TICKETMASTER GROUP INC, S-1, 1996-12-11

TICKETMASTER GROUP INC
S-1, 1996-12-11
MISCELLANEOUS AMUSEMENT & RECREATION

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

TICKETMASTER GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
ILLINOIS 7999 36-3597489
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

3701 WILSHIRE BOULEVARD, 7TH FLOOR
LOS ANGELES, CALIFORNIA 90010
(213) 381-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

NED S. GOLDSTEIN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
TICKETMASTER GROUP, INC.
3701 WILSHIRE BOULEVARD, 7TH FLOOR
LOS ANGELES, CALIFORNIA 90010
(213) 381-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------

COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS
SENT TO AGENT FOR SERVICE, SHOULD BE SENT TO:

<TABLE>
<S> <C>
CHARLES EVANS GERBER, ESQ. TIMOTHY E. PETERSON, ESQ.
NORMAN J. GANTZ, ESQ. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
NEAL, GERBER & EISENBERG ONE NEW YORK PLAZA
TWO NORTH LASALLE STREET NEW YORK, NY 10004
CHICAGO, ILLINOIS 60602 (212) 859-8000
(312) 269-8000
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE REGISTRATION FEE(1)
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<S> <C> <C>
Common Stock, no par value..................... $125,062,500 $42,704.41
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</TABLE>

(1) The registration fee is the sum of (i) $39,655.17, which amount was paid by
the Registrant in connection with Registration Statement No. 333-12413 with
an aggregate offering price of $115,000,000 and (ii) $3,049.24, which amount
is computed pursuant to Rule 457 under the Securities Act and relates to the
additional $10,062,500 of aggregate offering price covered by this
Registration Statement.

Pursuant to Rule 429 under the Securities Act, the prospectus which forms a
part hereof includes an aggregate offering price of $115,000,000 previously
registered on Registration Statement No. 333-12413.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 11, 1996

PROSPECTUS
7,250,000 SHARES

[TICKETMASTER LOGO]
TICKETMASTER GROUP, INC.

COMMON STOCK

All of the shares of common stock, no par value (the "Common Stock"),
offered hereby (the "Offering") are being sold by Ticketmaster Group, Inc.
("Ticketmaster" or the "Company"). Following the Offering, the Company's
directors, principal shareholders and certain of their affiliates will own
beneficially approximately 68.4% of the outstanding shares of Common Stock. See
"Principal Shareholders." Prior to the Offering, there has been no public market
for the Common Stock.

The Company's Common Stock has been approved for quotation on the National
Market System of the NASD under the symbol "TKTM", subject to official notice of
issuance.
------------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 10 HEREOF.
------------------------
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 OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
======================================================================================================
UNDERWRITING DISCOUNT PROCEEDS TO
PRICE TO PUBLIC AND COMMISSION(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share.............................. $14.50 $1.015 $13.485
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Total(3)............................... $105,125,000 $7,358,750 $97,766,250
======================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $1,695,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
1,087,500 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. See
"Underwriting." If all such shares are purchased, the total Price to Public,
Underwriting Discount and Commission, and Proceeds to Company will be
$120,893,750, $8,462,563 and $112,431,188, respectively.

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

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the certificates for the Common Stock will be made at
the offices of Allen & Company Incorporated, 711 Fifth Avenue, New York, New
York 10022, on or about November 22, 1996.
------------------------

ALLEN & COMPANY
INCORPORATED
LAZARD FRERES & CO. LLC
SMITH BARNEY INC.

The date of this Prospectus is December , 1996.
<PAGE> 3

The inside front cover is a gatefold which contains a multicolor graphic
layout containing, centered at the top of the layout, the Ticketmaster logo
beneath which is written the words "Great Performances Start Here." In clockwise
fashion from this point are four photographers depicting the following images:
(i) a page from Ticketmaster Online, the Company's site on the World Wide Web,
(ii) a view of Big Ben in London, England, upon which is superimposed the logo
"Ticketmaster Travel," the Company's travel agency, (iii) two tickets imprinted
generally with the Company's logo and the words "Your Ticket to the Best Seat in
Town" and (iv) an upcoming cover of Live! magazine with a photograph of Barbra
Streisand. In the center of the layout is a photograph of one of the Company's
call centers.

The gatefold opens to a multicolor graphic layout, in the center of which
is the Ticketmaster logo. In clockwise fashion from this point are fourteen
photographs depicting the following images: (i) the Rockettes on-stage at Radio
City Music Hall, (ii) a cover of Live! magazine with a photograph of Bruce
Springsteen, (iii) Julie Andrews on-stage in the Broadway musical
"Victor/Victoria", (iv) the Red Rock Amphitheatre outside of Denver, Colorado,
(v) the musical artists The Eagles, (vi) the cast of Sesame Street Live, (vii)
the interior of the Fox Theater in Detroit, Michigan, (viii) a cast of a
Christmas production, (ix) a basketball game, (x) a football game, (xi) a cover
of Live! magazine with a photograph of Smashing Pumpkins, alternative musical
artists, (xii) a classical violinist, (xiii) the Broadway musical "The King and
I" and (xiv) a ballerina.
<PAGE> 4

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Company intends to furnish its shareholders with annual reports
containing financial statements audited by an independent certified public
accounting firm and quarterly reports for the first three quarters of each
fiscal year containing unaudited interim financial information.

2
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and consolidated financial
statements (the "Consolidated Financial Statements") included elsewhere in this
Prospectus. As used in this Prospectus, references to a "fiscal" year refer to
the 12-month period ending on January 31 of each year (e.g., "fiscal 1996" shall
mean the Company's fiscal year ended January 31, 1996). Unless otherwise
indicated, all information contained in this Prospectus assumes that (i) the
Underwriters' over-allotment option has not been exercised, (ii) any outstanding
options to purchase shares of Common Stock have not been exercised, (iii) any
outstanding shares of Preferred Stock convertible into shares of Common Stock
have not been converted and (iv) any outstanding notes exchangeable for shares
of Common Stock have not been exchanged. In addition, all share amounts and per
share data in this Prospectus reflect a recently effected 1-for-3 reverse stock
split. Unless the context otherwise requires, references to "Ticketmaster" or
the "Company" include Ticketmaster Group, Inc., its predecessors and its
subsidiaries. References to the "Managed Businesses" include the Company's
wholly and majority owned subsidiaries (the "Consolidated Businesses") together
with the Company's interest in those unconsolidated joint ventures in which it
acts as managing partner (the "Unconsolidated Joint Ventures").

THE COMPANY

Ticketmaster, through the Managed Businesses (the Consolidated Businesses
together with the Unconsolidated Joint Ventures), is the leading provider of
automated ticketing services in the U.S. with over 3,500 clients, including many
of the country's foremost entertainment facilities and promoters and 73
professional sports franchises. The Company has established its market position
by providing these clients with comprehensive ticket inventory control and
management, a broad distribution network and dedicated marketing and support
services. Ticket orders are received and fulfilled through operator-staffed call
centers and independent sales outlets remote to the facility box office. Revenue
is generated principally from convenience charges received by the Company for
tickets sold on its clients' behalf. The Company generally serves as an
exclusive agent for its clients and typically has no financial risk for unsold
tickets. The Company, through the Managed Businesses, sold 53.1 million tickets
in fiscal 1996 and 30.4 million tickets during the first six months of fiscal
1997, while generating revenues of $241.3 million and $146.2 million,
respectively, for those periods.

Based upon recent trends in the entertainment, sporting and leisure
industries, the Company believes that its principal business, live entertainment
ticketing, will experience increased revenues under existing venue contracts.
The Company believes that significant opportunities exist through continued
penetration of this principal market. Additionally, the Company believes that
further ticketing opportunities will arise from the construction of new and
larger facilities, the increase in the number of professional sports teams and
the development of new sports leagues. Furthermore, the Company plans to
continue to broaden its client base to include such venues as museums, zoos,
amusement parks, state and county fairs and other locations such as golf
courses, ski resorts and trade shows.

The Company also believes that significant opportunities exist
internationally to attract additional venues in a historically under-penetrated
market for ticketing services. In addition, the continued enthusiasm for soccer
and growing popularity of major American sports such as football, baseball and
basketball should lead to increased utilization of these international venues
and provide additional revenue opportunities. In order to be in a position to
capitalize on these trends, the Company expects to expand its existing
operations in the U.K., Australia and, through a new joint venture, in Mexico,
and is exploring further opportunities in Europe, the Pacific Rim and Central
and South America.

3
<PAGE> 6

material and in additional media outlets which the Company is developing. In
addition, in February 1996, the Company launched Live!, a monthly entertainment
magazine and event guide which the Company believes is a natural extension of
its existing distribution channels. The Company has also recently launched
Ticketmaster Online (http://www.ticketmaster.com), its site on the World Wide
Web, designed to promote ticket sales for live events, disseminate event
information and offer transactional and merchandising services. These efforts to
create new promotional, marketing and distribution opportunities by utilizing
and integrating the Company's traditional principal ticketing services and brand
name have formed the basis for new growth opportunities in the future.

The Company believes that its proprietary inventory control management and
ticketing system (the "Ticketmaster System") and its extensive distribution
capabilities provide a competitive advantage that enhances the Company's ability
to attract new clients and maintain its existing client base. The Ticketmaster
System, which includes both hardware and software, is typically installed in a
client's facility box office and provides a single centralized inventory control
management system capable of tracking total ticket inventory for all events,
whether sales are made on a season, subscription, group or individual ticket
basis. The Ticketmaster System is capable of processing over 100,000 tickets per
hour in certain markets.

Through its Managed Businesses, Ticketmaster has a comprehensive domestic
distribution system that includes approximately 2,800 remote sales outlets in 44
states covering many of the major metropolitan areas in the U.S. and 17 call
centers with approximately 1,750 operator positions. The Company provides the
public with convenient access to tickets and information regarding entertainment
events. Ticket purchasers are assessed a convenience charge for each ticket sold
by the Company on behalf of its clients. These charges are negotiated and
included in the Company's contracts with its clients. The versatility of the
Ticketmaster System allows it to be customized to satisfy a full range of client
requirements.

From fiscal 1991 through fiscal 1996, the number of tickets sold and
revenues for the Managed Businesses have grown from 29.1 million tickets and
$96.1 million of revenues to 53.1 million tickets and $241.3 million of
revenues, a compounded annual growth rate of 13% and 20%, respectively.

BUSINESS STRATEGY

Ticketmaster believes that future growth will be derived principally from
the following:

- Continued penetration of its principal ticketing market in the U.S. and
expansion of both its live entertainment ticketing services and sales of
its automated general admission ticketing and concession sales/control
systems by broadening its client base to include such venues as museums,
zoos, amusement parks, state and county fairs, golf courses, ski resorts
and trade shows.

- International expansion of its live entertainment ticketing services and
sales of its automated general admission ticketing and concession
sales/control systems in Europe (including the U.K.), Australia, Canada,
Mexico, Central America and South America.

- Leveraging of its existing assets, including its brand name, fulfillment
capabilities, distribution network and user base, by offering integrated
brand management and expanded marketing services through both traditional
and new media for the benefit of its strategic partners and clients by:

- actively pursuing marketing and joint promotion agreements with third
parties, similar to its recent agreements with MasterCard International
and Sprint Communications;

- expanding the offerings on the Company's Web site, Ticketmaster Online,
and continuing to explore opportunities on the Internet;

- increasing subscription levels, advertising pages and related revenues
of Live! magazine;

- creating promotional and merchandising business opportunities through
membership programs, including the development of a co-branded
Ticketmaster credit card; and

- accessing its customer database to create direct marketing programs.

4
<PAGE> 7

RECENT TRANSACTIONS

In furtherance of its growth strategy, the Company has recently begun to
acquire, by purchase, redemption or otherwise, certain of the rights to use the
Company's name and the Ticketmaster System that had been previously granted to
licensees and the remaining interests in certain joint ventures.

Completed Transactions. Acquisitions completed by the Company since
January 31, 1996, in furtherance of its growth strategy (all of such completed
acquisitions being collectively referred to herein as the "Completed
Transactions") include the following: (i) on June 7, 1996, the Company acquired
the 50% equity interest of its joint venture partner in the European Joint
Venture (as defined herein) for $6.0 million in cash and an Exchangeable
Promissory Note in the principal amount of $5.0 million; (ii) on October 3,
1996, the Company acquired the license rights and related assets of its Delaware
Valley (Philadelphia) licensee for $19.0 million in cash; (iii) on February 12,
1996 and August 31, 1996, respectively, the Company acquired the license rights
and related assets of its Nashville, Tennessee and Albuquerque, New Mexico
licensees for an aggregate of $1.8 million in cash; (iv) on October 10, 1996,
the Company acquired a 27% equity interest in the Company's Mexico licensee for
$1.8 million in cash and 5% of net distributions received with respect to such
equity interest by the Company through December 31, 1998; (v) as of November 15,
1996, the Company acquired its joint venture partner's 50% equity interest in
Ticketmaster-Indiana for Preferred Stock automatically convertible into shares
of Common Stock having a value of $27.0 million based on the initial public
offering price of the Common Stock in the Offering; and (vi) on July 29, 1996,
the Company acquired the remaining 50% equity interest not already owned of its
Pacer/CATS/CCS operations; together with its initial 50% interest, aggregate
consideration paid by the Company for the Pacer/CATS/CCS operations totaled
$16.0 million in cash and the assumption of $7.5 million in debt.

Pending Transactions. Acquisitions in furtherance of the Company's growth
strategy that are pending but not yet completed (all of such proposed
acquisitions being subject to signed letters of intent or definitive agreements
and collectively referred to herein as the "Pending Transactions") include the
following: (i) on October 16, 1996, the Company entered into an agreement to
acquire the 20% equity interest of its partner in the Company's operating
subsidiary in Texas for $6.0 million in cash; (ii) on October 25, 1996, the
Company entered into an agreement to purchase the 20% equity interest of its
partner in the Company's operating subsidiary in Florida for shares of Common
Stock having a value of $4.6 million based on the initial public offering price
of the Common Stock in the Offering; and (iii) on June 20, 1996, the Company
entered into a letter of intent with the owner of a 73% equity interest in the
Company's Mexico licensee to form a Latin American Joint Venture (as defined
herein) for the purpose of marketing and operating the Ticketmaster System
throughout Central and South America and, in connection therewith, acquire an
additional 23% equity interest in the Company's Mexico licensee. See "Risk
Factors -- Failure to Close Pending Transactions" and "Business -- Joint
Ventures and Licensees."

Consummation of the Pending Transactions (or any one of the Pending
Transactions) is not a condition to the closing of the Offering.

5
<PAGE> 8

THE OFFERING

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<S> <C>
Common Stock offered(1).............. 7,250,000 shares(1)
Common Stock to be outstanding after
the Offering....................... 22,560,405 shares(1)(2)
Use of proceeds...................... The Company intends to use the net proceeds of the
Offering (i) to repay outstanding indebtedness ($19.0
million) incurred to acquire the license rights and
related assets of its Delaware Valley (Philadelphia)
licensee; (ii) to repay a portion of the outstanding
indebtedness (estimated to be $56.1 million) under the
Company's credit agreement (the "Credit Agreement");
(iii) to repay outstanding indebtedness under the
Exchangeable Promissory Note ($5.0 million) incurred
to acquire the Company's joint venture partner's 50%
equity interest in the European Joint Venture; (iv) to
purchase an interest not previously owned by the
Company in its operating subsidiary in Texas ($6.0
million); and (v) for general corporate purposes. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and
Capital Resources" and "Description of Certain
Indebtedness."
Nasdaq Market System symbol.......... TKTM
</TABLE>

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(1) Does not include up to 1,087,500 shares of Common Stock subject to the
over-allotment option granted to the Underwriters. See "Underwriting."

(2) Does not include 1,331,340 shares of Common Stock reserved for future
issuance pursuant to an option granted to Fredric D. Rosen, the Company's
President and Chief Executive Officer (the "Rosen Option"), and 3,250,000
shares of Common Stock reserved for future issuance under the Ticketmaster
Stock Plan (the "Stock Plan") of which options covering 3,066,811 shares
have been granted. See "Management -- Employment Agreements" and
"Management -- Stock Plan." Also, does not include shares of Common Stock
(i) issuable in lieu of cash repayment at the election of the Company's
joint venture partner, in connection with the Company's acquisition of that
partner's 50% equity interest in the European Joint Venture, in June 1996,
(ii) issuable upon conversion of convertible Preferred Stock issued in
connection with the acquisition of the Company's joint venture partner's 50%
equity interest in Ticketmaster-Indiana, and (iii) issuable in connection
with the Company's acquisition of the 20% equity interest of its partner in
the Company's operating subsidiary in Florida, expected to close shortly
after the consummation of the Offering, all of which, at the initial public
offering price of $14.50 per share, will total 2,524,138 shares of Common
Stock. See "Business -- Joint Ventures and Licensees."
------------------------

The Company was organized in 1988 as a corporation under the laws of the
State of Illinois. The principal executive office of the Company is currently
located at 3701 Wilshire Boulevard, 7th Floor, Los Angeles, California 90010,
and the telephone number at that address is (213) 381-2000. See "Business --
Properties."

RISK FACTORS

INVESTORS SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER "RISK
FACTORS" COMMENCING ON PAGE 10 BEFORE PURCHASING SHARES OF COMMON STOCK.

6
<PAGE> 9

SUMMARY FINANCIAL DATA
HISTORICAL AND PRO FORMA

The following table sets forth summary consolidated financial data of the
Company and summary combined financial data of the Unconsolidated Joint
Ventures, consisting of the Unconsolidated Ticketing Joint Ventures (as defined
herein) and the Pacer/CATS/CCS Joint Venture (as defined herein), for the years
ended January 31, 1994, 1995 and 1996 and for the six months ended July 31, 1995
and 1996. The summary financial data for the three years ended January 31, 1996
presented below was derived from the Company's Consolidated Financial
Statements, the Unconsolidated Ticketing Joint Ventures' Financial Statements
and the Pacer/CATS/CCS Joint Venture's Financial Statements, all of which were
audited by KPMG Peat Marwick LLP, independent auditors, whose reports with
respect thereto, together with such financial statements, appear elsewhere
herein. The summary financial data presented below as of and for the six months
ended July 31, 1995 and 1996 is unaudited. In the opinion of the management of
the Company, the unaudited financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the financial information included herein. Results for the interim periods are
not necessarily indicative of results to be expected during the remainder of the
current fiscal year or for any future period.

The following table also includes certain unaudited pro forma financial
information for the fiscal year ended January 31, 1996 and for the six months
ended July 31, 1996 which gives effect to the following as if each transaction
had occurred as of February 1, 1995 for statement of operations purposes and as
of July 31, 1996 for balance sheet purposes: (i) the formation of the Australian
Joint Ventures (as defined herein), which occurred in December 1995, in which
the Company acquired a 50% equity interest, (ii) the 100% acquisition of license
rights and related assets of the Company's Nashville, Tennessee licensee, which
occurred in February 1996, (iii) the acquisitions of its joint venture partners'
50% equity interests in each of the European Joint Venture and the
Pacer/CATS/CCS Joint Venture, which occurred in June and July of 1996,
respectively, (iv) the acquisition of the license rights and related assets of
the Company's Delaware Valley (Philadelphia) licensee, which occurred in October
1996, (v) the acquisition of a 27% equity interest in the Company's Mexico
licensee, which occurred in October 1996, (vi) the acquisition of its joint
venture partner's 50% equity interest in Ticketmaster-Indiana, (vii) the
proposed acquisitions of its partners' 20% equity interests in each of the
Company's Texas and Florida operating subsidiaries and the proposed acquisition
of an additional 23% equity interest in its Mexico licensee (all of such
proposed acquisitions being subject to signed letters of intent or definitive
agreements), (viii) the purchase of a building to serve as corporate
headquarters and (ix) the sale by the Company of 7,250,000 shares of Common
Stock offered hereby and application of proceeds therefrom as described in Notes
to Pro Forma Financial Information. See "Pro Forma Financial Information." Such
pro forma financial information is not necessarily indicative of actual results
that would have been achieved and is not indicative of future results. The
information set forth below should be read in conjunction with "Selected
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and related
Notes thereto appearing elsewhere in this Prospectus.

In the aggregate, consideration paid or to be paid for the acquisitions
referenced in clauses (i) through (vii) above totals approximately $63.9 million
in cash, the assumption of $7.5 million in debt, an Exchangeable Promissory Note
in the principal amount of $5.0 million (which, at the option of the holder, can
be repaid in cash or exchanged for shares of Common Stock at the initial public
offering price of the Common Stock in the Offering, but is herein assumed to be
repaid in cash) and shares of Common Stock issued directly or upon conversion of
convertible Preferred Stock having a value of $31.6 million at the initial
public offering price of the Common Stock in the Offering. See
"Business -- Joint Ventures and Licensees."

7
<PAGE> 10

partner's 50% interest in the European Joint Venture, the acquisition of the
other joint venture partner's 50% equity interest in the Pacer/CATS/CCS Joint
Venture and the acquisitions of third party interests in certain of the
Company's other joint ventures and licensees as described above (see
"Business -- Joint Ventures and Licensees"), the Consolidated Businesses will
constitute approximately 84% of revenues of the Managed Businesses on a pro
forma basis for the year ended January 31, 1996.

SUMMARY FINANCIAL DATA
HISTORICAL AND PRO FORMA
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY PRO FORMA
FISCAL YEAR ENDED JANUARY 31, 31, ------------------------------------
--------------------------------- --------------------- FISCAL YEAR ENDED SIX MONTHS ENDED
1994 1995 1996 1995 1996 JANUARY 31, 1996 JULY 31, 1996
--------- --------- --------- --------- --------- ----------------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
CONSOLIDATED BUSINESSES(1)
REVENUES:
Ticketing operations.......... $ 137,304 $ 172,002 $ 149,115 $ 78,816 $ 87,893 $ 186,558 $ 107,950
Concession and control
systems..................... -- -- -- -- -- 22,985 12,964
Publications.................. 4,575 4,640 4,198 1,766 4,512 5,697 4,688
Sponsorship & promotion....... 1,724 1,849 3,972 955 4,777 4,461 4,954
Other......................... 3,037 4,459 3,965 2,195 2,777 3,965 2,777
--------- --------- --------- --------- --------- --------- ---------
Total....................... 146,640 182,950 161,250 83,732 99,959 223,666 133,333
--------- --------- --------- --------- --------- --------- ---------
OPERATING COSTS AND EXPENSES:
Ticketing operations.......... 117,020 141,612 124,895 65,114 74,933 152,612 89,842
Concession and control
systems..................... -- -- -- -- -- 25,746 13,149
Publications.................. 2,297 2,908 9,129 3,368 9,115 10,176 9,215
Other......................... 11,738 22,444 16,649 7,940 9,622 16,649 9,622
Depreciation and
amortization................ 9,399 13,301 9,325 4,763 4,929 17,620 8,852
Equity in net (income) of
unconsolidated
affiliates.................. (1,577) (1,360) (1,458) (1,345) (2,136) (2,622) (1,632)
--------- --------- --------- --------- --------- --------- ---------
Operating income............... 7,763 4,045 2,710 3,892 3,496 3,485 4,285
Interest expense, net.......... 3,211 12,409 12,782 6,528 5,917 10,807 4,912
Net income (loss).............. 40 (6,678) (8,095) (2,327) (2,418) (4,479) (393)
Net income (loss) per share.... $ 0.01 $ (0.44) $ (0.53) $ (0.15) $ (0.16) $ (0.18) $ (0.02)
Shares used in per share
calculation(5)................ 4,993 15,310 15,310 15,310 15,310 24,740 24,740
UNCONSOLIDATED JOINT
VENTURES(2)
REVENUES:
Ticketing operations.......... $ 39,457 $ 46,921 $ 54,178 $ 27,530 $ 32,708 $ 40,862 $ 20,020
Publications.................. 1,599 2,129 1,939 1,009 176 787 --
Sponsorship & promotion....... 756 865 951 515 387 463 210
Concession and control
systems..................... -- 19,354 22,985 10,755 12,964 -- --
--------- --------- --------- --------- --------- --------- ---------
Total....................... 41,812 69,269 80,053 39,809 46,235 42,112 20,230
--------- --------- --------- --------- --------- --------- ---------
OPERATING COSTS AND EXPENSES:
Ticketing operations.......... 32,033 37,302 40,068 20,285 24,402 32,399 15,604
Publications.................. 1,108 1,261 1,148 611 128 530 --
Concession and control
systems..................... -- 20,932 25,746 11,995 13,149 -- --
Depreciation and
amortization................ 4,826 5,062 4,401 2,219 2,587 2,142 1,261
--------- --------- --------- --------- --------- --------- ---------
Operating income............... 3,845 4,712 8,690 4,699 5,969 7,041 3,365
Interest expense, net.......... 107 580 942 436 356 399 184
Net income..................... 3,738 3,632 7,443 4,197 5,364 6,358 3,129
Ticketmaster's share of net
income(7)..................... $ 1,577 $ 1,360 $ 1,458 $ 1,345 $ 2,136 $ 2,622 $ 1,632
</TABLE>

<TABLE>
<CAPTION>
AS OF JULY 31, 1996
------------------------------------
ACTUAL PRO FORMA
----------------- ----------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
CONSOLIDATED BUSINESSES(1)
Total assets.............................................................................. $ 147,174 $ 232,448
Total debt................................................................................ 183,606 135,335
Shareholders' equity (deficiency)......................................................... (110,268) 17,403
UNCONSOLIDATED JOINT VENTURES
Total assets.............................................................................. $ 29,309 $ 23,092
Total debt................................................................................ 111 111
Venturers' capital........................................................................ 11,993 10,217
</TABLE>

Footnotes on following page

8
<PAGE> 11

SUMMARY FINANCIAL DATA
HISTORICAL AND PRO FORMA
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED PRO FORMA
FISCAL YEAR ENDED JANUARY 31, JULY 31, ------------------------------------
--------------------------------- ------------------- FISCAL YEAR ENDED SIX MONTHS ENDED
1994 1995 1996 1995 1996 JANUARY 31, 1996 JULY 31, 1996
--------- --------- --------- -------- -------- ----------------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL INFORMATION: (UNAUDITED)
NUMBER OF TICKETS SOLD:
Consolidated Businesses(1)...... 38,655 42,458 37,619 19,630 21,580 48,144 26,866
Unconsolidated Joint
Ventures(2)................... 12,194 13,156 15,497 7,546 8,823 9,639 5,036
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. 50,849 55,614 53,116 27,176 30,403 57,783 31,902
=========== =========== =========== ========== ========== =========== ==========
GROSS DOLLAR VALUE OF TICKET
SALES:
Consolidated Businesses(1)...... $1,001,098 $1,308,310 $1,116,660 $571,210 $619,806 $1,389,801 $767,456
Unconsolidated Joint
Ventures(2)................... 282,274 345,491 414,918 202,145 250,188 269,984 144,499
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $1,283,372 $1,653,801 $1,531,578 $773,355 $869,994 $1,659,785 $911,955
=========== =========== =========== ========== ========== =========== ==========
TOTAL REVENUES:
Consolidated Businesses(1)...... $ 146,640 $ 182,950 $ 161,250 $ 83,732 $ 99,959 $ 223,666 $133,333
Unconsolidated Joint
Ventures(2)................... 41,812 69,269 80,053 39,809 46,235 42,112 20,230
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $ 188,452 $ 252,219 $ 241,303 $123,541 $146,194 $ 265,778 $153,563
=========== =========== =========== ========== ========== =========== ==========
EBITDA(3):
Consolidated Businesses(1)...... $ 15,585 $ 15,986 $ 10,577 $ 7,310 $ 6,289 $ 18,483 $ 11,505
Unconsolidated Joint
Ventures(2)................... 8,671 9,774 13,091 6,918 8,556 9,183 4,626
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $ 24,256 $ 25,760 $ 23,668 $ 14,228 $ 14,845 $ 27,666 $ 16,131
=========== =========== =========== ========== ========== =========== ==========
ATTRIBUTABLE EBITDA(4)........... $ 18,235 $ 19,503 $ 15,222 $ 10,425 $ 10,068 $ 23,272 $ 14,035
=========== =========== =========== ========== ========== =========== ==========
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Consolidated Businesses(1)...... $ 14,571 $ 12,309 $ (3,068) $ (2,778) $ 7,457 $ 1,239 $ 15,142
Unconsolidated Joint
Ventures(2)................... 6,439 15,761 17,658 5,698 6,721 14,927 56
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $ 21,010 $ 28,070 $ 14,590 $ 2,920 $ 14,178 $ 16,166 $ 15,198
=========== =========== =========== ========== ========== =========== ==========
NET CASH USED IN INVESTING
ACTIVITIES
Consolidated Businesses(1)...... $ (6,250) $ (14,553) $ (9,452) $ (4,440) $ (4,658) $ (12,107) $ (5,790)
Unconsolidated Joint
Ventures(2)................... (4,654) (1,772) (6,508) (1,081) (6,851) (3,793) (1,547)
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $ (10,904) $ (16,325) $ (15,960) $ (5,521) $(11,509) $ (15,900) $ (7,337)
=========== =========== =========== ========== ========== =========== ==========
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES
Consolidated Businesses(1)...... $ (2,732) $ 15,086 $ 7,772 $ 3,847 $ 10,347 $ 7,439 $ 10,342
Unconsolidated Joint
Ventures(2)................... (5,406) (9,133) (5,011) (5,417) (3,943) (645) (2,463)
----------- ----------- ----------- ---------- ---------- ----------- ----------
Managed Businesses.............. $ (8,138) $ 5,953 $ 2,761 $ (1,570) $ 6,404 $ 6,794 $ 7,879
=========== =========== =========== ========== ========== =========== ==========
Net income (loss)(6)............. $ (4,390) $ (620)
Net income (loss) per share(6)... $ (.24) $ (.03)
Shares used in per share
calculation(6).................. 18,295 18,295
</TABLE>

(2) Defined as the combined results of operations from Unconsolidated Ticketing
Joint Ventures and Pacer/CATS/CCS Joint Venture, the individual financial
statements of which are included elsewhere in this Prospectus.
Ticketmaster's ownership interests in these businesses range from
33 1/3%-50% and are in companies and joint ventures in which Ticketmaster
exercises significant influence over operating and financial policies, and
are accounted for under the equity method included in the Consolidated
Businesses.

(3) Defined as revenue less operating costs before interest, depreciation and
amortization, and taxes ("EBITDA"). Managed Business EBITDA does not
represent cash flows from operations, as defined by generally accepted
accounting principles, and should not be considered to be an alternative to
net income as an indicator of operations performance or to cash flows from
operations as a measure of liquidity. Management believes that an EBITDA
presentation is an important factor in evaluating the amount of cash
available for repayment of debt, future investments, dividends and in
determining cash available for future distributions.

(4) Defined as Ticketmaster's pro rata share in the results of its Consolidated
Businesses and Unconsolidated Joint Ventures' revenue less operating costs
before interest, depreciation and amortization, and taxes. EBITDA does not
represent cash flows from operations, as defined by generally accepted
accounting principles, and should not be considered to be an alternative to
net income as an indicator of operating performance or to cash flows from
operations as a measure of liquidity. Management believes that an EBITDA
presentation is an important factor in evaluating the amount of cash
available for repayment of debt, future investments, dividends and in
determining cash available for future distributions.

(5) See Note 1 to the Notes to Consolidated Financial Statements for per share
calculations for historical data and "Pro Forma Financial Information" for
unaudited pro forma data. For pro forma purposes, includes 15,310,405 pro
forma weighted average common and common equivalent shares outstanding at
January 31, 1996 and July 31, 1996, 7,250,000 shares of Common Stock offered
by the Company in connection with the Offering, and 1,862,069 and 317,241
shares of Common Stock expected to be issued in connection with the
acquisition, by purchase, redemption or otherwise, of its joint venture
partner's 50% equity interest in Ticketmaster-Indiana and the proposed
acquisition of its partner's 20% equity interest in the Company's Florida
operating subsidiary, respectively.

(6) Represents earnings and earnings per share information giving effect to the
reduction in interest expense associated with the repayment of a portion of
the outstanding indebtedness (see "Use of Proceeds"). Share information
reflects the increase in weighted average common shares assuming the
issuance of shares directly proportionate to the corresponding repayment of
indebtedness.

(7) Represents Ticketmaster's share of net income from Unconsolidated Joint
Ventures defined in Note (2) above and Ticketmaster's share of net income
from various investments in other unconsolidated joint ventures in which
Ticketmaster maintains ownership interests ranging from 25%-50%.

9
<PAGE> 12

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Company and its
business before purchasing shares of Common Stock.

High Leverage. As a result of its growth and cash distributions to
shareholders, the Company has incurred significant amounts of debt and is highly
leveraged. As of July 31, 1996, the Company had consolidated long-term debt of
$183.6 million. On a pro forma basis after giving effect to the sale of Common
Stock in the Offering and the application of the net proceeds therefrom, the
Pending Transactions and the Completed Transactions, the Company would have had,
as of July 31, 1996, consolidated long-term debt of $135.3 million. See
"Capitalization." The Company may incur additional indebtedness, including
borrowings under credit facilities, in the future, subject to certain
limitations contained in its debt instruments. See "Description of Certain
Indebtedness." The Company's ability to satisfy the financial obligations under
its indebtedness outstanding from time to time will depend upon its future
operating performance, which is subject to certain prevailing economic
conditions, 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 operating cash flow will be sufficient to cover its debt service
obligations. The Company's current and future debt service obligations could
have important consequences to holders of Common Stock, including the following:
(i) the Company's ability to obtain additional financing in the future for
working capital, capital expenditures, general corporate purposes or other
purposes may be impaired; (ii) a substantial portion of the Company's cash flow
from operations must be dedicated to the payment of interest on its
indebtedness; (iii) the Company's high degree of leverage may make it more
vulnerable to economic downturns; and (iv) a portion of the Company's borrowings
is at variable interest rates, subject to prescribed limits.

Net Losses for the Consolidated Businesses. The Company incurred net
operating losses, after interest expense, from the Consolidated Businesses
during each of the fiscal years ended January 31, 1995 and January 31, 1996 and
for the six-month period ended July 31, 1996. The net losses were primarily the
result of the Company's high leverage and the commencement of new business
ventures, including, without limitation, the launch of Live! in February 1996
and the formation of the Pacer/CATS/CCS Joint Venture during April 1994. The
Company may continue to incur net losses from the Consolidated Businesses in the
future as a result of, but not limited to, high leverage and expenses associated
with existing new business ventures and any additional new business ventures it
may undertake in the future.

Dependence on Entertainment, Sporting and Leisure Events. Pursuant to
contracts with arenas, stadiums, theaters and other facilities, sports teams,
promoters and others, the Company, in its capacity as agent, sells tickets
relating to entertainment, sporting and leisure events and, accordingly, the
Company's ticketing business is directly affected by the popularity, frequency
and location of such events. Factors affecting such events, including general
economic conditions, consumer trends and work stoppages (such as the 1994 strike
by the Major League Baseball Players Association against major league baseball),
could have a material adverse effect on the Company.

Quarterly Fluctuations in Revenues. The Company has historically
experienced quarterly fluctuations in ticket operation revenues, which vary
depending upon the dates when tickets for events are released for sale by its
clients. The scheduling of popular events has generally been more concentrated
during the warm weather months. This factor, together with the general practice
of commencing ticket sales several months prior to the event date, tends to
result in higher revenues in the Company's first six months of operations during
each fiscal year. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Seasonality and Quarterly Results."

Dependence upon President and Chief Executive Officer. The Company is
dependent to a large extent on the services of Fredric D. Rosen, its President
and Chief Executive Officer. Loss of the services of Mr. Rosen could have a
material adverse effect on the Company's business and operations. The Company
and Mr. Rosen have entered into an employment agreement with an initial term
ending on January 31, 1999, subject to various termination rights. See
"Management -- Employment Agreements."

10
<PAGE> 13

Control by Existing Owners. Upon completion of the Offering, Paul G. Allen
will beneficially own approximately 54.2% of the then-outstanding shares of
Common Stock (49.4% taking into account the shares of Common Stock issuable in
connection with the proposed acquisition of its partner's 20% equity interest in
the Company's Florida operating subsidiary and the conversion of Preferred Stock
issued in connection with the acquisition of its partner's 50% equity interest
in Ticketmaster-Indiana). Under Illinois law, Mr. Allen will effectively have
control of the Company and will have sufficient voting power to determine the
composition of the Board of Directors or the outcome of any matter submitted to
shareholders for approval. Under Illinois law, Mr. Allen also will be permitted
to take action by written consent without holding a shareholders' meeting or
providing the Company's other shareholders with the opportunity to consider and
vote upon the matters to be acted upon by the shareholders. However, should Mr.
Allen take any action by written consent, the Company will distribute to the
other shareholders an information statement to the extent required by and
meeting the requirements of Regulation 14C promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), at least 20 calendar days
prior to effecting any such corporate action by Mr. Allen pursuant to a written
consent. See "Principal Shareholders" and "Description of Capital Stock."

Failure to Close Pending Transactions. The Company has entered into letters
of intent or definitive agreements to acquire, by purchase, redemption or
otherwise, the interest of certain joint venturers and licensees. See
"Business -- Joint Ventures and Licensees." However, the completion of the
Pending Transactions remains subject to certain conditions. If any of such
conditions are not satisfied with respect to any of the Pending Transactions,
the Company may be unable to complete such transactions. If the Company is
unable, for any reason, to complete any of the Pending Transactions, the Company
will be unable to include those Pending Transactions in its consolidated
financial statements and may be unable to directly access the operating income
and related cash flows attributable to the interests to be acquired in the
Pending Transactions. See "-- High Leverage." No assurances can be given that
any of such transactions will be completed.

Changing Technology; Absence of Patent Protection. The automated ticketing
business is dependent upon the efficiencies created by the computer hardware and
software utilized by each service provider, such as the Company. The automated
ticketing industry is characterized by continual enhancement to existing
technology to improve these efficiencies and provide additional capabilities.
The Company, with its research and development staff, continues to improve the
Ticketmaster System. The failure of the Company to develop or have access to
current technology could adversely affect the Company's competitive position.

The Company presently has no patents pertaining to its products. The
technology used by the Company in its products is likely to be within the state
of the art and may not be more advanced than the technology used by or available
to certain of its competitors and potential competitors. The Company may be
unable to prevent its competitors and others from incorporating features of the
Company's products into their own products. See "Business -- Trademarks and
Patents."

New Ventures. The Company plans to continue to leverage its brand name and
extensive distribution capabilities to develop businesses in related areas.
Certain of these initiatives have entailed and other initiatives may entail
substantial start-up costs. There can be no assurance that the Company will be
successful in these endeavors. See "Business -- Strategy and Growth
Opportunities."

International Operations. The Company presently conducts business in the
U.K. and conducts business in Canada and Mexico through licensees and in
Australia through joint ventures. In fiscal 1996, revenues from international
operations accounted for 6.2% of total revenues of the Managed Businesses. The
Company intends to continue to expand its operations outside of the U.S. and to
enter additional markets, which will require additional resources. International
operations are generally subject to various risks not present in domestic
operations. Various foreign jurisdictions have laws limiting the right and
ability of foreign subsidiaries to pay dividends and remit earnings to
affiliated companies unless specified conditions are met. Risks exist with
respect to foreign currency fluctuations and difficulties in staffing and
managing international operations. As the Company continues to expand its
international operations, exposures to gains and losses on foreign currency
transactions may increase. See "Business -- Strategy and Growth Opportunities"
and "Business -- Joint Ventures and Licensees."

11
<PAGE> 14

Competition. The automated ticketing business is highly competitive, and
the Company faces competition, and potential competition, from numerous parties
offering similar services. In addition to competitors which perform services
similar to the Company on behalf of third parties, existing technology makes it
possible for individual facilities and promoters, or groups of facilities and
promoters, to operate their own automated ticketing systems. See "Risk
Factors -- Changing Technology; Absence of Patent Protection,"
"Business -- Client Relationships" and "Business -- Competition."

Government Investigations and Litigation. Federal, state and local
authorities have from time to time commenced investigations or inquiries with
respect to the Company's compliance with antitrust, unfair business practice and
other laws. The most recent federal investigation was commenced in 1994 by the
Antitrust Division of the United States Department of Justice and was concluded
in 1995 with no enforcement action being taken against the Company.

During 1994, the Company was also named as a defendant in multiple class
action lawsuits alleging that the Company's activities violated federal
antitrust laws. All of such federal lawsuits were consolidated by the Judicial
Panel on Multidistrict Litigation for pretrial proceedings. After an amended and
consolidated complaint was filed by the plaintiffs, the Company filed a motion
to dismiss and, on May 31, 1996, the United States District Court for the
Eastern District of Missouri granted the motion to dismiss for failure to state
a claim upon which relief could be granted. On June 12, 1996, plaintiffs
appealed the court's dismissal of such lawsuits.

The Company is also named as a defendant in a lawsuit filed by Moviefone,
Inc. and The Teleticketing Company, L.P. Plaintiffs allege that the Company has
violated antitrust laws and has tortiously interfered with contractual and
prospective business relationships. The Company has denied the allegations and
intends to vigorously defend such lawsuit.

The Company believes that it has conducted its business in substantial
compliance with all applicable laws. However, given the status of the foregoing
matters, no assurances can be given as to the effect that they may have on the
Company. The Company has incurred significant legal expenses in connection with
these and other investigations and lawsuits and will likely incur additional
significant legal expenses in the future should similar investigations or
additional lawsuits be instituted. See "Business -- Government Investigations
and Litigation."

Risk of Business Interruption. The Company's operations are dependent upon
its ability to protect its call centers, computer and telecommunications
equipment and software systems against damage from fire, power loss,
telecommunications interruption or failure, natural disaster and other similar
events. In the event that the Company experiences a temporary or permanent
interruption at one or more of its call centers through casualty, equipment
malfunction or otherwise, the Company's business could be adversely affected.
While the Company maintains secondary and tertiary backup facilities as well as
property and business interruption insurance, such facilities and insurance may
not adequately protect the Company or compensate the Company for all losses that
it may incur.

Shares Eligible for Future Sale. A substantial number of shares of Common
Stock will become available for sale in the public market at prescribed times
following the effective date of the Offering. No predictions can be made as to
the effect, if any, that market sales of such shares, or the availability of
such shares for future sales, will have upon the market price of shares of
Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock (including shares issued upon the exercise of stock options,
pursuant to automatic conversion of Preferred Stock or, at the election of the
holder, the Exchangeable Promissory Note), or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock and could impair the Company's future ability to raise capital through an
offering of its equity securities. The directors, officers and shareholders of
the Company have agreed that, without the written consent of Allen & Company
Incorporated on behalf of the Underwriters, they will not offer to sell,
contract to sell or otherwise sell or dispose of their shares of Common Stock
for a period of 180 days after the date of this Prospectus, except for certain
stock repurchases that may be required pursuant to employment agreements.
Persons who may receive shares of Common Stock in connection with certain of the
Completed Transactions and the Pending Transactions have also agreed to be bound
by similar restrictions. At any time following the

12
<PAGE> 15

expiration or termination of such period, certain of the existing shareholders
will have the right, pursuant to existing agreements, to require the Company,
subject to certain qualifications, to effect the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of all or a specified
number of their shares of Common Stock.

The Common Stock offered hereby will be freely tradeable (other than by an
"affiliate" of the Company as such term is defined in the Securities Act)
without restriction or registration under the Securities Act. See
"Underwriting." All remaining outstanding shares of Common Stock may be sold
under Rule 144 or Regulation S promulgated under the Securities Act, subject to
the holding period, volume, manner of sale and other restrictions of Rule 144 or
Regulation S and subject to the 180-day lock-up agreements with the
Underwriters. See "Shares Eligible for Future Sale," "Underwriting,"
"Management -- Employment Agreements" and "Certain Transactions."

Absence of Prior Public Market. Prior to the Offering, there has been no
public market for the Common Stock of the Company. Consequently, the initial
public offering price was determined by negotiations between the Company and the
Representatives of the Underwriters. See "Underwriting" for a discussion of the
factors considered in determining the initial public offering price. There can
be no assurance that an active trading market will develop after the Offering
or, if developed, that such a market will be sustained. Further, the trading
price of the Common Stock may be highly volatile. The market price for shares of
Common Stock may be significantly affected by such factors as quarter-to-quarter
variations in the Company's results of operations or changes in general
economic, industry or market conditions.

Dilution. Purchasers of the shares of Common Stock offered hereby will
incur immediate and substantial dilution in the net tangible book value of their
investment. See "Dilution."

Dividends. The Company does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future. Furthermore, the Credit Agreement
imposes restrictions and limitations on the payment of dividends to the
Company's shareholders. See "Dividend Policy" and "Description of Certain
Indebtedness."

Forward-Looking Statements and Associated Risks. This Prospectus contains
forward-looking statements, including statements regarding, among other items,
(i) the Company's growth strategies; (ii) anticipated trends in the Company's
business; and (iii) the Company's future liquidity requirements and capital
resources. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, certain of
which are beyond the Company's control. Actual results could differ materially
from those anticipated by these forward-looking statements as a result of
various factors including the risks set forth in this section. In light of these
risks and uncertainties, there can be no assurance that events anticipated by
the forward-looking statements contained in this Prospectus will in fact
transpire.

13
<PAGE> 16

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
pursuant to the Offering, after deducting expenses payable by the Company in
connection with the Offering, are estimated to be approximately $96.1 million
(approximately $110.7 million if the Underwriters' over-allotment option is
exercised in full) based on the initial public offering price of $14.50 per
share. The Company intends to use such proceeds, in the indicated approximate
amounts, for the following purposes (dollars in millions):

<TABLE>
<S> <C>
Repayment of outstanding indebtedness incurred to acquire the license
rights and related assets of its Delaware Valley (Philadelphia)
licensee, issued on September 27, 1996, maturing on June 24, 1997
and bearing interest at the London Inter-Bank Offering Rate
("LIBOR") (5.59% at October 23, 1996) plus the applicable margin,
as defined (1.625%)................................................ $19.0
Repayment of a portion of the outstanding indebtedness under the
Credit Agreement, issued in August 1995, maturing on December 31,
1999 and bearing interest at LIBOR plus the applicable margin, as
defined (1.625%)................................................... 56.1
Repayment of outstanding Exchangeable Promissory Note incurred to
acquire the Company's joint venture partner's 50% equity interest
in the European Joint Venture, issued on June 7, 1996, maturing on
June 7, 1997 and bearing interest at the prime rate (8.25% at
October 23, 1996)(1)............................................... 5.0
Purchase of the 20% equity interest not previously owned by the
Company in its operating subsidiary in Texas(2).................... 6.0
General corporate purposes........................................... 10.0
-----
Total...................................................... $96.1
=====
</TABLE>

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

(1) At the election of the holder, the Exchangeable Promissory Note is repayable
in cash or may be converted into shares of Common Stock. The exchange
provisions of the Exchangeable Promissory Note provide that it may be
converted, only in its entirety, into shares of Common Stock equal to the
outstanding principal amount of the Exchangeable Promissory Note divided by
the initial public offering price of the Common Stock in the Offering.
Accordingly, should the Exchangeable Promissory Note be exchanged for Common
Stock as opposed to being repaid in cash, the use of proceeds attributed to
the repayment of the Exchangeable Promissory Note would alternatively be
used to repay additional portions of the outstanding indebtedness under the
Credit Agreement.

(2) In the event this transaction is not consummated, the use of proceeds
attributed to the purchase of the interest in the operating subsidiary in
Texas would alternatively be used to repay additional portions of the
outstanding indebtedness under the Credit Agreement.

Any proceeds from the exercise of the Underwriters' over-allotment option
will be used to further repay of a portion of the outstanding indebtedness under
the Credit Agreement. For information relative to the indebtedness to be repaid
using the net proceeds of the Offering, see "Description of Certain
Indebtedness." See also "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

14
<PAGE> 17

DIVIDEND POLICY

Since November 17, 1993, the Company has not declared or paid any dividends
upon its Common Stock. The Company presently intends to retain earnings during
the foreseeable future for general corporate purposes, including business
expansion and capital expenditures. The declaration and payment of future
dividends will be at the sole discretion of the Board of Directors and will
depend on the Company's profitability, financial condition, capital needs,
future prospects and other factors deemed relevant by the Board of Directors.

Furthermore, the Credit Agreement imposes restrictions and limitations on
the making of dividends and distributions to the Company's shareholders.
Accordingly, the future ability of the Company to declare and pay dividends on
its Common Stock will be limited by virtue of the restrictions under the Credit
Agreement. See "Description of Certain Indebtedness."

In addition, the separate credit agreement pertaining to the Company's
Pacer/CATS/CCS operations restricts the ability of that entity to transfer funds
to the Company in the form of cash dividends, loans or advances. See
"Description of Certain Indebtedness."

15
<PAGE> 18

DILUTION

At July 31, 1996, on a pro forma basis to reflect pending and completed
transactions, the Company had net tangible book value (deficiency) of $(173.8)
million, or $(9.94) per share. After giving effect to the sale of the shares of
Common Stock offered in the Offering and the application of the estimated net
proceeds therefrom as described in "Use of Proceeds," the pro forma net tangible
book value (deficiency) of the Company at July 31, 1996 would have been
approximately $(77.7) million, or $(3.14) per share of Common Stock. This
represents an immediate decrease in such net tangible book deficiency of $6.79
per share to existing shareholders and an immediate dilution of $17.64 per share
to purchasers of shares of Common Stock in the Offering. Dilution per share is
determined by subtracting the pro forma net tangible book value (deficiency) per
share of Common Stock after completion of the Offering from the per share price
paid by purchasers of Common Stock in the Offering. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share................................... $ 14.50
Pro forma net tangible book value (deficiency) per share as of
July 31, 1996............................................... $ (9.94)
Decrease in net tangible book deficiency per share attributable
to the Offering............................................. 6.79
------
Adjusted pro forma net tangible book value (deficiency) per share
after the Offering...................................................... (3.14)
------
Dilution per share to purchasers of Common Stock in the Offering.......... $ 17.64
======
</TABLE>

The following table sets forth as of July 31, 1996 (calculated on the same
basis as set forth in the preceding paragraph) the number of shares of Common
Stock purchased from the Company, the total consideration paid and the average
price per share paid by the existing shareholders of the Company and the number
of shares of Common Stock to be purchased from the Company, the total
consideration to be paid and the average price per share to be paid by
purchasers of the Common Stock pursuant to the Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ------------------------ AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders..... 17,489,715 70.7% $196,484,000 65.1% $ 11.23
New investors............. 7,250,000 29.3 105,125,000 34.9 14.50
---------- ----- ------------ -----
Total........... 24,739,715 100.0% $301,609,000 100.0%
========== ===== ============ =====
</TABLE>

The computations in the tables above (i) reflect a recently effected
1-for-3 reverse stock split, (ii) do not assume exercise of the over-allotment
option granted to the Underwriters, (iii) exclude shares of Common Stock
reserved for issuance pursuant to the Rosen Option and options which have been
and may be granted under the Stock Plan or otherwise, and (iv) exclude shares of
Common Stock reserved for issuance pursuant to any conversion of the
Exchangeable Promissory Note. To the extent options are exercised or
exchangeable notes are exchanged, there may be further dilution to investors.
See "Capitalization" and "Management."

Additionally, the calculations assume the issuance of shares of Common
Stock in connection with the Company's proposed acquisition of its partner's 20%
equity interest in the Company's Florida operating subsidiary and the conversion
of Preferred Stock issued in connection with the acquisition of its partner's
50% equity interest in Ticketmaster-Indiana. If the Pending Transactions are not
consummated, the pro forma net tangible book value (deficiency) per share prior
to the Offering would be $(9.83), and the decrease in net tangible book
deficiency per share attributable to the Offering would be $6.85, which would
result in an adjusted pro forma net tangible book value (deficiency) per share
after the Offering of $(2.98). The resultant dilution per share to purchasers of
Common Stock in the Offering would be $17.48.

16
<PAGE> 19

CAPITALIZATION

The following table sets forth as of July 31, 1996: (i) the actual
capitalization of the Company, including the current portion of long-term debt
and capitalized lease obligations, (ii) the pro forma capitalization of the
Company after giving effect to the Completed Transactions and the Pending
Transactions as well as the purchase of the building to serve as corporate
headquarters and (iii) the pro forma, as adjusted, capitalization of the Company
after giving effect to the receipt of net proceeds from the sale of the
7,250,000 shares of Common Stock pursuant to the Offering and application
thereof, the conversion of the Company's Preferred Stock into Common Stock, the
issuance of Common Stock in connection with the Company's proposed acquisition
of the 20% equity interest not previously owned by the Company in its Florida
operating subsidiary and the repayment of the Exchangeable Promissory Note with
cash:

<TABLE>
<CAPTION>
JULY 31, 1996
----------------------------------------
PRO FORMA
PRO FORMA FOR
FOR TRANSACTIONS,
ACTUAL TRANSACTIONS AS ADJUSTED
--------- ------------ -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of long-term debt and capitalized lease
obligations.............................................. $ 205 $ 205 $ --
Long-term debt, net of current portion..................... 178,401 216,201 135,335
Exchangeable Promissory Note............................... 5,000 5,000 --
Stockholders' equity (deficiency):
Preferred Stock, no par value, 20,000,000 shares
authorized; no shares outstanding actual, one share
outstanding pro forma, no shares outstanding as
adjusted.............................................. -- 27,000 --
Common Stock, no par value, 80,000,000 shares authorized;
15,310,405 shares outstanding actual and pro forma;
24,739,715 shares outstanding as adjusted(1).......... -- -- --
Additional paid-in capital............................... -- 4,600 127,671
Retained earnings (deficit)................................ (110,268) (110,268) (110,268)
---------- ---------- ------------
Total stockholders' equity (deficiency).................... (110,268) (78,668) 17,403
---------- ---------- ------------
Total capitalization............................. $ 73,338 $ 142,738 $ 152,738
========== ========== ============
</TABLE>

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

(1) Gives effect to the recent 1-for-3 reverse stock split and excludes
1,596,451 shares of Common Stock reserved for issuance upon exercise of
outstanding options and 2,801,700 shares reserved for future option grants.
See "Management -- Executive Compensation," "Management -- Stock Plan" and
Note 13 of Notes to Consolidated Financial Statements.

17
<PAGE> 20

SELECTED FINANCIAL DATA
HISTORICAL AND PRO FORMA

The following table sets forth selected consolidated financial data of the
Company and summary combined financial data of the Unconsolidated Joint
Ventures, consisting of the Unconsolidated Ticketing Joint Ventures and the
Pacer/CATS/CCS Joint Venture, for the years ended January 31, 1992, 1993, 1994,
1995 and 1996 and for the six months ended July 31, 1995 and 1996. The selected
financial data as of January 31, 1995 and 1996 and for each of the years in the
three year period ended January 31, 1996 presented below was derived from the
Company's Consolidated Financial Statements, the Unconsolidated Ticketing Joint
Ventures' Financial Statements and the Pacer/CATS/CCS Joint Venture's Financial
Statements, all of which were audited by KPMG Peat Marwick LLP, independent
auditors, whose reports with respect thereto, together with such financial
statements, appear elsewhere herein. The selected financial data for each of the
years in the two-year period ended January 31, 1993 were derived from audited
financial statements of the Company not included herein. The selected financial
data presented below as of and for the six months ended July 31, 1995 and 1996
is unaudited. In the opinion of the management of the Company, the unaudited
financial statements include all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial information
included herein. Results for the interim periods are not necessarily indicative
of results to be expected during the remainder of the current fiscal year or for
any future period.

The following table also includes certain unaudited pro forma financial
information for the fiscal year ended January 31, 1996 and for the six months
ended July 31, 1996 which gives effect to the following as if each transaction
had occurred as of February 1, 1995 for statement of operations purposes and as
of July 31, 1996 for balance sheet purposes: (i) the formation of the Australian
Joint Ventures, which occurred in December 1995, in which the Company acquired a
50% equity interest, (ii) the 100% acquisition of license rights and related
assets of the Company's Nashville, Tennessee licensee, which occurred in
February 1996, (iii) the acquisitions of its joint venture partners' 50% equity
interests in each of the European Joint Venture and the Pacer/CATS/CCS Joint
Venture, which occurred in June and July of 1996, respectively, (iv) the
acquisition of the license rights and related assets of the Company's Delaware
Valley (Philadelphia) licensee, which occurred in October 1996, (v) the
acquisition of a 27% equity interest in the Company's Mexico licensee, which
occurred in October 1996, (vi) the acquisition of its joint venture partner's
50% equity interest in Ticketmaster-Indiana, (vii) the proposed acquisitions of
its partners' 20% equity interests in the Company's Texas and Florida operating
subsidiaries, and the proposed acquisition of an additional 23% equity interest
in its Mexico licensee (all of such proposed acquisitions being subject to
signed letters of intent or definitive agreements), (viii) the purchase of a
building to serve as corporate headquarters, and (ix) the sale by the Company of
7,250,000 shares of Common Stock offered hereby and application of proceeds
therefrom as described in Notes to Pro Forma Financial Information. See "Pro
Forma Financial Information." Such pro forma financial information is not
necessarily indicative of actual results that would have been achieved and is
not indicative of future results. The information set forth below should be read
in conjunction with "Summary Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements and related Notes thereto appearing elsewhere in this
Prospectus.

The Company's Managed Businesses are comprised of the Consolidated
Businesses together with the Unconsolidated Joint Ventures. The Company believes
that a meaningful measure of its operating results, in addition to those of the
Company on a historical consolidated basis, is a period to period comparison of
the results of the Company's Managed Businesses. Accordingly, certain additional
operating data which the Company believes is helpful to obtain a better
understanding of historical performance is discussed in terms of the Company's
attributable beneficial interest in (i.e., its pro rata share of the results of)
the Managed Businesses, regardless of whether or not fully consolidated. Through
the acquisition of the other joint venture partner's 50% interest in the
European Joint Venture, the acquisition of the other joint venture partner's 50%
interest in the Pacer/CATS/CCS Joint Venture and the acquisitions of third party
interests in certain of the Company's other joint ventures and licensees as
described above (see "Business -- Joint Ventures and Licensees"), the
Consolidated Businesses will constitute approximately 84% of revenues of the
Managed Businesses on a pro forma basis for the year ended January 31, 1996.

18
<PAGE> 21

SELECTED FINANCIAL DATA
HISTORICAL AND PRO FORMA
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA
SIX MONTHS ------------------------
ENDED FISCAL YEAR SIX MONTHS
FISCAL YEAR ENDED JANUARY 31, JULY 31, ENDED ENDED
---------------------------------------------------- ------------------- JANUARY 31, JULY 31,
1992 1993 1994 1995 1996 1995 1996 1996 1996
-------- -------- -------- -------- -------- -------- -------- ----------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
CONSOLIDATED BUSINESSES(1)
REVENUES:
Ticketing operations.... $106,533 $129,937 $137,304 $172,002 $149,115 $ 78,816 $ 87,893 $ 186,558 $107,950
Concession and control
systems............... -- -- -- -- -- -- -- 22,985 12,964
Publications............ 2,990 2,793 4,575 4,640 4,198 1,766 4,512 5,697 4,688
Sponsorship and
promotion............. 1,525 2,075 1,724 1,849 3,972 955 4,777 4,461 4,954
Other................... -- -- 3,037 4,459 3,965 2,195 2,777 3,965 2,777
-------- -------- -------- -------- -------- -------- -------- ---------- --------
Total................... 111,048 134,805 146,640 182,950 161,250 83,732 99,959 223,666 133,333
-------- -------- -------- -------- -------- -------- -------- ---------- --------
OPERATING COSTS AND
EXPENSES:
Ticketing operations.... 89,732 107,444 117,020 141,612 124,895 65,114 74,933 152,612 89,842
Concession and control
systems............... -- -- -- -- -- -- -- 25,746 13,149
Publications............ 1,196 1,117 2,297 2,908 9,129 3,368 9,115 10,176 9,215
Other................... 3,344 3,331 11,738 22,444 16,649 7,940 9,622 16,649 9,622
Depreciation and
amortization.......... 9,299 9,398 9,399 13,301 9,325 4,763 4,929 17,620 8,852
Equity in net (income)
of unconsolidated
affiliates............ (1,746) (1,061) (1,577) (1,360) (1,458) (1,345) (2,136) (2,622) (1,632)
-------- -------- -------- -------- -------- -------- -------- ---------- --------
Operating income.......... 9,223 14,576 7,763 4,045 2,710 3,892 3,496 3,485 4,285
Interest expense, net..... 1,872 1,311 3,211 12,409 12,782 6,528 5,917 10,807 4,912
Net income (loss)......... 4,037 7,501 40 (6,678) (8,095) (2,327) (2,418) (4,479) (393)
Net income (loss) per
share................... $ 1.34 $ 2.48 $ 0.01 $ (0.44) $ (0.53) $ (0.15) $ (0.16) $ (0.18) $ (0.02)
Shares used in per share
calculation(5).......... 3,021 3,021 4,993 15,310 15,310 15,310 15,310 24,740 24,740
UNCONSOLIDATED JOINT
VENTURES(2)
REVENUES:
Ticketing operations.... $ 24,254 $ 34,050 $ 39,457 $ 46,921 $ 54,178 $ 27,530 $ 32,708 $ 40,862 $ 20,020
Publications............ 645 818 1,599 2,129 1,939 1,009 176 787 --
Sponsorship and
promotion............. 454 1,125 756 865 951 515 387 463 210
Concession and control
systems............... -- -- -- 19,354 22,985 10,755 12,964 -- --
-------- -------- -------- -------- -------- -------- -------- ---------- --------
Total................... 25,353 35,993 41,812 69,269 80,053 39,809 46,235 42,112 20,230
-------- -------- -------- -------- -------- -------- -------- ---------- --------
OPERATING COSTS AND
EXPENSES:
Ticketing operations.... 18,406 28,727 32,033 37,302 40,068 20,285 24,402 32,399 15,604
Publications............ 258 327 1,108 1,261 1,148 611 128 530 --
Sponsorship and
promotion............. -- -- -- -- -- -- -- -- --
Concession and control
systems............... -- -- -- 20,932 25,746 11,995 13,149 -- --
Depreciation and
amortization.......... 2,931 4,278 4,826 5,062 4,401 2,219 2,587 2,142 1,261
-------- -------- -------- -------- -------- -------- -------- ---------- --------
Operating income.......... 3,758 2,661 3,845 4,712 8,690 4,699 5,969 7,041 3,365
Interest expense, net..... (39) 35 107 580 942 436 356 399 184
Net income................ 3,797 2,625 3,738 3,632 7,443 4,197 5,364 6,358 3,129
Ticketmaster's share of
net income(7)........... $ 1,746 $ 1,061 $ 1,577 $ 1,360 $ 1,458 $ 1,345 $ 2,136 $ 2,622 $ 1,632
BALANCE SHEET DATA:
CONSOLIDATED BUSINESSES(1)
Total assets............ $ 75,369 $ 78,530 $ 90,424 $108,592 $105,397 $106,760 $147,174 $232,448
Total debt.............. 24,306 18,080 135,473 151,599 159,909 155,829 183,606 135,335
Shareholders' equity
(deficiency).......... 20,831 22,084 (93,020) (99,698) (107,793) (102,025) (110,268) 17,403
UNCONSOLIDATED JOINT
VENTURES(2)
Total assets............ $ 17,070 $ 30,930 $ 28,514 $ 46,013 $ 56,927 $ 32,614 $ 29,309 $ 23,092
Total debt.............. -- 1,309 1,048 9,667 8,360 608 111 111
Venturers' capital...... 9,814 14,153 12,760 11,006 13,118 10,563 11,993 10,217
</TABLE>

Footnotes on Following Page

19
<PAGE> 22

SELECTED FINANCIAL DATA (CONTINUED)
HISTORICAL AND PRO FORMA
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
FISCAL YEAR ENDED JANUARY 31, JULY 31,
---------------------------------------------------------------- --------
1992 1993 1994 1995 1996 1995
-------- ---------- ---------- ---------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL INFORMATION: (UNAUDITED)
NUMBER OF TICKETS SOLD:
Consolidated Businesses(1)..................... 30,579 36,881 38,655 42,458 37,619 19,630
Unconsolidated Joint Ventures(2)............... 8,594 11,057 12,194 13,156 15,497 7,546
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. 39,173 47,938 50,849 55,614 53,116 27,176
======== ========== ========== ========== ========== ========
GROSS DOLLAR VALUE OF TICKET SALES:
Consolidated Businesses(1)..................... $700,641 $ 898,121 $1,001,098 $1,308,310 $1,116,660 $571,210
Unconsolidated Joint Ventures(2)............... 172,639 246,378 282,274 345,491 414,918 202,145
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $873,280 $1,144,499 $1,283,372 $1,653,801 $1,531,578 $773,355
======== ========== ========== ========== ========== ========
TOTAL REVENUES:
Consolidated Businesses(1)..................... $111,048 $ 134,805 $ 146,640 $ 182,950 $ 161,250 $ 83,732
Unconsolidated Joint Ventures(2)............... 25,353 35,993 41,812 69,269 80,053 39,809
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $136,401 $ 170,798 $ 188,452 $ 252,219 $ 241,303 $123,541
======== ========== ========== ========== ========== ========
EBITDA(3):
Consolidated Businesses(1)..................... $ 16,776 $ 22,913 $ 15,585 $ 15,986 $ 10,577 $ 7,310
Unconsolidated Joint Ventures(2)............... 6,689 6,939 8,671 9,774 13,091 6,918
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $ 23,465 $ 29,852 $ 24,256 $ 25,760 $ 23,668 $ 14,228
======== ========== ========== ========== ========== ========
ATTRIBUTABLE EBITDA(4)......................... $ 18,656 $ 25,262 $ 18,235 $ 19,503 $ 15,222 $ 10,425
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Consolidated Businesses(1)..................... $ 21,236 $ 21,384 $ 14,571 $ 12,309 $ (3,068) $ (2,778)
Unconsolidated Joint Ventures(2)............... 3,622 12,439 6,439 15,761 17,658 5,698
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $ 24,858 $ 33,823 $ 21,010 $ 28,070 $ 14,590 $ 2,920
======== ========== ========== ========== ========== ========
NET CASH USED IN INVESTING ACTIVITIES
Consolidated Businesses(1)..................... $(20,009) $ (4,830) $ (6,250) $ (14,553) $ (9,452) $ (4,440)
Unconsolidated Joint Ventures(2)............... (4,229) (10,431) (4,654) (1,772) (6,508) (1,081)
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $(24,238) $ (15,261) $ (10,904) $ (16,325) $ (15,960) $ (5,521)
======== ========== ========== ========== ========== ========
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
Consolidated Businesses(1)..................... $ 6,022 $ (14,017) $ (2,732) $ 15,086 $ 7,772 $ 3,847
Unconsolidated Joint Ventures(2)............... (228) 3,119 (5,406) (9,133) (5,011) (5,417)
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $ 5,794 $ (10,898) $ (8,138) $ 5,953 $ 2,761 $ (1,570)
======== ========== ========== ========== ========== ========
CAPITAL EXPENDITURES:
Consolidated Businesses(1)..................... $ 5,779 $ 7,500 $ 3,072 $ 6,838 $ 3,644 $ 2,012
Unconsolidated Joint Ventures(2)............... 1,994 1,148 1,139 1,927 2,801 1,121
-------- ---------- ---------- ---------- ---------- --------
Managed Businesses............................. $ 7,773 $ 8,648 $ 4,211 $ 8,765 $ 6,445 $ 3,133
======== ========== ========== ========== ========== ========
Net income (loss)(6)...........................
Net income (loss) per share(6).................
Shares used in per share calculation(6)........

SIX PRO FORMA
MONTHS -------------------------
ENDED FISCAL YEAR SIX MONTHS
JULY 31, ENDED ENDED
-------- JANUARY 31, JULY 31,
1995 1996 1996
-------- ----------- ----------
(UNAUDITED) (UNAUDITED)

<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION: (UNAUDITED)
NUMBER OF TICKETS SOLD:
Consolidated Businesses(1)..................... 21,580 48,144 26,866
Unconsolidated Joint Ventures(2)............... 8,823 9,639 5,036
-------- ---------- --------
Managed Businesses............................. 30,403 57,783 31,902
======== ========== ========
GROSS DOLLAR VALUE OF TICKET SALES:
Consolidated Businesses(1)..................... $619,806 $1,389,801 $767,456
Unconsolidated Joint Ventures(2)............... 250,188 269,984 144,499
-------- ---------- --------
Managed Businesses............................. $869,994 $1,659,785 $911,955
======== ========== ========
TOTAL REVENUES:
Consolidated Businesses(1)..................... $ 99,959 $ 223,666 $133,333
Unconsolidated Joint Ventures(2)............... 46,235 42,112 20,230
-------- ---------- --------
Managed Businesses............................. $146,194 $ 265,778 $153,563
======== ========== ========
EBITDA(3):
Consolidated Businesses(1)..................... $ 6,289 $ 18,483 $ 11,505
Unconsolidated Joint Ventures(2)............... 8,556 9,183 4,626
-------- ---------- --------
Managed Businesses............................. $ 14,845 $ 27,666 $ 16,131
======== ========== ========
ATTRIBUTABLE EBITDA(4)......................... $ 10,068 $ 23,272 $ 14,035
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Consolidated Businesses(1)..................... $ 7,457 $ 1,239 $ 15,142
Unconsolidated Joint Ventures(2)............... 6,721 14,927 56
-------- ---------- --------
Managed Businesses............................. $ 14,178 $ 16,166 $ 15,198
======== ========== ========
NET CASH USED IN INVESTING ACTIVITIES
Consolidated Businesses(1)..................... $ (4,658) $ (12,107) $ (5,790)
Unconsolidated Joint Ventures(2)............... (6,851) (3,793) (1,547)
-------- ---------- --------
Managed Businesses............................. $(11,509) $ (15,900) $ (7,337)
======== ========== ========
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
Consolidated Businesses(1)..................... $ 10,347 $ 7,439 $ 10,342
Unconsolidated Joint Ventures(2)............... (3,943) (645) (2,463)
-------- ---------- --------
Managed Businesses............................. $ 6,404 $ 6,794 $ 7,879
======== ========== ========
CAPITAL EXPENDITURES:
Consolidated Businesses(1)..................... $ 3,260 $ 5,796 $ 5,260
Unconsolidated Joint Ventures(2)............... 1,873 696 742
-------- ---------- --------
Managed Businesses............................. $ 5,133 $ 6,492 $ 6,002
======== ========== ========
Net income (loss)(6)........................... $ (4,390) $ (620)
Net income (loss) per share(6)................. $ (.24) $ (.03)
Shares used in per share calculation(6)........ 18,295 18,295
</TABLE>

- ---------------
(1) Defined as results of operations from businesses included in the Company's
Consolidated Financial Statements included elsewhere in this Prospectus,
which include the accounts of the Company, its wholly owned subsidiaries and
majority (80% or greater) owned companies and joint ventures. Investments in
companies and joint ventures, which ownership ranges from 33 1/3%-50% and in
which the Company exercises significant influence over operating and
financial policies, are accounted for using the equity method.
(2) Defined as the combined results of operations from Unconsolidated Ticketing
Joint Ventures and Pacer/CATS/CCS, the individual financial statements of
which are included elsewhere in this Prospectus. Ticketmaster's ownership
interest in these businesses range from 33 1/3%-50% and are companies and
joint ventures in which Ticketmaster exercises significant influence over
operating and financial policies, and are accounted for under the equity
method included in the Consolidated Businesses.
(3) Defined as revenue less operating costs before interest, depreciation and
amortization, and taxes ("EBITDA"). EBITDA does not represent cash flows
from operations, as defined by generally accepted accounting principles, and
should not be considered to be an alternative to net income as an indicator
of operations performance or to cash flows from operations as a measure of
liquidity. Management believes that an EBITDA presentation is an important
factor in evaluating the amount of cash available for repayment of debt,
future investments, dividends and in determining cash available for future
distributions.
(4) Defined as Ticketmaster's pro rata share in the results of the Consolidated
Businesses and of its Unconsolidated Joint Ventures' revenue less operating
costs before interest, depreciation and amortization, and taxes. EBITDA does
not represent cash flows from operations, as defined by generally accepted
accounting principles, and should not be considered to be an alternative to
net income as an indicator of operating performance or to cash flows from
operations as a measure of liquidity. Management believes that an EBITDA
presentation is an important factor in evaluating the amount of cash
available for repayment of debt, future investments, dividends and in
determining cash available for future distributions.
(5) See Note 1 to the Notes to Consolidated Financial Statements for per share
calculations for historical data and "Pro Forma Financial Information" for
unaudited pro forma data. For pro forma purposes, includes 15,310,405 pro
forma weighted average common and common equivalent shares outstanding at
January 31, 1996 and July 31, 1996, 7,250,000 shares of Common Stock offered
by the Company in connection with the Offering, and 1,862,069 and 317,241
shares of Common Stock expected to be issued in connection with the
acquisition, by purchase, redemption or otherwise, of its joint venture
partner's 50% equity interest in Ticketmaster-Indiana and the proposed
acquisition of its partner's 20% equity interest in the Company's Florida
operating subsidiary, respectively.
(6) Represents earnings and earnings per share information giving effect to the
reduction in interest expense associated with the repayment of a portion of
the outstanding indebtedness (see "Use of Proceeds"). Share information
reflects the increase in weighted average common shares assuming the
issuance of shares directly proportionate to the corresponding repayment of
indebtedness.
(7) Represents Ticketmaster's share of net income from Unconsolidated Joint
Ventures defined in Note (2) above and Ticketmaster's share of net income
from various investments in other unconsolidated joint ventures in which
Ticketmaster maintains ownership interests ranging from 25%-50%.

20
<PAGE> 23

PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information (the "Pro Forma
Financial Information") is based on the historical financial statements of the
Company and has been prepared to illustrate the effects of the acquisitions
described below and the related financing transactions and the application of
the proceeds of the Offering as set forth under "Use of Proceeds." The Pro Forma
Financial Information does not purport to represent what the Company's financial
position and results of operations actually would have been if such transactions
had in fact occurred on such dates. The pro forma adjustments are based on
currently available information and upon certain assumptions that management
believes are reasonable under current circumstances. The Pro Forma Financial
Information and accompanying notes should be read in conjunction with the
Consolidated Financial Statements and related Notes thereto, and other financial
information pertaining to the Company, the acquired businesses and businesses
proposed to be acquired included in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Prospectus.

The pro forma combined balance sheet as of July 31, 1996 and the pro forma
combined statements of operations for the year ended January 31, 1996 and for
the six months ended July 31, 1996 give effect to the following as if each
transaction had occurred as of February 1, 1995 for statement of operations
purposes and as of July 31, 1996 for balance sheet purposes: (i) the formation
of the Australian Joint Ventures, which occurred in December 1995, in which the
Company acquired a 50% equity interest, (ii) the 100% acquisition of license
rights and related assets of the Company's Nashville, Tennessee licensee, which
occurred in February 1996, (iii) the acquisitions of its joint venture partners'
50% equity interests in each of the European Joint Venture and the
Pacer/CATS/CCS Joint Venture, which occurred in June and July of 1996,
respectively, (iv) the acquisition of the license rights and related assets of
the Company's Delaware Valley (Philadelphia) licensee, which occurred in October
1996, (v) the acquisition of a 27% equity interest in the Company's Mexico
licensee, which occurred in October 1996, (vi) the acquisition of its joint
venture partner's 50% equity interest in Ticketmaster-Indiana, (vii) the
proposed acquisitions of its partners' 20% equity interests in the Company's
Texas and Florida operating subsidiaries, and the proposed acquisition of an
additional 23% equity interest in its Mexico licensee (all of such proposed
acquisitions being subject to signed letters of intent or definitive agreements,
(viii) the purchase of a building to serve as corporate headquarters and (ix)
the sale by the Company of 7,250,000 shares of Common Stock offered hereby and
application of proceeds therefrom.

The acquisitions will be accounted for using the purchase method of
accounting. The total purchase costs of the acquisitions will be allocated to
the tangible and intangible assets and liabilities acquired based upon their
respective fair values. The allocation of the aggregate purchase price reflected
in the Pro Forma Financial Information is preliminary; however, the final
allocation is not expected to differ materially from the preliminary allocation.

21
<PAGE> 24

TICKETMASTER GROUP, INC.

PRO FORMA BALANCE SHEET
(UNAUDITED)

JULY 31, 1996
(IN THOUSANDS)

ASSETS:

<TABLE>
<CAPTION>
TICKETMASTER PRO FORMA
CONSOLIDATED ACQUIRED PRO FORMA COMBINED
BUSINESSES BUSINESSES ADJUSTMENTS BALANCE SHEET
------------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents............................... $ 47,093 $ 5,985 $ 30,000 (1) $ 62,878
105,125 (2)
(73,271)(3)
(19,000)(5a)
(6,000)(5b)
(1,800)(5c)
(5,000)(6)
(11,200)(7)
(9,054)(8)
Account receivable, ticket sales........................ 10,785 1,760 12,545
Account receivable, other............................... 8,059 84 8,143
Inventory............................................... 4,454 4 4,458
Prepaid expenses........................................ 5,969 535 6,504
-------- ------- ---------
Total current assets.............................. 76,360 8,368 94,528
-------- ------- ---------
OTHER ASSETS
Property, equipment and leasehold improvements, net..... 16,276 1,812 11,200 (7) 29,288
Investments in and advances to affiliated entities...... 8,334 347 (1,228)(4a) 8,065
612 (5c)
Cost in excess net of assets acquired................... 27,333 20,619 (4a) 69,890
3,632 (4b)
12,427 (5a)
4,691 (5b)
1,188 (5c)
Intangible and other assets, net........................ 13,401 56 5,500 (4a) 25,207
350 (4b)
5,000 (5a)
900 (5b)
Deferred income taxes, net.............................. 5,470 5,470
-------- ------- ---------
Total other assets................................ 70,814 2,215 137,920
-------- ------- ---------
Total assets...................................... $ 147,174 $ 10,583 $ 232,448
======== ======= =========

<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY):
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt....................... $ 205 $ $ (205)(3) $ --
Accounts payable, trade................................. 8,401 2,270 10,671
Accounts payable, clients............................... 36,024 2,892 38,916
Accrued expenses........................................ 13,500 1,340 14,840
Deferred income......................................... 8,847 73 8,920
-------- ------- ---------
Total current liabilities......................... 66,977 6,575 73,347
-------- ------- ---------
LONG-TERM LIABILITIES
Long-term debt, net of current portion.................. 178,401 30,000 (1) 135,335
(73,066)(3)
Deferred rent and other................................. 5,963 326 6,289
Minority interests...................................... 1,101 (618)(4b) 74
(409)(5b)
Exchangeable Promissory Note............................ 5,000 (5,000)(6) --
SHAREHOLDERS' EQUITY (DEFICIENCY)
Preferred stock.........................................
Common stock............................................
Additional paid in capital.............................. 105,125 (2) 127,671
27,000 (4a)
4,600 (4b)
(9,054)(8)
Accumulated earnings (deficit).......................... (110,268) 3,682 (2,109)(4a) (110,268)
(1,573)(5a)
-------- ------- ---------
Total shareholders' equity (deficiency)........... (110,268) 3,682 17,403
-------- ------- ---------
Total liabilities and shareholders' equity........ $ 147,174 $ 10,583 $ 232,448
======== ======= =========
</TABLE>

Notes Following

22
<PAGE> 25

TICKETMASTER GROUP, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)

FISCAL YEAR ENDED JANUARY 31, 1996
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
OTHER ACQUIRED
TICKETMASTER ACQUIRED BUSINESSES --
CONSOLIDATED TICKETING PACER/ PRO FORMA COMBINED
BUSINESSES BUSINESSES CATS/CCS ADJUSTMENTS PRO FORMA
------------ ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Ticketing operations...................... $ 149,115 $ 37,681 $ $ (238)(9) $ 186,558
Concession control systems................ 22,985 22,985
Publications.............................. 4,198 1,499 5,697
Sponsorship & promotion................... 3,972 489 4,461
Merchandising............................. 2,201 2,201
Sales of ticketing equipment.............. 1,764 1,764
----------- ------- ------- -----------
161,250 39,669 22,985 223,666
----------- ------- ------- -----------
Operating costs, expenses and other items:
Ticketing operations...................... 97,147 20,289 (238)(9) 117,198
Ticketing selling, general and
administrative.......................... 27,748 7,666 35,414
Concession control systems operations..... 18,844 18,844
Concession control systems selling,
general and administrative.............. 6,902 6,902
Publications.............................. 9,129 1,047 10,176
Merchandising............................. 1,891 1,891
Corporate general and administrative...... 14,758 14,758
Depreciation and amortization............. 9,325 2,250 956 4,722(10a) 17,620
367(10b)
Equity in net (income) of unconsolidated
affiliates.............................. (1,458) (157) (1,007)(11) (2,622)
----------- ------- ------- -----------
Operating income (loss)............ 2,710 8,574 (3,717) 3,485
Other expenses:
Interest expense, net..................... 12,782 69 985 (3,029)(12) 10,807
Minority interests........................ 273 (129)(13) 144
----------- ------- ------- -----------
Income (loss) before income
taxes............................ (10,345) 8,505 (4,702) (7,466)
Income tax provision (benefit)............ (2,250) 305 (1,042)(14) (2,987)
----------- ------- ------- -----------
Net income (loss).................. $ (8,095) $ 8,505 $ (5,007) $ (4,479)
=========== ======= ======= ===========
Net income (loss) per share................. $ (0.53) $ (.18)
=========== ===========
Weighted average number of common shares
outstanding(16)........................... 15,310,405 24,739,715
=========== ===========
Supplemental Financial Information:
Attributable EBITDA(15)..................................................................... $ 23,272
Net cash provided by operating activities................................................... 1,239
Net cash used in investing activities....................................................... (12,107)
Net cash provided by financing activities................................................... 7,439
===========
</TABLE>

Notes Following

23
<PAGE> 26

TICKETMASTER GROUP, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)

SIX MONTHS ENDED JULY 31, 1996
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
OTHER ACQUIRED
TICKETMASTER ACQUIRED BUSINESSES --
CONSOLIDATED TICKETING PACER/ PRO FORMA COMBINED
BUSINESSES BUSINESSES CATS/CCS ADJUSTMENTS PRO FORMA
------------ ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Ticketing operations................... $ 87,893 $ 20,176 $ $ (119)(9) $ 107,950
Concession control systems............. 12,964 12,964
Publications........................... 4,512 176 4,688
Sponsorship & promotion................ 4,777 177 4,954
Merchandising.......................... 1,395 1,395
Sales of ticketing equipment........... 1,382 1,382
----------- ------- ------- --------
99,959 20,529 12,964 133,333
----------- ------- ------- --------
Operating costs, expenses and other
items:
Ticketing operations................... 58,655 11,698 (119)(9) 70,234
Ticketing selling, general and
administrative....................... 16,278 3,330 19,608
Concession control systems
operations........................... 10,133 10,133
Concession control systems selling,
general and administrative........... 3,016 3,016
Publications........................... 9,115 100 9,215
Merchandising.......................... 1,226 1,226
Corporate general and administrative... 8,396 8,396
Depreciation and amortization.......... 4,929 875 504 2,361(10a) 8,852
183(10b)
Equity in net loss (income) of
unconsolidated affiliates............ (2,136) (57) 561(11) (1,632)
----------- ------- ------- --------
Operating income
(loss)............................. 3,496 4,583 (689) 4,285
Other expenses:
Interest expense, net.................. 5,917 25 484 (1,514)(12) 4,911
Minority interests..................... 126 (98)(13) 28
----------- ------- ------- --------
Income (loss) before income taxes.... (2,547) 4,558 (1,173) (655)
Income tax provision (benefit)......... (129) (133)(14) (262)
----------- ------- ------- --------
Net income (loss).................... $ (2,418) $ 4,558 $ (1,173) $ (392)
=========== ======= ======= ========
Net income (loss) per share.............. $ (0.16) $ (.02)
=========== ========
Weighted average number of common shares
outstanding(16)........................ 15,310,405 24,739,715
=========== ========
Supplemental Financial Information:
Attributable EBITDA(15).................................................................. $ 14,035
Net cash provided by operating activities................................................ 15,142
Net cash used in investing activities.................................................... (5,790)
Net cash provided by financing activities................................................ 10,342
========
</TABLE>

Notes Following

24
<PAGE> 27

NOTES TO PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(1) Represents borrowings incurred by the Company to purchase a building which
will serve as corporate headquarters and acquire the license rights and
related assets of its Delaware Valley (Philadelphia) licensee. (See notes 7
and 5a).
(2) Gross proceeds from the sale by the Company of 7,250,000 shares of Common
Stock issued at the initial public offering price of $14.50 per share.
(3) Represents the portion of net proceeds from the Offering used for repayment
of outstanding indebtedness under the Company's Credit Agreement.
(4) Represents:
a. 1,862,069 shares of Common Stock to be issued in connection with the
acquisition of the other joint venturer's interest in Ticketmaster-Indiana
at the initial public offering price of $14.50 per share. The acquisition
reflects an elimination of Ticketmaster-Indiana's investment and equity
balances and provides for an allocation of the purchase price to net
assets acquired, contracts and cost in excess of net asset acquired.
b. 317,241 shares of Common Stock to be issued in connection with the
proposed acquisition of the 20% equity interest of its partner in
Ticketmaster-Florida, Inc. at the initial public offering price of $14.50
per share. The adjustments reflect an elimination of a minority interest
balance and provide for an allocation of the purchase price to net assets
acquired, contracts and cost in excess of net assets acquired.
(5) Represents:
a. cash used by the Company to acquire the license rights and related assets
of its Delaware Valley (Philadelphia) licensee. The adjustments reflect
the allocation of the purchase price to net assets acquired, contracts and
cost in excess of net assets acquired. (See note 1).
b. cash used by the Company in connection with the proposed acquisition of
the 20% equity interest of its partner in the Company's Texas operating
subsidiary. The adjustments reflect the allocation of the purchase price
to net assets acquired, contracts and cost in excess of assets acquired.
c. cash used to acquire a 50% joint venture interest in the Company's Mexico
licensee. The adjustments reflect recognition of an investment in the
licensee and an allocation to cost in excess of net assets acquired.
(6) Represents proceeds used by the Company to repay an outstanding
Exchangeable Promissory Note arising from the acquisition of the other
joint venturer's interest in the European Joint Venture.
(7) Represents cash used by the Company to purchase a building to serve as
corporate headquarters. (See Note 1).
(8) Represents the underwriting discount commission and estimated offering
expenses.
(9) Reflects elimination of license fees earned by Ticketmaster and paid by
joint ventures and licensees in Delaware Valley (Philadelphia) and
Nashville.
(10) Represents:
a. amortization arising from the purchased user agreements and excess
purchase price paid or to be paid for the net assets of a joint venturer
partner's 50% equity interest in the European Joint Venture, a licensee's
100% equity interest in Nashville, Tennessee, a joint venture partner's
50% equity interest in Ticketmaster-Indiana, a licensee's 100% equity
interest in Delaware Valley (Philadelphia), a partner's 20% equity
interest in the Company's Florida operating subsidiary, a partner's 20%
equity interest in the Company's Texas operating subsidiary and a
licensee's 50% equity interest in its Mexico licensee. The purchased user
agreements are being amortized using a discounted cash flow method through
the expiration date of the underlying contracts (amortization totals
$3,008 and $1,504 for fiscal 1996 and the six months ended July 31, 1996,
respectively). The cost in excess of net assets acquired is being
amortized over a 30 year period (amortization totals $1,714 and $857 for
fiscal 1996 and the six months ended July 31, 1996 respectively).
b. depreciation arising from the purchase of the building which will serve as
corporate headquarters. (See note 7).

25
<PAGE> 28

(11) Represents the consolidation of income earned by Ticketmaster-Indiana and
the European Joint Venture, aggregating $3,709 in fiscal 1996 and $1,734
for the six months ended July 31, 1996, and losses incurred by the
Pacer/CATS/CCS Joint Venture, totaling $4,211 in fiscal 1996 and $1,173 for
the six months ended July 31, 1996, offset by an increase of $505 in equity
for the inclusion of the Australian Joint Ventures for the entire period.
(12) Represents the reduction in interest expense resulting from the repayment
of indebtedness under the Company's Credit Agreement ($3,029 and $1,514 for
fiscal 1996 and the six months ended July 31, 1996, respectively), at
approximate rates of interest incurred by the Company during the respective
periods, approximately 7.0%.
(13) Represents a decrease in the minority interests held by the Company's
partners in its Florida and Texas operating subsidiaries.
(14) Represents the related income tax effect of the pro forma adjustments
utilizing a statutory rate of 40%.
(15) Defined as Ticketmaster's pro rata share of its Consolidated Businesses and
Unconsolidated Joint Ventures' revenue less operating costs before
interest, depreciation, amortization and taxes ("EBITDA"). EBITDA does not
represent cash flows from operations, as defined by generally accepted
accounting principles, and should not be considered to be an alternative to
net income as an indicator of operating performance or to cash flows from
operations as a measure of liquidity.
(16) Includes 15,310,405 pro forma weighted average common and common equivalent
shares outstanding at January 31, 1996 and July 31, 1996, 7,250,000 shares
of Common Stock offered by the Company in connection with the Offering, and
1,862,069 and 317,241 shares of Common Stock expected to be issued in
connection with the acquisition, by purchase, redemption or otherwise, of
its joint venture partner's 50% equity interest in Ticketmaster-Indiana and
the proposed acquisition of its partner's 20% equity interest in the
Company's Florida operating subsidiary, respectively.
(17) Summary data for Ticketmaster-Indiana, an acquisition not yet completed
included in the acquired businesses columns is as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
JANUARY 31, 1996 JULY 31, 1996
----------------- ----------------
<S> <C> <C>
Revenue...................................... $20,759 $ 11,036
Operating costs and expenses................. 14,526 8,118
------------- -------------
Net income................................... $ 6,233 $ 2,918
============= =============
</TABLE>

26
<PAGE> 29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Summary and
Selected Financial Data, Consolidated Financial Statements and related Notes
thereto and the Pro Forma Financial Information along with the other financial
information appearing elsewhere in this Prospectus. Unless otherwise noted,
references to a specific fiscal year are to the 12-month period ending on
January 31 of such year.

GENERAL

The Company's Managed Businesses are comprised of the Consolidated
Businesses together with the Unconsolidated Joint Ventures. The Company seeks to
optimize the performance of each of the Managed Businesses regardless of its
percentage ownership. The Company provides the same scope of ticket inventory
control and management, distribution and dedicated marketing and support
services to its joint ventures as it does to its wholly owned operating
subsidiaries. Consequently, certain aspects of the performance of the Managed
Businesses are better understood by measuring their performance as a whole
without regard to the Company's ownership interest. Where relevant, certain
aspects of the performance of the Managed Businesses are also discussed with
regard to the Consolidated Businesses and Unconsolidated Joint Ventures
separately.

The Company believes that a meaningful measure of its operating results, in
addition to those of the Company on a historical consolidated basis, is a period
to period comparison of the results of the Managed Businesses. Accordingly, in
order to obtain a better understanding of the factors affecting the Company's
performance, additional operating data is presented to show the Company's
attributable beneficial interest in (i.e., its pro rata share of the results of)
the Managed Businesses regardless of whether or not fully consolidated. Through
the acquisition of the remaining 50% joint venturer's interest in the European
Joint Venture, which was completed in June 1996, the acquisition of the
remaining 50% joint venturer's interest in the Pacer/CATS/CCS Joint Venture,
which was completed in July 1996, and the acquisitions of third party interests
in certain of the Company's other joint ventures and licensees (see
"Business -- Joint Ventures and Licensees"), the Consolidated Businesses will
constitute approximately 84% of revenues of the Managed Businesses on a pro
forma basis for the year ended January 31, 1996.

REVENUES

Historically, ticket operations revenues have accounted for approximately
95% of the Company's consolidated revenues. Ticket operation revenues are
primarily comprised of convenience charges which the Company generates by
providing clients with access to the Company's extensive distribution
capabilities including Company-owned call centers, an independent network of
sales outlets remote to the client's box office and non-traditional distribution
channels such as the Internet. Other components of ticket operations revenue
include handling fees attributed to the sale and distribution of tickets through
channels other than remote sales outlets, credit card fee reimbursements and
licensing fees. In addition, the Company generates revenues from the sale of
ticketing systems to licensees and other third party users, which revenues
historically have averaged between 1% and 2% of total revenues on an annual
basis.

The Company generally contracts with each client to be its exclusive agent
for ticket distribution for a specified period, typically three to five years,
and has experienced a high contract renewal rate. In contracts with clients, the
Company is granted the right to collect from ticket purchasers a per ticket
convenience charge on all tickets sold by the Company and an additional per
order handling charge on those tickets sold by the Company at other than remote
sales outlets.

Fluctuations in ticket operation revenues occur largely as a result of
changes in the number of tickets sold and changes in the Company's average
revenue per ticket. The number of tickets sold by the Company can vary as a
result of (i) additions or deletions to the list of client facilities serviced
by the Company; (ii) fluctuations in the scheduling of events, particularly for
popular performers; (iii) overall consumer demand for live entertainment events;
and (iv) the percentage of tickets for events which are sold directly by the
Company's clients and not through the Company's distribution system.

27
<PAGE> 30

The average revenue per ticket will vary as a result of the amount of
convenience charges earned on each ticket. The amount of the convenience charge
typically varies based upon numerous factors, including the type of event and
whether the ticket is purchased at a retail sales outlet or through call
centers, as well as the services to be rendered to the client, the amount and
cost of equipment to be installed at the client's facility and the amount of
advertising and/or promotional allowances to be provided by the Company.
Contracts with clients provide for scheduled increases in convenience charges
during the term of the contract.

The sale of tickets for an event often commences several months prior to
the date of the event. The Company recognizes ticket operation revenue when the
ticket is sold. If an event is likely to be canceled, a reserve is established
in the financial statements for potential convenience charge refunds. Except for
major league sports' work stoppages, the losses attributable to cancellations
have been very limited because most events are postponed and rescheduled rather
than cancelled.

The Company has generated revenue through the sale of subscriptions to the
Ticketmaster Entertainment Guides, which were produced and distributed by the
Company to provide the ticket buying public with regional information regarding
future live entertainment events. Significant growth in the number of
subscribers to the Entertainment Guide led, in part, to the creation of Live!
magazine, a monthly entertainment publication whose first edition was published
in February 1996. Each edition of Live! contains a supplemental regional
Entertainment Guide inserted for the reader's benefit. The first nine issues of
the magazine have had an aggregate of 259 pages of advertising.

In July 1994, the Company commenced operating Entertainment To Go (ETG), a
merchandising business designed to leverage the Company's inbound call center
traffic, its database of consumers and its relationships with the music and
entertainment industries to effectively sell at retail prices music, tour and
entertainment related merchandise products to consumers.

Additional revenues are generated through the development of integrated
marketing programs designed to provide a strategic partner with access to the
Company's extensive distribution capabilities and media assets such as Live!
magazine and Ticketmaster Online (a 75,000 page World Wide Web site). Additional
sponsorship and promotion opportunities exist through call center music on hold,
ticketbacks, inserts and ticket envelopes.

OPERATING COSTS

The Company records ticket operations costs specifically associated with
the distribution of tickets sold through its system. The largest components of
these operating costs are payroll, telecommunication charges, data communication
costs and commissions paid on tickets distributed through outlets away from the
box office, along with the clients' share of convenience charges, and other
expenses with lesser components including ticket stock and postage. These costs
are primarily variable in nature. Direct payroll costs relate to the Company's
call centers, which are located throughout the U.S., and in the U.K., Australia
and Mexico. Outlet commissions are paid to music chains, department stores and
other independent retail locations in exchange for their providing space and
personnel to service ticket purchases. The participation, if any, by clients in
the Company's revenues from convenience charges and other revenues is set forth
in the Company's contracts with its clients.

Costs associated with the production and fulfillment of Live! magazine
include production (paper and printing), editorial and distribution costs. These
costs are primarily variable in nature and fluctuate based upon the number of
copies produced and the number of pages in each edition.

The costs recorded by the Company for its merchandising operations are
directly related to the procurement of products which are ultimately sold and
distributed to consumers. The Company acquires its products through licensees of
major touring acts and other copyright owners and does not generally invest in
or hold inventory prior to sale; consequently, operations are designed to
quickly access product inventory to fulfill orders.

Because many operating expenses such as those attributable to technology
support, sales and marketing, human resources management and other
administrative functions are not allocable to specific businesses, they

28
<PAGE> 31

are recorded as corporate general and administrative expenses. These cost
characteristics of maintaining the Company's Consolidated Businesses differ from
the cost characteristics of the Unconsolidated Joint Ventures; consequently,
Consolidated Businesses have higher costs of services as a percentage of revenue
than Unconsolidated Joint Ventures.

OTHER

Although the Company collects ticket receipts, representing the full ticket
sales price, on behalf of its clients, it only records as revenue the
convenience charges and handling fees included in the ticket sales price. The
remainder of the ticket sales price constitutes funds being held on behalf of
clients, which the Company is obligated to remit to its clients at times
specified by contracts with each client. As a result, a significant portion of
the Company's cash, accounts receivable and accounts payable relates to funds
received and held on behalf of clients. Accounts payable primarily represent the
ticket proceeds payable to its clients, which are paid according to the terms
specified in each contract, typically weekly. Accounts receivable primarily
represent the portion of ticket proceeds, including the convenience charges, due
the Company from its independent outlets and from credit card companies. The
Company's contracts with outlets set forth payment terms, generally ranging from
daily to weekly, which together with other collection procedures virtually
eliminate losses from these receivables.

29
<PAGE> 32

RESULTS OF OPERATIONS

The following tables set forth operating results for the Managed Businesses
showing the results of the Consolidated Businesses and the Unconsolidated Joint
Ventures as a percentage of total revenues. The percentages shown for the
Unconsolidated Joint Ventures represent the full balance for each line item and
are not reduced by the joint venture ownership interests held by entities other
than the Company.

<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR ENDED JANUARY ENDED
31, JULY 31,
------------------------- ---------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
I. CONSOLIDATED BUSINESSES:
Revenue:
Ticketing operations........................... 93.6% 94.0% 92.5% 94.1% 87.9%
Publications................................... 3.1 2.6 2.6 2.1 4.5
Sponsorship & promotion........................ 1.2 1.0 2.5 1.2 4.8
Merchandising.................................. 0.0 0.7 1.3 1.5 1.4
Sales of ticketing equipment................... 2.1 1.7 1.1 1.1 1.4
----- ----- ----- ----- -----
100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- -----
Operating costs, expenses and other items:
Ticketing operations........................... 60.1 61.6 60.2 61.4 58.7
Ticketing selling, general and
administrative............................... 19.7 15.8 17.2 16.4 16.3
Publications................................... 1.6 1.6 5.7 4.0 9.1
Merchandising.................................. 0.0 0.7 1.2 1.3 1.2
Corporate general and administrative........... 8.0 7.5 9.2 8.2 8.4
Write-off of in process research and
development.................................. 0.0 4.1 0.0 0.0 0.0
Depreciation, amortization and other........... 6.4 7.3 5.8 5.7 4.9
Equity in income of unconsolidated
affiliates................................... (1.1) (0.7) (0.9) (1.6) (2.1)
----- ----- ----- ----- -----
Operating income............................... 5.3 2.1 1.6 4.6 3.5
Interest expense and other........................ 2.7 7.3 8.1 8.1 6.0
----- ----- ----- ----- -----
Income (loss) before income taxes.............. 2.6 (5.2) (6.5) (3.5) (2.5)
Income tax provision (benefit).................... 2.6 (1.5) (1.4) (0.7) (0.1)
----- ----- ----- ----- -----
Net income (loss).............................. 0.0% (3.7)% (5.1)% (2.8)% (2.4)%
===== ===== ===== ===== =====
II. UNCONSOLIDATED JOINT VENTURES:
Revenue:
Ticketing operations........................... 94.4% 67.7% 67.7% 69.2% 70.7%
Publications................................... 3.8 3.1 2.4 2.5 0.4
Sponsorship & promotion........................ 1.8 1.3 1.2 1.3 0.8
Concession control systems .................... 0.0 27.9 28.7 27.0 28.1
----- ----- ----- ----- -----
100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- -----
Operating costs, expenses and other items:
Ticketing operations........................... 54.6 40.7 38.5 39.3 39.7
Ticketing selling, general and
administrative............................... 22.0 13.1 11.5 11.6 13.1
Publications................................... 2.6 1.8 1.4 1.5 0.3
Concession control systems operations.......... 0.0 17.6 19.9 18.2 18.3
Concession control systems selling, general and
administrative............................... 0.0 12.7 12.3 11.9 10.1
Depreciation and amortization.................. 11.5 7.3 5.5 5.6 5.6
----- ----- ----- ----- -----
Operating income............................. 9.3 6.8 10.9 11.9 12.9
Interest expense and other........................ 0.3 0.8 1.2 1.1 0.8
----- ----- ----- ----- -----
Income before income tax..................... 9.0 6.0 9.7 10.8 12.1
Income tax provision.............................. 0.0 0.7 0.4 0.2 0.5
----- ----- ----- ----- -----
Net income................................... 9.0% 5.3% 9.3% 10.6% 11.6%
===== ===== ===== ===== =====
</TABLE>

30
<PAGE> 33

SIX MONTHS ENDED JULY 31, 1996 COMPARED WITH SIX MONTHS ENDED JULY 31, 1995

The following tables set forth unaudited operating results for the
Consolidated Businesses and the Unconsolidated Joint Ventures, collectively, the
Managed Businesses. The amounts shown for the Unconsolidated Joint Ventures
represent the full balance for each line item and do not give effect to the
joint venture ownership interests held by entities other than the Company.

<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY 31, 1995 SIX MONTHS ENDED JULY 31, 1996
------------------------------------------ ------------------------------------------
CONSOLIDATED UNCONSOLIDATED MANAGED CONSOLIDATED UNCONSOLIDATED MANAGED
BUSINESSES JOINT VENTURES BUSINESSES BUSINESSES JOINT VENTURES BUSINESSES
------------ -------------- ---------- ------------ -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations....... $ 78,816 $ 27,530 $ 106,346 $ 87,893 $ 32,708 $ 120,601
Concession control
systems................. -- 10,755 10,755 -- 12,964 12,964
Publications............... 1,766 1,009 2,775 4,512 176 4,688
Sponsorship & promotion.... 955 515 1,470 4,777 387 5,164
Merchandising.............. 1,255 -- 1,255 1,395 -- 1,395
Sales of ticketing
equipment............... 940 -- 940 1,382 -- 1,382
------- ------- -------- ------- ------- --------
Total Revenues..... 83,732 39,809 123,541 99,959 46,235 146,194
------- ------- -------- ------- ------- --------
Operating costs:
Ticketing operations....... 51,383 15,652 67,035 58,655 18,344 76,999
Ticketing selling, general
and administrative...... 13,731 4,633 18,364 16,278 6,058 22,336
Concession control systems
operations.............. -- 7,246 7,246 -- 8,462 8,462
Concession control systems
selling, general and
administrative.......... -- 4,749 4,749 -- 4,687 4,687
Publications............... 3,368 611 3,979 9,115 128 9,243
Merchandising.............. 1,066 -- 1,066 1,226 -- 1,226
Corporate general and
administrative.......... 6,874 -- 6,874 8,396 -- 8,396
Depreciation and
amortization............ 4,763 2,219 6,982 4,929 2,587 7,516
------- ------- -------- ------- ------- --------
Total Operating
Costs............ 81,185 35,110 116,295 98,599 40,266 138,865
------- ------- -------- ------- ------- --------
2,547 $ 4,699 $ 7,246 1,360 $ 5,969 $ 7,329
======= ======== ======= ========
Equity in net income of
unconsolidated
affiliates.............. (1,345) (2,136)
------- -------
Operating income............. 3,892 3,496
Interest expense and other... 6,809 6,043
Income tax (benefit)......... (590) (129)
------- -------
Net loss..................... $ (2,327) $ (2,418)
======= =======
Supplemental Information:
EBITDA..................... $ 7,310 $ 6,918 $ 14,228 $ 6,289 $ 8,556 $ 14,845
======= ======= ======== ======= ======= ========
Attributable EBITDA........ $ 10,425 $ 10,068
======== ========
Net cash provided by (used
in) operating
activities.............. (2,778) 5,698 2,920 7,457 6,721 14,178
Net cash (used in)
investing activities.... (4,440) (1,081) (5,521) (4,658) (6,851) (11,509)
Net cash provided by (used
in) financing
activities.............. 3,847 (5,417) (1,570) 10,347 (3,943) 6,404
</TABLE>

31
<PAGE> 34

CONSOLIDATED BUSINESSES

Ticketing operations revenues increased by $9.1 million, or 12%, to $87.9
million for the first six months of fiscal 1997 from $78.8 million for the first
six months of fiscal 1996. The increase is attributed to an increase of 10% in
the number of tickets sold (from 19.6 million to 21.6 million tickets). The
increase in the number of tickets sold resulted from the acquisition of a joint
venturer's interest in (and subsequent consolidation of) the European Joint
Venture (0.7 million tickets), an increase in ticket sales of Major League
Baseball (0.9 million tickets) and the National Hockey League (0.1 million
tickets) as compared to the first six months of fiscal 1996 when these leagues
were experiencing the residual effects of work stoppages, sales attributable to
new clients including a number of Major League Soccer teams (0.1 million
tickets) and the acquisition of the Company's Nashville licensee (0.2 million
tickets) in February 1996.

Publications revenues increased by $2.7 million, or 155%, to $4.5 million
for the first six months of fiscal 1997 from $1.8 million for the first six
months of fiscal 1996. The increase is attributed to Ticketmaster Publications'
launch of Live! magazine, a monthly entertainment magazine, which distributed
its first issue in February 1996. Live! was created as an extension of the
Entertainment Guide which was published and distributed without significant
advertising revenue by the Company during fiscal 1996. Since the February 1996
launch of Live!, the subscription base has remained relatively constant, with
the increase in revenues arising from increases in annual subscription rates and
advertising.

Sponsorship & promotions revenues increased by $3.8 million, or 400%, to
$4.8 million for the first six months of fiscal 1997 from $1.0 million for the
first six months of fiscal 1996. The increase is primarily attributed to an
increase in sponsorship and promotion activity with strategic marketing partners
resulting from the Company's efforts to create integrated marketing
opportunities around live events, its call centers, ticket stock and envelopes,
event promotional material and in additional media outlets such as Ticketmaster
Online and Ticketmaster Travel.

Ticketing operations costs increased by $7.3 million, or 14%, to $58.7
million for the first six months of fiscal 1997 from $51.4 million for the first
six months of fiscal 1996. As a percentage of ticketing operations revenues,
these expenses increased from 65% to 67%, which was primarily attributed to
increased costs resulting from the development of Ticketmaster Online and
Ticketmaster Travel.

Ticketing selling, general and administrative costs increased by $2.6
million, or 19%, to $16.3 million for the first six months of fiscal 1997 from
$13.7 million for the first six months of fiscal 1996. The increase is largely
attributed to the development of Ticketmaster Online ($0.6 million) and
Ticketmaster Travel ($0.2 million) and promotional activity ($1.6 million) with
strategic marketing partners in the Company's efforts to develop additional
integrated marketing opportunities around live events.

Publications costs increased by $5.7 million, or 171%, to $9.1 million for
the first six months of fiscal 1997 from $3.4 million for the first six months
of fiscal 1996. The increase is attributed to the increased production costs
resulting from the launch of Live! magazine.

Corporate general and administrative costs increased by $1.5 million, or
22%, to $8.4 million for the first six months of fiscal 1997 from $6.9 million
for the first six months of fiscal 1996. Much of the increase resulted from
increased compensation expense associated with growth in administrative
functions necessary to support the development of the Company's principal
business, and more recent development efforts in Ticketmaster Publications ($0.3
million), Ticketmaster Online ($0.3 million) and Ticketmaster Travel ($0.2
million).

Depreciation and amortization increased by $0.2 million, or 3%, to $4.9
million for the first six months of fiscal 1997 from $4.8 million for the first
six months of fiscal 1996. The increase is largely attributed to amortization
cost in excess of net assets acquired which resulted from the valuation of
purchased user agreements in connection with the acquisition of Ticketmaster's
Nashville licensee in February 1996.

The income tax benefit decreased by $0.5 million, or 78%, to $0.1 million
for the first six months of fiscal 1997 from $0.6 million for the first six
months of fiscal 1996. The decrease is attributed to higher earnings subject to
state and foreign taxes and the effect of nondeductible amortization of
intangible foreign assets.

32
<PAGE> 35

As a result of the foregoing, net losses from Consolidated Businesses
increased by $0.1 million, or 4%, to $2.4 million for the first six months of
fiscal 1997 from $2.3 million for the first six months of fiscal 1996.

UNCONSOLIDATED JOINT VENTURES

Ticket operations revenues increased by $5.2 million, or 19%, to $32.7
million for the first six months of fiscal 1997 from $27.5 million for the first
six months of fiscal 1996. The increase is attributed to an increase of 17% in
the number of tickets sold (from 7.5 million to 8.8 million tickets). The
increase in the number of tickets sold resulted from the formation of joint
ventures with the Company's Australian licensee (1.2 million tickets) commencing
in December 1995, an increase in popular music activity, an increase in ticket
sales of Major League Baseball and the National Hockey League (0.1 million
tickets) as compared to the first six months of fiscal 1996 when these leagues
were experiencing the residual effects of work stoppages and an increase related
to new clients including a number of new Major League Soccer teams (0.1 million
tickets).

Concession control systems revenues increased by $2.2 million, or 21%, to
$13.0 million for the first six months of fiscal 1997 from $10.8 million in the
first six months of fiscal 1996, as a result of sales related to the release of
a new product.

Publication revenue decreased by $0.8 million or 83%, to $0.2 million for
the first six months of fiscal 1997 from $1.0 million for the first six months
of fiscal 1996 due to the discontinued distribution of the monthly Entertainment
Guide, which has been replaced with Live! magazine, a publication of
Ticketmaster Publications, all costs and revenues of which are included in the
Consolidated Businesses.

Ticketing operations costs increased by $2.7 million, or 17%, to $18.3
million for the first six months of fiscal 1997 from $15.7 million for the first
six months of fiscal 1996. As a percentage of ticketing operations revenues,
these expenses decreased from 57% to 56%.

Concession control systems operating costs increased by $1.2 million, or
17%, to $8.5 million for the first six months of fiscal 1997 from $7.2 million
in the first six months of fiscal 1996, as a result of the increase in revenues.
As a percentage of concession control systems revenues, these costs decreased
from 67% to 65%.

Concession control systems selling, general and administrative costs
decreased by $0.1 million, or 1%, to $4.7 million in the first six months of
fiscal 1997 from $4.8 million in the first six months of fiscal 1996.

Publications costs decreased by $0.5 million, or 79%, to $0.1 million for
the first six months of fiscal 1997 from $0.6 million for the first six months
of fiscal 1996 due to the discontinued distribution of the monthly Entertainment
Guide, which has been replaced with Live! magazine, a publication of
Ticketmaster Publications, all costs and revenues of which are included in the
Consolidated Businesses.

Depreciation and amortization increased by $0.4 million, or 17%, to $2.6
million for the first six months of fiscal 1997 from $2.2 million for the first
six months of fiscal 1996. The increase is attributed to the amortization cost
in excess of net assets acquired which resulted from the valuation of purchased
user agreements in connection with the formation in December 1995 of the
Australian Joint Ventures.

As a result of the foregoing, net income from Unconsolidated Joint Ventures
increased by $1.2 million, or 28%, to $5.4 million for the first six months of
fiscal 1997 from $4.2 million for the first six months of fiscal 1996.

MANAGED BUSINESSES

Aggregate revenues for the Managed Businesses increased by $22.7 million,
or 18%, to $146.2 million for the first six months of fiscal 1997 from $123.5
million for the first six months of fiscal 1996 principally as a result of an
increase of $14.3 million, or 12%, to $120.6 million in ticket operation revenue
and an increase of $3.7 million or 251% to $5.2 million for the first six months
of fiscal 1997 from $1.5 million from the first six months of fiscal 1996 in
sponsorship and promotion revenue.

EBITDA for the Managed Businesses increased by $0.6 million, or 4%, to
$14.8 million for the first six months of fiscal 1997 from $14.2 million for the
first six months of fiscal 1996.

33
<PAGE> 36

FISCAL YEAR 1996 COMPARED WITH FISCAL YEAR 1995

The following tables set forth operating results for the Consolidated
Businesses and the Unconsolidated Joint Ventures, collectively, the Managed
Businesses. The amounts shown for the Unconsolidated Joint Ventures represent
the full balance for each line item and do not give effect to the joint venture
ownership interests held by entities other than the Company.

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31, 1995 YEAR ENDED JANUARY 31, 1996
------------------------------------------ ------------------------------------------
CONSOLIDATED UNCONSOLIDATED MANAGED CONSOLIDATED UNCONSOLIDATED MANAGED
BUSINESSES JOINT VENTURES BUSINESSES BUSINESSES JOINT VENTURES BUSINESSES
------------ -------------- ---------- ------------ -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations....... $172,002 $ 46,921 $ 218,923 $149,115 $ 54,178 $ 203,293
Concession control
systems................. -- 19,354 19,354 -- 22,985 22,985
Publications............... 4,640 2,129 6,769 4,198 1,939 6,137
Sponsorship & promotion.... 1,849 865 2,714 3,972 951 4,923
Merchandising.............. 1,321 -- 1,321 2,201 -- 2,201
Sales of ticketing
equipment............... 3,138 -- 3,138 1,764 -- 1,764
-------- ------- -------- -------- ------- --------
Total Revenues..... 182,950 69,269 252,219 161,250 80,053 241,303
-------- ------- -------- -------- ------- --------
Operating costs:
Ticketing operations....... 112,695 28,208 140,903 97,147 30,836 127,983
Ticketing selling, general
and administrative...... 28,917 9,094 38,011 27,748 9,232 36,980
Concession control systems
operations.............. -- 12,162 12,162 -- 15,912 15,912
Concession control systems
selling, general and
administrative.......... -- 8,770 8,770 -- 9,834 9,834
Publications............... 2,908 1,261 4,169 9,129 1,148 10,277
Merchandising.............. 1,222 -- 1,222 1,891 -- 1,891
Corporate general and
administrative.......... 13,722 -- 13,722 14,758 -- 14,758
Write off of in-process
research and
development............. 7,500 -- 7,500 -- -- --
Depreciation and
amortization............ 13,301 5,062 18,363 9,325 4,401 13,726
-------- ------- -------- -------- ------- --------
Total Operating
Costs............ 180,265 64,557 244,822 159,998 71,363 231,361
-------- ------- -------- -------- ------- --------
2,685 $ 4,712 $ 7,397 1,252 $ 8,690 $ 9,942
======= ======== ======= ========
Equity in net income of
unconsolidated
affiliates.............. (1,360) (1,458)
-------- --------
Operating income............. 4,045 2,710
Interest expense and other... 13,393 13,055
Income tax (benefit)......... (2,670) (2,250)
-------- --------
Net loss..................... $ (6,678) $ (8,095)
======== ========
Supplemental Information:
EBITDA..................... $ 15,986 $ 9,774 $ 25,760 $ 10,577 $ 13,091 $ 23,668
======== ======= ======== ======== ======= ========
Attributable EBITDA........ $ 19,503 $ 15,222
======== ========
Net cash provided by (used
in) operating
activities.............. 12,309 15,761 28,070 (3,068) 17,658 14,590
Net cash (used in)
investing activities.... (14,553) (1,772) (16,325) (9,452) (6,508) (15,960)
Net cash provided by (used
in) financing
activities.............. 15,086 (9,133) 5,953 7,772 (5,011) 2,761
</TABLE>

34
<PAGE> 37

CONSOLIDATED BUSINESSES

Revenues from ticketing operations decreased by $22.9 million, or 13%, to
$149.1 million for fiscal 1996 from $172.0 million for fiscal 1995. The decrease
is primarily attributed to a decrease of 12% in the number of tickets sold (from
42.5 million to 37.6 million tickets) and in the Company's average per ticket
operation revenue of 2% (from $4.05 to $3.97). The decrease in the number of
tickets sold was largely attributable to fewer performances by popular music
performers during fiscal 1996 as compared to fiscal 1995. The 2% decrease in
average revenue per ticket is comparable to the 4% decrease in average gross
price per ticket of tickets sold (from $30.81 to $29.68).

Publications revenues decreased by $0.4 million, or 10%, to $4.2 million
for fiscal 1996 from $4.6 million for fiscal 1995. The decrease is largely
attributed to fewer subscription sales of the Entertainment Guide during fiscal
1996. The decrease in subscriptions is consistent with the decrease in ticket
sales through the Company's call centers which was the only distribution channel
through which the Entertainment Guide was sold.

Sponsorship & promotions revenues increased by $2.2 million, or 115%, to
$4.0 million for fiscal 1996 from $1.8 million for fiscal 1995. The increase is
primarily attributed to an increase in sponsorship and promotion activity with
strategic marketing partners resulting from the Company's efforts to create
integrated marketing opportunities revolving around live events, call centers,
ticket stock and envelopes and event promotional material.

Merchandising revenues increased by $0.9 million, or 67%, to $2.2 million
for fiscal 1996 from $1.3 million in fiscal 1995. Fiscal 1996 revenues include a
full year of operations while fiscal 1995 revenues include six months of
operations.

Ticketing operations costs decreased by $15.5 million, or 14%, to $97.1
million in fiscal 1996 from $112.7 million in fiscal 1995. This decrease is
attributed to the decrease in ticketing operations revenues as these costs are
primarily variable in nature. As a percentage of ticketing operation revenues,
these expenses amounted to 66% and 65% in fiscal 1995 and 1996, respectively.

Publications costs increased by $6.2 million, or 214%, to $9.1 million in
fiscal 1996 from $2.9 million in fiscal 1995. This increase is attributed to the
design and pre-production cost attributable to the launch of Live! magazine by
Ticketmaster Publications.

Merchandising costs increased by $0.7 million, or 55%, to $1.9 million in
fiscal 1996 from $1.2 million in fiscal 1995. Fiscal 1996 costs include a full
year of operations while fiscal 1995 costs include six months of operations.

Corporate general and administrative costs increased by $1.0 million, or
8%, to $14.8 million in fiscal 1996 from $13.7 million in fiscal 1995. The
increase is primarily attributed to costs associated with litigation against the
Company and investigations into its operations by government agencies, see
"Business - Government Investigation and Litigation."

During fiscal 1995, the Company incurred a charge of $7.5 million to write
off purchased in-process research and development in connection with the
formation of the Pacer/CATS/CCS Joint Venture.

Depreciation and amortization decreased by $4.0 million, or 30%, to $9.3
million in fiscal 1996 from $13.3 million in fiscal 1995. The decrease is
attributed to the absence of a $3.8 million charge to amortization to write-off
the value of covenants-not-to-compete which was incurred in fiscal 1995 in
connection with the formation of the Pacer/CATS/CCS Joint Venture.

The income tax benefit decreased by $0.4 million, or 16%, to $2.3 million
in fiscal 1996 from $2.7 million in fiscal 1995. Income tax benefit as a
percentage of pre-tax loss decreased from 29% to 22% from fiscal 1995 to fiscal
1996. The decrease is attributed to higher earnings subject to state and foreign
taxes and the effect of nondeductible amortization of intangible foreign assets.

As a result of the foregoing, net loss from Consolidated Businesses
increased by $1.4 million, or 21%, to $8.1 million for fiscal 1996 from $6.7
million for fiscal 1995.

35
<PAGE> 38

UNCONSOLIDATED JOINT VENTURES

Revenues from ticket operations increased by $7.3 million, or 15%, to $54.2
million in fiscal 1996 from $46.9 million in fiscal 1995. This increase is
primarily attributed to an increase of 18% in the number of tickets sold (from
13.2 million to 15.5 million tickets). The increase in the number of tickets
sold was largely attributed to approximately a 39% growth in ticket sales from
the Company's venture in the United Kingdom (0.8 million tickets), increased
popularity of professional sport franchises (1.2 million tickets) in areas
serviced by these joint ventures, and the formation of joint ventures with the
Company's Australian licensee (0.4 million tickets) during fiscal 1996.

Concession control systems revenues increased by $3.6 million, or 19%, to
$23.0 million in fiscal 1996 from $19.4 million in fiscal 1995, because fiscal
1995 figures represent the results of operations from inception (April 15, 1994)
through fiscal year end.

Ticketing operations costs increased by $2.6 million, or 9%, to $30.8
million in fiscal 1996 from $28.2 million in fiscal 1995. This increase is
attributed to the increase in ticketing operations revenues as these costs are
primarily variable in nature. Ticket operations costs decreased as a percentage
of ticket operations revenues to 57% in fiscal 1996 from 60% in fiscal 1995.
Much of this decrease is attributed to increased efficiencies in the call
centers which service these joint ventures and increased revenue per ticket.

Concession control systems operating costs increased by $3.7 million, or
31%, to $15.9 million in fiscal 1996 from $12.2 million in fiscal 1995 because
fiscal 1996 costs represent a full year of operations as noted previously. As a
percentage of concession control systems revenues, these costs increased from
63% to 69% due to increased research and new product development expenses.

Concession control systems selling, general and administrative costs
increased by $1.1 million, or 12%, to $9.8 million in the fiscal 1996 from $8.8
million in fiscal 1995 because fiscal 1996 costs represent a full year of
operations as noted previously.

Depreciation and amortization decreased by $0.7 million, or 13%, to $4.4
million in fiscal 1996 from $5.1 million in fiscal 1995. The decrease is
attributed to certain purchased user agreements having become fully amortized
during fiscal 1995.

As a result of the foregoing, net income from Unconsolidated Joint Ventures
increased by $3.8 million, or 105%, to $7.4 million for fiscal 1996, from $3.6
million for fiscal 1995.

MANAGED BUSINESSES

Aggregate revenues for the Managed Businesses decreased by $10.9 million,
or 4%, to $241.3 million in fiscal 1996 from $252.2 million in fiscal 1995,
principally as a result of a decrease of $15.6 million, or 7%, to $203.2 million
in ticket operations revenue, offset by increases in sponsorship and promotion
revenue of $2.2 million and concession control systems revenue of $3.6 million
in fiscal 1996.

EBITDA for the Managed Businesses decreased by $2.1 million, or 8%, to
$23.7 million in fiscal 1996 from $25.8 million in fiscal 1995, principally as a
result of an increase of $6.1 million, or 147%, to $10.3 million in publications
costs resulting from the anticipated fiscal 1997 launch of Live! magazine and
losses incurred in the concession control systems businesses of the
Pacer/CATS/CCS Joint Venture offset by the effect of the write-off of in-process
research and development of $7.5 million in fiscal 1995.

36
<PAGE> 39

FISCAL YEAR 1995 COMPARED WITH FISCAL YEAR 1994

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31, 1994 YEAR ENDED JANUARY 31, 1995
------------------------------------------ ------------------------------------------
UNCONSOLIDATED UNCONSOLIDATED
CONSOLIDATED JOINT MANAGED CONSOLIDATED JOINT MANAGED
BUSINESSES VENTURES BUSINESSES BUSINESSES VENTURES BUSINESSES
------------ -------------- ---------- ------------ -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations..... $137,304 $ 39,457 $ 176,761 $172,002 $ 46,921 $ 218,923
Concession control
systems............... -- -- -- -- 19,354 19,354
Publications............. 4,575 1,599 6,174 4,640 2,129 6,769
Sponsorship &
promotion............. 1,724 756 2,480 1,849 865 2,714
Merchandising............ -- -- -- 1,321 -- 1,321
Sales of ticketing
equipment............. 3,037 -- 3,037 3,138 -- 3,138
-------- -------- -------- -------- -------- --------
Total Revenues...... 146,640 41,812 188,452 182,950 69,269 252,219
-------- -------- -------- -------- -------- --------
Operating costs:
Ticketing operations..... 88,089 22,846 110,935 112,695 28,208 140,903
Ticketing selling,
general and
administrative........ 28,931 9,187 38,118 28,917 9,094 38,011
Concession control
systems operations.... -- -- -- -- 12,162 12,162
Concession control
systems selling,
general and
administrative........ -- -- -- -- 8,770 8,770
Publications............. 2,297 1,108 3,405 2,908 1,261 4,169
Merchandising............ -- -- -- 1,222 -- 1,222
Corporate general and
administrative........ 11,738 -- 11,738 13,722 -- 13,722
Write off of in-process
research and
development........... -- -- -- 7,500 -- 7,500
Depreciation and
amortization.......... 9,399 4,826 14,225 13,301 5,062 18,363
-------- -------- -------- -------- -------- --------
Total Operating
Costs............ 140,454 37,967 178,421 180,265 64,557 244,822
-------- -------- -------- -------- -------- --------
6,186 $ 3,845 $ 10,031 2,685 $ 4,712 $ 7,397
======== ======== ======== ========
Equity in net income of
unconsolidated
affiliates............ (1,577) (1,360)
-------- --------
Operating income........... 7,763 4,045
Interest expense and
other.................... 3,923 13,393
Income tax provision
(benefit)................ 3,800 (2,670)
-------- --------
Net (loss) income.......... $ 40 $ (6,678)
======== ========
Supplemental Information:
EBITDA................... $ 15,585 $ 8,671 $ 24,256 $ 15,986 $ 9,774 $ 25,760
======== ======== ======== ======== ======== ========
Attributable EBITDA...... $ 18,235 $ 19,503
======== ========
Net cash provided by
operating
activities............ 14,571 6,439 21,010 12,309 15,761 28,070
Net cash (used in)
investing
activities............ (6,250) (4,654) (10,904) (14,553) (1,772) (16,325)
Net cash provided by
(used in) financing
activities............ (2,732) (5,406) (8,138) 15,086 (9,133) 5,953
</TABLE>

37
<PAGE> 40

CONSOLIDATED BUSINESSES

Revenues from ticketing operations increased by $34.7 million, or 25%, to
$172.0 million in fiscal 1995 from $137.3 million in fiscal 1994. The increase
is attributed to an increase of 10% in the number of tickets sold (from 38.7
million to 42.5 million tickets) and in the Company's average per ticket
operation revenue of 14% (from $3.55 to $4.05). The increase in the number of
tickets sold was largely attributable to a strong performance schedule that
included a large number of event dates. The 18% increase in average per ticket
operation revenue is comparable to the 19% increase in average gross price per
ticket of tickets sold (from $25.90 to $30.81), which was a result of a trend on
the part of certain popular music performers toward higher ticket prices.

Sponsorship & promotions revenues increased by $0.1 million, or 7%, to $1.8
million for fiscal 1995 from $1.7 million in fiscal 1994. The increase is a
result of increased sponsorship and promotional activity created around live
events, ticket stock and envelopes and event promotional material.

Merchandising was included in the consolidated results of the Company for
the first time in fiscal year 1995 with revenues totaling $1.3 million.

Ticketing operations costs increased by $24.6 million, or 28%, to $112.7
million in fiscal 1995 from $88.1 million in fiscal 1994. This increase is
attributed to the increase in ticketing operations revenues as these costs are
primarily variable in nature. As a percentage of ticketing operations revenues,
these expenses remained relatively constant at 66% and 64% in fiscal 1995 and
fiscal 1994, respectively.

Publications costs increased by $0.6 million, or 27%, to $2.9 million in
fiscal 1995 from $2.3 million in fiscal 1994. The increase is attributed to an
increase in the distribution of complimentary issues of the Entertainment Guide
during fiscal 1995 as compared to fiscal 1994.

Merchandising had its first year of operations in fiscal 1995; costs
totaled $1.2 million or 93% of merchandising revenue.

Corporate general and administrative costs increased by $2.0 million, or
17%, to $13.7 million in fiscal 1995 from $11.7 million in fiscal 1994. The
increase is primarily attributed to costs associated with litigation against the
Company and investigations into its operations by government agencies, see
"Business -- Government Investigations and Litigation."

During fiscal 1995, the Company incurred a charge of $7.5 million to write
off purchased in-process research and development in connection with the
formation of the Pacer/CATS/CCS Joint Venture.

Depreciation and amortization increased by $3.9 million, or 42%, to $13.3
million in fiscal 1995 from $9.4 million in fiscal 1994. The increase is
attributed to a write off of $3.8 million which had been allocated to
covenants-not-to-compete based upon an independent valuation prepared for the
Company related to its formation of the Pacer/CATS/CCS Joint Venture.

Interest expense and other increased by $9.5 million, or 241%, to $13.4
million in fiscal 1995 from $3.9 million in fiscal 1994. The increase is
attributed to an increase in average bank borrowings outstanding during fiscal
1995 as compared to borrowings outstanding during fiscal 1994.

Income taxes changed by $6.5 million, or 170%, to a benefit of $2.7 million
in fiscal 1995 from an expense of $3.8 million in fiscal 1994.

As a result of the foregoing, the Consolidated Businesses recognized a net
loss of $6.7 million for fiscal 1995. In the absence of a $3.8 million charge to
amortization to write off the value of covenants-not-to-compete and a $7.5
million charge to write off in-process research and development (both charges
incurred in connection with the formation of the Pacer/CATS/CCS Joint Venture),
the Consolidated Businesses would have recognized net income of $4.6 million.

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<PAGE> 41

UNCONSOLIDATED JOINT VENTURES

Revenues from ticket operations increased by $7.4 million, or 19%, to $46.9
million in fiscal 1995 from $39.5 million in fiscal 1994. This increase is
primarily attributed to an increase of 8% in the number of tickets sold (from
12.2 million to 13.2 million tickets) and in average per ticket operation
revenue of 10% (from $3.24 to $3.57). The increase in the number of tickets sold
was largely attributable to a strong performance schedule that included a large
number of event dates. The 15% increase in average revenue per ticket is
comparable to the 13% increase in average gross price per ticket of tickets sold
(from $23.15 to $26.26), which was a result of a trend on the part of certain
popular music performers toward higher ticket prices.

Publication revenues increased by $0.5 million, or 33%, to $2.1 million in
fiscal 1995 from $1.6 million in fiscal 1994 as a result of increased
subscription sales of the Entertainment Guide.

Concession control systems commenced operations in fiscal 1995 (inception,
April 15, 1994) and resulted in revenues of $19.4 million.

Ticketing operations costs increased by $5.4 million, or 23%, to $28.2
million in fiscal 1995 from $22.8 million in fiscal 1994. This increase is
attributed to the increase in ticketing operations revenues as these costs are
primarily variable in nature. Ticket operations costs increased as a percentage
of ticket operations revenues to 60% in fiscal 1995 from 58% in fiscal 1994.

Publications costs increased by $0.2 million, or 14%, to $1.3 million in
fiscal 1995 from $1.1 million in fiscal 1994 as a result of increased
subscription sales of the Entertainment Guide.

Concession control systems commenced operations in fiscal 1995 (inception,
April 15, 1994) and incurred related costs of $12.2 million or 63% of revenue;
selling, general and administrative costs incurred by concession control systems
totaled $8.8 million or 45% of revenue.

Depreciation and amortization increased by $0.3 million, or 5%, to $5.1
million in fiscal 1995 from $4.8 million in fiscal 1994. The increase is
attributed to the formation of the Pacer/CATS/CCS Joint Venture.

As a result of the foregoing, net income from Unconsolidated Joint Ventures
decreased by $0.1 million, or 3%, to $3.6 million for fiscal year 1995 from $3.7
million for fiscal 1994. The decrease is due to the net loss incurred by the
Pacer/CATS/CCS Joint Venture, which totaled $3.3 million, offset by a $3.2
million increase in the ticketing Joint Ventures' net income.

MANAGED BUSINESSES

Aggregate revenues for the Managed Businesses increased by $63.7 million,
or 34%, to $252.2 million in fiscal 1995 from $188.5 million in fiscal 1994,
principally as a result of an increase of $42.1 million, or 24%, to $218.9
million in ticket operations revenue and the concession control systems revenue
of $19.4 million in fiscal 1995.

EBITDA for the Managed Businesses increased by $1.5 million, or 6%, to
$25.8 million in fiscal 1995 from $24.3 million in fiscal 1994, principally as a
result of an increase of $12.3 million, or 18%, to $81.2 million in ticketing
operations income net of ticketing operations costs offset by the write off of
in-process research and development of $7.5 million and covenants-not-to-compete
of $3.8 million.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth selected cash flow information for the
periods indicated:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JANUARY 31, JULY 31,
-------------------------------- -------------------
1994 1995 1996 1995 1996
------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities............................ $14,571 $ 12,309 $(3,068) $(2,778) $ 7,457
Net cash (used in) investing
activities............................ (6,250) (14,553) (9,452) (4,440) (4,658)
Net cash provided by (used in) financing
activities............................ (2,732) 15,086 7,772 3,847 10,347
</TABLE>

39
<PAGE> 42

Historically, the Company's principal sources of cash have been cash flows
from operations and borrowings under its bank credit facilities. For fiscal
1994, 1995 and 1996, and the first six months of fiscal 1997, the Company
generated an aggregate of $31.3 million in cash from operating activities.

As of July 31, 1996, the Company had cash and cash equivalents of $11.1
million for its own account, exclusive of funds held in accounts on behalf of
venues and promoters and working capital of $9.4 million. The Company
historically has had small positive or negative working capital balances,
depending upon the timing of the use of cash for the purchase of property and
equipment or investments in other income producing noncurrent assets.

Cash used in investing activities has been primarily to fund investments in
property, equipment and fixed and other long term assets aggregating $3.6
million and $3.3 million during fiscal 1996 and for the six months ended July
31, 1996, respectively. Excluding the acquisitions and formations of new venture
investment activity, the Company's anticipated capital expenditures for fiscal
1997 and immediately beyond are expected to include $14.0 million for the
purchase of a building and tenant improvements, $4.5 million of replacements or
upgrades, $5.5 million in expanded call center capacity and additional amounts
which management determines are necessary in order to maintain the Company's
competitive position or to otherwise achieve its business strategies.

Amounts available under the Credit Agreement are limited to the lower of
the commitment amount or a borrowing base calculated as a multiple of cash flow
as defined in the Credit Agreement. As of July 31, 1996, the Company had $95.8
million in outstanding bank borrowings under its $100 million revolving bank
credit line and $75 million outstanding on a bank term loan, payable December
31, 1999. As of that date, the borrowing base calculation did not restrict the
Company's availability under the Credit Agreement. The Company's Credit
Agreement contains other covenants and restrictions, all of with which the
Company was in compliance at July 31, 1996. See "Description of Certain
Indebtedness."

Also as of July 31, 1996, Pacer/CATS/CCS had indebtedness of $7.5 million
outstanding under a bank term loan, with monthly interest payments only due
through June 1997 and principal and interest payable monthly from July 1997
through June 1999. The loan agreement is secured by all of Pacer/CATS/CCS'
assets and contains certain restrictions and covenants, with which the joint
venture is in full compliance. Ticketmaster Corporation has entered into an
interest keep-well agreement expiring July 31, 1997 (or sooner, subject to its
terms) covering $500,000 of Pacer/CATS/CCS' interest payments on this debt. See
"Description of Certain Indebtedness."

As of July 31, 1996, the Company's future commitments included a $5 million
Exchangeable Promissory Note due in June 1997, which is a portion of the payment
remaining from the Company's June 1996 acquisition of a 50% interest in the
European Joint Venture, as well as annual office and equipment lease expenses of
approximately $5.5 million. In addition, the Company has entered into letters of
intent or definitive agreements to acquire the 20% equity interest of its
partner in its Texas operating subsidiary; to acquire the 20% equity interest of
its partner in its Florida operating subsidiary; and to acquire a 23% equity
interest in its Mexico licensee in consideration of the Company entering into a
joint venture with the parent of its Mexico licensee to market and operate the
Ticketmaster System throughout Central and South America. In the event that all
of the transactions contemplated by such letters of intent or agreements are
consummated, the aggregate consideration would be approximately $10.6 million in
cash or Common Stock.

The Company intends to use the net proceeds of the Offering (i) to repay
outstanding indebtedness incurred to acquire the license rights and related
assets of its Delaware Valley (Philadelphia) licensee, (ii) to repay a portion
of the outstanding indebtedness under the Credit Agreement, (iii) to repay
outstanding indebtedness under the Exchangeable Promissory Note incurred to
acquire the Company's joint venture partner's 50% equity interest in the
European Joint Venture, (iv) to purchase an interest not previously owned by the
Company in its operating subsidiary in Texas, and (v) for general corporate
purposes. The Company anticipates that funds from the Offering, from operations
and from its restated bank lending facilities will be sufficient to meet its
working capital, capital expenditure and debt service requirements through the
expiration of the Credit Agreement (December 31, 1999) at a minimum and
ultimately until its credit agreements are extended, renegotiated or replaced
with other forms of capitalization. However, to the extent that such funds are
insufficient, the Company may need to incur additional indebtedness and/or
refinance existing indebtedness.

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<PAGE> 43

The Company's ability to do so may be restricted by borrowing base calculations
and other financial covenants described above and within the Credit Agreement.

SEASONALITY AND QUARTERLY RESULTS

The Company's ticketing operations results for its Managed Businesses are
impacted by fluctuations in the availability of events for sale to the public,
which varies depending upon scheduling by clients. This, together with the
general practice of scheduling the commencement of ticket sales several months
prior to event dates, tends to benefit the Company's first two fiscal quarters.
Set forth below are quarterly ticket quantities and gross sales for the Managed
Businesses for the past three fiscal years and the first two quarters of the
current fiscal year:

TICKETS SOLD
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL
- ----------------------------- ------------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
1994....................... 12,207 14,325 12,522 11,795 50,849
1995....................... 16,649 14,939 11,649 12,377 55,614
1996....................... 13,509 13,667 12,759 13,181 53,116
1997 (six months only)..... 15,268 15,135 30,403
</TABLE>

GROSS TICKET RECEIPTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL
- ----------------------------- ------------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
1994....................... $ 283,518 $ 351,741 $ 334,190 $ 313,923 $1,283,372
1995....................... 489,721 455,799 352,675 355,606 1,653,801
1996....................... 383,564 389,791 379,741 378,482 1,531,578
1997 (six months only)..... 425,382 444,612 869,994
</TABLE>

INFLATION RISK

General economic inflation has not had a significant impact on the
Company's operations during the periods covered by the accompanying Consolidated
Financial Statements.

FOREIGN CURRENCY RISK

The Company is not presently subject to significant foreign exchange risk
as international operations currently constitute a minor part of its operations.

EFFECT OF RECENT ACCOUNTING CHANGES

In October 1995, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 encourages
a new method of recognizing stock-based compensation expense using the estimated
fair value of employee stock options. Alternatively, companies may choose to
retain the approach set forth in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and provide expanded footnote
disclosures. The statement is effective for the Company's fiscal 1997. The
Company does not plan to use the fair value method when it adopts the
pronouncement. Accordingly, if the Company makes this election, SFAS No. 123
will have no impact on the Company's financial position or results of operations
for future periods.

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<PAGE> 44

BUSINESS

GENERAL

The Company is continuing to leverage its widely recognized brand name and
extensive distribution capabilities by developing new opportunities in related
areas, such as entertainment information and publishing, merchandising,
advertising, promotional services and direct marketing. Specific examples of its
efforts include offering integrated brand management and marketing services to
strategic partners, such as MasterCard International and Sprint Communications,
through sponsorship advertising opportunities during live events, during
telephone ticketing services, on its ticket stock and envelopes, on event
promotional material and in additional media outlets which the Company is
developing. In addition, in February 1996, the Company launched Live!, a monthly
entertainment magazine and event guide which the Company believes is a natural
extension of its existing distribution channels. The Company has also recently
launched Ticketmaster Online (http://www.ticketmaster.com), its site on the
World Wide Web, designed to promote ticket sales for live events, disseminate
event information and offer transactional and merchandising services. In
September 1996, Ticketmaster Online began to offer transactional services and is
currently capable of processing ticketing and merchandising transactions in the
Pacific Northwest and the Northeast, including Broadway. These efforts to create
new promotional, marketing and distribution opportunities by utilizing and
integrating the Company's traditional principal ticketing services and brand
name have formed the basis for new growth opportunities in the future.

The Company believes that the Ticketmaster System and its extensive
distribution capabilities provide a competitive advantage that enhances the
Company's ability to attract new clients and maintain its existing client base.
The Ticketmaster System, which includes both hardware and software, is typically
installed in a client's facility box office and provides a single centralized
inventory control management system capable of tracking total ticket inventory
for all events, whether sales are made on a season, subscription, group or

42
<PAGE> 45

individual ticket basis. The Ticketmaster System is capable of processing over
100,000 tickets per hour in certain markets, and each of its 18 computer systems
can support 10,000 users per system, of which as many as 3,000 can be online at
any one time.

Through its Managed Businesses, Ticketmaster has a comprehensive domestic
distribution system that includes approximately 2,800 remote sales outlets in 44
states covering many of the major metropolitan areas in the U.S. and 17 call
centers with approximately 1,750 operator positions. The Company provides the
public with convenient access to tickets and information regarding entertainment
events. Ticket purchasers are assessed a convenience charge for each ticket sold
offsite by the Company on behalf of its clients. These charges are negotiated
and included in the Company's contracts with its clients. The versatility of the
Ticketmaster System allows it to be customized to satisfy a full range of client
requirements.

From fiscal 1991 through 1996, the number of tickets sold and revenues for
the Managed Businesses have grown from 29.1 million tickets and $96.1 million of
revenues to 53.1 million tickets and $241.3 million of revenues, a compounded
annual growth rate of 13% and 20%, respectively.

CLIENT RELATIONSHIPS

The Company's clients include many of the most well known arenas, stadiums,
theaters, sports teams and promoters in the U.S. The Company currently has in
excess of 3,500 clients ranging in size from large stadiums with more than
60,000 seats to smaller theaters with seating in the hundreds, and from
multi-event promoters to one-time single event promoters.

Representative of the Company's clients are the following:

ARENAS, STADIUMS AND THEATERS

<TABLE>
<S> <C>
Alamodome, San Antonio, TX Madison Square Garden, New York, NY
Arie Crown Theater, Chicago, IL Market Square Arena, Indianapolis, IN
Astrodome, Houston, TX Meadowlands Sports Complex, East Rutherford, NJ
Blossom Amphitheatre, Cleveland, OH Miami Arena, Miami, FL
Bradley Center, Milwaukee, WI Nassau Coliseum, Uniondale, NY
Cajundome, Lafayette, LA Nederlander New York Broadway Theatres, New York,
Centrum, Worcester, MA NY
Charlotte Coliseum, Charlotte, NC The New World Music Theatre, Tinley Park, IL
Chicago Theater, Chicago, IL The Omni, Atlanta, GA
Coral Sky Amphitheatre, West Palm Beach, FL Orlando Arena and Centroplex, Orlando, FL
Deer Creek Music Center, Indianapolis, IN Orpheum Theatre, Boston, MA
Fargo Dome, Fargo, ND The Palace at Auburn Hills, Auburn Hills, MI
Fleet Center, Boston, MA Pine Knob Music Theatre, Clarkston, MI
Freedom Hall, Louisville, KY The Pond, Anaheim, CA
Garden State Arts Center, Holmdel, NJ Pontiac Stadium, Detroit, MI
The Georgia Dome, Atlanta, GA Pyramid, Memphis, TN
Great Western Forum, Inglewood, CA Radio City Music Hall, New York, NY
Greek Theatre, Los Angeles, CA RCA Dome, Indianapolis, IN
Gund Arena, Cleveland, OH Rosemont Horizon, Rosemont, IL
Ice Palace, Tampa, FL Rupp Arena, Lexington, KY
Irvine Meadows Amphitheatre, Costa Mesa, CA Sun Dome, Tampa, FL
Joe Louis Arena, Detroit, MI Star Lake Amphitheatre, Pittsburgh, PA
Joe Robbie Stadium, Miami, FL The Summit, Houston, TX
John G. Shedd Aquarium and Oceanarium, Chicago, IL Tacoma Dome, Tacoma, WA
Jones Beach Theatre, Wantagh, NY Target Center, Minneapolis, MN
Key Arena, Seattle, WA Tennessee Performing Arts Center, Nashville, TN
Los Angeles Memorial Coliseum, Los Angeles, CA The United Center, Chicago, IL
Louisiana Superdome, New Orleans, LA The Wang Center for the Performing Arts, Boston, MA
</TABLE>

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<PAGE> 46

<TABLE>
<S> <C>
PROMOTERS GENERAL
Avalon Attractions American Music Festival
Belkin Productions Beale Street Music Festival
Cellar Door Concerts Chicago International Film Festival
Jam Productions Del Mar Fair
Livent The 500 Festival Parade
MCA Concerts Houston Exposition and Rodeo
Pace Management New Orleans Jazz and Heritage Festival
Sunshine Promotions U.S. Hotrod Nationals
Walt Disney's Magic Kingdom on Ice
</TABLE>

The Company's clients also include 73 professional sports franchises,
including 16 Major League Baseball teams, 17 National Football League teams, 20
National Basketball Association teams, 13 National Hockey League teams and 7
Major League Soccer teams.

The Company generally enters into written agreements with its clients
pursuant to which it agrees to provide the Ticketmaster System and to serve as
the client's exclusive ticket sales agent for all sales of individual tickets
sold outside of the facility's box office, including any tickets sold at remote
sales outlets, over the phone or through other medium, for a specified period,
typically three to five years. Pursuant to an agreement with a facility, the
Company generally is granted the right to sell tickets for all events presented
at that facility, and as part of such arrangement the Company installs the
Ticketmaster System in the facility's box office. An agreement with a promoter
generally grants the Company the right to sell tickets for all events presented
by that promoter at any facility, unless the facility is covered by an exclusive
agreement with Ticketmaster or another automated ticketing service company. The
terms of the agreements with clients are negotiated on a contract-by-contract
basis. In the case of contracts subject to public bid (e.g., by facilities owned
or managed by municipalities or governmental agencies), the terms are defined,
to a material degree, by the specifications and conditions set forth in the
formal requests for bid.

Clients are routinely required by contract to include the Ticketmaster name
in print, radio and television advertisements for entertainment events sponsored
by such clients. The Ticketmaster name and logo are also prominently displayed
on printed tickets and ticket envelopes.

The Company generally does not buy tickets from its clients for resale to
the public and has no financial risk for unsold tickets. In the U.K., the
Company may from time to time buy tickets from its clients for resale to the
public in an amount typically not exceeding L250,000 in the aggregate. All
ticket prices are determined by the Company's clients and their customers. The
Company's clients also generally determine the scheduling of when tickets go on
sale to the public and what tickets will be available for sale through the
Company. Facilities and promoters, for example, often handle group sales and
season tickets in-house. The Company only sells a portion of its clients'
tickets, the amount of which varies from client to client and varies as to any
single client from year to year.

Among the primary benefits derived by the Company's clients by use of the
Ticketmaster System are (1) centralized control of total ticket inventory as
well as accounting information and market research data, (2) centralized
accountability for ticket proceeds, (3) manageable and predictable transaction
costs, (4) broader and expedited distribution of tickets, (5) wide dissemination
of information about upcoming events through Ticketmaster's call centers, the
Company's Web site and other media platforms, (6) the ability to easily add
additional performances if warranted by demand and (7) marketing and promotional
support.

The Ticketmaster System also provides the Company's clients with
flexibility in processing season, subscription and group ticketing. For example,
a sports team may want to give priority to season tickets, mini-ticket plans and
group sales, permitting those ticket purchasers to have first choice of tickets
before their sale to the general public. In addition, clients have the ability
to structure single or multiple events, including season events, in almost any
number and type of pricing and discount plans.

In general, the Company negotiates a contract with each client. Pursuant to
such contracts, Ticketmaster is granted the right to collect from ticket
purchasers a per ticket convenience charge on all tickets sold at remote sales
outlets, by telephone and other media (e.g., the Company's Web site) and an
additional per order

44
<PAGE> 47

handling charge on all tickets sold by the Company at other than remote sales
outlets to partially offset the cost of fulfillment. The amount of the
convenience charge is determined during the contract negotiation process, and
typically varies based upon numerous factors, including the services to be
rendered to the client, the amount and cost of equipment to be installed at the
client's box office and the amount of advertising and/or promotional allowances
to be provided, as well as the type of event and whether the ticket is purchased
at a remote sales outlet, by telephone, through the Company's Web site or
otherwise. Any deviations from those amounts for any event are negotiated and
agreed upon by the Company and its client prior to the commencement of ticket
sales. During fiscal 1996, the convenience charges generally ranged from $1.50
to $7.00 per ticket. Convenience charges, when added to per order handling
charges, averaged $3.45 per ticket in fiscal 1996. The agreement between the
Company and a client will also establish the amounts and frequency of any
increases in the convenience charge and handling charge during the term of the
agreement.

The agreements with certain of the Company's clients may provide for a
client to participate in the convenience charges paid by ticket purchasers for
tickets bought through the Company for that client's events. The amount of such
participation, if any, is determined by negotiation with clients. Some
agreements also may provide for the Company to make participation advances to
the client, generally recoupable by the Company out of the client's future right
to participations. In isolated instances, the Company may make an upfront, non-
recoupable payment to a client for the right to sell tickets for that client.

If an event is cancelled, the Company's current policy is to refund the per
ticket convenience charges (but not the handling charge which is payable with
respect to transactions by telephone and online orders). Refunds of the ticket
price for a cancelled event are funded by the client. To the extent that funds
then being held by Ticketmaster on behalf of the client are insufficient to
cover all refunds, the client is obligated to provide Ticketmaster with
additional amounts within a specified period of time (typically 24 to 72 hours)
after a request by Ticketmaster. Clients have historically fulfilled these
obligations.

During fiscal 1996, no single client accounted for more than 3.0% of the
Company's total revenues and no single facility accounted for more than 1.5% of
the Company's total revenues. Historically, approximately 15% to 20% of the
Company's contracts are subject to renewal each fiscal year. The Company has
experienced substantial success in renewing its contracts with clients on an
annual basis.

DISTRIBUTION SYSTEM

The Company's distribution system is comprised of remote sales outlets,
call centers and the Company's Web site, Ticketmaster Online
(http://www.ticketmaster.com). During fiscal 1996, ticket sales at the remote
sales outlets and call centers accounted for approximately 52.0% and 48.0%,
respectively, of ticket sales for the Company.

Remote Sales Outlets. Through its Managed Businesses, the Company has
approximately 2,800 remote sales outlets in the U.S. and approximately 80 remote
sales outlets internationally, up from approximately 1,700 remote sales outlets
worldwide at the end of fiscal 1991. During the past seven years, the Company
has emphasized the establishment of retail outlets in high visibility chain
stores with existing name recognition, significant customer traffic and customer
profiles consistent with the type of events sold through the Ticketmaster
System. The majority of remote sales outlets are located in major department,
grocery, music and video stores. Among the retailers that serve as remote sales
outlets are Carson Pirie Scott, Dayton/Hudson, Foley's and Robinsons-May
department stores, Dominick's, Fiesta and Kroger food stores, Blockbuster Music,
Coconuts and Tower Records music stores and Blockbuster Video stores. The
specific stores within each chain that will serve as remote sales outlets is
negotiated by the Company with each chain.

The Company is responsible for installation and maintenance of the hardware
and software necessary to operate the Ticketmaster System at the remote sales
outlets. The Company also trains the remote sales outlet's employees in the use
of the Ticketmaster System, provides support and oversight in connection with
the sale of tickets and furnishes the remote sales outlets with promotional
materials relative to the Ticketmaster System and events for which tickets are
available. The remote sales outlets are responsible for

45
<PAGE> 48

the staffing of the stores and their daily operation. The remote sales outlets
generally are paid a commission of approximately 20% to 25% of the convenience
charge, typically subject to a maximum amount per ticket. A majority of sales at
retail outlets are for cash, although some department stores also accept their
own charge cards (in which case the cost of the charge card and payment risk are
borne by the department stores). Ticket purchasers are delivered their tickets
at the point of sale. The remote sales outlets generally deliver sales proceeds
and convenience charges to Ticketmaster on a schedule ranging from daily to
weekly depending on the financial condition of the particular remote sales
outlets and other factors. The Company has not suffered any material loss with
respect to funds collected by its remote sales outlets for remittance to the
Company.

Call centers. Through its Managed Businesses, the Company currently
operates 17 regional call centers in the U.S., up from 10 at the end of fiscal
1991. Ticket purchasers seeking a greater degree of convenience than is afforded
at facility box offices or remote sales outlets can purchase tickets by
telephone seven days a week, up to 14 hours per day, using a major credit card.
Sales agents for the Managed Businesses, staffing up to approximately 1,750
telephone positions, take the customer's credit card order and mail the tickets
directly to the ticket purchasers. Tickets that are purchased by telephone can
also be picked up at the appropriate facility's "will call" ticket window. A per
order handling charge typically is assessed in addition to the per ticket
convenience charge. The ticket sales proceeds and convenience and handling
charges from telephone credit card transactions are generally received by the
Company within two business days after submission to the credit card company.
The call centers also respond to large numbers of informational calls relative
to events, including requests for facility characteristics, directions,
telephone numbers, disability access and seating and local hotels and
restaurants. Concurrently with the sale of tickets to entertainment events, the
Company's call centers offer other products for sale related to the events for
which tickets are being sold. The Company fulfills such sales by ordering the
products from a third party.

The Company's domestic call centers are located in Atlanta, Baton Rouge,
Chicago, Cleveland, Columbus, Dallas, Denver, Detroit, Houston, Los Angeles,
Minneapolis, New York, Orlando, Pittsburgh, San Diego, Seattle and Virginia
Beach. The Company also operates a call center located in London, England with
approximately 102 telephone positions, and, through its Australian joint
venture, a call center located in Melbourne with approximately 58 telephone
positions. In Mexico, the Company's Mexico licensee operates call centers
located in Mexico City and Monterrey with approximately 400 and 90 telephone
positions, respectively.

An important feature of the Company's domestic telephone system is the
ability to channel all or a portion of incoming calls from any city to a
selected regional call center. Accordingly, the number of telephone positions
available to receive telephone orders in a given region is capable of being
increased in advance of the commencement of sales activity for a major event.
Similarly, the ability to network regional call centers affords the Company
backup capabilities in the event that a regional call center experiences
operating difficulties.

Online Services. The Company is expanding its distribution network through
the addition of online services, which permit consumers to purchase tickets and
access information on their personal computers via the Internet. Currently,
tickets for selected events in Florida and Illinois are being distributed by the
Company through a Ticketmaster screen accessible through the America Online
service and in the Pacific Northwest and the Northeast, including Broadway,
through the Company's Web site, Ticketmaster Online. The Company currently
intends to have online access to all of its events by the end of April 1997. The
Company expects this to become a significant distribution channel as more
consumers begin to transact over the Internet. Additionally, this medium
provides the Company with a cost efficient way to disseminate information and
cross-promote, which will help reduce costs for these services across the
Company's other media.

THE TICKETMASTER SYSTEM

The Company's proprietary operating system and application software, and
its computer and telephone systems, were specifically developed for the
ticketing industry. The Ticketmaster System provides clients with the means to
maintain and control their ticket inventory efficiently. Users of the
Ticketmaster System can

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effect a range of functions from the most basic to the most complex, including
individual advanced ticket sales, season and subscription ticketing, day of show
walk-up ticket sales and group ticket sales. The Ticketmaster System is capable
of processing over 100,000 tickets per hour in certain markets and each of its
18 computer systems can support 10,000 users per system, of which as many as
3,000 can be online at any one time.

The Ticketmaster System software is maintained in-house, eliminating any
reliance upon outside software companies. Consequently, the Company is able to
adapt to its clients' needs, changing market conditions and advances in hardware
and other technologies. The Ticketmaster System communicates directly with bank
processing centers for instantaneous online credit card authorization and
electronic deposit of credit card receipts. All of the Ticketmaster System's
online terminals at the call centers and at selected facility box offices have
access to the authorization network.

A recent innovative feature of the Ticketmaster System is the Personal
Computer Interface ("PCI") which provides a Ticketmaster System operator easy
access to the Ticketmaster System through personal computers. The PCI software
allows an operator (including, in certain cases, a box office employee) to move
rapidly through a number of screens to quickly obtain information, complete
transactions and build customer profiles.

Significant measures are taken to prevent system failure in each computer
center. Each system has a live backup standing ready in the event of a primary
system failure. The rooms housing the computer-related equipment are protected
by computer-safe fire protection systems. Dual custom air conditioning units
provide constant climate control. To guard against power outages, the Company
employs uninterruptable power supplies. High capacity back-up generators
eliminate the dependency on public electric sources. Moreover, all data is
continually recorded on a back-up hard copy and the Company maintains an online
disaster recovery site in one of its principal offices. Historically, the
Ticketmaster System has experienced minimal downtime.

The Company's proprietary software is a product of 20 years of continual
enhancement by a team of in-house software and system professionals currently
numbering over 70. The Company's research and development staff has produced
significant enhancements to the Ticketmaster System, including proprietary
ticket printers and data telecommunications multiplexors, and regularly upgrades
its software. During each of fiscal 1994, 1995 and 1996, the Company spent
between $2.2 million and $2.9 million on this activity.

The Ticketmaster System is fully integrated and accessible on a real-time
basis by any authorized user. The Ticketmaster System has been designed to be
flexible in order to handle virtually any reserved seat configuration. Some of
the most commonly used features of the Ticketmaster System are the following:

Creation of Master Seating Chart and Events. A master seating chart
representing all of the seating sections of a facility is created for each
configuration of the facility's events. The master seating chart is then
used as a template for ticketing all events having that configuration.
Ticket text, ticket prices, special seats on hold and similar matters can
all be included on the master seating chart and automatically carried
forward to each event at the time it is created. Events can contain up to
1,000 sections having a combined seating capacity of 150,000 seats. Each
event can support multiple price levels, including pricing options for
subscriptions and discounts.

Editing of Seating Charts and Events. Once created, seating charts and
events can be fully edited online, at any time, by any authorized system
operator. Among the items that can be edited are the performance date or
time, the identity of a performer, new or revised ticket prices, the
structure of the sections and the order in which seats, rows and sections
are sold.

On-Sale Procedures. Once an event template has been created, checked
and customized, the tickets for that event can go on sale to the public.
The sale of tickets for events are under the control of the client's box
office management and, except as may be otherwise determined by the client,
are put on sale simultaneously at the box office, retail outlets, call
centers, and, eventually, on the Company's Web site.

Continuing Sale; Tracking of Inventory. Once an event is on sale,
there are a host of features that provide an operator with an enhanced
ability to make a sale. Events can be found by searching by the date

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or date range of the performance or by key words in the ticket text. Once
the event code is entered, seating within events can be selected by a
variety of attributes such as location or ticket price. These attributes
can also be combined, such as a request for balcony center seats at a
particular price.

Tickets, whether for a single event or multiple events, can be
selected on a best available seat basis or a specific seat basis. On a best
available seat basis, the computer will select the best seats requested by
the operator based on a comprehensive set of rules determined by the client
during the master seating chart and event creation process. On a specific
seat basis, the operator can look at a map of the seats that are available
in a requested section. Each available or open seat is shown on the map,
while a seat that is not available does not appear.

The inventory tracking capabilities also provide a facility or
promoter with the ability to monitor, on a real-time basis, the progress of
the sale of tickets for a particular event. This capability enhances the
ability of a facility or promoter to determine whether to add additional
dates for the event in order to satisfy demands.

Mastersearch. Mastersearch is specifically designed to streamline the
process of fulfilling requests for performances in a series of events.
Based upon the customer's specifications, mastersearch executes a rapid
search and finds the best available seats for the requested performances.
For example, the system can quickly give the customer a choice of the first
three events that have the best pair of seats available in the lower
concourse for a Wednesday performance during the month of December.

Reports. All standard reports are online and are updated at the time
each transaction occurs. There is a system of checks and balances that
verifies data accuracy based on sales by event, compared to sales by
operator. The Ticketmaster System produces numerous reports relative to
ticket sales, monies collected and event status.

Ancillary Box Office Features. Online credit card authorization is a
feature offered to selected facility box offices. Typical time to authorize
a transaction is less than two seconds, and a charge slip can be printed on
blank ticket stock along with the customer's event tickets. The box office
can print a report that verifies the deposit processed by the authorizing
bank.

Closing the Event. At the conclusion of the event, the box office can
take the event off-sale so that it is impossible for tickets to be sold or
returned. Final reports are then prepared. An event can remain on the
system indefinitely, but past events are normally archived on file copy
disks and deleted from the system.

STRATEGY AND GROWTH OPPORTUNITIES

Based upon recent trends in the entertainment, sporting and leisure
industries, the Company believes that its principal business, live entertainment
ticketing, will experience increased revenues under existing venue contracts.
The Company, through its Managed Businesses, sold 53.1 million tickets in fiscal
1996 and 30.4 million tickets during the first six months of fiscal 1997. The
Company believes that significant opportunities exist through continued
penetration of this principal market. Additionally, management believes that
further ticketing opportunities will arise from the construction of new and
larger facilities, the increase in the number of professional sports teams and
the development of new sports leagues. Furthermore, the Company plans to
continue to broaden its client base to include such venues as museums, zoos,
amusement parks, state and county fairs and other locations such as golf
courses, ski resorts and trade shows.

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The Company is continuing to leverage its widely recognized brand name and
extensive distribution capabilities by developing new opportunities in related
areas, such as entertainment information and publishing, merchandising,
advertising, promotional services and direct marketing. Specific examples of its
efforts include offering integrated brand management and marketing services to
strategic partners, such as MasterCard International and Sprint Communications,
through sponsorship, advertising opportunities during live events, during
telephone ticketing services, on its ticket stock and envelopes, on event
promotional material and in additional media outlets which the Company is
developing. In addition, the Company recently launched Live!, a monthly
entertainment magazine and event guide which the Company believes is a natural
extension of its existing distribution channels. The Company has also recently
launched Ticketmaster Online(http://www.ticketmaster.com), its site on the World
Wide Web designed to promote ticket sales for live events, disseminate event
information and offer transactional and merchandising services. These efforts to
create new promotional, marketing and distribution opportunities by utilizing
and integrating the Company's traditional core ticketing services and brand name
have formed the basis for new growth opportunities in the future.

Expand Domestic Ticketing Business. The Company believes that its domestic
ticketing business will experience growth as a result of increased revenues
under existing venue contracts and increased general interest in and attendance
at live entertainment events. The Company believes that significant
opportunities exist through continued penetration of this principal market. With
its broad distribution capabilities, the Company is strategically positioned to
benefit from any expansion of the live entertainment business. This expansion is
expected to come, in part, from an increase in the total number of tickets sold
by the facilities the Company currently services, due to an increase in the
number and variety of events presented at these facilities. In addition, the
Company intends to enter geographic territories where it does not presently
operate and seeks to enter into contracts with new, as well as existing,
facilities in the areas it currently operates. The Company also believes that
the Ticketmaster System can enhance ticket sales for any event which is time
and/or date sensitive. As a result, the Company is pursuing additional contracts
with state and county fairs, museums, zoos, amusement parks, golf courses, ski
resorts and trade shows. The Company also seeks to service special events. The
Company was the exclusive provider of ticketing services for the 1994 World Cup,
Woodstock 1994 and the European soccer championships.

Further Develop International Ticketing Business. The international
automated ticketing industry is in the early stages of development. Unlike in
the U.S., tickets in Europe are generally sold through ticket brokers which are
required by facilities and event promoters to purchase a specified quantity of
pre-printed tickets for resale to the public. Currently, in Europe neither event
promoters, facilities nor ticket brokers typically use a centralized automated
ticketing system to track ticket inventory or to print tickets. Therefore, a
promoter must allocate ticket inventory among its various brokers, who likewise
must allocate their inventory among their outlets. The Company believes that
there is an opportunity to replace this highly inefficient distribution process.
See Note 5 to Unconsolidated Ticketing Joint Ventures of Ticketmaster Group,
Inc. Financial Statements and Note 6 to Pacer/CATS/CCS Joint Venture Financial
Statements with respect to segment information for international operations.

Pursue Integrated Marketing and Joint Promotion Agreements. Integrated
marketing programs with strategic partners like MasterCard International and
Sprint Communications have created new business opportunities for the Company.
These programs are designed to provide access to entertainment related
opportunities, information and merchandise through traditional and new media,
thus benefitting the Company's strategic partners and clients. This type of
arrangement is attractive to entities seeking to reach a specific audience by
using the Company's unique marketing assets which include its brand name, user
database, distribution network and fulfillment capabilities. In other instances,
traditional promotion and marketing programs have been created with companies
such as Ford Motor Co., Calvin Klein Cosmetics Company and Honda America, Inc.

Implement Promotional and Merchandising Programs. Ticketmaster has the
ability to create specific promotional programs for its clients and for
advertisers such as printed advertising on ticket backs and envelopes,
customized inserts and coupons in ticket mailings, taped messages to callers on
hold, advertising in

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the Live! magazine and Ticketmaster Online and direct mail campaigns. These
promotional programs can be directed to the public generally, to ticket
purchasers or to those who call the Company for event information.
Ticketmaster's database of consumer information obtained through telephone sales
represents a large source of entertainment consumers in the U.S., containing
over 20 million active names. This database presents the opportunity to conduct
direct-mail campaigns that can be targeted by specific event, event type (e.g.,
sports, concerts, family attractions and performing arts), facility, zip code or
other criteria.

The Company currently sells various products to ticket purchasers who call
the call centers. Typically, at the conclusion of a confirmed ticket purchase, a
call center operator offers to sell merchandise that is related to a particular
event, such as videos, tour merchandise and sports memorabilia. The Company
intends to expand the types and range of merchandise that can be ordered by
telephone and online. In addition, the Company is exploring opportunities to use
its call centers to gather information from callers as a research service for
interested parties.

Further Develop Live! Magazine. In February 1996, the Company published the
first issue of Live!, a monthly, advertiser-supported entertainment magazine.
The magazine includes interviews, articles and features covering the entire
world of entertainment. Monthly contributors to the magazine currently include
Neil Simon, Carrie Fisher, Pat O'Brien and Robert Palmer. Each issue includes a
pullout Entertainment Guide listing events for which tickets are on sale through
Ticketmaster. The magazine is customized on a regional basis, with the
Entertainment Guide highlighting events scheduled to occur within each region.

The Company derives revenue from magazine sales, the sale of advertisements
and related revenue-generating opportunities. The Company expects to increase
subscription levels through traditional means, as well as by actively selling
subscriptions through its call centers. The magazine is also distributed through
newsstands. The first nine issues of the magazine have had an aggregate of 259
advertising pages.

Maximize Web Site and Internet Opportunities. Ticketmaster Online was
initially developed as a key link between the Company's clients and the ticket
buying public. Information is currently available through a national database
with details on more than 1,100 venues (including over 600 with seating charts),
and weekly listings of all events available and sale dates.

As it now exists, Ticketmaster Online provides advertisers with a new media
platform from which they can present their product or service. However, as the
Internet develops into a mass market for online commerce, the Company believes
that its Web site will present a natural extension for convenient cost-effective
access to tickets, merchandise and information. Further development of promotion
and sponsorship opportunities should also follow as usage of the Web site
increases.

Expand System Sales. The Company is a leading supplier of stand-alone
automated general admission ticketing systems in the U.S., the U.K. and other
worldwide locations. Customers for such systems include movie theaters and other
general admission facilities, such as amusement parks, zoos and museums. The
Company's ticketing systems are currently in use at movie theaters worldwide.

The Company also provides automated concession sales and control systems to
movie theaters, stadiums, arenas and general admission facilities. Many
facilities have antiquated or no central inventory control system for concession
sales. The Company's automated concession system enables a facility to monitor
on a real time basis inventory sales throughout its facility, and thereby manage
and supervise sales more effectively.

The Company has recently redesigned its general admission ticketing system
and its concession sales and control system and is beginning to market these
improved systems both domestically and internationally. The Company believes
that the improvements made to its ticketing and concession systems will lead to
increased sales of such systems both domestically and internationally. In
addition, the Company intends to increase sales of its concession system, in
part by leveraging relationships with facilities in the U.S. for which the
Company currently provides ticketing services.

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Other. The Company intends to organize membership programs that will
provide its members with certain benefits centered around entertainment, leisure
and travel activities. Membership will also include participation in promotional
and other activities not generally available to the public. The Company also
intends to develop further Ticketmaster Travel, its travel agency which
commenced operations in November 1995.

INDUSTRY OVERVIEW

The Company believes that since a small percentage of all tickets for live
entertainment events sold in the U.S. during fiscal 1996 were sold through
retail outlet networks, call centers and online services operated by automated
ticketing service companies, the domestic market represents a growth
opportunity.

The use of automated ticketing is generally in an earlier stage of
development outside of the U.S., although the actual level of use varies greatly
from country to country. While the Company believes that there is substantial
potential for international growth, the timing and rate of penetration within
each international market will vary.

The supply of tickets, both domestically and internationally, has increased
in recent years by virtue of, among other factors, increases in the number of
facilities (e.g., construction of amphitheaters), facility size and seating
capacity, event expansion into new market areas (e.g., the increase in the
number of professional sports teams and the development of new sports leagues)
and increases in the number of performances of an event (e.g., the adoption of
lengthened regular season play and expanded post-season play by sporting leagues
and associations). Ticket supply has also been enhanced by the desire of, and
necessity for, facilities to continually present as many revenue-producing
events as possible in order to meet their financial and other obligations. In
recent years, the public's increased demand for tickets to certain entertainment
events has been evidenced by its willingness to pay higher ticket prices to
attend entertainment events and the spread of public interest in certain types
of events beyond customary boundaries (e.g., increased worldwide interest in
football, baseball and basketball). In addition to live entertainment events
held at arenas, amphitheaters, stadiums and performing arts venues, automated
ticketing has expanded into servicing ticket issuing facilities that do not
generally have seats (e.g., museums, zoos, amusement parks, state and county
fairs, golf courses, ski resorts and trade shows).

The success of automated ticket service companies depends on their ability
to develop and maintain relationships with facilities, sports teams and
promoters by providing high quality service as well as the availability of, and
public demand for, tickets for all types of events, including sports, family
entertainment, concerts, fine arts and cultural attractions.

COMPANY HISTORY

Ticketmaster Corporation, the Company's principal subsidiary, was organized
in 1976 for the primary purpose of developing stand-alone automated ticketing
systems for sale to individual facilities. Ticketmaster Corporation initially
derived its revenues solely from the sale and installation of equipment and
ongoing royalties and service fees, but was not involved in the actual process
of selling tickets to the public. In the fall of 1982, Ticketmaster Corporation
began its transformation from a seller of stand-alone systems to a service
provider. Ticketmaster Corporation's growth and success resulted from combining
an integrated ticket inventory control management system (which permitted
season, subscription, group and individual tickets to be handled on one system)
with extensive distribution capabilities. In addition, by establishing revenue
sharing arrangements similar to those employed by food service and other
concessionaires to the facilities, Ticketmaster Corporation provided the
facilities with a new source of revenue.

Historically, the Company expanded both internally and through joint
ventures and acquisitions. During the 1980s and the early 1990s, the Company
formed four principal domestic joint ventures covering all or parts of Alabama,
Arkansas, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Ohio, Oregon,
South Carolina, Tennessee, Washington and West Virginia to operate ticket
selling services in those states. In addition, the Company selectively licensed
its name and technology to other entities for use in certain regions, including
Northern California, Washington, D.C., Philadelphia and parts of Canada and
Mexico.

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During the early 1990s, the Company continued to expand both through
acquisitions and strategic alliances with joint venture partners, including, in
1991, the acquisition of certain assets (principally client contracts) of
Ticketron, which previously had been one of the Company's major competitors; in
1992, the formation of a joint venture with an affiliate of Warner Music Group,
Inc. to pursue automated ticketing opportunities in European markets; and in
1994, the formation of a joint venture with an affiliate of Wembley plc to
provide advance ticketing for movie theaters worldwide and to market general
admission ticket selling and concession control systems to various clients,
including movie theaters, stadiums, arenas and amusement parks. Recently, the
Company has begun to reacquire certain of the rights to use the Company's name
and the Ticketmaster System that had previously been granted to joint ventures
and to licensees. See "-- Joint Ventures and Licensees."

As of July 31, 1996, the Company had expanded its ticket distribution
network into 44 states domestically and five countries worldwide.

JOINT VENTURES AND LICENSEES

In addition to the ticketing operations performed directly by the Company,
the Ticketmaster System is operated in certain territories through joint
ventures and licensees. Included among the Company's current and proposed joint
ventures and strategic alliances are the following:

Domestic Joint Ventures. The Company's live entertainment ticketing
business in certain states is conducted through joint ventures in which the
Company serves as the managing partner. The geographical territory covered by
each joint venture and percentage ownership of the Company are as follows: (i)
the Company owns a 33% equity interest in Ticketmaster-Southeast, which services
Georgia, North Carolina,
South Carolina, Birmingham, Alabama, and Chattanooga, Tennessee; (ii) the
Company owns an 80% equity interest in Ticketmaster-Tennessee, which services
parts of Tennessee, Arkansas and Mississippi; and (iii) the Company owns a 50%
equity interest in Ticketmaster-Northwest, which services Oregon and parts of
Washington. Further, third parties hold a 20% equity interest in the Company's
operating subsidiaries in Florida and Texas.

On October 16, 1996, the Company entered into an agreement to acquire the
20% equity interest of its partner in Southwest Ticketing, Inc., the Company's
operating subsidiary in Texas, for $6 million in cash.

On October 25, 1996, the Company entered into an agreement to acquire the
20% equity interest of its partner in Ticketmaster-Florida, Inc., the Company's
operating subsidiary in Florida, for shares of Common Stock having a value of
$4.6 million at the initial public offering price of the Common Stock in the
Offering.

Australian Joint Ventures. During 1988, the Company licensed the Victorian
Arts Centre Trust ("VACT") to use the Company's name and the Ticketmaster System
in the Australian states of Victoria and Tasmania and in the Australia Capitol
Territory (collectively, the "Australian Territory"). On December 1, 1995, the
license arrangement was terminated and the Company and VACT formed joint
ventures (the "Australian Joint Ventures") for the purpose of conducting the
Company's live entertainment ticketing business in the Australian Territory and,
possibly, other states in Australia and in New Zealand. The Company has a 50%
interest in and serves as the managing partner of the Australian Joint Ventures.
Concurrent with the formation of the Australian Joint Ventures, VACT contributed
one-half of its previously licensed ticketing business to one of the Australian
Joint Ventures and transferred the remaining one-half of such business to the
Company, and the Company contributed such remaining one-half interest to the
same Australian Joint Venture. The Company paid approximately $2.3 million to
VACT in connection with the transfer of such one-half interest by VACT to the
Company.

The Australian Joint Ventures' clients include the Victorian Arts Centre,
the National Tennis Centre, the Melbourne Cricket Grounds, the Australian Grand
Prix and the Olympic Park. During fiscal 1996, VACT, as licensee, and the
Australian Joint Ventures sold, in the aggregate, approximately 2.4 million
tickets.

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Latin American Joint Venture. On June 20, 1996, the Company and Corporacion
Interamericana de Entretenimiento, S.A. de C.V. ("CIE") entered into a letter of
intent to form a joint venture (the "Latin American Joint Venture") for the
purpose of marketing and operating the Ticketmaster System throughout Central
and South America. CIE is currently the owner of a 73% equity interest in the
Company's Mexico licensee (and, after the transaction described under " --
Foreign Licensees," a 50% equity interest). The Company will have a 50% interest
in and serve as the managing partner of the Latin American Joint Venture.

Domestic Licensees. The Company has selectively licensed its name and
technology to third parties for use in areas of Northern California, Oklahoma,
Oregon, parts of Washington, Maryland and in Washington, D.C. and certain other
cities. The Company derives revenues from the licensees in the form of license
fees and/or ongoing per ticket royalties. Less than 1% of the Company's total
revenues during fiscal 1996 were derived from these license arrangements. Some
of the Company's license agreements continue indefinitely while others have
scheduled expirations ranging from December 1997 to June 2001. Certain of the
license agreements are renewable at the option of the licensee.

Foreign Licensees. The Company has also selectively licensed its name and
technology to third parties for use in parts of Canada and Mexico. The Company
derives revenues from the licensees in the form of license fees and/or ongoing
per ticket royalties. Less than 1% of the Company's total revenues during fiscal
1996 were derived from these license arrangements. The license agreements have
varying terms with scheduled expirations ranging from May 1998 to May 2001.

On June 20, 1996, the Company entered into a letter of intent to acquire an
additional 23% equity interest in the Company's Mexico licensee from CIE in
consideration of the Company entering into the Latin American Joint Venture with
CIE. CIE will have general rights of management with respect to the Company's
Mexico licensee.

The Company has recently completed the acquisition, by purchase, redemption
or otherwise, of three former joint venture partners and three former domestic
licensees and has acquired a 27% equity interest in one foreign licensee as
described below:

European Joint Venture. During 1992, the Company and Warner Music
Ticketing, Inc., a subsidiary of Warner Music Group, Inc., formed Ticketmaster
Europe Group (the "European Joint Venture") for the purpose of conducting the
Company's live entertainment ticketing business in substantially all of Europe,
inclusive of the U.K. The Company had a 50% interest in and served as the
managing partner of the European Joint Venture. Concurrent with the formation of
the European Joint Venture, it acquired the operations of the Company's then
licensee in the U.K.

On June 7, 1996, the Company acquired the 50% equity interest of its
partner in the European Joint Venture (and in a related entity) in consideration
of $6 million in cash and an Exchangeable Promissory Note in the principal
amount of $5 million due June 7, 1997 (the "Exchangeable Promissory Note"). Upon
consummation of the Offering, the former partner will have the right to exchange
the Exchangeable Promissory Note for that number of shares of Common Stock which
is equal to the quotient of (i) the outstanding principal amount of the
Exchangeable Promissory Note on the date of the consummation of the Offering and
(ii) the price to the public of a share of Common Stock pursuant to the
Offering.

The Company's clients in the U.K. include Really Useful Group, Maybox
Theatres, Cameron McIntosh and several prominent professional soccer
organizations in the greater London area, all of which had previously been
clients of the European Joint Venture. During fiscal 1996, the European Joint
Venture sold approximately 2.9 million tickets.

Pacer/CATS/CCS Joint Venture. During 1994, the Company and WIL,
Incorporated, a subsidiary of Wembley plc ("WIL"), formed Pacer/CATS/CCS -- a
Wembley Ticketmaster Joint Venture (the "Pacer/CATS/CCS Joint Venture"), for the
purpose of designing, selling and servicing, worldwide other than in Israel, (i)
automated ticketing systems for use by motion picture theaters; (ii) automated
concession sales and control systems for use by motion picture theaters,
stadiums, arenas, amusement parks and other facilities; and (iii) automated
general admission ticketing systems for use by ticket-issuing facilities that do
not generally have seats (e.g., amusement parks, zoos and museums). The Company
had a 50% interest in and

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served as the managing partner of the Pacer/CATS/CCS Joint Venture. On July 29,
1996, the Company acquired the remaining 50% interest in the Pacer/CATS/CCS
Joint Venture from WIL and the name of the operating entity was changed to
Pacer/CATS/CCS. Consideration paid by the Company in connection with the
formation of the Pacer/CATS/CCS Joint Venture and the acquisition of WIL's 50%
interest in the Pacer/CATS/CCS Joint Venture aggregated approximately $16
million in cash and the assumption of $7.5 million of debt.

The automated ticketing and concession sales and control systems are
currently in use at movie theaters worldwide, including theaters operated by AMC
Theaters, Cineplex Odeon, General Cinemas, United Artists Cinemas, Warner Bros.
International Theaters, MGM Theaters, UGC, Pathe and UFA Olympia Reich Group,
and in such stadiums and other facilities as Wembley Stadium (U.K.), Cologne Zoo
(Germany), Calgary Saddledome (Canada), CICI Parque (Mexico), and 3Com Park,
Great Western Forum and Veteran's Stadium (U.S.). Pacer/CATS/CCS has recently
begun expansion into the Far East and has completed installations in Japan,
Australia, New Zealand and Singapore.

Prior to the formation of the Pacer/CATS/CCS Joint Venture, Pacer Cats
Corporation (one of the operating subsidiaries of Wembley plc) entered into an
agreement with Promofone, Inc., an affiliate of MovieFone, Inc. ("MovieFone"),
whereby the general admission ticket selling equipment and related computer
interface now owned by Pacer/CATS/CCS would be utilized in connection with
MovieFone's interactive telephone movie ticketing business. The Pacer/CATS/CCS
Joint Venture did not assume or otherwise become a party to that agreement.
Certain disputes have arisen with respect to the interpretation of that
agreement and whether any breaches have occurred thereunder. See "-- Government
Investigations and Litigation."

Ticketmaster-Indiana Joint Venture. On November 15, 1996, the Company
acquired the 50% equity interest of New East Associates LLC ("New East"), its
partner in Ticketmaster-Indiana, pursuant to which Ticketmaster-Indiana
purchased newly issued convertible Preferred Stock in exchange for Ticketmaster-
Indiana's promissory note in the principal amount of $27 million.
Ticketmaster-Indiana distributed the Preferred Stock to New East in complete
liquidation of New East's interest in Ticketmaster-Indiana. Concurrent with the
completion of the Offering, the Preferred Stock will automatically convert into
shares of Common Stock having a value of $27 million at the initial public
offering price of the Common Stock in the Offering.

Domestic Licensees. On February 12, 1996, the Company acquired the license
rights and related assets of its Nashville, Tennessee licensee. In addition, on
August 31, 1996, the Company acquired the license rights and related assets of
its Albuquerque, New Mexico licensee. The aggregate cash consideration for both
acquisitions was $1.8 million.

On October 3, 1996, the Company acquired the license rights and related
assets of its Delaware Valley (Philadelphia) licensee for $19.0 million in cash.
Such consideration was paid from the proceeds of a loan obtained by the Company
prior to consummation of the acquisition.

Foreign Licensees. On October 10, 1996, the Company acquired a 27% equity
interest in the Company's Mexico licensee from Ogden Entertainment Inc. for $1.8
million in cash and 5% of net distributions (as defined therein) received with
respect to such 27% equity interest by the Company from the Company's Mexico
licensee through December 31, 1998.

COMPETITION

Not all facilities, promoters and other potential clients use the services
of a automated ticketing company, choosing instead to distribute their tickets
through their own internal box offices or other distribution channels.
Accordingly, the Company competes with the facilities, promoters and other
potential clients for the right to distribute their tickets at retail outlets,
by telephone and on the Internet. Among those who perform their own ticketing
are Riverfront Coliseum in Cincinnati, the New York Mets, Don Law Presents (Next
Ticketing) and the Shubert Organization (Telecharge).

For those facilities and promoters which decide to utilize the services of
a automated ticketing company, the Company competes with many international,
national and regional ticketing systems, such as Telecharge

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Systems, which is a division of The Schubert Organization, Inc. and licenses the
Ticketron software, Dillards Ticketing Systems, which is a division of Dillard's
Department Stores, Inc. and which uses its own department stores as ticket
outlets, and Destinet (formerly Mistix Corporation). Several of the Company's
competitors have operations in multiple locations throughout the U.S., while
others compete principally in one specific geographic location. One or more of
these regional ticketing systems could expand into other regions or nationally.
Other companies compete with the Company by selling stand-alone automated
ticketing systems to enable the facilities to do their own ticketing, including
companies that sell systems under the names Prologue, Artsoft and Lasergate in
the U.S., Bocs in the U.K. and Softix in Australia, New Zealand and Pacific Rim
countries. The Company has experienced substantial competition for new accounts,
such as 1994 World Cup soccer (which became a client of the Company) and the
National and California Park Systems and the 1996 Summer Olympics (all of which
became clients of one of the Company's competitors). Accordingly, there can be
no assurance that prospective clients will enter into contracts with the Company
rather than the Company's competitors. The Company believes that it competes on
the basis of service provided, capability of the ticketing system, distribution
network, reliability and price. The Company also faces potential competition
from new technology such as online services, interactive television and cable
channels.

As an alternative to purchasing tickets through the Company, ticket
purchasers generally may purchase tickets from the facility's box office at
which an event will be held or by season, subscription or group sales directly
from the venue or promoter of the event. Although processed through the
Ticketmaster System, the Company derives no convenience charge revenue from the
ticket purchasers with respect to those ticket purchases.

TRADEMARKS AND PATENTS

The Company owns a number of registered trademarks in various countries
relating to, among other things, the name Ticketmaster and its related logo. The
Company believes that such trademarks are widely recognized throughout North
America and other parts of the world and have considerable value. The Company is
not aware of any actions against its trademarks used in the ticketing business
and has not received any notice or claim of infringement in respect of such
trademarks.

The Company also acquired the rights to the name Ticketron in connection
with the Company's purchase of certain assets of Ticketron.

The Company presently has no patents pertaining to the Ticketmaster System.
Although the Company may in the future file for patent protection on products
developed or to be developed by it, there can be no assurance that any patents
will be issued or, if issued, that such patents will provide the Company with
meaningful protection. Further, the technology used by the Company in many of
its products is likely to be within the state-of-the-art and may not be more
advanced than the technology used by or available to certain of its present or
potential competitors. The Company may be unable to prevent its competitors and
others from incorporating features of the Company's products into their own
products. See "Risk Factors -- Changing Technology; Absence of Patent
Protection."

REGULATION

The Company is subject to numerous state and local licensing laws and laws
that require the disclosure of specified information to ticket purchasers. In
addition, on February 8, 1996, a bill was introduced in the U.S. House of
Representatives to require ticket distributors (sellers and resellers) to (i)
disclose to a purchaser of an entertainment or sporting event ticket, prior to
any purchase of such ticket, any fee, charge or assessment (other than a tax or
other levy imposed pursuant to Federal, state or local law) to be imposed in
excess of the face amount of the ticket and (ii) have the amount of any such
fee, charge or assessment imprinted on the ticket or on a receipt evidencing any
such ticket sale. These requirements are consistent with existing Company
policy. The bill also included a provision directing the Federal Trade
Commission to conduct a study of ticketing practices. The 1996 Congressional
session adjourned without any action being taken with respect to the bill.

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<PAGE> 58

The Company is currently regulated by a law in Georgia that establishes
maximum convenience charges on tickets for certain sporting events. Other bills
that could affect the way the Company does business, including bills that would
regulate the amount of convenience charges, are introduced from time to time in
state and local legislative bodies. The Company is unable to predict whether any
such bills will be adopted and, if so, the impact thereof on its business.

In addition, increasing concern over consumer privacy has led to the
introduction from time to time of proposed legislation which could impact the
direct marketing and market research industries. The Company does not know when
or whether any such proposed legislation may pass or whether any such
legislation would relate to the types of services currently provided by the
Company or which the Company intends to develop. Accordingly, the Company cannot
predict the effect, if any, that any such future regulation may have on its
business.

Further, the Company is unable to predict, at this time, the effect, if
any, upon the Company's business that may result from the Telecommunications Act
of 1995 and various state telecommunications laws.

GOVERNMENT INVESTIGATIONS AND LITIGATION

The Company received a Civil Investigation Demand in June 1994 from the
Antitrust Division of the United States Department of Justice for the stated
purpose of determining if the Company had violated Sections 1 and 2 of the
Sherman Act. Section 1 of the Sherman Act prohibits contracts, combinations or
conspiracies in restraint of trade. Section 2 of the Sherman Act prohibits any
person from monopolizing, attempting to monopolize or combining or conspiring to
monopolize any part of trade or commerce. On July 5, 1995, the Antitrust
Division issued the following release (which is quoted in its entirety): "The
Department of Justice announced today that it has informed Ticketmaster Holdings
Group, Inc., that it is closing its antitrust investigation into that firm's
contracting practices. The Department will continue to monitor competitive
developments in the ticketing industry."

During 1994, the Company was named as a defendant in 16 federal class
action lawsuits filed in United States District Courts purportedly on behalf of
consumers who were alleged to have purchased tickets to various events through
the Company. These lawsuits alleged that the Company's activities violated
antitrust laws. On December 7, 1994, the Judicial Panel on Multidistrict
Litigation transferred all of the lawsuits to the United States District Court
for the Eastern District of Missouri (the "District Court") for coordinated and
consolidated pretrial proceedings. After an amended and consolidated complaint
was filed by the plaintiffs, the Company filed a motion to dismiss and, on May
31, 1996, the District Court granted that motion ruling that the plaintiffs had
failed to state a claim upon which relief could be granted. On June 12, 1996,
the plaintiffs appealed the District Court's decision to the Court of Appeals
for the Eighth Circuit (the "Court of Appeals"). The appeal has been fully
briefed by the parties and the parties are awaiting a date for the presentment
of oral arguments.

On July 20, 1994, the named plaintiffs in the Florida federal action filed
a complaint in Florida state court essentially asserting the same allegations
that were contained in the then pending federal action. On March 6, 1995, the
Florida state court granted the Company's motion to dismiss the complaint
without prejudice. Plaintiffs have appealed the dismissal.

On March 17, 1995, Moviefone, Inc. and The Teleticketing Company, L.P.
filed a complaint against Ticketmaster Corporation in the United States District
Court for the Southern District of New York. Plaintiffs allege that they are in
the business of providing movie information and teleticketing services, and that
they are parties to a contract with Pacer Cats Corporation to provide
teleticketing services to movie theaters. Plaintiffs also allege that, together
with Pacer Cats Corporation, they had planned to commence selling tickets to
live entertainment events, and that Ticketmaster Corporation, by its conduct,
frustrated and prevented plaintiffs' ability to do so. Plaintiffs further allege
that Ticketmaster Corporation has interfered with and caused Pacer Cats
Corporation to breach its contract with plaintiffs. The complaint asserts that
the Company's actions violate Section 7 of the Clayton Act and Sections 1 and 2
of the Sherman Act, and that the Company tortiously interfered with contractual
and prospective business relationships. The Company has filed a motion to
dismiss which is fully briefed and undecided.

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<PAGE> 59

From time to time, state and local authorities commence investigations or
inquiries with respect to the Company's compliance with applicable consumer
protection, deceptive advertising, unfair business practice and other laws. The
Company has historically cooperated in and satisfactorily resolved each such
investigation or inquiry.

The Company believes that it has conducted its business in substantial
compliance with all applicable laws, including federal and state antitrust laws.
However, given the status of the foregoing matters and the possibility of future
litigation being brought against the Company, no assurances can be made as to
the effect any of these pending or unasserted matters may have on the Company.
The Company has incurred significant legal expenses in connection with these and
other investigations and lawsuits and may incur additional significant legal
expenses in the future should investigations or lawsuits be instituted.

The Company is involved in various other litigation and claims arising out
of or related to the normal conduct of its business. In the opinion of the
Company, none of these proceedings will have a material adverse effect on its
results of operations or financial condition.

PROPERTIES

The Company leases its principal offices in Los Angeles, California, as
well as office space in additional cities throughout the U.S., the U.K., Germany
and France and, through joint ventures, in Australia. The Company currently has
approximately 390,000 square feet of space under lease, with scheduled
expirations ranging from January 1997 to May 2007.

The Company has purchased a building of approximately 70,000 square feet in
West Hollywood, California to serve as its corporate headquarters and the
principal offices for Live! magazine and Ticketmaster Online. The Company
currently expects to occupy approximately 50,000 square feet of the building by
the end of the first quarter of fiscal 1998.

EMPLOYEES

As of January 31, 1996, the Company employed approximately 1,425 full-time
employees, approximately 130 part-time administrative employees and
approximately 3,350 part-time telephone operators.

The telephone operators in New York City and Chicago and the telephone
operators employed by the Australian Joint Ventures (approximately 15.0% of the
Company's telephone operators) are the only employees of the Company covered by
collective bargaining agreements. The collective bargaining agreements covering
the telephone operators in New York City, Chicago and Australia are scheduled to
expire on April 30, 1997, December 31, 1997, and December 1, 1997, respectively.
The Company believes that its relations with its employees are good.

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<PAGE> 60

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

TICKETMASTER GROUP, INC.

The directors and executive officers of Ticketmaster Group, Inc. are as
follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- -------------------------------------------
<S> <C> <C>
Paul G. Allen 43 Chairman of the Board
Fredric D. Rosen 52 Director, President and Chief Executive
Officer
Charles Evans Gerber(1) 54 Director
David E. Liddle(2) 51 Director
John A. Pritzker(2)(3) 43 Director
William D. Savoy(1)(2) 32 Director
Terence M. Strom(1) 52 Director
Ned S. Goldstein 41 Senior Vice President and General Counsel
Peter B. Knepper 47 Senior Vice President and Chief Financial
Officer
Stuart W. DePina 35 Vice President -- Finance and Treasurer
</TABLE>

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

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Mr. Pritzker serves on the Board of Directors as the designee of certain
existing shareholders of the Company (other than Paul G. Allen) pursuant to
a right granted to those shareholders in an existing shareholders'
agreement. See "Certain Transactions."

Paul G. Allen has served as a director and Chairman of the Board since
December 1993. Since January 1991, Mr. Allen has been a private investor with
interests in a wide variety of companies, many of which focus on multimedia
digital communications such as Asymetrix Corp., Starwave Corporation and
Interval Research Corporation, of which Mr. Allen is the controlling shareholder
and a director. In addition, Mr. Allen is the Chairman of the Board of Trail
Blazers Inc., of the National Basketball Association, and The Paul Allen Group,
a venture capital firm. Mr. Allen currently serves as a director of Microsoft
Corporation and also serves as a director of various private corporations.

Fredric D. Rosen has served as a director since January 1991. Mr. Rosen has
served as the President and Chief Executive Officer since December 1993, and
served as the Chairman of the Board from January 1991 until December 1993. In
addition, since January 1991, Mr. Rosen has served as an executive officer of
numerous subsidiaries of the Company, including Ticketmaster Corporation,
Ticketmaster Ticketing Co., Inc. and Ticketmaster Publications, Inc. Mr. Rosen
has been employed by the Company for 14 years and has been involved in the
ticketing industry for 14 years.

Charles Evans Gerber served as a director of the Company from January 1993
through December 1993 and then was re-elected as a director in September 1994.
Since January 1991, Mr. Gerber has been a senior partner at the law firm of
Neal, Gerber & Eisenberg. Mr. Gerber is a director of Little City Foundation, a
not-for-profit corporation, and various privately-held corporations, and a
former member of the Board of Visitors of the University of Illinois College of
Law.

David E. Liddle has served as a director since September 1994. Mr. Liddle
has served as Chief Executive Officer of Interval Research Corporation, a
research and development company, since March 1992. From November 1991 until
March 1992, Mr. Liddle was a Vice President of IBM Corporation. From January
1991 to October 1991, Mr. Liddle was Chief Executive Officer of Metaphor, Inc.,
a company involved in the computer and software industry. Mr. Liddle currently
serves as a director of Sybase, Inc., Borland International, Inc., Broderbund
Software, Inc. and Netframe Systems Corp., all of which are involved in the
computer and/or software business.

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<PAGE> 61

John A. Pritzker has served as a director since July 1992. Since January
1991, Mr. Pritzker has served as the Chief Executive Officer of the Red Sail
Companies which provide ad specialty and catalogue fulfillment services and
operate water sports and retail facilities at resorts worldwide. Mr. Pritzker is
a director of International Flight Technologies, Inc. and a trustee of the U.S.
Ski Team Foundation, San Francisco Museum of Modern Art, San Francisco Day
School and Children Now.

William D. Savoy has served as a director since September 1994. Mr. Savoy
has served as the President of Vulcan Northwest Inc., a venture capital firm,
since January 1991. Mr. Savoy is a director of c/net, Inc., Harbinger
Corporation, Telescan, Inc. and U.S. Satellite Broadcasting, Inc.

Terence M. Strom has served as a director since September 1994. Mr. Strom
has served as the President and Chief Executive Officer of Egghead, Inc., a
retail software reseller, since June 1993. From July 1989 until June 1993, Mr.
Strom was a Vice President -- Merchandising and Senior Vice President of Best
Buy Company, Inc., a discount retail chain.

Ned S. Goldstein has served as Senior Vice President of the Company since
February 1995 and as General Counsel of the Company since January 1991. From
January 1991 until January 1995, Mr. Goldstein also served as a Vice President
of the Company. In addition, since January 1991, Mr. Goldstein has served as an
executive officer of numerous subsidiaries of the Company, including
Ticketmaster Corporation, Ticketmaster Ticketing Co., Inc. and Ticketmaster
Publications, Inc. Mr. Goldstein has been employed by the Company for nine years
and has been involved in the ticketing industry for nine years.

Peter B. Knepper has served as Chief Financial Officer and Treasurer of the
Company since January 1991, and as a Senior Vice President of the Company since
February 1995. In addition, since January 1991, Mr. Knepper has served as an
executive officer of numerous subsidiaries of the Company, including
Ticketmaster Corporation, Ticketmaster Ticketing Co., Inc. and Ticketmaster
Publications, Inc. Mr. Knepper has been employed by the Company for eight years
and has been involved in the ticketing industry for eight years.

Stuart W. DePina has served as Vice President -- Finance and Treasurer of
the Company since November 1995. Prior to November 1995, Mr. DePina was employed
by the public accounting firm of KPMG Peat Marwick, LLP serving in various
capacities including, most recently, a partner. In addition, Mr. DePina serves
as an executive officer of various subsidiaries of the Company, including
Ticketmaster Corporation and Ticketmaster Ticketing Co., Inc.

All directors hold office until the annual meeting of the shareholders of
the Company following their election or until their successors are duly elected
and qualified. Officers are appointed by and serve at the discretion of the
Board of Directors.

TICKETMASTER CORPORATION

In addition to certain of the executive officers of the Company named
elsewhere herein, the senior executive officers of Ticketmaster Corporation, a
principal operating subsidiary of the Company, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------- --- ------------------------------------------------
<S> <C> <C>
Robert A. Leonard 63 Senior Executive Vice President
Marc Bension 49 Executive Vice President
Judy A. Black 47 Senior Vice President -- Governmental Relations
Alan Citron 38 Senior Vice President -- New Media
Ann P. Mooney 40 Senior Vice President -- Administration
</TABLE>

Robert A. Leonard has served as Senior Executive Vice President of
Ticketmaster Corporation since December 1993 and served as President of
Ticketmaster Corporation from January 1991 until December 1993. Mr. Leonard has
been employed by the Company for 18 years and has been involved in the ticketing
industry for 18 years.

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<PAGE> 62

Marc Bension has served as Executive Vice President of Ticketmaster
Corporation since February 1994. In addition, since February 1994, Mr. Bension
has also served as an officer of various subsidiaries of Ticketmaster
Corporation. From January 1991 until January 1994, Mr. Bension was President of
MCA Concerts, a division of MCA, Inc.

Judy Black has served as Senior Vice President -- Governmental Relations of
Ticketmaster Corporation since March 1995. From January 1991 until February
1995, Ms. Black was employed by the International Council of Shopping Centers
Government Relations Office, a trade association, initially as a Vice President
and commencing in May 1994 as a Senior Vice President.

Alan Citron has served as Senior Vice President -- New Media of
Ticketmaster Corporation since January 1995. From January 1991 until December
1994, Mr. Citron was employed by The Los Angeles Times, a division of Times
Mirror Co., as a reporter and business writer and, commencing in 1992, as an
assistant business editor in charge of entertainment.

Ann P. Mooney has served as Senior Vice President -- Administration of
Ticketmaster Corporation since February 1995 and as Vice
President -- Administration of Ticketmaster Corporation since January 1991. Ms.
Mooney has been employed by the Company for 13 years and has been involved in
the ticketing industry for 13 years.

TICKETMASTER TICKETING CO., INC.

In addition to certain of the executive officers of the Company named
elsewhere herein, the senior executive officers of Ticketmaster Ticketing Co.,
Inc., a principal operating subsidiary of the Company, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------- --- ------------------------------------------------
<S> <C> <C>
Terry Barnes 45 President and Chief Operating Officer
Eugene Cobuzzi 40 Executive Vice President, Office of President
Donna Dowless 49 Executive Vice President, Office of President
Neal Gunn 48 Executive Vice President, Office of President
Marla Hoicowitz 40 Executive Vice President, Office of President
Claire Rothman 68 Executive Vice President, Office of President
Tim Wood 42 Executive Vice President, Office of President
Brian Delaney 38 Vice President
Tom Hogg 47 Vice President
</TABLE>

Terry Barnes has served as the President and Chief Operating Officer of
Ticketmaster Ticketing Co., Inc. since September 1995. From January 1991 until
August 1995, Mr. Barnes was Vice President and General Manager of numerous
subsidiaries of Ticketmaster Corporation in the Midwest Region. Mr. Barnes has
been employed by the Company for 13 years and has been involved in the ticketing
industry for 13 years.

Eugene Cobuzzi has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since September 1995. Since January 1991, Mr. Cobuzzi has
also served as an officer of various subsidiaries of Ticketmaster Corporation in
the Northeast Region. Mr. Cobuzzi has been employed by the Company for 11 years
and has been involved in the ticketing industry for 13 years.

Donna Dowless has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since September 1995. Since January 1991, Ms. Dowless has
also served as an officer of various subsidiaries of Ticketmaster Corporation in
the Southeast Region. Ms. Dowless has been employed by the Company for nine
years and has been involved in the ticketing industry for 30 years.

Neal Gunn has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since February 1996. From November 1992 until January 1996,
Mr. Gunn was employed by Astrodome USA, a facility operator, as an Executive
Vice President. From January 1, 1991 until October 1992, Mr. Gunn was

60
<PAGE> 63

employed by Houston Sports Associates, a facilities operator, as an Executive
Vice President. Mr. Gunn has been employed by the Company for two years and has
been involved in the ticketing industry for 29 years.

Marla Hoicowitz has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since September 1995. Since January 1991, Ms. Hoicowitz has
also served as an officer of various subsidiaries of Ticketmaster Corporation in
the Northeast Region. Ms. Hoicowitz has been employed by the Company for eight
years and has been involved in the ticketing industry for eight years.

Claire Rothman has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since September 1995. From January 1, 1991 until June 1995,
Ms. Rothman was employed by Ogden Entertainment Services, a facilities operator,
as the General Manager of the Great Western Forum. Ms. Rothman has been employed
by the Company for two years and has been involved in the ticketing industry for
29 years.

Tim Wood has served as an Executive Vice President of Ticketmaster
Ticketing Co., Inc. since September 1995. Since January 1991, Mr. Wood has also
served as an officer of various subsidiaries of Ticketmaster Corporation in the
Southeast Region. Mr. Wood has been employed by the Company for 13 years and has
been involved in the ticketing industry for 13 years.

Brian Delaney has served as a Vice President of Ticketmaster Ticketing Co.,
Inc. since September 1995. Since January 1991, Mr. Delaney has also served in
various managerial positions with Ticketmaster Corporation and its subsidiaries.
Mr. Delaney has been employed by the Company for nine years and has been
involved in the ticketing industry for nine years.

Tom Hogg has served as a Vice President of Ticketmaster Ticketing Co., Inc.
since September 1995. Since January 1991, Mr. Hogg has also served in various
managerial positions with Ticketmaster Corporation and its subsidiaries. Mr.
Hogg has been employed by the Company for 18 years and has been involved in the
ticketing industry for 18 years.

TICKETMASTER PUBLICATIONS, INC.

In addition to certain of the executive officers of the Company named
elsewhere herein, the senior executive officers of Ticketmaster Publications,
Inc., a principal operating subsidiary of the Company, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------- --- ----------------
<S> <C> <C>
Carole Ference 57 Publisher
Annie Gilbar 48 Editor in Chief
</TABLE>

Carole Ference has served as the Publisher of Ticketmaster Publications,
Inc. since February 1995. From January 1991 until March 1995, Ms. Ference was
employed by The Hearst Corporation as the Publisher of Connoisseur magazine
(from January 1991 until March 1992) and as the Publisher of House Beautiful
magazine (from April 1992 until January 1995).

Annie Gilbar has served as the Editor in Chief of Ticketmaster
Publications, Inc. since January 1995. From April 1993 until December 1994, Ms.
Gilbar was employed by Time Inc. as the West Coast Bureau Chief of InStyle
magazine. From January 1991 until March 1993, Ms. Gilbar was employed by
American Express Publishing Corp. as the Editor in Chief of L.A. Style magazine.

DIRECTOR COMMITTEES

The Board of Directors has established an Audit Committee and a
Compensation Committee. Each committee is composed of at least two independent
directors who together constitute a majority of each committee. See
"Management -- Directors and Executive Officers."

The functions of the Audit Committee are to recommend annually to the Board
of Directors the appointment of the independent public accountants of the
Company, discuss and review the scope and the fees of the prospective annual
audit and review the results thereof with the independent public accountants,
review and approve non-audit services of the independent public accountants,
review compliance with existing major

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<PAGE> 64

accounting and financial policies of the Company, review the adequacy of the
financial organization of the Company and review management's procedures and
policies relative to the adequacy of the Company's internal accounting controls.

The functions of the Compensation Committee are to review and approve
annual salaries and bonuses for all executive officers (consistent with the
terms of all applicable employment agreements), review, approve and recommend to
the Board of Directors the terms and conditions of all employee benefit plans or
changes thereto and administer the Stock Plan and such other employee benefit
plans as may be adopted by the Company from time to time.

The Board of Directors may also establish other committees from time to
time to assist in the discharge of its responsibilities.

COMPENSATION OF DIRECTORS

Prior to August 21, 1996, directors were not paid fees, but were reimbursed
for travel expenses incurred in attending board and committee meetings. On
August 21, 1996, each director who was not an employee of the Company or the
beneficial owner of 5% or more of the outstanding Common Stock was granted
options to purchase 25,000 shares of Common Stock in consideration for services
rendered through such date. In addition, commencing on August 21, 1996, each
director who is not an employee of the Company or the beneficial owner of 5% or
more of the outstanding Common Stock will be paid an annual fee of $6,000
payable in equal quarterly installments, and on the date of each scheduled
annual meeting of the shareholders of the Company, commencing in 1997 and
annually thereafter, each director will automatically be granted options to
purchase 10,000 shares of Common Stock. See "Management -- Stock Plan."

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

The Company has adopted provisions in its Amended and Restated Articles of
Incorporation (the "Articles") that, to the fullest extent provided under
Illinois law, limit the liability of its directors and officers for monetary
damages arising from a breach of their fiduciary duties as directors or
officers. Such limitation of liability does not affect the availability of
equitable remedies such as injunctive relief or rescission, nor does it limit
liability for acts of fraud, knowing violation of law, unlawful payment of
distributions. Furthermore, equitable remedies may not, as a practical matter,
be effective for various reasons. The Company's Articles also provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Illinois law, including circumstances in which indemnification is
otherwise discretionary to the Company under Illinois law. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

The Company has also agreed to indemnify each director and officer pursuant
to an Indemnity Agreement from and against any and all expenses, losses, claims,
damages and liabilities incurred by such director or officer for or as a result
of actions taken or not taken while such director or officer was acting in his
or her capacity as a director, officer, employee or agent of the Company. In
addition, the Company maintains officers' and directors' liability insurance
which insures against liabilities that officers and directors of the Company may
incur in such capacities. The Company believes that these provisions are
necessary to attract and retain qualified persons as directors and officers.

There is no pending litigation or proceeding involving a director, officer,
employee or agent of the Company where indemnification will be required or
permitted. The Company is not aware of any threatened litigation or proceeding
which may result in a claim for such indemnification.

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<PAGE> 65

EXECUTIVE COMPENSATION

The following table sets forth certain summary information with respect to
all compensation paid by the Company during the three fiscal years ended January
31, 1994, 1995 and 1996 to each of the Company's Chief Executive Officer and its
other executive officers:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
---------------------------------- UNDERLYING
NAME AND FISCAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS SARS COMPENSATION
- --------------------------------------------- ------ ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Fredric D. Rosen 1996 $1,800,000 $ 576,000 -- $ 12,989(2)
President and Chief 1995 1,800,000 2,354,000 -- 9,476
Executive Officer 1994 837,667 700,000 1,331,340 102
Ned S. Goldstein 1996 $ 250,000 $ 140,000 -- $ 3,695(3)
Senior Vice President 1995 225,000 100,000 70,696 2,681
and General Counsel 1994 170,000 550,000 -- 1,797
Peter B. Knepper 1996 $ 275,000 $ 140,000 -- $ 3,706(4)
Senior Vice President and 1995 245,000 100,000 70,696 2,605
Chief Financial Officer 1994 190,000 550,000 -- 1,559
Stuart W. DePina(1) 1996 $ 45,065 $ 5,000 -- $ 174(5)
Vice President -- Finance and Treasurer
</TABLE>

- ---------------
(1) Mr. DePina became an executive officer of the Company in November 1995.

(2) Represents cash payments for life insurance premiums of $12,989.

(3) Includes $2,329 contributed by the Company to the 401K Plan and $1,366 for
life insurance premiums.

(4) Includes $1,790 contributed by the Company to the 401K Plan and $1,916 for
life insurance premiums.

(5) Represents cash payments for life insurance premiums of $174.

FISCAL YEAR-END OPTIONS/SAR VALUES(1)

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END
--------------- ---------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
-------------------------------------------- --------------- ---------------
<S> <C> <C>
Fredric D. Rosen............................ 693,406/637,934 $0/$0
Ned S. Goldstein............................ 47,154/23,542 0/0
Peter B. Knepper............................ 47,154/23,542 0/0
Stuart W. DePina............................ --/-- 0/0
</TABLE>

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

(1) None of the named executive officers of the Company exercised options or
SARs during the last completed fiscal year. Accordingly, columns in this
table pertaining to the exercise of options/SARs have been omitted.

EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement, dated as of December 15,
1993, with Fredric D. Rosen for an initial term ending on January 31, 1999. The
Company and Mr. Rosen have agreed that they will negotiate a three-year
extension to the employment agreement during the last year of the initial term
upon terms and conditions no less favorable to Mr. Rosen than the terms and
conditions applicable during the last year of the initial term, unless either
party gives notice to the other of its or his desire not to extend the term of

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<PAGE> 66

the employment agreement. Pursuant to the employment agreement, Mr. Rosen is
entitled to receive an annual base salary in the amount of $1.8 million
increasing to $2.1 million and $2.3 million, respectively, during the fourth and
fifth years of the initial term. Mr. Rosen is also entitled to receive an annual
performance bonus in an amount equal to a percentage (15% for fiscal 1995, 12.5%
for fiscal 1996 and 10% for all subsequent years) of the excess, if any, of the
Company's consolidated earnings before interest, taxes, depreciation and
amortization, with certain adjustments ("Adjusted EBITDA"), for the relevant
year over (i) for fiscal 1995, Adjusted EBITDA for fiscal 1994; (ii) for fiscal
1996, the average of Adjusted EBITDA for fiscal 1994 and 1995; and (iii) for all
subsequent years, the average of Adjusted EBITDA for the three prior fiscal
years. The annual performance bonus is subject to a cap of 50% of the base
salary for the relevant year if the increase in Adjusted EBITDA for such year
does not exceed specified percentages ranging from 12.5% to 15%. The Company
shall also pay Mr. Rosen such other bonuses as may be granted by the Company's
Board of Directors in its discretion. The employment agreement also entitles Mr.
Rosen to participate in benefit programs, to receive full reimbursement of
medical expenses and to receive a $10 million life insurance policy payable to
Mr. Rosen's estate or named beneficiaries. Pursuant to the employment agreement,
the Company has granted Mr. Rosen options to purchase 1,331,340 shares of Common
Stock at an exercise price of $14.14 per share, 25% of which vested on the grant
date and 75% of which vest monthly on a pro rata basis over a 36-month period
beginning January 1, 1995. If requested by Mr. Rosen, the Company will loan Mr.
Rosen the amount necessary to purchase the shares of Common Stock issuable upon
exercise of the options, together with the amount necessary to pay all Federal
and state income taxes thereon. See "Management -- Executive Compensation." In
addition, Mr. Rosen is prohibited from competing with the Company, subject to
certain exceptions, or soliciting the employment of any employee of the Company
or any customer of the Company for a period of two years after termination of
Mr. Rosen's employment with the Company.

The employment agreement provides that if Mr. Rosen's employment by the
Company is terminated by virtue of Mr. Rosen's death, the Company shall pay to
Mr. Rosen's estate or designee in a lump sum an amount equal to what would have
been his annual base salary for the one-year period following such termination,
plus any annual performance bonus amounts, annual base salary and benefits
accrued up to the date of termination. In the event Mr. Rosen's employment by
the Company is terminated by reason of disability, the Company shall pay to Mr.
Rosen an amount equal to what would have been his annual base salary for the
two-year period following such termination and all annual performance bonus
amounts accrued up to the date of termination, and the Company will for a
two-year period continue to provide, subject to certain conditions, those
benefit plans (including life insurance) in effect immediately prior to such
termination. If the Company terminates Mr. Rosen's employment for good reason
(which includes a determination by the Board of Directors that Mr. Rosen has
failed to perform his duties), the Company shall pay to Mr. Rosen in a lump sum
an amount equal to what would have been his annual base salary and amounts
payable under benefit plans for the two-year period following such termination,
plus an amount equal to annual performance bonuses, annual base salary and
benefits accrued up to such termination. If Mr. Rosen terminates his employment
for good reason at any time, the Company shall pay him the amounts described in
the immediately preceding sentence over the two-year period following
termination. The Company is also required to gross-up the payments made to Mr.
Rosen for any excise taxes which he may incur as a result of receiving payments
from the Company in connection with a change of control. In the event the
Company terminates Mr. Rosen's employment for any reason, the Company is
obligated to repurchase from Mr. Rosen 306,208 shares of Common Stock at a
purchase price to be determined in the manner set forth in the Shareholders
Agreement described below, but in no event for less than $4.3 million. See
"Certain Transactions."

The Company entered into employment agreements with Ned S. Goldstein and
Peter B. Knepper (as of February 1, 1994) and Stuart W. DePina (as of November
1, 1995), all of which will expire on January 31, 1999 and all of which provide
for negotiation of an extension of the initial term during the last year of the
initial term. Each executive is entitled to receive an annual base salary amount
ranging from $225,000 to $300,000 in the case of Mr. Goldstein, $245,000 to
$310,000 in the case of Mr. Knepper and $200,000 to $240,000 in the case of Mr.
DePina. Each executive is also entitled to receive an annual performance bonus
in an amount determined by the Board of Directors of the Company; provided,
however, that the amount of such

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bonus for any full contract year shall not be less than $50,000 in the case of
each of Mr. Goldstein and Mr. Knepper and $20,000 in the case of Mr. DePina. The
employment agreements also entitle the executives to participate in benefit
programs, to receive life insurance policies ($1,000,000 in the case of Messrs.
Goldstein and Knepper and $750,000 in the case of Mr. DePina) payable to their
estates or named beneficiaries. Pursuant to the employment agreements (except
for Mr. DePina's), the Company has granted options to purchase shares of Common
Stock (70,696 shares in the case of each of Messrs. Goldstein and Knepper) at an
exercise price of $14.14 per share, vesting over a 36-month period, in each case
under the Company's Stock Plan. See "Management -- Stock Plan." In addition, the
executives are prohibited from competing with the Company (subject to certain
exceptions) or soliciting the employment of any employee of the Company or any
customer of the Company for a period of two years after termination of their
employment with the Company. Pursuant to the employment agreements, each
executive agrees to serve without further compensation as an officer or a
director of any of the Company's domestic and foreign subsidiaries and
affiliates if elected or appointed thereto.

If the Company terminates the employment of any of the persons named in the
immediately preceding paragraph for any reason other than for cause, death or
disability, the Company shall pay to such executive his annual base salary and
minimum annual performance bonus for the remainder of the term of the employment
agreement, subject to certain mitigation and other requirements. For a two-year
period following termination of employment for any reason other than the
executive's death, the executive shall be available to the Company as a
consultant. In consideration for such consulting services (and agreements not to
compete and solicit employees and customers) the executives will receive annual
compensation of $30,000 in the case of each of Messrs. Goldstein and Knepper and
$10,000 in the case of Mr. DePina.

STOCK PLAN

General. The Stock Plan was initially adopted by the Company in 1994 and
was amended and restated on August 21, 1996. The Stock Plan provides for the
issuance of up to 3,250,000 shares of Common Stock to employees, directors and
officers of, and consultants to, the Company and permits the Company to grant
(i) Common Stock subject to transfer restrictions ("Restricted Stock"), (ii)
incentive stock options ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (iii) non-qualified
stock options ("NSOs") ("ISOs" and "NSOs," individually, or collectively,
"Options"), (iv) stock appreciation rights ("SARs"), and (v) phantom stock
awards.

Purpose. The purpose of the Stock Plan is to foster the interests of the
Company and its shareholders by enabling employees, directors and officers of,
and consultants to, the Company to acquire a proprietary interest in the Company
and to provide an additional incentive for such persons to promote the success
of the Company's business.

Administration. The Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"), which selects the persons
who will receive grants of awards under the Stock Plan. The Committee is
comprised of two or more outside directors who are "non-employee directors" for
purposes of Rule 16b-3 of the Exchange Act. The Board appoints the members of
the Committee, fills vacancies on the Committee and has the power to replace
members of the Committee with other eligible persons at any time. The Committee
is authorized to make grants under the Stock Plan, to determine the terms and
conditions thereof and to otherwise administer and interpret the Stock Plan.

Eligibility. Employees, directors and officers of, and consultants to, the
Company and its subsidiaries are eligible to participate in the Stock Plan and
receive grants of awards thereunder. The selection of employees who will receive
grants under the Stock Plan (the "Participants") is in the sole discretion of
the Committee. The aggregate number of shares of Common Stock that may be issued
under Options, as restricted stock or upon which SARs or phantom stock may be
awarded to any Participant may not exceed 500,000.

Exercise Price of Options. The exercise price of any Option granted under
the Stock Plan is set in each case by the Committee; however, the exercise price
of any ISO may not be less than 100% of the fair market value of the shares of
Common Stock subject to the ISO on the date of grant (110% if the ISO is granted
to a greater than 10% shareholder of the Company).

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Terms of Options. ISOs granted under the Stock Plan expire upon the earlier
to occur of (i) the date on which the Option is forfeited under the terms of the
Stock Plan due to termination of employment (e.g., 100% forfeiture if a
Participant's relationship with the Company is terminated for Cause (as that
term is defined in the Stock Plan)); (ii) ten years from the Option Date (as
that term is defined in the Stock Plan) (five years if the ISO is granted to a
greater than 10% shareholder of the Company), (iii) three months after the
Participant's termination of employment for any reason other than death, or (iv)
six months after the Participant's death. The duration of NSOs granted under the
Stock Plan are identical to those of ISOs except that NSOs do not automatically
expire ten years after the Option Date.

Exercise of Awards. Unless the Committee establishes a different vesting
schedule and except with respect to the automatic director Options discussed
below, Options, Restricted Stock, SARs and phantom stock granted or awarded
under the Stock Plan shall become 25% vested after 12 months from the grant or
award date, and shall vest monthly pro rata over a period of 36 months
thereafter. Notwithstanding the foregoing, upon a Change in Control (as that
term is defined in the Stock Plan) all Options, Restricted Stock, SARs and
phantom stock shall become 100% vested and immediately exercisable. If a
Participant's employment with the Company, membership on the Board of Directors
or retention as a consultant terminates, all unvested grants and awards are
forfeited. Under the Stock Plan, upon the exercise of an Option, the optionee
may make payment either in cash, with shares of Common Stock having an aggregate
fair market value on the date of delivery equal to the exercise price, or by
delivery of an irrevocable commitment to use the proceeds of the sale of stock
acquired from exercise of the option. No Common Stock may be delivered upon the
exercise of an Option until full payment has been made for such shares. For
individuals subject to Rule 16b-3, any withholding obligation of the Company
will be satisfied automatically by the automatic withholding of shares of Common
Stock otherwise issuable to the Participant.

Director Options. Each director who is not an employee of the Company or
the beneficial owner of 5% or more of the outstanding Common Stock and who was a
director of the Company on August 21, 1996 shall automatically be granted as of
that date NSOs to purchase 25,000 shares of Common Stock at an exercise price
per share of $14.50. In addition, commencing with the date of the annual meeting
of the shareholders of the Company scheduled to be held in 1997, and annually
thereafter, each director who is not an employee of the Company or the
beneficial owner of 5% or more of the outstanding Common Stock shall
automatically be granted NSOs to purchase 10,000 shares of Common Stock at an
exercise price per share equal to the fair market value of the shares of Common
Stock on the Option Date. Each automatic director NSO shall be 100% vested as of
the Option Date; provided, however, that such NSO may not be exercised at any
time prior to six months after the Option Date. Automatic director NSOs shall
expire ten years from the Option Date.

Stock Appreciation Rights (SARs). Under the terms of the Stock Plan, the
Committee may, in its discretion, grant naked SARs and/or tandem SARs to
eligible Participants. A tandem SAR is an SAR that is granted in connection with
an Option and is exercisable only if the fair market value of the Company's
Common Stock on the date of surrender exceeds the Option Price of the related
ISO or the fair market value of the Common Stock on the Option Date in the case
of an NSO, and only to the extent that the related NSO or ISO is exercisable. A
Participant who elects to exercise a tandem SAR may surrender the exercisable
portion of related Options in exchange for a number of shares of Common Stock
determined by a formula in the Stock Plan. A naked SAR is similar to a tandem
SAR but it is not granted in connection with an underlying Option and its terms
are governed by the Participant's SAR agreement.

Phantom Stock. Under the Stock Plan, the Committee may, in its discretion,
award phantom stock to eligible Participants and, in connection therewith, grant
the Participant the right to receive payments equal to dividends paid on the
Common Stock to which the phantom stock relates. Subject to certain terms and
limitations, an award of phantom stock entitles the Participant to surrender all
or part of the vested portion of such stock and to receive from the Company the
fair market value on the date of surrender of the Common Stock to which the
phantom stock relates.

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Non-Assignability of Options, SARs and Phantom Stock. Options, SARs and
phantom stock granted under the Stock Plan are not transferable other than by
will or the then applicable laws of descent and distribution. During the
lifetime of a Participant, Options may be exercised only by such Participant.

Restricted Stock. In addition to Options, SARs and phantom stock, the
Committee may, in its discretion, make awards of restricted stock to eligible
Participants under the Stock Plan. A Participant may not sell or transfer shares
of restricted stock awarded under the Stock Plan and the shares are subject to
forfeiture in the event of the termination of the Participant's employment with
the Company or membership on the Board of Directors prior to the vesting
thereof. Notwithstanding the transfer restrictions, the holder of restricted
stock has the right to vote his or her shares of restricted stock and to receive
dividends in the same amount as dividends paid on non-restricted shares of
Common Stock.

Adjustment to Reflect Change in Capital Structure. If there is any change
in the corporate structure or shares of the Company, the Board of Directors has
the authority to make any adjustments necessary to prevent accretion or to
protect against dilution in the number and kind of shares authorized by the
Stock Plan or in the number and kind of shares covered by awards thereunder.

Rights as a Shareholder. No person shall have any rights or privileges of a
shareholder of the Company as to shares subject to an Option granted pursuant to
the Stock Plan until such Option is exercised in accordance with the terms of
the Stock Plan. A Participant who has been granted SARs or phantom stock has no
rights whatsoever as a shareholder with respect to such SARs or phantom stock.

No Right to Employment. Participation in the Stock Plan or any agreement
entered into pursuant thereto does not confer upon any Participant any right to
continue in the employment of the Company or its subsidiaries.

Amendment. The Committee may, at any time and from time to time, amend and
revise the Stock Plan without the approval of the Company's shareholders in such
a manner which does not impair the rights of the Participants, but may not,
without approval of the Company's shareholders, (i) change the aggregate number
of shares of Common Stock reserved for issuance pursuant to the Stock Plan,
except for such adjustments as are permitted under the Stock Plan, (ii) change
the class of eligible individuals who may receive awards under the Stock Plan,
(iii) adopt any amendment affecting the option price at which Options may be
granted or (iv) materially increase benefits accruing to Participants under the
Stock Plan.

Termination of Stock Plan. The Committee may terminate the Stock Plan at
any time with respect to any shares of Common Stock that are not then subject to
Options or restricted stock. Termination of the Stock Plan will not affect a
Participant's rights and obligations with respect to awards granted before such
termination.

Miscellaneous. The Stock Plan is not subject to any of the provisions of
the Employee Retirement Income Security Act of 1974, as amended.

Tax Consequences. The following is a brief summary of the principal
anticipated federal income tax consequences of grants under the Stock Plan to
Participants and the Company. This summary is not intended to be exhaustive and
does not describe all federal, state or local tax laws.

Options. ISOs are intended to meet the requirements of Section 422 of the
Code. The fair market value of shares of Common Stock for which any optionee may
be granted ISOs which are exercisable for the first time during any year may not
exceed $100,000. No income results to the holder of an ISO upon the grant of the
option or issuance of shares of Common Stock. The amount realized on the sale or
taxable exchange of such shares of Common Stock in excess of the option price
will be considered a capital gain, except that, if a disposition occurs within
one year after exercise of the ISO or two years after the grant of the ISO, the
optionee will realize compensation (and, subject to the discussion of Section
162(m) of the Code below, the Company may have a deduction), for federal income
tax purposes, on the amount by which the lesser of (i) the fair market value on
the date of exercise or (ii) the amount realized on the sale of the shares of
Common Stock exceeds the option price. For the purpose of determining
alternative minimum taxable income, an ISO is treated as a non-qualified option.

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No income results to the holder of an NSO upon the grant of the option. In
connection with the exercise of an NSO, an optionee will generally realize
compensation (and, subject to the discussion of Section 162(m) of the Code
below, the Company may have a deduction), for federal income tax purposes, on
the difference between the option price and the fair market value of the shares
of Common Stock acquired. Special rules may govern income recognition by
officers subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended.

Stock Appreciation Rights. The grant of an SAR should not give rise to
federal income tax consequences to the Participant or the Company. In the case
of an SAR that becomes exercisable (as opposed to an SAR that merely matures and
is paid out), exercisability alone should not give rise to federal income tax
consequences. Moreover, appreciation in the underlying stock, either before or
after the SAR becomes exercisable, should not trigger tax prior to payout. When
the holder of an SAR exercises the SAR or otherwise receives the payout, the
holder recognizes ordinary income (and, subject to the discussion of Section
162(m) of the Code below, the Company may have a deduction), subject to
withholding, in the amount of the payout. To the extent the payout is made in
shares of Common Stock, the holder's income is measured by the then fair market
value of the shares of Common Stock. The Company will be entitled to withhold
taxes on the value of the payout of an SAR. If the payout is made in shares of
Common Stock, satisfaction of the withholding may be accomplished by reducing
the number of shares of Common Stock to be issued to the employee.

Restricted Stock. Generally, a Participant will not recognize income and
the Company will not be entitled to a deduction with respect to an award of
Restricted Stock until the first to occur of the vesting or the free
transferability of such shares. The amount to be included in the Participant's
income (and, subject to the discussion of Section 162(m) of the Code below,
which may be deductible by the Company) will equal the fair market value of the
Restricted Stock on the first day it is freely transferable or vested, not when
it is first issued to a Participant, over the amount, if any, paid for such
stock. The Company will be entitled to withhold tax from a Participant's salary
or from the shares that are no longer subject to restriction in order to satisfy
any tax withholding obligation arising from the taxability of the Restricted
Stock.

A Participant receiving Restricted Stock can elect to include the value of
the Restricted Stock, over the amount, if any, paid for such stock, in income at
the time it is awarded by making a "Section 83(b) Election" within 30 days after
the Restricted Stock is transferred to the Participant.

Phantom Stock. The grant of phantom stock should not give rise to federal
income tax consequences to the Participant or the Company. In the case of a
holding of phantom stock which the Participant can compel the Company to redeem
(as opposed to phantom stock that merely matures and is paid out), the ability
to compel redemption alone should not give rise to federal income tax
consequences. Moreover, appreciation in the underlying stock, either before or
after the phantom stock becomes redeemable, should not trigger tax consequences
to the holder prior to payout. When the holder of phantom stock causes the
phantom stock to be redeemed or otherwise receives the payout, the holder will
realize ordinary income (and, subject to the discussion of Section 162(m) of the
Code below, the Company may have a deduction) subject to withholding, in the
amount of the payout. To the extent the payout is made in shares of Common
Stock, the holder's income is measured by the then fair market value of the
shares of Common Stock. The Company will be entitled to withhold taxes on the
value of the payout of phantom stock. If the payout is made in shares of Common
Stock, satisfaction of the withholding may be accomplished by reducing the
number of shares to be issued to the Participant.

Section 162(m). Section 162(m) of the Code generally disallows a federal
income tax deduction to any publicly held corporation for compensation paid in
excess of $1 million in any taxable year to the chief executive officer or any
of the four other most highly compensated executive officers who are employed by
the Company on the last day of the taxable year. Under a transition rule in
applicable treasury regulations, compensation attributable to grants made during
a transition period under a plan or agreement that is adopted prior to the time
a corporation becomes publicly held will not be subject to the deduction
limitation of Section 162(m) of the Code provided that the prospectus
accompanying the initial public offering discloses information about such plan
or agreement which satisfies all applicable securities laws. Based on such
transition rule, compensation attributable to grants made under the Stock Plan
prior to the Company's first

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meeting at which directors are elected in the year 2000 should not be subject to
such deduction limitation. See "Management -- Employment Agreements."

Stock Plan Benefits. The following table lists all the Options that have
been granted under the Stock Plan to the persons named in the Summary
Compensation Table. The Company has not entered into any other agreements and is
not obligated to grant any other Options or make any other awards under the
Stock Plan.

<TABLE>
<CAPTION>
STOCK PLAN
---------------------------------
NUMBER OF
SHARES
UNDERLYING PER SHARE
NAME AND POSITION OPTIONS EXERCISE PRICE
------------------------------------------------ ---------- --------------
<S> <C> <C>
Fredric D. Rosen*............................... -- $ --
President and
Chief Executive Officer
Ned S. Goldstein................................ 70,696 $14.14
Senior Vice President 115,000 14.50
and General Counsel
Peter B. Knepper................................ 70,696 $14.14
Senior Vice President 115,000 14.50
and Chief Financial Officer
Stuart W. DePina................................ 45,000 14.50
Vice President --
Finance and Treasurer
Executives as a group........................... 141,392 $14.14
(four persons)................................ 275,000 14.50
</TABLE>

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

* Although no awards have been made to Mr. Rosen under the Stock Plan, the
Company has granted Mr. Rosen options to acquire 1,331,340 shares of Common
Stock. See "Management -- Employment Agreements."

401(K) INVESTMENT SAVINGS PLAN

Effective January 1, 1990, Ticketmaster Corporation, a subsidiary of the
Company, established a 401(k) plan, which was amended and restated effective
October 1, 1994 in the form of the Ticketmaster 401(k) Savings Plan and Trust
(the "401(k) Plan"). The 401(k) Plan is a qualified retirement plan under the
Code. Generally, employees of Ticketmaster Corporation and other related
entities are eligible to participate in the 401(k) Plan once they have attained
age 21 and completed 1,000 hours of service during a calendar year. A
participant in the 401(k) Plan can contribute up to 12% of his or her
compensation to the 401(k) Plan on a pre-tax basis. Ticketmaster Corporation
contributes $0.25 for each dollar of the participant's contributions which are
not in excess of 6% of his or her compensation. Participants vest in
Ticketmaster Corporation's contributions according to a four-year schedule, with
25% vesting after one year and 25% additionally each year thereafter.
Participants are fully vested in their contributions regardless of the schedule
and in Ticketmaster Corporation's contributions upon death, disability or
retirement on or after age 55. Participants are eligible to receive distribution
of their vested accounts upon termination of employment for any reason.
Distributions are made in a lump sum payment only. Participants may withdraw
amounts from the 401(k) Plan while they remain employed for reasons of financial
hardship or after they attain age 59 1/2. Participants are allowed to direct the
investment of their accounts under the 401(k) Plan among four broad-based
investment funds, and a combination lifepath fund thereof.

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CERTAIN TRANSACTIONS

In addition to the transactions described under "Management -- Employment
Agreements," the Company has had during its last fiscal year, or contemplates
having, the transactions described below.

On December 15, 1993, the Company issued 12,233,014 shares of Common Stock
to Paul G. Allen for $173 million in cash. On December 15, 1993, the Company
also acquired all shares of capital stock of the Company's subsidiary, TM Movie
Tix, Inc. held by Fredric D. Rosen and the Rosen Family Foundation (who owned,
in the aggregate, a 20% interest in such entity), for an aggregate cash purchase
price of $6.3 million and 306,208 shares of Common Stock.

Concurrently with the sale of 12,233,014 shares of Common Stock by the
Company to Mr. Allen, the shareholders listed in the table under "Principal
Shareholders" entered into a shareholders agreement (the "Shareholders
Agreement") on December 15, 1993. The Shareholders Agreement, among other
things, (i) grants the existing shareholders (other than Mr. Allen) as a group
the right to designate one member for election to the Company's Board of
Directors, subject to the approval of Mr. Allen, which approval will not be
reasonably withheld or delayed, (ii) restricts the ability of Mr. Allen to
transfer shares of Common Stock owned by him other than pursuant to transfers to
relatives, affiliates, charities and other shareholders, pledges and sales
pursuant to Rule 144 under the Securities Act ("Rule 144") or a public offering
("Exempt Transfers"), (iii) restricts the ability of the existing shareholders
(other than Mr. Allen) to sell shares of Common Stock owned by them in a public
offering unless such existing shareholders shall have afforded Mr. Allen the
right of first refusal to acquire such shares, (iv) affords the existing
shareholders (other than Mr. Allen) the right to participate in any sale of
shares of Common Stock by Mr. Allen, other than the sale of shares of Common
Stock by Mr. Allen pursuant to Exempt Transfers, (v) affords Mr. Allen the right
to cause the existing shareholders (other than Mr. Allen) to sell their shares
of Common Stock to a bona fide unaffiliated third person to whom Mr. Allen has
agreed to sell shares of Common Stock where such sale results in Mr. Allen
owning less than 50% of the outstanding Common Stock of the Company, and (vi)
requires Mr. Allen to engage in any business that would otherwise be competitive
with the Company (subject to certain exceptions) through the Company. With
respect to Mr. Allen's right of first refusal to purchase shares of Common Stock
in a transaction of the type described in clause (iii) above, the purchase price
for the purchased shares shall be (if the Company's Common Stock is then
publicly traded) a price equal to the average of the closing prices for such
stock during a specified ten-business-day period. The Shareholders Agreement
shall terminate upon the voluntary agreement of all the parties thereto or at
such time as the existing shareholders (other than Mr. Allen) collectively own
less than 10% of the Common Stock of the Company outstanding as of December 15,
1993. The Shareholders Agreement shall also terminate as to any existing
shareholder when such shareholder owns less than 1% of the Common Stock of the
Company outstanding as of December 15, 1993.

Concurrently with the execution of the Shareholders Agreement, the Company
also entered into a Registration Rights Agreement with Mr. Allen and a
Registration and Exchange Rights Agreement with the existing shareholders other
than Mr. Allen pursuant to which they are granted rights to require the Company,
subject to certain qualifications, to effect the registration under the
Securities Act of all or a specified number of their shares of Common Stock or
have such shares included in a registration statement filed with respect to the
offering of Common Stock by the Company or any other shareholder. The Company
has agreed to bear all expenses relative to such registrations, except fees and
expenses of any counsel for the selling stockholders and the underwriters'
commissions. The existing shareholders (other than Mr. Allen), on the one hand,
and Mr. Allen, on the other hand, shall have no further rights under such
Registration Rights Agreement or such Registration and Exchange Rights
Agreement, as applicable, at any time after either of them fails to own at least
5% of the Common Stock of the Company outstanding as of December 15, 1993.

On November 18, 1994, Paul G. Allen entered into a Third Party Pledge
Agreement whereby Mr. Allen agreed to secure the Company's payment obligations
with respect to a Term Loan under the Credit Agreement by granting the lenders
thereunder a security interest in shares of publicly traded common stock and/or
investment grade bonds owned by Mr. Allen having an aggregate market value equal
to no less than $90 million or such amount as will cause the ratio of the
outstanding principal amount of the Term Loan to

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such stock and bonds to equal no more than 83.33%. No consideration was paid to
Mr. Allen in connection with his entering into the Third Party Pledge Agreement.
The Company has amended the Credit Agreement to provide that concurrent with the
completion of the Offering, Mr. Allen will be released from his obligation under
the Third Party Pledge Agreement. See "Description of Certain
Indebtedness -- Credit Agreement."

Pursuant to a Development and Services Agreement dated as of June 28, 1996
(the "Starwave Agreement"), Ticketmaster Multimedia Holdings, Inc. ("TMHI"), a
wholly-owned subsidiary of the Company, retained Starwave Corp. ("Starwave"), an
affiliate of Mr. Allen, to provide consulting, creative, writing, design and
computer programming services in connection with the development of Ticketmaster
branded Web sites and web pages available for informational and retail sales
purposes on the World Wide Web portion of the Internet. In consideration of the
services provided by Starwave under the Starwave Agreement, TMHI has agreed that
during the seven-year period beginning with the first commercial online
transaction consummated through the Ticketmaster retail Web site, Ticketmaster
will compensate Starwave as follows: (i) royalty payments of 5% of gross service
charge revenues received by Ticketmaster from consumers in connection with
online sales of tickets on the Ticketmaster retail Web site, less certain
enumerated deductions, (ii) royalty payments of 10% of the net profits of
Ticketmaster derived directly from the online sale of merchandise to consumers
through the Ticketmaster retail Web site and (iii) royalty payments of 20% of
the service charges, not to exceed $0.75 per ticket, for all tickets to sporting
events sold online in Starwave's web site. Ticketmaster has further agreed to
pay Starwave a minimum annual royalty of $100,000 (prorated for 1996), which
amount is credited against amounts otherwise payable to Starwave pursuant to
clauses (i) and (ii). The Board of Directors of the Company has determined that
the terms of the Starwave Agreement are fair and in the best interests of the
Company and its shareholders.

From time to time, the Company purchases products from Red Sail
Merchandising ("Red Sail"). Red Sail is indirectly owned by various trusts for
the benefit of certain members of the Pritzker family, including John A.
Pritzker, a director of the Company. Although purchases from Red Sail have not
exceeded $60,000 during any prior fiscal year of the Company, it is anticipated
that purchases from Red Sail during fiscal 1997 will exceed $60,000. The Company
believes that all purchases from Red Sail are upon terms no less favorable to
the Company than could be obtained from third parties.

In addition, trusts for the benefit of certain members of the Pritzker
family, including John A. Pritzker, a director of the Company, beneficially own
a one-third equity interest in Spectacor Management Group ("Spectacor"), a venue
management company, and have two designees on Spectacor's Management Committee.
During fiscal 1996, the Company derived revenues of approximately $6.9 million
from contracts with certain venues under Spectacor's management. For the nine
months ended October 31, 1996, revenues attributable to venues under Spectacor's
management approximated $5.0 million. The Company believes that its contracts
with Spectacor-managed venues are upon terms no less favorable to the Company
than similar contracts with third parties.

During fiscal 1996, the Company made an interest-free loan maturing January
10, 1997 in the amount of $75,000 to Ned S. Goldstein, an officer of the
Company. As of October 31, 1996, the outstanding principal amount of such loan
had been reduced to $25,000.

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<PAGE> 74

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the date hereof and as adjusted to
reflect the sale of Common Stock offered hereby, for (i) each person who is
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director of the Company, (iii) the Company's Chief Executive
Officer and each of the executive officers named in the Summary Compensation
Table and (iv) all directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING(1) AFTER OFFERING(2)
---------------------- ----------------------
NUMBER OF NUMBER OF
NAME(3) SHARES PERCENT SHARES PERCENT
- ------------------------------------------------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
Paul G. Allen.................................... 12,233,014 79.9% 12,233,014 54.2%
H.G., Inc.(4).................................... 2,544,526 16.6 2,544,526 11.3
Fredric D. Rosen(5)(6)........................... 1,332,449 8.0 1,332,449 5.6
Charles Evans Gerber(6)(7)....................... -- * -- *
David Liddle(6).................................. -- * -- *
John A. Pritzker(6)(8)........................... -- * -- *
William D. Savoy(6).............................. -- * -- *
Terence M. Strom(6).............................. -- * -- *
Ned S. Goldstein(6).............................. 70,696 * 70,696 *
Peter B. Knepper(6).............................. 70,696 * 70,696 *
Stuart W. DePina(6).............................. -- * -- *
All officers and directors as a group (10
persons)(5).................................... 13,706,855 83.2% 13,706,855 57.8
</TABLE>

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

* Represents beneficial ownership of less than 1%.

(1) Unless otherwise indicated in the footnotes to this table, the Company
believes the individuals named in this table have sole voting and investment
power with respect to all shares of Common Stock reflected in this table.

(2) Assumes no exercise of the Underwriters' over-allotment option or any of the
options granted under the Stock Plan or otherwise which are not exercisable
within 60 days of the date hereof.

(3) Unless otherwise indicated, the address of each shareholder is in care of
the Company, 3701 Wilshire Boulevard, 7th Floor, Los Angeles, California
90010.

(4) HG, Inc. is a Delaware corporation, the indirect beneficial owners of which
are various trusts for the benefit of certain members of the Pritzker
family. Excludes 23,438 shares owned by Rockwood & Co., a Delaware
corporation, the common stock of which is indirectly owned by various other
trusts for the benefit of certain members of the Pritzker family. As used
herein, the "Pritzker family" refers to the lineal descendants of Nicholas
J. Pritzker, deceased.

(5) Includes 50,000 shares owned by Mr. Rosen as trustee of trusts for the
benefit of his minor children.

(6) Includes 1,026,241, 70,696 and 70,696 shares covered by options granted to
Messrs. Rosen, Goldstein and Knepper, respectively, which are currently
exercisable or exercisable within 60 days of the date hereof. Excludes (i)
305,099, 115,000, 115,000 and 45,000 shares covered by options granted to
Messrs. Rosen, Goldstein, Knepper and DePina, respectively, which are not
exercisable within 60 days of the date hereof, (ii) 25,000 shares covered by
options granted to each of Messrs. Gerber, Liddle, Pritzker, Savoy and Strom
as director options under the Stock Plan and which are not exercisable
within 60 days of the date hereof and (iii) 705,099 shares covered by
options granted to all officers and directors as a group which are not
exercisable within 60 days of the date hereof.

(7) Does not include shares owned by Rockwood & Co. A nominal indirect
non-voting interest in Rockwood & Co. is owned by various trusts for the
benefit of certain members of the Pritzker family, of which Mr. Gerber is a
co-trustee.

(8) Does not include shares owned by H.G., Inc. and Rockwood & Co.

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<PAGE> 75

DESCRIPTION OF CERTAIN INDEBTEDNESS

The following summaries contain the material provisions of the various
agreements governing the indebtedness of the Company and its subsidiaries. The
summaries do not purport to be complete and are qualified by reference to the
various agreements described herein, copies of which have been filed with the
Commission.

CREDIT AGREEMENT

The Company's Credit Agreement (as amended through September 27, 1996)
provides for (i) a revolving loan commitment (the "Revolving Loan") not to
exceed $100 million which is available to satisfy debt of the Company and for
working capital and other general corporate purposes provided that (a) the
proceeds of the Revolving Loan borrowed on or after August 28, 1995 ($95.8
million at July 31, 1996) shall be used by the Company for purposes specified
therein, including the making of loans and advances to and investments in the
Australian Joint Ventures and TM Publications, Inc., and (b) as of the close of
business on August 28, 1995, the Revolving Loan shall be permanently reduced by
an amount equal to any excess of the Revolving Loan over $100 million; as of the
close of business on December 31, 1997, the Revolving Loan shall be permanently
reduced by an amount equal to any excess of the Revolving Loan over $90 million;
and as of the close of business on December 31, 1998, the Revolving Loan shall
be permanently reduced by an amount equal to any excess of the Revolving Loan
over $75 million; (ii) a swing line loan commitment (the "Swing Line Loan"),
which is a subfacility of the Revolving Loan, not to exceed $5 million to be
used for recoupable client agreement advances and other working capital
purposes; and (iii) a term loan (the "Term Loan") not to exceed $75 million
which was used solely to repay then existing indebtedness of the Company.
Amounts outstanding under the Revolving Loan, the Swing Line Loan and the Term
Loan (collectively, the "Borrowings") are due and payable on December 31, 1999.
As of July 31, 1996, $95.8 million, $0 and $75 million were outstanding under
the Revolving Loan, the Swing Line Loan and the Term Loan, respectively. The
Borrowings accrue interest at either the prime rate (8.25% at October 23, 1996)
or the London Inter Bank Offering Rate ("LIBOR") (5.59% at October 23, 1996)
plus an applicable margin as defined in the Credit Agreement. At July 31, 1996,
all borrowings under the Credit Agreement accrue interest at LIBOR plus an
applicable margin of 1.625%. On September 27, 1996, the Credit Agreement was
further amended to provide for further loans (the "Term Bridge Loans")
aggregating $30 million which were used during October to acquire the license
rights and related assets of the Company's Delaware Valley (Philadelphia)
licensee ($19 million) and to purchase an office building in West Hollywood,
California ($11 million). Borrowings under the Term Bridge Loans have the same
maturity date, and bear interest at the same rates, as the Term Loan; provided,
however, that the Term Bridge Loans will become due and payable upon
consummation of the Offering.

On October 24, 1996, the Credit Agreement was further amended to provide
that upon consummation of the Offering, (i) the Company will repay not less than
$69 million in principal amount of the Term Loan and, to the extent that the net
cash proceeds to the Company pursuant to the Offering are in excess of $90
million, the Company shall use such excess to repay additional principal under
the Term Loan, (ii) the Revolving Loan, the Swing Line Loan, the Term Loan and
the Term Bridge Loans will be converted into a single revolving line with an
initial maximum availability of $175 million, decreasing to $165 million as of
December 31, 1997 and further decreasing to $150 million as of December 31,
1998, (iii) all outstanding borrowings under the Term Loan and the Term Bridge
Loans (after all agreed upon repayments) will be converted into revolving loans
and (iv) various financial covenants will be modified, as appropriate, to
reflect the new amended borrowing arrangement. See "Use of Proceeds."

Borrowings under the Credit Agreement are guaranteed by certain of the
Company's subsidiaries and are secured by stock pledges and security interests
granted by the Company and its subsidiaries. In addition, the Term Loan is
secured by a first priority lien granted by a principal shareholder of the
Company in publicly traded common stock having an aggregate market value of no
less than $90 million. The Company has amended the Credit Agreement to provide
that upon consummation of the Offering, such principal shareholder will be
released from the security interest. See "Certain Transactions."

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<PAGE> 76

The Credit Agreement prohibits the Company from declaring or paying any
dividend or distribution, either in cash or any other property (other than stock
dividends or stock splits), on the Company's stock or equity securities then or
thereafter outstanding, and prohibits the Company from redeeming, retiring,
purchasing or otherwise acquiring any shares of any class of the Company's stock
or equity securities then or thereafter outstanding, except as provided in the
Credit Agreement.

PACER/CATS/CCS CREDIT AGREEMENT

On July 31, 1996, Pacer/CATS/CCS ("Borrower") entered into the First
Amended and Restated Credit Agreement, which provides for a loan of $7.5
million. The loan is a consolidation and renewal of a revolving loan and a term
loan extended to Borrower pursuant to the terms of an original credit agreement.
The outstanding principal of the loan bears interest at a rate equal to the
prime rate (8.25% at July 31, 1996) plus 25 basis points per annum. Commencing
on July 1, 1998, Borrower shall have the option to convert the interest rate to
a rate equal to the IBOR Rate (the lender's approximate equivalent of the London
Inter Bank Offering Rate), plus 225 basis points per annum. Borrowings under the
loan are secured by all of Borrower's assets. As a condition to the lender's
agreement to make the loan, Ticketmaster Corporation entered into an Interest
Keep-Well Agreement, which provides generally that Ticketmaster Corporation
shall pay to the lender on demand the amount of any and all interest payment
defaults by Borrower on the loan, not to exceed $500,000, during the period
which commenced July 31, 1996 and ends on June 30, 1997, or sooner as provided
by the credit agreement. See "Business -- Joint Ventures and Licensees."

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 20,000,000 shares
of Preferred Stock, no par value, and 80,000,000 shares of Common Stock, no par
value. Currently, there are 15,310,405 shares of Common Stock issued and
outstanding and, except as described herein, no shares of Preferred Stock will
be issued and outstanding upon completion of the Offering.

The following summary relating to the capital stock does not purport to be
complete. Reference is made to the Articles and the Amended and Restated By-laws
(the "By-laws") of the Company which are filed as exhibits to the Registration
Statement of which this Prospectus forms a part, for a detailed description of
the provisions thereof summarized below.

COMMON STOCK

Holders of Common Stock are entitled to receive such dividends as may from
time to time be declared by the Board of Directors of the Company out of funds
legally available therefor. Holders of Common Stock are entitled to one vote per
share on all matters on which the holders of Common Stock are entitled to vote
and do not have any cumulative voting rights. Holders of Common Stock have no
preemptive, conversion, redemption or sinking fund rights. In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to share equally and ratably in the assets of the Company, if any,
remaining after the payment of all debts and liabilities of the Company and the
liquidation preference of any outstanding series of Preferred Stock. The
outstanding shares of Common Stock are, and the shares of Common Stock offered
by the Company hereby when issued will be, fully paid and nonassessable. The
rights, preferences and privileges of holders of Common Stock are subject to any
series of Preferred Stock which the Company may issue in the future as described
below.

The By-laws provide that any action that can be taken at a meeting of the
shareholders may be taken by written consent in lieu of a meeting if the Company
receives consents signed by shareholders having the minimum number of votes that
would be necessary to approve the action at a meeting at which all shares
entitled to vote on the matter were present. This would enable the existing
shareholders to take all actions required to be taken by the shareholders
without providing the other shareholders the opportunity to consider and vote on
such matters or raise other matters at a meeting.

PREFERRED STOCK

The Board of Directors is authorized to provide for the issuance of
Preferred Stock in one or more series and to fix the number of shares
constituting any such series, the voting powers, designations, preferences and

74
<PAGE> 77

relative, participating, optional or other special rights and qualifications,
limitations or restrictions thereof, including the dividend rights, dividend
rate, terms of redemption, redemption price or prices, conversion rights and
liquidation preferences of the shares constituting any series, without any
further vote or action by the shareholders of the Company. The issuance of
Preferred Stock by the Board of Directors could adversely affect the rights of
holders of Common Stock. For example, issuance of Preferred Stock could result
in a series of securities outstanding that would have preferences over the
Common Stock with respect to dividends and in liquidation and that could (upon
conversion or otherwise) enjoy all of the rights appurtenant to the Common
Stock.

The authority possessed by the Board of Directors to issue Preferred Stock
could potentially be used to discourage attempts by others to obtain control of
the Company through merger, tender offer, proxy, consent or otherwise by making
such attempts more difficult to achieve or more costly. The Board of Directors
generally may issue Preferred Stock without shareholder approval and with voting
and conversion rights which could adversely affect the voting power of holders
of Common Stock. There are no agreements or understandings for the issuance of
Preferred Stock, and the Board of Directors has no present intention to issue
any shares of Preferred Stock.

In connection with the acquisition of the other joint venture partner's
interest in Ticketmaster-Indiana, the Company has issued a share of Preferred
Stock which will automatically convert into Common Stock at the initial public
offering price per share.

CERTAIN ANTI-TAKEOVER EFFECTS

Certain provisions of Illinois law and of the Articles and the By-laws of
the Company summarized above and in the succeeding paragraphs may have
anti-takeover effects and may delay, defer or prevent a tender offer or takeover
attempt that a shareholder might consider to be in such shareholder's best
interest, including those attempts that might result in a premium over the
market price for the shares held by shareholders.

Director Vacancies. The Articles and the By-laws provide that the number of
directors of the Company will be fixed from time to time exclusively by the
Board of Directors and, unless the Board of Directors otherwise determines, a
majority of the directors then in office may fill any vacancies on the Board of
Directors.

Section 11.75 of the IBCA. Section 11.75 of the Illinois Business
Corporation Act of 1983 (the "IBCA") prohibits a corporation from engaging in a
"business combination" with an "interested shareholder" for a period of three
years after the date of the transaction in which the person became an interested
shareholder, unless (i) before such person became an interested shareholder, the
board of directors of the corporation approved the transaction in which the
interested shareholder became an interested shareholder or approved the business
combination, (ii) upon consummation of the transaction which resulted in the
shareholder becoming an interested shareholder, the interested shareholder owned
at least 85% of the voting stock outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide employees with the
right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer), or (iii) upon or following the
transaction in which such person became an interested shareholder, the business
combination is approved by the board of directors of the corporation and the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested shareholder. A "business combination" includes
mergers, asset sales and other transactions resulting in a financial benefit to
the interested shareholder. Generally, an "interested shareholder" is a person
who, together with affiliates and associates, owns, or within three years prior
to such transaction did own, 15% or more of the corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

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<PAGE> 78

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 22,560,405 shares of
Common Stock outstanding (23,647,905 if the over-allotment option is exercised
in full), not including shares issuable in connection with exercisable options
or in connection with the Company's acquisition of the 20% equity interest in
its partner in the Company's operating subsidiary in Florida, or common stock
issuable upon conversion of outstanding convertible Preferred Stock or the
Exchangeable Promissory Note. Of these shares, the 7,250,000 shares to be sold
in the Offering (8,337,500 if the over-allotment option is exercised in full)
will be freely tradable without restriction or further registration under the
Securities Act unless purchased by "affiliates" of the Company, as that term is
defined in Rule 144 described below. The remaining 15,310,405 shares of Common
Stock outstanding after completion of this offering (all of which are owned by
the existing shareholders) are "restricted securities" and may not be sold in a
public distribution except in compliance with the registration requirements of
the Securities Act or an applicable exemption under the Securities Act,
including an exemption pursuant to Rule 144. Restricted securities are eligible
for sale in the public market pursuant to Rule 144 no sooner than two years from
the date of acquisition.

The directors, officers and shareholders of the Company have agreed with
the Underwriters not to offer to sell, contract to sell or otherwise sell or
dispose of any shares of Common Stock for a period of 180 days after the date of
this Prospectus without the consent of Allen & Company Incorporated acting on
behalf of the Underwriters, except for certain stock repurchases that may be
required pursuant to employment agreements. Persons who may receive shares of
Common Stock in connection with certain of the completed and proposed
acquisitions have also agreed to be bound by similar restrictions. Upon
expiration of this period, all of the shares owned by the existing shareholders
will be immediately eligible for sale in the public market subject to the
limitations of Rule 144. See "Certain Transactions."

In general, under Rule 144, as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned shares for at least two
years (including the holding period of any prior owner except an affiliate) is
entitled to sell in "broker's transactions" or to market makers, within any
three-month period commencing 90 days after the date of this Prospectus, a
number of shares that does not exceed the greater of (i) 1% of the number of
shares of Common Stock then outstanding (approximately 225,000 shares
immediately after the Offering) or (ii) generally, the average weekly trading
volume in the Common Stock during the four calendar weeks preceding the required
filing of a Form 144 with respect to such sale. Sales under Rule 144 are also
subject to certain notice requirements and the availability of current public
information about the Company. Under Rule 144(k), a person who is not deemed to
have been an affiliate of the Company at any time during the three months
preceding a sale and who has beneficially owned the shares proposed to be sold
for at least three years is entitled to sell such shares without having to
comply with the manner of sale, public information, volume limitation or notice
provisions of Rule 144.

In addition, any employee, officer or director of or consultant to the
Company who purchases his or her shares pursuant to a written compensatory plan
or contract may be entitled to rely on the resale provisions of Rule 701. Rule
701 permits affiliates to sell their Rule 701 shares under Rule 144 without
complying with the holding period requirements of Rule 144. Rule 701 further
provides that non-affiliates may sell such shares in reliance on Rule 144
without having to comply with the public information, volume limitation or
notice provisions of Rule 144.

Following the Offering, the Company intends to file under the Securities
Act a registration statement on Form S-8 to register all of the shares of Common
Stock subject to outstanding options and reserved for future option grants under
the Stock Plan. That registration statement is expected to become effective upon
filing and shares covered by that registration statement will be eligible for
sale, subject, in the case of affiliates only, to the restrictions of Rule 144,
other than the holding period requirements, and subject to expiration of the
lock-up agreements with the Underwriters.

In addition, at any time following the expiration or termination of the
aforesaid 180-day "lock-up" period, certain of the existing shareholders will
have the right, pursuant to existing agreements, to require the Company, subject
to certain qualifications, to effect the registration under the Securities Act
of all or a specified number of their shares of Common Stock, or to participate
in such registrations. See "Certain Transactions."

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<PAGE> 79

UNDERWRITING

The Underwriters named below, for whom Allen & Company Incorporated, Lazard
Freres & Co. LLC and Smith Barney Inc. are acting as representatives (the
"Representatives"), have severally agreed, subject to the terms and conditions
contained in the underwriting agreement (the "Underwriting Agreement"), to
purchase from the Company, and the Company has agreed to sell to the
Underwriters, the aggregate number of shares of Common Stock set forth opposite
their respective names below:

<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER SHARES
------------------------------------------------------------------ ---------
<S> <C>
Allen & Company Incorporated...................................... 1,685,000
Lazard Freres & Co. LLC........................................... 1,685,000
Smith Barney Inc. ................................................ 1,685,000
Bear, Stearns & Co. Inc. ......................................... 135,000
CS First Boston Corporation....................................... 135,000
Dean Witter Reynolds Inc. ........................................ 135,000
Dillon, Read & Co. Inc. .......................................... 135,000
Donaldson, Lufkin & Jenrette Securities Corporation............... 135,000
Goldman, Sachs & Co. ............................................. 135,000
Hambrecht & Quist LLC............................................. 135,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... 135,000
Montgomery Securities............................................. 135,000
PaineWebber Incorporated.......................................... 135,000
Cowen & Company................................................... 45,000
Crowell, Weedon & Co. ............................................ 45,000
Gabelli & Company, Inc. .......................................... 45,000
Gerard Klauer Mattison & Co., Inc. ............................... 45,000
Interstate/Johnson Lane Corporation............................... 45,000
Janney Montgomery Scott Inc. ..................................... 45,000
McDonald & Company Securities, Inc. .............................. 45,000
Needham & Company, Inc. .......................................... 45,000
Neuberger & Berman................................................ 45,000
Ragen MacKenzie Incorporated...................................... 45,000
Raymond James & Associates, Inc. ................................. 45,000
Stephens Inc. .................................................... 45,000
Sutro & Co. Incorporated.......................................... 45,000
Unterberg Harris.................................................. 45,000
Vector Securities International, Inc. ............................ 45,000
Yorkton (USA) Securities, Inc. ................................... 45,000
Arizona Securities Group Inc. .................................... 25,000
Burnham Securities Inc. .......................................... 25,000
Hanifen, Imhoff Inc. ............................................. 25,000
Rickel & Associates Inc. ......................................... 25,000
Starr Securities, Inc. ........................................... 25,000
---------
Total................................................... 7,250,000
=========
</TABLE>

Pursuant to the Underwriting Agreement, the several Underwriters have
agreed, subject to the terms and conditions therein, to purchase all of the
shares offered hereby (other than shares that may be purchased under the
over-allotment option) if any are purchased. The Underwriters propose initially
to offer the shares to the public at the public offering price set forth on the
cover page of this Prospectus. The Underwriters may allow a selling concession
not in excess of $0.61 per share to certain dealers. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $0.10 per share to
certain dealers. The public offering price and concessions may be changed by the
Representatives after the initial public offering.

The Company has granted to the Underwriters an option, expiring 30 days
after the date of the Underwriting Agreement, to purchase up to an additional
1,087,500 shares of Common Stock at the public offering price, less underwriting
discounts and commissions, all as set forth on the cover page of this
Prospectus. The Underwriters may exercise the option only to cover
over-allotments, if any, in the sale of shares of Common Stock in the Offering.
To the extent that the Underwriters exercise their option, each Underwriter will
be committed, subject to certain conditions, to purchase a number of such
additional shares proportionate to such Underwriter's initial commitment.

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<PAGE> 80

The Company and its directors, officers and shareholders have agreed to
deliver to the Representatives prior to the date of this Prospectus lock-up
agreements under which they agree not to, directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of Common Stock or any securities
exchangeable or exercisable for or convertible into its Common Stock, whether
now owned or hereafter acquired by the Company and any such director, officer or
shareholder or with respect to which the Company and any such director, officer
or shareholder has or hereafter acquires the power of disposition, or
participate in any registration statement under the Securities Act with respect
to any of the foregoing or enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, for a period of 180 days after the date of this Prospectus,
without the prior written consent of Allen & Company Incorporated on behalf of
the Underwriters, except for certain stock repurchases that may be required
pursuant to employment agreements. See "Shares Eligible for Future Sale."

At the request of the Company, the Underwriters have reserved, pursuant to
a reserved share program, up to 5% of the shares of Common Stock offered hereby
for sale at the initial public offering price to certain persons associated
with, or designated by, the Company. The number of shares available for sale to
the general public will be reduced to the extent such individuals purchase such
reserved shares. Any reserved shares not so purchased will be released for sale
by the Underwriters to the general public no later than the closing date of the
Offering (which is expected to be four business days after the date of this
Prospectus) on the same terms as the other shares offered hereby.

Prior to the Offering there has been no public market for the Common Stock.
The initial public offering price was determined by negotiation between the
Company and the Representatives. Among the factors considered in determining
such public offering price were the nature of the Company's business, its
history, recent financial operating information, prospects and management
abilities, the general condition of the securities markets at the time of the
Offering and other factors deemed relevant.

The Representatives have informed the Company that they do not expect sales
to discretionary accounts by the Underwriters to exceed five percent of the
total number of shares of Common Stock being offered pursuant to the Offering.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Neal, Gerber & Eisenberg, Chicago, Illinois. Charles Evans Gerber and
Norman J. Gantz, partners in the firm, serve as a director and as Secretary,
respectively, of the Company. In addition, Mr. Gerber and Marshall E. Eisenberg,
who is also a partner in the firm, are co-trustees of trusts which indirectly
own shares of Common Stock. Specifically, Mr. Eisenberg is a co-trustee of
trusts which indirectly own approximately 97.8% of the outstanding shares of
common stock of H.G., Inc. (which entity is the holder of 2,544,526 shares of
Common Stock) and Messrs. Eisenberg and Gerber are co-trustees of trusts which
directly own 100.0% of the outstanding shares of Class B Preferred Stock and
10.4% of the outstanding shares of Class A Preferred Stock of Rockwood & Co.
(which entity is the holder of 23,438 shares of Common Stock). Further, Mr.
Gerber holds options to purchase 25,000 shares of Common Stock, and will be
entitled to be granted additional options to purchase shares of Common Stock
under the Stock Plan. Certain legal matters in connection with this offering
will be passed upon for the Underwriters by Fried, Frank, Harris, Shriver &
Jacobson (a partnership including professional corporations), New York, New
York. Fried, Frank, Harris, Shriver & Jacobson will rely on Neal, Gerber &
Eisenberg with respect to certain matters of Illinois law.

EXPERTS

The consolidated financial statements of Ticketmaster Group, Inc. as of
January 31, 1995 and 1996 and for each of the years in the three year period
ended January 31, 1996, the combined financial statements of Unconsolidated
Ticketing Joint Ventures of Ticketmaster Group, Inc. as of January 31, 1995 and
1996 and for each of the years in the three-year period ended January 31, 1996,
the financial statements of Ticketmaster-Indiana (A Joint Venture) as of January
31, 1995 and 1996 and for each of the years in the two year period ended January
31, 1996 and the consolidated financial statements of Pacer/CATS/CCS -- a
Wembley Ticketmaster Joint Venture as of and for the periods ended December 31,
1994 and 1995 included in this

78
<PAGE> 81

Prospectus have been so included in reliance on the reports of KPMG Peat Marwick
LLP, independent certified public accountants, appearing elsewhere herein, and
upon the authority of said firm as experts in auditing and accounting. The
report of KPMG Peat Marwick LLP covering the December 31, 1995, consolidated
financial statements of Pacer/CATS/CCS -- a Wembley Ticketmaster Joint Venture
contains an explanatory paragraph that states that the Joint Venture's recurring
losses from operations and net capital deficiency raise substantial doubt about
the Joint Venture's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of that uncertainty.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
does not contain all the information set forth in the Registration Statement and
the exhibits and schedules thereto. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and to the exhibits and schedules filed therewith. A copy
of the Registration Statement may be inspected without charge at the public
reference facilities of the Commission located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, 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. Copies of all or
any part of the Registration Statement may be obtained at the prescribed rates
from the Public Reference Section of the Commission at its principal office in
Washington, D.C. Such materials also may be accessed electronically by means of
the Commission's home page on the Internet at http://www.sec.gov.

Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified by such reference.

79
<PAGE> 82

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
TICKETMASTER GROUP, INC. AND SUBSIDIARIES
Independent Auditors' Report.......................................................... F-2
Consolidated Balance Sheets -- January 31, 1995 and 1996 and July 31, 1996
(Unaudited)......................................................................... F-3
Consolidated Statements of Operations -- Years ended January 31, 1994, 1995 and 1996
and six months ended July 31, 1995 and 1996 (Unaudited)............................. F-4
Consolidated Statements of Shareholders' Deficiency -- Years ended January 31, 1994,
1995 and 1996 and six months ended July 31, 1996 (Unaudited)........................ F-5
Consolidated Statements of Cash Flows -- Years ended January 31, 1994, 1995 and 1996
and six months ended July 31, 1995 and 1996 (Unaudited)............................. F-6
Notes to Consolidated Financial Statements............................................ F-7
UNCONSOLIDATED TICKETING JOINT VENTURES OF TICKETMASTER GROUP, INC.
Independent Auditors' Report.......................................................... F-23
Combined Balance Sheets -- January 31, 1995 and 1996 and July 31, 1996 (Unaudited).... F-24
Combined Statements of Operations -- Years ended January 31, 1994, 1995 and 1996 and
six months ended July 31, 1995 and 1996 (Unaudited)................................. F-25
Combined Statements of Venturers' Capital -- Years ended January 31, 1994, 1995 and
1996 and six months ended July 31, 1996 (Unaudited)................................. F-26
Combined Statements of Cash Flows -- Years ended January 31, 1994, 1995 and 1996 and
six months ended July 31, 1995 and 1996 (Unaudited)................................. F-27
Notes to Combined Financial Statements................................................ F-28
PACER/CATS/CCS JOINT VENTURE (PACER CATS CORPORATION, COMPUTERIZED AUTOMATIC TICKET
SALES SYSTEMS LIMITED AND CCS COMPUTEL COMPUTER SYSTEM GMBH)
Independent Auditors' Report.......................................................... F-34
Consolidated Balance Sheets -- December 31, 1994 and 1995 and June 30, 1996
(Unaudited)......................................................................... F-35
Consolidated Statements of Operations and Accumulated Deficit -- the Period from April
15, 1994 (Inception) to December 31, 1994, the Year ended December 31, 1995, and the
six months ended June 30, 1995 and 1996 (Unaudited)................................. F-36
Consolidated Statements of Cash Flows -- the Period from April 15, 1994 (Inception) to
December 31, 1994, the Year ended December 31, 1995, and the six months ended June
30, 1995 and 1996 (Unaudited)....................................................... F-37
Notes to Consolidated Financial Statements............................................ F-38
TICKETMASTER-INDIANA (A JOINT VENTURE)
Independent Auditors' Report.......................................................... F-43
Balance Sheets -- January 31, 1995 and 1996 and July 31, 1996 (Unaudited)............. F-44
Statements of Income and Venturers' Capital -- Years ended January 31, 1995 and 1996
and six months ended July 31, 1995 and 1996 (Unaudited)............................. F-45
Statements of Cash Flows -- Years ended January 31, 1995 and 1996 and six months ended
July 31, 1995 and 1996 (Unaudited).................................................. F-46
Notes to Financial Statements......................................................... F-47
</TABLE>

F-1
<PAGE> 83

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Ticketmaster Group, Inc.:

We have audited the accompanying consolidated balance sheets of
Ticketmaster Group, Inc. and subsidiaries as of January 31, 1995 and 1996 and
the related consolidated statements of operations, shareholders' deficiency, and
cash flows for each of the years in the three year period ended January 31,
1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
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
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Ticketmaster
Group, Inc. and subsidiaries as of January 31, 1995 and 1996, and the results of
their operations and their cash flows for each of the years in the three year
period ended January 31, 1996 in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Los Angeles, California
March 8, 1996, except for
the first paragraph of Note 9,
which is as of June 12, 1996, and
Notes 7 and 14, which are as of
September 19, 1996

F-2
<PAGE> 84

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

<TABLE>
<CAPTION>
JANUARY 31,
--------------------- JULY 31,
1995 1996 1996
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents............................... $ 38,752 $ 34,004 $ 47,093
Accounts receivable, ticket sales....................... 12,029 8,644 10,785
Accounts receivable, other.............................. 2,090 3,783 8,059
Inventory............................................... 400 623 4,454
Prepaid expenses........................................ 5,884 5,491 5,969
-------- -------- --------
Total current assets............................ 59,155 52,545 76,360
Equipment and leasehold improvements, net................. 14,000 12,776 16,276
Investments in and advances to affiliates................. 6,350 9,784 8,334
Cost in excess of net assets acquired..................... 13,345 13,645 27,333
Intangible and other assets, net.......................... 12,372 11,447 13,401
Deferred income taxes, net................................ 3,370 5,200 5,470
-------- -------- --------
$108,592 $105,397 $ 147,174
======== ======== ========
<CAPTION>

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
<S> <C> <C> <C>
Current liabilities:
Current portion of long-term debt....................... $ 40 $ 45 $ 205
Accounts payable, trade................................. 3,569 5,352 8,401
Accounts payable, clients............................... 37,194 31,318 36,024
Accrued expenses........................................ 10,123 6,691 13,500
Deferred income......................................... 2,075 5,165 8,847
-------- -------- --------
Total current liabilities....................... 53,001 48,571 66,977
Long-term debt, net of current portion.................... 151,559 159,864 178,401
Deferred rent and other................................... 2,337 3,627 5,963
Minority interests........................................ 1,393 1,128 1,101
Exchangeable Promissory Note.............................. -- -- 5,000
Shareholders' deficiency:
Preferred stock......................................... -- -- --
Common stock, no par value, authorized 80,000,000
shares, issued and outstanding 15,310,405 shares..... -- -- --
Additional paid-in capital.............................. -- -- --
Accumulated deficit, net of foreign currency translation
adjustment........................................... (99,698) (107,793) (110,268)
-------- -------- --------
Total shareholders' deficiency.................. (99,698) (107,793) (110,268)
-------- -------- --------
$108,592 $105,397 $ 147,174
======== ======== ========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 85

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY
YEAR ENDED JANUARY 31, 31,
----------------------------------- -----------------------
1994 1995 1996 1995 1996
--------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
Ticketing operations.............. $ 137,304 $ 172,002 $ 149,115 $ 78,816 $ 87,893
Publications...................... 4,575 4,640 4,198 1,766 4,512
Sponsorship & Promotion........... 1,724 1,849 3,972 955 4,777
Merchandising..................... -- 1,321 2,201 1,255 1,395
Sales of Ticketing Equipment...... 3,037 3,138 1,764 940 1,382
--------- ---------- ---------- ---------- ----------
146,640 182,950 161,250 83,732 99,959
--------- ---------- ---------- ---------- ----------
Operating costs, expenses and other
items:
Ticketing operations.............. 88,089 112,695 97,147 51,383 58,655
Ticketing selling, general and
administrative................. 28,931 28,917 27,748 13,731 16,278
Publications...................... 2,297 2,908 9,129 3,368 9,115
Merchandising..................... -- 1,222 1,891 1,066 1,226
Corporate general and
administrative................. 11,738 13,722 14,758 6,874 8,396
Write off of in process research
and development................ -- 7,500 -- -- --
Depreciation and amortization..... 9,399 13,301 9,325 4,763 4,929
Equity in net income of
unconsolidated affiliates...... (1,577) (1,360) (1,458) (1,345) (2,136)
--------- ---------- ---------- ---------- ----------
Operating income............... 7,763 4,045 2,710 3,892 3,496
Other expenses:
Interest expense, net............. 3,211 12,409 12,782 6,528 5,917
Minority interests................ 712 984 273 281 126
--------- ---------- ---------- ---------- ----------
Income (loss) before income
taxes........................ 3,840 (9,348) (10,345) (2,917) (2,547)
Income tax provision (benefit)...... 3,800 (2,670) (2,250) (590) (129)
--------- ---------- ---------- ---------- ----------
Net income (loss).............. $ 40 $ (6,678) $ (8,095) $ (2,327) $ (2,418)
========= ========== ========== ========== ==========
Net income (loss) per share......... $ 0.01 $ (0.44) $ (0.53) $ (0.15) $ (0.16)
========= ========== ========== ========== ==========
Weighted average number of common
shares outstanding................ 4,992,563 15,310,405 15,310,405 15,310,405 15,310,405
========= ========== ========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 86

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
PREFERRED STOCK, NO PAR COMMON STOCK, NO PAR RETAINED
(NUMBER OF SHARES) (NUMBER OF SHARES) ADDITIONAL EARNINGS/ TOTAL
----------------------- --------------------- PAID IN (ACCUMULATED SHAREHOLDERS'
SERIES I SERIES II SERIES A SERIES B CAPITAL DEFICIT) DEFICIENCY
---------- ---------- ---------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 31,
1993..................... 9,452,982 5,700,085 2,973,385 47,701 $ 13,479 $ 8,605 $ 22,084
Issuance of Series A common
stock.................... -- -- 12,539,222 -- 177,348 (3,214) 174,134
Redemption of preferred
stock.................... (9,452,982) (5,700,085) -- -- (10,593) -- (10,593)
Repurchase of Series A
common stock............. -- -- (249,903) -- (25,943) -- (25,943)
Dividends paid to preferred
shareholders............. (12,848) (12,848)
Dividends paid to common
shareholders............. -- -- -- -- (154,291) (85,603) (239,894)
Net income................. -- -- -- -- 40 40
---------- ---------- ---------- -------- ---------- ---------- ---------
Balance at January 31,
1994..................... -- -- 15,262,704 47,701 -- (93,020) (93,020)
Common stock conversion.... 47,701 (47,701) --
Net loss................... -- -- -- (6,678) (6,678)
---------- ---------- ---------- -------- ---------- ---------- ---------
Balance at January 31,
1995..................... -- -- 15,310,405 -- -- (99,698) (99,698)
Net loss................... -- -- -- -- (8,095) (8,095)
---------- ---------- ---------- -------- ---------- ---------- ---------
Balance at January 31,
1996..................... -- -- 15,310,405 -- -- (107,793) (107,793)
Foreign currency
translation adjustment
(unaudited).............. -- -- -- -- -- (57) (57)
Net loss (unaudited)....... -- -- -- -- -- (2,418) (2,418)
---------- ---------- ---------- -------- ---------- ---------- ---------
Balance at July 31, 1996
(unaudited).............. -- -- 15,310,405 -- $ -- $ (110,268) $(110,268)
========== ========== ========== ======== ========== ========== =========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 87

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JANUARY 31, JULY 31,
--------------------------------- -----------------
1994 1995 1996 1995 1996
--------- --------- --------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)............................................. $ 40 $ (6,678) $ (8,095) $(2,327) $(2,418)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization............................... 9,399 13,301 9,325 4,763 4,929
Income attributable to minority interests................... 712 984 273 281 126
Equity in net income of unconsolidated affiliates........... (1,577) (1,360) (1,458) (1,345) (2,136)
Deferred income taxes....................................... (60) (4,200) (1,830) (300) (270)
Changes in operating assets and liabilities, net of effects
from purchase of venturers' interests:
Accounts receivable, ticket sales......................... (4,241) 1,797 3,385 (2,018) (680)
Accounts receivable, other................................ (192) (624) (1,693) 272 484
Inventory................................................. (655) 520 (223) 7 63
Prepaid expenses.......................................... 1,530 (1,036) 393 1,524 457
Accounts payable, trade................................... 532 (501) 1,783 (1,012) (782)
Accounts payable, clients................................. 7,394 7,632 (5,876) 982 2,013
Accrued expenses.......................................... 42 4,036 (3,432) (4,464) 1,337
Deferred income........................................... 1,192 (1,409) 3,090 (275) 1,998
Deferred rent and other................................... 455 (153) 1,290 1,134 2,336
--------- --------- --------- ------- -------
Net cash provided by (used in) operating activities.... 14,571 12,309 (3,068) (2,778) 7,457
--------- --------- --------- ------- -------
Cash flows from investing activities:
Purchase of equipment and leasehold improvements.............. (3,072) (6,838) (3,644) (2,012) (3,260)
Investments in affiliates..................................... (1,280) (2,586) (7,736) (1,853) (1,809)
Return on investments in affiliates........................... 3,845 4,060 5,760 5,254 2,940
Cost in excess of net assets acquired......................... (6,402) (3,250) (2,225) (2,225) (1,550)
Intangible and other assets................................... 659 (5,939) (1,607) (3,604) 193
Payment for acquisitions of venturers' interests, net of cash
acquired.................................................... -- -- -- -- (1,172)
--------- --------- --------- ------- -------
Net cash used in investing activities.................. (6,250) (14,553) (9,452) (4,440) (4,658)
--------- --------- --------- ------- -------
Cash flows from financing activities:
Proceeds from long-term debt.................................. 138,890 161,036 136,339 4,230 10,773
Reduction of long-term debt................................... (21,497) (144,910) (128,029) -- (273)
Distributions to minority shareholders........................ (650) (1,040) (538) (383) (153)
Issuance of common stock...................................... 169,803 -- -- -- --
Redemption and retirement of preferred and common stock....... (36,536) -- -- -- --
Payment of dividends/distributions............................ (252,742) -- -- -- --
--------- --------- --------- ------- -------
Net cash (used in) provided by financing activities.... (2,732) 15,086 7,772 3,847 10,347
--------- --------- --------- ------- -------
Effect of exchange rate changes on cash and cash equivalents.... -- -- -- -- (57)
--------- --------- --------- ------- -------
Net increase (decrease) in cash and cash-equivalents... 5,589 12,842 (4,748) (3,371) 13,089
Cash and cash equivalents, beginning of period.................. 20,321 25,910 38,752 38,752 34,004
--------- --------- --------- ------- -------
Cash and cash equivalents, end of period........................ $ 25,910 $ 38,752 $ 34,004 $35,381 $47,093
========= ========= ========= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest.................................................... $ 2,155 $ 14,268 $ 12,913 $ 6,705 $ 6,108
Income taxes................................................ 4,743 4,256 997 714 564
========= ========= ========= ======= =======
</TABLE>

Supplemental schedule of noncash investing and financing activities:
During the six months ended July 31, 1996, the Company acquired the 50%
interest of its partners in the European Joint Venture and Pacer/CATS/CCS. In
conjunction with the acquisitions, liabilities were assumed as follows:

<TABLE>
<S> <C>
Fair value of assets acquired................................ $29,300
Cash paid for venturers' interests........................... 6,000
Exchangeable promissory note issued for venturer's
interests.................................................. 5,000
------
Liabilities assumed................................. $18,300
======
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 88

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ticketmaster Group, Inc. and subsidiaries (the Company) is the leading
provider of automated ticketing services in the United States with clients
including the country's foremost entertainment facilities, promoters and
professional sports franchises. The Company has established its market position
by providing automated ticketing services to organizations that sponsor events,
which enable patrons alternatives to purchasing tickets through operator-staffed
call centers and independent sales outlets remote to the facility box office.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiaries and majority (80% or greater) owned companies and
joint ventures. Investments in companies and joint ventures, which ownership
interests range from 20-50% and in which the Company exercises significant
influence over operating and financial policies, are accounted for using the
equity method at cost plus advances, increased or decreased by the Company's
share of earnings or losses, less dividends received. All significant
intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Statements

The accompanying consolidated financial statements of the Company as of
July 31, 1996 and for the six months ended July 31, 1995 and 1996 are unaudited,
but in the opinion of management reflect all adjustments necessary (consisting
of those of a normal recurring nature) for a fair presentation of such
consolidated financial statements in accordance with generally accepted
accounting principles. The results of operations for interim periods are not
necessarily indicative of results for a full year.

Revenue Recognition

Revenue from ticket operations is recognized as tickets are sold. Revenue
from all other sources is recognized either upon delivery or when the service is
provided.

Cash and Cash Equivalents

The Company classifies all highly liquid debt instruments purchased with an
original maturity of three months or less as cash equivalents.

Accounts Receivable, Ticket Sales

Accounts receivable, ticket sales are principally due from ticketing
outlets and represent the face value of the tickets sold plus convenience
charges, generally net of outlet commissions. The Company performs credit
evaluations of new ticket outlets, which are reviewed and updated periodically,
requiring collateral as circumstances warrant.

Inventory

Inventory, consisting primarily of systems hardware and supplies, is stated
at the lower of cost (specific identification) or market.

F-7
<PAGE> 89

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equipment and Leasehold Improvements

Equipment and leasehold improvements are stated at cost. Depreciation and
amortization are computed using the straight-line method over the estimated
useful lives of the related assets of three to five years or, for leasehold
improvements, the term of the lease, if shorter. When assets are retired or
otherwise disposed of, the cost is removed from the asset account and the
corresponding accumulated depreciation is removed from the related allowance
account and any gain or loss is reflected in results of operations.

Cost in Excess of Net Assets Acquired

The cost in excess of net assets acquired represents amounts allocated to
goodwill through the purchase of other businesses, ticketing operations and
minority interests and is being amortized by the straight-line method
principally over terms ranging from ten to fifteen years.

The Company continually monitors its cost in excess of net assets acquired
(goodwill) to determine whether any impairment of these assets has occurred. In
making such determination with respect to goodwill, the Company evaluates the
expected future cash flows, on an undiscounted basis, of the underlying
businesses which gave rise to such amounts. Based on this review, the Company
does not believe that any impairment of its goodwill has occurred.

Intangible and Other Assets

The purchased user agreements and other long term assets are being
amortized generally in accordance with the contract terms, primarily on a
straight-line basis, including any annual minimum guarantees specified by the
contract. The lives of the contracts generally range from 2 to 10 years. The
covenants not to compete are being amortized using the straight-line method over
the lives of the noncompetition agreements, ranging from 2 to 10 years.

The Company continually monitors its purchased user agreements, other long
term assets and covenants not to compete to determine whether any impairment of
these assets has occurred. In making such determination with respect to
purchased user agreements, the Company evaluates the expected future cash flows,
on an undiscounted basis, based on past performance for the agreements which
gave rise to such amounts. Based on this review, the Company does not believe
that an impairment of its intangible and other assets has occurred.

Accounts Payable, Clients

Accounts payable, clients represents contractual amounts due to clients for
tickets sold by the Company on behalf of the organizations that sponsor events.

Deferred Revenue

Deferred revenue primarily consists of subscription revenue collected in
advance of the subscription period. Deferred revenue is recognized as earned,
pro rata on a monthly basis, over the life of subscriptions. Costs in connection
with the procurement of subscriptions are charged to expense as incurred.

F-8
<PAGE> 90

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes

Deferred tax assets and liabilities are recognized with respect to the tax
consequences attributable to the differences between the financial statement
carrying values and tax bases of assets and liabilities. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which these temporary differences are expected to be
recovered or settled. Further, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the
enactment date.

Foreign Currency Translation

The consolidated financial statements of foreign subsidiaries are
translated into U.S. dollars. Gains and losses resulting from translation are
accumulated in a separate component of shareholders' equity until the investment
in the foreign entity is sold or liquidated. Gains and losses on currency
transactions were immaterial for all periods presented.

Concentration of Credit Risk

The Company places its temporary cash investments principally in commercial
paper with large domestic and international companies and limits the amount of
credit exposure in any one company.

Income (Loss) per Share

Income (loss) per share is based on the weighted average number of Common
Shares outstanding, as adjusted for the reverse stock split (Note 15) for all
periods presented plus common stock equivalents arising from outstanding options
using the treasury stock method. Common stock equivalents have been excluded for
loss years as their effect is antidilutive.

Pursuant to the requirements of the Securities and Exchange Commission,
Common Shares and stock options issued by the Company during the twelve months
immediately preceding an initial public offering are included in the calculation
of the weighted average shares outstanding as if they were outstanding for all
periods presented using the treasury stock method. No dilutive options were
granted in the 12-month period preceding the initial public offering.

Financial Instruments

The estimated fair values of cash, accounts receivable, notes receivable,
accounts payable, accrued expenses, income taxes payable, exchangeable
promissory note and long term debt approximate their carrying value because of
the short term maturity of these instruments or the stated interest rates are
indicative of market interest rates.

Use of 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 at the
date of financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

F-9
<PAGE> 91

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Effect of Recent Accounting Changes

In October 1995, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123, "Accounting for Stock-Based Compensation". SFAS No. 123 encourages
a new method of recognizing stock-based compensation expense using the estimated
fair value of employee stock options. Alternatively, companies may choose to
retain the approach set forth in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and provide expanded footnote
disclosure. The statement is effective for the Company's fiscal year 1997. The
Company currently does not plan to use the fair value method when it adopts the
pronouncement. Accordingly, if the Company makes this election, SFAS No. 123
will have no impact on the Company's financial position or results of operations
for future periods.

(2) EQUIPMENT & LEASEHOLD IMPROVEMENTS, NET

Equipment and leasehold improvements consisted of the following (in
thousands):

<TABLE>
<CAPTION>
JANUARY 31,
--------------------- JULY 31,
1995 1996 1996
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment........................ $ 16,004 $ 17,203 $ 21,440
Telephone equipment and furnishings....... 7,733 7,688 9,540
Transportation equipment.................. 562 642 803
Leasehold improvements.................... 3,485 3,516 3,690
-------- -------- --------
27,784 29,049 35,473
Less accumulated depreciation &
amortization............................ (13,784) (16,273) (19,197)
-------- -------- --------
$ 14,000 $ 12,776 $ 16,276
======== ======== ========
</TABLE>

(3) INTANGIBLE AND OTHER ASSETS, NET

Intangible and other long term assets consisted of the following (in
thousands):

<TABLE>
<CAPTION>
JANUARY 31,
------------------- JULY 31,
1995 1996 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Purchased user agreements................... $ 7,448 $ 5,949 $ 8,031
Covenants not to compete.................... 1,638 1,274 1,137
Other....................................... 3,286 2,674 3,053
Notes Receivable............................ -- 1,550 1,180
------- ------- -------
$12,372 $11,447 $13,401
======= ======= =======
</TABLE>

F-10
<PAGE> 92

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(3) INTANGIBLE AND OTHER ASSETS, NET (CONTINUED)
Notes receivable consists of the long term portion of a $2 million note
entered into with a related party in May 1995. The $2 million note bears an
interest rate of prime (8.25% at July 31, 1996) plus 1% and is due in monthly
installments through April 30, 1997 with the balance due on May 31, 1997.

(4) INVESTMENTS IN AND ADVANCES TO AFFILIATES

Investments in Joint Ventures, which the Company refers to also as
affiliates or " affiliated companies", consisted of the following (in
thousands):

JANUARY 31,
------------------ JULY 31,
1995 1996 1996
------ ------- -----------
(UNAUDITED)
<S> <C>
Investments in Ticketing Joint Ventures.............. $5,345 $ 7,458 $ 5,673
Investment in Pacer/CATS/CCS......................... (334) (2,430) --
Advances to Pacer/CATS/CCS........................... 500 2,000 --
Investment in and advances to VJNIL (defined
below)............................................. -- 2,270 2,181
Other investments.................................... 839 486 480
------ ------- ------
$6,350 $ 9,784 $ 8,334
====== ======= ======
</TABLE>

All of the above investments are accounted for under the equity method. The
Company is managing general partner of each of the Joint Ventures.

TICKETING JOINT VENTURES

The percentage interest owned for the ticketing joint ventures is as
follows:

<TABLE>
<CAPTION>
JANUARY 31,
----------------- JULY 31,
VENTURE 1995 1996 1996
----------------------------------------------------- ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Ticketmaster-Northwest............................... 50.00% 50.00% 50.00%
Ticketmaster-Indiana................................. 50.00% 50.00% 50.00%
Ticketmaster-Southeast............................... 33.33% 33.33% 33.33%
Ticketmaster-Australia............................... 0.00% 50.00% 50.00%
TM-UK Limited........................................ 50.00% 50.00% 100.00%
TM-Europe Group...................................... 50.00% 50.00% 100.00%
</TABLE>

On December 1, 1995, the Company entered into a series of agreements which
resulted in the acquisition of a 50% interest in Joint Ventures with its former
licensee in Melbourne, Australia for Australian $2.8 million (approximately US
$2 million). Subsequent to January 31, 1996, an additional Australian $400,000
(approximately US $300,000) was paid in accordance with certain contingent
consideration provisions of the Joint Venture Agreement for a total of
Australian $3.2 million (approximately US $2.3 million).

F-11
<PAGE> 93

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(4) INVESTMENTS IN AND ADVANCES TO AFFILIATES (CONTINUED)
Summarized financial information of the unconsolidated ticketing joint
ventures is presented below (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED JANUARY 31, JULY 31,
------------------------------- -------------------
1994 1995 1996 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
COMBINED RESULTS OF OPERATIONS
Revenues......................... $41,812 $49,915 $57,068 $29,054 $33,271
Operating income................. 3,845 6,979 12,407 6,447 6,658
Net income....................... 3,738 6,903 12,450 6,469 6,537
</TABLE>

<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
-------------------
1995 1996 1996
------- ------- -----------
(UNAUDITED)

<S> <C> <C> <C>
COMBINED FINANCIAL POSITION
Total assets........................................ $30,376 $41,373 $29,309
Total liabilities................................... 19,273 25,938 17,316
Venturers' capital.................................. 11,103 15,435 11,993
</TABLE>

PACER/CATS/CCS

On April 14, 1994, the Company and WIL Incorporated (WIL), formed a joint
venture, Pacer/CATS/CCS -- a Wembley/Ticketmaster Joint Venture (the Pacer Joint
Venture) to develop, design and service stand-alone computer ticket systems, as
well as other management information systems to be used in various venues,
including motion picture theaters, stadiums, arenas and amusement parks. During
the years ended January 31, 1995 and 1996, the Company had a 50% interest in and
served as the managing general partner of the Pacer Joint Venture. On July 29,
1996 (as described in Note 15), the Company became the 100% owner of the Pacer
Joint Venture.

F-12
<PAGE> 94

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(4) INVESTMENTS IN AND ADVANCES TO AFFILIATES (CONTINUED)
Summarized financial information of the Pacer Joint Venture is presented
below (in thousands):

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 15
(INCEPTION) SIX MONTHS ENDED
THROUGH YEAR ENDED JUNE 30,
DECEMBER 31, DECEMBER 31, -------------------
1994 1995 1995 1996
------------ ------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
Revenues...................... $ 19,354 $ 22,985 $10,755 $12,964
Loss from operations.......... (2,267) (3,717) (1,748) (689)
Net loss...................... (3,271) (5,007) (2,272) (1,173)
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------
1994 1995 1996
------- ------- -----------
(UNAUDITED)

<S> <C> <C> <C>
BALANCE SHEETS
Current assets.............................. $10,147 $ 9,883 $ 9,212
Noncurrent assets........................... 5,490 5,671 5,752
------- ------- -------
Total assets...................... $15,637 $15,554 $14,964
======= ======= =======
Current liabilities......................... $ 8,770 $ 8,549 $ 7,504
Noncurrent liabilities...................... 6,964 7,322 7,507
Due to Joint Venture partners............... -- 2,000 2,000
Venturer's deficiency....................... (97) (2,317) (2,047)
------- ------- -------
Total liabilities and deficit..... $15,637 $15,554 $14,964
======= ======= =======
</TABLE>

During the Company's fiscal year ended January 31, 1996 and the six months
ended July 31, 1996, the Company was the principal source of funds to the
venture for operating purposes; accordingly, the Company recorded losses in
excess of its proportionate 50% interest of approximately $1.7 million and
$550,000 for the year ended January 31, 1996 and the six months ended July 31,
1996, respectively.

VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (VJNIL)

On June 30, 1995, the Company acquired 50% of the common stock in VJNIL for
$2.2 million in cash and commitments for future management services equivalent
to $1 million (the VJNIL Transaction). The investment is being accounted for
using the equity method of accounting. The purchase price exceeded the equity in
the net assets of VJNIL by $2.2 million, which is being amortized on the
straight line method over a period of ten years. Summarized financial
information relating to VJNIL has not been presented since its operating results
and financial position are not material to the Company.

Concurrent with the closing of the VJNIL Transaction, the Company loaned
VJNIL $1.5 million. The Note Receivable bears an interest rate of Prime (8.25%
at July 31, 1996) plus 1%; the first payment is due on July 1, 1997 with the
final installment due on October 1, 2005.

F-13
<PAGE> 95

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(5) LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
-------------------
1995 1996 1996
-------- -------- -----------
(UNAUDITED)

<S> <C> <C> <C>
Notes payable to bank on revolving loan (commitments
of $135 million at January 31, 1995, $100 million at
January 31, 1996, and July 31, 1996, respectively),
collateralized by substantially all of the Company's
assets, payable on December 31, 1999: bearing
interest at the London Inter-Bank Offering Rate
(4.3%, 5.5% and 5.4% at January 31, 1995 and 1996,
and July 31, 1996, respectively) plus the applicable
margin, as defined (1.825%, 1.625% and 1.625% at
January 31, 1995 and 1996, and July 31, 1996,
respectively)....................................... $111,450 $ 84,800 $ 95,800
Notes payable to bank on term loan collateralized by
substantially all of the Company's assets and
certain publicly traded common stock pledged by the
major shareholder, payable on December 31, 1999:
bearing interest at the London Inter-Bank Offering
Rate (4.3%, 5.5% and 5.4% at January 31, 1995 and
1996, and July 31, 1996, respectively), plus the
applicable margin, as defined (1.825% , 1.625% and
1.625% at January 31, 1995 and 1996, and July 31,
1996, respectively)................................. 40,000 75,000 75,000
Notes payable to bank on term loan collateralized by
substantially all of Pacer's assets, interest at
prime (8.25% at July 31, 1996) plus 0.25% or at the
Inter-Bank Offering Rate (8.25% at July 31, 1996),
plus 225 basis points; interest payable monthly;
principal payable monthly beginning July 31, 1997
with the balance due on June 30, 1999............... -- -- 7,507
Other................................................. 149 109 299
-------- -------- --------
151,599 159,909 178,606
Less current portion.................................. 40 45 205
-------- -------- --------
$151,559 $159,864 $ 178,401
======== ======== ========
</TABLE>

Annual principal payments due subsequent to January 31, 1996 are as follows
(in thousands):

<TABLE>
<S> <C>
Year ending January 31:
1997.................................................... $ 45
1998.................................................... 50
1999.................................................... 9,814
2000.................................................... 150,000
--------
$159,909
========
</TABLE>

Aggregate bank group commitment under the terms of the Company's revolving
loan agreement, currently equals $100 million reducing to $90 million at
December 31, 1997 and $75 million at December 31, 1998.

F-14
<PAGE> 96

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(5) LONG-TERM DEBT (CONTINUED)
The Company's revolving credit and term loan borrowing agreements with its
bank group are subject to certain restrictive covenants relating to, among other
things, net worth, cash flows and capital expenditures. The Company was in
compliance with its restrictive covenants or has obtained the necessary waivers
from its bank for the fiscal years ended January 31, 1994, 1995 and 1996 and for
the six months ended July 31, 1996. In addition, the Company's Credit agreements
impose restrictions on the payment of dividends to the Company's shareholders.

The Company has issued standby letters of credit totaling $125,000 and $1.4
million on January 31, 1996 and July 31, 1996, respectively.

(6) INCOME TAXES

Deferred income taxes result from temporary differences in the tax and
financial reporting bases of certain assets and liabilities. The sources of
these differences and the tax effect of each were as follows (in thousands):

<TABLE>
<CAPTION>
JANUARY 31,
----------------- JULY 31,
1995 1996 1996
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
DEFERRED TAX ASSETS:
Investments in affiliates due to equity in net loss
and amortization period differences............... $3,370 $5,125 $ 5,025
Deferred revenue.................................... -- 975 1,050
Contributions....................................... -- 375 615
State and local taxes............................... 165 130 125
Cost in excess of net assets acquired, principally
due to amortization............................... 90 -- --
Other............................................... 5 50 35
------ ------ ------
Total deferred tax assets................. 3,630 6,655 6,850
DEFERRED TAX LIABILITIES:
Other intangible assets, principally due to
amortization...................................... -- 880 700
Equipment and leasehold improvements, principally
due to depreciation............................... 260 575 415
Cost in excess of net assets acquired, principally
due to amortization............................... -- -- 265
------ ------ ------
Total deferred tax liabilities............ 260 1,455 1,380
------ ------ ------
Net deferred tax assets.............. $3,370 $5,200 $ 5,470
====== ====== ======
</TABLE>

In assessing the realizability of the net deferred tax assets, management
considers whether it is more likely than not that some or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax assets
depends upon the generation of future taxable income during the periods in which
those temporary differences become deductible. As of January 31, 1996 and July
31, 1996, the Company had not provided a valuation allowance to reduce the net
deferred tax assets due to the Company's expectation of future taxable income
against which the deferred tax asset may be realized.

F-15
<PAGE> 97

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(6) INCOME TAXES (CONTINUED)
The provision/(benefit) for income taxes consisted of the following (in
thousands):

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JANUARY 31, JULY 31,
------------------------------ ---------------
1994 1995 1996 1995 1996
------ ------- ------- ----- -----
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Current:
Federal............................ $3,000 $ 510 $(1,500) $(720) $(390)
State.............................. 860 1,020 1,080 430 490
Foreign............................ -- -- -- -- 41
Deferred........................... (60) (4,200) (1,830) (300) (270)
------ ------- ------- ----- -----
$3,800 $(2,670) $(2,250) $(590) $(129)
====== ======= ======= ===== =====
</TABLE>

The following is a reconciliation of the statutory Federal income tax rate
to the Company's effective income tax rate:

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JANUARY 31, JULY 31,
----------------------- -------------
1994 1995 1996 1995 1996
--- --- --- --- ---
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Statutory Federal income tax expense........ 35% (34)% (34)% (34)% (34)%
State income taxes, net of Federal
benefit................................... 6 2 5 8 13
Effect of foreign operations................ 3 (1) (3) (4) (7)
Stock transaction and other costs........... 48 -- -- -- --
Amortization of excess cost over fair market
value of net assets acquired.............. 7 3 5 4 10
Meals and entertainment limitation.......... 3 2 4 5
Other....................................... -- (2) 3 2 8
-- --- --- --- ---
99% (29)% (22)% (20)% (5)%
== === === === ===
</TABLE>

(7) CAPITAL STOCK

In August 1996, the Company amended its Restated Certificate of
Incorporation pursuant to which the classes of the Company's Common and
Preferred Stock were revised (the Stock Amendment). There were no accounting
effects as a result of the Stock Amendment; a description of the Company's
structure before and after the Stock Amendment follows:

COMMON STOCK

Prior to the Stock Amendment, the Company had authorized the issuance of
80,000,000 shares of Series A Common Stock and 1,000,000 shares of Series B
Common Stock. Each share of Series A Common Stock was entitled to one vote;
Series B Common Stock had no voting rights. As of January 31, 1995 and 1996, and
July 31, 1996, 15,310,405 shares of Series A Common Stock were issued and
outstanding, and no shares of Series B Common Stock were issued or outstanding.

Subsequent to the Stock Amendment, the authorized, issued and outstanding
shares of the Company's Series A Common Stock, and the voting rights, remained
unchanged. The Company no longer had Series B Common Stock.

F-16
<PAGE> 98

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(7) CAPITAL STOCK (CONTINUED)
PREFERRED STOCK

Prior to the Stock Amendment, the Company had authorized three series of
Preferred Stock. The Company had 15,000,000 authorized shares of no par Series I
Preferred Stock, 5,900,000 authorized shares of no par Series II Preferred
Stock, and 4,100,000 shares of no par undesignated Preferred Stock. As of
January 31, 1995 and 1996, and July 31, 1996 no shares of Preferred Stock were
issued or outstanding.

Subsequent to the Stock Amendment, the Company had 20,000,000 authorized
shares of no par undesignated Preferred Stock. The Company no longer had Series
I or II Preferred Stock.

(8) STOCK TRANSACTIONS

COMMON STOCK

On November 17, 1993, the Company declared and made a dividend distribution
of $130 million to the holders of its common stock as of the close of business
on November 19, 1993, which was paid as of that date in the form of promissory
notes issued by the Company.

On November 19 and December 10, 1993, the Company declared additional
dividend distributions of $100 million and $9.9 million, payable to the holders
of its common stock as of the close of business on November 22, 1993 and
December 14, 1993, respectively.

Also on November 19, 1993, the Company repurchased 249,903 shares of its no
par Series A common stock for $26 million, in exchange for promissory notes
(Repurchase Notes) issued by the Company.

In December 1993, the Company authorized an additional 55,000,000 shares of
no par Series A common stock, bringing the total number of such authorized
shares to 80,000,000. On December 15, 1993, the Company issued 12,233,014 of
these additional shares for proceeds of $170 million, net of $3.2 million of
issue costs. The proceeds from the stock sale were utilized to repay in full the
promissory notes issued to the shareholders on November 17, 1993, to partially
fund the dividends declared on November 19 and December 10, 1993 and to repay in
part the Repurchase Notes. The balance of the dividend distribution and the
Repurchase Notes not funded in cash were funded with promissory notes (the
Promissory Notes) issued by the Company in the aggregate principal amount of
$100 million due December 1, 1994. Terms of the Promissory Notes include
interest at the annual rate of 10% and restrictions on the payment of dividends.
On November 18, 1994, the Promissory Notes plus accrued interest were paid from
proceeds received in connection with the extension of credit from a group of
banks.

Additionally, as part of the December 15, 1993 transactions, the Company
acquired the remaining shares of certain subsidiaries held by minority
shareholders (including an officer of the Company) for approximately $6.3
million in cash and 306,208 shares of the Company's Series A no par common stock
which was valued at approximately $4.3 million. Accordingly, the purchase price
allocable to cost in excess of the net assets acquired was approximately $10.6
million, which is principally being amortized over a period of 10 years, and had
a remaining unamortized balance of $9.7 million, $8.8 million and $8.4 million
as of January 31, 1995 and 1996, and July 31, 1996, respectively.

For the year ended January 31, 1994, the Company incurred approximately
$6.8 million in expenses, including financial advisory and legal fees and
special employee bonuses, related to the transactions described above, which are
reflected in the consolidated statement of operations.

F-17
<PAGE> 99

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(8) STOCK TRANSACTIONS (CONTINUED)
PREFERRED STOCK

On November 1, 1993, the Company repurchased all 9,452,982 issued and
outstanding shares of the Company's Series I Preferred Stock, at the stated
redemption price of $1.00 per share and paid cumulative dividends in arrears of
$11.5 million.

On November 1, 1993, the Company paid a dividend of $1.3 million on the
5,700,875 outstanding shares of its Series II Preferred Stock, and on December
15, 1993, the Company repurchased all 5,700,875 outstanding shares of its Series
II Preferred Stock at the stated redemption price of $.20 per share, and paid
dividends totaling $6.8 million which had accumulated since the November 1, 1993
dividend payment date.

(9) LITIGATION AND GOVERNMENT INVESTIGATION

The Company and several of its subsidiaries were named as defendants in
several Federal and state antitrust consumer class action lawsuits. These cases
alleged, among other things, violations of Sections 1 and 2 of the Sherman Act
and various state causes of action under state antitrust laws. On May 31, 1996,
these cases were dismissed on the merits without leave to amend. On June 12,
1996, plaintiffs appealed the court's decision.

On March 17, 1995, Moviefone, Inc. and the Teleticketing Company, L.P.
filed a complaint against a subsidiary of the Company in the United States
District Court for the Southern District of New York. The complaint asserts that
the subsidiary, by its conduct, including its acquisition of a 50% interest in a
certain unconsolidated joint venture, has frustrated and prevented plaintiff's
ability to provide movie information and teleticketing services. Furthermore,
the complaint asserts that the Company's acquisition of its interest in such
joint venture violates Section 7 of the Clayton Act and the Company's business
conduct violates Sections 1 and 2 of the Sherman Act. The Company has filed a
motion to dismiss which is fully briefed and undecided.

The Company also is involved in various other investigations, lawsuits and
claims arising in the normal conduct of its business. The Company has also at
times responded to inquiries from various government and state authorities. In
the opinion of the Company's management, none of these proceedings will have a
material effect on the Company's financial position or results of operations.

(10) COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under various operating
leases that expire at various dates through 2003. Future minimum lease payments
are as follows as of January 31, 1996 (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
JANUARY 31 AMOUNT
----------- ------
<S> <C>
1997..................................................... $ 4,994
1998..................................................... 4,886
1999..................................................... 4,329
2000..................................................... 3,717
2001..................................................... 2,926
Thereafter................................................. 6,236
-------
$27,088
=======
</TABLE>

Additional rental payments may be required for the Company's pro rata share
of certain operating expenses associated with office space leases.

F-18
<PAGE> 100

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(10) COMMITMENTS AND CONTINGENCIES (CONTINUED)
Rental expense charged to operations for operating leases was approximately
$4.8 million, $4.9 million, and $4.9 million for the years ended January 31,
1994, 1995 and 1996 respectively, and $2.4 million and $2.5 million for the six
months ended July 31, 1995 and 1996, respectively.

In September 1995, the Company agreed to advance up to $8 million (on a
non-revolving basis) to an unrelated entity. As of January 31, 1996, the Company
had advanced $1.1 million to the entity and as of July 31, 1996, all amounts
advanced and substantially all interest had been repaid.

The Company has entered into a make well agreement expiring June 30, 1997
(or sooner subject to its terms) covering $500,000 of Pacer's interest payments
on bank indebtedness.

(11) 401(K) PLAN

The Company has a 401(k) plan covering all eligible employees, which
contains an employer matching feature of 25% up to a maximum of 6% of the
employee's compensation. The Company's contribution for the plan years ended
December 31, 1993, 1994 and 1995 was approximately $200,000, $190,000 and
$310,000, respectively.

(12) RELATED PARTY TRANSACTIONS

The Company has employment contracts with certain senior executives which
require through 1999, periodic payments aggregating $4.1 million to $4.8 million
per year, plus performance bonuses based in part upon the annual results of
operations.

At January 31, 1995 and 1996, and July 31, 1996, an affiliate of a primary
lender to the Company held 196,370 shares of Series A common stock, which
represents approximately 1% of the shares outstanding.

The Company has reached an agreement expiring on December 31, 2003, with an
affiliate of its majority shareholder, whereby in exchange for services rendered
in connection with the development of the Company's web site, the Company will
pay royalties ranging from 5 - 10% of ticket service charges and merchandise
sold through its web site (net of defined deductions). The agreement calls for
an annual minimum royalty payment of $100,000 per year (pro-rated for 1996).

(13) STOCK OPTIONS

In February 1994, the Company adopted the Ticketmaster Stock Plan (the
Plan), under which 3,250,000 shares of common stock have been reserved for
issuance upon exercise of incentive stock options, nonqualified stock options,
restricted stock, stock appreciation rights or phantom stock awards. As of
January 31, 1995, the Company had granted, under the Plan, stock options to
acquire 265,111 shares of common stock at an exercise price of $14.14 per share.
No options were exercisable as of January 31, 1995. As of January 31, and July
31, 1996, 165,022 and 206,229 shares, respectively, were exercisable; the
remaining shares vest ratably over the subsequent 21 months.

On December 15, 1994, the Company granted, outside of the Plan, options to
acquire 1,331,340 shares of common stock at an exercise price of $14.14 per
share. As of January 31, 1995 and 1996, and July 31, 1996, 360,571, 693,406 and
859,824 options were exercisable, respectively. The remaining shares vest
equally through January 1, 1998.

On October 22, 1996, options to acquire 2,676,700 shares of common stock,
exercisable at the price per share in the Company's initial public offering,
were granted to employees. These options vest ratably over a

F-19
<PAGE> 101

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(13) STOCK OPTIONS (CONTINUED)

four year period and expire ten years from date of grant. No options were
exercised under any of the above grants as of July 31, 1996.

(14) SUBSEQUENT EVENTS

BUSINESSES ACQUIRED

On February 12, 1996 the Company completed the acquisition of certain
assets of Tennessee Performing Arts Center Management Corporation, which manages
a ticket selling business within the state of Tennessee for a purchase price of
$1.6 million (the Nashville acquisition). The purchase price was funded from the
Company's existing credit facility.

On June 7, 1996, the Company acquired the minority interests held by its
joint venture partner in Ticketmaster UK Limited and Ticketmaster Europe Group
(collectively referred to as the European Joint Venture). The purchase
consideration was $6 million in cash and an Exchangeable Promissory Note (the
"Note") in the principal amount of $5 million, bearing interest at the prime
rate (8.25% at July 31, 1996) due on June 7, 1997. The exchange provisions of
the Note provide that it may be redeemed, only in its entirety, into shares of
Common Stock equal to the outstanding principal amount of the Note divided by
the price to be used in an initial offering of Common Stock to the public, prior
to the maturity date of the Note.

This acquisition has been recorded as a purchase transaction; accordingly,
the purchase price was allocated to the net assets acquired based on their
estimated fair market values. The excess of the estimated fair value of net
assets acquired amounted to approximately $8.9 million, which has been accounted
for as goodwill and is being amortized over 15 years using the straight line
method. The accompanying consolidated statements of operations include the
results of the European Joint Venture since the effective date of the
acquisition.

As discussed in Note 4, on July 29, 1996, the Company acquired the
remaining 50% equity interest in the Pacer Joint Venture from WIL. Consideration
paid by the Company in connection with its initial 50% interest in the Pacer
Joint Venture and the subsequent 50% interest purchased from WIL aggregated
approximately $16 million in cash and the assumption of $7.5 million of debt.
WIL's contribution to the Pacer Joint Venture included certain ticketing
technology in development and employment contracts with covenants-not-to-
compete, for which the Company paid $7.5 million and $3.75 million,
respectively. The technology in development was expensed as research and
development cost by the Company. During the year ended January 31, 1995, the
covenants-not-to-compete were charged to expense, as it was determined that this
intangible had no future value to the Company. The remaining $3.25 million of
the Company's excess investment over the underlying equity in the Pacer Joint
Venture has been recorded as cost in excess of net assets acquired and is being
amortized using the straight line method over a period of seven and a half
years.

On August 31, 1996, the Company purchased certain assets of its
Albuquerque, New Mexico licensee for $150,000.

The following unaudited pro forma information presents a summary of
consolidated results of the Company, the European Joint Venture and the Pacer
Joint Venture for the year ended January 31, 1996 and the six months ended July
31, 1996, assuming the acquisitions had been made as of February 1, 1995, with
pro forma adjustments to give affect to amortization of goodwill and interest
expense in notes payable issued in the

F-20
<PAGE> 102

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(14) SUBSEQUENT EVENTS (CONTINUED)
European Joint Venture. The pro forma financial information is not necessarily
indicative of the results of operations as they would have been had the
transactions been effective on February 1, 1995.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) JANUARY 31, 1996 JULY 31, 1996
--------------------------------------------- ----------------- ----------------
<S> <C> <C>
Total Revenue................................ $ 196,319 $118,482
Net loss..................................... (12,910) (3,483)
Loss per share............................... (0.84) (0.23)
</TABLE>

Pro forma results of operations have not been presented for the Nashville
or the New Mexico acquisitions because the pro forma effect of these
acquisitions are not significant.

BUSINESSES TO BE ACQUIRED

On August 7, 1996, the Company entered into a letter of intent to acquire
the license rights and related assets of its Philadelphia, Pennsylvania licensee
for $19 million in cash. Such consideration will be paid from the proceeds of a
loan to be obtained by the Company prior to consummation of the acquisition.

On September 12, 1996, the Company entered into a letter of intent to
acquire the 50% equity interest of its partner (the "Partner") in
Ticketmaster-Indiana. In connection with this transaction Ticketmaster-Indiana
will purchase newly issued convertible Preferred Stock of the Company (the
"Preferred Stock") in exchange for Ticketmaster-Indiana's promissory note in the
principal amount of $27 million and distribute the preferred stock to the
Partner. The conversion features of this Preferred stock provide that in the
event of an initial offering of the Company's Common Stock to the general public
(the Offering), the Partner shall receive shares of Common Stock having an
aggregate value of $27 million based on the price per share used in the
Offering. Absent any Offering, the Partner may cause the Company to repurchase
the Preferred Stock prior to the second anniversary of its issuance for $27
million plus interest at 10% after issuance of the Preferred Stock up to its
repurchase by the Company.

On September 19, 1996, the Company entered into an agreement to acquire a
27% equity interest in the Company's Mexico licensee from a third party for $1.8
million in cash and 5% of net distributions (as defined) received from the
Mexican operation through December 31, 1998. Previously, on June 20, 1996, the
Company and the majority owner of its Mexico licensee (CIE) signed a letter of
intent to form a Joint Venture to operate in Central and South America wherein
the Company will license its trademark and technology to the Joint Venture in
exchange for a 23% portion of CIE's 73% ownership interest in the Company's
Mexico licensee. Upon completion of these two transactions, the Company and CIE
will each have a 50% equity interest in existing and future ticketing service
entities in Mexico, Central America and South America.

On September 25, 1996, the Company entered into an agreement to acquire the
20% equity interest of its partner in Ticketmaster-Florida, Inc., the Company's
operating subsidiary in Florida, in consideration of the Company's distribution
to such partner of shares of Common Stock having a value of $4.6 million, based
on the initial public offering price of the Common Stock in the offering
(unaudited).

F-21
<PAGE> 103

TICKETMASTER GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(14) SUBSEQUENT EVENTS (CONTINUED)

STOCK SPLIT

On August 21, 1996, the Board of Directors authorized a one-for-three
reverse stock split of the Company's common stock which subsequently was
approved by the shareholders. All references in the consolidated financial
statements to the number of common shares and per share amounts have been
retroactively restated to reflect the decreased number of common shares
outstanding.

F-22
<PAGE> 104

INDEPENDENT AUDITORS' REPORT

The Venturers:

We have audited the accompanying combined balance sheets of Unconsolidated
Ticketing Joint Ventures of Ticketmaster Group, Inc. as of January 31, 1995 and
1996 and the related combined statements of operations, venturers' capital, and
cash flows for each of the years in the three year period ended January 31,
1996. These combined financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Unconsolidated
Ticketing Joint Ventures of Ticketmaster Group, Inc. as of January 31, 1995 and
1996, and the results of their operations and their cash flows for each of the
years in the three year period ended January 31, 1996 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Los Angeles, California
March 8, 1996, except for Note 9,
which is as of
June 7, 1996

F-23
<PAGE> 105

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

COMBINED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
JANUARY 31,
------------------- JULY 31,
1995 1996 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................. $12,374 $19,175 $14,060
Accounts receivable, ticket sales......................... 3,519 4,082 2,838
Accounts receivable, other................................ 408 821 649
Prepaid expenses.......................................... 928 1,631 775
------- ------- -------
Total current assets.............................. 17,229 25,709 18,322
Equipment and leasehold improvements, net................... 4,336 4,062 3,418
Due from venturers.......................................... 70 681 917
Cost in excess of net assets acquired....................... 706 566 --
Intangible and other assets, net............................ 8,035 10,355 6,652
------- ------- -------
$30,376 $41,373 $29,309
======= ======= =======
LIABILITIES AND VENTURERS' CAPITAL
Current liabilities:
Current portion of long-term debt......................... $ 222 $ 181 $ 20
Accounts payable, trade................................... 827 1,332 831
Accounts payable, clients................................. 12,408 18,744 13,020
Accrued expenses.......................................... 3,321 3,813 2,895
Deferred income........................................... 1,083 274 --
------- ------- -------
Total current liabilities......................... 17,861 24,344 16,766
Long-term debt, net of current portion...................... 295 214 91
Deferred rent and other..................................... 1,117 1,380 459
Venturers' capital.......................................... 11,103 15,435 11,993
------- ------- -------
$30,376 $41,373 $29,309
======= ======= =======
</TABLE>

See notes to combined financial statements.

F-24
<PAGE> 106

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

COMBINED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED JANUARY 31, JULY 31,
----------------------------- ------------------
1994 1995 1996 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Revenue:
Ticketing operations....................... $39,457 $46,921 $54,178 $27,530 $32,708
Publications............................... 1,599 2,129 1,939 1,009 176
Sponsorship & Promotion.................... 756 865 951 515 387
------- ------- ------- ------- -------
41,812 49,915 57,068 29,054 33,271
------- ------- ------- ------- -------
Operating costs, expenses and other items:
Ticketing operations....................... 22,846 28,208 30,836 15,652 18,344
Ticketing selling, general and
administrative.......................... 9,187 9,094 9,232 4,633 6,058
Publications............................... 1,108 1,261 1,148 611 128
Depreciation and amortization.............. 4,826 4,373 3,445 1,711 2,083
------- ------- ------- ------- -------
Operating income........................ 3,845 6,979 12,407 6,447 6,658
Interest expense (income), net............... 107 76 (43) (22) (128)
------- ------- ------- ------- -------
Income before income taxes.............. 3,738 6,903 12,450 6,469 6,786
Foreign income tax provision................. -- -- -- -- 249
------- ------- ------- ------- -------
Net income.............................. $ 3,738 $ 6,903 $12,450 $ 6,469 $ 6,537
======= ======= ======= ======= =======
</TABLE>

See notes to combined financial statements.

F-25
<PAGE> 107

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

COMBINED STATEMENTS OF VENTURERS' CAPITAL
(IN THOUSANDS)

<TABLE>
<CAPTION>
TICKETMASTER JOINT VENTURE VENTURERS'
GROUP, INC. PARTNERS' CAPITAL
------------ ------------- ----------
<S> <C> <C> <C>
Balance at January 31, 1993............................. $ 6,779 $ 7,374 $ 14,153
Distribution to Venturers............................... (3,845) (4,790) (8,635)
Venturers' investment................................... 1,745 1,745 3,490
Foreign currency translation adjustment................. 7 7 14
Net income.............................................. 1,576 2,162 3,738
------- ------- --------
Balance at January 31, 1994............................. 6,262 6,498 12,760
Distribution to Venturers............................... (4,060) (4,870) (8,930)
Venturers' investment................................... -- 434 434
Foreign currency translation adjustment................. (32) (32) (64)
Net income.............................................. 3,118 3,785 6,903
------- ------- --------
Balance at January 31, 1995............................. 5,288 5,815 11,103
Distribution to Venturers............................... (5,760) (6,595) (12,355)
Venturers' investment................................... 2,088 2,088 4,176
Foreign currency translation adjustment................. 31 30 61
Net income.............................................. 5,763 6,687 12,450
------- ------- --------
Balance at January 31, 1996............................. 7,410 8,025 15,435
Distribution to Venturers (unaudited)................... (2,940) (3,280) (6,220)
Venturers' investment (unaudited)....................... 306 306 612
Purchase and sale of Venturer's interest (unaudited).... (2,127) (2,127) (4,254)
Foreign currency translation adjustment (unaudited)..... (59) (58) (117)
Net income (unaudited).................................. 3,062 3,475 6,537
------- ------- --------
Balance at July 31, 1996 (unaudited).................... $ 5,652 $ 6,341 $ 11,993
======= ======= ========
</TABLE>

See notes to combined financial statements.

F-26
<PAGE> 108

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY
YEAR ENDED JANUARY 31, 31,
---------------------------- ---------------------
1994 1995 1996 1995 1996
------- ------- -------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income................................ $ 3,738 $ 6,903 $ 12,450 $ 6,469 $ 6,537
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization.......... 4,826 4,373 3,445 1,711 2,083
Changes in operating assets and
liabilities:
Accounts receivable, ticket sales.... (1,139) 969 (563) (883) (217)
Accounts receivable, other........... (76) 71 (413) (149) 12
Prepaid expenses..................... 125 (457) (703) (257) 111
Accounts payable, trade.............. (299) 206 505 631 161
Accounts payable, clients............ (2,093) 4,145 6,336 438 (3,031)
Accrued expenses..................... 1,323 (54) 492 1,643 2,259
Deferred income...................... 477 (36) (809) (22) (274)
Due from venturers................... 273 (734) (611) (2,019) (236)
Deferred rent and other.............. (716) 1,117 263 (3) (921)
------- ------- ------- ------- -------
Net cash provided by operating
activities...................... 6,439 16,503 20,392 7,559 6,484
------- ------- ------- ------- -------
Cash flows from investing activities:
Purchase of equipment and leasehold
improvements........................... (1,139) (1,522) (1,644) (614) (1,303)
Intangible and other assets............... (3,515) 155 (3,707) 40 (724)
Purchase of venturer's interest........... -- -- -- -- (4,254)
------- ------- ------- ------- -------
Net cash used in investing
activities...................... (4,654) (1,367) (5,351) (574) (6,281)
------- ------- ------- ------- -------
Cash flows from financing activities:
Investments by venturers.................. 3,490 434 4,176 -- 612
Distributions to venturers................ (8,635) (8,930) (12,355) (7,005) (6,220)
Proceeds from long-term debt.............. 313 161 231 183 412
Reduction of long-term debt............... (574) (692) (353) (92) (5)
------- ------- ------- ------- -------
Net cash used in financing
activities...................... (5,406) (9,027) (8,301) (6,914) (5,201)
------- ------- ------- ------- -------
Effect of exchange rate changes on cash and
cash equivalents.......................... 14 (64) 61 (5) (117)
------- ------- ------- ------- -------
Net increase (decrease) in cash
and cash-equivalents............ (3,607) 6,045 6,801 66 (5,115)
Cash and cash equivalents, beginning of
period.................................... 9,936 6,329 12,374 12,374 19,175
------- ------- ------- ------- -------
Cash and cash equivalents, end of period.... $ 6,329 $12,374 $ 19,175 $12,440 $14,060
======= ======= ======= ======= =======
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest............................... $ 170 $ 213 $ 171 $ 101 $ 31
======= ======= ======= ======= =======
</TABLE>

See notes to combined financial statements.

F-27
<PAGE> 109

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Ticketmaster Group, Inc. (TM Group) owns interests in unconsolidated Joint
Ventures which in turn provide automated ticketing services to organizations
within selected geographic regions that sponsor events. These services provide
patrons with alternatives to purchasing tickets at box offices, including the
ability to purchase tickets at outlets, call centers or via the internet. A
subsidiary of TM Group acts as managing general partner for each unconsolidated
Joint Venture included in these combined financial statements. TM Groups'
interest in each is as follows:

<TABLE>
<CAPTION>
JANUARY 31,
----------------- JULY 31,
VENTURE 1995 1996 1996
--------------------------------------------- ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Ticketmaster-Northwest....................... 50.00% 50.00% 50.00%
Ticketmaster-Indiana......................... 50.00% 50.00% 50.00%
TM-UK Limited................................ 50.00% 50.00% 100.00%
TM-Europe Group.............................. 50.00% 50.00% 100.00%
Ticketmaster-Southeast....................... 33.33% 33.33% 33.33%
Ticketmaster Australasia..................... 0.00% 50.00% 50.00%
</TABLE>

The combined financial statements include the accounts of the
unconsolidated Joint Ventures listed above, collectively referred to as the
"Company" or "Joint Ventures". All material intercompany balances and
transactions have been eliminated.

Unaudited Interim Financial Statements

The accompanying combined financial statements of the Joint Ventures as of
July 31, 1996 and for the six months ended July 31, 1995 and 1996 are unaudited,
but in the opinion of management reflect all adjustments necessary (consisting
of those of a normal recurring nature) for a fair presentation of such combined
financial statements in accordance with generally accepted accounting
principles. The results of operations for interim periods are not necessarily
indicative of results for a full year.

Revenue Recognition

Revenue from ticket operations is recognized as tickets are sold.

Cash and Cash Equivalents

The Company classifies all highly liquid debt instruments purchased with an
original maturity of three months or less as cash equivalents.

Accounts Receivable, Ticket Sales

Accounts receivable, ticket sales are principally from ticketing outlets
and represent the face value of the tickets sold plus convenience charges,
generally net of outlet commissions. The Company performs credit evaluations of
new ticket outlets, which are reviewed and updated periodically, requiring
collateral as circumstances warrant.

F-28
<PAGE> 110

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Equipment and Leasehold Improvements

Cost in Excess of Net Assets Acquired

The cost in excess of net assets acquired represents amounts allocated to
goodwill through the purchase of ticketing operations and minority interests and
is being amortized by the straight-line method primarily over terms of up to ten
years.

Intangible and Other Assets

Accounts Payable, Clients

Accounts payable, clients represents contractual amounts due to clients for
tickets sold by the Company on behalf of the organizations that sponsor events.

Deferred Revenue

Deferred revenue primarily consists of subscription revenue collected in
advance of the subscription period. Deferred revenue is recorded as earned, pro
rata on a monthly basis, over the life of subscriptions. Costs in connection
with the procurement of subscriptions are charged to expense as incurred.

F-29
<PAGE> 111

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes

Income tax expense represents taxes in foreign jurisdictions. No provision
has been made for Federal and state income taxes, since these taxes are the
responsibility of the Venturers.

Foreign Currency Translation

The combined financial statements of foreign subsidiaries are translated
into U.S. dollars. Gains and losses resulting from translation are accumulated
in a separate component of Venturers' capital until the investment in the
foreign entity is sold or liquidated. The Company's transactions predominately
occur in U.S. dollars. Gains and losses on currency transactions were immaterial
for all periods presented.

Concentration of Credit Risk

The Company places its temporary cash investments principally in commercial
paper with large domestic and international companies and limits the amount of
credit exposure in any one company.

Financial Instruments

The estimated fair values of cash, accounts receivable, due from Joint
Venturers, accounts payable, accrued expenses and long term debt approximate
their carrying value because of the short term maturity of these instruments or
the stated interest rates are indicative of market interest rates.

Use of Estimates

(2) EQUIPMENT & LEASEHOLD IMPROVEMENTS, NET

Equipment and leasehold improvements consisted of the following (in
thousands):

<TABLE>
<CAPTION>
JANUARY 31,
------------------ JULY 31,
1995 1996 1996
------ ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment........................... $6,920 $ 7,455 $ 6,811
Telephone equipment and furnishings.......... 2,344 1,984 449
Transportation equipment..................... 321 489 299
Leasehold improvements....................... 258 282 400
------ ------- ------
9,843 10,210 7,959
Less accumulated depreciation &
amortization............................... 5,507 6,148 4,541
------ ------- ------
$4,336 $ 4,062 $ 3,418
====== ======= ======
</TABLE>

F-30
<PAGE> 112

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(3) INTANGIBLE AND OTHER ASSETS, NET

Intangible and other long term assets consisted of the following (in
thousands):

<TABLE>
<CAPTION>
JANUARY 31,
------------------ JULY 31,
1995 1996 1996
------ ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Purchased user agreements.................... $7,835 $10,218 $ 6,560
Other........................................ 200 137 92
------ ------- ------
$8,035 $10,355 $ 6,652
====== ======= ======
</TABLE>

(4) LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
JANUARY 31,
------------- JULY 31,
1995 1996 1996
---- ---- -----------
(UNAUDITED)
<S> <C> <C> <C>
Obligations payable on a revolving line of
credit, collateralized by a Joint Venture's
assets, interest at the foreign bank's base
rate (6.25% at January 31, 1995), plus 1.25%
payable in equal amounts....................... $ 80 $ -- $ --
Obligations payable for assets acquired, imputed
interest at 9.4%, payable in monthly
installments................................... 437 280 --
Obligations payable for assets acquired, imputed
interest at 8.7%, payable in monthly
installments through November 30, 1998......... -- 115 111
---- ---- ----
517 395 111
Less current portion............................. 222 181 20
---- ---- ----
$295 $214 $ 91
==== ==== ====
</TABLE>

Annual principal payments due subsequent to January 31, 1996 are as follows
(in thousands):

<TABLE>
<CAPTION>
YEAR ENDING JANUARY 31:
-----------------------
<S> <C>
1997............................................. $181
1998............................................. 130
1999............................................. 84
----
$395
====
</TABLE>

F-31
<PAGE> 113

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(5) OPERATING INFORMATION BY GEOGRAPHIC REGION

The Joint Ventures' operations are summarized by geographic region as
follows (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JANUARY 31, JULY 31,
--------------------------- -----------------
1994 1995 1996 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue
United States.................. $33,039 $40,448 $43,251 $23,332 $23,194
Europe......................... 8,773 9,467 12,031 5,722 5,534
Other.......................... -- -- 1,786 -- 4,543
------- ------- ------- ------- -------
$41,812 $49,915 $57,068 $29,054 $33,271
======= ======= ======= ======= =======
Net income (loss)
United States.................. $ 5,609 $ 8,180 $11,064 $ 6,112 $ 5,620
Europe......................... (1,871) (1,277) 1,184 357 604
Other.......................... -- -- 202 -- 313
------- ------- ------- ------- -------
$ 3,738 $ 6,903 $12,450 $ 6,469 $ 6,537
======= ======= ======= ======= =======
Identifiable assets
United States.................. $17,521 $22,154 $23,112 $22,324 $19,503
Europe......................... 9,666 8,222 8,420 10,288 --
Other.......................... -- -- 9,841 -- 9,806
------- ------- ------- ------- -------
$27,187 $30,376 $41,373 $32,612 $29,309
======= ======= ======= ======= =======
</TABLE>

(6) COMMITMENTS AND CONTINGENCIES

The Joint Venturers' lease office space and equipment under various
operating leases that expire at various dates through 2007. Future minimum lease
payments are as follows as of January 31, 1996 (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
JANUARY 31 AMOUNT
------------ ------
<S> <C>
1997.............................................. $1,719
1998.............................................. 1,688
1999.............................................. 1,671
2000.............................................. 1,602
2001.............................................. 1,059
Thereafter........................................ 1,913
------
$9,652
======
</TABLE>

Additional rental payments may be required for the Joint Venturers' pro
rata share of certain operating expenses associated with office space leases.

Rental expense charged to operations for operating leases was approximately
$1.7 million, $1.8 million, and $2.0 million for the years ended January 31,
1994, 1995 and 1996, respectively, and $950,000 and $1.1 million for the six
months ended July 31, 1995 and 1996, respectively.

F-32
<PAGE> 114

UNCONSOLIDATED TICKETING JOINT VENTURES
OF TICKETMASTER GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF JULY 31, 1996 AND FOR THE SIX MONTHS
ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(7) 401(K) PLAN

Certain Joint Ventures have 401(k) plans covering all eligible employees,
which contain an employer matching feature of 25% up to a maximum of 6% of the
employee's compensation. The Joint Ventures' contribution for the plan years
ended December 31, 1993, 1994 and 1995 was approximately $32,000, $34,000 and
$43,000, respectively.

(8) RELATED PARTY TRANSACTIONS

Amounts charged to the Joint Ventures by TM Group or its affiliates under
various agreements were as follows (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JANUARY 31, JULY 31,
------------------------ -------------
1994 1995 1996 1995 1996
---- ---- ------ ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Management Fees..................... $305 $325 $ 435 $165 $390
Reimbursements for other services... 845 945 1,050 505 640
</TABLE>

Purchases of equipment by the Venturers was approximately $500,000,
$685,000, and $475,000 for the years ended January 31, 1994, 1995 and 1996,
respectively.

(9) SUBSEQUENT EVENT

On June 7, 1996, the TM Group acquired the 50% equity interest of its
partner in the European Joint Venture (and in a related entity) for $6 million
in cash and an Exchangeable Promissory Note in the principal amount of $5
million due June 7, 1997.

F-33
<PAGE> 115

INDEPENDENT AUDITORS' REPORT

The Venturers
Pacer/CATS/CCS -- a Wembley Ticketmaster Joint Venture:

We have audited the accompanying consolidated balance sheets of
Pacer/CATS/CCS -- a Wembley Ticketmaster Joint Venture as of December 31, 1994
and 1995 and the related consolidated statements of operations and accumulated
deficit and cash flows for the period from April 15, 1994 (inception) to
December 31, 1994 and for the year ended December 31, 1995. These consolidated
financial statements are the responsibility of the Joint Venture's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Pacer/CATS/CCS -- a Wembley Ticketmaster Joint Venture as of December 31, 1994
and 1995, and the results of their operations and their cash flows for the
period from April 15, 1994 (inception) to December 31, 1994 and for the year
ended December 31, 1995 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared
assuming that the Joint Venture will continue as a going concern. As discussed
in Note 2 to the consolidated financial statements, the Joint Venture has
suffered recurring losses from operations and has a net capital deficiency that
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

KPMG Peat Marwick LLP

Denver, Colorado
February 22, 1996,
except for note 4 which
is as of July 31, 1996

F-34
<PAGE> 116

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1994 1995 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash...................................................... $ 893 $ 603 $ 529
Trade accounts receivable, net of allowances of $1,479,
$1,266 and $1,211 at December 31, 1994 and 1995, and
June 30, 1996 (unaudited), respectively................ 5,618 5,208 4,600
Inventory................................................. 3,469 3,545 3,894
Prepaid expenses and other................................ 167 527 189
------- ------- -------
Total current assets.............................. 10,147 9,883 9,212
Equipment and leasehold improvements, net................. 1,356 1,841 2,049
Cost in excess of net assets acquired, net of accumulated
amortization of $200, $484 and $626 at December 31,
1994 and 1995, and June 30, 1996 (unaudited),
respectively........................................... 4,050 3,766 3,624
Other assets.............................................. 84 64 79
------- ------- -------
$15,637 $15,554 $14,964
======= ======= =======
<CAPTION>
LIABILITIES AND VENTURERS' DEFICIT
<S> <C> <C> <C>
Current liabilities:
Current portion of long-term debt......................... $ 2,186 $ 643 $ --
Trade accounts payable.................................... 2,052 2,850 3,170
Accrued liabilities....................................... 2,413 2,667 2,350
Capital lease obligations................................. 399 300 300
Deferred revenue.......................................... 1,720 2,089 1,684
------- ------- -------
Total current liabilities......................... 8,770 8,549 7,504
Long-term debt to bank, less current portion................ 6,964 7,322 7,507
Subordinated note payable to venturer....................... -- 2,000 2,000
------- ------- -------
Total liabilities................................. 15,734 17,871 17,011
------- ------- -------
Commitments and contingencies
Venturers' deficit:
Capital contributions..................................... 3,000 5,575 7,375
Accumulated deficit....................................... (3,271) (8,278) (9,451)
Cumulative foreign currency translation adjustment........ 174 386 29
------- ------- -------
Total venturers' deficit.......................... (97) (2,317) (2,047)
------- ------- -------
$15,637 $15,554 $14,964
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-35
<PAGE> 117

PACER/CATS/CCS - A WEMBLEY
TICKETMASTER JOINT VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 15, SIX MONTHS ENDED
(INCEPTION) YEAR ENDED JUNE 30,
TO DECEMBER 31, DECEMBER 31, -------------------
1994 1995 1995 1996
--------------- ------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Installation.............................. $12,141 $ 13,233 $ 5,723 $ 8,252
Service................................... 4,932 7,697 3,950 3,759
Product sales............................. 2,281 2,055 1,082 953
------- ------- ------- -------
Total revenue..................... 19,354 22,985 10,755 12,964
------- ------- ------- -------
Costs of revenue, expenses and other items:
Installation.............................. 7,730 9,739 4,169 5,429
Service................................... 3,111 4,989 2,458 2,498
Products.................................. 1,321 1,184 619 535
------- ------- ------- -------
Total costs of revenue............ 12,162 15,912 7,246 8,462
------- ------- ------- -------
General and administrative................ 5,654 4,998 2,362 2,053
Sales and marketing....................... 1,507 1,904 936 963
Research and development.................. 1,609 2,932 1,451 1,671
Depreciation and amortization............. 689 956 508 504
------- ------- ------- -------
Loss from operations.............. (2,267) (3,717) (1,748) (689)
Interest expense, net....................... 504 985 458 484
------- ------- ------- -------
Loss before income taxes.......... (2,771) (4,702) (2,206) (1,173)
Income taxes - withholdings on foreign
sales..................................... 500 305 66 --
------- ------- ------- -------
Net loss.......................... (3,271) (5,007) (2,272) (1,173)
Accumulated deficit, beginning of period.... -- (3,271) (3,271) (8,278)
------- ------- ------- -------
Accumulated deficit, end of period.......... $(3,271) $ (8,278) $(5,543) $(9,451)
======= ======= ======= =======
</TABLE>

See notes to consolidated financial statements.

F-36
<PAGE> 118

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 15, SIX MONTHS ENDED
(INCEPTION) YEAR ENDED JUNE 30,
TO DECEMBER 31, DECEMBER 31, -------------------
1994 1995 1995 1996
--------------- ------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................. $(3,271) $ (5,007) $(2,272) $(1,173)
Adjustments to reconcile net loss to net
cash used in (provided by) operating
activities:
Provisions for bad debts and inventory
obsolescence......................... 1,660 111 111 --
Depreciation and amortization.......... 689 956 508 504
Changes in operating assets and
liabilities:
Trade accounts receivable, net....... 267 407 714 802
Inventory............................ 167 (8) (261) (434)
Prepaid expenses and other assets.... 17 (337) (546) 419
Trade accounts payable............... 67 827 (101) 249
Accrued liabilities.................. 294 (52) (144) 172
Deferred revenue..................... (632) 369 130 (302)
------- ------- ------- -------
Net cash (used in) provided by
operating activities............ (742) (2,734) (1,861) 237
------- ------- ------- -------
Cash flows from investing
activities -- purchase of equipment and
leasehold improvements.................... (405) (1,157) (507) (570)
------- ------- ------- -------
Cash flows from financing activities:
Proceeds from long-term debt.............. 500 100 100 --
Principal payments on long-term debt...... (350) (1,286) (750) (542)
Principal payments on capital lease
obligations............................ (256) (99) (153) --
Proceeds from note payable to venturer.... -- 2,000 2,000 --
Capital contribution...................... -- 2,575 300 1,800
------- ------- ------- -------
Net cash (used in) provided by
financing activities............ (106) 3,290 1,497 1,258
------- ------- ------- -------
Effect of exchange rate changes on cash..... 60 311 637 (999)
------- ------- ------- -------
Decrease in cash.................. (1,193) (290) (234) (74)
Cash, beginning of period................... 2,086 893 893 603
------- ------- ------- -------
Cash, end of period......................... $ 893 $ 603 $ 659 $ 529
======= ======= ======= =======
Supplemental disclosure of cash flow
information:
Cash paid for interest.................... $ 451 $ 757 $ 470 $ 295
Cash paid for income taxes................ 487 127 -- 151
</TABLE>

See accompanying notes to consolidated financial statements.

F-37
<PAGE> 119

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND 1996 IS UNAUDITED)

(1) ORGANIZATION

On April 15, 1994, Ticketmaster Cinema Group Ltd. (TCG), a wholly owned
subsidiary of Ticketmaster Corporation (Ticketmaster), completed the formation
of Pacer/CATS/CCS -- A Wembley Ticketmaster Joint Venture (the Venture) with
WIL, Inc. (WIL), a wholly owned subsidiary of Wembley plc (Wembley). TCG, which
is the managing partner, and WIL each own a 50% undivided interest in the
Venture. The Venture acquired certain assets and assumed certain liabilities of
three companies previously owned by Wembley: Pacer Cats Corporation (Pacer
Cats), Computerized Automatic Ticket Sales Systems Limited (CATS) and stock of
CCS Computel Computer System GmbH (CCS). The formation of the Venture was
accounted for based upon the historical cost of the assets acquired and the
liabilities assumed by the Venture from the Wembley entities. TCG acquired a 50%
ownership interest in the Venture in exchange for a direct payment to Wembley of
$16 million. TCG did not make a capital contribution to the Venture at
inception. During 1995, CCS/CATS Pte, Ltd. (CATS -- Singapore) was formed as a
wholly owned subsidiary of the Venture.

The Venture engages in the design, sale and servicing of hardware and
software for the operation of computerized ticketing and concession systems for
motion picture theaters, stadiums, arenas, zoos and theme parks. The Venture is
based in Denver, Colorado, with offices in Los Angeles, Germany, Great Britain,
France, Singapore, and Australia.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Venture
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared
assuming the Venture will continue as a going concern. As shown in the
accompanying consolidated financial statements, the Venture incurred net losses
of $3.3 million and $5 million for the period from April 15, 1994 (inception) to
December 31, 1994 and the year ended December 31, 1995, respectively, and has a
net capital deficiency as of December 31, 1995. These factors raise substantial
doubt about the Venture's ability to continue as a going concern. The
accompanying consolidated financial statements do not include any adjustments
relating to the outcome of this uncertainty. Management's plans to finance its
business during the next twelve months include obtaining additional equity or
debt financing from the Venturers or third parties and attaining profitable
operations.

Use of 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
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Unaudited Interim Financial Statements

The accompanying consolidated financial statements of the Venture as of
June 30, 1996 and for the six months ended June 30, 1995 and 1996 are unaudited,
but in the opinion of management reflect all adjustments

F-38
<PAGE> 120

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND 1996 IS UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
necessary (consisting of those of a normal recurring nature) for a fair
presentation of such consolidated financial statements in accordance with
generally accepted accounting principles. The results of operations for interim
periods are not necessarily indicative of results for a full year.

Inventory

Inventory, consisting of systems hardware, maintenance parts and supplies,
is primarily stated at the lower of cost (first-in, first-out) or market.

Equipment and Leasehold Improvements

Equipment, consisting primarily of computer equipment, is stated at cost.
Equipment under capital leases is recorded at the present value of the minimum
lease payments at the inception of the lease. Depreciation is calculated using
the straight-line method over estimated useful lives of the related assets,
ranging from three to five years. Leasehold improvements and equipment owned
under capitalized leases are amortized using the straight-line method over the
lesser of their estimated useful life or the lease term.

Cost in Excess of Net Assets Acquired

Cost in excess of net assets acquired, which relates to CCS, is amortized
using the straight-line method over 15 years. Management periodically evaluates
the recoverability of the asset utilizing forecasted undiscounted future
operating cash flows. The amount of impairment, if any, is measured based on
projected discounted future operating cash flows using a discount rate
reflecting the Venture's average cost of funds.

Translation of Foreign Currencies

Assets and liabilities of the Venture's foreign operations are translated
into U.S. dollars at the current rate of exchange on the balance sheet date.
Revenue and expenses are translated at the average exchange rate for the period.
Unrealized foreign currency translation adjustments do not affect the results of
operations and are reflected as a component of venturers' deficit. Gains and
losses resulting from foreign currency transactions are included in indirect
costs as incurred.

Revenue and Costs

Revenue and the related costs of installation and product sales are
recognized upon delivery to the customer. Service revenue is recognized ratably
over the contract term.

Income Taxes

Income tax expense represents taxes withheld on foreign sales. The
Venture's net loss is reported in the individual tax returns of the venturers.

F-39
<PAGE> 121

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND 1996 IS UNAUDITED)

(3) EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1994 1995 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer and other equipment................ $ 4,069 $ 5,130 $ 5,458
Furniture and fixtures...................... 919 824 1,102
Vehicles.................................... 136 87 88
Leasehold improvements...................... 60 123 165
------- ------- -------
5,184 6,164 6,813
Less accumulated depreciation and
amortization.............................. (3,828) (4,323) (4,764)
------- ------- -------
$ 1,356 $ 1,841 $ 2,049
======= ======= =======
</TABLE>

(4) LONG-TERM DEBT

At the date of formation on April 15, 1994 the Venture entered into a
credit agreement (Original Agreement) with U.S. Bank of Washington (U.S. Bank),
whereby U.S. Bank extended to the Venture certain credit facilities. On July 31,
1996 the Original Agreement was amended and restated whereby U.S. Bank extended
a loan of $7.5 million (Amended Agreement) which was used to repay borrowings
outstanding under the Original Agreement. Borrowings under the Amended Agreement
bear interest at the prime rate plus .25% or at the Venture's option, beginning
July 1, 1998, the IBOR Rate plus 225 basis points per annum. Monthly interest
payments only are due for the period August 1, 1996 through June 30, 1997.
Principal and interest payments are due in monthly installments, beginning July
31, 1997, in an amount equal to the lesser of $107,166 or excess cash flow as
defined in the Amended Agreement. Borrowings are secured by substantially all
assets of the Venture. Standby and commercial letters of credit will be issued
by U.S. Bank in an aggregate amount not to exceed $200,000 at any one time.
These letters of credit will be available until the principal balance is equal
to or less than $6 million. Upon reducing the principal balance to less than or
equal to $6 million, U.S. Bank will provide funds to the Venture from time to
time on a revolving credit basis up to a maximum of $6 million.

Maturities under the Amended Agreement as of December 31, 1995 are as
follows (in thousands):

<TABLE>
<S> <C>
1996................................................ $ 643
1997................................................ 643
1998................................................ 1,286
1999................................................ 1,286
2000 and thereafter................................. 4,107
------
7,965
Less current portion.............................. 643
------
$7,322
======
</TABLE>

The Amended Agreement includes limitations on dividends and distributions,
transactions with affiliates, indebtedness, investments, and requires the
maintenance of certain financial ratios, and levels of working capital and
tangible net worth, including a restriction on the Venturers' ability to
distribute as dividends, cash to its parent.

F-40
<PAGE> 122

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND 1996 IS UNAUDITED)

The classification of long-term debt and current portion of long-term debt
in the accompanying consolidated balance sheet as of December 31, 1995 reflects
the terms and maturities of the Amended Agreement.

(5) SUBORDINATED NOTE PAYABLE TO VENTURER

As of December 31, 1995, the Venture had issued a note payable in the
amount of $2 million to TCG to provide working capital. The note bears interest
at the prime rate plus .25%, (8.75% at December 31, 1995) and is due on demand,
but is subordinated to the payment of the bank debt in Note 4. In addition, the
Venturer has indicated that they do not intend to request repayment in 1996.
Accordingly, the note payable to Venturer has been reclassified as long-term in
the accompanying consolidated financial statements.

(6) OPERATING INFORMATION BY GEOGRAPHIC REGION

The Venture's operations are summarized by geographic region as follows:
(in thousands):

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 15,
(INCEPTION) SIX MONTHS ENDED
THROUGH YEAR ENDED JUNE 30,
DECEMBER 31, DECEMBER 31, -------------------
1994 1995 1995 1996
------------------ ------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue from unaffiliated
customers:
United States................... $ 9,188 $ 10,411 $ 5,131 $ 8,019
Europe.......................... 8,946 10,025 4,681 4,416
Other........................... 1,220 2,549 943 529
------- ------- ------- -------
$ 19,354 $ 22,985 $10,755 $12,964
======= ======= ======= =======
Net loss:
United States................... $ (3,868) $ (5,024) $(2,041) $ (797)
Europe.......................... 743 (146) (244) (191)
Other........................... (146) 163 13 (185)
------- ------- ------- -------
$ (3,271) $ (5,007) $(2,272) $(1,173)
======= ======= ======= =======
Identifiable assets (excluding
goodwill):
United States................... $ 5,915 $ 5,155 $ 5,098 $ 5,655
Europe.......................... 3,524 5,696 5,213 4,427
Other........................... 2,148 937 1,009 1,258
------- ------- ------- -------
$ 11,587 $ 11,788 $11,320 $11,340
======= ======= ======= =======
</TABLE>

(7) RELATED-PARTY TRANSACTIONS

The Joint Venture agreement provides for a management fee to be paid to
TCG. Management fees payable to TCG totaled $71,000, $100,000 and $50,000 for
the period from April 15, 1994 (inception) to December 31, 1994, for the year
ended December 31, 1995 and for the six months ended June 30, 1996,
respectively.

F-41
<PAGE> 123

PACER/CATS/CCS -- A WEMBLEY
TICKETMASTER JOINT VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND 1996 IS UNAUDITED)

(8) EMPLOYEE BENEFIT PLAN

All eligible employees of the Venture in the United States may participate
in a 401(k) Plan sponsored by Ticketmaster Corporation. The Plan includes
employer matching of 25% of the employee's contribution up to a maximum of 6% of
the employee's compensation. The Venture's contributions for the period from
April 15, 1994 (inception) through December 31, 1994 and for the year ended
December 31, 1995, totaled $10,000 and $21,000, respectively.

(9) COMMITMENTS AND CONTINGENCIES

Leases

The Joint Venture leases office space and equipment under various
noncancelable operating leases. Future minimum lease payments under such leases
(with lease terms in excess of one year) as of December 31, 1995 were as follows
(in thousands):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
------------------------
<S> <C>
1996.............................................. $ 626
1997.............................................. 550
1998.............................................. 472
1999.............................................. 385
2000 and thereafter............................... 542
------
Total minimum lease payments.............. $2,575
======
</TABLE>

Rent expense for operating leases for the period from April 15, 1994
(inception) through December 31, 1994, for the year ended December 31, 1995, and
for the six months ended June 30, 1995 and 1996, was approximately $402,000,
$624,000, $215,000, and $260,000, respectively.

Additional rental payments may be required for the Venture's pro rata share
of certain operating expenses.

Litigation

In January 1996, the Venture was named as a defendant in a civil action by
a leasing company alleging that the Venture defaulted on certain equipment
rental agreements. The Plaintiffs seek back rental payments and other damages in
excess of $900,000. The plaintiffs also assert claims against one of the
Venturers as guarantor of the Venture's obligations. The Venturer has asserted a
cross claim against the Venture seeking indemnification.

Although management of the Venture believes that this proceeding will not
will have a material effect on the financial position, results of operations or
cash flows of the Venture, no assurance can be given as to the ultimate
resolution of this matter. The accompanying consolidated financial statements do
not include any adjustments relating to the outcome of these uncertainties.

(10) SUBSEQUENT EVENTS (UNAUDITED)

On July 29, 1996, a subsidiary of Ticketmaster acquired WIL's 50% equity
interest.

F-42
<PAGE> 124

INDEPENDENT AUDITORS' REPORT

The Venturers:
Ticketmaster Indiana (A Joint Venture)

We have audited the accompanying balance sheets of Ticketmaster Indiana (A
Joint Venture) as of January 31, 1995 and 1996 and the related statements of
income and venturers' capital, and cash flows for each of the years in the two
years ended January 31, 1996. These financial statements are the responsibility
of Ticketmaster Indiana's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ticketmaster Indiana (A
Joint Venture) as of January 31, 1995 and 1996, and the results of its
operations and its cash flows for each of the years in the two years ended
January 31, 1996 in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Los Angeles, California
March 8, 1996

F-43
<PAGE> 125

TICKETMASTER INDIANA
(A JOINT VENTURE)

BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
JANUARY 31,
----------------- JULY 31,
1995 1996 1996
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................... $4,937 $2,240 $ 2,486
Accounts receivable, ticket sales........................... 1,761 1,081 732
Accounts receivable, trade.................................. 89 65 49
Amount due from affiliates.................................. -- 317 347
Prepaid expenses............................................ 184 258 404
------- ------- ------
Total current assets................................ 6,971 3,961 4,018
Noncurrent assets:
Equipment and leasehold improvements, net................... 2,089 1,707 1,609
Other assets................................................ 30 31 20
------- ------- ------
$9,090 $5,699 $ 5,647
======= ======= ======
<CAPTION>
LIABILITIES AND VENTURERS' CAPITAL

<S> <C> <C> <C>
Current liabilities:
Accounts payable, trade..................................... $ 152 $ 241 $ 294
Accounts payable, clients................................... 4,995 2,532 2,349
Accrued expenses............................................ 825 701 1,047
Deferred income and other................................... 572 232 196
Amounts due to affiliates................................... 586 -- --
------- ------- ------
Total current liabilities........................... 7,130 3,706 3,886
Venturers' capital............................................ 1,960 1,993 1,761
------- ------- ------
$9,090 $5,699 $ 5,647
======= ======= ======
</TABLE>

See accompanying notes to financial statements.

F-44
<PAGE> 126

TICKETMASTER INDIANA
(A JOINT VENTURE)

STATEMENTS OF INCOME AND VENTURERS' CAPITAL
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
JANUARY 31, JULY 31,
------------------- -------------------
1995 1996 1995 1996
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue............................................ $19,070 $20,759 $10,909 $11,036
Operating costs, expenses and other items:
Operating costs.................................. 9,763 9,957 5,814 6,257
Selling, general and administrative.............. 3,556 3,783 1,202 1,456
Depreciation and amortization.................... 1,065 786 395 405
------- ------- ------- -------
Net income.................................... 4,686 6,233 3,498 2,918
Venturers' capital at beginning of period.......... 1,924 1,960 1,960 1,993
Distribution to venturers.......................... (4,650) (6,200) (3,650) (3,150)
------- ------- ------- -------
Venturers' capital at end of period................ $ 1,960 $ 1,993 $ 1,808 $ 1,761
======= ======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-45
<PAGE> 127

TICKETMASTER INDIANA
(A JOINT VENTURE)

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
JANUARY 31, JULY 31,
-------------------- --------------------
1995 1996 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net income..................................... $ 4,686 $ 6,233 $ 3,498 $ 2,918
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization............... 1,065 786 395 405
Changes in operating assets and liabilities:
Accounts receivable....................... 421 704 739 365
Due from affiliates....................... -- (317) (284) (30)
Prepaid expenses.......................... (80) (74) (82) (146)
Other assets.............................. 303 (10) -- 11
Accounts payable, trade................... 67 89 15 53
Accounts payable, clients................. 1,793 (2,463) (1,542) (183)
Accrued expenses.......................... 445 (124) 203 346
Deferred income and rent.................. (47) (340) (30) (36)
Due to affiliates......................... 106 (586) (586) --
------- ------- ------- -------
Net cash provided by operating activities...... 8,759 3,898 2,326 3,703
Cash used in investing activities-purchases of
equipment and leasehold improvements........... (710) (395) (196) (307)
Cash flows used in financing
activities-distributions to venturers.......... (4,650) (6,200) (3,650) (3,150)
------- ------- ------- -------
Net (decrease) increase in cash and
cash equivalents..................... 3,399 (2,697) (1,520) 246
Cash and cash equivalents, beginning of period... 1,538 4,937 4,937 2,240
------- ------- ------- -------
Cash and cash equivalents, end of period......... $ 4,937 $ 2,240 $ 3,417 $ 2,486
======= ======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-46
<PAGE> 128

TICKETMASTER INDIANA
(A JOINT VENTURE)

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JULY 31, 1996 AND FOR THE
SIX MONTHS ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Ticketmaster Indiana (Joint Venture) is a joint venture and is 50% owned by
Ticketmaster Corporation (Ticketmaster) and Evansim Entertainment, LLC,
respectively. The Joint Venture was formed on January 1, 1984 for the purpose of
providing computerized ticketing services for concert, sporting, and other
events in the states of Indiana, Ohio, Kentucky and West Virginia.

Unaudited Interim Financial Statements

The accompanying financial statements of the Joint Venture as of July 31,
1996 and for the six months ended July 31, 1995 and 1996 are unaudited, but in
the opinion of management reflect all adjustments necessary (consisting of those
of a normal recurring nature) for a fair presentation of such financial
statements in accordance with generally accepted accounting principles. The
results of operations for interim periods are not necessarily indicative of
results for a full year.

Revenue Recognition

Revenue from ticket operations is recognized as tickets are sold.

Cash and Cash Equivalents

The Joint Venture classifies all highly liquid debt instruments purchased
with an original maturity of three months or less as cash equivalents.

Accounts Receivable, Ticket Sales

Accounts receivable, ticket sales are principally from ticketing outlets
and represent the face value of the tickets sold plus convenience charges,
generally net of outlet commissions. The Joint Venture performs credit
evaluations of new ticket outlets, which are reviewed and updated periodically,
requiring collateral as circumstances warrant.

Equipment and Leasehold Improvements

Concentration of Credit Risk

The Joint Venture places its cash equivalents principally in money market
accounts with its banks. The money market investments are diverse and generally
short-term and, therefore, bear minimal risk. The Joint Venture has not
experienced any losses on its money market investments.

F-47
<PAGE> 129

TICKETMASTER INDIANA
(A JOINT VENTURE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JULY 31, 1996 AND FOR THE
SIX MONTHS ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounts Payable, Clients

Accounts payable, clients represents contractual amounts due to clients for
tickets sold by the Joint Venture on behalf of the organizations that sponsor
events.

Deferred Income and Other

Deferred income primarily consists of subscription revenue collected in
advance of the subscription period. Deferred income is recorded as earned, pro
rata on a monthly basis, over the life of subscriptions. Costs in connection
with the procurement of subscriptions are charged to expense as incurred.

Income Taxes

No provision has been made for Federal and state income taxes, since these
taxes are the responsibility of the joint venturers.

Financial Instruments

The estimated fair values of cash, accounts receivable, due from venturers,
accounts payable and accrued expenses approximate their carrying value because
of the short term maturity of these instruments or the stated interest rates are
indicative of market interest rates.

Use of Estimates

(2) EQUIPMENT & LEASEHOLD IMPROVEMENTS, NET

Equipment and leasehold improvements consisted of the following (in
thousands):

<TABLE>
<CAPTION>
JANUARY 31,
------------------- JULY 31,
1995 1996 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment.......................... $ 4,005 $ 4,332 $ 4,228
Telephone equipment and furnishings......... 319 330 334
Transportation equipment.................... 157 204 164
Leasehold improvements...................... 55 55 67
------- ------- -------
4,536 4,921 4,793
Less accumulated depreciation &
amortization.............................. (2,447) (3,214) (3,184)
------- ------- -------
$ 2,089 $ 1,707 $ 1,609
======= ======= =======
</TABLE>

F-48
<PAGE> 130

TICKETMASTER INDIANA
(A JOINT VENTURE)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JULY 31, 1996 AND FOR THE
SIX MONTHS ENDED JULY 31, 1995 AND 1996 IS UNAUDITED)

(3) COMMITMENTS AND CONTINGENCIES

The Joint Venture leases office space and equipment under various operating
leases. Future minimum lease payments are as follows as of January 31, 1996 (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDING
JANUARY 31 AMOUNT
----------- ------
<S> <C>
1997.............................................. $ 387
1998.............................................. 381
1999.............................................. 379
2000.............................................. 376
2001.............................................. 166
Thereafter.......................................... 57
------
.................................................... $1,746
======
</TABLE>

Rental expense charged to operations for operating leases was approximately
$378,000, and $388,000 for the years ended January 31, 1995 and 1996,
respectively, and $196,000 and $193,000 for the six months ended July 31, 1995
and 1996, respectively.

(4) 401(k) PLAN

The Joint Venture has a 401(k) plan covering all eligible employees, which
contains an employer matching feature of 25% up to a maximum of 6% of the
employee's compensation. The Joint Venture's contribution for the plan years
ended December 31, 1994 and 1995 was approximately $11,000 and $14,000,
respectively.

(5) RELATED PARTY TRANSACTIONS

Charges from the venturers and affiliates under various agreements were as
follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED
JANUARY 31, JULY 31,
------------- -------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Management Fees............................... $110 $115 $ 60 $ 60
Reimbursements for other services............. 395 435 200 300
</TABLE>

Purchases of equipment from the venturers was approximately $440,000, and
$200,000 for the years ended January 31, 1995 and 1996, respectively.

F-49
<PAGE> 131

INSIDE BACK COVER OF PROSPECTUS:

The inside back cover contains a multicolor graphic layout containing,
centered at the top of the layout, the Ticketmaster logo. Centered beneath the
Ticketmaster logo, in order from top to bottom, are the following operating
logos which are used by five of the Company's divisions, subsidiaries or
promotional events: Ticketmaster Online, Live! magazine, Entertainment to Go,
Ticketmaster Travel and Ticketmaster Music Showcase.

<PAGE> 132

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

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 OR BY ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 3
Summary Financial Data................. 7
Risk Factors........................... 10
Use of Proceeds........................ 14
Dividend Policy........................ 15
Dilution............................... 16
Capitalization......................... 17
Selected Financial Data................ 18
Pro Forma Financial Information........ 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 27
Business............................... 42
Management............................. 58
Certain Transactions................... 70
Principal Shareholders................. 72
Description of Certain Indebtedness.... 73
Description of Capital Stock........... 74
Shares Eligible for Future Sale........ 76
Underwriting........................... 77
Legal Matters.......................... 78
Experts................................ 78
Available Information.................. 79
Index to Financial Statements.......... F-1
</TABLE>

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

7,250,000 SHARES

[TICKETMASTER LOGO]
TICKETMASTER GROUP, INC.

COMMON STOCK
---------------------

PROSPECTUS
---------------------
ALLEN & COMPANY
INCORPORATED

LAZARD FRERES & CO. LLC

SMITH BARNEY INC.

December , 1996

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 133

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered, other than underwriting discounts. All of the amounts shown are
estimated except the Securities and Exchange Commission registration fee, the
National Market System of the NASD listing fee and the NASD filing fee.

<TABLE>
<S> <C>
SEC registration fee.......................................... $ 42,704.41
The National Market System of the NASD listing fee............ 57,560.41
NASD filing fee............................................... 12,000.00
Blue Sky filing fees and expenses............................. 25,000.00
Printing and engraving expenses............................... 260,000.00
Legal fees and expenses....................................... 350,000.00
Accounting fees and expenses.................................. 300,000.00
IPO liability coverage........................................ 200,000.00
Transfer agent and registrar fees............................. 10,000.00
Miscellaneous (including marketing costs and sales
presentations).............................................. 337,735.18
----------
Total......................................................... $1,595,000.00
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 8.75 of the IBCA empowers a corporation, subject to certain
limitations, to indemnify its directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any suit or proceeding to which
they are a party so long as they acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to a criminal action or proceeding, so long as they had no
reasonable cause to believe their conduct to have been unlawful. The
Registrant's Articles provide that the Registrant shall indemnify its directors
and officers to the fullest extent permitted by Section 8.75 of the IBCA.

Section 2.10 of the IBCA permits an Illinois corporation to include in its
articles of incorporation a provision eliminating or limiting a director's
personal liability to a corporation or its shareholders for monetary damages for
breaches of fiduciary duty. The enabling statute provides, however, that
liability for breaches of the duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or knowing violation of the law,
improper distributions or the receipt of improper personal benefits cannot be
eliminated or limited in this manner. The Registrant's Articles include a
provision which eliminates, to the fullest extent permitted, director liability
for monetary damages for breaches of fiduciary duty.

The Registrant has agreed to indemnify each director and officer pursuant
to an Indemnity Agreement from and against any and all expenses, losses, damages
and liabilities incurred by such director or officer for or as a result of
actions taken or not taken while such director or officer was acting in his or
her capacity as a director, officer, employee or agent of the Registrant.

The Registrant has purchased liability coverage for its officers and
directors insuring such officers and directors against losses arising from any
wrongful act in his or her capacity as an officer or director.

The form of Underwriting Agreement filed as Exhibit 1.1 provides for the
indemnification of the Registrant, its controlling persons, its directors and
its officers by the Underwriters against certain liabilities, including
liabilities under the securities laws.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The shares of Common Stock of the Registrant issued in the transactions
described below reflect a 1-for-3 reverse stock split to take place prior to the
effective date of the Offering contemplated by this registration statement.

II-1
<PAGE> 134

On December 15, 1993, the Registrant issued 12,233,014 shares of Common
Stock to Paul G. Allen in consideration of the payment of $173 million. On
December 15, 1993, the Registrant also acquired all shares of capital stock of
the Registrant's subsidiary, TM Movie Tix, Inc., held by Fredric D. Rosen and
the Rosen Family Foundation for an aggregate cash purchase price of $6.3 million
and 306,208 shares of Common Stock. See "Principal Shareholders." During 1993
and 1994, the Registrant granted to five employees of the Registrant options to
purchase an aggregate of 1,596,451 shares of Common Stock at an exercise price
per share of $14.14. On June 7, 1996, the Registrant issued an Exchangeable
Promissory Note in the principal amount of $5 million to Warner Music
International Services Limited, which note is exchangeable in certain
circumstances into shares of Common Stock having a value of $5 million based on
the initial public offering price of the Common Stock in the Offering. On August
21, 1996, the Registrant granted to each director who was not an employee or the
beneficial owner of 5% or more of the outstanding Common Stock options to
purchase 25,000 shares of Common Stock at an exercise price per share of $14.14
or, if the Company completes the Offering prior to February 21, 1997, the
initial public offering price. On October 22, 1996, the Registrant granted to
employees of the Registrant options to purchase 2,668,000 shares of Common Stock
at an exercise price equal to the initial public offering price of a share of
Common Stock in the Offering.

No underwriters were involved in the transactions described above. The
Registrant believes that the issuance of the aforesaid shares of Common Stock
and the grant of the aforesaid options were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof and the issuance of the
aforesaid note was exempt from registration under the Securities Act pursuant to
Regulation S promulgated thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------------
<C> <S>
1.1 * Form of Underwriting Agreement
3.1 * Amended and Restated Articles of Incorporation of the Company
3.2 * Amended and Restated Bylaws of the Company
4.1 * Specimen of Stock Certificate for Common Stock
4.2 * Exchangeable Promissory Note dated June 7, 1996 from the Company to Warner
Music International Services Limited
5.1 * Opinion of Neal, Gerber & Eisenberg
10.1 * Credit Agreement dated as of November 18, 1994 among the Company, its
lenders and Wells Fargo Bank, National Association, as agent (the "Credit
Agreement")
10.2 * First Amendment to Credit Agreement dated as of January 6, 1995
10.3 * Second Amendment to Credit Agreement dated as of January 30, 1995
10.4 * Third Amendment and Limited Waiver to Credit Agreement dated as of April 7,
1995
10.5 * Fourth Amendment and Limited Waiver to Credit Agreement dated as of August
28, 1995
10.6 * Waiver to Credit Agreement dated as of April 30, 1996
10.7 * Fifth Amendment to Credit Agreement dated as of June 6, 1996
10.8 * Third Party Pledge Agreement dated as of November 18, 1994, as amended
effective August 28, 1995, between Paul G. Allen and Wells Fargo Bank,
National Association
10.9 * First Amended and Restated Credit Agreement dated as of July 31, 1996
between Pacer/CATS/CCS and U.S. Bank of Washington, National Association
10.10* Employment Agreement dated as of December 15, 1993 between the Company and
Fredric D. Rosen
10.11* Employment Agreement dated as of February 1, 1994 between the Company and
Marc Bension
</TABLE>

II-2
<PAGE> 135

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------------
<C> <S>
10.12* Amendment to Employment Agreement dated as of January 31, 1996 between the
Company and Marc Bension
10.13* Employment Agreement dated as of February 1, 1994 between the Company and
Ned S. Goldstein
10.14* Employment Agreement dated as of February 1, 1994 between the Company and
Peter B. Knepper
10.15* Employment Agreement dated as of February 1, 1994 between the Company and
Ann Mooney
10.16* Employment Agreement dated as of November 1, 1995 between the Company and
Stuart W. DePina
10.17* Employment Agreement dated as of March 1, 1995 between the Company and Judy
A. Black
10.18* Employment Agreement dated as of December 1994 between the Company and Alan
Citron
10.19* Employment Agreement dated as of May 31, 1995 between the Company and
Claire Rothman
10.20* Employment Agreement dated as of February 1995 between the Company and
Carole Ference
10.21* Employment Agreement dated as of January 3, 1995 between the Company and
Annie Gilbar
10.22* Stock Option Agreement, dated December 15, 1993 between the Company and
Fredric D. Rosen
10.23* Ticketmaster 401(k) Savings Plan and Trust Agreement, as Amended and
Restated Effective October 1, 1994
10.24* Ticketmaster Stock Plan (as amended and restated)
10.25* Covenant Not to Compete, dated November 19, 1993 between the Company and
Fredric D. Rosen
10.26* Covenant Not to Compete, dated November 19, 1993 between the Company and
Robert A. Leonard
10.27* Registration Rights Agreement dated as of December 15, 1993 between the
Company and Paul Allen
10.28* Registration and Exchange Rights Agreement dated as of December 15, 1993
among the Company, HG, Inc., Wells Fargo & Company, Rockwood & Co., Richard
L. Schulze, Harold S. Handelsman and Fredric D. Rosen
10.29* Covenant Not to Compete dated December 15, 1993 among HG, Inc., the Company
and Paul Allen
10.30* Covenant Not to Compete dated December 15, 1993 among Fredric D. Rosen, the
Company and Paul Allen
10.31* Covenant Not to Compete dated December 15, 1993 among Robert A. Leonard,
the Company and Paul Allen
10.32* Covenant Not to Compete dated December 15, 1993 between Fredric D. Rosen
and TM Movie Tix, Inc.
10.33* Shareholders' Agreement dated as of December 15, 1993 among the
shareholders of the Company
10.34* Form of Indemnity Agreement between the Company and each of its officers
and directors
</TABLE>

II-3
<PAGE> 136

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------------
<C> <S>
10.35* Development and Services Agreement dated June 28, 1996 by and between
Ticketmaster Multimedia Holdings, Inc. and Starwave Corporation
10.36* Sixth Amendment to Credit Agreement dated as of September 27, 1996
10.37* Seventh Amendment and Limited Waiver to Credit Agreement and Release of
Third Party Pledge Agreement dated as of October 24, 1996
21.1 * Subsidiaries of the Registrant
23.1 ** Consent of KPMG Peat Marwick LLP
23.2 * Consent of Grant Thornton LLP
23.3 ** Consent of Neal, Gerber & Eisenberg
24.1 ** Powers of Attorney (included on page II-5)
27.1 * Financial Data Schedule
99.1 * Release, dated July 5, 1995, of the Antitrust Division of the United States
Department of Justice
</TABLE>

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

* Filed as an exhibit (with the same exhibit number) to Registration Statement
No. 333-12413.

** Filed herewith.

(b) FINANCIAL STATEMENT SCHEDULE:

Valuation and Qualifying Accounts, Pacer/CATS/CCS

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions (see response to Item 14 above),
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in said Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each posteffective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 137

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles and the State
of California on December 11, 1996.

TICKETMASTER GROUP, INC.,
an Illinois corporation

By: /s/ FREDRIC D. ROSEN
-----------------------------------
Fredric D. Rosen
President and Chief Executive
Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Ticketmaster Group, Inc.,
hereby severally constitute Fredric D. Rosen, Ned S. Goldstein and Peter B.
Knepper, and each of them singly, our true and lawful attorneys with full power
to them, and each of them singly, to sign for us and in our names in the
capacities indicated below, any and all amendments, including post-effective
amendments, to this registration statement, and generally to do all such things
in our name and behalf in such capacities to enable Ticketmaster Group, Inc. to
comply with the applicable provisions of the Securities Act of 1933, as amended,
and all requirements of the Securities and Exchange Commission, and we hereby
ratify and confirm our signatures as they may be signed by our said attorneys,
or any of them, to any and all such amendments.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on December 11, 1996 by the following
persons in the capacities indicated.

<TABLE>
<S> <C>
/s/ PAUL G. ALLEN Chairman of the Board
- -----------------------------------------------
Paul G. Allen

/s/ FREDRIC D. ROSEN President, Chief Executive Officer and
- ----------------------------------------------- Director
Fredric D. Rosen (Principal Executive Officer)

/s/ PETER B. KNEPPER Senior Vice President and Chief Financial
- ----------------------------------------------- Officer
Peter B. Knepper (Principal Financial and Accounting Officer)

/s/ CHARLES EVANS GERBER Director
- -----------------------------------------------
Charles Evans Gerber

Director
- -----------------------------------------------
David E. Liddle

/s/ JOHN A. PRITZKER Director
- -----------------------------------------------
John A. Pritzker

/s/ WILLIAM D. SAVOY Director
- -----------------------------------------------
William D. Savoy

Director
- -----------------------------------------------
Terence M. Strom
</TABLE>

II-5
<PAGE> 138

SCHEDULE II

PACER/CATS/CCS - A WEMBLEY
TICKETMASTER JOINT VENTURE

VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
COLUMN C
------------------------------
ADDITIONS COLUMN E
COLUMN B ------------------------------ --------
---------- (1) (2) COLUMN D BALANCE
COLUMN A BALANCE AT CHARGED TO CHARGED TO ---------- AT END
- -------------------------------------- BEGINNING COSTS OTHER ACCOUNTS DEDUCTIONS OF
DESCRIPTION OF PERIOD AND EXPENSES DESCRIBE DESCRIBE PERIOD
- -------------------------------------- ---------- ------------ -------------- ---------- --------
<S> <C> <C> <C> <C> <C>
Allowance deducted from assets to
which it applies
Allowance for doubtful accounts:
Year ended December 31, 1995..... $1,479 $ 343 $0 $356(A) $1,266
Period ended December 31, 1994... 492 1,237 0 250(A) 1,479
</TABLE>

- ---------------
Note A -- Uncollected receivables written off, net of recoveries.

S-1
<PAGE> 139

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ --------------------------------------------------------------------------------
<C> <S> <C>
1.1 * Form of Underwriting Agreement......................................
3.1 * Amended and Restated Articles of Incorporation of the Company.......
3.2 * Amended and Restated Bylaws of the Company..........................
4.1 * Specimen of Stock Certificate for Common Stock......................
4.2 * Exchangeable Promissory Note dated June 7, 1996 from the Company to
Warner Music International Services Limited.........................
5.1 * Opinion of Neal, Gerber & Eisenberg.................................
10.1 * Credit Agreement dated as of November 18, 1994 among the Company,
its lenders and Wells Fargo Bank, National Association, as agent
(the "Credit Agreement")............................................
10.2 * First Amendment to Credit Agreement dated as of January 6, 1995.....
10.3 * Second Amendment to Credit Agreement dated as of January 30, 1995...
10.4 * Third Amendment and Limited Waiver to Credit Agreement dated as of
April 7, 1995.......................................................
10.5 * Fourth Amendment and Limited Waiver to Credit Agreement dated as of
August 28, 1995.....................................................
10.6 * Waiver to Credit Agreement dated as of April 30, 1996...............
10.7 * Fifth Amendment to Credit Agreement dated as of June 6, 1996........
10.8 * Third Party Pledge Agreement dated as of November 18, 1994, as
amended effective August 28, 1995, between Paul G. Allen and Wells
Fargo Bank, National Association....................................
10.9 * First Amended and Restated Credit Agreement dated as of July 31,
1996 between Pacer/CATS/CCS and U.S. Bank of Washington, National
Association.........................................................
10.10* Employment Agreement dated as of December 15, 1993 between the
Company and Fredric D. Rosen........................................
10.11* Employment Agreement dated as of February 1, 1994 between the
Company and Marc Bension............................................
10.12* Amendment to Employment Agreement dated as of January 31, 1996
between the Company and Marc Bension................................
10.13* Employment Agreement dated as of February 1, 1994 between the
Company and Ned S. Goldstein........................................
10.14* Employment Agreement dated as of February 1, 1994 between the
Company and Peter B. Knepper........................................
10.15* Employment Agreement dated as of February 1, 1994 between the
Company and Ann Mooney..............................................
10.16* Employment Agreement dated as of November 1, 1995 between the
Company and Stuart W. DePina........................................
10.17* Employment Agreement dated as of March 1, 1995 between the Company
and Judy A. Black...................................................
10.18* Employment Agreement dated as of December 1994 between the Company
and Alan Citron.....................................................
10.19* Employment Agreement dated as of May 31, 1995 between the Company
and Claire Rothman..................................................
</TABLE>
<PAGE> 140

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ --------------------------------------------------------------------------------
<C> <S> <C>
10.20* Employment Agreement dated as of February 1995 between the Company
and Carole Ference..................................................
10.21* Employment Agreement dated as of January 3, 1995 between the Company
and Annie Gilbar....................................................
10.22* Stock Option Agreement, dated December 15, 1993 between the Company
and Fredric D. Rosen................................................
10.23* Ticketmaster 401(k) Savings Plan and Trust Agreement, as Amended and
Restated Effective October 1, 1994..................................
10.24* Ticketmaster Stock Plan (as amended and restated)...................
10.25* Covenant Not to Compete, dated November 19, 1993 between the Company
and Fredric D. Rosen................................................
10.26* Covenant Not to Compete, dated November 19, 1993 between the Company
and Robert A. Leonard...............................................
10.27* Registration Rights Agreement dated as of December 15, 1993 between
the Company and Paul Allen..........................................
10.28* Registration and Exchange Rights Agreement dated as of December 15,
1993 among the Company, HG, Inc., Wells Fargo & Company, Rockwood &
Co., Richard L. Schulze, Harold S. Handelsman and Fredric D.
Rosen...............................................................
10.29* Covenant Not to Compete dated December 15, 1993 among HG, Inc., the
Company and Paul Allen..............................................
10.30* Covenant Not to Compete dated December 15, 1993 among Fredric D.
Rosen, the Company and Paul Allen...................................
10.31* Covenant Not to Compete dated December 15, 1993 among Robert A.
Leonard, the Company and Paul Allen.................................
10.32* Covenant Not to Compete dated December 15, 1993 between Fredric D.
Rosen and TM Movie Tix, Inc.........................................
10.33* Shareholders' Agreement dated as of December 15, 1993 among the
shareholders of the Company.........................................
10.34* Form of Indemnity Agreement between the Company and each of its
officers and directors..............................................
10.35* Development and Services Agreement dated June 28, 1996 by and
between Ticketmaster Multimedia Holdings, Inc. and Starwave
Corporation.........................................................
10.36* Sixth Amendment to Credit Agreement dated as of September 27, 1996
10.37* Seventh Amendment and Limited Waiver to Credit Agreement and Release
of Third Party Pledge Agreement dated as of October 24, 1996........
21.1 * Subsidiaries of the Registrant......................................
23.1 ** Consent of KPMG Peat Marwick LLP....................................
23.2 * Consent of Grant Thornton LLP.......................................
23.3 ** Consent of Neal, Gerber & Eisenberg.................................
24.1 ** Powers of Attorney (included on page II-5)..........................
27.1 * Financial Data Schedule.............................................
99.1 * Release, dated July 5, 1995, of the Antitrust Division of the United
States Department of Justice........................................
</TABLE>

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* Filed as an exhibit (with the same exhibit number) to Registration Statement
No. 333-12413.

** Filed herewith.

<PAGE> 1

Exhibit 23.1

The Board of Directors -- Ticketmaster Group, Inc.

The Venturers -- Unconsolidated Ticketing Joint Ventures
of Ticketmaster Group, Inc.

The Venturers -- Ticketmaster Indiana (A Joint Venture)

We consent to the use of our reports included herein and to the references to
our firm under the headings, "Summary Financial Data," "Selected Financial
Data," and "Experts" in the prospectus.

With respect to Pacer/CATS/CCS -- a Wembley Ticketmaster Joint Venture, our
responsibility is to also express an opinion on its financial statement schedule
based on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth herein. Also,
our report contains an explanatory paragraph that states that the Joint Venture
has suffered recurring losses from operations and has a net capital deficiency,
which raise substantial doubt about its ability to continue as a going concern.
The financial statements and financial statement schedule do not include any
adjustments that might result from the outcome of that uncertainty.

/s/ KPMG Peat Marwick LLP

Los Angeles, California
December 10, 1996

<PAGE> 1

Exhibit 23.3

We hereby consent to the filing of our opinion as an exhibit to this
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus contained herein.

/s/ Neal, Gerber & Eisenberg