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PAXSON COMMUNICATIONS CORRESP LETTER

VIA FACSIMILE

August 2, 2005

Larry Spirgel, Assistant Director

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

              Re:

    Paxson Communications Corporation

Form 10-K/A for the fiscal year ended December 31, 2004

Filed on April 29, 2005

Form 10-Q for the fiscal quarter ended March 31, 2005

Filed on May 10, 2005

File No. 1-13452

Dear Mr. Spirgel:

     On behalf of Paxson Communications Corporation (the “Company”), I am writing in response to a
conference call with the Staff of the Division of Corporation Finance (the “Staff”) on July 28,
2005 in which the Staff requested additional information to supplement the response submitted by
the Company to the Staff on July 25, 2005 and on June 15, 2005 to the comments set forth in your
letter addressed to the Company dated June 2, 2005 (the “Comment Letter”), regarding the Company’s
Annual Report on Form 10-K/A for the fiscal year ended December 31, 2004 (the “Form 10-K”) and
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005 (the “Form 10-Q”). For
the convenience of the Staff, the additional information requested by the Staff is listed below in
italics, with the Company’s response set forth immediately following each comment.

    1.

    Please provide the Staff with the unrecorded adjustments and the correction of the
out-of-period items for the year ended December 31, 2004 and for each quarter in 2004.
Additionally, please revise the schedule of “Quantitative Analysis of Financial Statement Errors”
for the annual period from 1998 through 2004 and for each of the quarters in 2002, 2003 and 2004 to
include the percentage of the total financial statement errors to the loss before income taxes for
each period presented.

    As requested by the Staff, attached hereto is the Company’s revised schedule of the “Quantitative
Analysis of Financial Statement Errors” for each of the annual periods from 1998 through 2004 and
for each of the quarters in 2002, 2003 and 2004.

    2.

    Provide the Staff with the Company’s conclusion on all of the qualitative considerations
specifically described in Staff Accounting Bulletin Number 99 “Materiality” (“SAB 99”).

Date: August 2, 2005

Page: 2

    As requested by the Staff, the following are the Company’s conclusions on each of the individual
qualitative considerations specifically described in SAB 99. For the convenience of the Staff, the
qualitative considerations discussed in SAB 99 are listed below in italics, with the Company’s
conclusion set forth immediately following each qualitative consideration.

Whether the misstatement masks a change in earnings or other trends.

The Company has reported significant net losses attributable to common stockholders since
1998. As previously indicated to the Staff, the Company has incurred over $1.7 billion in
“net losses attributable to common stockholders” in the period from 1998 through 2003. In
2004, the Company incurred net losses attributable to common stockholders amounting to
$245.7 million. None of the financial statement errors identified in the attached schedule
would have, either individually or in the aggregate, resulted in the Company recording net
income attributable to common stockholders in any year. Additionally, because of the
significance of the incurred net losses attributable to common stockholders, the financial
statement errors would not have affected the Company’s “trend” of reporting net losses
attributable to common stockholders in any significant way nor would it have masked a
change in the Company’s financial results.

Whether the misstatement hides a failure to meet analysts’ consensus expectations for the
enterprise.

The Company’s stockholders and the holders of its debt and preferred equity securities have
historically focused on the value of the Company’s assets (principally its television
stations) rather than its results from operations. As a consequence, the Company does not
feel any extraordinary pressure from the public in meeting earnings estimates. In early
2005, the Company ceased providing earnings guidance. The majority of the analysts
covering the Company focus on the value of the Company’s assets and the Company’s ability
to generate cash flow from operations or the sale of its television stations. Virtually
all of the financial statement errors affecting results of operations did not affect the
Company’s reported cash flows from operations nor did they significantly affect the
Company’s asset values.

Whether the misstatement changes a loss into income or vice versa.

The Company has reported significant net losses attributable to common stockholders since
1998. The correction of the Company’s aggregate financial statement errors would not have
resulted in the Company reporting net income attributable to common stockholders in any
year.

Whether the misstatement concerns a segment or other portion of the registrant’s business
that has been identified as playing a significant role in the registrant’s operations or
profitability.

The Company operates its television network and television station assets as a single
consolidated distribution platform, does not engage in segment reporting and has not

Date: August 2, 2005

Page: 3

identified any specific portion of its business as playing a significant role in its
operations or profitability. The Company has reported significant net losses attributable
to common stockholders since 1998. None of the significant financial statement errors in
the attached schedule concerns a portion of the Company’s business that has been identified
as playing a significant role in the Company’s operations.

Whether the misstatement affects the registrant’s compliance with regulatory requirements.

None of the financial statement errors affect the Company’s compliance with any regulatory
requirements. The Company has discussed the larger financial statement errors in the notes
to its consolidated financial statements and in management’s discussion and analysis of
financial condition and results of operations.

Whether the misstatement affects the registrant’s compliance with loan covenants or other
contractual requirements.

None of the Company’s currently outstanding debt indentures or preferred stock certificates
of designation nor any other contractual arrangements require that the Company achieve a
specified amount of earnings or other financial metric, such as earnings before interest,
taxes, depreciation and amortization (“EBITDA”). The Company’s principal financial
covenants require that the Company maintain a specified ratio of “station value to senior
secured debt.” The balance of the covenants to which the Company is subject under these
instruments are negative covenants that restrict the Company’s ability to take certain
actions, such as the incurrence of additional debt and making certain types of payments.
The Company’s compliance with these covenants was not affected by the financial statement
errors identified in the attached schedule.

In January 2004, the Company refinanced its previously existing senior credit facility,
which required that the Company maintain a minimum amount of net revenues and EBITDA.
EBITDA, as defined in the related credit agreement, excluded, among other items,
depreciation and amortization and any other non-cash items. These exclusions would have
applied to the majority of the financial statement errors identified in the attached
schedule. After considering the financial statement errors that would have affected the
amount of net revenues and EBITDA achieved in the periods for which measurement was
required, the Company believes that it would have been in compliance with its then existing
credit agreement covenants. The Company therefore has concluded that none of the financial
statement errors would have affected its compliance with loan covenants or other
contractual requirements.

Whether the misstatement has the effect of increasing management’s compensation – for
example, by satisfying requirements for the award of bonuses or other forms of incentive
compensation.

Management of the Company has generally been compensated through base salary, awards
of stock options and/or restricted stock and annual performance bonuses. The

Date: August 2, 2005

Page: 4

vesting provisions of awards of stock options and/or restricted stock have been based upon
the passage of time and not the achievement of specific financial or other performance
goals.

The Board of Directors and its Compensation Committee have established annual executive
bonus programs under which payments have been based in whole or in part upon achievement by
the Company of specified performance goals. For each of the years since 1998 for which
performance-based bonuses were paid, the performance goals were established as specified
amounts of EBITDA and, in one year, a specified amount of net revenues. As EBITDA excludes
depreciation and amortization, the credit recorded in 2003 that resulted from the
over-amortization of cable and satellite distribution rights had no effect on the
measurement of performance bonuses for that year.

The annual performance goals were established based upon the Company’s annual budgeted
results, with eligible participants being entitled to receive increasing percentages of
their individual target bonus amounts as the Company’s financial performance met or
exceeded specified percentages of budgeted results (EBITDA and, in one year, net revenues).
The Company’s budgeted results in turn included specific assumptions as to accounting
matters. Errors, such as the additional lease expense for escalating lease payments, were
not considered in developing the base budget model just as they were not considered in the
determination of the actual results for the period.

Correction of the Company’s financial statement errors could reduce the Company’s
historical EBITDA in 2002 and 2001 to below the EBITDA targets established as bonus plan
performance goals. In these years, approximately $1.1 million and $0.1 million,
respectively, of performance bonuses based on EBITDA were paid to management. As
previously indicated to the Staff, none of the financial statement errors resulted from any
intentional acts or represent a defalcation or fraud. Had these errors not been made, the
Company’s budgeted results would have been different and the annual performance goals for
management bonuses would have been correspondingly different. Further, the Company notes
that in 2004, upon discovery of certain of the larger errors included in the attached
schedule, the Compensation Committee of the Board of Directors modified the 2004 bonus plan
EBITDA targets to exclude certain of the errors that resulted from the misapplication of
generally accepted accounting principles. As a result of the preceding, the Company has
concluded that the financial statement errors did not result in the Company increasing
management’s compensation in any period.

Whether the misstatement involves concealment of an unlawful transaction.

None of the financial statement errors involves the concealment of an unlawful
transaction. The Company has discussed the larger adjustments in the notes to its
consolidated financial statements and in management’s discussion and analysis of financial
condition and results of operations.

The majority of the larger financial statement errors detailed in the attached schedule
resulted from unintentional errors and/or omissions involving the misapplication of facts or
the

Date: August 2, 2005

Page: 5

    misapplication of generally accepted accounting principles. None of the financial statement
errors were a result of an attempt to “manage” earnings. As discussed above, the Company has
incurred significant net losses attributable to common stockholders since 1998 and its
investors have historically focused on the values of the Company’s assets rather than its
operating results. As a result, the Company did not expect the financial statement errors to
result in a significant positive or negative market reaction at the time they were discovered.

    Based upon the quantitative and qualitative factors discussed herein and in our response to the
Staff on July 25, 2005, the Company has concluded that its financial statements, as reported,
are fairly presented in accordance with generally accepted accounting principles in all
material respects.

    3.

    Provide the Staff with further detail regarding the Company’s cable and satellite
distribution agreements. Specifically, provide the breakdown between the distribution rights
and advertising components as well as the date in which the agreements were entered into.

    As requested by the Staff, attached is a schedule providing further detail regarding the
Company’s cable and satellite distribution agreements.

* * * * *

     The Company believes that the foregoing responds fully to the additional information requested
by the Staff on our conference call on July 28, 2005. I would appreciate if you would let me know
at your earliest convenience if you have questions about the Company’s response.

Respectfully submitted,

Richard Garcia

Senior Vice President and Chief Financial Officer

    cc:

    Bob Carroll, Staff Accountant

Steve Belous, Ernst & Young, LLP

David L. Perry, Jr., Holland & Knight LLP

Adam K. Weinstein, Senior Vice President, Secretary and Chief Legal Officer

Paxson Communications Corporation

Quantitative Analysis of Financial Statement Errors

For the annual periods from 1998 through 2004

(in thousands)

    2004

    2003

    2002

    2001

    2000

    1999

    1998

    NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS:

    As reported

    $
    (245,735
    )

    $
    (146,317
    )

    $
    (446,285
    )

    $
    (352,201
    )

    $
    (381,980
    )

    $
    (291,971
    )

    $
    (138,165
    )

    Adjustment

Number

    Financial Statement Errors:

    1

    Over (under) amortization of cable distribution rights

    (a)
    *

    -

    (4,048
    )

    7,421

    6,585

    1,125

    (7,757
    )

    (3,326
    )

    2

    Over (under) amortization of satellite distribution rights

    (a)
    *

    -

    (2,518
    )

    643

    643

    643

    589

    —

    3

    Impairment in connection with a purchase option on a television station

    (a)
    *

    -

    4,653

    (4,653
    )

    -

    -

    -

    —

    4

    Over (under) amortization of investment in broadcast properties

    (a)
    *

    -

    594

    5,118

    (1,428
    )

    (1,428
    )

    (1,428
    )

    (1,428
    )

    5

    Additional lease expense for escalating lease payments

    (a
    )

    3,086

    (1,003
    )

    (821
    )

    (486
    )

    (472
    )

    (188
    )

    (75
    )

    6

    Over (under) reserved for certain state taxes

    (a
    )

    -

    2,508

    (541
    )

    (541
    )

    (530
    )

    (461
    )

    (295
    )

    Interest on reserve for certain state taxes

    (b
    )

    -

    854

    (175
    )

    (175
    )

    (173
    )

    (157
    )

    (105
    )

    7

    Additional amortization expense for certain leasehold improvements

    (a
    )

    1,627

    (436
    )

    (459
    )

    (256
    )

    (251
    )

    (134
    )

    (55
    )

    8

    Unrecorded use taxes

    (a
    )

    943

    (305
    )

    (518
    )

    (120
    )

    -

    -

    —

    Interest expense related to unrecorded use taxes

    (b
    )

    176

    (88
    )

    (88
    )

    -

    -

    -

    —

    9

    Change in state income tax rate

    (c)
    *

    3,985

    (172
    )

    (3,813
    )

    -

    -

    -

    —

    Audit and other differences not included above impacting operating income (loss)

    (a
    )

    47