released for the March 1999 cash
distribution; see below) is held in cash to cover operating liabilities, current
litigation, and litigation contingencies relating to the California Cable
Systems prior to and resulting from their sale. In addition, approximately $26.8
million is being held for use at the operating level of Registrant's other
remaining media properties, and all remaining cash and cash equivalents are
available to Registrant for uses as provided in the Partnership Agreement. As of
December 25, 1998, the amount payable for accrued management fees and expenses
owed to the General Partner amounted to approximately $1.4 million.

Registrant's ongoing cash needs will be to fund debt service, capital and
operating expenditures and required working capital as well as to provide for
costs and expenses related to the purported class action lawsuit (see below).

During the year ended December 25, 1998, interest paid was $5,070,031 and
principal repayments of $12,250,901 were made. During 1999, Registrant is
required by its various debt agreements to make scheduled principal repayments
of $10.0 million under all its debt agreements after the repayment in full of
the Wincom-WEBE-WICC Loan during the first quarter of 1999.

On March 1, 1999, Registrant declared a $337 per $1,000 limited partnership unit
("Unit") cash distribution (less applicable state and federal withholding taxes)
totaling $63,353,978 that will be made to partners on March 30 and 31, 1999. In
addition, a cash distribution of $636,939 will be paid to the General Partner
representing its 1% share. The funds for this distribution have been derived
from: (i) distributable sales proceeds from the sale of the Anaheim Stations;
(ii) distributable sales proceeds from the sale of the Cleveland Station; and
(iii) amounts released from certain reserves previously established upon the
sale of the California Cable Systems. In accordance with the terms of the
Partnership Agreement, funds from sales reserves are distributed to partners of
record as of the date of their release (the date when Registrant determines such
reserves are no longer necessary), rather than to partners of record on the date
of such sale. Accordingly, the limited partners' portion of such distribution
has been composed of the following: (a) $119 per Unit (totaling $22,371,286)
from distributable sales proceeds from the January 4, 1999 sale of the Anaheim
Stations, which will be paid to partners of record as of January 4, 1999; (b)
$186 per Unit (totaling $34,966,884) from distributable sales proceeds from the
January 28, 1999 sale of the Cleveland Station, which will be paid to partners
of record as of January 28, 1999; and (c) $32 per Unit (totaling $6,015,810)
from amounts released from reserves established in connection with the 1996 sale
of the California Cable Systems (see above), which will be paid to partners of
record on March 1, 1999.

As of December 25, 1998, Registrant's operating investments in media properties
consisted of a 50% interest in a joint venture (the "Venture"), which owns 100%
of the stock of Century-ML Cable Corporation ("C-ML Cable"), which owns and
operates two cable television systems in Puerto Rico; an FM (WEBE-FM) and AM
(WICC-AM) radio station combination in Bridgeport, Connecticut; an FM
("KEZY-FM") and AM ("KORG-AM") radio station combination in Anaheim, California;
and Wincom Broadcasting Corporation ("Wincom"), a corporation that owns an FM
radio station ("WQAL-FM") in Cleveland, Ohio. On January 4, 1999, Registrant
consummated the sale of substantially all of the assets used in the operations
of the KEZY-FM and KORG-AM radio station combination (see further discussion
under KEZY-FM and KORG-AM below). On January 28, 1999, Registrant consummated
the sale of the stock of the WQAL-FM radio station (see further discussion under
Wincom below).

In June 1998, the Venture consummated the sale of an FM ("WFID-FM") and AM
("WUNO-AM") radio station, including Noti Uno News, combination and a background
music service in San Juan, Puerto Rico ("C-ML Radio") (see further discussion
under Puerto Rico Radio below).

On March 5, 1999, Century announced its pending acquisition by Adelphia
Communications Corporation. The General Partner continues to explore the various
sale alternatives for its interest in C-ML Cable.

Registrant continues its efforts to enter into agreements to sell its remaining
investments in media properties; however, due to changing market conditions, it
may not be prudent to enter into such agreements at the present time. Registrant
will continue to monitor industry markets and proceed with its efforts to secure
a timely sale of its remaining investments in a manner consistent with the
overall goal of maximizing the properties' value to Registrant.

The General Partner currently anticipates that the pendency of certain
litigation, as discussed below, the related claims against Registrant for
indemnification, other costs and expenses related to such litigation, and the
involvement of management, will adversely affect (i) the timing of the
termination of Registrant, (ii) the amount of proceeds which may be available
for distribution, and (iii) the timing of the distribution to the limited
partners of the net proceeds from the liquidation of Registrant's assets.

In September 1998, much of Puerto Rico was devastated by Hurricane Georges.
Although the final assessment of damage suffered at C-ML Cable is not complete,
Registrant's share of damage to the distribution plant of approximately $859,000
was incurred. Since such repairs were not covered by insurance policies, such
amount of net plant and equipment was written-off during the year ended December
25, 1998. During the year ended December 25, 1998, Registrant recorded, as
revenue, approximately $1.9 million of anticipated insurance recoveries related
to subscriber refunds. Registrant is in the process of finalizing an insurance
claim related to such hurricane damage at C-ML Cable. The ultimate resolution of
these claims is subject to further negotiations with the insurance carrier.

On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of Registrant, against
Registrant, Registrant's general partner, Media Management Partners (the
"General Partner"), the General Partner's two partners, RP Media Management
("RPMM") and ML Media Management Inc. ("MLMM"), Merrill Lynch & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). The action
concerns Registrant's payment of certain management fees and expenses to the
General Partner and the payment of certain purported fees to an affiliate of
RPMM.

Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million; (2) improperly paid itself
such fees and expenses out of proceeds from sales of Registrant assets; and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.

With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants believe that they have good and meritorious
defenses to the action, and vigorously deny any wrongdoing with respect to the
alleged claims. Defendants moved to dismiss the complaint and each claim for
relief therein. On March 3, 1999, the New York Supreme Court issued an order
granting Registrant's and co-defendants' motion and dismissing plaintiffs'
complaint in its entirety, principally on the ground that the claims are
derivative and plaintiffs lack standing to bring suit because they failed to
make a pre-litigation demand on the General Partner. Plaintiffs' time to appeal
has not yet expired.

The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, Registrant has received notices of requests for indemnification from the
following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the years ended December 25, 1998 and
December 26, 1997, Registrant incurred approximately $223,000 and $280,000,
respectively, for legal costs relating to such indemnification. Such cumulative
costs amount to approximately $503,000 through December 25, 1998.

KEZY-FM and KORG-AM

On January 4, 1999, Registrant consummated a sale to Citicasters Co., a
subsidiary of Jacor Communications, Inc. ("Citicasters") of substantially all of
the assets, other than cash and accounts receivable, used in the operations of
Registrant's radio stations, KORG-AM and KEZY-FM, serving Anaheim, California
(the "Anaheim Stations"), pursuant to the asset purchase agreement (the "Anaheim
Agreement") dated September 14, 1998, as amended.

The base sales price for the Anaheim Stations was $30,100,000, subject to
certain adjustments for the apportionment of income and liabilities as of the
closing date, as provided for in the Anaheim Agreement, resulting in a reduction
of the base sales price of approximately $20,000.

Pursuant to the Anaheim Agreement, Registrant deposited $1.0 million into an
indemnity escrow account against which Citicasters may make indemnification
claims for a period of one year after the closing. In addition, Registrant held
approximately $5.2 million of the sales proceeds to pay (or to reserve for
payment of) expenses and liabilities relating to the operations of the Anaheim
Stations prior to the sale as well as wind-down expenses, sale-related expenses
and contingent obligations of the Anaheim Stations. The remaining sales proceeds
of $23,840,000 will be included in the cash distribution made to partners on
March 30, 1999, after accounting for certain expenses of Registrant, in
accordance with the terms of the Partnership Agreement. To the extent any
amounts reserved or paid into escrow as described above are subsequently
discharged, such amounts will be distributed to partners of record as of the
date of such discharge from such escrow. In 1999, Registrant will recognize a
gain on the sale of the Anaheim Stations.

Wincom

On January 28, 1999, Registrant consummated a sale to Chancellor Media
Corporation of Los Angeles ("Chancellor") of the stock of Wincom, pursuant to a
stock purchase agreement (the "Cleveland Agreement") dated August 11, 1998.
Wincom owns all of the outstanding stock of Win Communications, Inc., which owns
and operates the radio station WQAL-FM, serving Cleveland, Ohio (the "Cleveland
Station").

The base sales price for the Cleveland Station was $51,250,000, subject to
certain adjustments for the apportionment of current assets and liabilities as
of the closing date, as provided for in the Cleveland Agreement, resulting in a
reduction of the base sales price of approximately $1.6 million.

Pursuant to the Cleveland Agreement, Registrant deposited $2.5 million into an
indemnity escrow account against which Chancellor may make indemnification
claims for a period of up to two years after the closing; $1.5 million, less any
claims previously asserted, will be discharged from such escrow on December 31,
1999. Approximately $2.0 million was used to repay in full the remaining
outstanding balance of the Wincom-WEBE-WICC Loan and pursuant to the terms of
the Wincom-WEBE-WICC Loan, an initial amount of approximately $7.3 million was
paid to the Wincom Bank, pursuant to its 15% residual interest in the net sales
proceeds from the sale of Wincom. In addition, Registrant held approximately
$2.5 million of the sales proceeds to pay (or to reserve for payment of)
wind-down expenses and sale-related expenses. The remaining sales proceeds of
$35.4 million will be included in the cash distribution made to partners on
March 30, 1999 in accordance with the terms of the Partnership Agreement. To the
extent any amounts reserved or paid into escrow as described above are
subsequently discharged, such amounts will be distributed to partners of record
as of the date of such discharge from such escrow. In 1999, Registrant will
recognize a gain on the sale of the Cleveland Station.

Additionally, in connection with the Cleveland Agreement, WIN and Chancellor
entered into a Time Brokerage Agreement, pursuant to which WIN made
substantially all of the time on the station available to Chancellor in exchange
for a monthly payment by Chancellor to WIN. The Time Brokerage Agreement became
effective on October 1, 1998.

On December 31, 1997, the Wincom-WEBE-WICC Loan matured and became due and
payable in accordance with its terms. As of that date, $4,244,038 of such amount
remained due and payable to the Wincom Bank. Although Registrant remained in
default on the Wincom-WEBE-WICC Loan during 1998, it paid $2,250,901 of
principal resulting in an outstanding balance of $1,993,137 as of December 25,
1998. In 1999, Registrant repaid the remaining outstanding balance of the
Wincom-WEBE-WICC Loan in full, however, the default has not been waived by the
Wincom Bank. Pursuant to the terms of the Wincom-WEBE-WICC Loan, an initial
amount of approximately $7.3 million was paid to the Wincom Bank in 1999,
pursuant to its 15% residual interest in the net sales proceeds from the sale of
Wincom (see above).

Puerto Rico Radio

On June 3, 1998, the Venture consummated the sale of C-ML Radio pursuant to a
sales agreement entered into in October 1997 between the Venture and Madifide,
Inc. The base sales price for C-ML Radio was approximately $11.5 million,
approximately $5.8 million of which is Registrant's share, subject to closing
adjustments. Pursuant to a local marketing agreement ("LMA") entered into,
effective as of October 1, 1997, the buyer was allowed to program the station
from such date through the date of sale. C-ML Radio collected a monthly LMA fee
from the buyer which was equal to the operating income for that month, provided
however, that it not be less than $50,000 nor more than $105,000. The monthly
fee was recognized as revenue during the LMA period and Registrant did not
recognize any operating revenues nor incur any net operating expenses of C-ML
Radio during the LMA period. At the closing, the Venture and Madifide, Inc.
entered into escrow agreements pursuant to which the Venture deposited, in
aggregate, $725,040, $362,520 of which is Registrant's share, into three
separate escrow accounts with respect to which indemnification, benefit, and
chattel mortgage claims may be made by Madifide, Inc. for a period of one year.
The balance of these escrows, which is being classified on the accompanying
Consolidated Balance Sheet as Investments held by escrow agents, was $321,023 as
of December 25, 1998. In 1998, Registrant recognized a gain for financial
reporting purposes of approximately $2.8 million on the sale of C-ML Radio.

Pursuant to the terms of the outstanding senior indebtedness that jointly
finances C-ML Radio and C-ML Cable, the net proceeds, and escrow amounts when
discharged, if any, from the resulting sale of C-ML Radio must be retained by
the Venture and cannot be distributed to Registrant or its partners. During the
year ended December 25, 1998, the Venture paid $20 million, $10 million of which
is Registrant's share, of principal under the outstanding senior indebtedness.
The outstanding balance as of December 25, 1998 was $80 million, $40 million of
which is Registrant's share.

California Cable Systems

On November 28, 1994, Registrant entered into an agreement (the "Asset Purchase
Agreement") with Century Communications Corp. ("Century") to sell to Century
substantially all of the assets used in Registrant's California Cable Operation
serving the Anaheim, Hermosa Beach/Manhattan Beach, Rohnert Park/Yountville and
Fairfield communities (the "California Cable Systems"). On May 31, 1996,
Registrant consummated such sale pursuant to the terms of the Asset Purchase
Agreement. The base purchase price for the California Cable Systems was $286
million, subject to certain adjustments including an operating cash flow, as
well as, a working capital adjustment, as provided in the Asset Purchase
Agreement.

In addition, upon closing of the sale of the California Cable Systems,
Registrant set aside approximately $40.7 million in a cash reserve to cover
operating liabilities, current litigation, and litigation contingencies relating
to the California Cable Systems' operations prior to and resulting from their
sale, as well as a potential purchase price adjustment. In accordance with the
terms of the Partnership Agreement, any amounts which may be available for
distribution from any unused cash reserves, after accounting for certain other
expenses of Registrant including certain expenses incurred after May 31, 1996,
will be distributed to partners of record as of the date such unused reserves
are released, when Registrant determines such reserves are no longer necessary,
rather than to the partners of record on May 31, 1996, the date of the sale. As
of December 25, 1998, Registrant had approximately $23.2 million remaining in
such cash reserves. On March 1, 1999, reserves in the amount of approximately
$6.1 million were released and, in accordance with the terms of the Partnership
Agreement, have been included in the cash distribution to be made on March 31,
1999.

Year 2000 Compliance Initiative

The year 2000 ("Y2K") problem is the result of a widespread programming
technique that causes computer systems to identify a date based on the last two
numbers of a year, with the assumption that the first two numbers of the year
are "19". As a result, the year 2000 would be stored as "00", causing computers
to incorrectly interpret the year as 1900. Left uncorrected, the Y2K problem may
cause information technology systems (e.g., computer databases) and
non-information technology systems (e.g., elevators) to produce incorrect data
or cease operating completely.

Overall, Registrant believes that it has identified and evaluated its internal
Y2K problem and that it is devoting sufficient resources to renovating
technology systems that are not already Y2K compliant. Registrant has been
working with third-party software vendors to ensure that computer programs
utilized by Registrant are Y2K compliant. In addition, Registrant has contacted
third parties to ascertain whether these entities are addressing the Y2K issue
within their own operation.

The Y2K compliance is required at both Registrant's parent level, as well as at
Registrant's operating investments in media properties, which currently includes
a cable television system and two radio systems (the "Media Properties").

Parent level
The General Partner, through MLMM is responsible for providing administrative
and accounting services necessary to support Registrant's operations, including
maintenance of the books and records, maintenance of the partner database,
issuance of financial reports and tax information to partners and processing
distribution payments to partners. In 1995, Merrill Lynch established the Year
2000 Compliance Initiative, which is an enterprisewide effort (of which MLMM is
a part) to address the risks associated with the Y2K problem, both internal and
external. The integration testing phase, which will occur throughout 1999,
validates that a system can successfully interface with both internal and
external systems. Merrill Lynch continues to survey and communicate with third
parties whose Year 2000 readiness is important to the company. Based on the
nature of the response and the importance of the product or service involved,
Merrill Lynch determines if additional testing is needed.

Merrill Lynch will participate in further industrywide testing currently
scheduled for March and April 1999, which will involve an expanded number of
firms, transactions, and conditions.

Media Properties level
During 1998, the Media Properties began a review of their computer systems and
related software to identify systems and software which might malfunction due to
a misidentification of the year 2000. The Media Properties are utilizing both
internal and external resources to identify, correct or reprogram, and test
systems for Y2K compliance. Most of the Media Properties' customer-related
computer systems and databases, including its billing systems, are managed by
third parties under contractual arrangements. Those third parties have been
requested to advise the Media Properties as to whether they anticipate
difficulties in addressing Y2K problems and if so, the nature of such
difficulties. The Media Properties are currently undertaking an inventory of all
local equipment used in the transmission and reception of all signals to
identify items that need to be upgraded or replaced. After evaluating its
internal compliance efforts as well as the compliance of third parties, the
Media Properties will develop, during 1999, appropriate contingency plans to
address situations in which various systems of third parties are not Y2K
compliant.

The Media Properties are also participating in an industry wide effort to
address Y2K issues with similarly situated companies in order to monitor
industry wide efforts and determine appropriate steps to address the anticipated
difficulties and potential solutions; the ultimate goal of which is to develop
contingency plans which address not only issues of the Media Properties, but
also the industry as a whole.

Although Registrant has not finally determined the cost associated with its Year
2000 readiness efforts, Registrant does not anticipate the cost of the Y2K
problem to be material to its business, financial condition or results of
operations in any given year. However, there can be no guarantee that the
systems of other companies on which Registrant's systems rely will be timely
converted, or that a failure to convert by another company or a conversion that
is incompatible with Registrant's systems would not have a material adverse
effect on Registrant's business, financial condition or results of operations.

Recent Accounting Statements Not Yet Adopted

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments and for hedging activities,
requiring the recognition of all derivatives as either assets or liabilities and
to measure those instruments at fair value, as well as to identify the
conditions for which a derivative may be specifically designed as a hedge. SFAS
No. 133 is effective for fiscal years beginning after June 15, 1999. Registrant
is still evaluating what effect, if any, SFAS No. 133 will have on the results
of operations and financial position of Registrant.

Impact of Legislation and Regulation

The information set forth in the Legislation and Regulation Section of Part I,
Item 1. Business, is hereby incorporated by reference and made a part hereof.

Forward Looking Information

In addition to historical information contained or incorporated by reference in
this report on Form 10-K, Registrant may make or publish forward-looking
statements about management expectations, strategic objectives, business
prospects, anticipated financial performance, and other similar matters. In
order to comply with the terms of the safe harbor for such statements provided
by the Private Securities Litigation Reform Act of 1995, Registrant notes that a
variety of factors, many of which are beyond its control, affect its operations,
performance, business strategy, and results and could cause actual results and
experience to differ materially from the expectations expressed in these
statements. These factors include, but are not limited to, the effect of
changing economic and market conditions, trends in business and finance, trends
in investor sentiment, the level of volatility of interest rates, the actions
undertaken by both current and potential new competitors, the impact of current,
pending, and future legislation and regulation both in the United States and
throughout the world, and the other risks and uncertainties detailed in this
Form 10-K. Registrant undertakes no responsibility to update publicly or revise
any forward-looking statements.

Results of Operations.

For the years ended December 25, 1998 and December 26, 1997:

Net Income.

Registrant's net income for the year ended December 25, 1998 was approximately
$14.2 million, as compared to net income of approximately $19.5 million for the
1997 period. The decrease in net income for the 1998 period resulted primarily
from the approximate $3.7 million gain in connection with the sales of WREX and
KATC which were recognized in the 1997 period, offset by the approximate $2.8
million gain in connection with the sale of C-ML Radio in 1998, as well as the
effect on operations of such sales and other factors described below.

Operating Revenues.

During the years ended December 25, 1998 and December 26, 1997, Registrant had
total operating revenues of approximately $54.4 million and $53.2 million,
respectively. The approximate $1.2 million increase in operating revenues was
primarily due to an increase of approximately $3.2 million in operating revenues
at C-ML Cable partially offset by a decrease of approximately $1.9 million in
operating revenues at C-ML Radio and a decrease of approximately $954,000 at
Wincom. The increase in operating revenues at C-ML Cable reflects an increase in
the number of basic subscribers from 123,990 as of December 26, 1997, to 130,518
as of December 25, 1998, an increase in premium revenues due to an increase in
premium subscriptions, as well as an increase in advertising sales. The decrease
in operating revenues at C-ML Radio is due to the recognition of a monthly fee
instead of actual operating revenues and expenses, in accordance with the LMA
entered into during the fourth quarter of 1997 as well as the effect of the sale
of C-ML Radio on June 3, 1998. The remaining increases or decreases in operating
revenues at Registrant's other properties were immaterial, either individually
or in the aggregate.

Interest Income.

During the years ended December 25, 1998 and December 26, 1997, Registrant
earned interest income of approximately $2.7 million and $3.4 million,
respectively. The decrease is due primarily to interest earned on the lower
average cash reserve balances that existed during 1998 resulting from the fourth
quarter 1997 cash distribution.

Property Operating Expense.

During the years ended December 25, 1998 and December 26, 1997, Registrant
incurred property operating expenses from year to year of approximately $18.4
million and $19.2 million, respectively. The approximate $757,000 decrease in
property operating expenses from year to year was primarily due to a decrease of
approximately $1.3 million at C-ML Radio, which resulted from the recognition of
a monthly fee instead of actual operating revenues and expenses, in accordance
with the LMA entered into during the fourth quarter of 1997, as well as the
effect of the sale of C-ML Radio on June 3, 1998 and a decrease of approximately
$648,000 at Wincom due to the entering into an LMA on October 1, 1998. This
decrease was partially offset by an increase of approximately $1.2 million at
C-ML Cable, which resulted from expenses directly related to an increase in
operating revenues, increased maintenance costs, as well as an increase in
overtime expenses due to Hurricane Georges. The remaining increases or decreases
in property operating expenses at Registrant's other properties were immaterial,
either individually or in the aggregate.

General and Administrative Expense.

During the years ended December 25, 1998 and December 26, 1997, Registrant
incurred general and administrative expenses of approximately $12.8 million and
$7.9 million, respectively. The approximate $4.9 million increase in total
general and administrative expenses from year to year was primarily due to an
increase of approximately $4.4 million at C-ML Cable and approximately $649,000
at C-ML Radio, both primarily due to an increase in the provision for income
taxes for the 1998 period as the joint venture had used its remaining net
operating loss carryforwards and is now a taxpayer, and by an increase of
approximately $747,000 at Wincom due primarily to the forgiveness of a
receivable. These increases were partially offset by a decrease of approximately
$434,000 resulting from the receipt, in 1998, of tax assessment refunds related
to the California Cable Systems and a decrease of approximately $375,000 at
Wincom resulting from the recognition of a monthly fee instead of actual
operating revenues and expenses, in accordance with the LMA entered into during
the fourth quarter of 1998. The remaining increases or decreases in general and
administrative expenses at Registrant's other properties were immaterial, either
individually or in the aggregate.

Depreciation and Amortization Expense.

During the years ended December 25, 1998 and December 26, 1997, Registrant's
depreciation and amortization expense totaled approximately $7.5 million. The
depreciation and amortization expense remained flat from year to year primarily
due to an increase of approximately $351,000 at C-ML Cable partially due to a
net increase in the asset base resulting from the plant expansion, partially
offset by a combined decrease of approximately $157,000 at the Wincom-WEBE-WICC
Group due to certain assets becoming fully amortized at the end of 1997, a
decrease of approximately $110,000 at C-ML Radio resulting from the sale of C-ML
Radio on June 3, 1998 and a decrease of approximately $94,000 at the Anaheim
Stations due to assets becoming fully depreciated in 1997 and early 1998. The
remaining increases or decreases in depreciation and amortization expense at
Registrant's other properties were immaterial, either individually or in the
aggregate.

For the years ended December 26, 1997 and December 27, 1996:

Net Income.

Registrant's net income for the year ended December 26, 1997 was approximately
$19.5 million, as compared to net income of approximately $189.7 million for the
1996 period. The decrease in net income for the 1997 period resulted primarily
from the gain recognized in connection with the sale of the California Cable
Systems during the second quarter of 1996, as well as the effect on operations
of such sale and other factors described below.

Operating Revenues.

During the years ended December 26, 1997 and December 27, 1996, Registrant had
total operating revenues of approximately $53.2 million and $71.8 million,
respectively. The approximate $18.6 million decrease in operating revenues was
primarily due to a decrease of approximately $24.1 million in operating revenues
resulting from the sale of the California Cable Systems during the second
quarter of 1996, partially offset by an increase in operating revenues at C-ML
Cable of approximately $2.2 million as well as a combined increase of
approximately $3.4 at the Wincom-WEBE-WICC Group. The increase in operating
revenues at C-ML Cable reflects an increase in the number of basic subscribers
during 1997, and implementation of rate increases. The average level of basic
subscribers at C-ML Cable increased to 120,664 in 1997 from 116,497 in 1996, and
the total number of basic subscribers increased to 123,990 at the end of 1997
from 117,338 at the end of 1996. Total premium subscriptions decreased to 68,445
at the end of 1997 from 75,760 at the end of 1996 at C-ML Cable due to the
Disney Channel being switched to the basic channel line-up. The combined
increase in operating revenues at the Wincom-WEBE-WICC Group is due to stronger
market conditions at all three stations, including higher advertising rates
arising from increased ratings. The remaining increases or decreases in
operating revenues were immaterial, either individually or in the aggregate.

Interest Income.

During the years ended December 26, 1997 and December 27, 1996, Registrant
earned interest income of approximately $3.4 million and $3.7 million,
respectively. The decrease is due primarily to interest earned on the lower
average cash balances that existed during 1997 and the interest earned on the
higher cash balances that existed during 1996 related to the sale of KATC, WREX
and the California Cable Systems.

Property Operating Expense.

During the years ended December 26, 1997 and December 27, 1996, Registrant
incurred property operating expenses of approximately $19.2 million and $25.4
million, respectively. The approximate $6.2 million decrease in total property
operating expenses from year to year was primarily due to the sale of the
California Cable Systems during the second quarter of 1996, offset by an
increase of approximately $1.2 million at C-ML Cable due to expenses directly
related to the increase in operating revenues, as well as increased marketing
costs and $1.2 million increase at the combined Wincom-WEBE-WICC Group due to
increased sales compensation resulting from higher revenues as well as increased
advertising, marketing, and programming expense incurred to combat increased
competition. The remaining increases or decreases in property operating expenses
at Registrant's other properties were immaterial, either individually or in the
aggregate.

General and Administrative Expense.

During the years ended December 26, 1997 and December 27, 1996, Registrant
incurred general and administrative expenses of approximately $7.9 million and
$14.1 million, respectively. The approximate $6.2 million decrease in total
general and administrative expenses from year to year was primarily due to the
sale of the California Cable Systems during the second quarter of 1996 as well
as a $1.1 million decrease at C-ML Cable due to the recognition of tax benefit
items in 1997. The remaining increases or decreases in general and
administrative expenses at Registrant's other properties were immaterial, either
individually or in the aggregate.

Depreciation and Amortization Expense.

During the years ended December 26, 1997 and December 27, 1996, Registrant's
depreciation and amortization expense totaled approximately $7.5 million and
$20.2 million, respectively. The approximate $12.7 million decrease in total
depreciation and amortization expense from year to year was primarily due to the
sale of the California Cable Systems during the second quarter of 1996 as well
as a decrease at C-ML Cable which primarily resulted from the write-off of
certain fixed assets during 1996. The remaining increases or decreases in
depreciation and amortization expense at Registrant's other properties were
immaterial, either individually or in the aggregate.

Additional Operating Information

Registrant holds a 50% interest in the Venture, which in turn, through C-ML
Cable, passed 293,670 homes, provided basic cable television service to 130,518
subscribers and accounted for 80,072 pay subscriptions as of December 25, 1998.
The following table shows the numbers of basic subscribers and pay subscriptions
at C-ML Cable:

As of As of As of
December 25, 1998 December 26, 1997 December 27, 1996
----------------- ----------------- -----------------

Homes Passed 293,670 284,450 276,858
- ----------------- ================= ================= =================

Basic Subscribers 130,518 123,990 117,338
- ----------------- ================= ================= =================

Pay Subscriptions 80,072 68,445 75,760
- ----------------- ================= ================= =================

The overall number of homes passed by C-ML Cable increased from the end of 1996
to the end of 1998 due primarily to the extension of cable plant to pass
incremental homes, and the number of basic subscribers increased during the same
period. This is due to the extension of cable service to pass additional homes,
as well as to an increased level of marketing. The number of pay subscriptions
at C-ML Cable decreased from the end of 1996 to the end of 1997, primarily due
to the Disney channel being switched to the basic channel line-up, and increased
from the end of 1997 to the end of 1998 due to marketing promotions for Showtime
and The Movie Channel during the first half of 1998.

As of December 25, 1998, Registrant operated five radio stations in three cities
in the continental United States. Each of Registrant's broadcast properties
competes with numerous other outlets in its area, with the number of competing
outlets varying from location to location. Stations are rated in each market
versus competitors based on the number of viewers or listeners tuned to the
various outlets in that market.

The information set forth below briefly describes, for each station owned by
Registrant, the number of competitors that each station faces in its market and
the station's ranking in that market, where applicable.

Registrant's radio station WQAL-FM in Cleveland, Ohio competed with
approximately 25 other radio stations in the Cleveland market according to
Arbitron, an accepted industry source. According to Arbitron, the station was
ranked number four in the market in its key demographic of women 25-54 as of the
Fall, 1998 rating period.

Registrant's radio stations WEBE-FM and WICC-AM in Fairfield County, Connecticut
compete with approximately 45 other rated radio stations in the Fairfield County
market according to Arbitron. According to Arbitron, WEBE-FM was ranked number
one in Fairfield County and WICC-AM was ranked number two in Bridgeport,
Connecticut in terms of listeners 12+ as of the Fall, 1998 rating period.

While reliable data is available from Arbitron for Registrant's radio stations
in Anaheim, California, this information was not available to Registrant, since
it did not subscribe to Arbitron or any other ratings service in the Anaheim
market.

The above information on competition and ratings for Registrant's broadcast
properties may give a distorted view of the success of, or competitive
challenges to, each of the properties for a number of reasons. For example, the
signals of stations listed as competitors may not be of equal strength
throughout the market. In addition, the competitive threat posed by stations
that serve essentially the same broadcast area is largely dependent upon factors
(e.g., financial strength, format, programming, management, etc.) unknown to or
outside the control of Registrant. Finally, rating information is segmented
according to numerous demographic groups (e.g., listeners 12+, women 25-34,
etc.), some of which are considered more attractive than others by advertisers.
Consequently, a station may be ranked highly for one group but not another, with
strength in different groups having substantially different impacts on financial
performance. For purposes of the discussion above, the most general type of
rating was used.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

As of December 25, 1998, Registrant maintains a portion of its cash equivalents
in financial instruments with original maturities of three months or less. These
financial instruments are subject to interest rate risk, and will decline in
value if interest rates increase. A significant increase or decrease in interest
rates would not have a material effect on Registrant's financial position.

Registrant's outstanding long-term debt as of December 25, 1998, bears interest
at fixed rates, therefore, changes in interest rates would have no effect on
Registrant's results of operations.

Item 8. Financial Statements and Supplementary Data.

TABLE OF CONTENTS

ML Media Partners, L.P.

Independent Auditors' Report

Consolidated Balance Sheets as of December 25, 1998 and
December 26, 1997

Consolidated Income Statements for the Three Years
Ended December 25, 1998

Consolidated Statements of Cash Flows for the Three Years
Ended December 25, 1998

Consolidated Statements of Changes in Partners'
Capital/(Deficit) for the Three Years Ended December 25, 1998

Notes to Consolidated Financial Statements for the
Three Years Ended December 25, 1998

No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.

INDEPENDENT AUDITORS' REPORT

ML Media Partners, L.P.:

We have audited the accompanying consolidated financial statements of ML Media
Partners, L.P. (the "Partnership") and its affiliated entities, as listed in the
accompanying table of contents. These consolidated financial statements are the
responsibility of the Partnership's general partner. Our responsibility is to
express an opinion on the consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
general partner, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Partnership and its affiliated
entities as of December 25, 1998 and December 26, 1997 and the results of their
operations and their cash flows for each of the three years in the period ended
December 25, 1998 in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

New York, New York
March 12, 1999

ML MEDIA PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 25, 1998 AND DECEMBER 26, 1997
- --------------------------------------------------------------------------------

1998 1997
---------- -------

ASSETS:
Cash and cash equivalents $ 101,394,305 $ 92,872,891
Investments held by escrow agents 321,023 -
Accounts receivable (net of allowance for doubtful
accounts of $540,407 and $328,702, respectively) 4,211,614 5,550,419
Prepaid expenses and deferred charges (net of
accumulated amortization of $1,681,486 and
$3,640,331, respectively) 478,957 1,355,810
Property, plant and equipment - net 26,286,171 23,564,815
Intangible assets - net 16,445,250 28,492,491
Assets held for sale 9,459,781 2,906,500
Other assets 3,195,518 1,903,252
------------- -------------
TOTAL ASSETS $ 161,792,619 $ 156,646,178
============= =============
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Borrowings $ 41,993,137 $ 54,244,038
Accounts payable and accrued liabilities 25,407,464 22,252,266
Subscriber advance payments 1,585,448 1,512,748
------------- -------------
Total Liabilities 68,986,049 78,009,052
============= =============

(Continued on the following page.)

ML MEDIA PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 25, 1998 AND DECEMBER 26, 1997
(continued)
- --------------------------------------------------------------------------------

Notes 1998 1997
----- ------- --------

Commitments and Contingencies 5,7

Partners' Capital:
General Partner:
Capital contributions, net of offering expenses 1,708,299 1,708,299
Cumulative cash distributions (1,357,734) (1,357,734)
Cumulative income 640,418 498,724
------------ ------------
990,983 849,289
------------ ------------
Limited Partners:
Capital contributions, net of offering expenses
(187,994 Units of Limited Partnership Interest) 169,121,150 169,121,150
Tax allowance cash distribution (6,291,459) (6,291,459)
Cumulative cash distributions (134,415,710) (134,415,710)
Cumulative income 63,401,606 49,373,856
----------- -----------
91,815,587 77,787,837
----------- -----------
Total Partners' Capital 92,806,570 78,637,126
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $161,792,619 $156,646,178
============ ============

See Notes to Consolidated Financial Statements.

ML MEDIA PARTNERS, L.P.
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 25, 1998
- --------------------------------------------------------------------------------

1998 1997 1996
------------ ------------- ------------

REVENUES:
Operating revenues $ 54,431,493 $ 53,223,983 $ 71,831,996
Interest 2,737,050 3,352,983 3,692,033
Gain on sale of C-ML Radio 2,752,975 - -
Gain on sale of the California
Cable Systems - - 185,609,191
Gain on sale of WREX - 2,005,498 -
Gain on sale of KATC - 1,697,227 -
------------- -------------- -------------
Total revenues 59,921,518 60,279,691 261,133,220
------------- -------------- -------------
COSTS AND EXPENSES:
Property operating 18,444,239 19,201,288 25,351,743
General and administrative 12,768,670 7,858,645 14,142,538
Depreciation and amortization 7,451,585 7,457,623 20,238,004
Interest expense 5,020,814 5,082,776 10,352,597
Management fees 1,207,688 1,211,671 1,337,034
Write-off of fixed assets 859,078 - -
------------- -------------- -------------
Total costs and expenses 45,752,074 40,812,003 71,421,916
------------- -------------- -------------
NET INCOME $ 14,169,444 $ 19,467,688 $ 189,711,304
============= ============== =============
PER UNIT OF LIMITED
PARTNERSHIP INTEREST:

NET INCOME $ 74.62 $ 102.52 $ 999.04
============= ============== =============
Number of Units 187,994 187,994 187,994
============= ============== =============

See Notes to Consolidated Financial Statements.

ML MEDIA PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 25, 1998

1998 1997 1996
------------- ------------- -------------

Cash flows from operating activities:
Net income $ 14,169,444 $ 19,467,688 $ 189,711,304
Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 7,451,585 7,457,623 20,238,004
Bad debt expense/ (recovery), net 318,676 (117,767) 360,989
Gain on sale of C-ML Radio (2,752,975) -- --
Gain on sale of the California Cable Systems -- -- (185,609,191)
Gain on sale of WREX -- (2,005,498) --
Gain on sale of KATC -- (1,697,227) --
Write-off of fixed assets 859,078 -- --
Changes in operating assets and liabilities:
(Increase)/Decrease:
Investments held by escrow agents (321,023) 6,244,252 (5,244,252)
Accounts receivable 1,487,818 683,226 4,387,235
Prepaid expenses and deferred charges 758,495 (536,204) 396,823
Other assets (1,404,799) (680,267) (62,218)
Increase/(Decrease):
Accounts payable and accrued liabilities 2,855,383 7,775,070 (10,445,177)
Subscriber advance payments 72,700 (33,087) (101,592)
------------ ------------ ------------
Net cash provided by operation activities $ 23,494,382 $ 36,557,809 $ 13,631,925
------------ ------------ ------------

(Continued on the following page.)

ML MEDIA PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 25, 1998
(continued)

1998 1997 1996
------------- ------------- -------------

Cash flows from investing activities:
Proceeds from sale of C-ML Radio 5,768,750 -- --
Purchase of property, plant and equipment (8,120,457) (7,917,343) (8,236,792)
Intangible assets -- -- (10,000)
Proceeds from sale of the
California Cable Systems -- -- 286,000,000
Payment of costs
incurred related to sale
of the California Cable Systems (138,970) (2,455,065) (8,256,285)
Payment of costs
incurred related to sale of C-ML Radio (41,497) -- --
------------ ----------- -------------
Net cash (used in)/ provided by investing activities (2,532,174) (10,372,408) 269,496,923
------------ ----------- -------------
Cash flows from financing activities:
Principal payments on borrowings (12,250,901) (6,104,390) (122,473,500)
Cash distributions (189,893) (18,799,400) (109,188,434)
------------ ----------- -------------
Net cash used in financing activities (12,440,794) (24,903,790) (231,661,934)
------------ ----------- -------------
Net increase in cash and cash equivalents 8,521,414 1,281,611 51,466,914
Cash and cash equivalents at beginning of year 92,872,891 91,591,280 40,124,366
------------ ----------- -------------

Cash and cash equivalents at end of year $ 101,394,305 $ 92,872,891 $ 91,591,280
============= ============= =============
Cash paid for interest $ 5,070,031 $ 5,614,297 $ 10,772,817
============= ============= =============

See Notes to Consolidated Financial Statements.

ML MEDIA PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL/(DEFICIT)
FOR THE THREE YEARS ENDED DECEMBER 25, 1998

General Limited
Partner Partners Total
---------- ------------ -------------

1996:

Partners' Capital/(Deficit) as of December 30, 1995 $ 39,276 $ (2,403,415) $ (2,364,139)

Net Income 1,897,113 187,814,191 189,711,304
Cash Distribution (1,091,884) (108,096,550) (109,188,434)
------------- ------------- --------------
Partners' Capital as of December 27, 1996 844,505 77,314,226 78,158,731

1997:

Net Income 194,677 19,273,011 19,467,688
Cash Distribution (189,893) (18,799,400) (18,989,293)
------------- ------------- --------------
Partners' Capital as of December 26, 1997 849,289 77,787,837 78,637,126

1998:

Net Income 141,694 14,027,750 14,169,444
------------- ------------- --------------
Partners' Capital as of December 25, 1998 $ 990,983 $ 91,815,587 $ 92,806,570
============= ============= ==============

See Notes to Consolidated Financial Statements.

ML MEDIA PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 25, 1998
- --------------------------------------------------------------------------------

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ML Media Partners, L.P. (the "Partnership") was formed and the Certificate of
Limited Partnership was filed under the Delaware Revised Uniform Limited
Partnership Act on February 1, 1985. Operations commenced on May 14, 1986 with
the first closing of the sale of units of limited partnership interest
("Units"). Subscriptions for an aggregate of 187,994 Units were accepted and are
now outstanding.

Media Management Partners (the "General Partner") is a joint venture, organized
as a general partnership under the laws of the State of New York, between RP
Media Management ("RPMM"), a joint venture organized as a general partnership
under the laws of the State of New York, consisting of The Elton H. Rule Company
and IMP Media Management, Inc., and ML Media Management Inc. ("MLMM"), a
Delaware corporation and an indirect wholly-owned subsidiary of Merrill Lynch &
Co., Inc. The General Partner was formed for the purpose of acting as general
partner of the Partnership. The General Partner's total capital contribution
amounted to $1,898,934 which represents 1% of the total Partnership capital
contributions.

Pursuant to the terms of the Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement"), the General Partner is liable for all
general obligations of the Partnership to the extent not paid by the
Partnership. The limited partners are not liable for the obligations of the
Partnership in excess of the amount of their contributed capital.

The Partnership was formed to acquire, finance, hold, develop, improve,
maintain, operate, lease, sell, exchange, dispose of and otherwise invest in and
deal with media businesses and direct and indirect interests therein.

As of December 25, 1998, the Partnership's operating investments in media
properties consisted of:

a 50% interest in a joint venture (the "Venture"), which owns 100% of the
stock of Century-ML Cable Corporation ("C-ML Cable Corp."), and all of the
assets of Community Cable-Vision of Puerto Rico, Inc., Community
Cablevision of Puerto Rico Associates, and Community Cablevision
Incorporated.

an AM (WICC-AM) and FM (WEBE-FM) radio station combination in Bridgeport,
Connecticut;

an AM (KORG-AM) and FM (KEZY-FM) radio station combination in Anaheim,
California; and

Wincom Broadcasting Corporation ("Wincom"), a corporation that owns an FM
radio station (WQAL-FM) in Cleveland, Ohio.

On January 4, 1999, the Partnership consummated the sale of substantially all of
the assets used in the operations of the KORG-AM and KEZY-FM radio station
combination. In addition, on January 28, 1999, the Partnership consummated the
sale of the stock of the WQAL-FM radio station (see Note 12).

Reclassifications

Certain reclassifications were made to the 1996 consolidated income statement to
conform with the current period's presentation.

Basis of Accounting and Fiscal Year

The Partnership's records are maintained on the accrual basis of accounting for
financial reporting and tax purposes. Pursuant to generally accepted accounting
principles, the Partnership recognizes revenue as various services are provided.
The Partnership consolidates its 100% interest in Wincom; its 99.999% interests
in WEBE-FM, WICC-AM, KEZY-FM and KORG-AM and its pro rata 50% interest in the
Venture. In addition, the Partnership consolidated California Cable Systems,
KATC-TV and WREX-TV prior to their respective dispositions (see Note 2). All
intercompany accounts have been eliminated. The fiscal year of the Partnership
ends on the last Friday of each calendar year.

Cash Equivalents

Short-term investments which have an original maturity of ninety days or less
are considered cash equivalents.

Property and Depreciation

Property, plant and equipment is stated at cost, less accumulated depreciation.
Property, plant and equipment is depreciated using the straight-line method over
the following estimated useful lives:

Machinery, Equipment and Distribution Systems 5-12 years
Buildings 15-30.5 years
Other 3-10 years

Initial subscriber connection costs, as it relates to the cable television
systems, are capitalized and included as part of the distribution systems. Costs
related to disconnects and reconnects are expensed as incurred. Expenditures for
maintenance and repairs are charged to operating expense as incurred.
Betterments, replacement equipment and additions are capitalized and depreciated
over the remaining life of the assets.

Intangible Assets and Deferred Charges

Intangible assets and deferred charges are being amortized on a straight-line
basis over various periods as follows:

Franchise life of the franchise
Other Intangibles various
Deferred Costs 4-10 years

The excess of cost over fair value of net assets acquired ("Goodwill") in
business combinations consummated since inception of the Partnership is being
amortized over forty years using the straight-line method.

Asset Impairment

The Partnership assesses the impairment of assets on a regular basis or
immediately upon the occurrence of a significant event in the marketplace or an
event that directly impacts its assets. The methodology varies depending on the
type of asset but typically consists of comparing the net book value of the
asset to either: (1) the undiscounted expected future cash flows generated by
the asset, and/or (2) the current market values obtained from industry sources.

If the net book value of a particular asset is materially higher than the
estimated net realizable value, and the asset is considered to be permanently
impaired, the Partnership will write down the net book value of the asset
accordingly; however, the Partnership may not write its assets down to a value
below the asset-related non-recourse debt. The Partnership relies on industry
sources and its experience in the particular marketplace to determine whether an
asset impairment is other than temporary.

Barter Transactions

As is customary in the broadcasting industry, the Partnership engages in the
bartering of commercial air time for various goods and services. Barter
transactions are recorded based on the fair market value of the products and/or
services received. The goods and services are capitalized or expensed as
appropriate when received or utilized. Revenues are recognized when the
commercial spots are aired.

Revenue Recognition

Operating revenue, as it relates to the cable television systems, includes
earned subscriber service revenues and charges for installation and connections.
Subscriber services paid for in advance are recorded as income when earned.
Operating revenue, as it relates to the radio broadcasting properties is net of
commissions paid to advertising agencies.

Management Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial Instruments", requires companies to report the fair
value of certain on- and off-balance sheet assets and liabilities which are
defined as financial instruments.

Considerable judgment is required in interpreting data to develop the estimates
of fair value. Accordingly, the estimates presented herein are not indicative of
the amounts that the Partnership could realize in a current market exchange. The
use of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.

Income Taxes

The Partnership accounts for income taxes pursuant to SFAS No. 109 "Accounting
for Income Taxes". No provision for income taxes has been made for the
Partnership because all income and losses are allocated to the partners for
inclusion in their respective tax returns. However, the Partnership owns certain
entities which are consolidated in the accompanying financial statements which
are taxable entities.

For entities owned by the Partnership which are consolidated in the accompanying
financial statements, SFAS No. 109 requires the recognition of deferred income
taxes for the tax consequences of differences between the bases of assets and
liabilities for income tax and financial statement reporting, based on enacted
tax laws. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. For the Partnership,
SFAS No. 109 requires the disclosure of the difference between the tax bases and
the reported amounts of the Partnership's assets and liabilities (see Note 11).

Recent Accounting Statements Adopted

The Partnership adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", during the year ended December 25, 1998
which changes the way that the Partnership reports information about its
operating segments (see Note 8).

Recent Accounting Statements Not Yet Adopted

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities, requiring the recognition of all derivatives as either
assets or liabilities and to measure those instruments at fair value, as well as
to identify the conditions for which a derivative may be specifically designed
as a hedge. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999. The Partnership is still evaluating what effect, if any, SFAS No. 133 will
have on the results of operations and financial position of the Partnership.

2. DISPOSITION OF ASSETS

Puerto Rico Radio

On June 3, 1998, the Venture consummated the sale of an FM (WFID-FM) and an AM
(WUNO-AM) radio station, including Noti Uno News, combination and a background
music service in San Juan, Puerto Rico ("C-ML Radio") pursuant to a sales
agreement entered into in October 1997 between the Venture and Madifide, Inc.
The base sales price for C-ML Radio was approximately $11.5 million,
approximately $5.8 million of which is the Partnership's share, subject to
closing adjustments. Pursuant to a local marketing agreement ("LMA") entered
into, effective as of October 1, 1997, the buyer was allowed to program the
station from such date through the date of sale. C-ML Radio collected a monthly
LMA fee from the buyer which was equal to the operating income for that month,
provided however, that it not be less than $50,000 nor more than $105,000. The
monthly fee was recognized as revenue during the LMA period and the Partnership
did not recognize any operating revenues nor incur any net operating expenses of
C-ML Radio during the LMA period. At the closing, the Venture and Madifide, Inc.
entered into escrow agreements pursuant to which the Venture deposited, in
aggregate, $725,040, $362,520 of which is the Partnership's share, into three
separate escrow accounts with respect to which indemnification, benefit, and
chattel mortgage claims may be made by Madifide, Inc. for a period of one year.
The balance of these escrows, which is being classified on the accompanying
Consolidated Balance Sheet as Investments held by escrow agents, was $321,023 as
of December 25, 1998. In 1998, the Partnership recognized a gain for financial
reporting purposes of approximately $2.8 million on the sale of C-ML Radio.

Pursuant to the terms of the outstanding senior indebtedness that jointly
finances C-ML Radio and C-ML Cable, the net proceeds, and escrow amounts when
discharged, if any, from the resulting sale of C-ML Radio must be retained by
the Venture and cannot be distributed to the Partnership or its partners.

California Cable Systems

On November 28, 1994, the Partnership entered into an agreement (the "Asset
Purchase Agreement") with Century Communications Corp. ("Century") to sell to
Century substantially all of the assets used in the Partnership's California
Cable Operation serving the Anaheim, Hermosa Beach/Manhattan Beach, Rohnert
Park/Yountville and Fairfield communities (the "California Cable Systems"). On
May 31, 1996, the Partnership consummated such sale pursuant to the terms of the
Asset Purchase Agreement. The base purchase price for the California Cable
Systems was $286 million, subject to certain adjustments including an operating
cash flow, as well as, a working capital adjustment, as provided in the Asset
Purchase Agreement. In 1996, the Partnership recognized a gain for financial
reporting purposes of approximately $185.6 million on the sale of the California
Cable Systems.

In addition, upon closing of the sale of the California Cable Systems, the
Partnership set aside approximately $40.7 million in a cash reserve to cover
operating liabilities, current litigation, and litigation contingencies relating
to the California Cable Systems' operations prior to and resulting from their
sale, as well as a potential purchase price adjustment. In accordance with the
terms of the Partnership Agreement, any amounts which may be available for
distribution from any unused cash reserves, after accounting for certain other
expenses of the Partnership including certain expenses incurred after May 31,
1996, will be distributed to partners of record as of the date such unused
reserves are released, when the Partnership determines such reserves are no
longer necessary, rather than to the partners of record on May 31, 1996, the
date of the sale. As of December 25, 1998, the Partnership had approximately
$23.2 million ($6.1 million of which is being released for the March 1999 cash
distribution; see Note 12) remaining in such cash reserves.

KATC

On June 24, 1997, the Partnership received the discharge of escrowed proceeds of
$1.0 million (and approximately $100,000 of interest earned thereon) generated
from the 1995 sale of KATC-TV, Lafayette, Louisiana ("KATC"). In addition,
effective August 14, 1997, approximately $1.5 million, a portion of the reserve
established at the time of the KATC sale, was released. In accordance with the
terms of the Partnership Agreement, the amount of such released reserve and
discharged escrowed proceeds, after accounting for certain expenses of the
Partnership, were included in the cash distribution made to partners on November
25, 1997. In addition, effective December 26, 1997, the remaining reserve
established at the time of the 1995 sale of KATC, of approximately $218,000 was
released. Thus, during 1997, the Partnership recognized a gain on sale of KATC
of approximately $1.7 million resulting from the release of reserves and
reversal of previous accruals.

WREX

Effective August 14, 1997, approximately $1.8 million, a portion of the reserve
established at the time of the 1995 sale of WREX-TV, Rockford, Illinois
("WREX"), was released. In accordance with the terms of the Partnership
Agreement, such released reserve amount, after accounting for certain expenses
of the Partnership, were included in the cash distribution made to partners on
November 25, 1997. In addition, effective December 26, 1997, the remaining
reserve established at the time of the 1995 sale of WREX of approximately
$161,000 was released. Thus, during 1997, the Partnership recognized a gain on
sale of WREX of approximately $2.0 million resulting from the release of
reserves and reversal of previous accruals.

3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

As of As of
December 25, December 26,
1998 1997
------------ ------------

Land and Improvements $ 171,728 $ 549,613

Buildings 1,778,352 2,070,652

Cable Distribution Systems and Equipment
38,339,159 34,773,035

Other 914,713 1,124,352
------------ ------------
41,203,952 38,517,652

Less accumulated depreciation (14,917,781) (14,952,837)
------------ ------------
Property, plant and equipment, net
$ 26,286,171 $ 23,564,815
============ ============

4. INTANGIBLE ASSETS

Intangible assets consisted of the following:

As of As of
December 25, December 26,
1998 1997
------------ ------------

Goodwill $ 17,701,805 $ 41,611,143
Franchises 35,315,562 35,315,562
Other 761,624 8,916,911
------------ -------------
53,778,991 85,843,616

Less accumulated amortization (37,333,741) (57,351,125)
------------ -------------
Intangible assets, net $ 16,445,250 $ 28,492,491
============= =============

5. BORROWINGS

The aggregate amount of borrowings as reflected on the Consolidated Balance
Sheets of the Partnership is as follows:

As of As of
December 25, December 26,
1998 1997
------------ ------------
A) C-ML Notes/Credit Agreement $ 40,000,000 $ 50,000,000
B) Restructuring Agreement/Wincom-WEBE-WICC Loan 1,993,137 4,244,038
------------- -------------
$ 41,993,137 $ 54,244,038
============= =============

A) Borrowings under the C-ML Notes bear semi-annual interest at a fixed
annual rate of 9.47%. Beginning November 30, 1998, annual principal
payments of $20 million, of which the Partnership's share is $10
million (see Note 9), commenced and will continue thereafter until
November 30, 2002. The C-ML Notes require that C-ML Cable maintain
certain ratios such as debt to operating cash flow, interest expense
coverage and debt service coverage and restricts such items as cash
distributions and certain additional indebtedness. Borrowings under the
C-ML Notes are nonrecourse to the Partnership and are collateralized
with substantially all of the Venture's interest in C-ML Cable as well
as by all of the assets of C-ML Cable.

As of December 25, 1998 and December 26, 1997, outstanding borrowings
under the C-ML Notes totaled $80 million, of which the Partnership's
share is $40 million, and $100 million, of which the Partnership's
share is $50 million, respectively.

B) In 1993 the Partnership and Chemical Bank (the "Wincom Bank") executed
an agreement amending the Wincom-WEBE-WICC Loan (the "Restructuring
Agreement") into three notes as follows: a Series A Term Loan in the
amount of $13.0 million; a Series B Term Loan in the amount of
approximately $11.7 million; and a Series C Term Loan in the amount of
approximately $2.0 million, which was forgiven by the Wincom Bank on
October 1, 1993 pursuant to the terms of the Restructuring Agreement.

The Series A Term Loan bears interest, payable monthly, at the Wincom
Bank's Alternate Base Rate plus 1-3/4% with principal payments due
quarterly through final maturity.

The Series B Term Loan bears interest at a rate equal to the Wincom
Bank's Alternate Base Rate plus 1-3/4% beginning on April 30, 1994,
with interest payments accruing, and payable annually only from Excess
Cash Flow through final maturity.

On December 31, 1997, the Wincom-WEBE-WICC Loan matured and became due
and payable in accordance with its terms. As of that date, $4,244,038
of such amount remained due and payable to the Wincom Bank. Although
the Partnership remained in default on the Wincom-WEBE-WICC Loan during
1998, it paid $2,250,901 of principal resulting in an outstanding
balance of $1,993,137 as of December 25, 1998. In 1999, the Partnership
repaid the remaining outstanding balance of the Wincom-WEBE-WICC Loan
in full, however, the default has not been waived by the Wincom Bank.

Borrowings under the Wincom-WEBE-WICC Loan remain nonrecourse to the
Partnership and remain collateralized with substantially all of the
assets of the Wincom-WEBE-WICC group.

Any remaining Net Cash Proceeds (as defined in the Restructuring
Agreement), from the sale of the stations in the Wincom-WEBE-WICC
group, after the principal and interest of the Wincom-WEBE-WICC Loan is
paid in full, will be divided between the Partnership and the Wincom
Bank, with the Partnership receiving 85% and the Wincom Bank receiving
15%, respectively. Pursuant to the terms of the Wincom-WEBE-WICC Loan,
an initial amount of approximately $7.3 million was paid to the Wincom
Bank in 1999, pursuant to its 15% residual interest in the net sales
proceeds from the sale of Wincom (see Note 12).

As of December 25, 1998, the annual aggregate amounts of principal payments
(inclusive of defaulted principal payments totaling $1,993,137) required for the
borrowings as reflected in the Consolidated Balance Sheet of the Partnership are
as follows:

Year Ending Principal Amount
1999 $11,993,137
2000 10,000,000
2001 10,000,000
2002 10,000,000
Thereafter 0
-----------
$41,993,137
===========

Based upon the restrictions of the borrowings as described above, approximately
$100.0 million of assets are restricted from distribution by the entities in
which the Partnership has an interest as of December 25, 1998.

6. TRANSACTIONS WITH THE GENERAL PARTNER AND ITS AFFILIATES

During the three years ended December 25, 1998, the Partnership incurred the
following expenses in connection with services provided by the General Partner
and its affiliates:

1998 1997 1996
---------- ---------- ----------
Media Management
Partners (General Partner):

Partnership Mgmt. fee $ 557,979 $ 557,979 $ 557,979
Property Mgmt. fee 649,709 653,692 779,055
Reimbursement of
Operating Expenses 1,041,246 951,940 799,690
---------- ---------- ----------
$2,248,934 $2,163,611 $2,136,724
========== ========== ==========

In addition, the Partnership, through the California Cable Systems, was party to
an agreement with MultiVision Cable TV Corp. ("MultiVision"), an affiliate of
the General Partner, whereby MultiVision provided the California Cable Systems
with certain administrative and day-to-day management services. The California
Cable Systems paid for these services at cost. The reimbursed costs incurred by
MultiVision on behalf of the California Cable Systems amounted to an aggregate
of $1,512,955, $804,843, and $3,662,649 for 1998, 1997 and 1996, respectively.
These costs did not include programming costs that were charged, without markup,
to the California Cable Systems under an agreement to allocate certain
management costs.

RP Radio Management Inc., an affiliate of the General Partner, provided certain
administrative and day-to-day management services to the Partnership's radio
station investments. The radio station investments paid for these services at
cost. The reimbursed costs incurred by RP Radio Management Inc. on behalf of the
Partnership's radio station investments totaled $693,929 and $143,536 during
1997 and 1996, respectively. On December 27, 1997, RP Radio Management Inc. was
merged into RP Radio Management LLC, an entity wholly owned by the Partnership.

RP Television, an affiliate of the General Partner, provided certain
administrative and accounting services to the Partnership's television stations.
The television stations paid for these services at cost. The reimbursed cost
incurred by RP Television on behalf of the Partnership's television stations
totaled $101,371 and $82,066 for 1997 and 1996, respectively.

The reimbursed costs related to MultiVision, RP Radio Management Inc., and RP
Television are included in the Consolidated Income Statements.

As of December 25, 1998, December 26, 1997 and December 27, 1996, the amounts
payable to the General Partner for management fees and reimbursement of
operating expenses were approximately $1.4 million, $4.5 million and $2.3
million, respectively. From the sale proceeds of the Anaheim and Cleveland
Stations in 1999, the Partnership will remit accrued management fees and
expenses owed to the General Partner of approximately $1.3 million (see Note
12).

7. COMMITMENTS AND CONTINGENCIES

Lease Commitments

C-ML Cable rents office and warehouse facilities under various operating lease
agreements. In addition, Wincom, the Anaheim Stations, WEBE-FM and WICC-AM lease
office space, broadcast facilities and certain other equipment under various
operating lease agreements. Prior to its disposition, the California Cable
Systems leased office space, equipment, and space on utility poles under
operating leases with terms of less than one year, or under agreements which are
generally terminable on short notice. Rental expense was incurred for the three
years ended December 25, 1998 as follows:

1998 1997 1996
-------- ------- --------
California Cable Systems $ - $ - $ 199,501
WICC-AM 78,862 62,457 72,898
Anaheim Stations 160,411 152,016 145,796
WEBE-FM 201,922 199,004 202,730
Wincom 194,670 158,931 148,296
C-ML Cable 15,825 45,075 30,000
-------- ------- --------
$651,690 $ 617,483 $ 799,221
======== ========= =========

As of December 25, 1998, future minimum commitments under all of the above
agreements (excluding Anaheim and Wincom due to their sales on January 4, 1999
and January 28, 1999, respectively) in excess of one year are as follows:

Year Ending Amount
----------- --------
1999 $ 282,340
2000 20,141
2001 19,500
2002 10,500
2003 10,500
Thereafter 152,250
--------
$ 495,231
=========

Litigation

On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of the Partnership,
against the Partnership, the General Partner, RPMM, MLMM, Merrill Lynch & Co.,
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch").
The action concerns the Partnership's payment of certain management fees and
expenses to the General Partner and the payment of certain purported fees to an
affiliate of RPMM.

Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million, (2) improperly paid itself
such fees and expenses out of proceeds from sales of Partnership assets, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.

With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants believe that they have good and meritorious
defenses to the action, and vigorously deny any wrongdoing with respect to the
alleged claims. Defendants moved to dismiss the complaint and each claim for
relief therein. On March 3, 1999, the New York Supreme Court issued an order
granting the Partnership's and co-defendants' motion and dismissing plaintiffs'
complaint in its entirety, principally on the ground that the claims are
derivative and plaintiffs lack standing to bring suit because they failed to
make a pre-litigation demand on the General Partner. Plaintiffs' time to appeal
has not yet expired.

The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, the Partnership has received notices of requests for indemnification from
the following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the years ended December 25, 1998 and
December 26, 1997, the Partnership incurred approximately $223,000 and $280,000,
respectively, for legal costs relating to such indemnification. Such cumulative
costs amount to approximately $503,000 through December 25, 1998.

8. SEGMENT INFORMATION

The Partnership adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", during the year ended December 25, 1998
which changes the way that the Partnership reports information about its
operating segments. The information for years ended December 26, 1997 and
December 27, 1996 has been restated from the prior year's presentation in order
to conform to the current year's presentation.

The Partnership's operations have been aggregated into its main industries
(Cable Television Systems and Radio Stations) in which the Partnership operates.
The Cable Television Systems segment consists of the Partnership's 50% share of
C-ML Cable and the California Cable Systems until its sale on May 31, 1996. The
Radio Stations segment consists of the Partnership's 50% share of C-ML Radio
until its sale on June 3, 1998, WEBE-FM, Wincom, WICC-AM and the Anaheim
Stations.

The accounting policies of the reportable segments are the same as those
described in Note 1. The Partnership evaluates the performance of its operating
segments based on profit or loss from operations not including non-recurring
gains and losses and interest income and expense. Inter-segment sales and
transfers are not significant.

Summarized financial information concerning the Partnership's reportable
segments is shown in the following table. The "Other" column includes parent
related items and the residual operations of the Television segment which was
disposed of in 1995.

Cable
Television Radio
Year ended December 25, 1998 Systems Stations Other Total
- ------------------------------ ---------------- --------------- --------------- ----------------
Operating revenues $ 32,575,174 $ 22,727,541 $ - $ 55,302,715
Interest income 1,994,529 66,287 676,234 2,737,050
Gain on sale of
C-ML Radio - 2,752,975 - 2,752,975
Interest expense - - 5,020,814 5,020,814
Depreciation and amortization
6,494,682 956,903 - 7,451,585
Operating expenses 23,132,327 17,898,780 7,760,745 48,791,852
Segment net income (loss) 11,437,376 9,816,579 (7,084,511) 14,169,444
Segment assets 110,266,280 42,349,652 9,176,687 161,792,619
Capital expenditures 8,081,109 39,348 - 8,120,457

Year ended December 26, 1997
- ----------------------------
Operating revenues 29,404,870 23,819,113 - 53,223,983
Interest income 2,316,128 - 1,036,855 3,352,983
Gain on sale of KATC - - 1,697,227 1,697,227
Gain on sale of WREX - - 2,005,498 2,005,498
Interest expense - - 5,082,776 5,082,776
Depreciation and amortization
6,143,721 1,313,902 - 7,457,623
Operating expenses 16,723,091 18,927,571 7,761,845 43,412,507
Segment net income (loss) 14,997,907 11,510,797 (7,041,016) 19,467,688
Segment assets 103,606,224 39,334,158 13,705,796 156,646,178
Capital expenditures 7,731,495 185,848 - 7,917,343

Year ended December 27, 1996
- ----------------------------
Operating revenues 50,428,590 21,143,717 259,689 71,831,996
Interest income 1,166,362 - 2,525,671 3,692,033
Gain on sale of the California Cable
Systems
185,609,191 - - 185,609,191
Interest expense - - 10,352,597 10,352,597
Depreciation and amortization
18,848,938 1,389,066 - 20,238,004
Operating expenses 42,826,364 17,154,921 12,815,319 72,796,604
Segment net income (loss) 194,907,463 5,180,337 (10,376,496) 189,711,304
Segment assets 107,467,339 44,693,750 8,833,735 160,994,824
Capital expenditures 7,833,870 402,922 - 8,236,792

The following tables represent reconciliations of reportable segment revenues
and operating expenses to the consolidated income statements for the three years
ended December 25, 1998.

For the years ended
December 25, December 26, December 27,
1998 1997 1996
------------- ------------ ------------
Operating revenues
Total operating revenues
for reportable segments $ 55,302,715 $ 53,223,983 $ 71,831,996
Elimination of intersegment
Operating revenues (871,222) -- --
------------ ------------ ------------
$ 54,431,493 $ 53,223,983 $ 71,831,996
============ ============ ============
Operating expenses
Total operating expenses
for reportable segments $ 48,791,852 $ 43,412,507 $ 72,796,604
Elimination of intersegment
operating expenses (871,222) -- --
Elimination of management
fee due to Other
segment (2,168,556) (2,600,504) (1,374,688)
------------ ------------ ------------
$ 45,752,074 $ 40,812,003 $ 71,421,916
============ ============ ============

The Partnership did not derive 10% or more of its revenue from any single
customer for each of the three years ended December 25, 1998.

9. JOINT VENTURES

Pursuant to a management agreement and joint venture agreement dated December
16, 1986 (the "Joint Venture Agreement"), as amended and restated, between the
Partnership and Century (the "Venture"), the parties formed a joint venture in
which each has a 50% ownership interest. The Venture, through its wholly-owned
subsidiary, Century-ML Cable Corporation ("C-ML Cable Corp."), subsequently
acquired Cable Television Company of Greater San Juan, Inc. ("San Juan Cable")
and liquidated San Juan Cable into C-ML Cable Corp. The Venture also acquired
all of the assets of Community Cable-Vision of Puerto Rico, Inc., Community
Cablevision of Puerto Rico Associates, and Community Cablevision Incorporated
(collectively, the "Community Companies"), which consisted of a cable television
system serving the communities of Catano, Toa Baja and Toa Alta, Puerto Rico,
which are contiguous to San Juan Cable. The Community Companies and C-ML Cable
Corp. are collectively referred to as C-ML Cable.

On February 15, 1989, the Partnership and Century entered into a management
agreement and joint venture agreement whereby a new joint venture, Century-ML
Radio Venture ("C-ML Radio"), was formed under New York law. Responsibility for
the management of radio stations acquired by C-ML Radio was assumed by the
Partnership.

Effective January 1, 1994, all of the assets of C-ML Radio were transferred to
the Venture, in exchange for the assumption by the Venture of all the
obligations of C-ML Radio and the issuance to Century and the Partnership by the
Venture of new certificates evidencing a partnership interest of 50% and 50%,
respectively. The transfer was made pursuant to a Transfer of Assets and
Assumption of Liabilities Agreement. At the time of this transfer, the
Partnership and Century entered into an amended and restated management
agreement and joint venture agreement (the "Revised Joint Venture Agreement")
governing the affairs of the Venture as revised.

Under the terms of the Revised Joint Venture Agreement, Century is responsible
for the day-to-day operations of C-ML Cable and until its sale on June 3, 1998,
the Partnership was responsible for the day-to-day operations of C-ML Radio. For
providing services of this kind, Century is entitled to receive annual
compensation of 5% of C-ML Cable's net gross revenues (defined as gross revenues
from all sources less monies paid to suppliers of pay TV product, e.g., HBO,
Cinemax and Showtime) and the Partnership was entitled to receive annual
compensation of 5% of C-ML Radio's gross revenues including the LMA revenue
(after agency commissions, rebates or discounts and excluding revenues from
barter transactions). All significant policy decisions relating to the Venture,
the operation of C-ML Cable and the operation of C-ML Radio prior to its sale,
however, are only made upon the concurrence of both the Partnership and Century.
The Partnership may require a sale of such assets and business of C-ML Cable at
any time. If the Partnership proposes such a sale, the Partnership must first
offer Century the right to purchase the Partnership's 50% interest in such
assets being sold at 50% of the total fair market value at such time as
determined by independent appraisal. If Century elects to sell C-ML Cable, the
Partnership may elect to purchase Century's interest in such assets being sold
on similar terms.

On June 3, 1998, the Venture consummated the sale of C-ML Radio pursuant to a
sales agreement entered into in October 1997 between the Venture and Madifide,
Inc. (see Note 2).

The total assets, total liabilities, net capital, total revenues and net income
of the Venture are as follows:

December 25, 1998 December 26, 1997
----------------- -----------------

Total Assets $ 155,600,000 $ 152,300,000
============== ==============
Total Liabilities $ 118,400,000 $ 127,300,000
============== ==============
Net Capital $ 37,200,000 $ 25,000,000
============== ==============

1998 1997 1996
---------- ----------- -----------
Total Operating Revenues $65,500,000 $62,900,000 $58,600,000
=========== =========== ===========
Gain from Sale of C-ML Radio $ 5,500,000 $ - $ -
=========== =========== ===========
Net Income $12,200,000 $16,400,000 $ 500,000
=========== =========== ===========

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Assets, including cash and cash equivalents and accounts receivable and
liabilities, such as trade payables, are carried at amounts which approximate
fair value.

The General Partner has been able to determine the estimated fair value of the
C-ML Notes based on a discounted cash flow analysis. As of December 25, 1998 and
December 26, 1997, the estimated fair value of the C-ML Notes is approximately
$84 million and $104 million, respectively, of which approximately 50% of the
estimated fair value or $42 million and $52 million, respectively pertains to
the carrying amount reflected on the Partnership's Consolidated Balance Sheet.

The General Partner has determined that the carrying value of the Restructuring
Agreement relating to the Wincom-WEBE-WICC Loan approximates fair value due to
the floating rate nature of the outstanding borrowings without giving effect to
the 15% equity participation.

11. ACCOUNTING FOR INCOME TAXES

Certain entities owned by the Partnership are taxable entities and thus are
required under SFAS No. 109 to recognize deferred income taxes. Income taxes
consist of the following:

Years Ended December 31,
1998 1997 1996
---------- ---------- ----------
Current
Federal $ 2,358,726 $ 155,331 $ -
State 10,840 7,100 -
----------- ----------- -----------
2,369,566 162,431 -
Deferred
Federal 1,660,878 (1,777,096) -
State - - -
----------- ----------- -----------
1,660,878 (1,777,096) -
----------- ----------- -----------
Recorded expense
(benefit) for income taxes $ 4,030,444 $ (1,614,665) $ -
----------- ----------- -----------

The components of the net deferred tax asset are as follows:

As of As of
December 25, December 26,
1998 1997
------------ ------------
Deferred tax assets:
Basis of intangible assets $ - $ 24,168
Net operating loss carryforward 5,922,662 7,857,921
Alternative minimum tax credit 120,655 301,096
Other 1,345,995 475,092
----------- -------------
7,389,312 8,658,277
Deferred tax liabilities:
Basis of property, plant and equipment (13,174) (26,379)

Total 7,376,138 8,631,898
Less: valuation allowance (7,259,920) (6,854,802)
Net deferred tax asset $ 116,218 $ 1,777,096
=========== =============

The increase in the valuation allowance for the year ended December 25, 1998 of
approximately $405,000 relates primarily to net operating loss carryforwards not
anticipated to be realized before their expiration. Management believes that it
is more likely than not that it will generate taxable income sufficient to
realize a portion of the tax benefit associated with future temporary
differences and net operating loss carryforwards prior to their expiration.

As of December 25, 1998, the taxable entities have available net operating loss
carryforwards of approximately $16.9 million which may be applied against future
taxable income of such entities. Such net operating loss carryforwards expire at
various dates from 1999 through 2008.

For the Partnership, the differences between the tax basis of assets and
liabilities and the reported amounts are as follows:

As of As of
December 25, 1998 December 26, 1997
----------------- -----------------
Partners' Capital - financial statements $ 92,806,570 $ 78,637,126
Differences:
Offering expenses 19,063,585 19,063,585
Basis of property, plant and equipment and intangible
assets
3,108,723 2,481,101
Cumulative losses of stock investments (corporations)
54,273,267 62,196,213
Management fees 2,119,827 2,931,410
Other 7,626,906 2,844,149
------------- -------------
Partners' Capital - income tax bases $ 178,998,878 $ 168,153,584
============= =============

12. SUBSEQUENT EVENTS

Sale of KEZY-FM and KORG-AM

On January 4, 1999, the Partnership consummated a sale to Citicasters Co., a
subsidiary of Jacor Communications, Inc. ("Citicasters") of substantially all of
the assets, other than cash and accounts receivable, used in the operations of
the Partnership's radio stations, KORG-AM and KEZY-FM, serving Anaheim,
California (the "Anaheim Stations"), pursuant to the asset purchase agreement
(the "Anaheim Agreement") dated September 14, 1998, as amended.

The base sales price for the Anaheim Stations was $30,100,000, subject to
certain adjustments for the apportionment of income and liabilities as of the
closing date, as provided for in the Anaheim Agreement, resulting in a reduction
of the base sales price of approximately $20,000.

Pursuant to the Anaheim Agreement, the Partnership deposited $1.0 million into
an indemnity escrow account against which Citicasters may make indemnification
claims for a period of one year after the closing. In addition, the Partnership
held approximately $5.2 million of the sales proceeds to pay (or to reserve for
payment of) expenses and liabilities relating to the operations of the Anaheim
Stations prior to the sale as well as wind-down expenses, sale-related expenses
and contingent obligations of the Anaheim Stations. The remaining sales proceeds
of $23,840,000 will be included in the cash distribution made to partners on
March 30, 1999, after accounting for certain expenses of the Partnership, in
accordance with the terms of the Partnership Agreement. To the extent any
amounts reserved or paid into escrow as described above are subsequently
released or discharged, such amounts will be distributed to partners of record
as of the date of such discharge from such escrow. The net assets of the Anaheim
Stations, which were sold pursuant to the Anaheim Agreement in 1999, have been
included in assets held for sale on the accompanying Consolidated Balance Sheet
as of December 25, 1998. In 1999, the Partnership will recognize a gain on the
sale of the Anaheim Stations.

Sale of Stock of Wincom

On January 28, 1999, the Partnership consummated a sale to Chancellor Media
Corporation of Los Angeles ("Chancellor") of the stock of Wincom, pursuant to a
stock purchase agreement (the "Cleveland Agreement") dated August 11, 1998.
Wincom owns all of the outstanding stock of Win Communications, Inc., which owns
and operates the radio station WQAL-FM, serving Cleveland, Ohio (the "Cleveland
Station").

The base sales price for the Cleveland Station was $51,250,000, subject to
certain adjustments for the apportionment of current assets and liabilities as
of the closing date, as provided for in the Cleveland Agreement, resulting in a
reduction of the base sales price of approximately $1.6 million.

Pursuant to the Cleveland Agreement, the Partnership deposited $2.5 million into
an indemnity escrow account against which Chancellor may make indemnification
claims for a period of up to two years after the closing; $1.5 million, less any
claims previously asserted, will be discharged from such escrow on December 31,
1999. Approximately $2.0 million was used to repay in full the remaining
outstanding balance of the Wincom-WEBE-WICC Loan and pursuant to the terms of
the Wincom-WEBE-WICC Loan, an initial amount of approximately $7.3 million was
paid to the Wincom Bank, pursuant to its 15% residual interest in the net sales
proceeds resulting from the sale of Wincom. In addition, the Partnership held
approximately $2.5 million of the sales proceeds to pay (or to reserve for
payment of) wind-down expenses and sale-related expenses. The remaining sales
proceeds of $35.4 million will be included in the cash distribution made to
partners on March 30, 1999, in accordance with the terms of the Partnership
Agreement. To the extent any amounts reserved or paid into escrow as described
above are subsequently discharged, such amounts will be distributed to partners
of record as of the date of such discharge from such escrow. The net asset value
of the Cleveland Station, which was sold pursuant to the Cleveland Agreement in
1999, has been included in assets held for sale on the accompanying Consolidated
Balance Sheet as of December 25, 1998. In 1999, the Partnership will recognize a
gain on the sale of the Cleveland Station.

Cash Distributions

On March 1, 1999, the Partnership declared a cash distribution that will be made
to partners on March 30 and 31, 1999. Distributable proceeds from the sales of
the Anaheim Stations, Cleveland Station, and release of approximately $6.1
million of the reserve established at the time of the California Cable Systems
sale, after accounting for certain expenses of the Partnership, will be included
in the total cash distribution of $64.0 million.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
---------------------------------------------------------------------

None.

Part III.

Item 10. Directors and Executive Officers of the Registrant.

Registrant has no executive officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are carried
out either by executive officers of RP Media Management or ML Media Management
Inc. acting on behalf of the General Partner. The executive officers and
directors of RP Media Management and ML Media Management Inc. are:

RP Media Management (the "Management Company")

Served in Present Capacity
Since (1)
Name Position Held
-------------------- --------------

I. Martin Pompadur 1/01/86 President, Chief Executive Officer, Chief
Operating Officer, Secretary, Director

Elizabeth McNey Yates 4/01/88 Executive Vice President

(1) The Director holds office until a successor is elected and qualified.
All executive officers serve at the pleasure of the Director.

ML Media Management Inc. ("MLMM")

Served in
Present Capacity
Name Since (1) Position Held
---------- ---------------- ----------------

Kevin K. Albert 02/19/91 President
12/16/85 Director

James V. Caruso 11/20/98 Executive Vice President
11/20/98 Director

David G. Cohen 08/11/95 Vice President
11/20/98 Director

Rosalie Y. Goldberg 11/20/98 Director

Diane T. Herte (2) 11/20/98 Vice President

Kevin T. Seltzer 11/20/98 Vice President
11/20/98 Treasurer

(1) Directors hold office until their successors are elected and
qualified. All executive officers serve at the pleasure of the Board
of Directors.

(2) Ms. Herte held the position of Treasurer from August 11, 1995 through November 19, 1998.

I. Martin Pompadur, 63, Director and President of RP Media Management. Mr.
Pompadur is an Executive Vice President of News Corporation and President of
News Corporation-Eastern and Central Europe. Mr. Pompadur is also the Chairman
and Chief Executive Officer of GP Station Partners which is the General Partner
of Television Station Partners, L.P., a private limited partnership that owned
and operated four network affiliated television stations. These stations were
sold in January 1996 and this partnership is currently in its liquidation phase.
Mr. Pompadur is the Chairman and Chief Executive Officer of PBTV, Inc., the
Managing General Partner of Northeastern Television Investors Limited
Partnership, a private limited partnership which owned and operated WBRE-TV, a
network affiliated station in Wilkes-Barre/Scranton, Pennsylvania. This station
was sold in January 1998, and is currently in its liquidating phase. Mr.
Pompadur is also the President and a Director of RP Opportunity Management, L.P.
("RPOM"), a limited partnership organized under the laws of Delaware, which is
indirectly owned and controlled by Mr. Pompadur. RPOM is a partner in Media
Opportunity Management Partners, an affiliate of the General Partner, and the
general partner of ML Media Opportunity Partners, L.P. which was formed to
invest in under performing and turnaround media businesses. Mr. Pompadur is the
Principal Executive Officer of ML Media Opportunity Partners, L.P. Mr. Pompadur
is also Chief Executive Officer of MultiVision Cable TV Corp. ("MultiVision"), a
cable television multiple system operator ("MSO") organized in January 1988 and
owned principally by Mr. Pompadur and the estate of Elton H. Rule to provide MSO
services to cable television systems acquired by entities under his control. Mr.
Pompadur was the Principal Executive Officer and principal owner of RP Radio
Management Inc. ("RP Radio"), a company owned principally by Mr. Pompadur to
provide administrative and day-to-day management services to Registrant's radio
properties. On December 27, 1997, RP Radio Management Inc. was merged into RP
Radio Management LLC, an entity wholly owned by Registrant. Mr. Pompadur is a
principal owner, member of the Board of Directors and Secretary of Caribbean
International News Corporation ("Caribbean"). Caribbean owns and publishes EL
Vocero, the largest Spanish language daily newspaper in the United States.

Elizabeth McNey Yates, 35, Executive Vice President of RP Media Management,
joined RP Companies Inc., an entity controlled by Mr. Pompadur, in March 1988
and has senior executive responsibilities in the areas of finance, operations,
administration, acquisitions and dispositions. Ms. Yates is Chief Operating
Officer and Executive Vice President of RP Companies, Inc., Executive Vice
President of RPOM, Chief Operating Officer and Executive Vice President of RP
Radio. In addition, Ms. Yates is the President and Chief Operating Officer of
MultiVision.

Kevin K. Albert, 46, a Managing Director of Merrill Lynch Investment Banking
Group ("ML Investment Banking"), joined Merrill Lynch in 1981. Mr. Albert works
in the Equity Private Placement Group and is involved in structuring and placing
a diversified array of private equity financings including common stock,
preferred stock, limited partnership interests and other equity-related
securities. Mr. Albert is also a director of ML Opportunity Management Inc. ("ML
Opportunity"), an affiliate of MLMM and a joint venturer in Media Opportunity
Management Partners, the general partner of ML Media Opportunity Partners, L.P.;
a director of ML Mezzanine II Inc. ("ML Mezzanine II"), an affiliate of MLMM and
sole general partner of the managing general partner of ML-Lee Acquisition Fund
II, L.P. and ML-Lee Acquisition Fund (Retirement Accounts) II, L.P.; a director
of ML Mezzanine Inc. ("ML Mezzanine"), an affiliate of MLMM and the sole general
partner of the managing general partner of ML-Lee Acquisition Fund, L.P.; a
director of Merrill Lynch Venture Capital Inc. ("ML Venture"), an affiliate of
MLMM and the general partner of the Managing General Partner of ML Venture
Partners II, L.P. ("Venture II") and ML Oklahoma Venture Partners Limited
Partnership ("Oklahoma") and a director of Merrill Lynch R&D Management Inc.
("ML R&D"), an affiliate of MLMM and the general partner of the General Partner
of ML Technology Ventures, L.P. Mr. Albert also serves as an independent general
partner of Venture II.

James V. Caruso, 47, a Director of ML Investment Banking, joined Merrill Lynch
in 1975. Mr. Caruso manages the Investment Banking Group Corporate Accounting,
Master Lease and off Balance Sheet accounting functions as well as the
Controller's area of the Partnership Analysis and Finance Group. Mr. Caruso is
also a director of ML Opportunity, ML Venture, ML R&D, ML Mezzanine, ML
Mezzanine II and MLH Property Managers Inc., an affiliate of MLMM and the
general partner of MLH Income Realty Partnership VI.

David G. Cohen, 36, a Vice President of ML Investment Banking, joined Merrill
Lynch in 1987. Mr. Cohen shares responsibility for the ongoing management of the
operations of various project related limited partnerships for which
subsidiaries of ML Leasing Equipment Corp., an affiliate of Merrill Lynch, are
general partners. Mr. Cohen is also a director of ML Opportunity, ML Venture and
ML R&D.

Rosalie Y. Goldberg, 61, a First Vice President and Senior Director of Merrill
Lynch's Private Client Group and the Director of its Special Investments Group.
Ms. Goldberg joined Merrill Lynch in 1975, and has held a number of management
positions in the Special Investments area, including the position of Manager for
Product Development and Origination from 1983 to 1989. Ms. Goldberg is also a
Director of ML Mezzanine, ML Mezzanine II, and ML Opportunity.

Diane T. Herte, 38, a Vice President of ML Investment Banking since 1996 and
previously an Assistant Vice President of Merrill Lynch & Co. Corporate Credit
Group since 1992, joined Merrill Lynch in 1984. Ms. Herte's responsibilities
include controllership and financial management functions for certain
partnerships and other entities for which subsidiaries of Merrill Lynch are the
general partner, manager or administrator.

Kevin T. Seltzer, 32, an Assistant Vice President of ML Investment Banking since
1999, joined Merrill Lynch in 1995. Mr. Seltzer's responsibilities include
financial management functions for certain partnerships and other entities for
which subsidiaries of Merrill Lynch are the general partner or administrator.

Mr. Pompadur and Ms. Yates were each executive officers of Maryland Cable
Corp. and Maryland Cable Holdings Corp. at and during the two years prior to the
filing by both companies on March 10, 1994 of a consolidated plan of
reorganization under Chapter 11 of the United States Bankruptcy Code with the
United States Bankruptcy Court for the Southern District of New York. Maryland
Cable Holdings Corp. was at the time of such filings a subsidiary of ML Media
Opportunity Partners, L.P.

An Investment Committee of Registrant was established to have the responsibility
and authority for developing, in conjunction with the Management Company,
diversification objectives for the investments to be made by Registrant, for
reviewing and approving each investment proposed by the Management Company for
Registrant and for evaluating and approving dispositions of investments of
Registrant. The Investment Committee will also establish reserves for Registrant
for such purposes and in such amounts as it deems appropriate. A simple majority
vote shall be required for any proposed investment or disposition. The
Investment Committee also has the responsibility and authority for monitoring
the management of the investments of Registrant by the Management Company. The
current members of the Investment Committee are as follows:

RPMM Representative MLMM Representatives
I. Martin Pompadur Kevin K. Albert
James V. Caruso

Item 11. Executive Compensation.

Registrant does not pay the executive officers or directors of the General
Partner any remuneration. The General Partner does not presently pay any
remuneration to any of its executive officers or directors. See Note 6 to the
Financial Statements included in Item 8 hereof, however, for amounts paid by
Registrant to the General Partner and its affiliates for the three years ended
December 25, 1998.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

As of March 15, 1999, Smithtown Bay, LLC, having the mailing address 601 Carlson
Parkway, Suite 200, Minnetonka, Minnesota, 55305, is the owner of 11,775 Units,
representing approximately 6.3% of all such Units. As of March 15, 1999, no
person or entity, other than Smithtown Bay, LLC, was known by Registrant to be
the beneficial owner of more than five percent of the Units.

To the knowledge of the General Partner, as of February 1, 1999, the officers
and directors of the General Partner in aggregate own less than 1% of the
outstanding common stock of Merrill Lynch & Co., Inc.

RP Media Management is owned 50% by IMP Media Management, Inc. and 50% by
the Elton H. Rule Company. IMP Media Management, Inc. is wholly-owned by Mr. I.
Martin Pompadur and The Elton H. Rule Company is wholly-owned by the Rule Trust.

Item 13. Certain Relationships and Related Transactions.

Refer to Note 6 to the Financial Statements included in Item 8 hereof, and in
Item 1 for a description of the relationship of the General Partner and its
affiliates to Registrant and its subsidiaries.

Part IV.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) Financial Statements, Financial Statement Schedules and Exhibits.

(1) Financial Statements

See Item 8. "Financial Statements and Supplementary Data."

(2) Financial Statement Schedules

No financial statement schedules are included because of the
absence of the conditions which require their inclusion or
because the required information is included in the financial
statements or set forth herein the notes thereto.

(3) Exhibits Incorporated by Reference to

3.1 Amended and Restated Certificate of Exhibit 3.1 to Registrant's Form
Limited Partnership S-1 the Registration Statement
(File No. 33-2290)

3.2.1 Second Amended and Restated Agreement of Exhibit 3.2.1 to Registrant's
Limited Partnership dated May 14, 1986 Annual Report on Form 10-K for
the fiscal year ended
December 26, 1986
(File No. 0-14871)

3.2.2 Amendment No. 1 dated February 27, 1987 to Exhibit 3.2.2 to Registrant's
Second Amended and Restated Agreement of Annual Report on Form 10-K for
Limited Partnership the fiscal year ended
December 26, 1986
(File No. 0-14871)

10.1.1 Joint Venture Agreement dated July 2, 1986 Exhibit 10.1.1 to Registrant's
between Registrant and Century Annual Report on Form 10-K for
Communications Corp.("CCC") the fiscal year ended
December 26, 1986
(File No. 0-14871)

10.1.2 Management Agreement and Joint Venture Exhibit 10.1.2 to Registrant's
Agreement dated December 16, 1986 between Annual Report on Form 10-K for the
Registrant and CCC (attached as Exhibit 1 fiscal year ended December 26, 1986
to Exhibit 10.3) (File No. 0-14871)

10.1.3 Management Agreement and Joint Venture Exhibit 10.1.3 t Registrant's
Agreement dated as of February 15, 1989 Annual Report on Form 10-K for the
between Registrant and CCC fiscal year ended December 30, 1988
(File No. 0-14871)

10.1.4 Amended and Restated Management Agreement Exhibit 10.1.4 to Registrant's
and Joint Venture Agreement of Century/ML Annual Report on Form 10-K for
Cable Venture dated January 1, 1994 the fiscal year ended
between Century Communications Corp. and December 31, 1993
Registrant (File No. 0-14871)

10.2.1 Stock Purchase Agreement dated July 2, Exhibit 28.1 to Registrant's
1986 between Registrant and the sellers of Form 8-K Report dated
shares of Cable Television Company of December 16, 1986
Greater San Juan, Inc. (File No. 33-2290)

10.2.2 Assignment dated July 2, 1986 between Exhibit 10.2.2 to Registrant's
Registrant and Century-ML Cable Corporation Annual Report on Form 10-K for the
("C-ML") fiscal year ended December 26, 1986
(File No. 0-14871)

10.2.3 Transfer of Assets and Assumption of Exhibit 10.2.3 to Registrant's
Liabilities Agreement dated January 1, Annual Report on Form 10-K for
1994 between Century-ML Radio Venture, the fiscal year ended
Century/ML Cable Venture, Century December 31, 1993
Communications Corp. and Registrant (File No. 0-14871)

10.3 Amended and Restated Credit Agreement Exhibit 10.3.5 to Registrant's
dated as of March 8, 1989 between Annual Report on Form 10-K for
Citibank, N.A., Agent, and C-ML the fiscal year ended
December 30, 1988
(File No. 0-14871)

10.3.1 Note Agreement dated as of December 1, Exhibit 10.3.1 to Registrant's
1992 between Century-ML Cable Corporation, Annual Report on Form 10-K for
Century/ML Cable Venture, Jackson National the fiscal year ended
Life Insurance Company, The Lincoln December 25, 1992
National Life Insurance Company and (File No. 0-14871)
Massachusetts Mutual Life Insurance Company

10.3.2 Second Restated Credit Agreement dated Exhibit 10.3.2 to Registrant's
December 1, 1992 among Century-ML Cable Annual Report on Form 10-K for the
Corporation, Century/ML Cable Venture and fiscal year ended December 25, 1992
Citibank (File No. 0-14871)

10.3.3 Amendment dated as of September 30, 1993 Exhibit 10.3.3 to Registrant's
among Century-ML Cable Corporation, the banks Quarterly Report on Form 10-Q for
parties to the Credit Agreement, and Citibank, September 24, 1993
N.A. and Century/ML Cable Venture (File No. 0-14871)

10.3.4 Amendment dated as of December 15, 1993 Exhibit 10.3.4 to Registrant's
among Century-ML Cable Corporation, the banks Annual Report on Form 10-K for
parties to the Credit Agreement, and Citibank, the quarter fiscal year ended December 31, 1993
N.A. and Century/ML Cable Venture (File No. 0-14871)

10.4 Pledge Agreement dated December 16, 1986 Exhibit 10.4 to Registrant's
among Registrant, CCC, and Citibank, N.A., Annual Report on Form 10-K for
Agent the fiscal year ended
December 26, 1986
(File No. 0-14871)

10.5 Guarantee dated as of December 16, 1986 Exhibit 10.5 to Registrant's
among Registrant, CCC and Citibank, N.A., Annual Report on Form 10-K for
Agent the fiscal year ended
December 25, 1987
(File No. 0-14871)

10.6 Assignment of Accounts Receivable dated as Exhibit 10.6 to Registrant's
of December 16, 1986 among Registrant, CCC Annual Report on Form 10-K for
and Citibank, N.A., Agent the fiscal year ended
December 25, 1987
(File No. 0-14871)

10.7 Real Property Mortgage dated as of Exhibit 10.7 to Registrant's
December 16, 1986 among Registrant, CCC Annual Report on Form 10-K for
and Citibank, N.A., Agent the fiscal year ended
December 30, 1988
(File No. 0-14871)

10.8 Stock Sale and Purchase Agreement dated as Exhibit 28.1 to Registrant's
of December 5, 1986 between SCIPSCO, Inc. Form 8-K Report dated
and ML California Cable Corp. ("ML December 23, 1986
California") (File No. 33-2290)

10.8.1 Asset Purchase Agreement dated as of Exhibit 2 to Registrant's
November 28, 1994 among Registrant and Form 8-K Report dated
Century Communications Corp. November 28, 1994
(File No. 0-14871)

10.9 Security Agreement dated as of December Exhibit 10.10 to Registrant's
22, 1986 among Registrant, ML California Annual Report on Form 10-K for
and BA the fiscal year ended
December 26, 1987
(File No. 0-14871)

10.10 Assets Purchased Agreement dated as of Exhibit 28.1 to Registrant's
September 17, 1986 between Registrant and Form 8-K Report dated
Loyola University February 2, 1987
(File No. 33-2290)

10.11 Asset Acquisition Agreement dated April Exhibit 28.1 to Registrant's
22, 1987 between Community Cable-Vision of Form 8-K Report dated
Puerto Rico Associates, Community October 14, 1987
Cable-Vision of Puerto Rico, Inc., (File No. 33-2290)
Community Cable-Vision Incorporated and
Century Communications Corp., as assigned

10.12 Asset Purchase Agreement dated April 29, Exhibit 2.1 to Registrant's
1987 between Registrant and Gilmore Form 8-K Report dated
Broadcasting Corporation September 16, 1987
(File No. 33-2290)

10.13 License Holder Pledge Agreement dated Exhibit 2.5 to Registrant's
August 27, 1987 by Registrant and Media Form 8-K Report dated
Management Partners in favor of September 15, 1987
Manufacturers Hanover (File No. 33-2290)

10.14 Asset Purchase Agreement dated August 20, Exhibit 28.1 to Registrant's
1987 between 108 Radio Company Limited Form 8-K Report dated
Partnership and Registrant January 15, 1988
(File No. 33-2290)

10.15 Security Agreement dated as of December Exhibit 28.3 to Registrant's
16, 1987 between Registrant and CNB Form 8-K Report dated
January 15, 1988
(File No. 33-2290)

10.16 Asset Purchase Agreement dated as of Exhibit 10.25 to Registrant's
January 9, 1989 between Registrant and Annual Report on Form 10-K for
Connecticut Broadcasting Company, Inc. the fiscal year ended
("WICC") December 30, 1988
(File No. 0-14871)

10.17.1 Stock Purchase Agreement dated June 17, Exhibit 28.2 to Registrant's
1988 between Registrant and the certain Quarterly Report on Form 10-Q
sellers referred to therein relating to for the quarter ended
shares of capital stock of Universal Cable June 24, 1988
Holdings, Inc. ("Universal") (File No. 0-14871)

10.17.2 Amendment and Consent dated July 29, 1988 Exhibit 2.2 to Registrant's
between Russell V. Keltner, Larry G. Form 8-K Report dated
Wiersig and Donald L. Benson, Universal September 19, 1988
Cable Midwest, Inc. and Registrant (File No. 0-14871)

10.17.3 Amendment and Consent dated July 29, 1988 Exhibit 2.3 to Registrant's
between Ellsworth Cable, Inc., Universal Form 8-K Report dated
Cable Midwest, Inc. and Registrant September 19, 1988
(File No. 0-14871)

10.17.4 Amendment and Consent dated August 29, Exhibit 2.4 to Registrant's
1988 between ST Enterprises, Ltd., Form 8-K Report dated
Universal Cable Communications, Inc. and September 19, 1988
Registrant (File No. 0-14871)

10.17.5 Amendment and Consent dated September 19, Exhibit 2.5 to Registrant's
1988 between Dennis Wudtke, Universal Form 8-K Report dated
Cable Midwest, Inc., Universal Cable September 19, 1988
Communications, Inc. and Registrant (File No. 0-14871)

10.17.6 Amendment and Consent dated October 14, Exhibit 10.26.6 to Registrant's
1988 between Down's Cable, Inc., Universal Annual Report on Form 10-K
Cable Midwest, Inc. and Registrant for the fiscal year ended
December 30, 1988
(File No. 0-14871)

10.17.7 Amendment and Consent dated October 14, Exhibit 10.26.7 to Registrant's
1988 between SJM Cablevision, Inc., Annual Report on Form 10-K
Universal Cable Midwest, Inc. and for the fiscal year ended
Registrant December 30, 1988
(File No. 0-14871)

10.17.8 Bill of Sale and Transfer of Assets dated Exhibit 2.6 to Registrant's
as of September 19, 1988 between Form 8-K Report dated
Registrant and Universal Cable September 19, 1988
Communications Inc. (File No. 0-14871)

10.18 Credit Agreement dated as of September 19, Exhibit 10.27 to Registrant's
1988 among Registrant, Universal, certain Annual Report on Form 10-K
subsidiaries of Universal, and for the fiscal year ended
Manufacturers Hanover Trust Company, as December 30, 1988
Agent (File No. 0-14871)

10.19 Stock Purchase Agreement dated October 6, Exhibit 10.28 to Registrant's
1988 between Registrant and the certain Annual Report on Form 10-K
sellers referred to therein relating to for the fiscal year ended
shares of capital stock of Acosta December 30, 1988
Broadcasting Corp. (File No. 0-14871)

10.20 Stock Purchase Agreement dated April 19, Exhibit 28.1 to Registrant's
1988 between Registrant and the certain Quarterly Report on Form 10-Q
sellers referred to therein relating to for the quarter ended
shares of capital stock of Wincom June 24, 1988
Broadcasting Corporation (File No. 0-14871)

10.21 Subordination Agreement dated as of August Exhibit 2.3 to Registrant's
15, 1988 among Wincom, the Subsidiaries, Form 8-K Report dated
Registrant and Chemical Bank August 26, 1988
(File No. 0-14871)

10.22 Management Agreement dated August 26, 1988 Exhibit A to Exhibit 10.30.2 above
between Registrant and Wincom

10.22.1 Management Agreement by and between Exhibit 10.22.1 to Registrant's
Fairfield Communications, Inc. and Quarterly Report on Form 10-Q
Registrant and ML Media Opportunity for the quarter ended
Partners, L.P. dated May 12, 1993 June 25, 1993
(File No. 0-14871)

10.22.2 Sharing Agreement by and among Registrant, Exhibit 10.22.2 to Registrant's
ML Media Opportunity Partners, L.P., RP Quarterly Report on
Companies, Inc., Radio Equity Partners, Form 10-Q for the quarter ended
Limited Partnership and Fairfield June 25, 1993
Communications, Inc. (File No. 0-14871)

10.23 Amended and Restated Credit, Security and Exhibit 10.33 to Registrant's
Pledge Agreement dated as of August 15, Quarterly Report on
1988, as amended and restated as of July Form 10-Q for the quarter ended
19, 1989 among Registrant, Wincom June 30, 1989
Broadcasting Corporation, Win (File No. 0-14871)
Communications Inc., Win Communications of
Florida, Inc., Win Communications Inc. of
Indiana, WEBE Associates, WICC Associates,
Media Management Partners, and Chemical
Bank and Chemical Bank, as Agent

10.23.1 Second Amendment dated as of July 30, 1993 Exhibit 10.23.1 to Registrant's
to the Amended and Restated Credit, Quarterly Report on
Security and Pledge Agreement dated as of Form 10-Q for the quarter ended
August 15, 1988, as amended and restated June 25, 1993
as of July 19, 1989 and as amended by the (File No. 0-14871)
First Amendment thereto dated as of August
14, 1989 among Registrant, Wincom
Broadcasting Corporation, Win
Communications Inc., Win Communications
Inc. of Indiana, WEBE Associates, WICC
Associates, Media Management Partners, and
Chemical Bank and Chemical Bank, as Agent

10.24 Agreement of Consolidation, Extension, Exhibit 10.34 to Registrant's
Amendment and Restatement of the WREX Quarterly Report on
Credit Agreement and KATC Credit Agreement Form 10-Q for the quarter ended
between Registrant and Manufacturers June 30, 1989
Hanover Trust Company dated as of June 21, (File No. 0-14871)
1989

10.25 Asset Purchase Agreement between ML Media Exhibit 10.35 to Registrant's
Partners, L.P. and Anaheim Broadcasting Quarterly Report on
Corporation dated July 11, 1989 Form 10-Q for the quarter ended
September 29, 1989
(File No. 0-14871)

10.26 Asset Purchase Agreement between WIN Exhibit 10.36 to Registrant's
Communications Inc. of Indiana, and WIN Annual Report on Form 10-K
Communications of Florida, Inc. and Renda for the fiscal year ended
Broadcasting Corp. dated November 27, 1989 December 28, 1990
(File No. 0-14871)

10.26.1 Asset Purchase Agreement between WIN Exhibit 10.26.1 to Registrant's
Communications of Indiana, Inc. and Quarterly Report on Form 10-Q
Broadcast Alchemy, L.P. dated April 30, for the quarter ended
1993 June 25, 1993
(File No. 0-14871)

10.26.2 Joint Sales Agreement between Exhibit 10.26.2 to Registrant's
WIN Communications of Indiana, Inc. and Quarterly Report on
Broadcast Alchemy, L.P. dated May 1, 1993 Form 10-Q for the quarter ended
June 25, 1993
(File No. 0-14871)

10.27 Credit Agreement dated as of November 15, Exhibit 10.39 to Registrant's
1989 between ML Media Partners, L.P. and Quarterly Report on Form 10-Q
Bank of America National Trust and Savings for the quarter ended
Association June 29, 1990
(File No. 0-14871)

10.27.1 First Amendment and Limited Waiver dated Exhibit 10.27.1 to Registrant's
as of February 23, 1995 to the Amended and Annual Report on Form 10-K
Restated Credit Agreement dated as of May for the fiscal year ended
15, 1990 among ML Media Partners, L.P. and December 30, 1994
Bank of America National Trust and Saving (File 0-14871)
Association, individually and as Agent

10.28 Asset Purchase Agreement dated November Exhibit 10.38 to Registrant's
27, 1989 between Win Communications and Quarterly Report on Form 10-Q
Renda Broadcasting Corp. for the quarter ended
June 29, 1990
(File No. 0-14871)

10.29 Amended and Restated Credit Agreement Exhibit 10.39 to Registrant's
dated as of May 15, 1990 among ML Media Quarterly Report on Form 10-Q
Partners, L.P. and Bank of America for the quarter ended
National Trust and Saving Association, June 29, 1990
individually and as Agent (File No. 0-14871)

10.30 Stock Purchase Agreement between Exhibit 10.40.1 to Registrant's
Registrant and Ponca/Universal Holdings, Quarterly Report on Form 10-Q
Inc. dated as of April 3, 1992 for the quarter ended
March 27, 1992
(File No. 0-14871)

10.30.1 Earnest Money Escrow Agreement between Exhibit 10.40.1 to Registrant's
Registrant and Ponca/Universal Holdings, Quarterly Report on Form 10-Q
Inc. dated as of April 3, 1992 for the quarter ended
March 27, 1992
(File No. 0-14871)

10.30.2 Indemnity Escrow Agreement between Exhibit 10.40.2 to Registrant's
Registrant and Ponca/Universal Holdings, Form 8-K Report dated July 8,
Inc. dated as of July 8, 1992 1992
(File No. 0-14871)

10.30.3 Assignment by Registrant in favor of Exhibit 10.40.3 to Registrant's
Chemical Bank, in its capacity as agent Form 8-K Report dated July 8,
for itself and the other banks party to 1992
the credit agreement dated as of September (File No. 0-14871)
19, 1988, among Registrant, Universal,
certain subsidiaries of Universal, and
Manufacturers Hanover Trust Company, as
agent

10.30.4 Confirmation of final Universal agreements Exhibit 10.40.4 to Registrant's
between Registrant and Manufacturers Hanover Quarterly Report on Form 10-Q
Trust Company, dated April 3, 1992 for the quarter ended September 25, 1992
(File No. 0-14871)

10.30.5 Letter regarding discharge and release of Exhibit 10.40.5 to Registrant's
the Universal Companies and Registrant Quarterly Report on Form 10-Q
dated July 8, 1992 between Registrant and for the quarter ended
Chemical Bank (as successor, by merger, to September 25, 1992
Manufacturers Hanover Trust Company) (File No. 0-14871)

10.31.1 Asset Purchase Agreement dated May 25, Exhibit 10.1 to Registrant's
1995 with Quincy Newspapers, Inc. to sell Form 8-K dated
substantially all of the assets used in May 25, 1995
the operations of the Registrant's (File No. 0-14871)
television station WREX-TV, Rockford,
Illinois

10.31.3 Asset Purchase Agreement dated June 1, Exhibit 10.1 to Registrant's
1995 with KATC Communications, Inc., Form 8-K dated May 25, 1995
to sell substantially all of the assets used (File No. 0-14871)
in the operations of Registrant's television
station KATC-TV, Lafayette, Louisiana

10.32 Asset Purchase Agreement dated November Exhibit to Registrant's
28, 1994 with Century Communications Form 8-K Report dated
Corp., to sell substantially all of the November 28, 1994
assets used in Registrant's California (File No. 0-14871)
Cable Systems.

10.33 Letter Agreement dated May 31, 1996 Exhibit to Registrant's
between Registrant and Century Form 8-K Report dated
Communications Corp. May 31, 1996
(File No. 0-14871)

10.34 Asset Purchase Agreement dated October 9, Exhibit 10.34 to Registrant's
1997 with Madifide, Inc., to sell Annual Report on Form 10-K for
substantially all of the assets used in the fiscal year ended December
the operations of Registrant's C-ML Radio. 26, 1997 (File 0-14871)

10.35 Asset Purchase Agreement dated September Exhibit 1 to Registrant's Form
14, 1998, between Registrant and 8-K/A Report dated January 4,
Citicasters Co., to sell substantially all 1999 (File No. 0-14871)
of the assets used in the operations of
Registrant's Anaheim Stations

10.36 Stock Purchase Agreement dated August 11, Exhibit 1 to Registrant's Form
1998, between Registrant and Chancellor 8-K Report dated January 28, 1999
Media Corporation of Los Angeles, to sell (File No. 0-14871)
the stock of Wincom.

18.1 Letter from Deloitte, Haskins & Sells Exhibit 18.1 to Registrant's
regarding the change in accounting method, Annual Report on Form 10-K
dated March 30, 1989 for the fiscal year ended
December 30, 1988
(File No. 0-14871)

27.0 Financial Data Schedule to Form 10-K
Report for the fiscal year ended December 25, 1998

99 Pages 12 through 19 and 38 through 46 of Prospectus dated February 4,
Prospectus dated February 4, 1986, filed 1986, filed pursuant to Rule
pursuant to Rule 424(b) under the 424(b) under the Securities Act
Securities Act of 1933, as amended of 1933, as amended
(File No. 33-2290)

(b) Reports on Form 8-K.

During the period covered by this report, on November 25, 1998,
Registrant filed with the Securities and Exchange Commission (the
"SEC") a Current Report on Form 8-K/A dated August 11, 1998. This
Current Report contained details regarding the stock purchase
agreement entered into with Chancellor Media Corporation of Los
Angeles to sell the stock of Wincom.

In addition, on January 20, 1999, Registrant filed with the SEC a
Current Report on Form 8-K/A dated January 4, 1999. This Current
Report contained details regarding the consummation of the sale
of substantially all of the assets used in the operations of the
KEZY-FM and KORG-AM radio stations.

On January 29, 1999, Registrant filed with the SEC a Current
Report on Form 8-K dated January 28, 1999. This Current Report
contained details regarding the consummation of the sale of the
stock of Wincom.

On February 12, 1999, Registrant filed with the SEC a Current
Report on Form 8-K/A dated January 28, 1999. This Current Report
contains pro forma consolidated financial statements which give
effect to the sale of Wincom and the KEZY-FM and KORG-AM radio
stations.

(c) Exhibits.

See (a) (3) above.

(d) Financial Statement Schedules.

See (a) (2) above.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

ML MEDIA PARTNERS, L.P.
By: Media Management Partners
General Partner

By: ML Media Management Inc.

Dated: March 26, 1999 /s/ Kevin K. Albert
-------------------
Kevin K. Albert
Director and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant in the
capacities and on the dates indicated.

RP MEDIA MANAGEMENT

Signature Title Date
- ------------------------ --------------------------------- ----------------

/s/ I. Martin Pompadur President, Secretary and Director March 26, 1999
-----------------------
(I. Martin Pompadur) (principal executive officer of the
Registrant)

/s/Elizabeth McNey Yates Executive Vice President March 26, 1999
------------------------
(Elizabeth McNey Yates)

ML MEDIA MANAGEMENT INC.

Signature Title Date

/s/ Kevin K. Albert Director and President March 26, 1999
- ----------------------------------------------
(Kevin K. Albert)

/s/ James V. Caruso Director and Executive Vice President March 26, 1999
- ----------------------------------------------
(James V. Caruso)

/s/ David G. Cohen Director and Vice President March 26, 1999
- ----------------------------------------------
(David G. Cohen)

/s/ Kevin T. Seltzer Vice President and Treasurer March 26, 1999
- ---------------------------------------------- (principal financial officer and
(Kevin T. Seltzer) principal accounting officer of the
Registrant)