PEGASUS COMMUNICATIONS CORP
424B3, 1998-02-03
TELEVISION BROADCASTING STATIONS
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PROSPECTUS

                               [GRAPHIC OMITTED]


                       PEGASUS COMMUNICATIONS CORPORATION


                     336,464 Shares of Class A Common Stock


                                  -------------


         This Prospectus relates to 336,464 shares (the "Shares") of Class A
Common Stock, par value $.01 per share (the "Class A Common Stock") of Pegasus
Communications Corporation ("Pegasus," and together with its direct and indirect
subsidiaries, the "Company"), all of which may be sold by certain selling
stockholders (the "Selling Stockholders") or for the account of Selling
Stockholders by pledgees ("Pledgees") to whom Shares may be pledged by Selling
Stockholders to secure loans. The Company will not receive any of the proceeds
from the sale of the Shares.


         The distribution of the Shares covered by this Prospectus may be
effected from time to time in one or more transactions (which may involve block
transactions) in the Nasdaq National Market at prices prevailing at the time of
sale, in negotiated transactions or a combination of such methods of sale, at
fixed prices, at market prices prevailing at the time of the sale, at prices
related to the prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling Shares directly to
purchasers or to or through broker-dealers which may act as agents or
principals. Such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
and/or the purchaser of the Shares for whom such broker-dealers may act as agent
or to whom they may sell as principals or both (which compensation to a
particular broker-dealer may be more than or less than customary commissions).
Under certain circumstances, the Selling Stockholders and any broker-dealers
that act in connection with the sale of their Shares may be deemed to be
"Underwriters" within the meaning of Section 2(11) of the Securities Act of
1933, as amended (the "Securities Act") and any underwriting commissions
received by them and any profit on the resale of Shares as principal may be
deemed to be underwriting discounts and commissions under the Securities Act.

                                  -------------

         See "Risk Factors" beginning on page 4 for a discussion of certain
factors that should be considered by prospective purchasers of the Shares.

                                  -------------

  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
     AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
       THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
           COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
            PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
                              CRIMINAL OFFENSE.

                                  -------------


                 The date of this Prospectus is February 3, 1998


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                              AVAILABLE INFORMATION

      The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission" or "SEC"). Such reports,
proxy statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549-1004 and at the regional offices of the Commission
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials may also be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549-1004 at prescribed rates. The Commission maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, like the Company, that file
electronically with the Commission. The Company's Class A Common Stock is quoted
on the Nasdaq National Market, and reports and other information concerning the
Company may be inspected at the Nasdaq Stock Market at 1735 K Street, N.W.,
Washington, D.C. 20006-1500.

      This Prospectus constitutes a part of a Registration Statement on Form S-3
filed by the Company with the Commission under the Securities Act. This
Prospectus omits certain of the information contained in the Registration
Statement, and reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
securities offered hereby. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in such instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.

      The Company intends to furnish to its stockholders annual reports
containing audited financial information and furnish quarterly reports
containing condensed unaudited financial information for each of the first three
quarters of each fiscal year.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The Company incorporates by reference the following documents previously
filed with the Commission under the Exchange Act:

      (a)   Annual Report on Form 10-K for the fiscal year ended December 31,
            1996;

      (b)   Quarterly Reports on Form 10-Q for the quarterly periods ended March
            31, 1997, June 30, 1997 and September 30, 1997;

      (c)   Current Reports on Forms 8-K dated January 31, 1997, April 16, 1997,
            September 8, 1997 (as amended by a Form 8-K/A filed October 31,
            1997), November 5, 1997 and December 10, 1997; and

      (d)   Form 8-A dated September 18, 1996.

      Additionally, all documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the offering made
hereby shall be deemed to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing of such documents. Any statement or
information contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement or information contained herein modifies or replaces
such a statement or such information. Any such statement or information so
modified or replaced shall not be deemed, except as so modified or replaced, to
constitute a part of this Prospectus. Such incorporation by reference shall not
be deemed specifically to incorporate by reference the information referred to
in Item 402(a)(8) of Regulation S-K under the Securities Act.

                                       -2-


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      The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any and all of the information that has been incorporated by
reference in this Prospectus, other than exhibits to such information, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates. Requests should be submitted by telephone to
(610) 341-1801 or in writing to Pegasus Communications Corporation c/o Pegasus
Communications Management Company, Suite 454, 5 Radnor Corporate Center, 100
Matsonford Road, Radnor, Pennsylvania 19087, Attention: Chief Financial Officer.




                                       -3-


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                                  RISK FACTORS

      Prospective investors should consider carefully the following risk
factors, in addition to the other information contained in this Prospectus and
incorporated herein by reference concerning the Company and its business, before
purchasing the Shares offered hereby. See "Glossary of Defined Terms," which
begins on page G-1 of this Prospectus, for definitions of certain terms used in
this section and elsewhere in this Prospectus.

Risks Relating to Forward-Looking Statements

      Certain statements contained in this Prospectus and incorporated herein by
reference including, without limitation, statements containing the words
"anticipates," "believes," "intends," "estimates," "expects" and "projects" and
words of similar import constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions, both nationally, internationally and
in the regions in which the Company operates; demographic change; existing
government regulations and changes in, or the failure to comply with, government
regulations; competition; the loss of any significant numbers of subscribers or
viewers; changes in business strategy or development plans; technological
developments; the ability to attract and retain qualified personnel; the
significant indebtedness of the Company; the availability and terms of capital
to fund the expansion of the Company's business; and other factors referenced in
this Prospectus and in the documents incorporated herein by reference. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements. The Company disclaims any
obligations to update any such factors or publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.

Substantial Indebtedness and High Degree of Leverage

      The Company is highly leveraged. As of September 30, 1997, on a pro forma
basis after giving effect to the Transactions, other than the DTS Acquisition,
the Company would have had indebtedness of $218.6 million, total common
stockholders' equity of $63.0 million, Series A Preferred Stock of $108.7
million and, assuming certain conditions are met, $180.0 million available under
the New Credit Facility. For the year ended December 31, 1996 and the nine
months ended September 30, 1997, on a pro forma basis after giving effect to the
Transactions, other than the DTS Acquisition, the Company's earnings would have
been inadequate to cover its combined fixed charges and dividends on Series A
Preferred Stock by approximately $44.3 million and $32.4 million, respectively.
The Company is not required under the terms of the Series A Preferred Stock and
is restricted under the terms of the Senior Notes Indenture from paying its
dividends in cash prior to July 1, 2002. The ability of the Company to repay its
existing indebtedness will depend upon future operating performance, which is
subject to the success of the Company's business strategy, prevailing economic
conditions, regulatory matters, levels of interest rates and financial, business
and other factors, many of which are beyond the Company's control. There can be
no assurance that the Company's growth strategy will be successful in generating
the substantial increases in cash flow from operations that will be necessary
for the Company to meet its obligations on it existing indebtedness. The current
and future leverage of the Company could have important consequences, including
the following: (i) the ability of the Company to obtain additional financing for
future working capital needs or financing for possible future acquisitions or
other purposes may be limited, (ii) a substantial portion of the Company's cash
flow from operations will be dedicated to payment of the principal and interest
on its indebtedness, thereby reducing funds available for other purposes, and
(iii) the Company may be more vulnerable to adverse economic conditions than
some of its competitors and, thus, may be limited in its ability to withstand
competitive pressures. The agreements with respect to the Company's
indebtedness, including the Senior Notes Indenture, the PM&C Indenture, the
Certificate of Designation and the Exchange Note Indenture contain numerous
financial and operating covenants, including, among

                                       -4-


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others, restrictions on the ability of the Company to incur additional
indebtedness, to create liens or other encumbrances, to pay dividends and to
make certain other payments and investments, and to sell or otherwise dispose of
assets or merge or consolidate with another entity. A failure to comply with the
obligations contained in any agreement with respect to any indebtedness could
result in events of default which could permit acceleration of such indebtedness
and acceleration of indebtedness under the debt agreements that may contain
cross-acceleration or cross-default provisions.

Dividend Policy; Restrictions on Payment of Dividends

      Pegasus does not anticipate paying cash dividends in the foreseeable
future. The Certificate of Designation and the Senior Notes Indenture also
impose restrictions on Pegasus' obligations to pay dividends on its Common
Stock. Moreover, Pegasus is a holding company, and its ability to pay dividends
is dependent upon the receipt of dividends from its direct and indirect
subsidiaries. The New Credit Facility and the PM&C Indenture each impose
substantial restrictions on PM&C's ability to pay dividends to Pegasus.

Dependence on Network Affiliations

     Certain of the Company's TV stations are affiliated with the Fox network,
which provides the stations with up to 40 hours of programming time per week,
including 15 hours of prime time programming, in return for the broadcasting of
Fox-inserted commercials by the stations during such programming. The Company
programs, or intends to program, pursuant to local marketing agreements
("LMAs"), other TV stations as affiliates of United Paramount Network ("UPN") or
The WB Television Network ("WB"). As a result, the successful operation of the
Company's TV stations is highly dependent on the Company's relationship with its
broadcast networks and upon the success of such broadcast networks. All of the
Company's affiliation agreements with Fox expire on October 31, 1998 with the
exception of the affiliation agreement with respect to TV station WTLH, which
expires on December 31, 2000. Thereafter, the affiliation agreements may be
extended for additional two-year terms by Fox in its sole discretion. Fox has,
in the past, changed affiliates in certain markets where it acquired a
significant ownership position in a station in such market. In the event that
Fox, directly or indirectly, acquires any significant ownership and/or
controlling interest in any TV station licensed to any community within the
Company's TV markets, Fox has the right to terminate the affiliation agreement
of the Company's TV station serving that market. As a consequence, there is no
assurance that Fox could not enter into such an arrangement in one of the
Company's markets. Although the Company's affiliation agreement with UPN expires
on January 15, 2001, the affiliation agreement may be terminated earlier under
certain circumstances. The Company has entered into commitments to program TV
stations WOLF and WGFL as affiliates of WB and is currently in the process of
negotiating agreements with respect to these stations, although there can be no
assurance that a definitive affiliation agreement will result. There can also be
no assurance that Fox, UPN or WB programming will be successful or that such
networks will continue to provide programming to their respective affiliates on
the same basis as they currently do, all of which matters are beyond the
Company's control. The non-renewal or termination of the affiliation of one or
more of the Company's stations could have a material adverse effect on the
Company's operations.

Reliance on DBS Technology and DIRECTV

      The Company's direct broadcast satellite television ("DBS") business is a
new business with unproven potential. There are numerous risks associated with
DBS technology, in general, and DIRECTV(R) ("DIRECTV"), in particular. DBS
technology is highly complex and requires the manufacture and integration of
diverse and advanced components that may not function as expected. Although the
DIRECTV satellites are estimated to have orbital lives at least through the year
2007, there can be no assurance as to the longevity of the satellites or that
loss, damage or changes in the satellites as a result of acts of war,
anti-satellite devices, electrostatic storms or collisions with space debris
will not occur and have a material adverse effect on DIRECTV and the Company's
DBS business. Furthermore, the digital compression technology used by DBS
providers is not standardized and is undergoing rapid change. Since the Company
serves as an intermediary for DIRECTV, the Company would be adversely affected
by material adverse changes in DIRECTV's financial condition, programming,
technological capabilities or services,

                                       -5-

<PAGE>



and such effect could be material to the Company's prospects. There can also be
no assurance that there will be sufficient demand for DIRECTV services since
such demand depends upon consumer acceptance of DBS, the availability of
equipment and related components required to access DIRECTV services and the
competitive pricing of such equipment.

      The National Rural Telecommunications Cooperative (the "NRTC") is a
cooperative organization whose members and affiliate members are engaged in the
distribution of telecommunications and other services in predominantly rural
areas of the U.S. Pursuant to agreements between Hughes and the NRTC (the "NRTC
Agreement") and between the NRTC and participating NRTC members and affiliate
members (the "Member Agreement" and, together with the NRTC Agreement, the "DBS
Agreements"), participating NRTC members and affiliate members acquired the
exclusive right to provide DIRECTV programming services to residential and
commercial subscribers in certain service areas. The DBS Agreements authorize
the NRTC and participating NRTC members and affiliate members to provide all
commercial services offered by DIRECTV that are transmitted from the frequencies
that the Federal Communications Commission (the "FCC") has authorized for
DIRECTV's use at its present orbital location for a term running through the
life of the current satellites. The NRTC has advised the Company that the NRTC
Agreement also provides the NRTC a right of first refusal to acquire comparable
rights in the event that DIRECTV elects to launch successor satellites upon the
removal of the present satellites from active service. The financial terms of
any such purchase are likely to be the subject of negotiations. Any exercise of
such right is uncertain and will depend, in part, on DIRECTV's costs of
constructing, launching and placing in service such successor satellites. The
Company is, therefore, unable to predict whether substantial additional
expenditures by the NRTC and its members and affiliate members, including the
Company, will be required in connection with the exercise of such right of first
refusal.

Competition in the TV, DBS and Cable Businesses

      Each of the markets in which the Company operates is highly competitive.
Many of the Company's competitors have substantially greater resources than the
Company and may be able to compete more effectively than the Company in the
Company's markets. In addition, the markets in which the Company operates are in
a constant state of change due to technological, economic and regulatory
developments. The Company is unable to predict what forms of competition will
develop in the future, the extent of such competition or its possible effects on
the Company's businesses. The Company's TV stations compete for audience share,
programming and advertising revenue with other television stations in their
respective markets and with other direct to home ("DTH") providers including DBS
operators, cable operators and wireless-cable operators, and compete for
advertising revenue with other advertising media, such as newspapers, radio,
magazines, outdoor advertising, transit advertising, yellow page directories,
direct mail and local cable systems. The Company's DBS business faces
competition from other current or potential multichannel programming
distributors, including other DBS operators, other DTH providers, cable
operators, wireless cable operators and local exchange and long-distance
telephone companies, which may be able to offer more competitive packages or
pricing than the Company or DIRECTV. The Company's cable systems face
competition from TV stations SMATV systems, wireless cable systems, DTH and DBS
systems.

Risks Attendant to Acquisition Strategy

      The Company regularly considers the acquisition of media and
communications properties and, at any given time, is in various stages of
considering such opportunities. Since January 1, 1997, the Company has acquired
or entered into agreements or letters of intent to acquire a number of
properties, including the Pending DBS Acquisitions and the DTS Acquisition. Each
of the Pending DBS Acquisitions and the DTS Acquisition are subject to the
negotiation of a definitive agreement, if not already entered into, and, among
other conditions, the prior approval of Hughes Electronics Corporation or one of
its subsidiaries ("Hughes") and the NRTC. In addition to these conditions, each
of the Pending DBS Acquisitions and the DTS Acquisition are expected to be
subject to conditions typical in acquisitions of this nature, certain of which
conditions, like the Hughes and NRTC consents, may be beyond the Company's
control. There can be no assurance that definitive agreements will be entered
into

                                       -6-


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with respect to all of the Pending DBS Acquisitions or the DTS Acquisition, or,
if entered into, that all or any of the Pending DBS Acquisitions or the DTS
Acquisition will be completed. The Company sometimes structures its acquisitions
to qualify for tax-free treatment. There is no assurance that such treatment
will be respected by the Internal Revenue Service. There can also be no
assurance that the anticipated benefits of any of the acquisitions described
herein or future acquisitions will be realized. The process of integrating
acquired operations into the Company's operations may result in unforeseen
operating difficulties, could absorb significant management attention and may
require significant financial resources that would otherwise be available for
the ongoing development or expansion of the Company's existing operations. The
Company's acquisition strategy may be unsuccessful since the Company may be
unable to identify acquisitions in the future or, if identified, to arrive at
prices and terms comparable to past acquisitions, especially in light of the
competition the Company faces from other well-financed organizations. The
competition has resulted and is expected to further result in increased
acquisition prices for such acquisitions. The successful completion of an
acquisition may depend on consents from third parties, including federal, state
and local regulatory authorities or private parties such as Fox, UPN, WB, the
NRTC, DIRECTV and, in certain circumstances, lenders under the New Credit
Facility, all of whose consents are beyond the Company's control. Possible
future acquisitions by the Company could result in dilutive issuances of equity
securities, the incurrence of additional debt and contingent liabilities, and
additional amortization expenses related to goodwill and other intangible
assets, which could materially adversely affect the Company's financial
condition and operating results.

Offer to Purchase DTS Notes

      The DTS Acquisition will constitute a "Change of Control" of DTS within
the meaning of the indenture (the "DTS Indenture") governing DTS' Series A 12
1/2% Senior Subordinated Notes due 2007 (the "DTS Notes"). This will require DTS
to make an offer to the holders of the DTS Notes to purchase the DTS Notes (the
"Offer to Purchase") for 101% of their principal amount (approximately $155.0
million) plus accrued interest. Pegasus intends to arrange for a stand-by
commitment to purchase DTS Notes tendered in response to the Offer to Purchase,
or otherwise to arrange to finance the Offer to Purchase, but there is no
assurance this can be done on satisfactory economic terms, or at all. If DTS is
unable to purchase DTS Notes tendered in response to the Offer to Purchase,
substantially all of DTS' indebtedness will be in default.

Uncertainties Relating to Integration of Operations from the DTS Acquisition

      The anticipated benefits of the DTS Acquisition may not be achieved unless
the operations of DTS are combined successfully with those of the Company in a
coordinated, timely and efficient manner, and there can be no assurance that
this will occur. Even if the two companies' operations are integrated
successfully, there can be no assurance that the benefits anticipated by the DTS
Acquisition will be achieved. The transition to a combined company will require
substantial attention from management. The diversion of the attention of
management and any difficulties encountered in the transition process could have
an adverse impact on the revenues and operating results of the combined
companies. These difficulties will be increased by the fact that Pegasus and DTS
will have separate and independent sources of debt financing and will be subject
to separate financial covenants and operating restrictions, each of which will
require that transactions between Pegasus and DTS be carried out on an
arm's-length basis and with a greater degree of formality than is normally the
case for companies and their wholly-owned subsidiaries. These difficulties may
also be increased by the necessity of integrating personnel with disparate
business backgrounds and combining two different corporate cultures. In
addition, the process of combining the two organizations could cause the
interruption of, or a loss of momentum in, the activities of either or both of
the companies' businesses, which could have an adverse effect on their combined
operations. The uncertainties associated with such integration may result in the
loss of key management and other employees. Failure to achieve the anticipated
benefits of the DTS Acquisition or to integrate successfully the operations of
the companies could have a material adverse effect upon the business, operating
results and financial condition of the Company after the DTS Acquisition. Even
if the benefits of the DTS Acquisition are achieved and the two companies'
operations are integrated successfully, there can be no assurance that the
operating results and financial condition of the Company

                                       -7-


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after the DTS Acquisition will not be materially and adversely affected by any
number of economic, market or other factors that are not related to the DTS
Acquisition.

Consequences Under Debt Agreements and Preferred Stock Terms

      Pegasus intends to designate DTS and its subsidiaries as "Unrestricted
Subsidiaries" under the Senior Notes Indenture relating to the Senior Notes and
under the Certificate of Designation relating to its Series A Preferred Stock.
The consequences of this are, among other things, that DTS and its subsidiaries
will not be subject to compliance with many of the covenants and operating
restrictions imposed by the Senior Notes Indenture and the Certificate of
Designation; that neither their indebtedness nor the results of their operations
will enter into the determination of Pegasus' ability to incur indebtedness or
make dividends, investments and other restricted payments; that Pegasus and its
"Restricted Subsidiaries" may not make loans to or guarantee indebtedness of DTS
and its subsidiaries; that neither DTS nor any of its subsidiaries may make
loans to or guarantee indebtedness of Pegasus or any of its Restricted
Subsidiaries; and that all transactions between Pegasus and its Restricted
Subsidiaries, on the one hand, and DTS and its subsidiaries, on the other hand,
must be carried out on arm's-length terms and, in certain cases, must be
supported by a fairness opinion from an investment banking firm of national
standing.

      Pegasus' existing DBS business is conducted by Restricted Subsidiaries of
PM&C, a first-tier subsidiary of Pegasus. The PM&C Indenture requires that
transactions between PM&C and its subsidiaries, on the one hand, and affiliates
of PM&C, such as DTS will be after the closing of the DTS Acquisition, on the
other hand, must be carried out on arm's-length terms and, in certain cases,
must be supported by a fairness opinion from an investment banking firm of
national standing. The DTS Indenture contains similar provisions that will
affect transactions between DTS and PM&C's subsidiaries. The New Credit Facility
contains similar requirements regarding arm's- length treatment.

      Because of these provisions, dealings between DTS' DBS business and
Pegasus' other DBS businesses will need to be carried out with a greater degree
of formality than is normally the case among wholly-owned subsidiaries of a
common parent, and Pegasus will not have the same degree of flexibility to
finance DTS' continuing operations as a parent company not subject to these
provisions would have. This may adversely affect the ability of the Company to
fully integrate DTS' business with the Company's other DBS businesses and may
limit the advantages of the DTS Acquisition.

Inability to Manage Growth Effectively

      The Company has experienced a period of rapid growth primarily as a result
of its acquisition strategy. In order to achieve its business objectives, the
Company expects to continue to expand largely through acquisitions, which could
place a significant strain on its management, operating procedures, financial
resources, employees and other resources. The Company's ability to manage its
growth may require it to continue to improve its operational, financial and
management information systems, and to motivate and effectively manage its
employees. If the Company's management is unable to manage growth effectively,
the Company's results of operations could be materially adversely affected.

Dependence on Key Personnel

      The Company's future success may depend to a significant extent upon the
performance of a number of the Company's key personnel, including Marshall W.
Pagon, Pegasus' President and Chief Executive Officer. The loss of Mr. Pagon or
other key management personnel or the failure to recruit and retain personnel
could have a material adverse effect on the Company's business. The Company does
not maintain "key-man" insurance and has not entered into employment agreements
with respect to any such individuals.


                                       -8-


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Discretion of Management Concerning Funds

      A portion of the net proceeds of the Senior Notes Offering is anticipated
to be contributed to current or future subsidiaries of Pegasus or to be used to
fund acquisitions, such as the Pending DBS Acquisitions. It is anticipated that
pending such use, such proceeds will be invested in certain short-term
investments. Such funds, together with the Company's existing working capital
and funds available to the Company under the New Credit Facility, will represent
a significant amount of funds over which management will have substantial
discretion as to their application. There can be no assurance the Company will
deploy such funds in a manner that will enhance the financial condition of the
Company.

Government Legislation, Regulation, Licenses and Franchises

      The Company's businesses are subject to extensive and changing laws and
regulations, including those of the FCC and local regulatory bodies. Many of the
Company's operations are subject to licensing and franchising requirements of
federal, state and local law and are, therefore, subject to the risk that
material licenses and franchises will not be obtained or renewed in the future.
The U.S. Congress and the FCC have in the past, and may in the future, adopt new
laws, regulations and policies regarding a wide variety of matters, including
rulemakings arising as a result of the Telecommunications Act of 1996 (the "1996
Act"), that could, directly or indirectly, affect the operations of the
Company's businesses. The business prospects of the Company could be materially
adversely affected by the application of current FCC rules or policies in a
manner leading to the denial of pending applications by the Company, by the
adoption of new laws, policies and regulations, or changes in existing laws,
policies and regulations, including changes to their interpretations or
applications, that modify the present regulatory environment or by the failure
of certain rules or policies to change in the manner anticipated by the Company.

      To the extent that the Company expects to program stations through the use
of LMAs, there can be no assurance that the licensees of such stations will not
exercise rights to preempt the programming of the Company, in a fashion which
interferes with the Company's business objectives, or that the licensees of such
stations will continue to maintain the transmission facilities of the stations
in a manner sufficient to broadcast a high quality signal over the station. As
the licensees must also maintain all of the qualifications necessary to be a
licensee of the FCC, and as the principals of the licensees are not under the
control of the Company, there can be no assurance that these licenses will be
maintained by the entities which currently hold them. There can also be no
assurance that any LMAs entered into by the Company, whether or not in
conjunction with the sale of a TV station by the Company or the acquisition of
an LMA by the Company with an option to purchase the underlying station, will
not be questioned by the FCC as being attributable to the Company due to the
relationship between the Company and the holder or proposed holder of the
license. In such an instance, the FCC may force the Company to terminate the LMA
or other arrangements entered into in connection with the operation or
programming of such station.

      Pursuant to the 1996 Act, the continued performance of then existing LMAs
was generally grandfathered. The LMA for TV station WPME (the "Portland LMA")
was entered into prior to the adoption of the 1996 Act but the Company did not
begin programming the station until August 1997 upon completion of construction
of the station. The FCC suggested in a recent rulemaking proposal that LMAs
entered into after November 6, 1996 will not be grandfathered. The Company
cannot predict if the Portland LMA will be grandfathered. Currently, television
LMAs are not considered attributable interests under the FCC's multiple
ownership rules. However, the FCC is considering proposals which would make such
LMAs attributable, as they generally are in the radio broadcasting industry. If
the FCC were to adopt a rule that makes such interests attributable, without
modifying its current prohibitions against the ownership of more than one TV
station in a market, the Company could be prohibited from entering into such
arrangements with other stations in markets in which it owns TV stations and
could be required to modify any then existing LMAs. The LMAs entered into with
respect to TV stations WFXU and WOLF could also be barred by any new rule
adopted by the FCC which makes LMAs attributable without changing the multiple
ownership rules.


                                       -9-


<PAGE>



      Additionally, irrespective of the FCC rules, the Department of Justice and
the Federal Trade Commission (the "Antitrust Agencies") have the authority to
determine that a particular transaction presents antitrust concerns. The
Antitrust Agencies have recently increased their scrutiny of the television and
radio industry, and have indicated their intention to review matters related to
the concentration of ownership within markets (including through LMAs) even when
the ownership or LMA in question is permitted under the regulations of the FCC.
There can be no assurance that future policy and rulemaking activities of the
Antitrust Agencies will not affect the Company's operations (including existing
stations or markets) or expansion strategy.

      The FCC has recently adopted orders requiring that television stations
begin operating digital television stations on new channels by May 1, 2002, and
cease operating their current analog channels by 2006. The costs of this
conversion is currently unknown. As digital television allows a single station
to broadcast multiple channels of programming, the impact of this conversion on
audience share, advertising revenues, and program availability is unknown.

      Also, the FCC's orders allotted television stations which currently
operate on VHF channels substantially higher power levels for their digital
operations than were permitted for stations which currently operate on the UHF
band. As the Company's stations all operate on the UHF band, this power
disparity, if not reconsidered by the FCC, could have an adverse impact on the
competitive posture of the Company's TV stations after the digital conversion
takes place.

Concentration of Share Ownership and Voting Control By Marshall W. Pagon

      Pegasus' Common Stock is divided into two classes with different voting
rights. Holders of Class A Common Stock are entitled to one vote per share on
all matters submitted to a vote of stockholders generally and holders of Class B
Common Stock are entitled to ten votes per share. Both classes vote together as
a single class on all matters except in connection with certain amendments to
Pegasus' Amended and Restated Certificate of Incorporation, the authorization or
issuance of additional shares of Class B Common Stock, and except where class
voting is required under the Delaware General Corporation Law. As a result of
his beneficial ownership of all the outstanding voting stock of the sole general
partner of a limited partnership that indirectly controls Pegasus' parent and of
his control of the only other holder of Class B Common Stock, Marshall W. Pagon,
the President and Chief Executive Officer of Pegasus, beneficially owns all of
the Class B Common Stock of Pegasus. After giving effect to the greater voting
rights attached to the Class B Common Stock, Mr. Pagon will be able to
effectively vote 89.6% (80.3% after giving effect to the DTS Acquisition) of the
combined voting power of the outstanding Common Stock and will have sufficient
power (without the consent of the holders of the Class A Common Stock) to elect
the entire Board of Directors of Pegasus and, in general, to determine the
outcome of matters submitted to the stockholders for approval. Except as
required under the Delaware General Corporation Law and the Certificate of
Designation, holders of the Series A Preferred Stock will have no voting rights.

Volatility of Stock Price

      There may be significant volatility in the market price of the Class A
Common Stock due to factors that may or may not relate to the Company's
performance. The market price of the Class A Common Stock may be significantly
affected by various factors such as economic forecasts, financial market
conditions, acquisitions and quarterly variations in the Company's results of
operations.

Potential Anti-Takeover Provisions; Change of Control

      Pegasus' Amended and Restated Certificate of Incorporation contains, among
other things, provisions authorizing the issuance of "blank check" preferred
stock and two classes of Common Stock with different voting rights. In addition,
the Company is subject to the provisions of Section 203 of the Delaware General
Corporation Law. These provisions could delay, deter or prevent a merger,
consolidation, tender offer, or other business combination or change of control
involving the Company that some or a majority of the Company's stockholders

                                      -10-


<PAGE>



might consider to be in their best interests, including tender offers or
attempted takeovers that might otherwise result in such stockholders receiving a
premium over the market price for the Class A Common Stock.

      Upon a Change of Control (as defined in the Senior Notes Indenture, the
Certificate of Designation and, if the Exchange Notes are issued, the Exchange
Note Indenture, as applicable), Pegasus will be required to offer to purchase
all Senior Notes, shares of Series A Preferred Stock or Exchange Notes, as the
case may be, then outstanding at 101% of, in the case of Series A Preferred
Stock, the Liquidation Preference thereof plus, without duplication, accumulated
and unpaid dividends to the repurchase date or, in the case of each of the
Senior Notes and the Exchange Notes, the aggregate principal amount, plus
accrued and unpaid interest, if any. The repurchase price is payable in cash.
There can be no assurance that, were a Change of Control to occur, Pegasus would
have sufficient funds to pay the purchase price for the Senior Notes, the shares
of Series A Preferred Stock or Exchange Notes, as the case may be, which Pegasus
might be required to purchase. There can also be no assurance that the
subsidiaries of Pegasus would be permitted by the terms of their outstanding
indebtedness, including pursuant to the PM&C Indenture and the New Credit
Facility, to pay dividends to Pegasus to permit Pegasus to purchase the Senior
Notes, the shares of the Series A Preferred Stock or Exchange Notes, as
applicable. Any such dividends are currently prohibited. In addition, any such
Change of Control transaction may also be a change of control under the New
Credit Facility and the PM&C Indenture, which would require PM&C to prepay all
amounts owing under the New Credit Facility and to reduce the commitments
thereunder to zero and to offer to purchase all outstanding PM&C Notes at a
price of 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon to the date of purchase. In the event Pegasus does not have
sufficient funds to pay the purchase price of the Senior Notes, the Series A
Preferred Stock or the Exchange Notes, as the case may be, upon a Change of
Control, Pegasus could be required to seek third party financing to the extent
it did not have sufficient funds available to meet its purchase obligations, and
there can be no assurance that Pegasus would be able to obtain such financing on
favorable terms, if at all. In addition, any change of control would be subject
to the prior approval of the FCC.




                                      -11-


<PAGE>



                                   THE COMPANY

General

      Pegasus is a diversified company that operates in growing segments of the
media and communications industries. The Company owns and operates five TV
stations affiliated with the Fox Broadcasting Company ("Fox") and has or plans
to enter into local marketing agreements ("LMAs") to operate three television
stations, two of which are to be affiliated with The WB Television Network
("WB") and one affiliated with United Paramount Network ("UPN"). The Company is
the largest independent provider of DIRECTV(R) ("DIRECTV"). Giving effect to the
Pending DBS Acquisitions and the DTS Acquisition, the Company will have the
exclusive right to provide DIRECTV services to approximately 4.2 million U.S.
television households in rural areas of 33 states serving a subscriber base of
approximately 266,000 DBS customers, as of November 7, 1997. The Company also
provides cable service to approximately 27,600 subscribers in Puerto Rico and
approximately 15,200 subscribers in New England. The Company has entered into a
letter of intent to sell its New England cable operations (the "New England
Cable Sale").

      Pegasus was incorporated under the laws of the State of Delaware in May
1996. Management's principal executive offices are located at Suite 454, 5
Radnor Corporate Center, 100 Matsonford Road, Radnor, Pennsylvania 19087. Its
telephone number is (610) 341-1801.


                                 USE OF PROCEEDS

      The Company will not realize any of the proceeds of the Shares offered
hereby. Any such proceeds will be paid to the Selling Stockholders or Pledgees.



                              SELLING STOCKHOLDERS


      The following table sets forth as of January 31, 1998 certain information
relating to the beneficial ownership of the Class A Common Stock of the Selling
Stockholders.
<TABLE>
<CAPTION>

                                Pegasus Class A Common        Number of Shares           Pegasus Class A Common
                                  Stock Beneficially            to be Sold              Stock Beneficially Owned
                               Owned Prior to Offering          in Offering                  After Offering
                               -----------------------        ----------------          -------------------------
                                Shares        %                                             Shares          %
                                ------       ----                                           ------         ----

<S>                             <C>          <C>                <C>     <C>                  <C>          <C>   
Robert N. Verdecchio......      163,438(1)   2.8%               150,000 (2)(3)               13,438       (4)(3)

Guyon W. Turner..........       157,143      2.7%               157,143 (5)(3)               0            (4)(3)

Howard E. Verlin..........       47,001(1)   (4)                 29,321 (6)(3)               17,680       (4)(3)
</TABLE>

- ----------------------
(1) Includes 9,090 shares which are subject to options which will vest on
    March 21, 1998.
(2) 107,500 of these shares have vested as of the date of this Prospectus;
    42,500 shares will vest on December 31, 1998.
(3) Assuming each Selling Stockholder will sell all of his shares in the
    Offering.
(4) Represents less than 1% of the outstanding shares of Class A Common Stock.
(5) 117,858 of these shares have vested as of the date of this Prospectus;
    39,285 shares will vest on December 31, 1998. 
(6) 19,491 of these shares have vested as of the date of this Prospectus; 9,830 
    shares will vest on December 31, 1998.



                                      -12-


<PAGE>



      Robert N. Verdecchio has been a member of Pegasus' Board of Directors
since December 18, 1997. He has served as Pegasus' Senior Vice President, Chief
Financial Officer and Assistant Secretary since its inception, and has served as
Pegasus' Treasurer since June 1997. He has also served similar functions for
PM&C's affiliates and predecessors in interest since 1990.

      Guyon W. Turner served as Pegasus' Vice President of Broadcast Television
from 1994 through June 1997, when he left the Company.

      Howard E. Verlin is a Vice President and Assistant Secretary of Pegasus
(and was until 1997 its Secretary), positions he has held since 1994. Mr. Verlin
has served similar functions with respect to the Company's affiliates and
predecessors in interest since 1987.


                              PLAN OF DISTRIBUTION

      The Shares may be sold from time to time to purchasers directly by any of
the Selling Stockholders or by Pledgees, or, alternatively any of the Selling
Stockholders may from time to time offer the Shares through dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom they may act as agent. Any discounts, commissions or concessions
received by any such dealers or agents and any profits on the sale of Shares by
them may be deemed to be underwriting discounts and commissions under the
Securities Act.


      As of the date of this Prospectus, 244,849 Shares in the aggregate have
vested in the Selling Stockholders and will be available for immediate sale. The
remaining 91,615 Shares will not vest until December 31, 1998 and will become
available for sale at that time.


      The Shares may be sold from time to time in one or more transactions at a
fixed offering price, which may be changed, at varying prices determined at the
time of sale, or at negotiated prices. Such prices will be determined by the
Selling Stockholders or Pledgees or by agreement between the Selling
Stockholders or Pledgees and/or dealers. The Shares are listed on the Nasdaq
National Market and may also be sold in transactions on the Nasdaq National
Market.

      In connection with the offer and sale of the Shares, various state
securities laws and regulations require that any such offer and sale should be
made only through the use of a broker-dealer registered as such in any state
where a Selling Stockholder engages such broker-dealer and in any state where
such broker-dealer intends to offer and sell the Shares.

      Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not bid for or purchase the Shares
until after such person has completed his or her participation in such
distribution. In addition to and without limiting the foregoing, the Selling
Stockholders and any other person participating in such distribution will be
subject to other applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation Regulation M, which
provisions may affect the timing of purchases and sales of any of the Shares by
the Selling Stockholders and any such other person. All of the foregoing may
affect the marketability of the Shares and the ability of any person or entity
to engage in market making activities with respect to the Shares.

      The Selling Stockholders and any broker-dealers, agents, underwriters or
dealers that participate with the Selling Stockholders in the distribution of
the Shares may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, any commission received by them and any profit on
the resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.

                                      -13-

<PAGE>



                                  LEGAL MATTERS

      The validity of the Shares offered hereby has been passed upon by Drinker
Biddle & Reath LLP, counsel for the Company. Michael B. Jordan, a partner of
Drinker Biddle & Reath LLP, is an Assistant Secretary of the Company.


                                     EXPERTS

      The Company's consolidated balance sheets as of December 31, 1995 and 1996
and the related consolidated statements of operations, statements of changes in
total equity and statements of cash flows for each of the three years in the
period ended December 31, 1996 incorporated by reference in this Prospectus,
have been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.

      The balance sheet of Clearvision, Inc. as of January 16, 1997, and the
related statement of operations, statement of stockholders' equity and statement
of cash flows for the fiscal year ended January 16, 1997, incorporated by
reference in this Prospectus, have been included herein in reliance on the
report of Poole Cunningham & Reitano, P.A., independent accountants.

      The statement of net assets to be sold of Southeastern Communication
Systems, Inc. as of December 31, 1996, and the related statement of operations
of assets to be sold and the statement of cash flows for the year ended December
31, 1996, incorporated by reference in this Prospectus, have been included
herein in reliance on the report of Greenway, Smith & Haisten, P.C., independent
accountants.

      The balance sheet of Northern Electric Service Corporation as of December
31, 1996, and the related statement of operations and accumulated deficit and
statement of cash flows for the year ended December 31, 1996, incorporated by
reference in this Prospectus, have been included herein in reliance on the
report of Larson, Allen, Weishair & Co., LLP, independent accountants.

      The financial statements of Direct Broadcast Satellites for the year ended
December 31, 1996, have been audited by Ernst & Young, LLP, independent
auditors, as set forth in their report and incorporated herein by reference.
Such financial statements have been incorporated herein by reference and
included herein, in reliance on such reports given upon the authority of such
firm as experts in accounting and auditing.

      The balance sheet of Suwannee Valley Satellite, Inc. as of December 31,
1996, and the related statement of income and retained earnings and statement of
cash flows for the year ended December 31, 1996, incorporated by reference in
this Prospectus, have been included herein in reliance on the report of
Bolinger, Segars, Gilbert & Moss, L.L.P., independent accountants.

      The balance sheet of View Star Entertainment Services, Inc. as of December
31, 1996, and the related statement of operations, statement of stockholders'
equity and statement of cash flows for the year ended December 31, 1996,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent accountants, and are included herein in reliance upon
the authority of said firm as experts in giving said reports.

      The statement of net assets to be sold of Midwest Minnesota DBS, LLC as of
December 31, 1996, and the related statement of operations of assets to be sold
and statement of cash flows for the year ended December 31, 1996, incorporated
by reference in this Prospectus, have been included herein in reliance on the
report of Bradley R. Helmeke, Ltd., independent accountants.


                                      -14-


<PAGE>



      The statement of net assets to be sold of the DBS Operations of
Turner-Vision, Inc. as of December 31, 1996, and the related statement of
operations and statement of cash flows for the year ended December 31, 1996,
incorporated by reference in this Prospectus, have been included herein in
reliance on the report of Grigoraci, Trainer, Wright & Paterno, independent
accountants.

      The balance sheet of the DBS Operations of Pioneer Services Corporation as
of September 30, 1997, and the related statement of operations and division
deficiency and statement of cash flows for the fiscal year ended September 30,
1997, incorporated by reference in this Prospectus, have been included herein in
reliance on the report of Jackson, Thornton & Co., P.C., independent
accountants.

      The (i) consolidated financial statements of Digital Television Services,
LLC and its subsidiaries for the period from inception (January 30, 1996)
through December 31, 1996, (ii) financial statements of WEP Intermediate Corp.
for the period from inception (January 28, 1997) through September 30, 1997,
(iii) financial statements of Direct Programming Services Limited Partnership
for the years ended December 31, 1994, December 31, 1995 and December 31, 1996,
(iv) financial statements of Kansas DBS, L.L.C. for the years ended December 31,
1995 and December 31, 1996, (v) financial statements of the DBS Operations of
NRTC System No. 0422 for the years ended December 31, 1995 and December 31,
1996, (vi) financial statements of the DBS Operations of NRTC System No. 0073
for the year ended December 31, 1996, (vii) financial statements of Northeast
DBS Enterprises, L.P. for the year ended December 31, 1996, (viii) financial
statements of the DBS Operations of NRTC System No. 0001 for the year ended
December 31, 1995 and for the period from January 1, 1996 through November 26,
1996, (ix) financial statements of the DBS Operations of NRTC System No. 1025
for the period from March 10, 1995 (inception) through December 31, 1995 and the
period from January 1, 1996 through August 28, 1996 and (x) financial statements
of Ocmulgee Communications, Inc. for the year ended December 31, 1996,
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent accountants and are included herein in reliance upon
the authority of said firm as experts in giving said reports.

      The financial statements of Northeast DBS Enterprises, L.P. for the years
ended December 31, 1994 and December 31, 1995 incorporated by reference in this
Prospectus have been audited by Fishbein & Company, P.C., independent auditors
and are included herein in reliance upon the authority of said firm as experts
in giving said reports.

      The financial statements of Satellite Television Services, Inc.
incorporated in this Prospectus by reference from Pegasus Communications
Corporation's Current Report on Form 8-K dated December 10, 1997 (and filed
January 12, 1998) have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

                                      -15-


<PAGE>

<TABLE>
<CAPTION>
                            GLOSSARY OF DEFINED TERMS


<S>                                          <C>    
Certificate of Designation                     The Certificate of Designation, Preferences and Relative, 
                                               Participating, Optional and Other Special Rights of Preferred
                                               Stock and Qualifications, Limitations and Restrictions Thereof,
                                               which sets forth the terms of the Series A Preferred Stock.

Class A Common Stock                           Pegasus' Class A Common Stock, par value $.01 per share.

Class B Common Stock                           Pegasus' Class B Common Stock, par value $.01 per share.

Common Stock                                   The Class A Common Stock and the Class B Common Stock.

Company                                        Pegasus and its direct and indirect subsidiaries.

Completed DBS Acquisitions                     The acquisition of DBS territories and related assets from
                                               25 independent providers of DIRECTV services, which were all
                                               acquired from January 1, 1997 to an effective date as of 
                                               November 7, 1997.

Completed Transactions                         The Completed DBS Acquisitions, the New Hampshire
                                               Cable Sale and the Unit Offering and the Senior Notes Offering.

DBS                                            Direct broadcast satellite television.

DBS Acquisitions                               The Completed DBS Acquisitions and the Pending DBS Acquisitions.

DIRECTV                                        The video, audio and data services provided via satellite by DIRECTV
                                               Enterprises, Inc., or the entity, as applicable.

DTS Acquisition                                The acquisition of the stock of Digital Television Services, Inc., the
                                               second largest independent provider of DIRECTV services, for
                                               approximately 5.5 million shares of Pegasus' Class A Common
                                               Stock.

Exchange Note Indenture                        The indenture between Pegasus and First Union National Bank, as trustee,
                                               governing the Exchange Notes.

Exchange Notes                                 Pegasus' 12 3/4% Senior Subordinated Exchange Notes due
                                               2007, which are issuable at Pegasus' option upon exchange of the
                                               Series A Preferred Stock.

FCC                                            Federal Communications Commission.

Fox                                            Fox Broadcasting Company.

Hughes                                         Hughes Electronics Corporation or one of its subsidiaries, including
                                               DIRECTV Enterprises, Inc., as applicable.

LMAs                                           Local marketing agreements, program service agreements or time
                                               brokerage agreements between broadcasters and television station
                                               licensees pursuant to which broadcasters provide programming to
                                               and retain the advertising
</TABLE>


                                       G-1

<PAGE>


<TABLE>
<CAPTION> 
<S>                                             <C>    
                                               revenues of such stations in exchange for fees paid to television station
                                               licensees.

New Credit Facility                            PM&C's $180.0 million credit facility, which was entered into as of
                                               December 10, 1997.

New England Cable Sale                         The proposed sale of the Company's New England cable systems.

New  Hampshire Cable Sale                      The sale of the Company's New Hampshire cable system which took place effective
                                               January 31, 1997.

NRTC                                           The National Rural Telecommunications Cooperative, the only entity
                                               authorized to provide DIRECTV services that is independent of DIRECTV
                                               Enterprises, Inc. Approximately 200 NRTC members and affiliate members
                                               are authorized to provide DIRECTV services in exclusive territories
                                               granted to the NRTC by DIRECTV Enterprises, Inc.

Pegasus                                        Pegasus Communications Corporation, the original issuer of the Shares
                                               offered hereby.

Pending DBS Acquisitions                       The acquisition of DBS territories and related assets from seven 
                                               independent providers of DIRECTV services, without giving effect
                                               to any letters of intent entered into after November 24, 1997.

Pledgees                                       The pledgees to whom Shares may be pledged by Selling
                                               Stockholders to secure loans.

PM&C                                           Pegasus Media & Communications, Inc., a wholly-owned subsidiary of
                                               Pegasus.

PM&C Indenture                                 The indenture dated July 7, 1995 by and among PM&C,
                                               certain of its subsidiaries and First Union National Bank, as
                                               trustee, relating to the PM&C Notes.

PM&C Notes                                     PM&C's 12 1/2% Series B Senior Subordinated Notes due 2005 issued in an
                                               aggregate principal amount of $85.0 million.

PSH                                            Pegasus Satellite Holdings, Inc., a wholly-owned subsidiary of Pegasus,
                                               which concurrently with the consummation of the Senior Notes Offering
                                               sold its assets to PM&C in connection with the Subsidiaries
                                               Combination.

PSH Credit Facility                            PSH's $130.0 million credit facility, which was terminated upon the
                                               consummation of the Senior Notes Offering.

Selling Stockholders                           The stockholders of Pegasus who beneficially own the Shares
                                               offered hereby.

Senior Notes                                   Pegasus' 9 5/8% Series A Senior Notes due 2005 issued in
                                               an aggregate principal amount of $115.0 million or Pegasus'
                                               9 5/8% Series B Senior Notes due 2005, which will be issued upon
                                               exchange of the Series A Senior Notes
</TABLE>


                                       G-2


<PAGE>

<TABLE>
<CAPTION>


<S>                                           <C>    
                                               and which will have terms substantially similar to the Series A
                                               Senior Notes, as applicable.

Senior Notes Indenture                         The indenture between Pegasus and First Union National Bank, as trustee,
                                               governing the Senior Notes.

Senior Notes Offering                          Pegasus' offering of its 9 5/8% Series A Senior Notes due 2005, which was
                                               completed on October 21, 1997.

Series A Preferred Stock                       The 12 3/4% Series A Cumulative Exchangeable Preferred Stock, which was
                                               offered in connection with the Unit Offering.

Shares                                         Pegasus' Class A Common Stock registered hereby.

Subsidiaries Combination                       The acquisitions of the assets of PSH by PM&C, which took place 
                                               concurrently with the consummation of the Senior Notes Offering.

Transactions                                   The Completed Transactions, the DBS Acquisitions, the Senior
                                               Notes Offering, the New Credit Facility, the Subsidiaries
                                               Combination, the DTS Acquisition and the New England Cable Sale.

Unit                                           Offering Pegasus' public offering of 100,000 Units consisting of
                                               100,000 shares of Series A Preferred Stock and 100,000 Warrants,
                                               which was completed on January 27, 1997.

Units                                          The units consisting of Series A Preferred Stock and Warrants offered
                                               in the Unit Offering.

UPN                                            United Paramount Network.

WB                                             The WB Television Network.

</TABLE>

                                       G-3


<PAGE>

================================================================================

No dealer, salesperson or other person has been authorized to give any
information or to make any representation other than those contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy the Warrant
Shares by anyone in any jurisdiction in which the person making the offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall create any implication that there has been no
change in the affairs of the Company since the date hereof or that information
contained herein is correct as of any time subsequent to the date hereof.

                              --------------------

                                TABLE OF CONTENTS
                              --------------------
                                                               Page
                                                               ----

Available Information...........................................2

Incorporation of Certain
  Documents by Reference........................................2

Risk Factors....................................................4

The Company....................................................12

Use of Proceeds................................................12

Selling Stockholders...........................................12

Plan of Distribution...........................................13

Legal Matters..................................................14

Experts........................................................14

Glossary of Defined Terms.....................................G-1

================================================================================


================================================================================



                               [GRAPHIC OMITTED]




                             PEGASUS COMMUNICATIONS
                                   CORPORATION





                     336,464 Shares of Class A Common Stock





                                 --------------

                                   PROSPECTUS

                                 --------------






                                 February 3, 1998

================================================================================






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