USA NETWORKS INC, POS AM, 1998-05-21

USA NETWORKS INC
POS AM, 1998-05-21
TELEVISION BROADCASTING STATIONS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1998

REGISTRATION NO. 333-53093

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
USA NETWORKS, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 4833 59-2712887
(State of incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
</TABLE>

152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 314-7300
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
---------------------
THOMAS J. KUHN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
USA NETWORKS, INC.
152 WEST 57TH STREET
NEW YORK, NY 10019
(212) 314-7300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
PAMELA S. SEYMON, ESQ.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
(212) 403-1000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly 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. [ ]
---------------------

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.
================================================================================
<PAGE> 2

[TICKET MASTER LOGO]

May 19, 1998

Dear Shareholder:

The Boards of Directors of Ticketmaster Group, Inc. and USA Networks, Inc.
have, by the unanimous vote of all directors voting, approved a merger agreement
that would result in Ticketmaster becoming a wholly owned subsidiary of USA
Networks. In the merger, each share of Ticketmaster common stock would be
converted into 1.126 shares of USA Networks common stock. We believe this
transaction will enhance shareholder value by providing Ticketmaster
shareholders, through a tax-free transaction, with a significant premium for
their shares of Ticketmaster as well as the opportunity to participate in the
growth and future value of USA Networks, which is engaged in diversified media
and electronic commerce businesses.

Before we can go ahead with the transaction, the holders of a majority of
our outstanding shares of common stock must vote in favor of the merger and the
related merger agreement. USA Networks currently owns approximately 47% of the
outstanding shares of common stock and has agreed to vote such shares in favor
of the proposed merger.

We have scheduled the Annual Meeting of Shareholders of Ticketmaster for
this vote as well as to vote on proposals which are customary for an annual
meeting of shareholders. The Annual Meeting will be held:

Tuesday, June 23, 1998
10:00 a.m. (local time)
Park Hyatt Hotel, 2151 Avenue of the Stars
Century City, California 90067

This Proxy Statement/Prospectus provides detailed information about the
proposed merger and the Annual Meeting matters on which you are being asked to
vote.

Your Board of Directors has carefully considered the terms and conditions
of the proposed merger, and, based in part on the recommendation of a special
committee of independent directors of the Ticketmaster Board, believes that the
merger is in the best interests of Ticketmaster and its shareholders.
ACCORDINGLY, YOUR BOARD OF DIRECTORS, BY THE UNANIMOUS VOTE OF ALL DIRECTORS
VOTING, RECOMMENDS THAT YOU APPROVE THE MERGER.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual
Meeting, please take the time to vote by completing and mailing the enclosed
proxy card. If you attend the Annual Meeting, you may vote in person if you
wish, even though you have previously returned your proxy card.

Sincerely,

/s/ Fredric D. Rosen

Fredric D. Rosen
President and Chief Executive
Officer

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

Neither the Securities and Exchange Commission nor any state securities
regulator has approved the shares of USA Networks Common Stock to be issued
under this Proxy Statement/Prospectus, or determined if this Proxy
Statement/Prospectus is accurate or adequate. Any representation to the
contrary is a criminal offense.
- --------------------------------------------------------------------------------

This Proxy Statement/Prospectus is dated May 19, 1998,
and was first mailed to shareholders on May 21, 1998.
<PAGE> 3

TICKETMASTER GROUP, INC.
8800 SUNSET BOULEVARD
WEST HOLLYWOOD, CALIFORNIA 90069

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, JUNE 23, 1998

TO THE SHAREHOLDERS OF TICKETMASTER GROUP, INC.:

The Annual Meeting of Shareholders of Ticketmaster Group, Inc., an Illinois
corporation, will be held on Tuesday, June 23, 1998 at 10:00 a.m., local time,
at the Park Hyatt Hotel located at 2151 Avenue of the Stars, Century City,
California 90067 for the following purposes:

(1) To vote on a proposal to approve an Agreement and Plan of Merger,
dated as of March 20, 1998, among USA Networks, Inc., Brick Acquisition
Corp. and Ticketmaster, pursuant to which Ticketmaster would become a
wholly owned subsidiary of USA Networks;

(2) To elect nine directors to serve as directors of Ticketmaster until
the next annual meeting of shareholders and until their successors are duly
elected, or until completion of the proposed merger, whichever occurs
earlier;

(3) To ratify the appointment of Ernst & Young LLP as Ticketmaster's
independent auditors for the fiscal year ending January 31, 1999; and

(4) To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement/Prospectus accompanying this Notice.

Holders of Ticketmaster Common Stock who do not vote in favor of the merger
and who follow the procedures required by the Illinois Business Corporation Act
will have the right to dissent from the merger and to demand and obtain payment
of the "fair value" of their shares. Please see the section of the attached
Proxy Statement/Prospectus entitled "The Merger -- Description of the
Merger -- Dissenters' Rights" and the text of the applicable sections of the
Illinois Business Corporation Act attached as Appendix C to the Proxy
Statement/Prospectus.

Only shareholders of record of Ticketmaster Common Stock at the close of
business on May 12, 1998 are entitled to notice of, and will be entitled to vote
at, the Annual Meeting or any adjournment or postponement thereof.

By Order of the Board of Directors,

/s/ Ned S. Goldstein

Ned S. Goldstein
Senior Vice President, Secretary
and General Counsel

West Hollywood, California
May 19, 1998
<PAGE> 4

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE ANNUAL MEETING

Q: WHY IS USAI ACQUIRING THE REMAINING SHARES OF TICKETMASTER COMMON STOCK IT
DOES NOT ALREADY OWN?

A: USAi believes Ticketmaster's automated ticketing system will complement
USAi's other electronic retailing businesses. USAi believes that this will
create a broader mass distribution system for promoting USAi's various services
and products and create opportunities to increase overall operating efficiency.

Q: PLEASE EXPLAIN WHAT I WILL RECEIVE IN THE MERGER.

A: If the merger is completed, each outstanding share of Ticketmaster common
stock will be converted into the right to receive 1.126 shares of USAi common
stock. USAi will not issue fractional shares of USAi common stock. Instead, each
Ticketmaster shareholder will receive a check in the amount of the net proceeds
from the sale of its fractional shares in the market.

Q: DOES MY VOTE MATTER?

A: Yes. Although USAi owns approximately 47% of the outstanding shares of
Ticketmaster common stock and has agreed to vote such shares in favor of the
merger, a majority of Ticketmaster's outstanding shares must vote in favor of
the merger for it to be approved. Accordingly, please send in your signed proxy
as soon as possible.

Q: WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?

A: We expect the merger will close promptly after the annual meeting, late in
the second quarter of 1998.

Q: AM I ENTITLED TO DISSENTERS' RIGHTS?

A: Yes. You will have the right under Illinois law to seek appraisal of the
value of your Ticketmaster shares provided that you comply with Illinois law.
For a more detailed description of your rights, see page 32.

Q: WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES TO TICKETMASTER SHAREHOLDERS OF
THE MERGER?

A: The exchange of shares by Ticketmaster shareholders is intended to be
tax-free to Ticketmaster shareholders for federal income tax purposes, except
for taxes on cash received instead of a fractional share of USAi common stock.
To review the federal income tax consequences in greater detail, see page 23.
Each Ticketmaster shareholder should consult its own tax advisor as to its
particular tax consequences.

Q: WHEN IS THE ANNUAL MEETING?

A: The meeting will take place on Tuesday, June 23, 1998.

Q: WHAT DO I NEED TO DO NOW?

A: Just mail your signed proxy card in the enclosed return envelope as soon as
possible, so that your shares may be represented at the annual meeting. YOUR
BOARD OF DIRECTORS, BY THE UNANIMOUS VOTE OF ALL DIRECTORS VOTING, RECOMMENDS
THAT YOU VOTE IN FAVOR OF THE MERGER. YOUR BOARD OF DIRECTORS ALSO RECOMMENDS
THAT YOU VOTE IN FAVOR OF EACH OF THE OTHER PROPOSALS BEING SUBMITTED TO YOU FOR
APPROVAL.

Q: WHAT DO I DO IF I WANT TO CHANGE MY VOTE?

A: Just send in a later-dated, signed proxy card to Ticketmaster's Secretary
before the meeting or attend the meeting in person and vote.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. After the merger is completed, USAi will send you written instructions
for exchanging your stock certificates.

Q: WHERE CAN I FIND MORE INFORMATION?

A: You may obtain more information from various sources, as set forth under
"Additional Information -- Where You Can Find More Information." (Page 66)
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY..................................................... 1
The Companies............................................. 1
Background of the Merger.................................. 1
Recommendations to Shareholders........................... 1
Interests of Certain Persons in the Merger................ 1
Risk Factors.............................................. 1
The Merger................................................ 2
Annual Meeting Proposals.................................. 2
Selected Historical Financial Data of USA Networks,
Inc.................................................... 4
Selected Historical Financial Data of Ticketmaster Group,
Inc.................................................... 6
Selected Pro Forma Combined Financial Data of USA
Networks, Inc.......................................... 8
Certain Comparative Per Share Data and Share Prices....... 9
RISK FACTORS................................................ 10
Dependence on Certain Key Personnel....................... 10
Controlling Shareholders.................................. 10
Integration of Operations; Management of Growth........... 11
Competition............................................... 12
THE MERGER.................................................. 12
Background................................................ 12
Background of the Merger............................... 12
USAi's Reasons for the Merger.......................... 15
Recommendation of the Special Committee and
Ticketmaster Board.................................... 16
Opinion of Salomon Smith Barney........................ 18
Material Federal Income Tax Consequences............... 23
Accounting Treatment of the Merger..................... 25
Federal Securities Laws Consequences; Resale
Restrictions.......................................... 25
Litigation............................................. 25
Description of the Merger................................. 26
General................................................ 26
The Merger Agreement................................... 26
Cooperation, Non-Competition and Confidentiality
Agreement............................................. 30
Interests of Certain Persons in the Merger............. 31
Dissenters' Rights..................................... 32
Ownership Interest of Ticketmaster Shareholders After
the Merger............................................ 34
Unaudited Pro Forma Combined Condensed Financial
Statements............................................ 35
Comparative Market Price and Dividend Information...... 43
Description of USAi Capital Stock...................... 44
Stock Exchange Listing; Delisting and Deregistration of
Ticketmaster Common Stock............................. 45
Comparison of Rights of Shareholders of Ticketmaster
and USAi.............................................. 45
THE ANNUAL MEETING.......................................... 51
Business to Be Conducted at the Annual Meeting............ 51
Matters to Be Considered............................... 51
Date, Time and Place of Meeting........................ 51
Record Date; Shares Outstanding and Entitled to Vote... 51
Voting and Revocation of Proxies....................... 51
Quorum; Vote Required.................................. 52
Solicitation of Proxies and Expenses................... 52
</TABLE>

i
<PAGE> 6

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Proposals and Ticketmaster Board
Recommendations........................................ 52
Merger Proposal........................................ 52
Election of Ticketmaster Directors..................... 53
Ratification of Auditors Proposal...................... 54
Directors and Executive Officers of Ticketmaster.......... 55
Executive Officers..................................... 55
Section 16(a) Beneficial Ownership Reporting
Compliance............................................ 56
Board of Directors and Board Committees................ 56
Compensation of Directors.............................. 56
Compensation Committee Interlocks and Insider
Participation......................................... 57
Compensation of Executive Officers..................... 57
Employment Agreements.................................. 58
Related Party Transactions................................ 60
Compensation Committee Report on Executive Compensation... 61
Performance Graph......................................... 63
Security Ownership of Certain Beneficial Owners and
Management............................................. 64
ADDITIONAL INFORMATION...................................... 66
Cautionary Statement Concerning Forward-Looking
Statements............................................. 66
Shareholder Proposals..................................... 66
Other Matters............................................. 66
Where You Can Find More Information....................... 66
LEGAL MATTERS............................................... 68
EXPERTS..................................................... 68
INDEX OF DEFINED TERMS...................................... 69
APPENDIX A -- Agreement and Plan of Merger
APPENDIX B -- Opinion of Salomon Smith Barney
APPENDIX C -- Sections 11.65 and 11.70 of the Illinois Business
Corporation Act pertaining to dissenters' rights
</TABLE>

ii
<PAGE> 7

SUMMARY

This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
transaction fully and for a more complete description of the legal terms of the
transaction, you should read carefully this entire document and the documents to
which we have referred you. See "Additional Information -- Where You Can Find
More Information." (Page 66)

THE COMPANIES

USA NETWORKS, INC.
152 West 57th Street
New York, New York 10019
(212) 314-7300

USAi, formerly known as HSN, Inc., is a holding company, the subsidiaries
of which are engaged in diversified media and electronic commerce businesses.
USAi, through its subsidiaries and entities in which its owns a controlling
interest, engages in four principal areas of business: Home Shopping Network,
Inc., which primarily engages in the electronic retailing business; Networks and
television production, which operates the USA Network and Sci-Fi Channel cable
networks and Studios USA, which produces and distributes television programming;
USA Broadcasting, which owns and operates television stations; and Ticketmaster
Group, Inc., which is the leading provider of automated ticketing services in
the United States.

TICKETMASTER GROUP, INC.
8800 Sunset Boulevard
West Hollywood, California 90069
(310) 360-6000

Ticketmaster is the leading provider of automated ticketing services in the
world with over 3,750 domestic clients and over 550 foreign clients, including
many of the foremost entertainment facilities and promoters and over 200
professional and semi-professional sports franchises. Ticketmaster has a
comprehensive domestic distribution system in 44 states covering many of the
major metropolitan areas in the U.S., as well as operations in seven foreign
countries.

For more information relating to USAi and Ticketmaster, you should review
the documents referenced in "Additional Information -- Where You Can Find More
Information" on page 66.

BACKGROUND OF THE MERGER (PAGE 12)

After USAi proposed in October 1997 to acquire the remaining shares of
Ticketmaster common stock that it did not already own, the Ticketmaster Board of
Directors formed a special committee of independent directors to consider USAi's
proposal. The special committee was also authorized to negotiate a different
proposal with USAi, to negotiate, if appropriate, a merger agreement and to make
recommendations to the Ticketmaster Board of Directors regarding a possible
merger. In March 1998, after extensive negotiation with USAi, the special
committee unanimously recommended to the Ticketmaster Board that it approve the
merger agreement and the related transactions described in this Proxy
Statement/Prospectus.

RECOMMENDATIONS TO SHAREHOLDERS

Your Board of Directors, based in part on the unanimous recommendation of
the special committee, believes the transaction is in your best interests and in
Ticketmaster's best interests and recommends, by the unanimous vote of all
directors voting, that you vote FOR the proposal related to the merger. The
Ticketmaster Board also recommends that you vote FOR each of the other proposals
being submitted to you.

INTERESTS OF CERTAIN PERSONS IN THE MERGER (PAGE 31)

The officers and directors of Ticketmaster may have interests in the merger
that are different from, or in addition to, yours. We discuss these interests in
this Proxy Statement/Prospectus.

RISK FACTORS (PAGE 10)

In deciding how to vote with respect to the merger, Ticketmaster
shareholders should consider the matters relating to an investment in USAi
common stock described under the caption "Risk Factors," in addition to the
other information described in this document.

1
<PAGE> 8

THE MERGER

MERGER AGREEMENT (PAGE 26)

The Merger Agreement is the legal document that governs the merger. This
agreement is attached as Appendix A to this Proxy Statement/ Prospectus. We
encourage you to read it carefully.

HOW THE MERGER WILL BE COMPLETED (PAGE 26)

The merger will involve the following steps, all of which will take place
at the effective time of the merger:

- Brick Acquisition Corp., a wholly owned subsidiary of USAi, will merge
with and into Ticketmaster. The separate corporate existence of Brick
Acquisition will cease and Ticketmaster will be the surviving corporation
and become a direct wholly owned subsidiary of USAi.

- Each share of issued and outstanding Ticketmaster common stock (other
than shares held by Ticketmaster shareholders who properly demand
dissenters' rights), will automatically convert into the right to receive
1.126 shares of USAi common stock. No fractional shares of USAi common
stock will be issued. Instead, a cash payment of the net proceeds from
the sale of such fractional shares will be made.

Promptly after the effective time of the merger, USAi will send you written
instructions for exchanging Ticketmaster stock certificates for USAi stock
certificates.

OPINION OF FINANCIAL ADVISOR (PAGE 18)

In deciding to approve the merger, Ticketmaster's Board of Directors
considered, among other things, advice from Salomon Smith Barney, the financial
advisor to the special committee of the Ticketmaster Board. The special
committee received an opinion from Salomon Smith Barney that, as of the date of
its opinion, the exchange ratio was fair, from a financial point of view, to the
holders of Ticketmaster common stock (other than USAi or any subsidiary of
USAi). Salomon Smith Barney's opinion is attached as Appendix B to this Proxy
Statement/Prospectus. We encourage you to read it carefully.

COOPERATION, NON-COMPETITION AND CONFIDENTIALITY AGREEMENT (PAGE 30)
USAi and Fredric D. Rosen, Chief Executive Officer of Ticketmaster, are
parties to a Cooperation, Non-Competition and Confidentiality Agreement. Under
the Agreement, Mr. Rosen has agreed not to compete with, or to solicit customers
of, Ticketmaster after the expiration of his current employment agreement with
Ticketmaster through January 31, 2001. The agreement also provides that Mr.
Rosen will cooperate with Ticketmaster and USAi to provide for an orderly
transition to a new Chief Executive Officer of Ticketmaster.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES (PAGE 23)

The merger has been structured so that Ticketmaster shareholders will not
recognize any gain or loss for federal income tax purposes in the merger (except
for tax payable on cash received instead of fractional shares of USAi common
stock).

ACCOUNTING TREATMENT (PAGE 25)

The merger will be accounted for as a purchase in accordance with generally
accepted accounting principles.

DISSENTERS' RIGHTS (PAGE 32)

Under Illinois law, you have the right to seek appraisal of the value of
your Ticketmaster shares, provided that you:

- deliver to Ticketmaster, before the vote is taken at the Annual Meeting,
a written demand for payment of your shares of Ticketmaster common stock;

- do not vote in favor of the merger; and

- otherwise comply with the provisions governing dissenters' rights under
Illinois law.

You should be aware that submitting a signed proxy card without indicating
a vote with respect to the merger will be deemed a vote FOR the merger and a
waiver of your dissenters' rights.

ANNUAL MEETING PROPOSALS

PROPOSAL TO APPROVE THE MERGER (PAGE 52)

At the Annual Meeting, Ticketmaster shareholders will be asked to approve
the Merger Agreement which provides that Ticketmaster will

2
<PAGE> 9

become a wholly owned subsidiary of USAi. USAi currently owns approximately
47% of the outstanding shares of Ticketmaster common stock and has agreed to
vote such shares in favor of the proposed merger. Accordingly, shareholder
approval is virtually assured.

ELECTION OF TICKETMASTER DIRECTORS (PAGE 53)

At the Annual Meeting, Ticketmaster shareholders will be asked to elect the
following nine director nominees to serve as directors of Ticketmaster until the
next annual meeting of shareholders and until their successors are duly elected,
or until completion of the merger, whichever occurs earlier: Paul G. Allen,
Peter R. Barton, Barry Diller, Jonathan L. Dolgen, James G. Held, John A.
Pritzker, Fredric D. Rosen, William D. Savoy and Terence M. Strom.

PROPOSAL TO RATIFY AUDITORS (PAGE 54)

We have appointed Ernst & Young LLP as our independent auditors for the
fiscal year ending January 31, 1999. At the Annual Meeting, you will be asked to
ratify this appointment.

RECORD DATE; VOTE REQUIRED FOR TICKETMASTER SHAREHOLDER APPROVAL OF THE
PROPOSALS (PAGE 51)

Only holders of record of Ticketmaster common stock at the close of
business on May 12, 1998 are entitled to notice of and to vote at the Annual
Meeting. Ticketmaster common stock is entitled to one vote per share on each
matter being submitted to a vote of shareholders at the Annual Meeting. Approval
by the Ticketmaster shareholders of the Merger Agreement requires the
affirmative vote of the holders of a majority of the outstanding shares of
Ticketmaster common stock. Approval by the Ticketmaster shareholders of the
nominees for directors and the ratification of the appointment of Ticketmaster's
independent auditors requires the affirmative vote of a majority of the
Ticketmaster shares present in person or represented by proxy at the Annual
Meeting.

3
<PAGE> 10

SELECTED HISTORICAL FINANCIAL DATA OF USA NETWORKS, INC.

In the tables below, we provide you with selected historical financial data
of USAi. We prepared this data using the consolidated financial statements of
USAi. When you read this selected historical consolidated financial data, it is
important that you read the footnotes set forth below the financial data. You
should also read the historical financial statements and accompanying notes that
USAi has included in its Annual Report on Form 10-K for the year ended December
31, 1997 and its Quarterly Report on Form 10-Q for the three months ended March
31, 1998 (you can obtain these reports by following the instructions we provide
in this Proxy Statement/Prospectus under "Additional Information -- Where You
Can Find More Information" on page 66).

It is also important that you read the unaudited pro forma combined
condensed financial information and accompanying notes that we have included in
this Proxy Statement/Prospectus under "The Merger -- Description of the Merger
- -- Unaudited Pro Forma Combined Condensed Financial Statements" on page 35.

<TABLE>
<CAPTION>
FOUR MONTHS THREE THREE
YEARS ENDED ENDED YEARS ENDED MONTHS MONTHS
AUGUST 31, DECEMBER 31, DECEMBER 31, ENDED ENDED
------------------------------ ------------ ----------------------- MARCH 31, MARCH 31,
1993 1994 1995 1995 1996(1) 1997(2) 1997 1998(3)
-------- -------- -------- ------------ ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA:
Net revenues............ $ 46,136 $ 46,563 $ 47,918 $ 15,980 $ 75,172 $1,261,749 $ 279,551 $ 523,111
Earnings (loss) before
cumulative effect of
change in accounting
principle(4).......... (6,386) (899) 115 (2,882) (6,539) 13,061 3,770 33,931
Net earnings
(loss)(5)............. (6,386) (3,878) 115 (2,882) (6,539) 13,061 3,770 33,931
Basic earnings (loss)
per common share(6):
Earnings (loss) before
cumulative effect of
change in accounting
principle........... (.36) (.05) .01 (.15) (.30) .12 .04 .28
Net earnings (loss)... (.36) (.22) .01 (.15) (.30) .12 .04 .28
Diluted earnings (loss)
per common share(6):
Earnings (loss) before
cumulative effect of
change in accounting
principle........... (.36) (.05) .01 (.15) (.30) .12 .04 .17
Net earnings (loss)... (.36) (.22) .01 (.15) (.30) .12 .04 .17
CONSOLIDATED BALANCE
SHEET DATA:
Working capital
(deficit)............. $ 4,423 $ 1,553 $ 6,042 $ 7,553 $ (24,444) $ 60,941 $ 7,451 $ 75,975
Total assets............ 153,718 145,488 142,917 136,670 2,116,232 2,670,796 2,099,300 7,713,436
Long-term obligations... 128,210 114,525 97,937 95,980 271,430 448,346 269,071 1,862,909
Shareholders' equity.... 6,396 2,614 9,278 7,471 1,158,749 1,447,354 1,164,451 1,892,358
Shares outstanding(6)... 111,886 92,638 134,236
</TABLE>

(See notes on following page)
4
<PAGE> 11

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

(1) The consolidated statement of operations includes the operations of Savoy
Pictures Entertainment, Inc. and Home Shopping Network, Inc. since their
acquisition by USAi on December 19, 1996 and December 20, 1996,
respectively.

(2) The consolidated statement of operations includes Ticketmaster since the
acquisition by USAi of its interest in Ticketmaster on July 17, 1997.

(3) The consolidated statement of operations includes the operations of USA
Networks and Studios USA since the acquisition by USAi from Universal
Studios, Inc. on February 12, 1998.

(4) In fiscal 1994, USAi adopted Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes." The cumulative effect of the accounting
change resulted in a charge of approximately $3.0 million. Prior years'
financial statements were not restated.

(5) In fiscal 1993, the USA Stations were charged interest expense on the note
payable to HSN Capital Corporation (presently HSN Capital LLC), a wholly
owned subsidiary of Home Shopping Network, Inc., at a rate of 9.5% per
annum. In fiscal 1994, USAi paid interest to HSN Capital Corporation until
August 1, 1994 when USAi repaid the long-term obligation to HSN Capital
Corporation.

(6) Earnings (loss) per common share data and shares outstanding reflect the
impact of two-for-one Common Stock and Class B Common Stock splits approved
by USAi on February 20, 1998, for shareholders of record on March 12, 1998,
and paid on March 26, 1998.

5
<PAGE> 12

SELECTED HISTORICAL FINANCIAL DATA OF TICKETMASTER GROUP, INC.

In the table below, we provide you with selected historical financial data
of Ticketmaster. We prepared this data using the consolidated financial
statements of Ticketmaster. When you read this selected historical consolidated
financial data, it is important that you read the footnotes set forth below the
financial data. You should also read the historical financial statements and
accompanying notes that Ticketmaster has included in its Annual Report on Form
10-K for the year ended January 31, 1998 (you can obtain this report by
following the instructions we provide in this Proxy Statement/Prospectus under
"Additional Information -- Where You Can Find More Information" on page 66).

It is also important that you read the unaudited pro forma combined
condensed financial information and accompanying notes that we have included in
this Proxy Statement/Prospectus under "The Merger -- Description of the
Merger -- Unaudited Pro Forma Combined Condensed Financial Statements" on page
35.

As used in the table and footnotes below, references to the Managed
Businesses include Ticketmaster's wholly and majority owned subsidiaries
(Consolidated Businesses) together with Ticketmaster's interest in those
unconsolidated joint ventures in which it acts as managing partner
(Unconsolidated Businesses).

<TABLE>
<CAPTION>
PRO FORMA(1)
------------
FISCAL YEAR
YEARS ENDED JANUARY 31, ENDED
-------------------------------------------------------------- JANUARY 31,
1994 1995 1996 1997 1998 1998
---------- ---------- ---------- ---------- ---------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Consolidated Businesses:
Revenue.................................... $ 146,640 $ 182,950 $ 161,250 $ 230,961 $ 340,980 $ 361,697
Operating income........................... 7,763 4,045 2,710 13,663 29,525 32,140
Net income (loss).......................... 40 (6,678) (8,095) 1,792 8,147 9,582
Basic earnings (loss) per share............ $ .01 $ (.44) $ (.53) $ .10 $ .32 $ .37
Diluted earnings (loss) per share.......... .01 (.44) (.53) .10 .31 .36
Unconsolidated Businesses:
Revenue.................................... $ 41,812 $ 69,269 $ 80,053 $ 67,541 $ 35,511 $ 20,587
Operating income........................... 3,845 4,712 8,690 9,398 4,247 929
Pretax income.............................. 3,738 3,632 7,443 8,859 4,648 531
Ticketmaster's share of net income
(loss)................................... 1,577 1,360 1,458 3,605 1,240 (302)
SUPPLEMENTAL INFORMATION:
Number of tickets sold:
Consolidated Businesses.................... 38,655 42,458 37,619 45,530 61,890 66,397
Unconsolidated Businesses.................. 12,194 13,156 15,497 14,491 8,297 4,396
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... 50,849 55,614 53,116 60,021 70,187 70,793
========== ========== ========== ========== ========== ==========
Gross dollar value of ticket sales:
Consolidated Businesses.................... $1,001,098 $1,308,310 $1,116,660 $1,370,709 $2,055,702 $2,196,499
Unconsolidated Businesses.................. 282,274 345,491 414,918 409,646 234,465 122,035
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... $1,283,372 $1,653,801 $1,531,578 $1,780,355 $2,290,167 $2,318,534
========== ========== ========== ========== ========== ==========
Total revenues:
Consolidated Businesses.................... $ 146,640 $ 182,950 $ 161,250 $ 230,961 $ 340,980 $ 361,697
Unconsolidated Businesses.................. 41,812 69,269 80,053 67,541 35,511 20,587
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... $ 188,452 $ 252,219 $ 241,303 $ 298,502 $ 376,491 $ 382,284
========== ========== ========== ========== ========== ==========
EBITDA(2):
Consolidated Businesses.................... $ 15,585 $ 15,986 $ 10,577 $ 22,602 $ 52,581 $ 58,832
Unconsolidated Businesses.................. 8,671 9,774 13,091 13,426 6,910 2,247
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... $ 24,256 $ 25,760 $ 23,668 $ 36,028 $ 59,491 $ 61,079
========== ========== ========== ========== ========== ==========
Attributable EBITDA(3)....................... $ 18,235 $ 19,503 $ 15,222 $ 28,299 $ 55,310 $ 58,329
Net cash provided by (used in) operating
activities:
Consolidated Businesses.................... $ 14,571 $ 12,309 $ (3,068) $ 15,585 $ 34,147 $ 39,193
Unconsolidated Businesses.................. 6,439 15,761 17,658 11,806 13,158 7,745
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... $ 21,010 $ 28,070 $ 14,590 $ 27,391 $ 47,305 $ 46,938
========== ========== ========== ========== ========== ==========
Net cash provided by (used in) investing
activities:
Consolidated Businesses.................... $ (6,250) $ (14,553) $ (9,452) $ (43,752) $ (52,627) $ (51,443)
Unconsolidated Businesses.................. (4,654) (1,772) (6,508) (4,775) (9,948) (3,900)
---------- ---------- ---------- ---------- ---------- ----------
Managed Businesses......................... $ (10,904) $ (16,325) $ (15,960) $ (48,527) $ (62,575) $ (55,343)
========== ========== ========== ========== ========== ==========
</TABLE>

(See notes on following page)

6
<PAGE> 13

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

(1) The pro forma financial information has been prepared to illustrate the
effects of Ticketmaster's acquired interests in Ticketmaster operating
entities from certain joint venture partners, minority shareholders and
licensee as if they had been acquired on February 1, 1997, including certain
pro forma adjustments.

(2) Defined as revenue less operating costs before interest, taxes, depreciation
and amortization. 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 operating performance or to cash flows from operations as a measure of
liquidity. Ticketmaster's management believes that an EBITDA presentation is
an important factor in evaluating the amount of cash available for repayment
of debt, future investments and dividends and in determining cash available
for future distributions.

(3) Defined as Ticketmaster's pro rata share in the results of its Consolidated
Businesses and Unconsolidated Businesses' revenue less operating costs
before interest, taxes, depreciation and amortization. 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. Ticketmaster's management believes
that an EBITDA presentation is an important factor in evaluating the amount
of cash available for repayment of debt, future investments and dividends
and in determining cash available for future distributions.

7
<PAGE> 14

SELECTED PRO FORMA COMBINED FINANCIAL DATA OF USA NETWORKS, INC.
(in thousands, except per share data)
(unaudited)

In the table below, we attempt to illustrate the financial results that
might have occurred if the merger had been completed previously. Presented is
combined statement of operations information for USAi for the year ended
December 31, 1997 and for the three months ended March 31, 1998 as if the merger
and the acquisition of USA Networks and Studios USA from Universal Studios, Inc.
had been completed on January 1, 1997 and 1998, respectively. Also presented is
combined balance sheet information for USAi as of March 31, 1998 as if the
merger had been completed on March 31, 1998.

It is important to remember that this information is hypothetical, and does
not necessarily reflect the financial performance that would have actually
resulted if the merger had been completed on those dates. It is important to
remember that this information does not necessarily reflect future financial
performance if the merger actually occurs.

Please see "The Merger -- Description of the Merger -- Unaudited Pro Forma
Combined Condensed Financial Statements" on page 35 of this Proxy
Statement/Prospectus for a more detailed explanation of this analysis.

<TABLE>
<CAPTION>
THREE MONTHS
SUMMARY PRO FORMA COMBINED YEAR ENDED ENDED
STATEMENT OF OPERATIONS DATA DECEMBER 31, 1997 MARCH 31, 1998
---------------------------- ----------------- --------------
<S> <C> <C>
Net revenues................................................ $2,574,672 $ 680,475
Operating income............................................ 205,904 59,692
Net income (loss)........................................... (16,054) 34,607
Basic earnings per share.................................... (0.11) 0.24
Diluted earnings per share.................................. (0.11) 0.12
</TABLE>

<TABLE>
<CAPTION>
SUMMARY PRO FORMA COMBINED
BALANCE SHEET DATA
--------------------------
<S> <C> <C>
Working capital............................................. $ 73,975
Total assets................................................ 8,155,334
Long-term obligations....................................... 1,656,909
Minority interest........................................... 2,916,431
Shareholders' equity........................................ 2,357,835
Shares outstanding(1)....................................... 150,277
</TABLE>

- ---------------
(1) Pro forma shares outstanding for USAi at March 31, 1998 include the
historical shares outstanding of USAi and 16,040,852 shares to be issued to
Ticketmaster shareholders (other than USAi) in connection with the Merger
(excluding shares issuable upon exercise of Ticketmaster options and shares
issuable upon exercise of Universal's and Liberty's preemptive rights).

8
<PAGE> 15

CERTAIN COMPARATIVE PER SHARE DATA AND SHARE PRICES

COMPARATIVE PER SHARE DATA

In the table below, we provide you with certain historical and pro forma
per share financial information as of and for the three months ended March 31,
1998 and for the year ended December 31, 1997. Ticketmaster historical data is
as of and for the 12-month period ended January 31, 1998. We prepared the USAi
pro forma combined amounts based on the purchase method of accounting and a
preliminary allocation of the purchase price.

It is important that when you read this information, you read along with it
USAi's and Ticketmaster's historical financial statements (and related notes)
included in the documents described on page 66 of this Proxy Statement/
Prospectus under "Where You Can Find More Information." It is also important
that you read the Unaudited Pro Forma Combined Condensed Financial Statements
and accompanying discussion and Notes that we have included in this Proxy
Statement/Prospectus on page 35 under "The Merger -- Description of the Merger
- -- Unaudited Pro Forma Combined Condensed Financial Statements." You should not
rely on the pro forma financial information as an indication of the results
that would have been achieved if the merger had taken place earlier or of the
results of USAi after the merger.

<TABLE>
<CAPTION>
USAI TICKETMASTER
------------------------- -------------------------
EQUIVALENT
HISTORICAL PRO FORMA(1) HISTORICAL PRO FORMA(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Book value per share --
Common Stock and Class B Common Stock:
March 31, 1998................................. $14.10 $15.69 -- $17.67
December 31, 1997.............................. 12.94 -- $1.87 --
Basic earnings (loss) per share --
Common Stock and Class B Common Stock:
For the quarter ended March 31, 1998........... 0.28 0.23 -- 0.26
For the year ended December 31, 1997........... 0.12 (0.11) 0.32 (0.12)
Diluted earnings (loss) per share --
Common Stock and Class B Common Stock:
For the quarter ended March 31, 1998........... 0.17 0.12 -- 0.14
For the year ended December 31, 1997........... 0.12 (0.11) 0.31 (0.12)
</TABLE>

- ---------------
(1) Pro forma information gives effect to the merger and the acquisition of USA
Networks and Studios USA as of and for the period beginning on the dates
indicated.

(2) The equivalent pro forma per share data for Ticketmaster is computed by
multiplying USAi's pro forma per share information by the exchange ratio of
1.126.

COMPARATIVE SHARE PRICES

The table below provides historical closing prices per share of USAi common
stock and Ticketmaster common stock on The Nasdaq Stock Market on October 22,
1997, the last full trading day prior to the public announcement of USAi's
initial proposal with respect to a merger proposal, on March 9, 1998, the last
full trading day prior to the public announcement of an agreement in principle
concerning the economic terms of the proposed merger, and on May 18, 1998, the
last practicable trading day before the printing of this Proxy Statement/
Prospectus. The table also sets forth the equivalent per share prices for
Ticketmaster common stock based on the USAi common stock prices as of such
dates. Ticketmaster shareholders are urged to obtain current market quotations
prior to making any decisions with respect to the merger.

<TABLE>
<CAPTION>
HISTORICAL
---------------------------- TICKETMASTER
USAI TICKETMASTER EQUIVALENT PER
COMMON STOCK COMMON STOCK SHARE PRICE(1)
------------ ------------ --------------
<S> <C> <C> <C>
October 22, 1997..................................... $23.50 $25.00 $26.46
March 9, 1998........................................ 26.38 26.38 29.70
May 18, 1998......................................... 24.00 26.50 27.02
</TABLE>

- ---------------
(1) The equivalent per share price for Ticketmaster is computed by multiplying
the closing sale price per share of USAi common stock on such date by the
exchange ratio of 1.126. Based on USAi's initial proposal in October 1997
with an exchange ratio of 1.012, the Ticketmaster equivalent per share price
based on the USAi common stock price as of October 22, 1997 was $23.78.
9
<PAGE> 16

RISK FACTORS

Before voting on the merger (the "Merger") of Brick Acquisition Corp.
("Sub"), a wholly owned subsidiary of USA Networks, Inc. ("USAi"), with and into
Ticketmaster Group, Inc. ("Ticketmaster"), each Ticketmaster shareholder should
carefully consider and evaluate the following factors, among others.

As used in this proxy statement/prospectus ("Proxy Statement/Prospectus"),
references to USAi include USA Networks, Inc., its predecessors and its
subsidiaries, and references to Ticketmaster include Ticketmaster Group, Inc.,
its predecessors and its subsidiaries. References to USAi's fiscal year refer to
the 12-month period ending on December 31 of each year, and references to
Ticketmaster's fiscal year refer to the 12-month period ending on January 31 of
each year (e.g., "fiscal 1998" means Ticketmaster's fiscal year ended January
31, 1998).

All per share information contained in this Proxy Statement/Prospectus
regarding common stock, par value $.01 per share, of USAi ("USAi Common Stock"),
including exchange ratios involving USAi Common Stock, has been restated to
reflect a two-for-one stock split of the USAi Common Stock paid on March 26,
1998 in the form of a dividend to shareholders of record as of the close of
business on March 12, 1998 (the "Stock Split").

DEPENDENCE ON CERTAIN KEY PERSONNEL

USAi is dependent upon the continued contributions of its senior corporate
management, particularly Barry Diller, and certain key employees for its future
success. Mr. Diller is the Chairman of the Board and Chief Executive Officer of
USAi. Mr. Diller does not have an employment agreement with USAi and does not
receive a salary from USAi, although he has been granted options to purchase a
substantial number of shares of USAi Common Stock and the vesting of such
options is to occur over the next several years, subject to acceleration in
certain specified circumstances. Except in certain circumstances, such vesting
is conditioned upon Mr. Diller remaining at USAi.

If Mr. Diller no longer serves in his positions at USAi, the business of
USAi, as well as the market price of USAi Common Stock, could be substantially
adversely affected. In addition, under the terms of a governance agreement,
dated as of October 19, 1997, among Universal Studios, Inc. ("Universal"), HSN,
Inc. (now USAi), Mr. Diller and Liberty Media Corporation ("Liberty") (the
"Governance Agreement"), if Mr. Diller no longer serves as Chief Executive
Officer of USAi, then certain restrictions on Universal's conduct will be
eliminated, and Universal's ability to increase its equity interest in USAi will
be accelerated. Due to current regulatory restrictions of the Federal
Communications Commission (the "FCC") on foreign ownership and on the ability of
Liberty and Universal to exercise voting control over entities that hold
broadcast licenses, in the event that Mr. Diller were no longer Chief Executive
Officer of USAi, became disabled or otherwise no longer exercised control over
USAi, USAi would be required either to divest itself of its broadcast licenses
so that Universal and Liberty could exercise control over USAi or otherwise
enter into arrangements relating to the control of USAi in compliance with FCC
law. There can be no assurance that USAi will be able to retain the services of
Mr. Diller or any other members of senior management or key employees of USAi.

CONTROLLING SHAREHOLDERS

Mr. Diller, through entities he controls, currently beneficially owns or
has the right to vote 100% of the shares of Class B common stock, par value $.01
per share, of USAi ("USAi Class B Common Stock") which is sufficient to control
the outcome of any matter submitted to a vote or for the consent of USAi
shareholders with respect to which holders of USAi Common Stock and USAi Class B
Common Stock vote together as a single class. See "The Merger -- Description of
Merger -- Description of USAi Capital Stock." As of May 12, 1998 (but without
giving effect to the issuance of any USAi securities upon exercise of options
held by Mr. Diller or upon exchange of shares of USANi LLC ("LLC") or Home
Shopping Network, Inc. ("Home Shopping")), Mr. Diller owns or has the right to
vote approximately 8% of the outstanding USAi Common Stock, 100% of the
outstanding USAi Class B Common Stock and 77% of the outstanding total voting
power of the USAi Common Stock and USAi Class B Common Stock. Mr. Diller,
subject to the terms of a
10
<PAGE> 17

stockholders agreement, dated as of October 19, 1997, among Universal, Liberty,
Mr. Diller, USAi and The Seagram Company Ltd. ("Seagram") (the "Stockholders
Agreement"), effectively controls the outcome of all matters submitted to a vote
or for the consent of USAi shareholders (other than with respect to the election
by the holders of USAi Common Stock of 25% of the members of the Board of
Directors of USAi (the "USAi Board") (rounded up to the nearest whole number)
and certain matters as to which a separate class vote of the holders of USAi
Common Stock is required under the Delaware General Corporation Law).

Pursuant to the Stockholders Agreement, Mr. Diller, Universal and Liberty
have agreed that USAi securities owned by any of Mr. Diller, Universal, Liberty
and certain of their affiliates will not be voted in favor of the taking of any
action with respect to certain fundamental changes relating to USAi, except with
the consent of each of Mr. Diller, Universal and Liberty. Accordingly, in
respect of such matters, each of Mr. Diller, Universal and Liberty has the
ability to veto, in his or its sole discretion, the taking of any action with
respect to these matters. In addition, there can be no assurance that Mr.
Diller, Universal and Liberty will be able to agree in the future with respect
to any such transaction or action, in which case USAi would not be able to
engage in such transaction or take such action, provided that, under the terms
of the Stockholders Agreement, if Mr. Diller and Universal agree to certain
fundamental changes that Liberty does not agree to, subject to certain
conditions, Universal will be entitled to purchase Liberty's entire USAi equity
interest, and USAi would then be able to engage in such transaction or take such
action.

In addition to the specific requirements of the Stockholders Agreement, the
existence of a controlling shareholder of USAi may have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from seeking to acquire, a majority of the outstanding USAi securities. A third
party would be required to negotiate any such transaction with Mr. Diller,
Universal and Liberty, and the interests of any one or more of such persons as
shareholders may be different from the interests of other USAi shareholders.

Upon Mr. Diller's permanent departure from USAi, USAi may change in various
fundamental respects. For example, generally, Universal would be able to control
LLC and also would have the ability to seek to cause a spinoff or other
disposition of USAi's broadcast businesses, after which Universal could directly
control USAi. In addition, Universal and Liberty have certain agreements
relating to the management and governance of USAi, as well as the voting and
disposition of their shares of USAi stock and the stock of the regulated
businesses that are spun off (including preemptive rights). USAi has generally
agreed to use its reasonable best efforts to implement the arrangements agreed
to by Universal and Liberty. In the case of Universal or Liberty selecting the
manager of LLC, these actions could, depending on the circumstances, result in
deconsolidation for financial accounting purposes of the results of operations
of LLC from those of USAi. These arrangements could have a material impact on
the voting and other rights of USAi's public shareholders and could adversely
affect the market price of USAi's Common Stock.

INTEGRATION OF OPERATIONS; MANAGEMENT OF GROWTH

Following the Universal Transaction and upon consummation of the Merger,
the integration of the operations of USAi's recently acquired businesses and of
Ticketmaster and the consolidation of such operations in USAi will require the
dedication of management resources, which will temporarily detract attention
from the day-to-day businesses of the combined companies. The difficulties of
assimilation may be increased by the necessity of coordinating geographically
separated organizations, integrating personnel with disparate business
backgrounds and combining different corporate cultures. The process of combining
the organizations may cause an interruption of, or a loss of momentum in, the
activities of any or all of the companies' businesses, which could have an
adverse effect on the revenues and operating results of the combined companies,
at least in the near term. There can be no assurance that the combined entities
will be able to retain key technical and management personnel or that the
combined entities will realize any of the other anticipated benefits of the
Universal Transaction or the Merger.

11
<PAGE> 18

COMPETITION

The markets for USAi's products and services are intensely and increasingly
competitive. Certain competitors of USAi have greater financial, technical,
marketing, sales and customer support resources than USAi. In addition to
competitors in the electronic retailing industry, USAi must compete with store
and catalogue retailers and its business, financial condition and results of
operations can be adversely affected by changes in the general retailing
industry. In addition, USAi expects that the environment of increased
competition may place significant strain on the marketing, technological and
financial resources of USAi. USAi also competes for distribution of its
programming with other cable programmers, many of whom have substantially
greater resources. There can be no assurance that USAi will compete successfully
in the future.

THE MERGER

BACKGROUND

BACKGROUND OF THE MERGER

USAi regularly evaluates strategic opportunities, including business
combinations with other companies, that could complement and strengthen its
media and electronic commerce businesses. On July 17, 1997, USAi acquired
approximately 47% of the shares of Ticketmaster common stock, no par value per
share ("Ticketmaster Common Stock"), from Mr. Paul G. Allen in exchange for
shares of USAi Common Stock. At that time, pursuant to the stock exchange
agreement between Mr. Allen and USAi (the "Stock Exchange Agreement"), Mr. Barry
Diller, the Chairman and Chief Executive Officer of USAi, and Mr. James G. Held,
the President and Chief Executive Officer of Home Shopping, joined the Board of
Directors of Ticketmaster (the "Ticketmaster Board"). In addition, Jonathan L.
Dolgen and Peter R. Barton joined the Ticketmaster Board as outside directors.
At about the same time, USAi elected to the USAi Board Mr. Allen, Mr. William D.
Savoy and Mr. Fredric D. Rosen, each of whom was also a Ticketmaster director.

At the time of USAi's acquisition of Mr. Allen's Ticketmaster Common Stock,
USAi publicly disclosed that it had not reached any definite conclusion with
respect to its future course of action regarding Ticketmaster and the
Ticketmaster Common Stock beneficially owned by it, and that USAi would consider
all of its options, including the possibility of proposing a merger between USAi
and Ticketmaster.

At a meeting of the Ticketmaster Board held on September 4, 1997, Mr.
Diller advised the Ticketmaster Board that, as disclosed in USAi's report on
Schedule 13D, as filed with the Securities and Exchange Commission (the "SEC"),
USAi was considering a number of alternatives regarding its investment in
Ticketmaster, including whether to make a proposal to acquire the remaining
equity securities of Ticketmaster. He requested the Ticketmaster Board to
consider, and the Ticketmaster Board briefly discussed, the process to be
followed should an offer be made by USAi.

On October 20, 1997, Mr. Rosen resigned from the USAi Board.

On October 23, 1997, USAi proposed to the Ticketmaster Board a tax-free
stock merger transaction in which Ticketmaster shareholders would receive 1.012
shares of USAi Common Stock for each share of Ticketmaster Common Stock ($23.78
in USAi Common Stock per Ticketmaster share, at then-current market prices),
subject to a collar which capped the consideration to be paid to Ticketmaster
shareholders at $25.30 per share in USAi Common Stock and provided for an
adjustment in the ratio at USAi Common Stock prices between $22 and $20 so that
Ticketmaster shareholders would receive $22.264 per share in market value of
USAi Common Stock if the price of USAi Common Stock was between those prices at
closing (the "Initial Proposal"). Such proposal also included an alternative
cash merger (which alternative was shortly thereafter withdrawn by USAi), which
would not have been tax-free, at $25 per Ticketmaster share.

At a meeting of the Ticketmaster Board held on October 30, 1997,
Ticketmaster formed a special committee of the Ticketmaster Board (the "Special
Committee"), consisting of Jonathan L. Dolgen and Peter R. Barton, to evaluate
the Initial Proposal on behalf of the Ticketmaster shareholders other than USAi

12
<PAGE> 19

or any subsidiary of USAi (the "Public Shareholders"). The Ticketmaster Board
also authorized the Special Committee to discuss with USAi and its
representatives any modifications to the Initial Proposal as the Special
Committee might determine to be desirable and to negotiate a definitive
agreement with USAi on the basis of the Initial Proposal and any modifications,
and to make a recommendation to the Ticketmaster Board with respect to an
agreement, if one could be reached. In addition, the Special Committee was
authorized to retain legal, financial and other advisors and selected Shearman &
Sterling to be its legal advisor.

On November 11, 1997, Mr. Barton resigned from the Special Committee and,
at a meeting of the Ticketmaster Board held on November 26, 1997, Terence M.
Strom, who had previously been a Ticketmaster director, was elected to be a
director of Ticketmaster and was asked to serve as a member of the Special
Committee. At that meeting, the Ticketmaster Board fixed the compensation for
each member of the Special Committee at $15,000 per month, plus reimbursement
for out-of-pocket expenses.

During December 1997, the Special Committee and its legal advisor met with
representatives of several investment banks, and the Special Committee selected
Salomon Smith Barney to be its financial advisor.

In early January 1998, the Special Committee met with its legal and
financial advisors to review the financial terms of the Initial Proposal,
including the effect of the collar, to discuss a preliminary timetable for a due
diligence review of financial and legal information regarding Ticketmaster and
USAi and for meetings with their respective managements, and to discuss various
matters relating to a possible transaction, including the Special Committee's
legal responsibilities and the pending shareholder litigation. Six purported
class actions (the "Shareholder Litigation") were commenced shortly after the
Initial Proposal was made, naming Ticketmaster, certain of its current and
former directors and USAi as defendants. Those actions, brought by several
Public Shareholders (the "Plaintiffs") as class actions on behalf of all Public
Shareholders, alleged that the defendants breached their fiduciary duties to the
Plaintiffs and the other Public Shareholders in connection with the Initial
Proposal. See "-- Litigation."

During January and February 1998, the Special Committee and representatives
of its financial and legal advisors reviewed public and non-public information
regarding Ticketmaster and USAi and certain of such persons held various
meetings and discussions with members of senior management of Ticketmaster and
USAi relating to the business and financial condition of Ticketmaster and USAi
and their respective plans and prospects, including, in the case of USAi, with
respect to the then pending Universal Transaction. During this period, the
Special Committee and its advisors discussed the information that had been
reviewed and the progress of their investigation on a regular basis. On February
12, 1998, USAi consummated the Universal Transaction.

On February 26, 1998, the Special Committee met with its legal and
financial advisors. The representatives of Salomon Smith Barney reviewed with
the members of the Special Committee certain valuation analyses prepared by
Salomon Smith Barney regarding each of USAi and Ticketmaster. The Committee and
its advisors discussed possible alternatives to the Initial Proposal that would
provide greater value to the Public Shareholders and strategies for negotiating
with USAi to increase the value to be provided. At the end of the meeting, the
Special Committee authorized Salomon Smith Barney to inform Allen & Company
Incorporated ("Allen & Co."), financial advisor to USAi, that it believed that
the Initial Proposal did not adequately value the Ticketmaster Common Stock and
to discuss its valuation analyses with Allen & Co.

During the last week of February and the first week of March, USAi and the
Special Committee and their respective financial advisors held discussions in
which they reviewed with each other their views regarding valuation and
discussed a possible increase in the exchange ratio included in the Initial
Proposal, as well as adjustments to or elimination of the collar contained in
the Initial Proposal. The Special Committee also held periodic conference
telephone calls with its advisors to review the discussions its members and
advisors were having with representatives of USAi and its advisors, and to
consider and develop strategies for negotiating with USAi to increase the
consideration offered for the proposed merger.

On March 5, 1998, USAi proposed a stock-for-stock merger at a fixed
exchange ratio of 1.126 with no collar (the "Revised Proposal"). The Revised
Proposal was subject to USAi receiving certain assurances

13
<PAGE> 20

regarding its ability to effect an orderly transition in the leadership of
Ticketmaster and negotiation of satisfactory definitive documentation for the
transaction.

On March 9, 1998, as a condition to the willingness of USAi to enter into a
transaction with Ticketmaster on the basis of the Revised Proposal, USAi and Mr.
Rosen entered into a Cooperation, Non-Competition and Confidentiality Agreement
(the "Cooperation Agreement"), pursuant to which Mr. Rosen agreed, among other
things, to cooperate with Ticketmaster and USAi to provide an orderly transition
in the leadership of Ticketmaster, including working with a designated successor
to Mr. Rosen as Chief Executive Officer. These discussions and the related
agreement resulted from the anticipated January 1999 expiration of Mr. Rosen's
employment agreement with Ticketmaster, and USAi's request that Mr. Rosen agree
to a smooth transition in the event of a merger between USAi and Ticketmaster
and to reaffirm the noncompetition provisions in his Ticketmaster employment
agreement.

At a meeting of the Special Committee held on March 9, 1998, the Special
Committee received a presentation regarding the financial terms of the Revised
Proposal (including the proposed exchange ratio and the effect of the removal of
the collar contained in the Initial Proposal) from Salomon Smith Barney and
regarding the financial analyses of Ticketmaster and USAi previously reviewed
with the Special Committee by Salomon Smith Barney. Salomon Smith Barney then
delivered its oral opinion, subsequently confirmed in writing, that as of such
date the exchange ratio in the Revised Proposal (the "Exchange Ratio") was fair,
from a financial point of view, to the Public Shareholders. The Special
Committee considered the economic terms of the Revised Proposal (which
represented an 11% increase in the Exchange Ratio and which, based on the
closing price for the USAi Common Stock on March 9, 1998, would have resulted in
each share of Ticketmaster Common Stock held by the Public Shareholders being
converted into USAi Common Stock with a market value of $29.70 per share) and
unanimously determined that the proposed economic terms of a merger based on the
Revised Proposal would be fair to and in the best interests of the Public
Shareholders. The Special Committee also unanimously resolved to recommend to
the Ticketmaster Board that the Board approve, subject to the Board's
satisfaction with a definitive agreement, the proposed economic terms of a
merger based on the Revised Proposal.

Immediately following the meeting of the Special Committee held on March 9,
1998, a meeting of the Ticketmaster Board was held. At that meeting, at which
all of the directors of Ticketmaster were present except Mr. Diller, the
Ticketmaster Board received a presentation from Salomon Smith Barney regarding
the financial terms of the Revised Proposal and regarding Salomon Smith Barney's
financial analyses of Ticketmaster and USAi. The Special Committee then
delivered its recommendation that the Ticketmaster Board approve, subject to the
Board's satisfaction with a definitive agreement, the proposed economic terms of
a merger based on the Revised Proposal. The Ticketmaster Board, by a unanimous
vote of those directors who voted (with certain members of the Board abstaining
because of their relationship with USAi), determined that a merger with the
proposed economic terms based on the Revised Proposal would be fair to and in
the best interests of the Company and its shareholders and approved, in
principle, a merger with such proposed economic terms, and authorized the
Special Committee to negotiate a definitive merger agreement between
Ticketmaster and USAi based on such terms (the "Merger Agreement"), subject to
the approval of such definitive Merger Agreement by the Ticketmaster Board. The
proposed economic terms were also approved, in principle, by the "Disinterested
Directors" of Ticketmaster (as that term is defined in Section 7.85 of the
Illinois Business Corporation Act ("IBCA")) by the unanimous vote of such
directors, subject to the approval of the definitive Merger Agreement by the
Ticketmaster Board.

On March 10, 1998, USAi issued a press release describing the agreement in
principle between Ticketmaster and USAi with respect to the Revised Proposal.

From March 10, 1998 through the date of the Merger Agreement, USAi and the
Special Committee and their financial and legal advisors negotiated the terms of
the definitive Merger Agreement providing for a merger that was intended to be
tax-free for federal income tax purposes for the Ticketmaster shareholders.

On March 13, 1998, the USAi Board met to consider the proposed agreement in
principle and the terms of the draft Merger Agreement and to discuss a possible
merger transaction. At that meeting, USAi's legal and financial advisors
discussed the terms of the transaction. The USAi Board, by a unanimous vote of
all
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<PAGE> 21

directors present, approved the terms of the Merger and approved the Merger
Agreement, subject to final negotiation of the definitive Merger Agreement with
the Special Committee.

USAi also held discussions with representatives of HG, Inc. ("HG"), a
company that owns 2,544,526 shares of Ticketmaster Common Stock. USAi was
advised by HG that it may be subject to different tax considerations than the
other Ticketmaster shareholders, and these discussions attempted to address
these differences in a manner that would not adversely affect the Public
Shareholders or USAi. Such negotiations did not, however, result in a definitive
agreement with HG, and were terminated on March 20, 1998. HG is controlled by
trusts for the benefit of the Pritzker family, including Mr. John A. Pritzker, a
member of the Ticketmaster Board.

At a joint meeting of the Ticketmaster Board and the Special Committee held
on March 20, 1998, representatives of Shearman & Sterling reviewed the principal
terms and conditions of the Merger Agreement and representatives of Salomon
Smith Barney confirmed that nothing had come to the attention of Salomon Smith
Barney that would cause it to change the conclusion of the opinion it had given
on March 9, 1998. The Special Committee unanimously determined (a) that the
terms of the Merger are fair to, and in the best interests of, the Public
Shareholders and (b) to recommend to the Public Shareholders that such
shareholders vote to approve and adopt the Merger Agreement. The Special
Committee then unanimously recommended to the Ticketmaster Board that the
Ticketmaster Board approve and adopt the Merger Agreement and that the
Ticketmaster Board recommend to the Ticketmaster shareholders that such
shareholders vote to approve and adopt the Merger Agreement. At that meeting, at
which all of the directors of Ticketmaster were present, except Messrs. Diller
and Savoy, the Ticketmaster Board, based on the Special Committee's
recommendation, by a unanimous vote of those directors who voted, approved and
adopted the Merger Agreement, determined to recommend to the Ticketmaster
shareholders that they vote to approve and adopt the Merger Agreement and
determined that the terms of the Merger are fair to, and in the best interests
of, Ticketmaster and its shareholders (with certain members of the Board
abstaining because of their relationship with USAi). The Merger Agreement was
also approved by the "Disinterested Directors" of Ticketmaster (as such term is
defined in Section 7.85 of the IBCA) by the unanimous vote of such directors.

On March 23, 1998, USAi and Ticketmaster issued a joint press release
announcing execution of the Merger Agreement.

Throughout the remainder of March and continuing through the date of this
Proxy Statement/ Prospectus, USAi and Ticketmaster continued to exchange
information and prepare for the anticipated consummation of the Merger.

USAi'S REASONS FOR THE MERGER

In reaching its determination to approve the Merger Agreement, the Merger
and related transactions, the USAi Board has identified the following potential
benefits of the Merger that it believes will contribute to the success of the
businesses of USAi, including Ticketmaster:

- Enhancement of Electronic Retailing Businesses. USAi believes
Ticketmaster's automated ticketing system will complement USAi's other
electronic retailing businesses, creating a broader mass distribution
system in which to promote USAi's various services and products and
opportunities for increased operating efficiencies.

- Role of Mr. Diller. The USAi Board believes that the roles of Mr. Diller
as Chairman of the Board, Chief Executive Officer and controlling
shareholder of USAi have been, and will continue to be, of substantial
benefit to the evolving business strategies of USAi, including
Ticketmaster.

In the course of its deliberations, the USAi Board reviewed and considered
with USAi's management a number of other factors relevant to the proposed
Merger. In particular, the USAi Board considered, among other things:

- USAi's position as the controlling shareholder of Ticketmaster, owning
approximately 47% of the then total outstanding Ticketmaster Common
Stock;

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<PAGE> 22

- information concerning USAi's and Ticketmaster's respective prospects,
financial performance, financial condition, assets and operations;

- premiums to market price and multiples paid in other merger and
acquisition transactions in market segments similar in nature and dynamic
to that of Ticketmaster;

- the expectation that the Merger would be accounted for as a purchase for
financial reporting purposes and would be tax free to USAi for U.S.
federal income tax purposes;

- a review with USAi's special outside legal counsel of the terms of the
Merger Agreement and related agreements, including the Cooperation
Agreement pursuant to which Mr. Rosen agreed to cooperate with the smooth
transition of the leadership of Ticketmaster and affirmed his
con-competition agreement with Ticketmaster through January 2001;

In connection with its deliberations concerning the proposed Merger, the
USAi Board also considered a variety of specific financial factors, including
the following: (i) the fact that in March 1998 USAi Common Stock was trading at
the high end of its historical trading range; (ii) the expectation that
Ticketmaster represents a complementary business and that the Merger may be
viewed favorably by investors due to such complementary nature; (iii) the
opportunities presented by the current securities market environment which
support the ability to use USAi Common Stock as an attractive currency for the
Merger; and (iv) the recognition that high-quality acquisition and merger
opportunities are relatively limited in the live entertainment ticketing
industry.

The USAi Board also considered a variety of potentially negative factors in
its deliberations concerning the Merger, including: (i) the risk that, despite
the efforts of the combined companies, key technical and management personnel of
Ticketmaster may not be retained; and (ii) the risk that other benefits sought
to be obtained by the Merger may not be obtained.

In view of the wide variety of factors, both positive and negative,
considered by the USAi Board, the USAi Board did not find it practical to, and
did not, quantify or otherwise assign relative weights to the specific factors
considered. In addition, individual members of the USAi Board may have given
different weights to the various factors considered.

RECOMMENDATION OF THE SPECIAL COMMITTEE AND TICKETMASTER BOARD

THE SPECIAL COMMITTEE

The Special Committee has determined that the terms of the Merger are fair
to, and in the best interests of, the Public Shareholders. See "-- Background of
the Merger." In reaching this determination, the Special Committee concluded
that holding 1.126 shares of USAi Common Stock (after giving effect to the
Merger) represented a more favorable investment opportunity than holding one
share of Ticketmaster Common Stock, after taking into account the risks inherent
in each investment. In evaluating such risks and opportunities and the fairness
of the terms of the Merger, the Special Committee considered the following
factors:

(i) the financial condition, assets, results of operations, business
and prospects of Ticketmaster (including Ticketmaster management's views
regarding the potential for increases in operating leverage based on
achieving increases in sales with limited increases in costs) and the risks
inherent in achieving those prospects;

(ii) the financial condition, assets, results of operations, business
and prospects of USAi, and the risks inherent in achieving those prospects,
including those described in the "Risk Factors" section of this Proxy
Statement/Prospectus;

(iii) the March 9, 1998 oral opinion of Salomon Smith Barney,
subsequently confirmed in writing, that as of such date the Exchange Ratio
was fair, from a financial point of view, to the Public Shareholders and
the financial analyses presented to the Special Committee by Salomon Smith
Barney in connection with the delivery of its opinion (see "-- Opinion of
Salomon Smith Barney");

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<PAGE> 23

(iv) Salomon Smith Barney's oral confirmation, at the joint meeting of
the Ticketmaster Board and the Special Committee held on March 20, 1998,
that nothing had come to the attention of Salomon Smith Barney that would
cause it to change the conclusion of the opinion it had given on March 9,
1998;

(v) the terms and conditions of the Merger Agreement, including the
amount and form of consideration, and the nature of the parties'
representations, warranties, covenants and agreements and the fact that the
conditions to USAi's obligation to consummate the Merger are reasonably
limited and thus the risk that the Merger would not be consummated was
reasonably small (see "-- Description of the Merger");

(vi) the opportunity for Ticketmaster shareholders to become holders
of USAi Common Stock, a stock which the Special Committee believed would
perform at least as well as Ticketmaster Common Stock over the long-term
and that also has greater liquidity than Ticketmaster Common Stock, and the
fact that USAi is a larger and more diversified entity;

(vii) the relative trading prices and volumes of Ticketmaster Common
Stock and USAi Common Stock and the Historical Exchange Ratios;

(viii) the history of the negotiations with respect to the Exchange
Ratio that, among other things, led to an increase in USAi's offer

- from the Initial Proposal of 1.012 shares of USAi Common Stock for
each share of Ticketmaster Common Stock, subject to a collar (which
would have resulted in each share of Ticketmaster Common Stock being
exchanged for USAi Common Stock having a market value of $25.30 or
less)

- to the Revised Proposal of 1.126 shares of USAi Common Stock for each
share of Ticketmaster Common Stock, without any collar (an increase of
approximately 11% in the Exchange Ratio),

and the Special Committee's belief that the economic terms contained in the
Revised Proposal and the Merger Agreement represented the best economic
terms that could be obtained from USAi;

(ix) the structure of the Merger, which permits the Ticketmaster
shareholders to exchange their Ticketmaster Common Stock for USAi Common
Stock in a transaction that is intended to be tax-free for federal income
tax purposes (see "-- Material Federal Income Tax Consequences");

(x) USAi's stated position that it would not sell its shares of
Ticketmaster Common Stock; and

(xi) the availability of dissenters' rights under the IBCA to
dissenting Ticketmaster shareholders in the Merger.

In light of the number and variety of factors the Special Committee
considered in connection with its evaluation of the Merger, the Special
Committee did not find it practicable to assign relative weights to the
foregoing factors, and, accordingly, the Special Committee did not do so.

Although the Special Committee did consider historical trading prices of
the USAi Common Stock and Ticketmaster Common Stock and the Historical Exchange
Ratios, the Special Committee did not place much significance on trading prices
of such common stock or Historical Exchange Ratios for the period following the
announcement of the Initial Proposal because it believed that such prices were
influenced by the terms announced, including the collar contained in the Initial
Proposal. The Special Committee did consider the going concern value of
Ticketmaster as reflected in the discounted cash flow analysis prepared by
Salomon Smith Barney (see "-- Opinion of Salomon Smith Barney"). The Special
Committee believed, based in part on the views of its advisors, that it was
unlikely that another entity would seek to acquire the remaining shares of
Ticketmaster Common Stock not owned by USAi. The Special Committee was of the
view, based in part on USAi's approximately 47% interest in Ticketmaster and its
unwillingness to sell such interest, as well as on the views of Salomon Smith
Barney, that it was highly unlikely that a solicitation of other bidders would
result in an offer to acquire the Public Shareholders' interests in a
transaction more favorable to the Public Shareholders than the Merger.

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<PAGE> 24

THE TICKETMASTER BOARD

The Ticketmaster Board has considered the unanimous recommendation of the
Special Committee, as well as the factors (enumerated above) considered by the
Special Committee, and has unanimously determined (with certain members of the
Board abstaining because of their relationship with USAi) that the Merger is
fair to, and in the best interests of, Ticketmaster and its shareholders, has
approved and adopted the Merger Agreement, and recommends that the Ticketmaster
shareholders vote to approve and adopt the Merger Agreement.

OPINION OF SALOMON SMITH BARNEY

At the meeting of the Special Committee held on March 9, 1998, Salomon
Smith Barney delivered its oral opinion, subsequently confirmed in writing on
March 9, 1998, that, as of such date, the Exchange Ratio was fair to the Public
Shareholders from a financial point of view. No limitations were imposed by the
Special Committee upon Salomon Smith Barney with respect to the investigation
made or the procedures followed by Salomon Smith Barney in rendering its
opinion.

THE FULL TEXT OF THE WRITTEN OPINION OF SALOMON SMITH BARNEY IS SET FORTH
AS APPENDIX B TO THIS PROXY STATEMENT/PROSPECTUS AND SETS FORTH THE ASSUMPTIONS
MADE, PROCEDURES FOLLOWED AND MATTERS CONSIDERED BY SALOMON SMITH BARNEY.
TICKETMASTER SHAREHOLDERS ARE URGED TO READ SALOMON SMITH BARNEY'S OPINION IN
ITS ENTIRETY. THE SUMMARY OF THE OPINION AS SET FORTH IN THIS PROXY
STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF SUCH OPINION, WHICH IS INCORPORATED HEREIN BY REFERENCE.

In connection with rendering its opinion, Salomon Smith Barney reviewed
certain publicly available information concerning Ticketmaster and USAi and
certain other financial information concerning Ticketmaster and USAi that were
provided to Salomon Smith Barney by Ticketmaster and USAi, respectively. Salomon
Smith Barney discussed the past and current business operations, financial
condition and prospects of Ticketmaster and USAi with certain officers and
employees of Ticketmaster and USAi, respectively. Although financial forecasts
with respect to Ticketmaster and USAi were not made available to Salomon Smith
Barney, both Ticketmaster and USAi confirmed the reasonableness of the financial
forecasts prepared by Salomon Smith Barney in connection with rendering its
opinion. Salomon Smith Barney also considered such other information, financial
studies, analyses, investigations and financial, economic and market criteria
that it deemed relevant.

In its review and analysis and in arriving at its opinion, Salomon Smith
Barney assumed and relied upon the accuracy and completeness of the information
it reviewed, and Salomon Smith Barney did not assume any responsibility for
independent verification of such information. Salomon Smith Barney did not make
or obtain, or assume any responsibility for making or obtaining, any independent
evaluation or appraisal of any of the assets (including properties and
facilities) or liabilities of Ticketmaster or USAi. Salomon Smith Barney was not
asked to, and did not, solicit other proposals to acquire Ticketmaster.

Salomon Smith Barney's opinion noted that approximately 47% of the then
outstanding shares of Ticketmaster Common Stock was owned, directly or
indirectly, by USAi.

Salomon Smith Barney's opinion is necessarily based upon conditions as they
existed and could be evaluated on the date thereof. Salomon Smith Barney's
opinion does not imply any conclusion as to the likely trading range for USAi
Common Stock following the consummation of the Merger, which may vary depending
upon, among other factors, changes in interest rates, dividend rates, market
conditions, general economic conditions and other factors that generally
influence the price of securities. Salomon Smith Barney's opinion does not
address Ticketmaster's underlying business decision to effect the Merger, and
Salomon Smith Barney expressed no view on the effect on Ticketmaster of the
Merger and related transactions. Further, Salomon Smith Barney's opinion is
directed only to the fairness, from a financial point of view, of the Exchange
Ratio to holders of Ticketmaster Common Stock (other than USAi or any subsidiary
of USAi) and does not constitute a recommendation concerning how holders of
Ticketmaster Common Stock should vote with respect to the proposal regarding the
Merger and the Merger Agreement.

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<PAGE> 25

In connection with its opinion, Salomon Smith Barney performed certain
financial analyses, which it discussed with the Special Committee and the
Ticketmaster Board on March 9, 1998 and again on March 20, 1998. The material
portions of the analyses performed by Salomon Smith Barney in connection with
the rendering of its opinion dated March 9, 1998 are summarized below. Although
the Exchange Ratio and the per share equity valuation numbers in the initial
analysis described below were calculated prior to the Stock Split, such numbers
have been adjusted to reflect such split in the following description:

(i) Historical Stock Price Performance. Salomon Smith Barney reviewed
the relationship between movements of Ticketmaster Common Stock, USAi
Common Stock, an index composed of diversified media companies' common
stocks, an index composed of data services companies' common stocks, an
index of internet retailers' common stocks and the Standard & Poor's 500
Index for the period from October 17, 1997 (the last trading day before the
announcement of the Universal Transaction), through March 9, 1998.

(ii) Historical Exchange Ratio Analysis. Salomon Smith Barney reviewed
the daily closing prices of Ticketmaster Common Stock and USAi Common Stock
during the period from November 19, 1996 (the first full day of public
trading of Ticketmaster Common Stock) through March 9, 1998 (the last
trading day before the announcement of the agreement in principle between
Ticketmaster and USAi concerning the Merger), and the implied historical
exchange ratios determined by dividing the price per share of Ticketmaster
Common Stock by the price per share of USAi Common Stock (the "Historical
Exchange Ratio") over such period. Salomon Smith Barney felt that the most
relevant time during this period was the three-month span from July 29,
1997 (the day that USAi completed the acquisition of its approximately 47%
stake in Ticketmaster) until October 23, 1997 (the day that USAi announced
its Initial Proposal to acquire the remaining shares of the Ticketmaster
Common Stock). Salomon Smith Barney calculated (i) that during the
three-month period from July 29, 1997 until October 23, 1997 the Historical
Exchange Ratio averaged 1.04 and (ii) that the Historical Exchange Ratio on
March 6, 1998 was 1.00.

(iii) Ticketmaster Valuation Analysis. Salomon Smith Barney arrived at
a range of values for Ticketmaster by utilizing three principal valuation
methodologies: a public market analysis, a segment valuation analysis and a
discounted cash flow analysis. A public market analysis reviews a business'
operating performance and outlook relative to a group of publicly traded
peer companies to determine an implied unaffected market trading value. A
segment valuation analysis separately values distinct segments of a company
using public market analysis with publicly traded companies comparable to
each segment and uses such valuations to arrive at a range of values for
the consolidated entity. A discounted cash flow analysis provides insight
into the intrinsic value of a business based on the projected earnings and
capital requirements and the net present value of the subsequent cash flows
anticipated to be generated by the assets of such business. No company used
in the public market analysis or in the segment valuation analysis
described below is identical to Ticketmaster. Accordingly, an examination
of the results of the analyses described below necessarily involves complex
considerations and judgments concerning differences in financial and
operating characteristics of the businesses and other facts that could
affect the public trading value or the acquisition value of the companies
to which they are being compared.

(a) Public Market Analysis. Salomon Smith Barney compared certain
financial information of Ticketmaster with three groups of companies
that Salomon Smith Barney believed to be appropriate for comparison. The
first group included APAC TeleServices, Precision Response, Sitel Corp.
and Teletech Holdings (the "Teleservices Companies"). The second group
included Automatic Data Processing, First Data Corp., Fiserv, National
Data Corp. and Total System Services (the "Data Services Companies").
The third group included Galileo International and Sabre Group Holdings
(the "Electronic Distribution Services Companies"). Salomon Smith Barney
reviewed, among other things, (i) the multiples of firm value to last
twelve months ("LTM") earnings before interest, taxes, depreciation and
amortization ("EBITDA") represented by the trading prices of the
Teleservices Companies, which ranged from 10.3x to 20.8x, with a mean of
14.2x, (ii) the comparable multiples for the Data Services Companies,
which ranged from 9.6x to 16.8x, with a
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<PAGE> 26

mean of 12.9x, and (iii) the comparable multiples for the Electronic
Distribution Services Companies, which ranged from 9.3x to 10.4x, with a
mean of 9.9x. Using this information and other factors deemed by Salomon
Smith Barney to be relevant in the valuation of Ticketmaster, Salomon
Smith Barney determined a multiple range (x) of firm value of
Ticketmaster to its 1998 fiscal year attributable EBITDA of 13.0x and
15.0x and (y) of firm value to its estimated 1999 fiscal year
attributable EBITDA of 10.0x and 12.0x. These multiple ranges implied
equity values per share of Ticketmaster Common Stock ranging from $20.36
to $24.36.

(1) Minority Premium Analysis. Salomon Smith Barney also
analyzed transactions similar to the Merger whereby a controlling
shareholder was purchasing the remainder of a company's stock that it
did not already own ("Minority Transactions"). Specifically, Salomon
Smith Barney reviewed the premiums paid for each share in the
Minority Transactions to determine what premium the merger
consideration represented when compared with the target companies'
share price four weeks prior to announcement of the offer and one day
prior to announcement of the offer. When this premium analysis was
combined with the public market analysis discussed above, Salomon
Smith Barney calculated a range of equity values for each share of
Ticketmaster Common Stock of $25.45 to $32.16.

(b) Segment Valuation Analysis. Salomon Smith Barney arrived at a
range of values for Ticketmaster by separately valuing its Internet
business ("Ticketmaster Online") from the rest of Ticketmaster's
operations. Salomon Smith Barney analyzed Ticketmaster Online's
operating performance and outlook relative to a group of publicly traded
peer companies to determine an implied unaffected market trading value.
Salomon Smith Barney compared certain financial information of
Ticketmaster Online with Amazon.com, Inc., CDNow and N2K Inc. (the
"Online Comparable Companies") which Salomon Smith Barney felt were
appropriate for comparison. Salomon Smith Barney reviewed (i) the
multiples of firm value to LTM revenues represented by the trading
prices of the Online Comparable Companies, which ranged from 11.6x to
30.4x, with a mean of 20.4x, and (ii) the multiples of firm value to
estimated 1998 revenues represented by the trading prices of the Online
Comparable Companies, which ranged from 4.4x to 7.1x, with a mean of
5.8x. Using this information and other factors relevant to the valuation
of Ticketmaster Online, such as that Ticketmaster Online, unlike its
public market Online Comparable Companies, is profitable, Salomon Smith
Barney determined a multiple range (x) of firm value of Ticketmaster
Online to its revenues for fiscal year 1998 of 12.0x to 14.0x and (y) of
firm value to its revenues for fiscal year 1999 of 7.0x to 9.0x. When
combined with the multiple ranges for the rest of Ticketmaster's
operations as described above under the public market analysis for
Ticketmaster as a consolidated entity (after subtracting Ticketmaster
Online from such ranges), this segment valuation analysis resulted in
implied equity values per share of Ticketmaster Common Stock ranging
from $21.72 to $26.11.

(c) Discounted Cash Flow Analysis. Salomon Smith Barney performed a
discounted cash flow analysis to provide insight into the intrinsic
value of Ticketmaster based on projected earnings and capital
requirements and the subsequent cash flows generated by the assets of
Ticketmaster. Salomon Smith Barney derived ranges of per share equity
values of Ticketmaster based upon the present value as of January 31,
1998 of its five-year stream of projected cash flow (based on estimates
provided by management of Ticketmaster) and the projected fiscal year
2003 terminal values based upon a range of multiples of its projected
fiscal year 2003 EBITDA if Ticketmaster were to continue on a
stand-alone basis (without giving effect to the Merger). Salomon Smith
Barney applied several discount rates reflecting a weighted average cost
of capital ("WACC") ranging from 11.5% to 13.5% and terminal multiples
of EBITDA ranging from 11.0x to 13.0x. Based on such WACC rates,
multiples and certain adjustments, this analysis resulted in implied per
share values of Ticketmaster Common Stock ranging from $29.43 to $37.06.

(iv) USAi Valuation Analysis. Salomon Smith Barney arrived at a range
of values for USAi by utilizing three principal valuation methodologies: a
public market analysis, a segment valuation analysis and a discounted cash
flow analysis. No company used in the public market analysis or in the
segment
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<PAGE> 27

valuation analysis described below is identical to USAi. Accordingly, an
examination of the results of the analyses described below necessarily
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the businesses and other facts
that could affect the public trading value or the acquisition value of the
companies to which they are being compared.

(a) Public Market Analysis. Salomon Smith Barney compared certain
financial information of USAi with a group of companies that Salomon
Smith Barney believed to be appropriate for comparison. The group
included The Walt Disney Co., The News Corporation Ltd., Time Warner
Inc., Viacom, Inc. ("Viacom"), Comcast Corporation and TCI Group (the
"USAi Comparable Companies"). Salomon Smith Barney reviewed, among other
things, (i) the multiples of firm value to LTM EBITDA represented by the
trading prices of the USAi Comparable Companies, which ranged from 9.1x
to 19.9x, with a mean of 12.9x, and (ii) the multiples of firm value to
1998 estimated EBITDA for the USAi Comparable Companies, which ranged
from 7.6x to 15.2x, with a mean of 10.4x. Using this information and
other factors deemed by Salomon Smith Barney to be relevant in the
valuation of USAi, Salomon Smith Barney determined a multiple range (x)
of firm value of USAi to its 1997 fiscal year EBITDA of 17.0x and 19.0x
and (y) of firm value to its estimated 1998 fiscal year EBITDA revenues
of 14.0x and 16.0x. Utilizing these multiple ranges and giving effect to
certain adjustments to reflect (i) certain tax benefits to USAi arising
from its transaction with Universal relating to Universal's transaction
with Viacom and (ii) the value of certain business segments of USAi
discussed under (b)(3)-(5) below not otherwise included in the foregoing
analysis (the "USAi Adjustments"), this analysis resulted in implied
equity values per share of USAi Common Stock ranging from $24.99 to
$27.97.

(b) Segment Valuation Analysis. Salomon Smith Barney arrived at a
range of values for USAi by separately valuing each of its business
segments directly to publicly traded peer companies in the same
industry.

(1) Home Shopping Segment. Salomon Smith Barney analyzed USAi's
Home Shopping business segment's operating performance and outlook
relative to a group of publicly traded peer companies to determine an
implied unaffected market trading value. Salomon Smith Barney
compared certain financial information of Home Shopping with
ValueVision International, Inc. and Shop at Home, Inc. (the
"Electronic Commerce Comparable Companies") which Salomon Smith
Barney felt were appropriate for comparison, although Salomon Smith
Barney noted that Home Shopping was larger and more profitable than
its public market Electronic Commerce Comparable Companies. Salomon
Smith Barney reviewed (i) the multiples of firm value to LTM EBITDA
represented by the trading prices of the Electronic Commerce
Comparable Companies, which were not meaningful for Valuevision and
were 7.8x for Shop at Home, with a mean of 7.8x, and (ii) the
multiples of firm value to estimated 1998 EBITDA represented by the
trading prices of the Electronic Commerce Comparable Companies, which
were not available for Valuevision and were 5.4x for Shop at Home,
with a mean of 5.4x. Using this information and other factors
relevant to the valuation of Home Shopping, Salomon Smith Barney
determined a multiple range (x) of firm value of Home Shopping to its
1997 EBITDA of 14.0x to 16.0x and (y) of firm value to its estimated
1998 EBITDA of 12.0x to 14.0x. This analysis resulted in a valuation
of Home Shopping ranging from $2,340 million to $2,800 million.

(2) Ticketmaster Segment. Using the multiple ranges discussed
under the Ticketmaster Segment Analysis described above, Salomon
Smith Barney calculated the value for the approximately 12.5 million
shares of Ticketmaster Common Stock currently owned by USAi as being
in a range from $254.3 million to $304.3 million.

(3) Cable TV Network Segment. Salomon Smith Barney analyzed
USAi's cable television network business segments (comprising USA
Network and Sci-Fi Channel, "USA/Sci-Fi") operating performance and
outlook relative to a group of publicly traded peer companies to
determine an implied unaffected market trading value. Salomon Smith
Barney

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compared certain financial information of USA/Sci-Fi with BET
Holdings and Playboy (the "TV Network Comparable Companies") which
Salomon Smith Barney felt were appropriate for comparison, although
Salomon Smith Barney noted that USA/Sci-Fi has greater penetration of
the cable television market and is more desirable to advertisers than
its public market TV Network Comparable Companies. Salomon Smith
Barney reviewed (i) the multiples of firm value to LTM EBITDA
represented by the trading prices of the TV Network Comparable
Companies, which ranged from 9.0x to 14.7x, with a mean of 11.9x, and
(ii) the multiples of firm value to estimated 1998 EBITDA represented
by the trading prices of the TV Network Comparable Companies, which
ranged from 8.3x to 11.8x, with a mean of 10.1x. Using this
information and other factors relevant to the valuation of
USA/Sci-Fi, Salomon Smith Barney determined a multiple range (x) of
firm value of USA/Sci-Fi to its 1997 EBITDA of 16.0x to 18.0x and (y)
of firm value to its estimated 1998 EBITDA of 14.0x to 16.0x. This
analysis resulted in a valuation of USA/Sci-Fi ranging from $2,780
million to $3,840 million.

(4) Studios Segment. Salomon Smith Barney analyzed USAi's
television production and distribution business segment's ("Studios
USA") operating performance and outlook relative to a group of
publicly traded peer companies to determine an implied unaffected
market trading value. Salomon Smith Barney compared certain financial
information of Studios with King World Productions and Spelling
Entertainment (the "TV Production Comparable Companies") which
Salomon Smith Barney felt were appropriate for comparison. Salomon
Smith Barney reviewed (i) the multiples of firm value to LTM EBITDA
represented by the trading prices of the TV Production Comparable
Companies, which ranged from 14.7x to 33.5x, with a mean of 24.1x,
and (ii) the multiples of firm value to estimated 1998 EBITDA
represented by the trading prices of the TV Production Comparable
Companies, which were 7.4x for King World and were not available for
Spelling Entertainment, with a mean of 7.4x. Using this information
and other factors relevant to the valuation of Studios USA, Salomon
Smith Barney determined a multiple range (x) of firm value of Studios
USA to its 1997 EBITDA of 12.0x to 14.0x and (y) of firm value to its
estimated 1998 EBITDA of 10.0x to 12.0x. This analysis resulted in a
valuation of Studios ranging from $500 million to $630 million.

(5) Broadcast Stations Segment. Salomon Smith Barney valued
USAi's broadcast television stations based on estimates of "stick
value" (the estimated value of a broadcast television station in a
given media market) and management projections. Such analysis
resulted in a valuation of such stations ranging from $1,360 million
to $1,620 million.

(6) Other Assets Segment. Salomon Smith Barney valued USAi's
other assets and minority interests in broadcast stations at
investment cost. This analysis resulted in a valuation of $180
million for such other assets.

By combining the stand alone valuations for Home Shopping,
Ticketmaster, USA/Sci-Fi, Studios USA, USAi's broadcast television
stations and other assets business segments described above and making
certain other adjustments, including giving effect to certain
adjustments to reflect certain tax benefits to USAi arising from its
transaction with Viacom, this segment valuation analysis resulted in
implied equity values per share of USAi Common Stock ranging from $23.07
to $26.79.

(c) Discounted Cash Flow Analysis. Salomon Smith Barney also
performed a discounted cash flow analysis of USAi. Salomon Smith Barney
derived ranges of per share equity value for USAi based upon the present
value as of January 1, 1998 of its fiscal year end five-year stream of
projected cash flow and the projected fiscal year 2002 terminal values
based upon a range of multiples of its projected fiscal year 2002 EBITDA
if USAi were to continue on a stand-alone basis (without giving effect
to the Merger). Salomon Smith Barney applied discount rates reflecting a
WACC ranging from 10.0% to 12.0% and multiples of terminal EBITDA
ranging from 12.0x to 14.0x. Based on such WACC and multiples, this
analysis resulted in a range of implied per share equity values of USAi

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Common Stock of $24.33 to $30.88. After giving effect to the USAi
Adjustments, such implied per share equity values of USAi Common Stock
became equal to a range of $25.85 to $32.41.

The preparation of a fairness opinion is a complex process not susceptible
to partial analysis or summary descriptions. The summary set forth above is not
and does not purport to be a complete description of the analyses underlying
Salomon Smith Barney's opinion or its presentation to the Special Committee.
Salomon Smith Barney believes that its analyses and the summary set forth above
must be considered as a whole and that selecting portions of its analyses and
the factors considered by it, without considering all such analyses and factors,
could create an incomplete view of the processes underlying the analyses set
forth in its opinion.

In performing its analyses, Salomon Smith Barney made numerous assumptions
with respect to industry performance, general business, financial, market and
economic conditions and other matters, many of which are beyond the control of
Ticketmaster or USAi. The analyses which Salomon Smith Barney performed are not
necessarily indicative of actual values or actual future results, which may be
significantly more or less favorable than suggested by such analyses. Such
analyses were prepared solely as part of Salomon Smith Barney's analysis of the
fairness, from a financial point of view, of the Exchange Ratio to the Public
Shareholders. The analyses do not purport to be appraisals or to reflect the
prices at which a company might actually be sold or the prices at which any
securities may trade at the present time or at any time in the future.

Pursuant to an engagement letter dated December 22, 1997, Ticketmaster
agreed to pay to Salomon Smith Barney: (a) a fee of $250,000, which was payable
following the execution of the engagement letter; and (b) an additional fee of
$1,000,000, which was payable following the date on which Salomon Smith Barney
informed the Special Committee of the Ticketmaster Board as to whether or not
Salomon Smith Barney could render its opinion. Ticketmaster also agreed, under
certain circumstances, to reimburse Salomon Smith Barney for all reasonable fees
and disbursements of Salomon Smith Barney's counsel and all of Salomon Smith
Barney's reasonable travel and other out-of-pocket expenses incurred in
connection with the Merger, or otherwise pursuant to Salomon Smith Barney's
engagement, and agreed to indemnify Salomon Smith Barney and certain related
persons against various liabilities, including liabilities under the federal
securities laws, relating to or arising out of its engagement.

Salomon Smith Barney is an internationally recognized investment banking
firm that provides financial services in connection with a wide range of
business transactions. As part of its business, Salomon Smith Barney regularly
engages in the valuation of companies and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and other purposes. In the past, Salomon Smith Barney has rendered certain
investment banking and financial advisory services to Ticketmaster for which
Salomon Smith Barney received customary compensation. In addition, in the
ordinary course of its business, Salomon Smith Barney may actively trade the
securities of Ticketmaster and USAi for its own account and the accounts of its
customers and, accordingly, may at any time hold a long or short position in
such securities. Salomon Smith Barney and its affiliates (including Travelers
Group Inc.) may have other business relationships with USAi, Ticketmaster and
their affiliates. The Special Committee of the Ticketmaster Board retained
Salomon Smith Barney based on Salomon Smith Barney's expertise in the valuation
of companies as well as its substantial experience in transactions such as the
Merger.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

GENERAL

The following discussion describes the material federal income tax
consequences of the Merger to holders of Ticketmaster Common Stock. The
discussion is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), U.S. Treasury regulations promulgated thereunder, and judicial and
administrative interpretations thereof, all as in effect on the date of this
Proxy Statement/Prospectus, and is subject to any changes in these or other laws
occurring after such date. The discussion does not address the effects of any
state, local or foreign tax laws or of any federal tax laws other than federal
income tax laws.

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The tax consequences of the Merger to an individual shareholder may vary
depending upon such shareholder's particular situation, and certain shareholders
(particularly any shareholder which, at the effective time of the Merger, is not
a U.S. Person, is a tax-exempt entity, securities dealer, broker-dealer,
insurance company or financial institution or is an individual who acquired his
or her shares of Ticketmaster Common Stock pursuant to an employee stock option
or otherwise as compensation or holds shares of Ticketmaster Common Stock as
part of a hedge, straddle or conversion transaction) may be subject to special
rules not discussed below. For these purposes, a U.S. Person is (1) a citizen or
resident of the United States for U.S. federal income tax purposes, (2) a
corporation or partnership created or organized in or under the laws of the
United States or any political subdivision thereof, (3) an estate, the income of
which is subject to U.S. federal income tax regardless of the source, or (4) a
trust with respect to which a court within the United States is able to exercise
primary supervision over its administration and one or more U.S. persons have
the authority to control all its substantial decisions.

EACH TICKETMASTER SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR AS TO
THE PARTICULAR TAX CONSEQUENCES TO IT OF THE MERGER, INCLUDING THE APPLICABILITY
AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY CHANGES IN ANY
APPLICABLE TAX LAWS.

The respective obligations of the parties to consummate the Merger are
conditioned on Ticketmaster's receipt of an opinion of Shearman & Sterling, the
special counsel to the Special Committee, and USAi's receipt of an opinion of
Wachtell, Lipton, Rosen & Katz, special counsel to USAi, in each case dated as
of the closing date, to the effect that (1) the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code and that each of Ticketmaster, Sub and USAi will be a party
to the reorganization within the meaning of Section 368(b) of the Code, and (2)
no gain or loss will be recognized, for federal income tax purposes, by
Ticketmaster shareholders who exchange Ticketmaster Common Stock for USAi Common
Stock pursuant to the Merger (except with respect to cash received in lieu of
fractional shares). Shareholders should be aware that an opinion of counsel is
not binding on the Internal Revenue Service ("IRS") or the courts. Shareholders
should also be aware that the opinions of Shearman & Sterling and Wachtell,
Lipton, Rosen & Katz will be based upon current laws and on certain customary
representations regarding factual matters made by USAi and Ticketmaster which,
if incorrect in certain material respects, might jeopardize the conclusions
reached by each counsel in its opinion.

Assuming that the Merger will qualify as a reorganization within Section
368(a) of the Code, the Merger will have the federal income tax consequences
discussed below.

TAX IMPLICATIONS TO TICKETMASTER SHAREHOLDERS

Except with respect to cash received by Ticketmaster shareholders in lieu
of a fractional share interest in USAi Common Stock, Ticketmaster shareholders
who exchange shares of Ticketmaster Common Stock in the Merger for USAi Common
Stock will not recognize gain or loss for federal income tax purposes upon the
receipt of USAi Common Stock in exchange for their Ticketmaster Common Stock.
The aggregate tax basis of the shares of USAi Common Stock received as a result
of the Merger will be the same as the shareholder's aggregate tax basis in the
Ticketmaster Common Stock surrendered in the exchange, reduced by the portion of
the shareholder's tax basis properly allocated to the fractional share interest,
if any, for which the shareholder receives cash. The holding period of the USAi
Common Stock received by Ticketmaster shareholders as a result of the Merger
will include the period during which the shareholder held the Ticketmaster
Common Stock exchanged in the Merger, provided that the shares of Ticketmaster
Common Stock so exchanged were held as capital assets at the effective time of
the Merger. A Ticketmaster shareholder who, as a result of sales of USAi Common
Stock by the exchange agent in the over-the-counter market, receives cash in
lieu of a fractional share of USAi Common Stock will recognize gain or loss in
an amount equal to the difference between the amount of cash so received and the
shareholder's adjusted tax basis allocable to such fractional share. Such gain
or loss will be capital gain or loss if such shareholder's shares of
Ticketmaster Common Stock are held as a capital asset at the effective time of
the Merger, and such capital gain or loss will be long-term capital gain or loss
if the holding period of the fractional share (determined as described above) is
more than one year, and in the case of individual holders, will be taxed at

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varying rates depending upon the holder's income level and the length of the
holding period for the fractional share interest.

BACKUP WITHHOLDING

Under the U.S. backup withholding rules, a holder of Ticketmaster Common
Stock may be subject to backup withholding at the rate of 31%, unless the
shareholder (1) is a corporation or comes within certain other exempt categories
and, when required, demonstrates this fact or (2) provides a correct taxpayer
identification number, certifies that such shareholder is not subject to backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. Any amount withheld under these rules will be credited
against the shareholder's federal income tax liability. USAi may require holders
of the Ticketmaster Common Stock to establish an exemption from backup
withholding or to make arrangements which are satisfactory to USAi to provide
for the payment of backup withholding. A shareholder that does not provide USAi
with its current taxpayer identification number may be subject to penalties
imposed by the IRS.

ACCOUNTING TREATMENT OF THE MERGER

In accordance with generally accepted accounting principles ("GAAP"), the
Merger will be accounted for under the purchase method of accounting with USAi
treated as the acquiror for accounting purposes in accordance with Accounting
Principles Board Opinion No. 16, "Business Combinations," as amended.

FEDERAL SECURITIES LAWS CONSEQUENCES; RESALE RESTRICTIONS

All shares of USAi Common Stock received by Ticketmaster shareholders in
the Merger will be freely transferable under the Securities Act of 1933, as
amended (the "Securities Act"), except that shares of USAi Common Stock received
by persons who are deemed to be "affiliates" of Ticketmaster under the
Securities Act at the time of the Annual Meeting may be resold by them only in
transactions permitted by Rule 145 or as otherwise permitted under the
Securities Act. Persons who may be deemed to be affiliates of Ticketmaster for
such purposes generally include individuals or entities that control, are
controlled by or are under common control with Ticketmaster and generally
include certain officers, directors and significant Ticketmaster shareholders.
The Merger Agreement requires Ticketmaster to use its reasonable best efforts to
cause each of such affiliates to execute a written agreement to the effect that
such person will not offer or sell or otherwise dispose of any of the shares of
USAi Common Stock issued to such person in the Merger in violation of the
Securities Act or the rules and regulations promulgated by the SEC thereunder.

This Proxy Statement/Prospectus does not cover any resales of the USAi
Common Stock to be received by the Ticketmaster shareholders upon consummation
of the Merger, and no person is authorized to make any use of this Proxy
Statement/Prospectus in connection with any such resale.

LITIGATION

Ticketmaster and, in certain cases, USAi and certain of Ticketmaster's
current and former directors have been named as defendants in six purported
class action lawsuits brought on behalf of Public Shareholders (of which the
Illinois cases have been consolidated and one case has been dismissed): In re
Ticketmaster Group, Inc. Securities Class Action Litigation, 97 CH 13411
(Circuit Court, Cook County, IL); Tiger Options LLC v. Ticketmaster Group, Inc.,
et al., Case No. BC 180045 (Los Angeles Superior Court); and Bender v.
Ticketmaster Group, Inc., et al., Case No. BC 181006 (Los Angeles Superior
Court), all of which were instituted in late October 1997. The complaints, all
of which are substantially similar, challenge the Initial Proposal and allege
that the consideration offered by USAi under such proposal is inadequate and
that the defendants have breached their fiduciary duties to the Plaintiffs and
the class of Ticketmaster shareholders which they claim to represent. The cases
seek to enjoin the proposed transaction and ask for unspecified damages.
Plaintiffs in one of the California cases have agreed to stay proceedings in
that case pending the outcome of the Illinois case. Ticketmaster and USAi
believe that all of the lawsuits are without merit and intend to vigorously
defend the claims asserted. See "The Merger -- Background -- Background of the
Merger."

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DESCRIPTION OF THE MERGER

GENERAL

At the Effective Time, Ticketmaster and USAi will consummate the Merger, in
which Sub will merge with and into Ticketmaster. As a result of the Merger, the
separate corporate existence of Sub will cease and Ticketmaster will be the
surviving corporation (the "Surviving Corporation") of the Merger and a direct
wholly owned subsidiary of USAi. If the requisite approval of Ticketmaster
shareholders is received, the Merger is expected to be consummated promptly
after the Annual Meeting assuming that the other conditions to consummation of
the Merger have been satisfied or waived.

THE MERGER AGREEMENT

THIS SECTION OF THE PROXY STATEMENT/PROSPECTUS DESCRIBES CERTAIN ASPECTS OF
THE MERGER AGREEMENT AND THE PROPOSED MERGER. THE FOLLOWING DESCRIPTION DOES NOT
PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MERGER AGREEMENT, WHICH IS ATTACHED AS APPENDIX A TO THIS PROXY STATEMENT/
PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE. TICKETMASTER SHAREHOLDERS
SHOULD READ THE MERGER AGREEMENT CAREFULLY.

GENERAL TERMS OF THE MERGER

The Merger will become effective upon the filing of properly executed
articles of merger with, and the issuance of a certificate of merger by, the
Secretary of State of the State of Illinois in accordance with the IBCA (the
"Effective Time").

At the Effective Time, the certificate of incorporation and bylaws of Sub
will become the certificate of incorporation and bylaws of the Surviving
Corporation. Also, the directors of Sub will become the initial directors of the
Surviving Corporation and the officers of Ticketmaster will continue as the
officers of the Surviving Corporation.

CONVERSION OF TICKETMASTER COMMON STOCK

At the Effective Time, each share of Ticketmaster Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares held by
Ticketmaster shareholders who properly demand dissenters' rights in accordance
with Sections 11.65 and 11.70 of the IBCA), will, subject to anti-dilution
adjustment of the Exchange Ratio, be automatically converted into the right to
receive 1.126 fully paid and nonassessable shares of USAi Common Stock. At the
Effective Time, Ticketmaster Common Stock will no longer be outstanding, and
will automatically be cancelled and retired and will cease to exist, and each
certificate previously representing any such shares (including shares of
Ticketmaster Common Stock held by USAi) will thereafter represent only the right
to receive the shares of USAi Common Stock to be issued as consideration upon
the surrender of such certificate, without interest. USAi's shares of
Ticketmaster Common Stock will be contributed to a subsidiary of USAi and such
subsidiary shall receive shares of USAi Common Stock in exchange for such shares
of Ticketmaster Common Stock. No fractional shares of USAi Common Stock shall be
issued; and, in lieu thereof, a cash payment shall be made.

If, between the date of the Merger Agreement and the Effective Time, the
number or class of outstanding shares of USAi Common Stock changes due to any
reclassification, recapitalization, split-up, stock dividend, stock combination,
exchange of shares, readjustment or otherwise, then the Exchange Ratio shall be
correspondingly adjusted.

EXCHANGE OF SHARES

Common Stock. As soon as practicable after the Effective Time, the exchange
agent will mail transmittal forms and exchange instructions to each holder of
record (other than Ticketmaster, USAi, Sub and any wholly owned subsidiary of
Ticketmaster) of a certificate or certificates formerly representing shares of
Ticketmaster Common Stock (collectively, the "Certificates"). After receipt of
such transmittal forms, each holder of a Certificate will be able to surrender
such Certificate to the exchange agent, and the holder of such

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Certificate will receive in exchange therefor certificates representing that
number of whole shares of USAi Common Stock to which such holder is entitled,
any cash which may be payable in lieu of fractional shares of USAi Common Stock,
and any dividends or other distributions with respect to USAi Common Stock with
a record date after the Effective Time declared or made after the Effective
Time. In the event of a transfer of ownership of shares of Ticketmaster Common
Stock which is not registered on the transfer records of Ticketmaster, a
certificate representing the proper number of shares of USAi Common Stock, any
cash in lieu of fractional shares of USAi Common Stock and applicable dividends
may be issued and paid to a transferee if the Certificate representing such
Ticketmaster Common Stock is presented to the exchange agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid.

No dividends or other distributions declared or made after the Effective
Time with respect to USAi Common Stock with a record date after the Effective
Time will be paid to the holder of any unsurrendered Certificate with respect to
the shares of USAi Common Stock represented thereby, and no cash payment in lieu
of fractional shares shall be paid to any such holder until the holder of record
of such Certificate shall surrender such Certificate. Subject to applicable
laws, following surrender of any such Certificate, such dividends and
distributions, together with any cash payment in lieu of a fractional share of
the USAi Common Stock, will be paid without interest.

Stock Options. At the Effective Time, Ticketmaster's obligation with
respect to each outstanding option (each, a "Ticketmaster Option") to purchase
shares of Ticketmaster Common Stock issued pursuant to Ticketmaster's Stock Plan
(the "Ticketmaster Stock Plan") and (unless otherwise elected by the optionee
pursuant to the terms of an individual agreement) pursuant to the Stock Option
Agreement, dated as of December 15, 1993, between Ticketmaster and Fredric D.
Rosen (the "Rosen Option"), as amended, shall be assumed by USAi. Ticketmaster
Options so assumed by USAi shall continue to have, and be subject to, the same
terms and conditions as set forth in the Ticketmaster Stock Plan and the Rosen
Option and the agreements pursuant to which such Ticketmaster Options were
issued as in effect immediately prior to the Effective Time, except that (i)
each Ticketmaster Option shall be exercisable for that number of whole shares of
USAi Common Stock equal to the product of (a) that number of shares of
Ticketmaster Common Stock covered by such Ticketmaster Option immediately prior
to the Effective Time multiplied by (b) the Exchange Ratio and rounded up to the
nearest whole number of shares of USAi Common Stock, and (ii) the exercise price
per share of USAi Common Stock shall equal (a) the exercise price per share of
Ticketmaster Common Stock in effect immediately prior to the Effective Time
divided by (b) the Exchange Ratio.

REPRESENTATIONS AND WARRANTIES; COVENANTS

The Merger Agreement contains standard representations and warranties of
USAi and Ticketmaster. It also contains customary covenants as well as specific
covenants relating to the conduct of the respective parties' businesses pending
the closing of the Merger. Ticketmaster (as to itself and its subsidiaries) has
agreed, among other things and subject to certain exceptions, that without
USAi's prior consent it will not:

- merge or consolidate with, or acquire assets of, any other person other
than in the ordinary course;

- incur or increase any indebtedness or guarantee any indebtedness of
another person;

- enter into, materially change or terminate certain material contracts;

- enter into any transaction with any officer or director of Ticketmaster;

- authorize or make any capital expenditures other than as previously
disclosed to USAi;

- take any action with respect to accounting policies or procedures other
than those required by applicable law or GAAP;

- settle or compromise any material litigation;

- enter into any new employment agreements, or increase the compensation
paid to its employees or officers; or

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- authorize or enter into any formal or informal agreement or otherwise
make any commitment to do any of the foregoing.

Indemnification; Insurance. USAi will cause the Surviving Corporation to
maintain in effect, for a period of six years after the Effective Time, the
current indemnification provisions contained in the Articles of Incorporation
and Bylaws of Ticketmaster. Upon the Effective Time, USAi shall assume all of
the obligations of Ticketmaster under Ticketmaster's existing indemnification
agreements with each of the existing and former directors and officers of
Ticketmaster. In addition, USAi agrees to provide to the current directors and
officers of Ticketmaster the maximum indemnification protection (including with
respect to advancement of expenses) permitted under the IBCA. USAi has also
agreed to cause Ticketmaster to have in effect, as of the Effective Time and
covering the six-year period following the Effective Time, directors' and
officers' insurance in the same amount and on substantially the same terms as
Ticketmaster's current directors' and officers' policies with respect to acts
and omissions occurring on or prior to the Effective Time.

Employee Matters. From and after the Effective Time, USAi will cause the
Surviving Corporation to fulfill all written employment, severance, termination,
consulting and retirement agreements, as in effect on the date hereof, to which
Ticketmaster or any of its subsidiaries is a party, pursuant to the terms
thereof and applicable law.

CONDITIONS TO THE MERGER

The respective obligations of USAi, Sub and Ticketmaster to effect the
Merger are subject to the satisfaction of a number of customary conditions,
including:

- Effective Registration Statement. The registration statement on Form S-4
covering the shares of USAi Common Stock to be issued in connection with
the Merger having become effective and not being the subject of any stop
order or proceeding by the SEC seeking a stop order.

- Shareholder Approval. The Merger Agreement having been approved and
adopted by the requisite vote of the Ticketmaster shareholders, in
accordance with all applicable provisions of the IBCA.

- Governmental Entity Approvals. All other material authorizations,
consents, orders or approvals of, or declarations or filings with, or
expiration of waiting periods imposed by, any governmental entity
necessary for the Merger and the consummation of the transactions
contemplated by the Merger Agreement having been filed, expired or been
obtained except where the failure to so file, obtain or expire would not,
in the reasonable opinion of USAi, have a material adverse effect on
Ticketmaster or USAi.

- No Injunctions or Proceedings. No temporary restraining order,
preliminary or permanent injunction or other order being in effect that
would prevent the consummation of the Merger or the other transactions
contemplated by the Merger Agreement; no proceeding being brought by an
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing being
pending or threatened; and there not being any statute, rule, regulation
or order enacted, entered or enforced which makes the consummation of the
Merger or the other transactions contemplated by the Merger Agreement
illegal or prevents or prohibits the Merger or such other transactions.

- NASDAQ Quotation. The shares of USAi Common Stock issuable to the holders
of Ticketmaster Common Stock pursuant to the Merger having been
authorized for quotation on The Nasdaq Stock Market ("NASDAQ") (or
other national market or exchange on which USAi Common Stock is then
traded or quoted).

- Representations and Warranties; Performance of Obligations. The
representations and warranties set forth in the Merger Agreement of the
other party being true and correct as of the date of the Merger Agreement
and as of the closing date and the performance in all material respects
by the other party of its respective obligations and covenants required
to be performed by such party under the Merger Agreement prior to or as
of the closing date.

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- Tax Opinions. USAi having received a written opinion from its special
counsel, and Ticketmaster having received a written opinion from special
counsel to the Special Committee, regarding the tax-free nature of the
Merger.

The obligations of Ticketmaster to effect the Merger are further
conditioned on Mr. Barry Diller continuing to be the Chief Executive Officer of
USAi.

AMENDMENT; WAIVER

Amendment. The Merger Agreement may be amended in writing prior to the
Effective Time by USAi, Sub and Ticketmaster (provided, that no amendment will
be approved by the Ticketmaster Board unless such amendment was recommended by
the Special Committee and, if required by law, approved by the disinterested
directors of Ticketmaster), at any time before or after approval of the Merger
by the Ticketmaster shareholders but, after any such shareholders approval, no
amendment will be made which by law requires further approval by such
shareholders without such further approval.

Waiver. At any time prior to the Effective Time, USAi and Ticketmaster may,
in writing, (i) extend the time for the performance of any of the obligations or
other acts of the other parties, (ii) waive any inaccuracies in the
representations and warranties contained in the Merger Agreement or in any
document delivered pursuant to the Merger Agreement and (iii) waive compliance
with any of the agreements or conditions contained in the Merger Agreement. Any
extension or waiver on behalf of Ticketmaster will be taken only upon the
recommendation of the Special Committee (and, if required by law, by the
disinterested directors of Ticketmaster).

TERMINATION OF THE MERGER AGREEMENT; FEES AND EXPENSES

Termination by Either USAi or Ticketmaster. The Merger Agreement may be
terminated at any time prior to the Effective Time by mutual written consent, or
by either USAi or Ticketmaster if (i) the Merger has not been consummated by
December 31, 1998 (provided, that the party wishing to terminate the Merger
Agreement shall not have prevented such consummation by failing to fulfill any
of its obligations under the Merger Agreement), (ii) a court of competent
jurisdiction or other governmental entity enters an order, decree or ruling
(which order, decree or ruling is final and nonappealable), or takes any other
action, preventing the consummation of the Merger, (iii) a governmental,
regulatory or administrative agency or commission proceeds to enjoin the Merger
and the terminating party reasonably believes that the time period required to
resolve such governmental action and the related uncertainty is reasonably
likely to have a material adverse effect on either USAi or Ticketmaster, or (iv)
the required approval of Ticketmaster shareholders contemplated by the Merger
Agreement was not obtained due to the failure to obtain the required vote
(provided, that the party wishing to terminate the Merger Agreement shall not
have deliberately failed to obtain the required shareholder approval).

Termination by USAi. USAi may terminate the Merger Agreement (i) if the
Ticketmaster Board, acting on the recommendation of the Special Committee,
withdraws or modifies its recommendation concerning the Merger, or (ii) upon a
breach of any representation, warranty, covenant or agreement on the part of
Ticketmaster set forth in the Merger Agreement, or if any representation or
warranty of Ticketmaster shall have become untrue, such that the conditions with
respect to the representations and warranties and performance of obligations
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Ticketmaster's representations and warranties or breach by
Ticketmaster is curable by Ticketmaster through the exercise of its reasonable
efforts and for so long as Ticketmaster continues to exercise such reasonable
efforts, USAi may not terminate the Merger Agreement.

Termination by Ticketmaster. Ticketmaster may terminate the Merger
Agreement, upon a breach of any representation, warranty, covenant or agreement
on the part of USAi set forth in the Merger Agreement, or if any representation
or warranty of USAi shall have become untrue, such that the conditions with
respect to the representations and warranties and performance of obligations
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
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<PAGE> 36

inaccuracy in USAi's representations and warranties or breach by USAi is curable
by USAi through the exercise of its reasonable efforts and for so long as USAi
continues to exercise such reasonable efforts, Ticketmaster may not terminate
the Merger Agreement.

Effect of Termination. In the event of the termination of the Merger
Agreement, the Merger Agreement shall be of no further force or effect, except
(i) the treatment of confidential information, (ii) the effect of termination on
fees and expenses, and (iii) the general provisions, all of which will survive
the termination of the Merger Agreement.

Fees and Expenses. All fees and expenses incurred in connection with the
Merger Agreement and the transactions contemplated by the Merger Agreement shall
be paid by the party incurring such fees and expenses, whether or not the Merger
is consummated.

COOPERATION, NON-COMPETITION AND CONFIDENTIALITY AGREEMENT

USAi has entered into the Cooperation Agreement with Fredric D. Rosen,
Ticketmaster's chief executive officer. Pursuant to the Cooperation Agreement,
Mr. Rosen agreed to cooperate with Ticketmaster and USAi to provide for an
orderly transition in the leadership of Ticketmaster, including working with his
successor. The Cooperation Agreement provides that if Mr. Rosen's successor is
chosen prior to the termination of his employment contract with Ticketmaster,
such action by USAi will not constitute a breach of Mr. Rosen's employment
contract or a good reason for Mr. Rosen to terminate such contract. Furthermore,
if the successor assumes part or all of Mr. Rosen's responsibilities, such
assumption of responsibility will not constitute a breach by Mr. Rosen of his
employment contract. Any compensation paid to the successor will be excluded
from the computation of Mr. Rosen's performance bonus, as provided under his
employment contract. On May 11, 1998, Ticketmaster announced that, following
consummation of the Merger, Terry Barnes and Eugene Cobuzzi (each of whom is
currently an executive officer of Ticketmaster Corporation, the principal
operating subsidiary of Ticketmaster) would become the chief executive officer
and the chief operating officer, respectively, of Ticketmaster.

The Cooperation Agreement also contains provisions relating to the
stock-based compensation terms of his Ticketmaster employment contract. It
provides that the obligation of Ticketmaster to repurchase Ticketmaster Common
Stock (including USAi Common Stock issued in exchange for those shares) from Mr.
Rosen, the Rosen Family Foundation or their transferees upon Mr. Rosen's request
remains unaffected; provided that Mr. Rosen gives Ticketmaster a 30-day notice
and that the repurchase obligation may be satisfied by USAi causing Ticketmaster
to arrange to place Mr. Rosen's shares (including USAi Common Stock issued in
exchange for Ticketmaster Common Stock) with a third party. In addition, USAi
will cause Ticketmaster to pay Mr. Rosen the excess, if any, of the amount of
cash he would have received with respect to such repurchase obligation over the
amount received by Mr. Rosen in such placement.

The Cooperation Agreement further provides that, prior to the Effective
Time and in connection with the exercise of his rights under his Ticketmaster
employment contract, Mr. Rosen may elect (i) to have his outstanding stock
options assumed by USAi at the Effective Time pursuant to the terms of the
Merger Agreement and/or (ii) to the extent such assumption is not elected, to
have USAi cause Ticketmaster to provide him with an amount (the "Spread") equal
to the product of (A) the excess of the "merger consideration" per share over
the exercise price per share of the option and (B) the number of shares subject
to such option. If Mr. Rosen elects to receive the Spread for all or a portion
of his options, then Ticketmaster may elect to provide the Spread in cash and/or
USAi Common Stock. If requested by Mr. Rosen at the Effective Time, USAi will
cause Ticketmaster to arrange to place any such shares of USAi Common Stock with
a third party and to pay Mr. Rosen the excess, if any, of the amount of cash Mr.
Rosen would have received for the Spread over the amount actually received.

Finally, the Cooperation Agreement prohibits Mr. Rosen from competing with
Ticketmaster as provided in the agreement or from soliciting any Ticketmaster
employee or customer through January 31, 2001. The Cooperation Agreement further
prohibits Mr. Rosen from disclosing Ticketmaster's proprietary information
through January 31, 2004. The Cooperation Agreement will promptly terminate if
the Merger is not consummated.
30
<PAGE> 37

USAi and Mr. Rosen are currently discussing the terms of a possible
severance arrangement between Mr. Rosen and Ticketmaster. As of the date of this
Proxy Statement/Prospectus, no such arrangement has been reached.

See "The Annual Meeting -- Directors and Executive Officers of
Ticketmaster -- Employment Agreements" for a summary of Mr. Rosen's employment
contract.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

GENERAL

In considering the recommendations of the Special Committee and the
Ticketmaster Board with respect to the Merger, the Ticketmaster shareholders
should be aware that certain members of Ticketmaster's management and the
Ticketmaster Board have certain interests summarized below that are in addition
to or different from the interests of Ticketmaster shareholders generally and
that may present them with potential conflicts of interest in connection with
the Merger. The Special Committee and the Ticketmaster Board recognized such
interests and determined that such interests did not detract from the fairness
of the Merger to the shareholders.

USAi is the owner of approximately 47% of Ticketmaster Common Stock. Paul
G. Allen, Chairman of the Board of Ticketmaster, is also a director of USAi.
Barry Diller, a director of Ticketmaster since July 17, 1997, is also the
Chairman and Chief Executive Officer of USAi. James G. Held, a director of
Ticketmaster since July 17, 1997, is also the President and Chief Executive
Officer of Home Shopping. William D. Savoy, a member of the Ticketmaster Board
is also a director of USAi. Fredric D. Rosen, President and Chief Executive
Officer of Ticketmaster and a director since 1988, became a director of USAi on
July 17, 1997, but subsequently resigned three months later. USAi and Mr. Rosen
are also parties to the Cooperation Agreement. See "-- Cooperation,
Non-Competition and Confidentiality Agreement" for a summary of the terms of
such Agreement.

COMPENSATION OF MEMBERS OF THE SPECIAL COMMITTEE

Jonathan L. Dolgen and Terence M. Strom, each an independent director,
serve on the Special Committee. Each of the members of the Special Committee is
being paid $15,000 per month for serving on the Special Committee. This
compensation was authorized by the Ticketmaster Board in order to compensate the
members thereof for the significant additional time commitment that would be
required of them in connection with fulfilling their duties and responsibilities
as members of the Special Committee and was paid, and will be paid until
consummation or termination of the Merger, without regard to whether the Special
Committee had approved the Merger. The members of the Special Committee also
receive the compensation described in "The Annual Meeting -- Directors and
Executive Officers of Ticketmaster -- Compensation of Directors."

OFFICERS OF THE SURVIVING CORPORATION

The officers of Ticketmaster at the Effective Time will be the officers of
the Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified. See "The
Annual Meeting -- Directors and Executive Officers of Ticketmaster."

OWNERSHIP OF COMMON STOCK

As of the Record Date, excluding shares subject to Ticketmaster Options
exercisable as of such date and excluding shares held by certain trusts in which
certain persons have an interest and certain trusts or foundations for which
certain persons are trustees, (i) the directors and executive officers of
Ticketmaster, as a group, owned an aggregate of 278,708 shares of Ticketmaster
Common Stock (representing approximately 1.1% of the then outstanding shares of
Ticketmaster Common Stock) and will be entitled to receive approximately 313,825
shares of USAi Common Stock for their shares of Ticketmaster Common Stock upon
consummation of the Merger, (ii) the members of the Special Committee, as a
group, owned an aggregate of 10,000 shares of Ticketmaster Common Stock
(representing approximately 0.04% of the then outstanding
31
<PAGE> 38

shares of Ticketmaster Common Stock) and will be entitled to receive 11,260
shares of USAi Common Stock for their shares of Ticketmaster Common Stock upon
consummation of the Merger, and (iii) directors and officers of USAi and its
subsidiaries who are also members of the Ticketmaster Board, as a group, owned
no shares of Ticketmaster Common Stock. All of such shares of Ticketmaster
Common Stock held by such directors and executive officers of Ticketmaster and
by the members of the Special Committee will be treated in the Merger in the
same manner as shares of Ticketmaster Common Stock held by the other
Ticketmaster shareholders. See "-- The Merger Agreement -- Exchange of Shares --
Common Stock."

TICKETMASTER OPTIONS

As of the Record Date, the directors and executive officers of
Ticketmaster, as a group, had Ticketmaster Options which, on such date, were
unexercised but exercisable at such time or within a period of 60 days from such
date for an aggregate of 1,972,732 shares of Ticketmaster Common Stock. As of
the Record Date, members of the Special Committee, as a group, had Ticketmaster
Options, which, on such date, were unexercised but exercisable at such time or
within a period of 60 days from such date for an aggregate of 45,000 shares of
Ticketmaster Common Stock. As of the Record Date, certain directors and
executive officers of USAi and its subsidiaries who are also members of the
Ticketmaster Board, as a group, had Ticketmaster Options which, on such date,
were unexercised but exercisable at such time or within a period of 60 days from
such date for an aggregate of 45,000 shares of Ticketmaster Common Stock. See
"The Annual Meeting -- Security Ownership of Certain Beneficial Owners and
Management." In the Merger, Ticketmaster Options held by such directors and
executive officers and by the members of the Special Committee will be converted
into options to purchase USAi Common Stock. See "-- The Merger
Agreement -- Exchange of Shares -- Stock Options." With certain exceptions, the
vesting of options outstanding and not fully vested on July 17, 1997 was
accelerated on that date as a result of the change in control that resulted when
USAi purchased the shares of Ticketmaster Common Stock then owned by Mr. Allen.

INDEMNIFICATION AND INSURANCE

For a discussion of certain agreements by USAi with respect to
indemnification of, and insurance for, directors and officers of the Company,
see "-- The Merger Agreement -- Certain Covenants -- Indemnification;
Insurance."

DISSENTERS' RIGHTS

Ticketmaster shareholders who do not vote in favor of the Merger and who
follow certain procedures, as described below, will have the right to dissent
from the Merger and to demand and obtain payment of the "fair value" of their
shares in cash or, in the alternative, may be instructed to sell their shares in
the public market. The proceedings resulting from such a demand may result in a
determination of "fair value" equal to, less than or greater than the
consideration to be received under the Merger Agreement.

The following is a summary of Sections 11.65 and 11.70 of the IBCA which
specify the procedures that a Ticketmaster shareholder must follow to dissent
from the Merger and demand payment for his or her shares. THE FOLLOWING SUMMARY
IS NOT A COMPLETE STATEMENT OF THE LAW PERTAINING TO DISSENTERS' RIGHTS UNDER
THE IBCA. ANY TICKETMASTER SHAREHOLDER CONTEMPLATING THE EXERCISE OF DISSENTERS'
RIGHTS SHOULD CAREFULLY REVIEW THE PROVISIONS OF SECTIONS 11.65 AND 11.70 OF THE
IBCA, A COPY OF WHICH IS ATTACHED AS APPENDIX C TO THIS PROXY
STATEMENT/PROSPECTUS, PARTICULARLY THE SPECIFIC PROCEDURAL STEPS REQUIRED TO
PERFECT SUCH RIGHTS CONTAINED IN SECTION 11.70. IF THE PROCEDURAL REQUIREMENTS
OF SECTION 11.70 ARE NOT PRECISELY SATISFIED, SUCH RIGHTS WILL BE LOST.

Under Section 11.70 of the IBCA, a Ticketmaster shareholder may assert
dissenters' rights only if he or she: (i) delivers to Ticketmaster prior to the
vote taken to approve the Merger at the Annual Meeting, a written demand for
payment for his or her shares in the event the Merger is consummated; and (ii)
does not vote in favor of the Merger (and does not execute a proxy appointing
another person to vote in favor of the Merger). If a Ticketmaster shareholder
submits a proxy that is not marked to indicate a vote with respect to the
Merger, such proxy will be counted as a vote in favor of the Merger, and will
constitute a waiver of

32
<PAGE> 39

statutory dissenters' rights. A dissenting shareholder retains all other rights
of a Ticketmaster shareholder until those rights are cancelled or modified by
the consummation of the Merger.

A record owner of shares may assert dissenters' rights as to fewer than all
of his shares only if he dissents as to all shares beneficially owned by any one
person and notifies Ticketmaster in writing of the name and address of each
person on whose behalf he asserts dissenters' rights. The rights of a partial
dissenter are determined as if the shares as to which dissent is made and the
other shares are recorded in the names of different shareholders. A beneficial
owner of shares who is not the record owner may assert dissenters' rights as to
shares held on such person's behalf only if the beneficial owner submits to
Ticketmaster the record owner's written consent to the dissent before or at the
same time the beneficial owner asserts dissenters' rights.

Within ten days after the Merger becomes effective, or thirty days after
the shareholder delivers to Ticketmaster the written demand for payment,
whichever is later, the Surviving Corporation will send each dissenting
shareholder: (i) a statement setting forth its opinion as to the estimated fair
value of the shares of Ticketmaster Common Stock; (ii) a balance sheet as of the
most recently completed fiscal year ending not earlier than sixteen months prior
to delivery of the statement, together with the statement of income for that
year and the latest available interim financial statements; and (iii) either a
commitment to pay the estimated fair value for the dissenting shareholder's
shares of Ticketmaster Common Stock upon that shareholder's transmittal of his
or her stock certificate(s) or other evidence of ownership, or instructions to
the dissenting shareholder to sell his or her shares within ten days after
delivery of the Surviving Corporation's statement to the shareholder. The
Surviving Corporation may instruct the shareholder to sell only if there is a
public market at which the shares may be readily sold.

If the Surviving Corporation instructs the dissenting shareholder to sell
his or her shares and the shareholder does not sell them within that ten day
period, the shareholder shall be deemed to have sold his or her shares at the
average closing price of the shares if listed on a national exchange, or the
average of the bid and asked price with respect to the shares quoted by a
principal market maker, if not listed on a national exchange, during that ten
day period. If the Surviving Corporation commits to pay the dissenting
shareholder, it will pay to such dissenting shareholder who transmits to the
Surviving Corporation the certificate or other evidence of ownership of his
shares, the amount it estimates to be the fair value of the shares, plus accrued
Interest (as defined in Section 11.70 of the IBCA), from the Effective Time to
the date of payment, accompanied by a written explanation of how the Interest
was calculated.

If the dissenting shareholder does not agree with the Surviving
Corporation's estimate of the fair value of the shares or the Interest, the
shareholder, within thirty days after the delivery of the statement of value,
must notify the Surviving Corporation in writing of his or her estimate of fair
value and the Interest and demand payment for the difference between the
shareholder's estimate of fair value and the Interest and the amount of the
payment by the Surviving Corporation or the proceeds of the sale by the
shareholder, whichever applies. If, within sixty days from delivery to the
Surviving Corporation of the shareholder notification of estimate of fair value
of shares and the Interest, the Surviving Corporation and the dissenting
shareholder have not agreed in writing upon the fair value and the Interest, the
Surviving Corporation must either pay the difference in value demanded (with
Interest) or file a petition in the circuit court of Cook County, Illinois,
requesting the court to determine the fair value of the shares and Interest.

If the Surviving Corporation files a petition, it must make all dissenters
whose demands remain unsettled parties to the proceeding whether or not such
dissenters are residents of Illinois. All parties will be served with a copy of
the petition. The Surviving Corporation's failure to commence an action will not
limit or affect the right of dissenting shareholders to otherwise commence an
action as permitted by law.

In an appraisal proceeding, the court may appoint one or more persons as
appraisers to receive evidence and recommend a decision on the question of fair
value. According to Section 11.70 of the IBCA, "fair value" means the value of
the shares immediately before the consummation of the corporate action to which
the dissenter objects excluding any appreciation or depreciation in anticipation
of the corporate action, unless such exclusion would be inequitable.

33
<PAGE> 40

Each dissenter made a party to an appraisal proceeding is entitled to
judgment for the amount, if any, by which the court finds that the fair value of
the shares, plus Interest, exceeds the amount paid by the Surviving Corporation
or the proceeds of sale by the shareholder, whichever is applicable.

The court, in an appraisal proceeding, will determine all costs of the
proceeding, including the reasonable compensation and expenses of the
appraisers, if any, but will exclude the fees and expenses of counsel and
experts for any party. If the court's estimate of the fair value of the shares
materially exceeds the amount offered by the Surviving Corporation, or if no
offer was made, then all or any part of such expenses may be assessed against
the Surviving Corporation. If the dissenter's estimate materially exceeds the
value determined by the court, then all or any part of the costs may be assessed
against the dissenter.

OWNERSHIP INTEREST OF TICKETMASTER SHAREHOLDERS AFTER THE MERGER

Assuming that none of the Public Shareholders exercise dissenters' rights,
approximately 16,040,852 shares of USAi Common Stock will be issued to the
Public Shareholders in the Merger (excluding shares issuable upon exercise of
Ticketmaster Options and excluding shares issuable upon exercise of Universal's
and Liberty's preemptive rights), representing approximately 9.1% of outstanding
USAi Common Stock (assuming as outstanding all shares of USAi Common Stock
issuable upon exchange of LLC Shares and shares of Home Shopping).

34
<PAGE> 41

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed financial statements
(the "Condensed Statements") have been prepared to give effect to the Merger, as
well as acquisitions made by Ticketmaster during its fiscal year ended January
31, 1998. In addition, the Condensed Statements have been prepared to give
effect to the Universal Transaction through which USAi acquired USA Networks
("Networks") and Studios USA. The purchase method of accounting was used to give
effect to all transactions.

The Condensed Statements reflect certain assumptions regarding the proposed
Merger and the Universal Transaction and are based on the historical
consolidated financial statements of the respective entities. The Condensed
Statements, including the notes thereto, are qualified in their entirety by
reference to, and should be read in conjunction with, the audited and unaudited
financial statements, including the notes thereto, of USAi and Ticketmaster, and
the audited and unaudited financial statements of Networks and Studios USA,
including the notes thereto, all of which are incorporated by reference in this
Proxy Statement.

The pro forma combined condensed balance sheet as of March 31, 1998 gives
effect to the Merger as if it had occurred on March 31, 1998.

The pro forma combined condensed statement of operations for the three
months ended March 31, 1998 gives effect to the Merger and the Universal
Transaction as if they had occurred on January 1, 1998.

The pro forma combined condensed statement of operations for the year ended
December 31, 1997 reflects the audited consolidated statement of operations of
USAi combined with the unaudited pro forma results of operations of Ticketmaster
for the year ended January 31, 1998 (including the pro forma effects of certain
acquisitions of Ticketmaster) less amounts reflected in the USAi historical
statements of operations for the year ended December 31, 1997, and also reflects
the unaudited pro forma results of Studios USA (including the pro forma effects
of its acquisition of Networks), for the year ended December 31, 1997 and gives
effect to the Merger and the Universal Transaction as if they had occurred on
January 1, 1997.

After the consummation of the proposed Merger, and currently in connection
with the Universal Transaction, USAi will and is evaluating the fair value of
assets acquired and liabilities assumed, specifically including television
program rights, commitments to produce or purchase television programming,
contractual commitments to provide ticketing services and other contractual
commitments. Using this information, USAi will make a final allocation of the
excess purchase price, including allocation to the intangibles other than
goodwill. Accordingly, the purchase accounting information is preliminary and
has been made solely for the purpose of developing such unaudited pro forma
combined condensed financial information.

The Condensed Statements are presented for illustrative purposes only and
are not necessarily indicative of the financial position or results of
operations which would have actually been reported had the Merger occurred as of
March 31, 1998 or the Merger and the Universal Transaction had occurred as of
January 1, 1997 nor are the Condensed Statements necessarily indicative of
future financial position or results of operations.

35
<PAGE> 42

USA NETWORKS, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1998
(in thousands)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
USAi ADJUSTMENTS COMBINED
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments............................. $ 162,191 $ $ 162,191
Accounts and notes receivable, net.......................... 283,392 283,392
Inventories, net............................................ 400,013 400,013
Deferred income taxes....................................... 37,296 37,296
Other....................................................... 27,507 27,507
---------- -------- ----------
Total current assets................................... 910,399 -- 910,399

Property, plant and equipment, net.......................... 234,447 234,447
Intangible assets including goodwill and broadcast licenses,
net....................................................... 6,018,127 441,898(a) 6,460,025
Cable distributions fees, net............................... 106,771 106,771
Long-term investments and notes receivable.................. 75,692 75,692
Inventories, net............................................ 164,825 164,825
Deferred income taxes....................................... 63,190 63,190
Deferred charges and other.................................. 139,985 139,985
---------- -------- ----------
Total assets........................................... $7,713,436 $441,898 $8,155,334
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued and other current liabilities..... $ 558,179 $ 2,000(a) $ 560,179
Obligation for program rights............................... 240,846 240,846
Current portion of long-term debt........................... 35,399 35,399
---------- -------- ----------
Total current liabilities.............................. 834,424 2,000 836,424
Long-term debt.............................................. 1,862,909 (206,000)(a) 1,656,909
Other long-term liabilities................................. 60,621 60,621
Obligation for program rights............................... 327,114 327,114
Minority interest........................................... 2,736,010 (25,579)(b) 2,916,431
206,000(a)
Stockholders' Equity:
Preferred stock............................................. -- --
Common stock................................................ 1,022 160(a) 1,182
Common stock -- Class B..................................... 320 320
Additional paid-in capital.................................. 1,968,386 465,317(a) 2,433,703
Accumulated deficit......................................... (69,670) (69,670)
Unearned compensation....................................... (2,702) (2,702)
Notes receivable from key executive for common stock
issuance.................................................. (4,998) (4,998)
---------- -------- ----------
Total shareholders' equity............................. 1,892,358 465,477 2,357,835
---------- -------- ----------
Total liabilities and shareholders' equity............. $7,713,436 $441,898 $8,155,334
========== ======== ==========
</TABLE>

(Notes follow)

36
<PAGE> 43

USA NETWORKS, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(in thousands, except per share data)

<TABLE>
<CAPTION>
UNIVERSAL USAi AND
TRANSACTION UNIVERSAL TICKETMASTER
UNIVERSAL PRO FORMA PRO FORMA PRO FORMA PRO FORMA
USAi TRANSACTION(C) ADJUSTMENTS COMBINED ADJUSTMENTS COMBINED
---- -------------- ----------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
NET REVENUES:
Home Shopping............................ $249,196 $ -- $ -- $249,196 $ -- $249,196
Networks and Television Production....... 166,162 157,364 323,526 323,526
Ticketing operations..................... 93,235 -- 93,235 93,235
Broadcasting and other................... 14,518 -- 14,518 14,518
-------- -------- -------- -------- ------- --------
Total net revenues..................... 523,111 157,364 -- 680,475 -- 680,475
-------- -------- -------- -------- ------- --------
Operating costs and expenses
Cost of sales............................ 164,364 -- -- 164,364 164,364
Program costs............................ 90,138 100,478 (12,794)(d) 177,822 177,822
Other costs.............................. 186,571 32,994 (4,222)(e) 215,343 215,343
Depreciation and amortization............ 47,268 9,110 4,114(f) 60,492 2,762(f) 63,254
-------- -------- -------- -------- ------- --------
Total operating costs and expenses..... 488,341 142,582 (12,902) 618,021 2,762 620,783
-------- -------- -------- -------- ------- --------
Operating profit....................... 34,770 14,782 12,902 62,454 (2,762) 59,692
Interest income (expense), net........... (23,549) 156 (1,546)(d) (38,703) 3,811(h) (34,892)
(13,764)(g)
Gain on disposition of broadcast
station................................ 74,940 -- 74,940 74,940
Other expense, net....................... (9,220) (1,039) (10,259) (10,259)
-------- -------- -------- -------- ------- --------
Income (loss) before income taxes and
minority interest........................ 76,941 13,899 (2,408) 88,432 1,049 89,481
Income tax (expense) benefit............... (38,712) (4,729) 1,164(i) (42,277) (732)(i) (43,009)
Minority interest.......................... (4,298) -- (7,839)(j) (12,137) (425)(j) (11,865)
697(k)
-------- -------- -------- -------- ------- --------
NET EARNINGS............................... $ 33,931 $ 9,170 $ (9,083) $ 34,018 $ 589 $ 34,607
======== ======== ======== ======== ======= ========
Basic weighted average shares
outstanding.............................. 123,062 145,474(n)
======== ========
Diluted weighted average shares
outstanding.............................. 212,501 298,777(n)
======== ========
Basic earnings per share................... $ 0.28 $ 0.24
======== ========
Diluted earnings per share................. $ 0.17 $ 0.12
======== ========
</TABLE>

(Notes follow)

37
<PAGE> 44

USA NETWORKS, INC.

UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
UNIVERSAL USAi AND
TRANSACTION UNIVERSAL TICKETMASTER
UNIVERSAL PRO FORMA PRO FORMA TICKETMASTER PRO FORMA
USAi TRANSACTION(l) ADJUSTMENTS COMBINED ADJUSTED(m) ADJUSTMENTS
---------- --------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
NET REVENUES:
Home Shopping................. $1,037,060 $ -- $ -- $1,037,060 $ -- $ --
Networks and Television
Production.................. -- 1,107,604 1,107,604 --
Ticketing operations.......... 156,378 -- 156,378 205,319
Broadcasting and other........ 68,311 -- 68,311 --
---------- ---------- --------- ---------- -------- --------
Total net revenues...... 1,261,749 1,107,604 -- 2,369,353 205,319 --
---------- ---------- --------- ---------- -------- --------
Operating costs and expenses:
Cost of sales................. 645,299 -- 645,299 14,023
Program costs................. -- 700,874 (62,000)(d) 638,874 --
Other costs................... 424,907 241,725 (12,175)(e) 654,457 158,196
Depreciation and
amortization................ 97,024 54,881 77,210(f) 229,115 17,757 11,047(f)
---------- ---------- --------- ---------- -------- --------
Total operating costs
and expenses.......... 1,167,230 997,480 3,035 2,167,745 189,976 11,047
---------- ---------- --------- ---------- -------- --------
Operating profit........ 94,519 110,124 (3,035) 201,608 15,343 (11,047)
Interest income (expense),
net......................... (26,266) 782 (11,100)(d) (136,114) (5,770) 15,244(h)
(99,530)(g)
Other expense, net............ (11,752) (13,337) (25,089) (416)
---------- ---------- --------- ---------- -------- --------
Income (loss) before income
taxes and minority interest... 56,501 97,569 (113,665) 40,405 9,157 4,197
Income tax (expense) benefit.... (41,051) (39,028) 50,543(i) (29,536) (7,112) 771(i)
Minority interest............... (2,389) -- (29,075)(j) (31,464) 1,800 (6,661)(j)
2,389(k)
---------- ---------- --------- ---------- -------- --------
NET EARNINGS.................... $ 13,061 $ 58,541 $ (92,197) $ (20,595) $ 3,845 $ 696
========== ========== ========= ========== ======== ========
Basic weighted average shares
outstanding................... 104,780
==========
Diluted weighted average shares
outstanding................... 112,244
==========
Basic earnings per share........ $ 0.12
==========
Diluted earnings per share...... $ 0.12
==========

PRO FORMA
COMBINED
----------
<S> <C>
NET REVENUES:
Home Shopping................. $1,037,060
Networks and Television
Production.................. 1,107,604
Ticketing operations.......... 361,697
Broadcasting and other........ 68,311
----------
Total net revenues...... 2,574,672
----------
Operating costs and expenses:
Cost of sales................. 659,322
Program costs................. 638,874
Other costs................... 812,653
Depreciation and
amortization................ 257,919
----------
Total operating costs
and expenses.......... 2,368,768
----------
Operating profit........ 205,904
Interest income (expense),
net......................... (126,640)
Other expense, net............ (25,505)
----------
Income (loss) before income
taxes and minority interest... 53,759
Income tax (expense) benefit.... (35,877)
Minority interest............... (33,936)
----------
NET EARNINGS.................... $ (16,054)
==========
Basic weighted average shares
outstanding................... 142,135(n)
==========
Diluted weighted average shares
outstanding................... 142,135(n)
==========
Basic earnings per share........ $ (.11)
==========
Diluted earnings per share...... $ (.11)
==========
</TABLE>

(Notes follow)

38
<PAGE> 45

USA NETWORKS, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS
(in thousands, except share data)

(a) Ticketmaster Merger. Merger costs and the preliminary determination of the
unallocated excess of merger costs over net assets acquired are set forth
below:

<TABLE>
<S> <C>
Value of 16,040,852 shares of USAi Common Stock issued and
assumption of "in the money" stock options................ $465,477
Estimated transaction costs................................. 2,000
--------
Total acquisition costs........................... 467,477
Net assets acquired......................................... 25,579
--------
Unallocated excess of acquisition cost over net assets
acquired (see note (f))................................... $441,898
========
</TABLE>

The fair value of shares of USAi Common Stock of $26.37 per share was
determined by taking an average of the closing price of USAi Common Stock
for a short period just before and just after the terms of the Merger were
agreed to by the parties and announced to the public. The purchase price
was increased by the difference between $26.37 per share and the average
exercise price of the outstanding Ticketmaster options times the number of
options outstanding as of January 31, 1998.

Also reflects the issuance of 10.3 million shares to Universal upon
exercise of its mandatory preemptive right to acquire shares at $20 per
share in connection with the Merger.

(b) Reflects the elimination of Ticketmaster minority interest recorded in the
historical USAi balance sheet.

(c) Reflects the results of operations for the period from January 1, 1998 to
February 11, 1998 for Networks and Studios USA, which were acquired by USAi
in the Universal Transaction.

(d) Reflects adjustments to programming cost for fair value adjustments and the
effects of imputed interest related to present valuing long term program
commitments.

(e) Represents certain corporate overhead allocated from Universal to Networks
and Studios USA which are no longer being charged.

(f) Reflects additional amortization expense resulting from the increase in
intangible assets. The unallocated excess of acquisition costs over net
assets acquired has been preliminarily allocated to goodwill, which is
being amortized over 40 years. In connection with finalizing the purchase
price allocation, USAi is currently evaluating the fair value of assets
acquired and liabilities assumed, specifically including television program
rights, commitments to produce or purchase television programming,
contractual commitments to provide ticketing services and other contractual
commitments. Using this information, USAi will make a final allocation of
the excess purchase price, including allocation to the intangibles other
than goodwill. Accordingly, the purchase accounting information is
preliminary.

(g) Reflects the incremental interest expense at a rate of 7.4% resulting from
the net increase in borrowings incurred in connection with the Universal
Transaction. The 7.4% represents the estimated average interest rate USAi
will incur under the new credit agreement used to finance the cash portion
of the acquisition cost.

An interest rate variance of 1/8% would cause a corresponding change in
interest expense of $420 and $1,681 for the three months ended March 31,
1998 and the year ended December 31, 1997.

(h) Reflects interest savings on assumed debt reduction of $206 million at an
interest rate of 7.4% as a result of the exercise of Universal's mandatory
preemptive right described in note (a).

(i) Reflects the income tax effect of the pro forma adjustments, excluding
permanent differences between book amounts and tax amounts, utilizing a
statutory federal rate of 35% and an estimated state and local tax rate.

39
<PAGE> 46
USA NETWORKS, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS -- (CONTINUED)

(j) Reflects net adjustment to record Universal's and Liberty's minority
interest in the pro forma pre-tax results of operations.

(k) Reflects the elimination of Ticketmaster minority interest recorded in the
historical USAi operations.

(l) Reflects Networks and Studios USA, which were acquired by USAi in the
Universal Transaction. See separate Universal Transaction Unaudited Pro
Forma Adjusted Combined Condensed Statement of Operations and notes thereto
in the USAi Form 8-K dated May 19, 1998.

(m) Reflects the pro forma adjustments to USAi's historical results of
operations necessary to reflect a full year of pro forma operations of
Ticketmaster. The historical results include Ticketmaster operations since
the date of USAi's acquisition of a controlling interest in July 1997. See
separate Ticketmaster Group, Inc. Unaudited Pro Forma Adjusted Combined
Condensed Statement of Operations for the year ended January 31, 1998
included herein.

(n) For the year ended December 31, 1997, basic pro forma earnings (loss) per
common share adjusts the 104,780,000 USAi historical weighted average
shares by 7,814,000 shares, which reflects the additional impact of the
shares issued in connection with USAi's July 1997 investment in
Ticketmaster, 16,040,852 shares issued in connection with the Merger, and
13,500,000 shares issued in connection with the Universal Transaction, as
if the respective shares were outstanding for the entire period. For the
three months ended March 31, 1998, basic pro forma earnings per share
adjusts the 123,062,000 USAi historical basic weighted average shares by
6,371,000 shares, which reflects the additional impact of the shares issued
in connection with the Universal Transaction and 16,040,852 shares to be
issued in connection with the Merger (excluding shares issuable (i) to
USAi, (ii) upon exercise of Ticketmaster Options, and (iii) upon exercise
of Universal's and Liberty's preemptive rights).

Diluted weighted average shares outstanding gives effect to stock options
and convertible debt, when applicable, and the impact of common stock
equivalents of Ticketmaster. For the year ended December 31, 1997, diluted
pro forma earnings (loss) per common share is considered to be the same as
basic earnings (loss) per common share since the effect of certain
potentially dilutive securities is anti-dilutive. For the three months
ended March 31, 1998, diluted pro forma earnings per share adjusts the
212,501,000 USAi historical diluted weighted average shares by 58,362,629
shares, which reflects the additional dilutive impact of the shares issued
in connection with the Universal Transaction (assuming the conversion of
LLC Shares into USAi shares) and 17,612,852 shares (excluding shares
issuable (i) to USAi, and (ii) upon exercise of Universal's and Liberty's
preemptive rights) to be issued in connection with the Merger and the
potential dilutive impact of Ticketmaster stock options to be converted
into USAi options at the conversion ratio of 1.126 and 10,300,000 LLC
Shares for Universal's mandatory preemptive obligation (assuming the
conversion of LLC Shares into USAi shares).

40
<PAGE> 47

TICKETMASTER GROUP, INC.

UNAUDITED PRO FORMA ADJUSTED COMBINED
CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED JANUARY 31, 1998
(in thousands)

<TABLE>
<CAPTION>
TICKETMASTER TICKETMASTER TICKETMASTER USAI
CONSOLIDATED ACQUIRED PRO FORMA PRO FORMA PRO FORMA TICKETMASTER
BUSINESS BUSINESSES ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED
------------ ---------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Ticketing operations............... $295,419 $20,796 $ (79)(1) $316,136 $(156,378)(5) $159,758
Concession control systems......... 30,036 30,036 30,036
Publications....................... 13,067 13,067 13,067
Merchandising...................... 2,458 2,458 2,458
-------- ------- ------- -------- --------- --------
340,980 20,796 (79) 361,697 (156,378) 205,319
-------- ------- ------- -------- --------- --------
Operating costs, expenses and other
items:
Cost of sales...................... 185,907 10,839 (79)(1) 196,667 (182,644)(5) 14,023
Other costs........................ 101,075 5,434 106,509 51,687(5) 158,196
Depreciation and amortization...... 24,473 984 924(2) 26,381 (10,987)(5) 17,757
2,363(6)
-------- ------- ------- -------- --------- --------
311,455 17,257 845 329,557 (139,581) 189,976
-------- ------- ------- -------- --------- --------
Operating profit................. 29,525 3,539 (924) 32,140 (16,797) 15,343
Interest income (expense), net..... (9,560) 45 (690)(3) (10,205) 4,435(5) (5,770)
Other expense, net................. -- 0 (416)(5) (416)
-------- ------- ------- -------- --------- --------
Income (loss) before income taxes and
minority interest.................. 19,965 3,584 (1,614) 21,935 (12,778) 9,157
Income tax (expense) benefit......... (11,883) (484) (291)(4) (12,658) 5,546(5) (7,112)
Minority interest.................... 65 240 305 1,495(5) 1,800
-------- ------- ------- -------- --------- --------
NET EARNINGS......................... $ 8,147 $ 3,340 $(1,905) $ 9,582 $ (5,737) $ 3,845
======== ======= ======= ======== ========= ========
</TABLE>

(See notes on following page)

41
<PAGE> 48

TICKETMASTER GROUP, INC.
NOTES TO UNAUDITED PRO FORMA ADJUSTED
COMBINED CONDENSED FINANCIAL STATEMENTS

(1) Represents the elimination of license fees paid by Canada to
Ticketmaster during the year.

(2) Represents amortization arising from the purchased user agreements and
excess purchase price paid for the net assets of a joint venture partner's 50%
equity interest in Ticketmaster-Northwest and Synchro Systems Limited, joint
venture partners' 67% equity interest in Ticketmaster-Southeast and a licensee's
100% equity interest in the Canadian licensee. The purchased user agreements are
being amortized using a discounted cash flow method through the expiration date
of the underlying contracts, generally ranging from 3 to 10 years. The cost in
excess of net assets acquired is being amortized over a 30-year period.

(3) Represents the interest expense resulting from additional borrowings
under Ticketmaster's credit agreement incurred by Ticketmaster as if the
acquisitions had taken place on February 1, 1997, at rates of interest incurred
by Ticketmaster during the year, approximately 7.0%.

(4) Represents the related income tax effect of the pro forma adjustments
utilizing a statutory federal rate of 34% and a statutory rate for state and
foreign taxes based on the rate in the applicable jurisdiction.

(5) Represents elimination of amounts reflected in USAi 1997 historical
results of operations and certain reclassifications to conform to USAi
presentation. USAi acquired a controlling interest in Ticketmaster in July 1997.

(6) Represents additional amortization on goodwill arising from USAi's July
1997 acquisition of a controlling interest in Ticketmaster to give effect to the
acquisition as of January 1, 1997.

42
<PAGE> 49

COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION

Shares of USAi Common Stock have been quoted on NASDAQ under the symbol
USAi since February 15, 1998 and previously under the symbols HSNI since
December 23, 1996 and SKTV since August 26, 1993. Shares of Ticketmaster Common
Stock have been quoted on NASDAQ under the symbol TKTM since November 19, 1996.

The following table gives effect to the Stock Split and sets forth the
range of the high and low sales prices of USAi Common Stock and Ticketmaster
Common Stock as reported on NASDAQ for the periods indicated:

<TABLE>
<CAPTION>
USAi
COMMON STOCK
----------------
HIGH LOW
------ ------
<S> <C> <C>
Fiscal 1996
First Quarter............................................. $17.38 $13.75
Second Quarter............................................ 17.25 14.00
Third Quarter............................................. 15.25 10.63
Fourth Quarter............................................ 13.25 10.50
Fiscal 1997
First Quarter............................................. $14.50 $10.00
Second Quarter............................................ 17.00 11.13
Third Quarter............................................. 20.50 15.25
Fourth Quarter............................................ 25.78 18.32
Fiscal 1998
First Quarter............................................. $29.31 $23.00
Second Quarter (through May 18, 1998)..................... $27.63 $22.75
</TABLE>

<TABLE>
<CAPTION>
TICKETMASTER
COMMON STOCK
----------------
HIGH LOW
------ ------
<S> <C> <C>
Fiscal 1997
Fourth Quarter (commencing November 19, 1996)............. $15.00 $10.25
Fiscal 1998
First Quarter............................................. $14.63 $11.75
Second Quarter............................................ 17.75 11.63
Third Quarter............................................. 25.00 16.00
Fourth Quarter............................................ 24.50 20.88
Fiscal 1999
First Quarter............................................. $30.38 $24.38
Second Quarter (through May 18, 1998)..................... $28.31 $26.50
</TABLE>

On October 22, 1997, the last full trading day prior to the public
announcement of USAi's Initial Proposal, the closing price of USAi Common Stock
was $23.50 per share (as adjusted for the Stock Split) and the closing price of
Ticketmaster Common Stock was $25.00 per share. On March 9, 1998, the last full
trading day prior to the public announcement of an agreement in principle
concerning the economic terms of the proposed Merger, the closing price of USAi
Common Stock was $26.38 per share (as adjusted for the Stock Split) and the
closing price of Ticketmaster Common Stock was $26.38 per share. On May 18,
1998, the most recent practicable date prior to the printing of this Proxy
Statement/Prospectus, the closing price of USAi Common Stock was $24.00 per
share and the closing price of Ticketmaster Common Stock was $26.50 per share.
TICKETMASTER SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS PRIOR TO
MAKING ANY DECISION WITH RESPECT TO THE MERGER.

USAi has paid no cash dividends on the USAi Common Stock to date and does
not anticipate paying cash dividends in the immediate future. Additionally,
USAi's current loan facility precludes the payment of dividends.

43
<PAGE> 50

Since November 17, 1993, Ticketmaster has not declared or paid any cash
dividends on the Ticketmaster Common Stock and does not anticipate paying cash
dividends in the immediate future. Additionally, Ticketmaster's current loan
facilities place restrictions and limitations upon the payment of dividends.

DESCRIPTION OF USAi CAPITAL STOCK

As of the date of this Proxy Statement/Prospectus, the authorized capital
stock of USAi consists of 800,000,000 shares of USAi Common Stock, 200,000,000
shares of USAi Class B Common Stock and 15,000,000 shares of preferred stock,
par value $.01 per share ("USAi Preferred Stock").

COMMON STOCK AND CLASS B COMMON STOCK

As of the Record Date, there were 103,087,542 shares of USAi Common Stock
outstanding held of record by approximately 37,000 shareholders and 31,181,726
shares of USAi Class B Common Stock outstanding held of record by six
shareholders. Upon consummation of the Merger, there would be outstanding
approximately 119,128,394 shares of USAi Common Stock and 31,181,726 shares of
USAi Class B Common Stock.

With respect to matters that may be submitted to a vote or to the consent
of the USAi shareholders, including the election of directors, each holder of
USAi Class B Common Stock is entitled to ten votes for each share of USAi Class
B Common Stock held and will vote together with the holders of USAi Common Stock
as a single class. Notwithstanding the foregoing, the holders of USAi Common
Stock, acting as a single class, are entitled to elect 25% of the total number
of directors, and, in the event that 25% of the total number of directors shall
result in a fraction of a director, then the holders of USAi Common Stock,
acting as a single class, are entitled to elect the next higher whole number of
directors.

Shares of USAi Class B Common Stock are convertible into shares of USAi
Common Stock at the option of the holder thereof at any time on a
share-for-share basis. Such conversion ratio will in all events be equitably
preserved in the event of any recapitalization of the corporation by means of a
stock dividend on, or a stock split or combination of, outstanding USAi Common
Stock or USAi Class B Common Stock, or in the event of any merger, consolidation
or other reorganization of the corporation with another corporation. Upon the
conversion of USAi Class B Common Stock into shares of USAi Common Stock, said
shares of USAi Class B Common Stock will be retired and will not be subject to
reissue. Shares of USAi Common Stock are not convertible into shares of USAi
Class B Common Stock.

In all other respects, the USAi Common Stock and the USAi Class B Common
Stock are identical. The holders of USAi Common Stock and the holders of USAi
Class B Common Stock are entitled to receive, share for share, such dividends as
may be declared by the USAi Board out of funds legally available therefor. In
the event of a liquidation, dissolution, distribution of assets or winding-up of
USAi, the holders of USAi Common Stock and the holders of USAi Class B Common
Stock are entitled to share ratably in all the assets of USAi available for
distribution to its shareholders, after the rights of the holders of the USAi
Preferred Stock, if any, have been satisfied.

On February 12, 1998, pursuant to an Investment Agreement, dated as of
October 19, 1997, as amended and restated as of December 18, 1997 (the
"Investment Agreement"), among Universal, HSN, Inc. (now USAi), Home Shopping
and Liberty, USAi acquired from Universal, Networks, a New York general
partnership, consisting of cable television networks USA/Sci-Fi, as well as
Universal's domestic television production and distribution businesses (the
"Universal Transaction"). In connection therewith, USAi granted to Universal and
Liberty certain preemptive rights which generally provide that each of Universal
and Liberty may elect to purchase a number of shares of USAi stock (or shares of
a subsidiary of USAi exchangeable for shares of USAi stock ("LLC Shares")) so
that the percentage equity interest such entity owned of USAi after the
Universal Transaction will be the same as before such transaction (in each case,
assuming the exchange of all LLC Shares owned by Universal and Liberty and
shares of Home Shopping owned by a subsidiary of Liberty). In addition, Liberty
and Universal were each granted certain limited preemptive rights at $20 per
share of USAi Common Stock (as adjusted for the Stock Split) relating to certain
specific USAi stock issuances, including the issuance of up to 12.6 million
shares of USAi Common Stock in the Merger
44
<PAGE> 51

(which preemptive right is mandatory in the case of Universal). With the
exception of these limited events, of which the only remaining event that is
still expected to occur is the Merger, the purchase price for shares of USAi
stock pursuant to a preemptive right election is the fair market value of the
USAi stock (or LLC Share) purchased. Subject to certain limits set forth in the
Governance Agreement, Universal may elect to receive shares of USAi Common Stock
or USAi Class B Common Stock in connection with a preemptive exercise (or LLC
Shares exchangeable therefor); Liberty's preemptive exercises are for USAi
Common Stock only (or LLC Shares exchangeable for shares of USAi Common Stock).

The USAi Certificate of Incorporation provides that there can be no stock
dividends or stock splits or combinations of stock declared or made on USAi
Common Stock or USAi Class B Common Stock unless the shares of USAi Common Stock
and USAi Class B Common Stock then outstanding are treated equally and
identically.

The shares of USAi Common Stock to be issued in connection with the Merger
will be validly issued, fully paid and non-assessable.

PREFERRED STOCK

As of the Record Date, there were no shares of USAi Preferred Stock
outstanding. The USAi Preferred Stock may be issued from time to time in one or
more series. The USAi Board has authority, by resolution, to designate the
powers, preferences, rights and qualifications, limitations and restrictions of
the USAi Preferred Stock. The USAi Board has no present plan or intention to
issue any USAi Preferred Stock.

DELAWARE GENERAL CORPORATION LAW SECTION 203

As a corporation organized under the laws of the State of Delaware, USAi is
subject to Section 203 of the Delaware General Corporation Law (the "DGCL")
which restricts certain business combinations between USAi and an "interested
shareholder" (as defined in the DGCL) or its affiliates or associates for a
period of three years following the date on which the shareholder becomes an
"interested shareholder." The restrictions do not apply if (i) prior to an
interested shareholder becoming such, the USAi Board approves either the
business combination or the transaction in which the shareholder becomes an
interested shareholder, (ii) upon consummation of the transaction in which any
person becomes an interested shareholder, such interested shareholder owns at
least 85% of the voting stock of USAi outstanding at the time the transaction
commences (excluding shares owned by certain employee stock ownership plans and
persons who are both directors and officers of USAi) or (iii) on or subsequent
to the date an interested shareholder becomes such, the business combination is
both approved by the USAi Board and authorized at an annual or special meeting
of USAi shareholders, not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock not owned by the interested
shareholders. See "-- Comparison of Rights of Shareholders of Ticketmaster and
USAi -- Anti-Takeover Provisions."

The USAi Board has previously approved for purposes of Section 203 of the
DGCL certain transactions among Barry Diller, Universal and Liberty and their
respective affiliates and associates and USAi, which transactions may have
resulted in Mr. Diller, Universal and/or Liberty becoming an "interested
shareholder" of USAi.

STOCK EXCHANGE LISTING; DELISTING AND DEREGISTRATION OF TICKETMASTER COMMON
STOCK

It is a condition to the Merger that the shares of USAi Common Stock
issuable in the Merger be authorized for quotation on NASDAQ. If the Merger is
consummated, Ticketmaster Common Stock will cease to be listed for quotation on
NASDAQ and will be deregistered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

COMPARISON OF RIGHTS OF SHAREHOLDERS OF TICKETMASTER AND USAI

AS A RESULT OF THE MERGER, TICKETMASTER SHAREHOLDERS WILL BECOME USAI
SHAREHOLDERS, AND THEIR RIGHTS WILL BE GOVERNED BY THE DGCL AND BY USAI'S
CERTIFICATE OF INCORPORATION AND BY-LAWS, WHICH DIFFER IN CERTAIN

45
<PAGE> 52

MATERIAL RESPECTS FROM THE IBCA AND TICKETMASTER'S ARTICLES OF INCORPORATION AND
BYLAWS. THE FOLLOWING IS A SUMMARY OF THE MATERIAL DIFFERENCES BETWEEN THE
RIGHTS OF TICKETMASTER SHAREHOLDERS AND USAi SHAREHOLDERS.

GENERAL

Ticketmaster is an Illinois corporation and USAi is a Delaware corporation.
Ticketmaster shareholders, whose rights are currently governed by the IBCA,
Ticketmaster's Amended and Restated Articles of Incorporation (the "Ticketmaster
Articles") and Ticketmaster's Amended and Restated Bylaws (the "Ticketmaster
Bylaws"), will, at the Effective Time of the Merger, become USAi shareholders
and their rights as such will be governed by the DGCL, USAi's Restated
Certificate of Incorporation (the "USAi Certificate") and USAi's By-Laws (the
"USAi By-Laws"). Certain differences between the rights of Ticketmaster
shareholders and USAi shareholders are summarized below. For information as to
how you may obtain copies of the Ticketmaster Articles, the Ticketmaster Bylaws,
the USAi Certificate and the USAi By-Laws, see "Additional Information -- Where
You Can Find More Information."

AUTHORIZED CAPITAL

The authorized capital stock of Ticketmaster consists of 80,000,000 shares
of Ticketmaster Common Stock, one share of Series A redeemable convertible
preferred stock, no par value, and 19,999,999 shares of undesignated preferred
stock, no par value.

The authorized capital stock of USAi consists of 800,000,000 shares of USAi
Common Stock, 200,000,000 shares of USAi Class B Common Stock and 15,000,000
shares of USAi Preferred Stock.

VOTING POWER OF COMMON STOCK

USAi has a "dual class" common stock structure, consisting of USAi Common
Stock and USAi Class B Common Stock, with each share of USAi Class B Common
Stock generally entitled to 10 votes and generally voting together with the USAi
Common Stock on all matters submitted for the vote or consent of USAi
shareholders, other than in the case of matters as to which the DGCL provides
for a separate class vote and other than the election of 25% of the USAi
directors. See "-- Board of Directors." Based on the number of shares of USAi
Class B Common Stock outstanding as of the date of this Proxy
Statement/Prospectus and expected to be outstanding upon consummation of the
Merger, the holders of USAi Class B Common Stock can control the vote of any
matter submitted to USAi shareholders voting together as a single class except
as noted above. Ticketmaster has one class of common stock, and each share of
Ticketmaster Common Stock is entitled to one vote per share.

BOARD OF DIRECTORS

The Ticketmaster Bylaws provide that the number of directors will not be
less than five or more than ten, as determined by the Ticketmaster Board. In the
absence of a resolution fixing the number of directors, the Ticketmaster Bylaws
state that the number shall be fixed at seven. Currently, the number of
directors is nine. The term of each director is one year or until such time as
the director's successor is duly elected.

The USAi By-Laws provide that the USAi Board shall determine the number of
directors by resolution. Currently, the number of directors is 11. The term of
each director is one year or until such time as the director's successor is duly
elected. The USAi Certificate provides that the holders of USAi Common Stock,
acting as a single class, elect 25% of the total number of directors, with the
remaining directors elected by the holders of USAi Common Stock and USAi Class B
Common Stock voting together as a single class. If 25% of the total number of
directors results in a fraction, then the holders of USAi Common Stock are
entitled to elect the next higher whole number of directors.

DISSENTERS' OR APPRAISAL RIGHTS

The IBCA grants to shareholders of an Illinois corporation the right to
dissent and receive the fair value of their shares in the event of certain
amendments to the articles of incorporation that adversely affect their

46
<PAGE> 53

shares, or certain business transactions, including certain mergers. For a
description of Ticketmaster shareholders' dissenters' rights under the IBCA, see
"-- Dissenters' Rights."

Under the DGCL, appraisal rights may be available in connection with a
statutory merger or consolidation in certain specific situations. Appraisal
rights are not available under the DGCL when a corporation is to be the
surviving corporation and no vote of its shareholders is required to approve the
merger or consolidation. In addition, no appraisal rights are available to
holders of shares of any class of stock which is either: (a) listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc. or (b) held of record by more than 2,000 shareholders, unless such
shareholders are required by the terms of the merger or consolidation to accept
anything other than: (i) shares of the surviving corporation, (ii) shares of
stock that are listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or held of record by more than
2,000 shareholders, (iii) cash in lieu of fractional shares or (iv) any
combination of the foregoing. Shareholders who perfect their appraisal rights
are entitled to receive cash from the corporation equal to the value of their
shares as established by judicial appraisal. Corporations may enlarge these
statutory rights by including in their certificate of incorporation a provision
allowing the appraisal rights in any merger or consolidation in which the
corporation is a constituent corporation. The USAi Certificate does not contain
a provision enlarging such appraisal rights.

VOTE ON CERTAIN FUNDAMENTAL ISSUES

The IBCA requires that a plan of merger, consolidation, exchange, sale of
all or substantially all of a corporation's assets other than in the ordinary
course, or dissolution of a corporation be approved by at least two-thirds of
the outstanding shares of the corporation entitled to vote thereon. The IBCA
permits corporations to supersede the two-thirds voting requirement in their
articles of incorporation, but not to reduce the voting requirement to less than
a majority. The Ticketmaster Articles have superseded the two-thirds voting
requirement to allow for approval of the foregoing business transactions by a
majority of the outstanding shares entitled to vote thereon.

The DGCL requires that any merger, consolidation, sale of all or
substantially all of the assets, or dissolution of a corporation be approved by
the affirmative vote of the holders of a majority of the outstanding shares of
the corporation entitled to vote thereon. Neither the USAi Certificate nor the
USAi By-Laws alter this shareholder approval requirement.

CUMULATIVE VOTING

The IBCA provides that in all elections for directors, every shareholder
shall have the right to vote the number of shares owned by him or her for as
many persons as there are directors to be elected, or to cumulate such shares,
and give one candidate as many votes as is equal to the number of directors to
be elected multiplied by the number of such shareholder's shares, or to
distribute such votes in any proportion among any number of candidates.
Corporations incorporated after June 30, 1971 may limit or eliminate cumulative
voting rights in all or specified circumstances. The Ticketmaster Articles
prohibit cumulative voting for directors.

The DGCL provides that the certificate of incorporation of any corporation
may grant shareholders the right to cumulate their votes. The USAi Certificate
does not provide shareholders the right to cumulate votes in the election of
directors. Therefore, a plurality of the votes cast at any meeting of
shareholders at which directors are to be elected shall elect directors, except
that the USAi Certificate entitles the holders of Common Stock to elect 25% of
the directors, or the next higher whole number if 25% is a fraction. See
"-- Board of Directors."

PAYMENT OF DIVIDENDS

The IBCA and the Ticketmaster Bylaws authorize the Ticketmaster Board to
make distributions to the Ticketmaster shareholders. No distribution may be made
if, after giving effect to such distribution, Ticketmaster would be insolvent or
its net assets would be less than zero or less than the maximum amount
47
<PAGE> 54

payable at the time of distribution to shareholders having preferential
liquidation rights (if liquidation was imminent). Ticketmaster has not paid cash
dividends on Ticketmaster Common Stock since November 17, 1993.

The DGCL allows a corporation to pay dividends out of its surplus or, if
there is no surplus, out of net profits for the fiscal year in which dividends
are declared or out of net profits for the preceding fiscal year. The USAi
By-Laws grant the USAi Board the power to declare dividends at any regular or
special meeting of the USAi Board and provide that dividends can be paid in
cash, property, contractual rights or shares of capital stock. USAi has never
paid cash dividends on USAi Common Stock.

SPECIAL MEETINGS OF THE SHAREHOLDERS

Under the IBCA and the Ticketmaster Bylaws, special meetings of the
shareholders may be called by the Chairman of the Ticketmaster Board, by the
President, by the Ticketmaster Board (pursuant to a resolution adopted by a
majority of the directors) or by holders of not less than one-fifth of all the
outstanding shares entitled to vote on the matter for which the meeting is
called.

The DGCL provides that the Board of Directors or such other persons as
authorized by the certificate of incorporation or by the bylaws may call a
special meeting of the shareholders. The USAi By-Laws provide that the Chairman
of the Board or a majority of the USAi Board may call a special meeting of the
shareholders.

SHAREHOLDER ACTION BY WRITTEN CONSENT

The IBCA and the Ticketmaster Bylaws permit Ticketmaster shareholders to
act by written consent whenever any action is required to be taken by a vote at
a special or annual shareholder meeting; provided that any such written consent
must be signed by at least the holders of shares having the number of votes
required to authorize the action at a meeting at which all shares entitled to
vote as to the matter were present and voting. If the written consent is not
unanimous, it will only be effective if the corporation delivers a notice to
each shareholder entitled to vote at least five days prior to the execution of
the consent and a notice to each shareholder who did not consent subsequent to
the effective date of the consent. If the action taken by written consent
necessitates the filing of a certificate under the IBCA, the certificate must
state that the written consent and the required notices, if any, have been
delivered in accordance with the law.

The DGCL and the USAi By-Laws also permit shareholder action to be taken
pursuant to written consent signed by shareholders having not less than the
minimum number of votes necessary to authorize or take such action; provided
that if a corporate action is taken by less than a unanimous written consent,
subsequent notice is sent to those shareholders who did not consent in writing.

AMENDMENT OF GOVERNING DOCUMENTS

Incorporation Documents. Generally under the IBCA, the Board of Directors
must recommend and two-thirds of the shareholders entitled to vote must approve
amendments to a corporation's articles of incorporation, other than those
amendments relating to certain immaterial procedural matters. If a specified
amendment affects the rights of holders of a particular class of securities,
then those shareholders must approve the amendment (by a two-thirds vote) even
if that class of shareholders would not ordinarily have voting rights. The IBCA
permits corporations to supersede the two-thirds voting requirement in their
articles of incorporation. The Ticketmaster Articles have superseded the
requirement for two-thirds shareholder approval to allow for majority approval
instead.

Under the DGCL, the USAi Board must adopt a resolution setting forth the
proposed amendment to the certificate of incorporation, declare its advisability
and call either a special meeting for the consideration of the proposed
amendment or direct that the amendment be considered at the next annual meeting.
Subject to certain exceptions (in which case supermajority votes are required),
a majority of the outstanding stock entitled to vote thereon, and a majority of
the outstanding stock of each class entitled to vote thereon as a class, must
approve the amendment.

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Bylaws. Under the IBCA and the Ticketmaster Bylaws, either the Ticketmaster
Board or the shareholders have the power to make, alter, amend or repeal the
bylaws of the corporation; provided, however, that no bylaws adopted by
shareholders may be altered, amended or repealed by the Ticketmaster Board. The
Ticketmaster Bylaws additionally require that notice be given in the manner
prescribed therein.

Under the DGCL, shareholders have the authority to make, alter, amend or
repeal the bylaws of a corporation and such power may be delegated to the Board
of Directors. The USAi Certificate expressly authorizes the USAi Board to make,
alter or repeal the USAi By-Laws.

ANTI-TAKEOVER PROVISIONS

Section 11.75 of the IBCA prohibits a corporation from engaging in certain
business combinations with any interested shareholder (generally, a shareholder
whose beneficial ownership in the corporation is, or in certain cases was, at
least 15% of the outstanding voting securities, and affiliates of such
shareholders) for a period of three years following the date on which such
shareholder became an interested shareholder, unless (i) prior to the time that
a person or entity becomes an interested shareholder, the board of directors of
the corporation approved the business combination or the transaction in which
such shareholder became an interested shareholder, (ii) upon the consummation of
the transaction in which the shareholder became an interested shareholder, such
shareholder owned at least 85% of the outstanding voting shares of the
corporation (excluding shares held by certain persons set forth in the statute)
or (iii) at, or subsequent to such time, the business combination is approved by
the board of directors and authorized at an annual or special meeting of the
shareholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting shares which are not owned by the interested
shareholder. Certain exemptions exist under this statute. The Ticketmaster Board
has previously approved for purposes of Section 11.75 of the IBCA, the Stock
Exchange Agreement which resulted in USAi becoming an "interested shareholder"
of Ticketmaster.

Under Section 7.85 of the IBCA, a corporation may not enter into a business
combination with any interested shareholder (defined substantially as in Section
11.75, above) unless the transaction has been approved by the holders of at
least 80% of the outstanding voting shares of the corporation and the holders of
a majority of the voting shares of the corporation not held by such interested
shareholders and their affiliates or associates. The heightened shareholder
voting requirement of Section 7.85 does not apply if (i) the business
combination has been approved by two-thirds of the "disinterested directors," or
(ii) certain procedural requirements and requirements relating to the
consideration to be paid are met. For purposes of Section 7.85, a "disinterested
director" is a director who (i) is neither the interested shareholder nor its
affiliate or associate, (ii) was a director before the interested shareholder
became an interested shareholder or before 1997, or was recommended to succeed a
disinterested director by a majority of disinterested directors, and (iii) was
not nominated to be a director by the interested shareholder or its affiliates
or associates. The disinterested directors of the Ticketmaster Board have
unanimously approved the Merger Agreement and the Merger. See "The
Merger-Background -- Background of the Merger."

Section 203 of the DGCL also limits certain business combinations of
Delaware corporations with interested shareholders. Under the DGCL, an
interested shareholder (a shareholder whose beneficial ownership in the
corporation is at least 15% of the outstanding voting securities) cannot enter
certain business combinations with the corporation for a period of three years
following the time that such shareholder became an interested shareholder
unless, (i) prior to such time, a corporation's board of directors approved
either the business combination or the transaction in which the shareholder
became an interested shareholder, (ii) upon consummation of the transaction in
which any person becomes an interested shareholder, such interested shareholder
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding shares owned by certain employee stock
ownership plans and persons who are both directors and officers of the
corporation) or (iii) at or subsequent to such time, the business combination is
both approved by the board of directors and authorized at an annual or special
meeting of shareholders, not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock not owned by the interested
shareholder. The USAi Certificate does not provide for an "opt-out" from this
provision of the DGCL and, therefore, it applies to USAi.

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<PAGE> 56

LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF DIRECTORS

The IBCA and the Ticketmaster Articles provide that no director will be
personally liable to Ticketmaster or its shareholders for monetary damages for
breach of fiduciary duty as a director, except for liability: (i) for any breach
of the director's duty of loyalty to Ticketmaster or its shareholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) arising under Section 8.65 of the IBCA if (a)
the director votes for or assents to a prohibited distribution or (b) the
director of a dissolved corporation fails to take reasonable steps to give
notice to a known creditor or carries on business other than that necessary to
wind up its affairs after the articles of dissolution have been filed; or (iv)
for any transaction from which the director derived an improper personal
benefit.

The USAi Certificate is similar to the IBCA and Ticketmaster Articles
except that the USAi Certificate does not address the liability of a director of
a dissolved corporation as referred to above in clause (iii)(b).

Generally, the IBCA provides that a corporation may indemnify any person
who is a party or is threatened to be made a party to any proceeding by reason
of the fact that such person is a director, officer, employee or agent of the
corporation, if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action, had no reasonable cause
to believe his or her actions were unlawful. The Ticketmaster Articles provide
that the corporation will indemnify those persons set forth in the IBCA to the
fullest extent it is permitted to indemnify such persons.

The DGCL is similar to the IBCA with respect to indemnification. The USAi
Certificate and the USAi By-Laws provide for the indemnification of directors
and officers to the fullest extent permitted by the DGCL against liability
arising by reason of the fact that such individual was a director or officer of
USAi.

In general, the indemnification provided for under the IBCA and the DGCL is
not deemed to be exclusive of any nonstatutory indemnification rights provided
to directors, officers and employees under any bylaw, agreement or vote of
shareholders or disinterested directors.

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EXPLANATORY NOTE: Pages 51-65 of this document contain Ticketmaster Proxy
Statement information only and shall not be deemed to constitute prospectus
information.

THE ANNUAL MEETING

BUSINESS TO BE CONDUCTED AT THE ANNUAL MEETING

MATTERS TO BE CONSIDERED

This Proxy Statement/Prospectus is furnished to holders of Ticketmaster
Common Stock in connection with the solicitation of proxies by the Ticketmaster
Board for use at the Annual Meeting of Shareholders of Ticketmaster (the "Annual
Meeting") to be held for the purposes described in this Proxy Statement/
Prospectus. Each copy of this Proxy Statement/Prospectus mailed to holders of
Ticketmaster Common Stock is accompanied by a form of proxy for use at the
Annual Meeting.

In connection with the Annual Meeting, Ticketmaster shareholders will be
asked:

1. To vote on a proposal to approve the terms of the Merger Agreement,
pursuant to which Ticketmaster would become a wholly owned subsidiary of
USAi;

2. To elect nine directors to serve as directors of Ticketmaster until
the next annual meeting of shareholders, or until consummation of the
Merger, whichever occurs earlier; and

3. To ratify the appointment of Ernst & Young LLP as Ticketmaster's
independent auditors for the fiscal year ending January 31, 1999.

DATE, TIME AND PLACE OF MEETING

The Annual Meeting will be held on Tuesday, June 23, 1998 at 10:00 a.m.,
local time, at the Park Hyatt Hotel located at 2151 Avenue of the Stars, Century
City, California 90067.

RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE

Only holders of record of Ticketmaster Common Stock at the close of
business on May 12, 1998 (the "Record Date") are entitled to notice of, and will
be entitled to vote at, the Annual Meeting. Each share of Ticketmaster Common
Stock is entitled to one vote on each matter being submitted to a vote of
shareholders at the Annual Meeting. At the close of business on the Record Date,
there were 26,427,951 shares of Ticketmaster Common Stock outstanding and
entitled to vote, held of record by approximately 100 shareholders.

VOTING AND REVOCATION OF PROXIES

The proxy accompanying this Proxy Statement/Prospectus is solicited on
behalf of the Ticketmaster Board for use at the Annual Meeting. You are
requested to complete, date and sign the accompanying proxy and promptly return
it in the accompanying envelope or otherwise mail it to Ticketmaster. All
proxies that are properly executed and returned, and that are not revoked, will
be voted at the Annual Meeting in accordance with the instructions indicated on
the proxies. If no instructions are indicated, such proxies will be voted FOR
each of the proposals described in this Proxy Statement/Prospectus.

The Ticketmaster Board does not presently intend to bring any business
before the Annual Meeting other than the specific proposals referred to in this
Proxy Statement/Prospectus and specified in the notice of the Annual Meeting. So
far as is known to the Ticketmaster Board, no other matters are to be brought
before the Annual Meeting. If any other business properly comes before the
Annual Meeting, however, it is intended that proxies, in the form enclosed, will
be voted on such matters in accordance with the judgment of the persons voting
such proxies.

If the Annual Meeting is postponed or adjourned for any reason, at any
subsequent reconvening of the Annual Meeting, all proxies (except for any
proxies that have theretofore effectively been revoked or

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withdrawn) will be voted in the same manner as such proxies would have been
voted at the original convening of the Annual Meeting.

A Ticketmaster shareholder who has given a proxy may revoke it at any time
before it is exercised at the Annual Meeting by delivering to the Secretary of
Ticketmaster a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not, by itself, revoke a proxy).

QUORUM; VOTE REQUIRED

The required quorum for the transaction of business at the Annual Meeting
is a majority of shares of Ticketmaster Common Stock issued and outstanding on
the Record Date, which shares must be present in person or represented by proxy
at the Annual Meeting. Approval and authorization by the Ticketmaster
shareholders of the Merger Agreement requires the affirmative vote of the
holders of a majority of the voting power of all outstanding shares of
Ticketmaster Common Stock. Approval by the Ticketmaster shareholders of the
nominees for directors and the ratification of the appointment of Ticketmaster's
independent auditors requires the affirmative vote of a majority of the shares
of Ticketmaster Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on such matters. Abstentions and broker non-
votes are counted for purposes of determining whether there is a quorum at the
Annual Meeting. A non-vote occurs when a nominee holding shares for a beneficial
owner votes on one proposal, but does not vote on another proposal because the
nominee does not have discretionary voting power and has not received
instructions from the beneficial owner. If you abstain or if your shares become
broker non-votes, such votes have the same effect as a vote against the Merger
Agreement. With respect to the other proposals, abstentions will have the same
effect as a vote against such proposals, while broker non-votes will have no
effect on the outcome of such proposals.

USAi currently owns approximately 47% of the outstanding shares of
Ticketmaster Common Stock and has agreed to vote such shares in favor of the
Merger Agreement. Accordingly, shareholder approval is virtually assured.

SOLICITATION OF PROXIES AND EXPENSES

Ticketmaster will bear the cost of the solicitation of proxies from its
shareholders. In addition to solicitation by mail, the directors, officers and
employees of Ticketmaster may solicit proxies from shareholders by telephone,
telegram, letter, facsimile or in person. Following the original mailing of the
proxies and other soliciting materials, Ticketmaster will request brokers,
custodians, nominees and other record holders to forward copies of the proxy and
other soliciting materials to person for whom they hold shares of Ticketmaster
Common Stock and to request authority for the exercise of proxies. In such
cases, Ticketmaster, upon the request of the record holders, will reimburse such
holders for their reasonable expenses.

DESCRIPTION OF PROPOSALS AND TICKETMASTER BOARD RECOMMENDATIONS

The Ticketmaster Board has considered each of the proposals described in
this Proxy Statement/ Prospectus and believes that each proposal is in the best
interests of Ticketmaster's shareholders.

THE TICKETMASTER BOARD RECOMMENDS THAT YOU VOTE FOR EACH PROPOSAL DESCRIBED
IN THIS SECTION.

YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.

MERGER PROPOSAL

At the Annual Meeting, Ticketmaster shareholders will be asked to approve
and authorize the Merger Agreement pursuant to which Ticketmaster would become a
wholly owned subsidiary of USAi. See "The Merger."

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ELECTION OF TICKETMASTER DIRECTORS

At the Annual Meeting, Ticketmaster shareholders will be asked to elect the
following nine director nominees to serve as directors of Ticketmaster for the
ensuing year, or until completion of the Merger, whichever occurs earlier: Paul
G. Allen, Peter R. Barton, Barry Diller, Jonathan L. Dolgen, James G. Held, John
A. Pritzker, Fredric D. Rosen, William D. Savoy and Terence M. Strom. In the
event that the Ticketmaster shareholders vote to approve and authorize the
Merger Agreement and the Merger, we expect to complete the Merger as quickly as
possible after the Annual Meeting. Upon completion of the Merger, the board of
directors of USAi Subsidiary will become the board of directors of the Surviving
Corporation of the Merger. Accordingly, in the event that the Ticketmaster
shareholders approve and authorize the Merger Agreement and the Merger at the
Annual Meeting, it is expected that the directors elected at the Annual Meeting
will serve as directors of Ticketmaster for only a very short period of time. In
the event that the Merger Agreement and the Merger are not approved by the
Ticketmaster shareholders or in the event that the Merger is not completed for
any other reason, the directors elected at the Annual Meeting will serve as
directors of Ticketmaster until the next succeeding annual meeting of
shareholders and until their successors have been duly elected.

In the event that any nominee named herein for election as a director at
the Annual Meeting is not available or willing to serve when the election
occurs, proxies in the accompanying form may be voted for a substitute as well
as for the other persons named herein. All of the nominees currently serve as
directors of Ticketmaster.

INFORMATION CONCERNING THE NOMINEES FOR ELECTION AS DIRECTORS

Information concerning the nine nominees for election as directors,
including their principal occupations and employment, is set forth below.

Paul G. Allen, 45, has served as a director and Chairman of the Board of
Ticketmaster since December 1993. Mr. Allen has been a private investor for more
than five years, with interests in a wide variety of companies, many of which
focus on multimedia digital communications such as Asymetrix Corp. 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., owner of the Portland franchise of the National Basketball Association.
Mr. Allen currently serves as a director of Microsoft Corporation and, since
July 1997, has served as a director of USAi. Mr. Allen also serves as a director
of various private corporations.

Peter R. Barton, 47, has served as a director of Ticketmaster since July
1997. Mr. Barton has served as President of Barton and Associates, a private
investment firm specializing in technology and software, since April 1997. From
1990 to 1997, Mr. Barton was President and CEO of Liberty Media Corporation, a
holding company with positions in cable networks and broadcasting companies. Mr.
Barton has served as a director of Ascent Entertainment Group, Inc. since June
1997 and as a director of First Albany Companies, Inc. since August 1997.

Barry Diller, 56, has served as a director of Ticketmaster since July 1997.
Mr. Diller has been a director and Chairman of the Board and Chief Executive
Officer of USAi since August 24, 1995. He was Chairman of the Board and Chief
Executive Officer of QVC, Inc. from December 1992 through December 1994. From
1984 to 1992, Mr. Diller served as the Chairman of the Board and Chief Executive
Officer of Fox, Inc. Prior to joining Fox, Inc., Mr. Diller served for ten years
as Chairman of the Board and Chief Executive Officer of Paramount Pictures
Corporation. Mr. Diller is also a director of The Seagram Company, Ltd. and
Golden Books Family Entertainment, Inc. He also serves on the Board of the
Museum of Television and Radio and is a member of the Board of Councilors for
the University of Southern California's School of Cinema-Television. Mr. Diller
also serves on the Board of Directors of AIDS Project Los Angeles, the Executive
Board for the Medical Sciences of the University of California, Los Angeles and
the Board of the Children's Advocacy Center of Manhattan.

Jonathan L. Dolgen, 53, has served as a director of Ticketmaster since July
1997. Mr. Dolgen has served as the Chairman of Viacom Entertainment Group, a
unit of Viacom, Inc., since April 1994. From May 1991

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to April 1994, Mr. Dolgen was President of Sony Pictures Entertainment's Motion
Picture Group. Mr. Dolgen also serves on the Board of Fellows of the Claremont
University Center and Graduate School.

James G. Held, 48, has served as a director of Ticketmaster since July
1997. Mr. Held has been a director of USAi since December 1996 and served as
Vice Chairman from January 1997 to February 1998. He previously had served as a
director of Home Shopping since February 1996. Since November 1995, Mr. Held has
been President and Chief Executive Officer of Home Shopping. From January 1995
to November 1995, Mr. Held served as President and Chief Executive Officer of
Adrienne Vittadini, Inc., an apparel manufacturer and retailer. Between
September 1993 and January 1995, Mr. Held was a senior executive of QVC, Inc.,
first as Senior Vice President in charge of new business development and later
as Executive Vice President of merchandising, sales, product planning and new
business development. For eleven years prior to that, until September 1993, Mr.
Held was employed in different executive positions at Bloomingdale's, Inc.

John A. Pritzker, 44, has served as a director of Ticketmaster since July
1992. Since July 1988, Mr. Pritzker has served as the Chief Executive Officer of
the Red Sail Companies which operate water sports and retail facilities at
resorts worldwide. Mr. Pritzker is a director of Chemdex Corporation and a
trustee of the U.S. Ski Team Foundation and the San Francisco Day School. Mr.
Pritzker serves on the Ticketmaster Board as the designee of certain
Ticketmaster shareholders pursuant to a right granted to those shareholders in
an existing shareholders' agreement.

Fredric D. Rosen, 54, has served as a director of Ticketmaster since
January 1988 (the date of formation), and was Chairman of the Board of
Ticketmaster until December 1993. Mr. Rosen was the Chairman of the Board and
Chief Executive Officer of Ticketmaster Corporation from September 1982 until
December 1993, at which time he became President and Chief Executive Officer of
Ticketmaster. Mr. Rosen also serves as a director of King World Productions,
Inc.

William D. Savoy, 33, has served as a director of Ticketmaster since
September 1994. Since 1990, Mr. Savoy has served as Vice President of Vulcan
Ventures, Incorporated, a venture capital fund owned by Paul G. Allen. From 1987
until November 1990, Mr. Savoy was employed by Layered, Inc., a company
controlled by Mr. Allen, and became its President in 1988. Currently, Mr. Savoy
serves as President of Vulcan Northwest, Inc., a company wholly owned by Mr.
Allen. Mr. Savoy also serves on the Advisory Board of Dream Works SKG. Mr. Savoy
serves as a director of CNET, Inc., Harbinger Corporation, Metricom, Inc.,
Telescan, Inc., U.S. Satellite Broadcasting, Inc. and, since July 1997, has
served as a director of USAi. See "-- Directors and Executive Officers of
Ticketmaster -- Related Party Transactions."

Terence M. Strom, 53, has served as a director of Ticketmaster since March
1998. Previously, Mr. Strom served as a director of Ticketmaster from September
1994 to July 1997. Since February 1997, Mr. Strom has served as a consultant to
Egghead, Inc., a retail software reseller, and served as the President and Chief
Executive Officer of Egghead, Inc. from June 1993 until February 1997. 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.

RATIFICATION OF AUDITORS PROPOSAL

The Ticketmaster Board, adopting the recommendation of the Audit Committee
of the Ticketmaster Board, has appointed the certified public accounting firm of
Ernst & Young LLP ("Ernst & Young") as Ticketmaster's independent auditors for
the fiscal year ending January 31, 1999. Representatives of Ernst & Young are
expected to be present at the Annual Meeting and will be available to respond to
questions and may make a statement if such representatives so desire.

On August 5, 1997, Ticketmaster engaged Ernst & Young as its independent
accountants to audit the financial statements of Ticketmaster and its
subsidiaries for the fiscal year ended January 31, 1998, to replace KPMG Peat
Marwick LLP ("KPMG") who was dismissed as Ticketmaster's independent auditors
effective August 5, 1997. The decision to change independent accountants was
approved by Ticketmaster's Board.

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KPMG's reports on Ticketmaster's financial statements for the years ended
January 31, 1996 and 1997 did not contain an adverse opinion or a disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles.

During Ticketmaster's fiscal years ended January 31, 1996 and 1997 and in
the subsequent interim period preceding August 5, 1997, there were no
disagreements between Ticketmaster and KPMG on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of KPMG, would have caused
KPMG to make a reference to the subject matter of the disagreement in connection
with KPMG's reports for such periods.

During Ticketmaster's fiscal years ended January 31, 1996 and 1997 and the
subsequent interim period preceding August 5, 1997, KPMG did not advise
Ticketmaster as to the presence of any reportable event as described in Item 304
of Regulation S-K. In addition, during such period, Ticketmaster did not consult
with Ernst & Young with regard to the matters or events described in Item 304 of
Regulation S-K.

DIRECTORS AND EXECUTIVE OFFICERS OF TICKETMASTER

EXECUTIVE OFFICERS

The executive officers of Ticketmaster are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Paul G. Allen................... 45 Chairman of the Board
Fredric D. Rosen................ 54 President and Chief Executive Officer
John J. Ruscin.................. 47 Senior Executive Vice President
Ned S. Goldstein................ 43 Senior Vice President, Secretary and General
Counsel
Peter B. Knepper................ 49 Senior Vice President and Chief Financial
Officer
Stuart W. DePina................ 37 Vice President -- Finance and Treasurer
</TABLE>

See "-- Election of Ticketmaster Directors -- Information Concerning the
Nominees for Election as Directors" above for biographical information
concerning Messrs. Allen and Rosen. Information concerning the other executive
officers of Ticketmaster listed above, including their principal occupations and
employment, is set forth below:

John J. Ruscin has served as Senior Executive Vice President of
Ticketmaster and President and Chief Operating Officer of Ticketmaster Direct,
Inc., a wholly owned subsidiary of Ticketmaster, since March 1997 and, in
addition, has served as a director of certain of Ticketmaster's subsidiaries
from time to time. From November 1994 to March 1997, Mr. Ruscin served as
President and Chief Executive Officer of the CBS/ FOX Company, a joint venture
home entertainment company between CBS Inc. and Twentieth Century Fox Film Corp.
From October 1992 to October 1994, Mr. Ruscin was Executive Vice President of
Marketing and Distribution for Ticketmaster Corporation. From July 1987 until
October 1992, Mr. Ruscin was Senior Vice President of Acquisitions for Twentieth
Century Fox Film Corp.

Ned S. Goldstein has served as a Senior Vice President of Ticketmaster
since February 1995, as General Counsel of Ticketmaster since January 1988, and
as Secretary of Ticketmaster since September 1997. From January 1988 until
January 1995, Mr. Goldstein also served as a Vice President of Ticketmaster. In
addition, Mr. Goldstein has served as an executive officer of Ticketmaster
Corporation since June 1987, and as an officer and/or director of other
subsidiaries of Ticketmaster from time to time.

Peter B. Knepper has served as a Senior Vice President of Ticketmaster
since February 1995 and as Chief Financial Officer of Ticketmaster since May
1988. From May 1988 until November 1995, Mr. Knepper also served as Treasurer of
Ticketmaster. In addition, Mr. Knepper has served as an executive officer of
Ticketmaster Corporation since May 1988, and as an officer and/or director of
other subsidiaries of Ticketmaster from time to time.

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Stuart W. DePina has served as Vice President -- Finance and Treasurer of
Ticketmaster since November 1995. In addition, Mr. DePina has served as an
officer and/or director of various subsidiaries of Ticketmaster from time to
time. From August 1984 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.

Officers are appointed by and serve at the discretion of the Ticketmaster
Board.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

For the fiscal year ended January 31, 1998, no director or executive
officer of Ticketmaster subject to Section 16 of the Exchange Act failed to file
on a timely basis reports required by Section 16 of the Exchange Act, except
that Mr. Strom, Mr. Ruscin and Mr. Britton inadvertently failed to promptly file
the Initial Statement of Beneficial Ownership of Securities on Form 3 and Mr.
Dolgen inadvertently failed to file one Statement of Changes in Beneficial
Ownership on Form 4 by its due date. In addition, Mr. Barton's and Mr. Dolgen's
Initial Statements of Beneficial Ownership of Securities on Form 3 did not
reflect options to purchase Ticketmaster Common Stock that had been
automatically granted to them under the Ticketmaster Stock Plan, although
amendments to such forms were filed promptly after they were informed of such
grants.

BOARD OF DIRECTORS AND BOARD COMMITTEES

The Ticketmaster Board has established an Audit Committee and a
Compensation Committee. Each committee is composed of two "Non-Employee
Directors" as defined in the Exchange Act. The current members of the Audit
Committee are William D. Savoy and Peter R. Barton. The current members of the
Compensation Committee are John A. Pritzker and William D. Savoy.

The functions of the Audit Committee are to recommend annually to the
Ticketmaster Board the appointment of Ticketmaster's independent public
accountants, 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 accounting and financial policies of
Ticketmaster, review the adequacy of Ticketmaster's financial organization and
review management's procedures and policies relative to the adequacy of
Ticketmaster'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 Ticketmaster Board the terms and conditions of all employee benefit plans or
changes thereto and administer the Ticketmaster Stock Plan and such other
employee benefit plans as Ticketmaster may adopt from time to time.

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

During fiscal 1998, the Ticketmaster Board held three meetings and took
action by written consent seven times, the Audit Committee held one meeting and
the Compensation Committee held two meetings and took action by written consent
once. Each director attended or participated in at least 75% of the aggregate
number of meetings held by the Ticketmaster Board and the committees, if any, on
which he served during fiscal 1998.

In addition to the standing committees of the Board described above, the
Special Committee was formed to evaluate the various Merger proposals. See "The
Merger -- Background -- Background of the Merger."

COMPENSATION OF DIRECTORS

Prior to August 21, 1996, directors were not paid fees, but were reimbursed
for travel expenses incurred in attending Ticketmaster Board and committee
meetings. On August 21, 1996, each director who was not a Ticketmaster employee
or the beneficial owner of 5% or more of the outstanding Ticketmaster Common
Stock was granted options to purchase 25,000 shares of Ticketmaster Common Stock
in consideration for services

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<PAGE> 63

rendered through such date. In addition, commencing on August 21, 1996, each
director who is not a Ticketmaster employee or the beneficial owner of 5% or
more of the outstanding Ticketmaster 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 Ticketmaster shareholders, commencing in 1997 and
annually thereafter, each such director will automatically be granted options to
purchase 10,000 shares of Ticketmaster Common Stock. Commencing on November 26,
1997, the Ticketmaster Board fixed the compensation for each member of the
Special Committee at $15,000 per month, plus reimbursement for out-of-pocket
expenses. See "The Merger -- Description of the Merger -- Interests of Certain
Persons in the Merger."

It is contemplated that the automatic grant of options to directors will
cease upon approval of the Merger Agreement by the Ticketmaster shareholders, in
which event directors will not be granted options on the date of the Annual
Meeting.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee currently are Messrs. Savoy and
Pritzker. Prior to his resignation as a director of Ticketmaster, David E.
Liddle also served on the Compensation Committee during fiscal 1998. None of
these directors was ever an officer or employee of Ticketmaster or its
subsidiaries. Certain other information with respect to Messrs. Pritzker and
Liddle is set forth below under "-- Related Party Transactions."

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth certain summary information with respect to
all compensation paid by Ticketmaster during the three fiscal years ended
January 31, 1996, 1997 and 1998 to each of Ticketmaster's Chief Executive
Officer and its four other most highly paid executive officers during fiscal
1998 (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------- ------------
AWARDS
------------
SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS COMPENSATION
------------------ ------ ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Fredric D. Rosen 1998 $2,100,000 $2,740,000 -- $31,671(1)
President & Chief Executive 1997 1,800,000 2,248,000 -- 26,280
Officer 1996 1,800,000 576,000 -- 12,989
John J. Ruscin(2) 1998 446,217 125,000 -- 6,382(3)
Senior Executive Vice President
Ned S. Goldstein 1998 290,000 200,000 -- 5,834(4)
Senior Vice President, Secretary 1997 270,000 190,000 115,000 3,741
and General Counsel 1996 250,000 140,000 -- 3,695
Peter B. Knepper 1998 300,000 200,000 -- 6,925(5)
Senior Vice President and Chief 1997 285,000 195,000 115,000 4,207
Financial Officer 1996 275,000 140,000 -- 3,706
Layne Leslie Britton(6) 1998 425,000 115,000 -- 574(7)
Executive Vice President 1997 57,211 -- 12,500 --
</TABLE>

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

(1) Represents cash payments for life insurance premiums of $31,671.

(2) Mr. Ruscin became an executive officer of Ticketmaster in March 1997.
Accordingly, salary and bonus amounts in fiscal 1998 reflect a partial year
of employment.

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<PAGE> 64

(3) Represents $2,028 contributed by Ticketmaster to the 401K Plan and $4,354
for life insurance premiums.

(4) Represents $2,010 contributed by Ticketmaster to the 401K Plan and $3,824
for life insurance premiums.

(5) Represents $2,011 contributed by Ticketmaster to the 401K Plan and $4,914
for life insurance premiums.

(6) Mr. Britton became an executive officer of Ticketmaster in December 1996.
Accordingly, salary amounts in fiscal 1997 reflect a partial year of
employment. Mr. Britton resigned his position with Ticketmaster effective
October 29, 1997, but received severance compensation through January 31,
1998.

(7) Represents cash payments for life insurance premiums of $574.

OPTION HOLDINGS

The following table sets forth information with respect to the aggregate
number and value of shares underlying unexercised options held as of January 31,
1998 by each of the Named Executive Officers.

FISCAL YEAR-END OPTIONS VALUES(1)

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END
------------------------------ --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---- ------------------------------ --------------------
<S> <C> <C>
Fredric D. Rosen....................... 1,331,340/0 $13,543,722/$0
John J. Ruscin......................... 100,000/0 $ 981,300/$0
Ned S. Goldstein....................... 185,696/0 $ 1,847,685/$0
Peter B. Knepper....................... 185,696/0 $ 1,847,685/$0
Layne Leslie Britton................... 12,500/0 $ 122,663/$0
</TABLE>

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

(1) None of the Named Executive Officers exercised options during the last
completed fiscal year. Accordingly, columns in this table pertaining to the
exercise of options have been omitted.

EMPLOYMENT AGREEMENTS

Ticketmaster entered into an employment agreement, dated as of December 15,
1993, with Fredric D. Rosen for an initial term ending on January 31, 1999.
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 Ticketmaster'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%. Ticketmaster will also pay Mr. Rosen such other
bonuses as may be granted by the Ticketmaster Board 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, Ticketmaster has granted Mr. Rosen options
to purchase 1,331,340 shares of Ticketmaster Common Stock at an exercise price
of $14.14 per share, 25% of which vested on the grant date and the remaining 75%
of which vest monthly on a pro rata basis over the 36-month period beginning
January 1, 1995. Upon the closing of the Stock Exchange Agreement on July 17,
1997, Mr. Rosen became fully vested in 100% of such options. If requested by Mr.
Rosen, Ticketmaster will loan Mr. Rosen the amount necessary to purchase the
shares of Ticketmaster Common Stock issuable upon exercise of the options,
together with the amount necessary to pay all federal and state income taxes
thereon. In addition, Mr. Rosen is prohibited from competing with Ticketmaster
as provided in the agreement or soliciting the employment of any employee of

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<PAGE> 65

Ticketmaster or any customer of Ticketmaster for a period of two years after
termination of Mr. Rosen's employment with Ticketmaster.

The employment agreement provides that if Mr. Rosen's employment by
Ticketmaster is terminated by virtue of Mr. Rosen's death, Ticketmaster will 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 Ticketmaster is terminated by reason of disability, Ticketmaster
will 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
Ticketmaster 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 Ticketmaster terminates Mr. Rosen's employment for
good reason (which includes a determination by the Ticketmaster Board that Mr.
Rosen has failed to perform his duties), Ticketmaster will 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, Ticketmaster will pay him the amounts
described in the immediately preceding sentence over the two-year period
following termination. Ticketmaster 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 Ticketmaster in connection with a change of control. In
the event Ticketmaster terminates Mr. Rosen's employment for any reason,
Ticketmaster 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 a
shareholders agreement but in no event for less than $4.3 million.

See "The Merger -- Description of the Merger -- Cooperation,
Non-Competition and Confidentiality Agreement" for a summary of the Cooperation
Agreement that has been entered into by USAi and Mr. Rosen and how the
Cooperation Agreement affects Mr. Rosen's employment agreement.

Ticketmaster entered into employment agreements with John J. Ruscin
(commencing March 24, 1997 and expiring January 31, 2002), Ned S. Goldstein
(commencing February 1, 1994 and expiring January 31, 1999) and Peter B. Knepper
(commencing February 1, 1994 and expiring January 31, 1999). Each executive is
entitled to receive an annual base salary amount ranging from $525,000 to
$600,000 in the case of Mr. Ruscin, $225,000 to $300,000 in the case of Mr.
Goldstein and $245,000 to $310,000 in the case of Mr. Knepper. Each executive is
also entitled to receive an annual performance bonus in an amount determined by
the Ticketmaster Board; provided, however, that the amount of such bonus for any
full contract year shall not be less than an amount ranging from $125,000 to
$175,000 in the case of Mr. Ruscin and $50,000 in the case of Mr. Goldstein and
Mr. Knepper. The employment agreements also entitle the executives to
participate in benefit programs and to receive a $3,000,000 life insurance
policy payable to their estates or named beneficiaries. Pursuant to Mr.
Goldstein's and Mr. Knepper's employment agreements, Ticketmaster has granted
options to purchase 70,696 shares of Ticketmaster Common Stock at an exercise
price of $14.14 per share, vesting over a 36-month period, under the
Ticketmaster Stock Plan. Upon the closing of the Stock Exchange Agreement on
July 17, 1997, Mr. Goldstein and Mr. Knepper became fully vested in 100% of such
options. In addition, the executives are prohibited from competing with
Ticketmaster (subject to certain exceptions) or soliciting the employment of any
employee of Ticketmaster or any customer of Ticketmaster for a period of two
years after termination of their employment with Ticketmaster. Pursuant to the
employment agreements, each executive agrees to serve without further
compensation as an officer or a director of any of Ticketmaster's domestic and
foreign subsidiaries and affiliates if elected or appointed thereto.

If Ticketmaster terminates the employment of any of the persons named in
the immediately preceding paragraph for any reason other than for cause, death
or disability, Ticketmaster 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. In
the case of Mr. Goldstein and Mr. Knepper, for a two-year period following
termination of employment for any reason other than such
59
<PAGE> 66

executive's death, the executive shall be available to Ticketmaster as a
consultant. In consideration for such consulting services (and agreements not to
compete and solicit employees and customers), each of Messrs. Goldstein and
Knepper will receive annual compensation of $30,000.

Ticketmaster entered into an employment agreement with Layne Leslie Britton
for a term commencing November 1, 1996 and ending January 31, 2001, with each
party having the right to early terminate the employment agreement for any
reason during the period commencing December 10, 1997 and ending January 31,
1998 (the "Termination Period"). Pursuant to the employment agreement, Mr.
Britton was entitled to receive an annual base salary in an amount ranging from
$425,000 to $525,000, to receive an annual performance bonus determined by the
Ticketmaster Board (but not less than an amount ranging from $115,000 to
$150,000 during any full contract year), to participate in benefit programs and
to receive a $2,000,000 life insurance policy. Pursuant to the employment
agreement, Ticketmaster also granted Mr. Britton stock options to purchase
75,000 shares of Ticketmaster Common Stock at an exercise price of $14.145 per
share, of which 12,500 shares vested on January 31, 1997, 6,250 were to vest on
February 1, 1998 (provided that Mr. Britton did not terminate the employment
agreement during the Termination Period) and the remaining shares would vest
monthly on a pro rata basis over the 36-month period immediately following
February 1, 1998. On October 29, 1997, Ticketmaster and Mr. Britton entered into
a Resignation and Mutual Release (the "Release") regarding the termination of
Mr. Britton's employment agreement. The Release provides that Ticketmaster will
pay to Mr. Britton his base salary of $425,000 through January 31, 1998 and the
minimal annual performance bonus of $115,000. Absent the Release, Mr. Britton
would have been entitled to continue to receive his base salary until the
earlier of January 31, 1999 or the date at which Mr. Britton commenced work with
a new employer, with Ticketmaster paying Mr. Britton the difference between his
base salary and his compensation at his new employment until January 31, 1999.
Pursuant to the Release, Ticketmaster ceased to pay Mr. Britton's benefits on
the date of his resignation, October 29, 1997, but agreed to pay for COBRA until
the earlier of (a) Mr. Britton's being covered by another medical plan of
another entity or (b) 30 days. The Release further provides that Mr. Britton has
vested options to purchase 12,500 shares of Ticketmaster Common Stock, which
options were exercised in full in April 1998. The Release also contains mutual
releases.

RELATED PARTY TRANSACTIONS

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

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 Ticketmaster, 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, which amount is credited
against amounts otherwise payable to Starwave pursuant to clauses (i) and (ii).
Payments under the Starwave Agreement during fiscal 1998 aggregated
approximately $100,000. During fiscal 1999, TMHI anticipates making payments of
approximately $150,000 to Starwave. The Ticketmaster Board has determined that
the terms of the Starwave Agreement are fair and in the best interests of
Ticketmaster and its shareholders.

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<PAGE> 67

In addition, trusts for the benefit of certain members of the Pritzker
family, including John A. Pritzker, a Ticketmaster director, 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 1998, Ticketmaster derived revenues of approximately $13.8 million
from contracts with certain venues under Spectacor's management. During fiscal
1999, revenues attributable to venues under Spectacor's management are
anticipated to be approximately $11.0 million. Ticketmaster believes that its
contracts with Spectacor-managed venues are upon terms no less favorable to
Ticketmaster than similar contracts with third parties.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Ticketmaster's executive compensation program is administered by the
Compensation Committee of the Ticketmaster Board. The members of the
Compensation Committee currently are William D. Savoy and John A. Pritzker.
Prior to his resignation as a director of Ticketmaster on July 17, 1997, David
E. Liddle also served on the Compensation Committee during fiscal 1998. Included
in the functions of the Compensation Committee are review and approval of base
annual salaries and annual bonuses for all executive officers (consistent with
the terms of all applicable employment agreements), and administration of the
Ticketmaster Stock Plan and such other employee benefit plans as Ticketmaster
may adopt from time to time.

GENERAL COMPENSATION POLICIES

Ticketmaster's compensation program for executive officers currently
consists, in general, of three principal components: a base annual salary, a
performance-based annual bonus and periodic grants of stock options. The
Compensation Committee believes that this approach best serves the interests of
shareholders by enabling Ticketmaster to structure compensation in a manner
necessary to attract and retain executives in a highly competitive environment,
while ensuring that Ticketmaster's executives are compensated in a manner that
advances both the short-term and long-term interests of shareholders.
Accordingly, compensation for executives involves a high proportion of pay which
is at risk: the variable annual bonus (which permits individual performance to
be recognized on an annual basis, and which is based, in significant part, on
either specified formulas or an evaluation of the contribution made by the
executive to Ticketmaster's performance) and stock options (which create a
direct link between the executive's long-term remuneration and stock price
appreciation realized by Ticketmaster's shareholders).

The Compensation Committee believes that it is important that
Ticketmaster's executive officers hold equity positions in Ticketmaster. Stock
option grants to executives permit them to hold equity interests at more
meaningful levels than they could through other alternatives, such as stock
purchase arrangements. Accordingly, while the Compensation Committee is
conscious of the dilutive effects of stock options on shareholders, it believes
that stock option grants at reasonable levels are an important component of
executive compensation. In addition, because of the nature of Ticketmaster's
operations, Ticketmaster's management believes, and the Compensation Committee
agrees, that it is important that stock options be granted to a broad range of
employees so that the long-term interests of its executives and other employees
are aligned with those of its shareholders.

CHIEF EXECUTIVE OFFICER COMPENSATION

As Chief Executive Officer, Mr. Rosen was compensated during fiscal 1998 in
accordance with his employment agreement described under "-- Directors and
Executive Officers -- Employment Agreements," above. Pursuant to his employment
agreement, Mr. Rosen was entitled to receive an annual base salary in the amount
of $2.1 million during fiscal 1998, and received an annual base salary of $1.8
million during fiscal 1995, 1996 and 1997. The Compensation Committee believes
that Mr. Rosen's base annual salary fairly reflects his tenure, experience and
responsibilities and Ticketmaster's historic operating performance. Mr. Rosen's
total compensation under his employment agreement was, and will be,
substantially related to Ticketmaster's performance because it provides for an
annual performance bonus in an amount calculated as a percentage of the excess
of Ticketmaster's Adjusted EBIDTA for each fiscal year over the average of
Adjusted EBIDTA for specified prior fiscal years. Although Mr. Rosen may also be
granted such other
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<PAGE> 68

bonuses as the Compensation Committee determines in its discretion, Mr. Rosen's
bonus for fiscal 1998 was comprised solely of amounts calculated pursuant to the
contractual formula. In addition, although Mr. Rosen is entitled to participate
in the Ticketmaster Stock Plan, no stock options were awarded to him during
fiscal 1998. See "-- Employment Agreements."

OTHER EXECUTIVE OFFICERS OF THE COMPANY

The base annual salaries and performance-based annual bonuses of the other
executive officers of the Company are determined in accordance with their
respective employment agreements. See "-- Directors and Executive
Officers -- Employment Agreements," above. The Compensation Committee is
authorized to determine the actual amount of bonuses (subject to specified
minimums) based upon such guidelines and factual circumstances as the
Compensation Committee deems relevant, including Ticketmaster's operating
results during the applicable fiscal year, the importance of the efforts of the
executives in achieving such operating results and the achievement by
Ticketmaster and/or executives of performance goals, if any, previously
established by the Ticketmaster Board for such fiscal year. The executives are
also entitled to participate in the Ticketmaster Stock Plan. Among the factors
considered by the Compensation Committee in establishing the amount of bonuses
and stock option awards to executives were the recommendations of the Chief
Executive Officer. The Compensation Committee believes that the total
compensation paid to each executive during fiscal 1998, inclusive of bonus and
stock option awards, reflects that executive's individual contributions and
achievements during such fiscal year and Ticketmaster's long-term potential, or
was necessary to attract an executive to initiate and/or operate a business
unit.

INTERNAL REVENUE CODE SEC.162(M)

Section 162(m) of the Code generally disallows a tax deduction to public
corporations for compensation over $1,000,000 for any fiscal year paid to the
corporation's chief executive officer and four other most highly compensated
executive officers in service at the end of any fiscal year. However, Section
162(m) also provides that qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. The Compensation
Committee currently intends to structure compensation amounts and plans that
meet the requirements for deductibility, although the Compensation Committee
also reserves the authority to award non-deductible compensation in such
circumstances as they deem appropriate. Because of ambiguities and uncertainties
as to the application and interpretation of Section 162(m) and the regulations
issued thereunder, no assurance can be given, notwithstanding Ticketmaster's
efforts in this area, that compensation that Ticketmaster intended to satisfy
the requirements for deductibility under Section 162(m) does in fact do so.

MEMBERS OF THE COMPENSATION
COMMITTEE

William D. Savoy, Chairman
John A. Pritzker

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<PAGE> 69

PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder return on the
Ticketmaster Common Stock since initiation of trading of Ticketmaster Common
Stock on November 19, 1996 with (i) a peer group index and (ii) The Nasdaq Stock
Market (U.S.) (assuming the investment on November 19, 1996 of $100 in each of
Ticketmaster's Common Stock, the peer group and The Nasdaq Stock Market (U.S.)
and the reinvestment of dividends, if any). Ticketmaster does not believe that
the stock price performance shown on the graph below is necessarily indicative
of future price performance.

Because Ticketmaster is involved in a wide variety of services, no
published peer group accurately mirrors Ticketmaster's businesses or weighs
those businesses to match their relative contributions to Ticketmaster's overall
performance. Accordingly, Ticketmaster has created a special peer group index
that includes companies in Ticketmaster's principal lines of businesses. The
common stock of the following companies have been included in the peer group
index: APAC TeleServices, Inc., Automatic Data Processing, First Data Corp.,
Fiserv, Inc., ICT Group, Inc., National Data Corp., Precision Response Corp.,
Shop at Home, Inc., Sitel Corporation, TeleTech Holdings, Inc., Total System
Services, Inc., and ValueVision International, Inc. The peer group weighs the
constituent companies' stock performance on the basis of market capitalization,
measured at the beginning of each relevant time period.

[PERFORMANCE GRAPH]

11/19/96 1/97 1/98

TICKETMASTER GROUP, INC 100 100 172
PEER GROUP 100 93 101
NASDAQ STOCK MARKET (U.S.) 100 110 130

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<PAGE> 70

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the Record Date (except as indicated
below), information relating to the beneficial ownership of Ticketmaster Common
Stock by (i) each person known by Ticketmaster to own beneficially more than 5%
of the outstanding shares of Ticketmaster Common Stock, (ii) each director and
nominee for director, (iii) each Named Executive Officer, and (iv) all directors
and executive officers of Ticketmaster as a group:

<TABLE>
<CAPTION>
NUMBER OF SHARES APPROXIMATE
NAME AND ADDRESS BENEFICIALLY OWNED(1) PERCENT OF CLASS
- ---------------- --------------------- ----------------
<S> <C> <C>
USA Networks, Inc.(2)..................................... 12,283,014 46.5%
152 West 57th Street
New York, New York 10019
HG, Inc.(3)............................................... 2,544,526 9.6
200 West Madison Street, Suite 3800
Chicago, Illinois 60606
Gabelli Funds, Inc(4)..................................... 2,100,400 8.0
One Corporate Center
Rye, New York 10580-1434
New East Associates, LLC.................................. 1,862,069 7.1
c/o Mr. Herbert Simon
Simon DeBartolo Group
115 West Washington
Indianapolis, Indiana 46204
Fredric D. Rosen(5)(6).................................... 1,637,548 5.9
c/o Ticketmaster Group, Inc.
8800 Sunset Boulevard
West Hollywood, California 90069
Paul G. Allen............................................. -- *
Peter R. Barton(6)........................................ 10,000 *
Barry Diller(7)........................................... -- *
Jonathan L. Dolgen(6)(8).................................. 12,500 *
James G. Held............................................. -- *
John A. Pritzker(6)(9).................................... 45,000 *
William D. Savoy(6)....................................... 35,000 *
Terence M. Strom(6)....................................... 45,000 *
John J. Ruscin(6)......................................... 100,000 *
Ned S. Goldstein(6)....................................... 185,696 *
Peter B. Knepper(6)....................................... 185,696 *
Layne Leslie Britton(10).................................. 12,500 *
All officers and directors as a Group (13 2,300,640 8.1%
persons)(6)(10).........................................
</TABLE>

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

* Represents beneficial ownership of less than 1%.

(1) Unless otherwise indicated in the footnotes to this table, Ticketmaster
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) Excludes 206,000 shares owned by USA Networks Foundation, Inc. USAi
disclaims beneficial ownership of such shares.

(3) 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 (see Note
9). As used herein, the "Pritzker family" refers to the lineal descendants
of Nicholas J. Pritzker, deceased.

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<PAGE> 71

(4) Gabelli Funds, Inc. and certain of its subsidiaries and affiliates
including Gabelli Associates Fund, Gabelli Associates Limited, GAMCO
Investors, Inc., Gabelli International Limited, Gabelli Performance
Partnership L.P., and Gabelli Foundation, Inc., as well as Marc J. Gabelli
and Mario J. Gabelli jointly filed a Schedule 13D with the SEC on February
9, 1998 with an amendment thereto filed on March 18, 1998. This Schedule
13D shows that these companies had, as of April 6, 1998, shared voting
power and shared dispositive power over 2,100,400 shares.

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

(6) Includes shares covered by options which are currently exercisable.
Individually, Mr. Rosen holds 1,331,340, each of Messrs. Goldstein and
Knepper hold 185,696, Mr. Ruscin holds 100,000, each of Messrs. Pritzker,
Savoy and Strom hold 35,000, and each of Messrs. Barton and Dolgen hold
10,000 shares covered by options.

(7) Excludes shares owned by USAi of which Mr. Diller is the Chairman of the
Board and Chief Executive Officer. Mr. Diller disclaims beneficial
ownership of such shares.

(8) Includes 2,500 shares owned by a trust for the benefit of his family of
which Mr. Dolgen and his wife are co-trustees.

(9) Excludes shares owned by HG, Inc. and Rockwood & Co.

(10) Mr. Britton resigned his position with Ticketmaster effective October 29,
1997.

65
<PAGE> 72

ADDITIONAL INFORMATION

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this document that are subject
to risks and uncertainties. Forward-looking statements include the information
concerning possible or assumed future results of operations, cost savings and
synergies of Ticketmaster or USAi set forth under "Questions and Answers About
the Merger and the Annual Meeting," "Risk Factors" and "The Merger --
Background -- USAi's Reasons for the Merger" and those preceded by, followed
by or that otherwise include the words "believes," "expects," "anticipates,"
"intends," "estimates" or similar expressions. For those statements, we claim
the protection of the safe harbor for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995 to the extent provided by
applicable law. You should understand that the following important factors, in
addition to those discussed elsewhere in this document and in the documents
which are incorporated by reference, and in our other public filings and press
releases, could affect the future results of Ticketmaster and USAi, and could
cause those results to differ materially from those expressed in our
forward-looking statements: material adverse changes in economic conditions
generally or in the markets served by our companies; a significant delay in
the expected closing of the Merger; material changes in inflation; future
regulatory and legislative actions affecting our companies' operating areas;
competition from others; the ability to successfully integrate the management
structures of Ticketmaster and of USAi's recently acquired businesses and
consolidate activities/operations in USAi in order to achieve anticipated cost
and revenue synergies; product demand and market acceptance; the ability to
protect proprietary information and technology or to obtain necessary licenses
on commercially reasonable terms; the ability to expand into and successfully
operate in foreign markets; and obtaining and retaining skilled workers.
Neither Ticketmaster nor USAi intends to update these forward-looking
statements.

SHAREHOLDER PROPOSALS

If the Merger is not consummated for any reason, then proposals of
Ticketmaster shareholders which are intended to be presented by such
shareholders at the next annual meeting of Ticketmaster shareholders must be
received by Ticketmaster no later than January 21, 1999 in order to be
considered for inclusion in the proxy statement and form of proxy relating to
that meeting.

OTHER MATTERS

The Ticketmaster Board knows of no other matters which are likely to be
brought before the Annual Meeting. If any matters are brought before the Annual
Meeting, Fredric D. Rosen, President and Chief Executive Officer of
Ticketmaster, Ned S. Goldstein, Senior Vice President, Secretary and General
Counsel of Ticketmaster, and Peter B. Knepper, Senior Vice President and Chief
Financial Officer of Ticketmaster, as the proxy agents named in the enclosed
proxy, will vote on such matters in accordance with their best judgment.

WHERE YOU CAN FIND MORE INFORMATION

USAi and Ticketmaster file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information that we file at the SEC's public
reference rooms in Washington D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services and at the Internet web site maintained
by the SEC at "http://www.sec.gov." Reports, proxy statements and other
information should also be available for inspection at the offices of the NASD.

USAi filed a Registration Statement on Form S-4 to register with the SEC
the USAi Common Stock to be issued to Ticketmaster shareholders in the Merger.
This Proxy Statement/Prospectus is a part of that Registration Statement and
constitutes a prospectus of USAi in addition to being a proxy statement/
prospectus of Ticketmaster for the Annual Meeting. As allowed by SEC rules, this
Proxy Statement/

66
<PAGE> 73

Prospectus does not contain all the information you can find in the Registration
Statement or the exhibits to the Registration Statement.

The SEC allows us to "incorporate by reference" information into this Proxy
Statement/Prospectus, which means that we can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this Proxy
Statement/Prospectus, except for any information superseded by information in
this Proxy Statement/ Prospectus. This Proxy Statement/Prospectus incorporates
by reference the documents set forth below that we have previously filed with
the SEC. These documents contain important information about our companies and
their finances.

<TABLE>
<CAPTION>
USAI SEC FILINGS (FILE NO. 0-20570) PERIOD
----------------------------------- ------
<S> <C>
Annual Report on Form 10-K............... Fiscal Year ended December 31, 1997
Quarterly Report on Form 10-Q............ Quarter ended March 31, 1998
Current Reports on Form 8-K.............. Filed on January 9, 1998 (amending Form
8-K filed on February 13, 1996); filed on
January 16, 1998; filed on January 23,
1998; filed on February 13, 1998; filed
on February 23, 1998; filed on April 1,
1998; filed on May 1, 1998; and filed on
May 19, 1998.
Definitive Proxy Statement............... Dated January 12, 1998
The description of USAi Common Stock set
forth in the Registration Statement on
Form S-4 dated November 20, 1996 (File
No. 333-16437).
</TABLE>

<TABLE>
<CAPTION>
TICKETMASTER SEC FILINGS (FILE NO. 0-21631) PERIOD
- ------------------------------------------- ------
<S> <C>
Annual Report on Form 10-K................ Fiscal Year ended January 31, 1998
The description of Ticketmaster Common
Stock set forth in the Registration
Statement on Form 8-A.
</TABLE>

We are also incorporating by reference additional documents that we file
with the SEC between the date of this Proxy Statement/Prospectus and the date of
the Annual Meeting.

USAi has supplied all information contained or incorporated by reference in
this Proxy Statement/ Prospectus relating to USAi, and Ticketmaster has supplied
all such information relating to Ticketmaster.

If you are a shareholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us or the SEC.
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated by reference an
exhibit in this Proxy Statement/Prospectus. Shareholders may obtain documents
incorporated by reference in this Proxy Statement/Prospectus by requesting them
in writing or by telephone from the appropriate party at the following address

<TABLE>
<S> <C>
USA Networks, Inc. Ticketmaster Group, Inc.
Investor Relations Department Shareholder Services
152 West 57th Street 8800 Sunset Boulevard
New York, New York 10019 West Hollywood, CA 90069
Tel: (212) 314-7300 Tel: (310) 360-6000
</TABLE>

If you would like to request documents from us, please do so by June 16,
1998 to receive them before the Annual Meeting.

67
<PAGE> 74

You should rely only on the information contained or incorporated by
reference in this Proxy Statement/ Prospectus to vote on the Merger. We have not
authorized anyone to provide you with information that is different from what is
contained in this Proxy Statement/Prospectus. This Proxy Statement/Prospectus is
dated May 19, 1998. You should not assume that the information contained in the
Proxy Statement/ Prospectus is accurate as of any date other than such date, and
neither the mailing of this Proxy Statement/ Prospectus to Ticketmaster
shareholders nor the issuance of USAi Common Stock in the Merger shall create
any implication to the contrary.

LEGAL MATTERS

The validity of the USAi Common Stock to be issued to Ticketmaster
shareholders pursuant to the Merger will be passed upon by Wachtell, Lipton,
Rosen & Katz, special counsel to USAi. It is a condition to the consummation of
the Merger that USAi and Sub receive an opinion from Wachtell, Lipton, Rosen &
Katz, and that Ticketmaster receive an opinion from Shearman & Sterling, special
counsel to the Special Committee, each to the effect that, among other things,
the Merger will constitute a "reorganization" within the meaning of Section
368(a) of the Code. See "The Merger Agreement -- Conditions to the Merger" and
"The Merger -- Certain U.S. Federal Income Tax Consequences."

EXPERTS

The consolidated balance sheets of USA Networks, Inc. as of December 31,
1997 and 1996, and the related consolidated statements of operations,
shareholders' equity and cash flows for the years then ended have been
incorporated by reference in this Proxy Statement/Prospectus in reliance upon
the reports of Ernst & Young LLP, independent auditors, incorporated by
reference herein, and given upon the authority of said firm as experts in
accounting and auditing. The consolidated statements of operations,
stockholders' equity and cash flows of USA Networks, Inc. and subsidiaries for
the period September 1, 1995 through December 31, 1995 and for the year ended
August 31, 1995 have been incorporated by reference in this Proxy Statement/
Prospectus in reliance upon the reports of Deloitte & Touche LLP, independent
certified public accountants, incorporated by reference herein, and given upon
the authority of said firm as experts in accounting and auditing.

The consolidated balance sheet of Ticketmaster Group, Inc. and subsidiaries
as of January 31, 1998 and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year ended January 31, 1998 have
been incorporated by reference in this Proxy Statement/Prospectus in reliance
upon the report of Ernst & Young LLP, independent auditors, incorporated by
reference herein, and given upon the authority of said firm as experts in
accounting and auditing. The consolidated balance sheet of Ticketmaster Group,
Inc. and subsidiaries as of January 31, 1997 and the related consolidated
statements of operations, shareholders' equity (deficiency), and cash flows for
each of the years in the two-year period then ended have been incorporated by
reference in this Proxy Statement/Prospectus in reliance upon the reports of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and given upon the authority of said firm as experts in
accounting and auditing.

The combined balance sheets of Universal Television Group as of June 30,
1997 and 1996 and the related combined statements of operations and cash flows
for each of the three years in the period ended June 30, 1997 have been
incorporated by reference in this Proxy Statement/Prospectus in reliance upon
the report of Price Waterhouse LLP, independent accountants, incorporated by
reference herein, and given upon the authority of said firm as experts in
accounting and auditing.

The combined balance sheet of USA Networks as of December 31, 1996 and 1995
and the related combined statements of income, cash flows, and changes in
partners' equity for each of the two years in the period ended December 31, 1996
have been incorporated by reference in this Proxy Statement/Prospectus in
reliance upon the report of Price Waterhouse LLP, independent accountants,
incorporated by reference herein, and given upon the authority of said firm as
experts in accounting and auditing. The combined statements of income, cash
flows and changes in partners' equity of USA Networks for the year ended
December 31, 1994 have been incorporated by reference in this Proxy
Statement/Prospectus in reliance upon the report of KPMG Peat Marwick LLP,
independent accountants, incorporated by reference herein, and given upon the
authority of said firm as experts in accounting and auditing.

68
<PAGE> 75

INDEX OF DEFINED TERMS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Adjusted EBITDA............................................. 58
Allen & Co.................................................. 13
Annual Meeting.............................................. 51
Certificates................................................ 26
Code........................................................ 23
Condensed Statements........................................ 35
Cooperation Agreement....................................... 14
Data Services Companies..................................... 19
DGCL........................................................ 45
EBITDA...................................................... 19
Effective Time.............................................. 26
Electronic Commerce Comparable Companies.................... 21
Electronic Distribution Services Companies.................. 19
Ernst & Young............................................... 54
Exchange Act................................................ 45
Exchange Ratio.............................................. 14
FCC......................................................... 10
GAAP........................................................ 25
Governance Agreement........................................ 10
HG.......................................................... 15
Historical Exchange Ratio................................... 19
Home Shopping............................................... 10
IBCA........................................................ 14
Initial Proposal............................................ 12
Investment Agreement........................................ 44
IRS......................................................... 24
KPMG........................................................ 54
Liberty..................................................... 10
LLC......................................................... 10
LLC Shares.................................................. 44
LTM......................................................... 19
Merger...................................................... 10
Merger Agreement............................................ 14
Minority Transactions....................................... 20
Named Executive Officers.................................... 57
NASDAQ...................................................... 28
Networks.................................................... 35
Online Comparable Companies................................. 20
Plaintiffs.................................................. 13
Proxy Statement/Prospectus.................................. 10
Public Shareholders......................................... 13
Record Date................................................. 51
Release..................................................... 60
Revised Proposal............................................ 13
Rosen Option................................................ 27
Seagram..................................................... 11
SEC......................................................... 12
Securities Act.............................................. 25
Shareholder Litigation...................................... 13
</TABLE>

69
<PAGE> 76

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Special Committee........................................... 12
Spectacor................................................... 61
Spread...................................................... 30
Starwave.................................................... 60
Starwave Agreement.......................................... 60
Stock Exchange Agreement.................................... 12
Stock Split................................................. 10
Stockholders Agreement...................................... 11
Studios USA................................................. 22
Sub......................................................... 10
Surviving Corporation....................................... 26
Teleservices Companies...................................... 19
Termination Period.......................................... 60
Ticketmaster................................................ 10
Ticketmaster Articles....................................... 46
Ticketmaster Board.......................................... 12
Ticketmaster Bylaws......................................... 46
Ticketmaster Common Stock................................... 12
Ticketmaster Online......................................... 20
Ticketmaster Option......................................... 27
Ticketmaster Stock Plan..................................... 27
TMHI........................................................ 60
TV Network Comparable Companies............................. 22
TV Production Comparable Companies.......................... 22
Universal................................................... 10
Universal Transaction....................................... 44
USA/Sci-Fi.................................................. 21
USAi........................................................ 10
USAi Adjustments............................................ 21
USAi Board.................................................. 11
USAi By-Laws................................................ 46
USAi Certificate............................................ 46
USAi Class B Common Stock................................... 10
USAi Common Stock........................................... 10
USAi Comparable Companies................................... 21
USAi Preferred Stock........................................ 44
Viacom...................................................... 21
WACC........................................................ 20
</TABLE>

70
<PAGE> 77

APPENDIX A
================================================================================

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

USA NETWORKS, INC.,

BRICK ACQUISITION CORP.

AND

TICKETMASTER GROUP, INC.

AS OF MARCH 20, 1998

================================================================================
<PAGE> 78

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1 THE MERGER........................................................ A-7
Section 1.1. The Merger.................................................. A-7
Section 1.2. Effective Time of the Merger................................ A-7
Section 1.3. Closing..................................................... A-8
Section 1.4. Effects of the Merger....................................... A-8
Section 1.5. Certificate of Incorporation and Bylaws of Surviving
Corporation................................................. A-8
ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES............................ A-8
Section 2.1. Effect of Merger on Capital Stock........................... A-8
(a) Capital Stock of Sub........................................ A-8
(b) Treatment of Certain Shares of Company Common Stock......... A-8
(c) Exchange Ratio for Company Common Stock..................... A-8
(d) Adjustment of Exchange Ratio for Dilution and Other
Matters..................................................... A-9
Section 2.2. Exchange of Certificates.................................... A-9
(a) Exchange Agent.............................................. A-9
(b) Exchange Procedures......................................... A-9
(c) Distributions with Respect to Unsurrendered Certificates.... A-9
(d) No Further Ownership Rights in Company Common Stock......... A-10
(e) No Issuance of Fractional Shares............................ A-10
(f) Termination of Exchange Fund................................ A-11
(g) No Liability................................................ A-11
(h) Lost, Stolen or Destroyed Certificates...................... A-11
Section 2.3. Stock Options............................................... A-11
Section 2.4. Taking of Necessary Action; Further Action.................. A-11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................... A-12
Section 3.1. Organization and Qualification; Subsidiaries................ A-12
Section 3.2. Certificate of Incorporation and Bylaws..................... A-12
Section 3.3. Capitalization.............................................. A-12
Section 3.4. Authority Relative to this Agreement; Board Approval........ A-13
Section 3.5. No Conflict; Required Filings and Consents.................. A-13
Section 3.6. Compliance; Permits......................................... A-14
Section 3.7. SEC Filings; Financial Statements........................... A-14
Section 3.8. Absence of Certain Changes or Events........................ A-15
Section 3.9. Absence of Litigation....................................... A-15
Section 3.10. Registration Statement; Proxy Statement..................... A-16
Section 3.11. Brokers..................................................... A-16
Section 3.12. Opinion of Financial Advisor................................ A-16
Section 3.13. Employee Benefit Plans...................................... A-16
Section 3.14. Tax Matters................................................. A-17
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................. A-17
Section 4.1. Organization and Qualification; Subsidiaries................ A-17
Section 4.2. Certificate of Incorporation and Bylaws..................... A-17
Section 4.3. Capitalization.............................................. A-17
Section 4.4. Authority Relative to this Agreement; Board Approval........ A-18
Section 4.5. No Conflict; Required Filings and Consents.................. A-19
Section 4.6. Compliance; Permits......................................... A-19
Section 4.7. SEC Filings; Financial Statements........................... A-20
Section 4.8. Absence of Certain Changes or Events........................ A-20
Section 4.9. Absence of Litigation....................................... A-20
</TABLE>

A-2
<PAGE> 79

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 4.10. Registration Statement; Proxy Statement..................... A-21
Section 4.11. Brokers..................................................... A-21
Section 4.12. Opinion of Financial Advisor................................ A-21
Section 4.13. Interim Operations of Sub................................... A-21
Section 4.14. Employee Benefit Plans...................................... A-21
Section 4.15. Tax Matters................................................. A-22
ARTICLE 5 CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL
AGREEMENTS........................................................ A-22
Section 5.1. Information and Access...................................... A-22
Section 5.2. Conduct of Business of the Company.......................... A-22
Section 5.3. Conduct of Business of Parent............................... A-24
Section 5.4. Preparation of S-4 and Proxy Statement; Other Filings....... A-24
Section 5.5. Letter of Independent Auditors.............................. A-25
Section 5.6. Shareholders Meeting........................................ A-25
Section 5.7. Agreements to Take Reasonable Action........................ A-25
Section 5.8. Consents.................................................... A-26
Section 5.9. NASDAQ Quotation............................................ A-26
Section 5.10. Affiliates.................................................. A-26
Section 5.11. Indemnification and Insurance............................... A-26
Section 5.12. Notification of Certain Matters............................. A-26
Section 5.13. Employee Agreements......................................... A-26
Section 5.14. Reorganization.............................................. A-27
ARTICLE 6 CONDITIONS PRECEDENT.............................................. A-27
Section 6.1. Conditions to Each Party's Obligation to Effect the
Merger...................................................... A-27
(a) Shareholder Approval........................................ A-27
(b) Effectiveness of the S-4.................................... A-27
(c) Governmental Entity Approvals............................... A-27
(d) No Injunctions or Restraints; Illegality.................... A-27
(e) NASDAQ Quotation............................................ A-27
Section 6.2. Conditions of Obligations of Parent and Sub................. A-27
(a) Representations and Warranties.............................. A-27
(b) Performance of Obligations of the Company................... A-28
(c) Consents.................................................... A-28
(d) Tax Opinion................................................. A-28
Section 6.3. Conditions of Obligations of the Company.................... A-28
(a) Representations and Warranties.............................. A-28
(b) Performance of Obligations of Parent and Sub................ A-28
(c) Consents.................................................... A-28
(d) Tax Opinion................................................. A-28
(e) Officer of Parent........................................... A-29
ARTICLE 7 TERMINATION....................................................... A-29
Section 7.1. Termination................................................. A-29
Section 7.2. Effect of Termination....................................... A-29
Section 7.3. Fees and Expenses........................................... A-30
ARTICLE 8 GENERAL PROVISIONS................................................ A-30
Section 8.1. Amendment................................................... A-30
Section 8.2. Extension; Waiver........................................... A-30
Section 8.3. Nonsurvival of Representations, Warranties and Agreements... A-30
Section 8.4. Entire Agreement............................................ A-30
Section 8.5. Severability................................................ A-30
Section 8.6. Notices..................................................... A-31
</TABLE>

A-3
<PAGE> 80

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 8.7. Headings.................................................... A-31
Section 8.8. Counterparts................................................ A-31
Section 8.9. Benefits; Assignment........................................ A-32
Section 8.10. Governing Law............................................... A-32
</TABLE>

EXHIBIT A -- Form of Company Affiliate Letter

A-4
<PAGE> 81

INDEX OF DEFINED TERMS

<TABLE>
<CAPTION>
SECTION
-------
<S> <C>
"Agreement"................................................. Preamble
"Approvals"................................................. Section 3.1
"Approved Matter"........................................... Section 3.1
"Blue Sky Laws"............................................. Section 4.5(b)
"Business Day".............................................. Section 1.3
"Certificates".............................................. Section 2.2(b)
"Closing"................................................... Section 1.3
"Closing Date".............................................. Section 1.3
"Code"...................................................... Recitals
"Common Shares Trust"....................................... Section 2.2(e)(iii)
"Commonly Controlled Entity"................................ Section 3.13(a)
"Company"................................................... Preamble
"Company Banker"............................................ Section 3.11
"Company Benefit Plans"..................................... Section 3.13(a)
"Company Common Stock"...................................... Recitals
"Company Disclosure Letter"................................. Section 3.3
"Company Option"............................................ Section 2.3
"Company Permits"........................................... Section 3.6(b)
"Company SEC Reports"....................................... Section 3.7(a)
"Confidentiality Agreement"................................. Section 5.1
"Constituent Corporations".................................. Section 1.1
"Cooperation Agreement"..................................... Recitals
"Effective Time"............................................ Section 1.2
"ERISA"..................................................... Section 3.13(a)
"ERISA Plan"................................................ Section 3.13(a)
"Excess Shares"............................................. Section 2.2(e)(iii)
"Exchange Act".............................................. Section 3.5(b)
"Exchange Agent"............................................ Section 2.2(a)
"Exchange Fund"............................................. Section 2.2(a)
"Exchange Ratio"............................................ Section 2.1(c)
"GAAP"...................................................... Section 3.7(b)
"Governmental Entity"....................................... Section 3.5(b)
"Illinois Articles of Merger"............................... Section 1.2
"Illinois Certificate of Merger"............................ Section 1.2
"Illinois Statute".......................................... Recitals
"Investment Agreement"...................................... Section 5.3
"Liberty"................................................... Section 5.3
"Material Adverse Effect"................................... Section 3.1, 4.1
"Merger".................................................... Recitals
"Multiemployer Plan"........................................ Section 3.13(a)
"NASD"...................................................... Section 2.2(e)(iii)
"Ordinary Venue Contracts".................................. Section 5.2
"Other Filings"............................................. Section 5.4
"Parent".................................................... Preamble
"Parent Banker"............................................. Section 4.11
"Parent Benefit Plans"...................................... Section 4.14(a)
"Parent Class B Common Stock"............................... Section 4.3
"Parent Common Shares"...................................... Section 4.3
"Parent Common Stock"....................................... Section 2.1(c)
</TABLE>

A-5
<PAGE> 82

<TABLE>
<CAPTION>
SECTION
-------
<S> <C>
"Parent Disclosure Letter".................................. Section 4.3
"Parent ERISA Plan"......................................... Section 4.14(a)
"Parent Permits"............................................ Section 4.6(b)
"Parent Preferred Stock".................................... Section 4.3
"Parent Proxy Statement".................................... Section 4.3
"Parent SEC Reports"........................................ Section 4.7(a)
"Proxy Statement"........................................... Section 3.5(b)
"Rosen Option".............................................. Section 2.3
"S-4"....................................................... Section 3.10
"SEC"....................................................... Section 3.1
"Securities Act"............................................ Section 3.7(a)
"Shareholders Meeting"...................................... Section 3.10
"Special Committee"......................................... Recitals
"Stock Plan"................................................ Section 2.3
"Sub"....................................................... Preamble
"Sub Common Stock".......................................... Section 2.1(a)
"subsidiary"................................................ Section 3.1
"Surviving Corporation"..................................... Section 1.1
"Surviving Corporation Common Stock"........................ Section 2.1(a)
"Transactions".............................................. Recitals
"Universal"................................................. Section 5.3
</TABLE>

A-6
<PAGE> 83

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of March
20, 1998, by and among USA NETWORKS, INC., a Delaware corporation ("Parent"),
BRICK ACQUISITION CORP., an Illinois corporation and a wholly owned subsidiary
of Parent ("Sub"), and TICKETMASTER GROUP, INC., an Illinois corporation (the
"Company").

RECITALS:

A. The Boards of Directors of Parent, Sub and the Company have each
approved the terms and conditions of the business combination between Parent and
the Company to be effected by the merger (the "Merger") of Sub with and into the
Company, pursuant to the terms and subject to the conditions of this Agreement
and the Business Corporation Act of the State of Illinois (the "Illinois
Statute"), and each deems the Merger advisable and in the best interests of each
corporation. A Special Committee of the Board of Directors of the Company (the
"Special Committee") has determined that the Merger is fair to, and in the best
interests of, the holders of shares of common stock, no par value, of the
Company ("Company Common Stock"), other than Parent and its subsidiaries, and
has recommended to the Board of Directors of the Company that it approve the
terms and conditions of the Merger, including this Agreement. The Disinterested
Directors (as defined in Section 5/7.85 of the Illinois Statute) of the Company
have approved the terms and conditions of the Merger.

B. Each of Parent, Sub and the Company desires to make certain
representations, warranties, covenants and agreements in connection with the
Merger.

C. For federal income tax purposes, it is intended that the Merger and the
transactions contemplated thereby qualify as a reorganization under the
provisions of Section 368(a) of the United States Internal Revenue Code of 1986,
as amended (the "Code").

D. It was a condition, which condition was satisfied, to the willingness of
Parent and Sub to enter into this Agreement and to consummate the transactions
contemplated hereby (the "Transactions"), including the acquisition of the stock
of the Company in the Merger from the Company's shareholders, including the
Chief Executive Officer, that the Chief Executive Officer of the Company entered
into that certain agreement with Parent, dated March 9, 1998 (the "Cooperation
Agreement"), pursuant to which, among other things, such individual agreed not
to compete with, or to solicit customers of, the Company from and after the
expiration of his current employment agreement with the Company and to cooperate
with the Company and Parent to provide for an orderly transition to a new Chief
Executive Officer of the Company.

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained in this Agreement, the parties agree as follows:

ARTICLE 1

THE MERGER

SECTION 1.1. THE MERGER. Upon the terms and subject to the conditions of
this Agreement and in accordance with the Illinois Statute, at the Effective
Time, Parent shall cause Sub to be merged with and into the Company. Following
the Merger, the Company shall continue as the surviving corporation (the
"Surviving Corporation") and the separate corporate existence of Sub shall
cease. Sub and the Company are collectively referred to as the "Constituent
Corporations."

SECTION 1.2. EFFECTIVE TIME OF THE MERGER. Subject to the provisions of
this Agreement, the Merger shall become effective (the "Effective Time") upon
the filing of properly executed articles of merger (the "Illinois Articles of
Merger") with, and the issuance of a certificate of merger (the "Illinois
Certificate of Merger") by, the Secretary of State of the State of Illinois in
accordance with the Illinois Statute. The Effective Time shall be the time of
the Closing as set forth in Section 1.3.

A-7
<PAGE> 84

SECTION 1.3. CLOSING. Unless this Agreement shall have been terminated
pursuant to Section 7.1, the closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date (the "Closing Date") to be mutually agreed upon by
the parties, which date shall be no later than the third Business Day after
satisfaction of the latest to occur of the conditions set forth in Sections 6.1
(other than Section 6.1(d)), 6.2(b) (other than the delivery of the officers'
certificate referred to therein), 6.2(c), 6.3(b) (other than the delivery of the
officers' certificate referred to therein), and 6.3(c), unless another date is
agreed to in writing by the parties. The Closing shall take place at the offices
of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York
10019, unless another place is agreed to in writing by the parties. As used in
this Agreement, "Business Day" shall mean any day, other than a Saturday, Sunday
or legal holiday on which banks are permitted to close in the City and State of
New York, the State of Delaware or the State of Illinois.

SECTION 1.4. EFFECTS OF THE MERGER. At the Effective Time: (a) the separate
existence of Sub shall cease and Sub shall be merged with and into the Company,
with the result that the Company shall be the Surviving Corporation, and (b) the
Merger shall have all of the effects provided by the Illinois Statute.

SECTION 1.5. CERTIFICATE OF INCORPORATION AND BYLAWS OF SURVIVING
CORPORATION. At the Effective Time, (a) the certificate of incorporation of Sub
shall be the certificate of incorporation of the Surviving Corporation until
altered, amended or repealed as provided in the Illinois Statute; (b) the bylaws
of Sub shall become the bylaws of the Surviving Corporation until altered,
amended or repealed as provided in the Illinois Statute or in the certificate of
incorporation or bylaws of the Surviving Corporation; (c) the directors of Sub
shall become the initial directors of the Surviving Corporation, such directors
to hold office from the Effective Time until their respective successors are
duly elected or appointed as provided in the certificate of incorporation and
bylaws of the Surviving Corporation; and (d) the officers of the Company shall
continue as the officers of the Surviving Corporation until such time as their
respective successors are duly elected as provided in the bylaws of the
Surviving Corporation.

ARTICLE 2

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

SECTION 2.1. EFFECT OF MERGER ON CAPITAL STOCK. At the Effective Time,
subject and pursuant to the terms of this Agreement, by virtue of the Merger and
without any action on the part of the Constituent Corporations or the holders of
any shares of capital stock of the Constituent Corporations:

(a) Capital Stock of Sub. Each issued and outstanding share of the
common stock, $.01 par value per share, of Sub ("Sub Common Stock") shall
be converted into one validly issued, fully paid and nonassessable share of
common stock, $.01 par value per share, of the Surviving Corporation
("Surviving Corporation Common Stock"). Each stock certificate of Sub
evidencing ownership of any such shares shall continue to evidence
ownership of such shares of Surviving Corporation Common Stock.

(b) Treatment of Certain Shares of Company Common Stock. Each share of
Company Common Stock that is owned by the Company as treasury stock and
each share of Company Common Stock that is owned by Parent, Sub or any
other wholly owned subsidiary of Parent shall not be cancelled and retired
and shall be treated as provided in Section 2.1(c).

(c) Exchange Ratio for Company Common Stock. Each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares of Company Common Stock held by shareholders who
properly demand dissenters' rights in accordance with Section 5/11.70 of
the Illinois Statute), shall, subject to Section 2.1(d), be converted into
the right to receive 1.126 of a fully paid and nonassessable share of
common stock, $.01 par value per share, of Parent ("Parent Common Stock")
(the "Exchange Ratio"). At the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding, and shall automatically be
cancelled and retired and cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the shares of Parent Common Stock to
be issued in consideration therefor upon the surrender of such certificate
in accordance with Section 2.2, without interest. No
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fractional shares of Parent Common Stock shall be issued; and, in lieu
thereof, a cash payment shall be made pursuant to Section 2.2(e).

(d) Adjustment of Exchange Ratio for Dilution and Other Matters. If,
between the date of this Agreement and the Effective Time, the outstanding
shares of Parent Common Stock shall have been changed into a different
number of shares or a different class by reason of any reclassification,
recapitalization, split-up, stock dividend, stock combination, exchange of
shares, readjustment or otherwise, then the Exchange Ratio, as the case may
be, shall be correspondingly adjusted. Without otherwise limiting the
foregoing, the Exchange Ratio of 1.126 set forth in paragraph (c) above
gives effect to the two-for-one stock split declared by the Company on
February 20, 1998, with respect to the Parent Common Shares (as defined in
Section 4.3).

SECTION 2.2. EXCHANGE OF CERTIFICATES.

(a) Exchange Agent. Prior to the Closing Date, Parent shall select a bank
or trust company reasonably acceptable to the Company to act as exchange agent
(the "Exchange Agent") in the Merger. Prior to the Effective Time, Parent shall
deposit with the Exchange Agent, for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this Article 2,
certificates representing the shares of Parent Common Stock (such shares of
Parent Common Stock, together with any dividends or distributions with respect
thereto, the "Exchange Fund") issuable pursuant to Section 2.1(c) at the
Effective Time in exchange for outstanding shares of Company Common Stock, which
shall include such shares of Parent Common Stock to be sold by the Exchange
Agent pursuant to Section 2.2(e).

(b) Exchange Procedures. As soon as practicable after the Effective Time,
Parent shall instruct the Exchange Agent to mail to each holder of record (other
than the Company, Parent, Sub and any wholly owned subsidiary of the Company) of
a certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock (collectively,
the "Certificates") whose shares were converted into the right to receive Parent
Common Stock pursuant to Section 2.1(c), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Parent and the
Company may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing Parent
Common Stock and any cash in lieu of fractional shares of Parent Common Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent, together
with a duly executed letter of transmittal and such other documents as may be
reasonably required by the Exchange Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate representing that
number of whole shares of Parent Common Stock which such holder has the right to
receive pursuant to the provisions of this Article 2 and any cash in lieu of
fractional shares of Parent Common Stock, and the Certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of ownership of shares
of Company Common Stock which is not registered on the transfer records of the
Company, a certificate representing the proper number of shares of Parent Common
Stock and any cash in lieu of fractional shares of Parent Common Stock may be
issued and paid to a transferee if the Certificate representing such Company
Common Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed, on and after
the Effective Time, to represent only the right to receive upon such surrender
the certificate representing shares of Parent Common Stock and cash in lieu of
any fractional shares of Parent Common Stock as contemplated by this Article 2
and the Illinois Statute. The consideration to be issued in the Merger will be
delivered by the Exchange Agent as promptly as practicable following surrender
of a Certificate and any other required documents. No interest will be payable
on such consideration regardless of any delay in making payments.

(c) Distributions with Respect to Unsurrendered Certificates. No dividends
or other distributions declared or made after the Effective Time with respect to
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such
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holder pursuant to Section 2.2(e) until the holder of record of such Certificate
shall surrender such Certificate. Subject to the effect, if any, of applicable
laws, following surrender of any such Certificate, there shall be paid to the
record holder of the certificates representing whole shares of Parent Common
Stock issued in exchange therefor or such holder's transferee pursuant to
Section 2.2(e), without interest, (i) at the time of such surrender, the amount
of any cash payable in lieu of a fractional share of Parent Common Stock to
which such holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions on Parent Common Stock with a record date after
the Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions on Parent Common Stock with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Parent Common Stock.

(d) No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of shares of Company
Common Stock in accordance with the terms of this Article 2 (plus any cash paid
pursuant to Section 2.2(c) or 2(e)) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to such shares of Company
Common Stock. From and after the Effective Time, the stock transfer books of the
Company shall be closed with respect to the shares of Company Common Stock, and
there shall be no further registration of transfers on the stock transfer books
of the Company or the Surviving Corporation of the shares of Company Common
Stock which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this Article 2.

(e) No Issuance of Fractional Shares.

(i) No certificates or scrip for fractional shares of Parent Common
Stock shall be issued upon the surrender for exchange of Certificates, and
such fractional share interests will not entitle the owner thereof to vote
or to any rights of a shareholder of Parent.

(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (A) the number of full shares
of Parent Common Stock delivered to the Exchange Agent by Parent pursuant
to Section 2.2(a) over (B) the aggregate number of full shares of Parent
Common Stock to be distributed to holders of Company Common Stock pursuant
to Section 2.2(b) (such excess, the "Excess Shares"). As soon after the
Effective Time as practicable, the Exchange Agent, as agent for the holders
of Company Common Stock, shall sell the Excess Shares at then prevailing
prices in the over-the-counter market, all in the manner provided in clause
(iii) of this Section 2.2(e).

(iii) The sale of the Excess Shares by the Exchange Agent shall be
executed in the over-the-counter market through one or more member firms of
the National Association of Securities Dealers, Inc. (the "NASD") and shall
be executed in round lots to the extent practicable. Until the net proceeds
of such sale or sales have been distributed to the holders of Company
Common Stock, the Exchange Agent will hold such proceeds in trust for the
holders of Company Common Stock (the "Common Shares Trust"). Parent shall
pay all commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation of the Exchange Agent
incurred in connection with such sale of the Excess Shares. The Exchange
Agent shall determine the portion of the Common Shares Trust to which each
holder of Company Common Stock shall be entitled, if any, by multiplying
the amount of the aggregate net proceeds comprising the Common Shares Trust
by a fraction, the numerator of which is the amount of the fractional share
interest to which such holder of Company Common Stock is entitled and the
denominator of which is the aggregate amount of fractional share interests
to which all holders of Company Common Stock are entitled.

(iv) As soon as practicable after the determination of the amount of
cash, if any, to be paid to the holders of Company Common Stock in lieu of
any fractional share interests and subject to clause (v) of this Section
2.2(e), the Exchange Agent shall make available such amounts to such
holders of Company Common Stock.

(v) Parent or the Exchange Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such

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amounts as Parent or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision
of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent or the Exchange Agent.

(f) Termination of Exchange Fund. Any portion of the Exchange Fund and
Common Shares Trust which remains undistributed to the shareholders of the
Company for 12 months after the Effective Time shall be delivered to Parent,
upon demand, and any former shareholders of the Company who have not theretofore
complied with this Article 2 shall thereafter look only to Parent for payment of
their claim for Parent Common Stock, any cash in lieu of fractional shares of
Parent Common Stock and any dividends or distributions with respect to Parent
Common Stock.

(g) No Liability. Neither the Exchange Agent, Parent, Sub nor the Company
shall be liable to any holder of shares of Company Common Stock or Parent Common
Stock, as the case may be, for shares (or dividends or distributions with
respect thereto) from the Exchange Fund or cash from the Common Shares Trust
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.

(h) Lost, Stolen or Destroyed Certificates. In the event any Certificates
evidencing shares of Company Common Stock shall have been lost, stolen or
destroyed, the holder of such lost, stolen or destroyed Certificate(s) shall
execute an affidavit of that fact upon request. The holder of any such lost,
stolen or destroyed Certificate(s) shall also deliver a reasonable indemnity
against any claim that may be made against Parent or the Exchange Agent with
respect to the Certificate(s) alleged to have been lost, stolen or destroyed.
The affidavit and any indemnity which may be required hereunder shall be
delivered to the Exchange Agent, who shall be responsible for making payment for
such lost, stolen or destroyed Certificate(s).

SECTION 2.3. STOCK OPTIONS. At the Effective Time, the Company's obligation
with respect to each outstanding option (each, a "Company Option") to purchase
shares of Company Common Stock issued pursuant to the Company's Stock Plan (the
"Stock Plan") and (unless otherwise elected by the optionee pursuant to the
terms of an individual agreement) pursuant to the Stock Option Agreement, dated
as of December 15, 1993, between the Company and Fredric D. Rosen (the "Rosen
Option"), as amended in the manner described in the following sentence, shall be
assumed by Parent. The Company Options so assumed by Parent shall continue to
have, and be subject to, the same terms and conditions as set forth in the Stock
Plan and the Rosen Option and the agreements pursuant to which such Company
Options were issued as in effect immediately prior to the Effective Time, which
plan, agreements and Rosen Option shall be assumed by Parent, except that (in
accordance with the applicable provisions of such plan and Rosen Option and
subject to any other rights that a holder of Company Options may have) (a) each
such Company Option shall be exercisable for that number of whole shares of
Parent Common Stock equal to the product of that number of shares of Company
Common Stock covered by such Company Option immediately prior to the Effective
Time multiplied by the Exchange Ratio and rounded up to the nearest whole number
of shares of Parent Common Stock, and (b) the exercise price per share of Parent
Common Stock shall equal the exercise price per share of Company Common Stock in
effect immediately prior to the Effective Time divided by the Exchange Ratio.
The adjustment provided herein with respect to any Company Options which are
"Incentive Stock Options" (as defined in Section 422 of the Code) shall be and
is intended to be effected in a manner which is consistent with Section 424(a)
of the Code. Parent shall reserve for issuance the number of shares of Parent
Common Stock that will become issuable upon the exercise of such Company Options
pursuant to this Section 2.3.

SECTION 2.4. TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time
after the Effective Time, any such further action is necessary or desirable to
carry out the purposes of this Agreement or to vest, perfect or confirm of
record or otherwise establish in the Surviving Corporation full right, title and
interest in, to or under any of the assets, property, rights, privileges, powers
and franchises of the Company and Sub, the officers and directors of the
Surviving Corporation are fully authorized in the name and on behalf of each of
the Constituent Corporations or otherwise to take all such lawful and necessary
or desirable action.

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Sub as follows:

SECTION 3.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of the
Company and its "Significant Subsidiaries" (as such term is defined in
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) is a corporation or other entity duly incorporated or organized, validly
existing and, as applicable, in good standing under the laws of the jurisdiction
of its incorporation or organization and has the requisite corporate or other
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted. Each of the Company and its
subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
("Approvals") necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted,
except where the failure to have such Approvals would not, individually or in
the aggregate, have a Material Adverse Effect (as defined below). Each of the
Company and its subsidiaries is, as applicable, duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect. When used in this Article 3 or elsewhere in this
Agreement in connection with the Company or any of its subsidiaries, the term
"Material Adverse Effect" means any change, event or effect that is materially
adverse to the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, excluding (i) any changes or
effects resulting from any matter, which matter was expressly approved by the
Board of Directors of the Company following the date hereof unless, with respect
to such matter, both directors of the Company who are also executive officers of
Parent either voted against or abstained from voting (such matter and related
contemplated transactions, an "Approved Matter") and (ii) changes in general
economic conditions in the economy as a whole. Other than wholly owned
subsidiaries and except as disclosed in the Company SEC Reports or Section 3.1
of the Company Disclosure Letter, the Company does not directly or indirectly
own any equity or similar interest in, or any interest convertible or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
business, association or entity. As used in this Agreement, "subsidiary" with
respect to any person shall mean any entity which such person has the ability to
control the voting power thereof, either through ownership of equity interests
or otherwise, provided that under no circumstances shall the Company and its
subsidiaries be deemed to be subsidiaries of Parent.

SECTION 3.2. CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has
previously furnished or made available to Parent a complete and correct copy of
its Articles of Incorporation and Bylaws as amended to date. Such Articles of
Incorporation and bylaws are in full force and effect. Neither the Company nor
any of its Significant Subsidiaries is in violation of any of the provisions of
its certificate of incorporation or bylaws or equivalent organizational
documents.

SECTION 3.3. CAPITALIZATION. The authorized capital stock of the Company
consists of 80,000,000 shares of Company Common Stock and 20,000,000 shares of
Company Preferred Stock. At the close of business on March 9, 1998, (a)
26,176,265 shares of Company Common Stock were issued and outstanding, all of
which are validly issued, fully paid and nonassessable, and not subject to
preemptive rights, (b) of the amount referred to in clause (a) above, no shares
of Company Common Stock were held in treasury by the Company or by wholly owned
subsidiaries of the Company, (c) options to purchase 2,658,086 and 1,331,340
shares of Company Common Stock were outstanding under the Stock Plan and the
Rosen Option, and (d) 237,346 shares of Company Common Stock were reserved for
issuance to the former owners of the Company's Canadian subsidiary. As of the
date hereof, no shares of Company Preferred Stock were issued or outstanding. No
change in such capitalization has occurred between March 9, 1998 and the date
hereof, except (i) the issuance of shares of Company Common Stock pursuant to
the exercise of outstanding options and (ii) as contemplated by this Agreement.
Except as set forth in this Section 3.3 or as disclosed in Section 3.3 of the
disclosure letter delivered by the Company to Parent (the "Company Disclosure
Letter"), as of the date of

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this Agreement, there are no options, warrants or other rights, agreements, or
commitments, in each case to which the Company or any of its subsidiaries is a
party, of any character relating to the issued or unissued capital stock of the
Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue or sell any shares of capital stock of, or other equity
interests in, the Company or any of its subsidiaries. All shares of Company
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth in Section 3.3 of the Company
Disclosure Letter, there are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of Company Common Stock or the capital stock of any subsidiary or to
provide funds to or make any material investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity other than
guarantees of obligations of subsidiaries entered into in the ordinary course of
business. All of the outstanding equity interests of each of the Company's
subsidiaries are duly authorized, validly issued, and, where applicable, fully
paid and nonassessable, and, except as set forth in Section 3.3 of the Company
Disclosure Letter or (in the case of subsidiaries of the Company only) for such
matters as would not, individually or in the aggregate, have a Material Adverse
Effect, all such shares are owned by the Company or another subsidiary free and
clear of all security interests, liens, claims, pledges, agreements, limitations
in the Company's voting rights, charges or other encumbrances of any nature
whatsoever.

SECTION 3.4. AUTHORITY RELATIVE TO THIS AGREEMENT; BOARD APPROVAL.

(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and, subject
to obtaining the approval of the shareholders of the Company of this Agreement,
to consummate the Transactions. The execution and delivery of this Agreement by
the Company and the consummation by the Company of the Transactions have been
duly and validly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Transactions so
contemplated (other than, with respect to the Merger, the approval and adoption
of this Agreement by the vote of shareholders of the Company owning at least a
majority of the outstanding shares of Company Common Stock in accordance with
the Illinois Statute and the Company's Articles of Incorporation and By-Laws,
which vote is the only vote required to consummate the Transactions under the
Company's Articles of Incorporation and the Illinois Statute). This Agreement
has been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by Parent and Sub, constitutes the
legal and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors rights generally and (ii) the availability of injunctive relief and
other equitable remedies. The Company has taken all appropriate actions so that
the restrictions on business combinations contained in Section 5/11.75 of the
Illinois Statute will not apply to Parent or Sub and their respective affiliates
and associates with respect to or as a result of this Agreement or the
Transactions.

(b) The Board of Directors of the Company based on the recommendation of
the Special Committee (which recommendation was a condition to the approval of
the Company's Board of Directors set forth in clause (i) of this sentence) has,
prior to this Agreement, (i) approved this Agreement and the Transactions
(including for purposes of the Illinois Statute), (ii) determined that the
Transactions are fair to and in the best interests of the shareholders of the
Company and (iii) recommended that the shareholders of the Company approve this
Agreement and the Transactions. This Agreement and the Transactions have been
approved by the vote of at least two-thirds of the Disinterested Directors (as
defined in Section 5/7.85 of the Illinois Statute), and no vote of Company
shareholders pursuant to Section 5/7.85 of the Illinois Statute is required in
connection with the Transactions.

SECTION 3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.

(a) The execution and delivery of this Agreement by the Company do not, and
the performance of its obligations hereunder and the consummation of the
Transactions by the Company will not, (i) conflict with or violate the
certificate of incorporation, bylaws or equivalent organizational documents of
the Company or any

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of its subsidiaries; (ii) subject to obtaining the approval of the Company's
shareholders of this Agreement in accordance with the Illinois Statute and the
Company's Articles of Incorporation and Bylaws and compliance with the
requirements set forth in Section 3.5(b), conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which any of their respective properties is bound or
affected; or (iii) except as set forth in Section 3.5 of the Company Disclosure
Letter, result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or alter the
rights or obligations of any third party or the Company or its subsidiaries
under, or give to others any rights of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien or
other encumbrance on any of the properties or assets of the Company or any of
its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties are
bound or affected, except, in the case of clauses (ii) and (iii) above, for any
such conflicts, violations, breaches, defaults or other alterations or
occurrences that would not prevent or delay consummation of the Merger in any
material respect, or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and would not have,
individually or in the aggregate, a Material Adverse Effect. Section 3.5 of the
Company Disclosure Letter lists all material consents, waivers and approvals
under any agreements, contracts, licenses or leases required to be obtained by
the Company or its subsidiaries in connection with the consummation of the
Transactions.

(b) The execution and delivery of this Agreement by the Company do not, and
the performance of its obligations hereunder and the consummation of the
Transactions by the Company will not, require any consent, approval,
authorization or permit of, or registration or filing with or notification to,
any court, administrative agency, commission, governmental or regulatory
authority, domestic or foreign (a "Governmental Entity"), except (i) the filing
of documents to satisfy the applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and state takeover laws,
(ii) the filing with the SEC of a proxy statement and prospectus in definitive
form relating to the Shareholders Meeting (the "Proxy Statement"), (iii) the
filing of the Illinois Articles of Merger with, and the issuance of the Illinois
Certificate of Merger by, the Secretary of State of the State of Illinois, (iv)
filings under the rules and regulations of the NASD, or (v) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications (A) would not prevent or delay consummation of the
Merger in any material respect or otherwise prevent or delay in any material
respect the Company from performing its obligations under this Agreement or (B)
would not, individually or in the aggregate, have a Material Adverse Effect.

SECTION 3.6. COMPLIANCE; PERMITS.

(a) Except as set forth in Section 3.6 or 3.9 of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries is in conflict with, or
in default or violation (i) of, any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which any of
their respective properties is bound, or (ii) whether after the giving of notice
or passage of time or both, of, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties is
bound, except for any conflicts, defaults or violations which do not and would
not have, individually or in the aggregate, a Material Adverse Effect.

(b) The Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from Governmental Entities which are material
to operation of the business of the Company and its subsidiaries taken as a
whole (collectively, the "Company Permits"). The Company and its subsidiaries
are in compliance with the terms of the Company Permits, except where the
failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect.

SECTION 3.7. SEC FILINGS; FINANCIAL STATEMENTS.

(a) The Company has made available to Parent a correct and complete copy of
each report, schedule, registration statement (but only such registration
statements that have become effective prior to the date
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hereof) and definitive proxy statement filed by the Company with the SEC on or
since the date of its initial public offering and prior to the date of this
Agreement (the "Company SEC Reports"), which are all the forms, reports and
documents required to be filed by the Company with the SEC since such date. As
of their respective dates, the Company SEC Reports and any forms, reports and
other documents filed by the Company with the SEC after the date of this
Agreement (i) complied or will comply in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable thereto, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement
then on the date of such filing) or will not at the time they are filed contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading, provided, however, that no
representation is made with respect to information included in the Company SEC
Reports that was provided in writing by Parent or Sub. None of the Company's
subsidiaries is required to file any reports or other documents with the SEC.

(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Company SEC Reports complied as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, had been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Form 10-Q or the Exchange Act regulations promulgated by the SEC),
and each fairly presented the consolidated financial position of the Company and
its consolidated subsidiaries in all material respects as at the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated (subject, in the case of the unaudited interim financial
statements, to normal audit adjustments which were not and are not expected,
individually or in the aggregate, to be material in amount).

(c) Neither the Company nor any of its subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) of a nature required to be
disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of the Company and its subsidiaries taken as a whole, except
liabilities (i) set forth in Section 3.7 of the Company Disclosure Letter or the
Company SEC Reports filed with the SEC prior to the date of this Agreement or
provided for in the Company's balance sheet (and related notes thereto) as of
January 31, 1997 filed in the Company SEC Reports, or (ii) incurred since
January 31, 1997 in the ordinary course of business, none of which are material
to the business, results of operations or financial condition of the Company and
its subsidiaries, taken as a whole or (iii) arising out of or incurred in
connection with (x) this Agreement or the transactions contemplated hereby or
(y) an Approved Matter.

SECTION 3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 3.8 of the Company Disclosure Letter, contemplated by this Agreement or
disclosed in the Company SEC Reports, since January 31, 1997, (a) the Company
and its subsidiaries have, in all material respects, conducted their businesses
only in the ordinary course and in a manner consistent with past practice and
have not taken any of the actions set forth in Section 5.2(b)(i)-(iv), (vii),
(x), (xi), (xii) (but with respect to this clause, only since October 31, 1997)
and (xiii), and (b) there has not been (i) any transaction, commitment, dispute
or other event or condition (financial or otherwise) of any character (whether
or not in the ordinary course of business), individually or in the aggregate,
having or which could reasonably be expected to have a Material Adverse Effect,
or (ii) any material change by the Company in its accounting methods, principles
or practices except as required by concurrent changes in GAAP.

SECTION 3.9. ABSENCE OF LITIGATION. Except as disclosed in the Company SEC
Reports or Section 3.9 of the Company Disclosure Letter, there are no claims,
actions, suits, investigations or proceedings pending or, to the best knowledge
of the Company, threatened against the Company or any of its subsidiaries,
before any court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign, that, individually or in the aggregate,
would, or reasonably could be expected to, have a Material Adverse Effect, nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator
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outstanding against the Company or any of its subsidiaries (a) having or which
would, or reasonably could be expected to, have a Material Adverse Effect or (b)
which seeks to restrain, enjoin or delay consummation of any of the
Transactions.

SECTION 3.10. REGISTRATION STATEMENT; PROXY STATEMENT. None of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in (a) the registration statement on Form S-4 to be
filed with the SEC by Parent in connection with the issuance of the Parent
Common Stock in or as a result of the Merger (the "S-4") will, at the time the
S-4 is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading; and (b) the Proxy Statement will, at the date the Proxy
Statement is mailed to the shareholders of the Company, at the time of the
shareholders meeting of the Company (the "Shareholders Meeting") in connection
with the Transactions and as of the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they are made,
not misleading, provided, however, that no representation is made with respect
to information included in the Proxy Statement that was provided in writing by
Parent or Sub. The Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
promulgated by the SEC thereunder.

SECTION 3.11. BROKERS. Except as set forth in Section 3.11 of the Company
Disclosure Schedule, no broker, finder or investment banker (other than Salomon
Smith Barney (f/k/a Salomon Brothers Inc) (the "Company Banker")) is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
and the Transactions based upon arrangements made by or on behalf of the
Company. The Company has heretofore furnished to Parent a complete copy of all
agreements between the Company and the Company Banker pursuant to which such
firm would be entitled to any payment relating to the Merger and the
Transactions.

SECTION 3.12. OPINION OF FINANCIAL ADVISOR. The Special Committee and the
Company's Board of Directors have received the written opinion, dated March 9,
1998, of the Company Banker that, as of March 9, 1998, the Exchange Ratio is
fair to the holders of Company Common Stock (other than Parent or any subsidiary
of Parent) from a financial point of view, a copy of which opinion will be
delivered to Parent.

SECTION 3.13. EMPLOYEE BENEFIT PLANS.

(a) The Company has delivered or made available to Parent prior to the
execution of this Agreement true and complete copies (or, in the case of bonus
or other incentive plans, summaries thereof) of all material pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other material incentive plans, all
other material written employee programs, arrangements or agreements, whether
arrived at through collective bargaining or otherwise, all material medical,
vision, dental or other health plans, all life insurance plans and all other
material employee benefit plans or fringe benefit plans, including, without
limitation, all "employee benefit plans" as that term is defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by the Company or any entity required to be aggregated with the
Company pursuant to Section 414 of the Code (each, a "Commonly Controlled
Entity") for the benefit of current or former employees, retirees, dependents,
spouses, directors, independent contractors or other beneficiaries and under
which current or former employees, retirees, dependents, spouses, directors,
independent contractors or other beneficiaries are eligible to participate
(collectively, the "Company Benefit Plans"). Any of the Company Benefit Plans
which is an "employee pension benefit plan," as that term is defined in Section
3(2) of ERISA, is referred to herein as an "ERISA Plan." No Company Benefit Plan
is or has been a multiemployer plan within the meaning of Section 3(37) of ERISA
(a "Multiemployer Plan").

(b) All Company Benefit Plans are in compliance with the applicable terms
of ERISA and the Code and any other applicable laws, rules and regulations the
breach or violation of which could result in a Material Adverse Effect.
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(c) No ERISA Plan is subject to Title IV or Section 302 of ERISA, and no
circumstances exist that could result in material liability to the Company under
Title IV or Section 302 of ERISA.

(d) Except as set forth in Section 3.13 of the Company Disclosure Letter,
as described in any Company SEC Reports or as provided under the Stock Plan or
any related agreement and the Rosen Option, neither the execution and delivery
of this Agreement nor the consummation of the Transactions (or any termination
of employment in connection with the Transactions) will (i) result in any
material payment becoming due to any current or former director or employee of
the Company or any of its affiliates from the Company or any of its affiliates
under any Company Benefit Plan or otherwise, (ii) materially increase any
benefits otherwise payable under any Company Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such benefits to any
material extent.

SECTION 3.14. TAX MATTERS. Neither the Company nor any of its subsidiaries
has taken or agreed to take any action (including in connection with the
Transactions) that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

Parent and Sub jointly and severally represent and warrant to the Company,
as follows:

SECTION 4.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of Parent
and its Significant Subsidiaries is a corporation or other entity duly
organized, validly existing and, as applicable, in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate or other power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted. Each of
Parent and its subsidiaries is in possession of all Approvals necessary to own,
lease and operate the properties it purports to own, operate or lease and to
carry on its business as it is now being conducted, except where the failure to
have such Approvals would not, individually or in the aggregate, have a Material
Adverse Effect (as defined below). Each of Parent and its subsidiaries is, as
applicable, duly qualified or licensed as a foreign corporation or other entity
to do business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would
not, either individually or in the aggregate, have a Material Adverse Effect.
When used in this Article 4 or elsewhere in connection with Parent or any of its
subsidiaries, the term "Material Adverse Effect" means any change, event or
effect that is materially adverse to the business, financial condition or
results of operations of Parent and its subsidiaries (including USANi LLC, a
Delaware limited liability company) taken as a whole, excluding changes in
general economic conditions in the economy as a whole. Other than wholly owned
subsidiaries and except as disclosed in the Parent SEC Reports (as defined in
Section 4.7(a)) or Section 5.3 of the Parent Disclosure Letter, Parent does not
directly or indirectly own any equity or similar interest in, or any interest
convertible or exchangeable or exercisable for any equity or similar interest
in, any corporation, partnership, limited liability company, joint venture or
other business, association or entity.

SECTION 4.2. CERTIFICATE OF INCORPORATION AND BYLAWS. Parent has previously
furnished to the Company a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date. Such certificate of incorporation
and bylaws are in full force and effect. Neither Parent nor any of its
Significant Subsidiaries is in violation of any of the provisions of its
certificate of incorporation or bylaws or equivalent organizational documents.

SECTION 4.3. CAPITALIZATION. In each case without giving effect to the
2-for-1 stock split declared by Parent on February 20, 1998, as of the date
hereof, the authorized capital stock of Parent consists of (a) 800,000,000
shares of Parent Common Stock and 200,000,000 shares of Class B common stock,
par value $.01 per share, of Parent ("Parent Class B Common Stock" and, together
with the Parent Common Stock, the "Parent Common Shares") and (b) 15,000,000
shares of preferred stock, par value $.01 per share, of Parent ("Parent
Preferred Stock"), none of which have been designated as to class or series. At
the close of business
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on March 11, 1998, (i) 51,089,631 shares of Parent Common Stock were issued and
outstanding and 16,006,808 shares of Parent Class B Common Stock were issued and
outstanding, all of which Parent Common Stock and Parent Class B Common Stock
are validly issued, fully paid and nonassessable and, except as disclosed in the
Parent proxy statement dated January 12, 1998 (the "Parent Proxy Statement"),
not subject to any preemptive rights, (ii) no shares of Parent Common Stock were
held in treasury by Parent or by subsidiaries of Parent, (iii) shares of USANi
LLC exchangeable into 54,327,175 Parent Common Shares were outstanding, and (iv)
Home Shopping Network, Inc. shares exchangeable into 7,905,016 shares of Parent
Common Stock and 399,136 shares of Parent Class B Common Stock were outstanding.
At the close of business on March 2, 1998, options to purchase 17,499,297 shares
of Parent Common Stock were outstanding under Parent's 1997 Stock and Annual
Incentive Plan, 1995 Stock Incentive Plan, 1992 Stock Option and Restricted
Stock Plan, Stock Option Plan for Outside Directors, other Company stock option
plans described in documents incorporated by reference in the Parent SEC
Reports, and under equity compensation arrangements. Except as set forth in
Section 4.3 of the Parent Disclosure Letter, no change in such capitalization
has occurred between March 2, 1998 and the date hereof, except for issuances of
Parent Common Stock upon exercise, conversion or exchange of the outstanding
securities referenced in this Section 4.3. As of the date hereof, no shares of
Parent Preferred Stock were issued or outstanding. The authorized capital stock
of Sub consists of 100,000,000 shares of Sub Common Stock. As of the date
hereof, 1,000 shares of Sub Common Stock are issued and outstanding. All of the
outstanding shares of Parent's and Sub's respective capital stock have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in this Section 4.3, the Parent Proxy Statement or as disclosed in the
disclosure letter delivered by Parent to the Company (the "Parent Disclosure
Letter"), as of the date of this Agreement, there are no options, warrants or
other rights, agreements, or commitments, in each case, to which Parent or any
of its subsidiaries is a party, of any character relating to the issued or
unissued capital stock of Parent or any of its subsidiaries or obligating Parent
or any of its subsidiaries to issue or sell any shares of capital stock of, or
other equity interests in, Parent or any of its subsidiaries. All shares of
Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
shall, and the shares of Parent Common Stock to be issued pursuant to the Merger
will be, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights, except as set forth in the Parent Proxy Statement.
Except as set forth in the Parent Proxy Statement or Section 4.3 of the Parent
Disclosure Letter, there are no obligations, contingent or otherwise, of Parent
or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares
of Parent Common Stock or the capital stock of any subsidiary or to provide
funds to or make any material investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity other than
guarantees of obligations of subsidiaries entered into in the ordinary course of
business. All of the outstanding equity interests (other than directors'
qualifying shares) of each of Parent's subsidiaries are duly authorized, validly
issued, and, where applicable, fully paid and nonassessable and, except as set
forth in the Parent Proxy Statement or for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect, all such
shares (other than directors' qualifying shares) are owned by Parent or another
subsidiary. The shares of Surviving Corporation Common Stock to be issued in the
Merger will, upon issuance, be validly issued, fully paid, nonassessable and
free and clear of all security interests, liens, claims, pledges, agreements,
limitations in the holder's voting rights, charges or other encumbrances of any
nature whatsoever (in each case to which the Surviving Corporation is a party).

SECTION 4.4. AUTHORITY RELATIVE TO THIS AGREEMENT; BOARD APPROVAL.

(a) Each of Parent and Sub has all necessary corporate power and authority
to execute and deliver this Agreement, and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent and
Sub of the Transactions have been duly and validly authorized by all necessary
corporate action on the part of Parent and Sub and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement, or to consummate the Transactions (other than the approval of the
NASD listing application with respect to the issuance of shares of Parent Common
Stock in the Merger). This Agreement has been duly and validly executed and
delivered by Parent and Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes the legal and binding obligations of Parent
and Sub,
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enforceable against Parent and Sub in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors rights generally and (ii) the availability of
injunctive relief and other equitable remedies.

(b) The Board of Directors of Parent has (i) approved this Agreement and
the Transactions and (ii) determined that the Transactions are fair to and in
the best interests of the shareholders of Parent. No vote of Parent shareholders
is required in connection with the Transactions.

SECTION 4.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.

(a) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance of their respective obligations hereunder and the
consummation of the Transactions by Parent and Sub will not, (i) conflict with
or violate the certificate of incorporation, bylaws or equivalent organizational
documents of Parent or any of its subsidiaries; (ii) subject to compliance with
the requirements set forth in Section 4.5(b), conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries or by which their respective properties are bound or affected; or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or alter the
rights or obligations of any third party or Parent or its subsidiaries under, or
give to others any rights of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any of the properties or assets of Parent or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any of its subsidiaries is a party or by which Parent or any
of its subsidiaries or any of their respective properties are bound or affected,
except in the cases of clauses (ii) and (iii) above, for any such conflicts,
violations, breaches, defaults or other alterations or occurrences that would
not prevent or delay consummation of the Merger in any material respect, or
otherwise prevent Parent and Sub from performing their respective obligations
under this Agreement in any material respect, and would not have, individually
or in the aggregate, a Material Adverse Effect. Section 4.5(a) of the Parent
Disclosure Letter lists all material consents, waivers and approvals under any
agreements, contracts, licenses or leases required to be obtained by Parent or
its subsidiaries in connection with the consummation of the Transactions.

(b) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance of their respective obligations hereunder and the
consummation of the Transactions by Parent and Sub will not, require any
consent, approval, authorization or permit of, or registration or filing with or
notification to, any Governmental Entity except (i) the filing of documents to
satisfy the applicable requirements, if any, of the Exchange Act and state
takeover laws, (ii) the filing with the SEC of the Proxy Statement and the
declaration of effectiveness of the S-4 by the SEC, (iii) the filing of the
Illinois Articles of Merger with, and the issuance of the Illinois Certificate
of Merger by, the Secretary of State of the State of Illinois, (iv) filings
under the rules and regulations of the NASD, (v) filings under state securities
laws ("Blue Sky Laws"), and (vii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications
(A) would not prevent or delay consummation of the Merger in any material
respect or otherwise prevent or delay in any material respect Parent or Sub from
performing their respective obligations under this Agreement or (B) would not,
individually or in the aggregate, have a Material Adverse Effect.

SECTION 4.6. COMPLIANCE; PERMITS.

(a) Except as disclosed in Section 4.6 or Section 4.9 of the Parent
Disclosure Letter, neither Parent nor any of its subsidiaries is in conflict
with, or in default or violation (i) of, any law, rule, regulation, order,
judgment or decree applicable to Parent or any of its subsidiaries or by which
any of their respective properties is bound, or (ii) whether after the giving of
notice or passage of time or both, of, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or any of their respective properties is
bound, except for any such conflicts, defaults or violations which do not and
would not have, individually or in the aggregate, a Material Adverse Effect.

(b) Parent and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from Governmental Entities which are material
to the operation of the business of Parent and its subsidiaries

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taken as a whole (collectively, the "Parent Permits"). Parent and its
subsidiaries are in compliance with the terms of the Parent Permits, except
where the failure to so comply would not, individually or in the aggregate, have
a Material Adverse Effect.

SECTION 4.7. SEC FILINGS; FINANCIAL STATEMENTS.

(a) Parent has made available to the Company a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Parent with the SEC on or after January 1, 1997 and prior to the date
of this Agreement (the "Parent SEC Reports"), which are all the forms, reports
and documents required to be filed by Parent with the SEC since January 1, 1997.
As of their respective dates, the Parent SEC Reports and any forms, reports and
other documents filed by Parent and Sub after the date of this Agreement (i)
complied or will comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable thereto, and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement then on the date of such filing) or will not at the time they
are filed contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading, provided, however,
that no representation is made with respect to information included in the
Parent SEC Reports that was provided in writing by the Company. None of Parent's
subsidiaries is required to file any reports or other documents with the SEC.

(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Parent SEC Reports complied as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, had been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q or the Exchange Act
regulations promulgated by the SEC) and each fairly presented the consolidated
financial position of Parent and its consolidated subsidiaries in all material
respects as at the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated (subject, in the case of the
unaudited interim financial statements, to normal audit adjustments which were
not and are not expected, individually or in the aggregate, to be material in
amount).

(c) Except as disclosed in Section 4.7 of the Parent Disclosure Letter,
neither Parent nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of Parent
and its subsidiaries taken as a whole, except liabilities (i) set forth in the
Parent SEC Reports filed with the SEC prior to the date of this Agreement or
provided for in Parent's balance sheet (and related notes thereto) as of
December 31, 1996 filed in the Parent SEC Reports or (ii) incurred since
December 31, 1996 in the ordinary course of business, none of which are material
to the business, results of operations or financial condition of Parent and its
subsidiaries, taken as a whole.

SECTION 4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Parent SEC Reports or in Section 4.8 of the Parent Disclosure Letter or as
contemplated by this Agreement, since December 31, 1996, (a) Parent and its
subsidiaries have, in all material respects, conducted their businesses only in
the ordinary course and in a manner consistent with past practice and have not
taken any of the actions set forth in Section 5.3(b)(i)-(iv), and (b) there has
not been (i) any transaction, commitment, dispute or other event or condition
(financial or otherwise) of any character (whether or not in the ordinary course
of business), individually or in the aggregate, having or which could reasonably
be expected to have a Material Adverse Effect or (ii) any material change by
Parent in its accounting methods, principles or practices except as required by
concurrent changes in GAAP.

SECTION 4.9. ABSENCE OF LITIGATION. Except as disclosed in Section 4.9 of
the Parent Disclosure Letter or the Parent SEC Reports, there are no claims,
actions, suits, investigations or proceedings pending or, to the best knowledge
of Parent, threatened against Parent or any of its subsidiaries before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that, individually or in the aggregate, would, or
could reasonably be expected to, have a Material Adverse Effect, nor is there
any
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judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against Parent or any of its subsidiaries (a) having or
which would, or could reasonably be expected to, have a Material Adverse Effect
or (b) which seeks to restrain, enjoin or delay consummation of any of the
Transactions.

SECTION 4.10. REGISTRATION STATEMENT; PROXY STATEMENT. None of the
information supplied or to be supplied by Parent for inclusion or incorporation
by reference in the S-4 will, at the time the S-4 is filed with the SEC and at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading, provided, however,
that no representation is made with respect to information included in the S-4
that was provided in writing by the Company. The Proxy Statement will comply as
to form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder, and the S-4 will comply
as to form in all material respects with the provisions of the Securities Act
and the rules and regulations promulgated by the SEC thereunder.

SECTION 4.11. BROKERS. No broker, finder or investment banker (other than
Allen & Company Incorporated ("Parent Banker")) is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger and the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Sub.

SECTION 4.12. OPINION OF FINANCIAL ADVISOR. In connection with its March
13, 1998 approval of the Transactions, Parent's Board of Directors has received
the oral opinion of Parent Banker that, as of March 13, 1998, the Exchange Ratio
for each share of Company Common Stock (other than shares owned by Parent and
its subsidiaries) is fair to Parent from a financial point of view, which
opinion will be confirmed in writing, a copy of which will be delivered to the
Company.

SECTION 4.13. INTERIM OPERATIONS OF SUB. Sub is a direct wholly owned
subsidiary of Parent and was formed solely for the purpose of engaging in the
Transactions, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.

SECTION 4.14. EMPLOYEE BENEFIT PLANS.

(a) Parent will deliver or make available to the Company as soon as
practicable after the execution of this Agreement true and complete copies (or,
in the case of bonus or other incentive plans, summaries thereof) of all
material pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus or other
material incentive plans, all other material written employee programs,
arrangements or agreements, whether arrived at through collective bargaining or
otherwise, all material medical, vision, dental or other health plans, all life
insurance plans and all other material employee benefit plans or fringe benefit
plans, including, without limitation, all "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in whole or in part by, or contributed to by Parent or any Commonly Controlled
Entity of Parent for the benefit of current or former employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
and under which current or former employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries are eligible to
participate (collectively, the "Parent Benefit Plans"). Any of the Parent
Benefit Plans which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "Parent ERISA
Plan." Except as set forth in Section 4.14 of the Parent Disclosure Letter, no
Parent Benefit Plan is or has been a Multiemployer Plan within the meaning of
Section 3(37) of ERISA.

(b) All Parent Benefit Plans are in compliance with the applicable terms of
ERISA and the Code and any other applicable laws, rules and regulations the
breach or violation of which could result in a Material Adverse Effect.

(c) No parent ERISA Plan is subject to Title IV or Section 302 of ERISA and
no circumstances exist that could result in material liability to Parent under
Title IV or Section 302 of ERISA.

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(d) Neither the execution and delivery of this Agreement nor the
consummation of the Transactions (or any termination of employment in connection
with the Transactions) will (i) result in any material payment becoming due to
any current or former director or employee of Parent or any of its affiliates
from Parent or any of its affiliates under any Parent Benefit Plan or otherwise,
(ii) materially increase any benefits otherwise payable under any Parent Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefits to any material extent.

SECTION 4.15. TAX MATTERS. Neither Parent nor any of its affiliates has
taken or agreed to take any action (including in connection with the
Transactions) that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.

ARTICLE 5

CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME;
ADDITIONAL AGREEMENTS

SECTION 5.1. INFORMATION AND ACCESS. From the date of this Agreement and
continuing until the Effective Time, the Company and Parent each agrees as to
itself and its subsidiaries that it shall afford and, with respect to clause (b)
below, shall cause its independent auditors to afford, (a) to the officers,
independent auditors, counsel and other representatives of the other reasonable
access to its and its subsidiaries' properties, books, records (including tax
returns filed and those in preparation) and executives and personnel in order
that the other may have a full opportunity to make such investigation as it
reasonably desires to make of the other, and, in the case of access to the
Company's executives and personnel, to plan and provide for the Merger and for
the future direction of the Company, and (b) to the independent auditors of the
other, reasonable access to the audit work papers and other records of its
independent auditors. No investigation pursuant to this Section 5.1 shall affect
or otherwise obviate or diminish any representations and warranties of any party
or conditions to the obligations of any party. Promptly following the date
hereof, the Company will deliver to Parent a complete copy of its current
operating budget. Except as required by law or stock exchange or NASD
regulation, any information furnished pursuant to this Section 5.1 shall be
treated confidentially by such party, its officers, independent accountants and
other representatives and advisors (except for such information as has otherwise
been made public (other than by reason of a violation of this Section 5.1)),
subject, in the case of information furnished to Parent, to any limitations in
the letter agreement, dated as of February 9, 1998, between Parent and the
Company (the "Confidentiality Agreement").

SECTION 5.2. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by
this Agreement (including Section 5.2 of the Company Disclosure Letter) or with
respect to Approved Matters, and excluding transactions between the Company and
its wholly owned subsidiaries or between such subsidiaries, during the period
from the date of this Agreement and continuing until the Effective Time or until
the termination of this Agreement pursuant to Section 7.1, (a) the Company and
its subsidiaries shall conduct their respective businesses in the ordinary and
usual course consistent with past practice (including, without limitation, with
respect to the terms of any new arena or venue contracts or renewals of existing
arena or venue contracts (such contracts, "Ordinary Venue Contracts"), or
financial expenditures), and (b) neither the Company nor any of its subsidiaries
shall without the prior written consent of Parent:

(i) declare, set aside or pay any dividends on or make any other
distribution in respect of any of its capital stock, except dividends or
distributions declared and paid by a subsidiary of the Company only to the
Company or another subsidiary of the Company;

(ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance or authorization of any other securities
in respect of, in lieu of, or in substitution for shares of its capital
stock or repurchase, redeem or otherwise acquire any shares of its capital
stock;

(iii) issue, deliver, pledge, encumber or sell, or authorize or
propose the issuance, delivery, pledge, encumbrance or sale of, or purchase
or propose the purchase of, any shares of its capital stock or securities
convertible into, or rights, warrants or options to acquire, any such
shares of capital stock or other convertible securities (other than the
issuance of such capital stock to the Company or a wholly
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owned subsidiary of the Company, or upon the exercise or conversion of
outstanding options or warrants in accordance with the Stock Plan or the
Rosen Option in effect on the date of this Agreement or other convertible
or exchangeable securities outstanding on the date hereof, in each case in
accordance with its present terms), authorize or propose any change in its
equity capitalization, or amend any of the financial or other economic
terms of such securities or the financial or other economic terms of any
agreement relating to such securities;

(iv) amend its Articles of Incorporation or Bylaws in any manner;

(v) take any action that would or could reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being untrue or in any of the conditions to the Merger set forth
in Article not being satisfied;

(vi) merge or consolidate with any other person, or acquire any assets
or capital stock of any other person, other than acquisitions of assets in
the ordinary course of business, such as for inventory or relating to the
ordinary operations of the Company;

(vii) incur any indebtedness or guarantee any indebtedness of another
person or increase the indebtedness outstanding under any current agreement
relating to indebtedness, other than trade payables, or as disclosed on
Section 5.2 of the Company Disclosure Letter, in each case in the ordinary
course of business;

(viii) make or authorize any capital expenditures of the Company and
its subsidiaries taken as a whole, other than capital expenditures
permitted pursuant to Section 5.2 of Company Disclosure Letter;

(ix) except as may be required by changes in applicable law or GAAP,
change any method, practice or principle of accounting;

(x) enter into any new employment agreements, or increase the
compensation of any employee or officer of the Company or any of its
subsidiaries (including entering into any bonus, severance or consulting
agreement or other employee benefits arrangement or agreement pursuant to
which such person has the right to any form of compensation from the
Company or any of its subsidiaries), other than (A) with the prior consent
of Parent, which consent will not be unreasonably withheld, or (B) as
required by law or by written agreements in effect on the date hereof with
such person, or otherwise amend in any material respect any existing
agreements with any such person or use its discretion to materially amend
any Company Benefit Plan or accelerate the vesting or any payment under any
Company Benefit Plan;

(xi) enter into any transaction with any officer or director of the
Company or its subsidiaries, other than as provided for in the terms of any
agreement in effect on or prior to the date hereof and described in the
Company Disclosure Letter;

(xii) enter into, amend in any material respect or waive any material
rights under or terminate any material agreement to which the Company or
any of its subsidiaries is a party, it being agreed that any Ordinary Venue
Contract with less than $2,000,000 in financial commitments or guarantees
by the Company or its subsidiaries over five years shall not be deemed
material with respect to the entering into of a new or amending or
extending an existing agreement;

(xiii) settle or otherwise compromise any material litigation,
arbitration or other judicial or administrative dispute or proceeding
relating to the Company or any of its subsidiaries; or

(xiv) authorize or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.

With respect to any matter requiring the consent of Parent under this
Section 5.2, the Company shall provide Parent with a summary of the deal terms,
and Parent shall have five business days to discuss the matter with
representatives of the Company and to indicate whether it consents to such
matter. If Parent does not respond by the close of business on the fifth
business day after it receives the notice hereunder, then such

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matter shall be deemed to have been consented to, and the Company may proceed on
the basis of the terms described to Parent in the notice. If Parent advises the
Company that it does not consent to such matter in such time period, the Company
shall not take such action.

SECTION 5.3. CONDUCT OF BUSINESS OF PARENT. Except as contemplated by this
Agreement (including the Parent Disclosure Letter), and the Parent Proxy
Statement or the Investment Agreement, as amended and restated as of December
18, 1997, among Parent, Universal Studios, Inc. ("Universal"), Home Shopping
Network, Inc., and Liberty Media Corporation ("Liberty") (the "Investment
Agreement") and excluding transactions between Parent and its wholly owned
subsidiaries or between such subsidiaries, during the period from the date of
this Agreement and continuing until the Effective Time or until the termination
of this Agreement pursuant to Section 7.1, (a) Parent and its subsidiaries shall
conduct their respective businesses in the ordinary and usual course consistent
with past practice, and (b) neither Parent nor any of its subsidiaries shall
without the prior written consent of the Company:

(i) declare, set aside or pay any dividends on or make any other
distribution in respect of any of its capital stock, except the 2-for-1
stock split declared by Parent on February 20, 1998, or dividends or
distributions declared and paid by a subsidiary of Parent only to Parent or
another subsidiary of Parent;

(ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance or authorization of any other securities
in respect of, in lieu of or in substitution for shares of its capital
stock, except for the 2-for-1 stock split declared by Parent on February
20, 1998 or repurchase, redeem or otherwise acquire any shares of its
capital stock;

(iii) except for the 2-for-1 stock split declared by Parent on
February 20, 1998, issue, deliver, pledge, encumber or sell, or authorize
or propose the issuance, delivery, pledge, encumbrance or sale of, or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or rights, warrants or options to acquire, any
such shares of capital stock or other convertible securities (other than
(A) the issuance of such capital stock to Parent or another wholly owned
subsidiary of Parent, or upon the exercise or conversion of options or
other convertible or exchangeable securities outstanding on the date of
this Agreement or which Parent is obligated to issue pursuant to the
Investment Agreement and related agreements with Universal and Liberty, or
(B) the granting of options or stock to employees in the ordinary course of
business and the issuance of Parent Common Stock upon exercise thereof) or
authorize or propose any change in its equity capitalization;

(iv) amend its Certificate of Incorporation in any manner or amend its
Bylaws in any material respect;

(vi) authorize or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.

SECTION 5.4. PREPARATION OF S-4 AND PROXY STATEMENT; OTHER FILINGS. As
promptly as practicable after the date of this Agreement, Parent and the Company
shall prepare and file with the SEC a preliminary Proxy Statement in form and
substance reasonably satisfactory to each of Parent and the Company and Parent
shall prepare and file with the SEC the S-4, in which the Proxy Statement (or
portion thereof) will be included as part of a prospectus. Each of Parent and
the Company shall use its reasonable best efforts to respond to any comments of
the SEC, to have the S-4 declared effective under the Securities Act as promptly
as practicable after such filing and to cause the Proxy Statement approved by
the SEC to be mailed to the Company's shareholders at the earliest practicable
time. As promptly as practicable after the date of this Agreement, Parent and
the Company shall prepare and file any other filings required under the Exchange
Act, the Securities Act or any other federal or Blue Sky Laws relating to the
Merger and the Transactions, including, without limitation or under state
takeover laws (the "Other Filings"). The Company and Parent will notify the
other party promptly of the receipt of any comments from the SEC or its staff
and of any request by the SEC

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or its staff or any other government officials for amendments or supplements to
the S-4, the Proxy Statement or any Other Filing or for additional information,
and will supply the other with copies of all correspondence between it or any of
its representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the S-4, the Proxy
Statement, the Merger or any Other Filing. The Proxy Statement, the S-4 and the
Other Filings shall comply in all material respects with all applicable
requirements of law. Whenever any event occurs which is required to be set forth
in an amendment or supplement to the Proxy Statement, the S-4 or any Other
Filing, Parent or the Company, as the case may be, shall promptly inform the
other party of such occurrence and cooperate in filing with the SEC or its staff
or any other government officials, and/or mailing to shareholders of the
Company, such amendment or supplement. The Proxy Statement shall include,
subject to applicable fiduciary duties (based on advice of outside counsel to
the Special Committee), the recommendations of the Board of Directors of the
Company in favor of approval of this Agreement and the Transactions; provided,
that the Board of Directors of the Company will not recommend approval of this
Agreement and the Transactions without the recommendation of the Special
Committee. The Company and Parent each shall promptly provide the other (or its
counsel) copies of all filings made by it with any Governmental Entity in
connection with this Agreement and the Transactions. Parent shall take all
necessary actions to cause the shares of Parent Common Stock issuable in
connection with the Stock Plan and the Rosen Option (to the extent not exercised
at or prior to the Effective Time) to be registered under the Securities Act.
Prior to the Effective Time, the Company shall take appropriate action so that
Parent's assumption of the Stock Plan as of the Effective Time shall be
effective.

SECTION 5.5. LETTER OF INDEPENDENT AUDITORS. The Company and Parent shall
use all reasonable efforts to cause to be delivered to the other "comfort"
letters of Ernst & Young LLP, the Company's independent auditors, and KPMG Peat
Marwick LLP, the Company's previous independent auditors, and of Ernst & Young
LLP, Parent's independent auditors, in each case dated and delivered the date on
which the S-4 shall become effective and as of the Effective Time, and addressed
to the Boards of Directors of the Company and Parent, in form and substance
reasonably satisfactory to the other and customary in scope and substance for
letters delivered by independent auditors in connection with registration
statements similar to the S-4.

SECTION 5.6. SHAREHOLDERS MEETING. The Company shall call its Shareholders
Meeting to be held as promptly as practicable for the purpose of voting upon
this Agreement. The Company shall use its reasonable best efforts to hold the
Shareholders Meeting on the date as soon as practicable after the date on which
the S-4 becomes effective. At the Shareholders Meeting, Parent agrees to vote,
or cause to be voted, all shares of Company Common Stock beneficially owned by
it in favor of the Transactions and approval of this Agreement.

SECTION 5.7. AGREEMENTS TO TAKE REASONABLE ACTION.

(a) The parties shall take, and shall cause their respective subsidiaries
to take, all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on them with respect to the Merger and shall
take all reasonable actions necessary to cooperate promptly with and furnish
information to the other parties in connection with any such requirements
imposed upon them or any of their subsidiaries in connection with the Merger.
Each party shall take, and shall cause its subsidiaries to take, all reasonable
actions necessary (i) to obtain (and will take all reasonable actions necessary
to promptly cooperate with the other parties in obtaining) any clearance,
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity, or other third party, required to be obtained or made by it
(or by the other parties or any of their respective subsidiaries) in connection
with the Transactions or the taking of any action contemplated by this
Agreement; (ii) to lift, rescind or mitigate the effect of any injunction or
restraining order or other order adversely affecting its ability to consummate
the Transactions; (iii) to fulfill all conditions applicable to the parties
pursuant to this Agreement; and (iv) to prevent, with respect to a threatened or
pending temporary, preliminary or permanent injunction or other order, decree or
ruling or statute, rule, regulation or executive order, the entry, enactment or
promulgation thereof, as the case may be; provided, however, that with respect
to clauses (i) through (iv) above, the parties will take only such curative
measures (such as licensing and divestiture) as the parties determine to be
reasonable.

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(b) Subject to the terms and conditions of this Agreement, each of the
parties shall use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as promptly as practicable the Transactions, subject to the appropriate approval
of the shareholders of the Company. Upon the request of Parent, the Company
will, and will use its reasonable efforts to cause its officers to, cooperate
with a designated search committee of officers and/or directors of Parent
appointed by Parent to identify an appropriate successor Chief Executive Officer
for the Company in connection with the Merger. In the event that Parent believes
that the Company is not in compliance with the foregoing, Parent shall provide
written notice to the nonemployee directors of the Company so that the Company
may so comply by taking such action as such directors deem appropriate in their
good faith judgment.

SECTION 5.8. CONSENTS. Parent, Sub and the Company shall each use all
reasonable efforts to obtain the consent and approval of, or effect the
notification of or filing with, each person or authority whose consent or
approval is required in order to permit the consummation of the Merger and the
Transactions and to enable the Surviving Corporation to conduct and operate the
business of the Company and its subsidiaries substantially as presently
conducted and as contemplated to be conducted.

SECTION 5.9. NASDAQ QUOTATION. Parent shall use its reasonable best efforts
to cause the shares of Parent Common Stock issuable to the shareholders of the
Company in the Merger to be eligible for quotation on the NASD National Market
(or other national market or exchange on which Parent Common Stock is then
traded or quoted) prior to the Effective Time.

SECTION 5.10. AFFILIATES. At least ten Business Days prior to the date of
the Shareholders Meeting, the Company shall deliver to Parent a list of names
and addresses of those persons who were, at the record date for the Company
Shareholders Meeting, "affiliates" of the Company within the meaning of Rule 145
under the Securities Act. The Company shall use its reasonable efforts to
deliver or cause to be delivered to Parent, prior to the Effective Time, from
each of the affiliates of the Company identified in the foregoing list,
agreements substantially in the form attached to this Agreement as Exhibit A.

SECTION 5.11. INDEMNIFICATION AND INSURANCE. Parent shall cause the
Surviving Corporation to maintain in effect, for a period of six years after the
Effective Time, the current provisions regarding indemnification of officers and
directors (including with respect to advancement of expenses) contained in the
Articles of Incorporation and Bylaws of the Company. Upon the Effective Time,
Parent shall assume all of the obligations of the Company under the Company's
existing indemnification agreements with each of the existing and former
directors and officers of the Company, as such agreements relate to the
indemnification of such persons for expenses and liabilities arising from facts
or events which occurred on or before the Effective Time or relating to the
Merger or Transactions. In addition, Parent agrees to provide to the current
directors and officers of the Company the maximum indemnification protection
(including with respect to advancement of expenses) permitted under the Illinois
Statute. Parent agrees to cause the Company to have in effect, as of the
Effective Time and covering the six-year period following the Effective Time,
for the benefit of the Company's current and former directors and officers,
insurance in the same amount and on substantially the same terms as the
Company's current directors' and officers' policies with respect to acts or
omissions occurring on or prior to the Effective Time.

SECTION 5.12. NOTIFICATION OF CERTAIN MATTERS. Each of the Company, Parent
and Sub shall give prompt notice to the other such parties of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
likely to cause (a) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect at any time from the date of
this Agreement to the Effective Time, or (b) any material failure of the
Company, Parent, or Sub as the case may be, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
Notwithstanding the foregoing, the delivery of any notice pursuant to this
Section shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.

SECTION 5.13. EMPLOYEE AGREEMENTS. From and after the Effective Time,
Parent shall cause the Surviving Corporation to fulfill all written employment,
severance, termination, consulting and retirement
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agreements, as in effect on the date hereof, to which the Company or any of its
subsidiaries is a party, pursuant to the terms thereof and applicable law.

SECTION 5.14. REORGANIZATION. From and after the date hereof, each of
Parent and the Company and their respective subsidiaries shall not, and shall
use reasonable efforts to cause their affiliates not to, take any action, or
fail to take any action, that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or enter into
any contract, agreement, commitment or arrangement that would have such effect.

ARTICLE 6

CONDITIONS PRECEDENT

SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger are
subject to the satisfaction prior to the Closing Date of the following
conditions:

(a) Shareholder Approval. This Agreement shall have been approved and
adopted by the requisite vote of the shareholders of the Company, in
accordance with all applicable provisions of the Illinois Statute.

(b) Effectiveness of the S-4. The S-4 shall have been declared
effective by the SEC under the Securities Act and shall not be the subject
of any stop order or proceeding by the SEC seeking a stop order.

(c) Governmental Entity Approvals. All other material authorizations,
consents, orders or approvals of, or declarations or filings with, or
expiration of waiting periods imposed by, any Governmental Entity necessary
for the Merger and the consummation of the Transactions shall have been
filed, expired or been obtained, other than those that, individually or in
the aggregate, the failure to be filed, expired or obtained would not, in
the reasonable opinion of Parent, have a Material Adverse Effect on the
Company or Parent.

(d) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger or the other Transactions shall
be in effect, nor shall any proceeding brought by an administrative agency
or commission or other governmental authority or instrumentality, domestic
or foreign, seeking any of the foregoing be pending or threatened; and
there shall not be any action taken, or any statute, rule, regulation or
order (whether temporary, preliminary or permanent) enacted, entered or
enforced which makes the consummation of the Merger or the other
Transactions illegal or prevents or prohibits the Merger or the other
Transactions.

(e) NASDAQ Quotation. The shares of Parent Common Stock issuable to
the holders of the Company Common Stock pursuant to the Merger shall have
been authorized for quotation on the NASD National Market (or other
national market or exchange on which Parent Common Stock is then traded or
quoted), upon official notice of issuance.

SECTION 6.2. CONDITIONS OF OBLIGATIONS OF PARENT AND SUB. The obligations
of Parent and Sub to effect the Merger are subject to the satisfaction of the
following additional conditions, unless waived in writing by Parent:

(a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct or, in
the case of representations and warranties not containing any materiality
qualifier, including, without limitation, "Material Adverse Effect," shall
be true and correct in all material respects (i) as of the date hereof and
(ii) as of the Closing Date, as though made on and as of the Closing Date
(provided, that in the cases of clauses (i) and (ii), any such
representation and warranty made as of a specific date shall be true and
correct as of such specific date),

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and Parent shall have received certificates to such effect signed by the
Chief Executive Officer or the Chief Financial Officer of the Company with
respect to Company matters.

(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all of its respective obligations and
covenants, taken as a whole, required to be performed by it under this
Agreement prior to or as of the Closing Date, and Parent shall have
received a certificate to such effect signed by the Chief Executive Officer
or the Chief Financial Officer of the Company.

(c) Consents. Parent and Sub shall have received duly executed copies
of all material third-party consents and approvals contemplated by this
Agreement or the Company Disclosure Letter to be obtained by the Company in
form and substance reasonably satisfactory to Parent and Sub, except those
consents the failure to so receive would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.

(d) Tax Opinion. Parent and Sub shall have received the opinion, dated
the Closing Date, of Wachtell, Lipton, Rosen & Katz, special counsel to
Parent, based upon customary representations, to the effect that (i) the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and that each of the
Company, Sub and Parent will be a party to that reorganization within the
meaning of Section 368(b) of the Code, and (ii) no taxable gain or loss
will be recognized, for federal income tax purposes, by shareholders of the
Company who exchange Company Common Stock for shares of Parent Common Stock
pursuant to the Merger (except with respect to cash received in lieu of
fractional shares).

SECTION 6.3. CONDITIONS OF OBLIGATIONS OF THE COMPANY. The obligation of
the Company to effect the Merger is subject to the satisfaction of the following
conditions, unless waived in writing by the Company:

(a) Representations and Warranties. The representations and warranties
of Parent and Sub set forth in this Agreement shall be true and correct or,
in the case of representations and warranties not containing any
materiality qualifier, including, without limitation, "Material Adverse
Effect," shall be true and correct in all material respects (i) as of the
date hereof and (ii) as of the Closing Date, as though made on and as of
the Closing Date (provided, that in the cases of clauses (i) and (ii), any
such representation and warranty made as of a specific date shall be true
and correct as of such specific date), and the Company shall have received
certificates to such effect signed by a senior executive officer of Parent
and of Sub to such effect with respect to Parent matters and Sub matters,
respectively.

(b) Performance of Obligations of Parent and Sub. Each of Parent and
Sub shall have performed in all material respects all of their respective
obligations and covenants, taken as a whole, required to be performed by
such party under this Agreement prior to or as of the Closing Date, and the
Company shall have received certificates to such effect signed by a senior
executive officer of Parent and of Sub with respect to Parent and Sub
matters, respectively.

(c) Consents. The Company shall have received duly executed copies of
all material third-party consents and approvals contemplated by this
Agreement and the Parent Disclosure Letter to be obtained by Parent in form
and substance reasonably satisfactory to the Company, except those consents
the failure to so receive, would not, individually or in the aggregate,
have a Material Adverse Effect on Parent.

(d) Tax Opinion. The Company shall have received the opinion, dated
the Closing Date, of Shearman & Sterling, special counsel to the Company,
based upon customary representations, to the effect that (i) the Merger
will be treated for federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code, and that each of the Company,
Sub and Parent will be a party to that reorganization within the meaning of
Section 368(b) of the Code, and (ii) no taxable gain or loss will be
recognized, for federal income tax purposes, by shareholders of the Company
who exchange Company Common Stock for shares of Parent Common Stock
pursuant to the Merger (except with respect to cash received in lieu of
fractional shares).

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(e) Officer of Parent. Mr. Barry Diller shall continue to be the Chief
Executive Officer of Parent.

ARTICLE 7

TERMINATION

SECTION 7.1. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
the Merger by the shareholders of the Company:

(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and the Company based on the recommendation of the
Special Committee;

(b) by either Parent or the Company if the Merger shall not have been
consummated by December 31, 1998 (provided, that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any
party whose action or failure to act has been the cause of or resulted in
the failure of the Merger to occur on or before such date and such action
or failure to act constitutes a breach of this Agreement);

(c) by either Parent or the Company, if (i) a court of competent
jurisdiction or other Governmental Entity shall have issued an order,
decree or ruling or taken any other action, in any case having the effect
of permanently restraining, enjoining or otherwise prohibiting the Merger,
which order, decree or ruling is final and nonappealable or (ii) a
governmental, regulatory or administrative agency or commission shall seek
to enjoin the Merger and the terminating party reasonably believes that the
time period required to resolve such governmental action and the related
uncertainty is reasonably likely to have a Material Adverse Effect on
either Parent or the Company;

(d) by either Parent or the Company, if the required approvals of the
shareholders of the Company contemplated by this Agreement shall not have
been obtained by reason of the failure to obtain the required vote upon a
vote taken at a Shareholders Meeting or at any adjournment thereof
(provided, that the right to terminate this Agreement under this Section
7.1(d) shall not be available to any party where the failure to obtain
shareholder approval of such party shall have been caused by the action or
failure to act of such party in breach of this Agreement);

(e) by Parent, if the Board of Directors of the Company acting on the
recommendation of the Special Committee shall have withdrawn or modified
its recommendation concerning the Merger in accordance with Section 5.4
hereof;

(f) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or
if any representation or warranty of Parent shall have become untrue, in
either case such that the conditions set forth in Section 6.3(a) or Section
6.3(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided,
that if such inaccuracy in Parent's representations and warranties or
breach by Parent is curable by Parent through the exercise of its
reasonable efforts and for so long as Parent continues to exercise such
reasonable efforts, the Company may not terminate this Agreement under this
Section 7.1(f); or

(g) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if
any representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided,
that if such inaccuracy in the Company's representations and warranties or
breach by the Company is curable by the Company through the exercise of its
reasonable efforts and for so long as the Company continues to exercise
such reasonable efforts, Parent may not terminate this Agreement under this
Section 7.1(g).

SECTION 7.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no further
force or effect, except (a) as set forth in the last sentence of
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Section 5.1, this Section 7.2, Section 7.3, and Article 8, each of which shall
survive the termination of this Agreement, and (b) nothing herein shall relieve
any party from liability for any breach of this Agreement.

SECTION 7.3. FEES AND EXPENSES. All fees and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses, whether or not the Merger is consummated.

ARTICLE 8

GENERAL PROVISIONS

SECTION 8.1. AMENDMENT. This Agreement (including the Exhibits and
disclosure letters hereto) may be amended prior to the Effective Time by Parent,
Sub and the Company, by action taken by the Board of Directors of Parent and the
Board of Directors of the Company (provided, that no amendment shall be approved
by the Board of Directors of the Company unless such amendment shall have been
recommended by the Special Committee and, if required by law, approved by the
disinterested directors of the Company), at any time before or after approval of
the Merger by the shareholders of the Company but, after any such approval, no
amendment shall be made which by law requires further approval by such
shareholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.

SECTION 8.2. EXTENSION; WAIVER. At any time prior to the Effective Time
(whether before or after approval of the shareholders of the Company), Parent
and the Company may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement and (c) waive compliance with any
of the agreements or conditions contained in this Agreement. Any extension or
waiver on behalf of the Company shall be taken only upon the recommendation of
the Special Committee (and, if required by law, by the disinterested directors
of the Company). Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.

SECTION 8.3. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements in this Agreement or in any
instrument or certificate delivered pursuant to this Agreement shall be deemed
to be conditions to the Merger and shall not survive the Merger, except for the
agreements contained in Sections 2.2 (exchange of Certificates), 2.3 (Company
Options), 2.4 (further assurances), 5.11 (indemnification), 5.13 (employee
agreements) and 5.14 (reorganization), each of which shall survive the Merger.

SECTION 8.4. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
disclosure letters hereto) and the Confidentiality Agreement contain the entire
agreement among all of the parties with respect to the subject matter hereof and
supersede all prior arrangements and understandings, both written and oral, with
respect thereto, but shall not supersede any agreements among any group of the
parties hereto entered into on or after the date hereof. In this regard, the
breach of the Cooperation Agreement in and of itself shall not be deemed to be a
breach of this Agreement.

SECTION 8.5. SEVERABILITY. It is the desire and intent of the parties that
the provisions of this Agreement be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

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SECTION 8.6. NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed to be sufficient if contained
in a written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

(a) if to Parent or Sub, to:

USA Networks, Inc.
152 West 57th Street
New York, NY 10019
Attention: General Counsel
Telecopier: (212) 582-9291;

with a copy to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-5150
Attention: Pamela S. Seymon, Esq.
Telecopier: (212) 403-2000

(b) if to the Company, to:

Ticketmaster Group, Inc.
8800 Sunset Boulevard
West Hollywood, CA 90069
Attention: Ned S. Goldstein, General Counsel
Telecopier: 310-360-6512;

with a copy to:

Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Faith Grossnickle, Esq.
Telecopier: (212) 848-7179;

and to:

Neal, Gerber & Eisenberg
2 North LaSalle Street
Chicago, IL 60602
Attention: Charles E. Gerber, Esq.
Telecopier: (312) 269-1747

All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a telecopy, when the party receiving such telecopy shall have confirmed
receipt of the communication, (c) in the case of delivery by nationally
recognized overnight courier, on the Business Day following dispatch and (d) in
the case of mailing, on the third Business Day following such mailing.

SECTION 8.7. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

SECTION 8.8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
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SECTION 8.9. BENEFITS; ASSIGNMENT. This Agreement is not intended to confer
upon any person other than the parties any rights or remedies hereunder and
shall not be assigned by operation of law or otherwise; provided, however, that
the officers and directors of the Company are intended beneficiaries of the
covenants and agreements contained in Section 5.11, the Company employees having
the agreements described in Section 5.13 and the holders of Company Options
described in Section 2.3, provided, that such assignment shall not alter the
treatment of the Merger under the Code for Company shareholders, and the Company
shall execute any amendment to this Agreement necessary to provide the benefits
of this Agreement to any such assignee.

SECTION 8.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein, without giving effect to laws that
might otherwise govern under applicable principles of conflicts of law, provided
that any matter relating to the fiduciary matters affecting the Company and its
board of directors or to the mechanics and legal consequences of the Merger
shall be governed by Illinois law.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereinto duly authorized, as of the date first
written above.

USA NETWORKS, INC.

By: /s/ THOMAS J. KUHN

----------------------------------
Name: Thomas J. Kuhn
Title: Senior Vice President and
General Counsel

BRICK ACQUISITION CORP.

By: /s/ THOMAS J. KUHN

----------------------------------
Name: Thomas J. Kuhn
Title: President

TICKETMASTER GROUP, INC.

By: /s/ FREDRIC D. ROSEN

----------------------------------
Name: Fredric D. Rosen
Title: Chief Executive Officer

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APPENDIX B

[SALOMON LOGO]

MARCH 9, 1998

Special Committee of the Board of Directors
Ticketmaster Group, Inc.

Members of the Special Committee of the Board:

You have requested our opinion as to the fairness, from a financial point
of view, to the holders of common stock, no par value ("Company Common Stock"),
of Ticketmaster Group, Inc. (the "Company") of the consideration to be received
by such holders in connection with the proposed merger (the "Merger") of a
wholly owned subsidiary ("Sub") of USA Networks, Inc. ("Parent") with and into
the Company, pursuant to an Agreement and Plan of Exchange and Merger (the
"Merger Agreement") to be entered into by Parent, Sub and the Company on such
terms, among others, as have been approved by the Board of Directors of Parent
and the Board of Directors and the Special Committee of the Board of Directors
of the Company on or prior to the date hereof. Upon the effectiveness of the
Merger, each issued and outstanding share of Company Common Stock will be
converted into and represent the right to receive 0.563 of a share of common
stock, par value $0.01 per share ("Parent Common Stock"), of Parent (the
"Exchange Ratio").

In connection with rendering our opinion, we have reviewed certain publicly
available information concerning Parent and the Company and certain other
financial information concerning Parent and the Company that were provided to us
by Parent and the Company, respectively. We have discussed the past and current
business operations, financial condition and prospects of Parent and the Company
with certain officers and employees of Parent and the Company, respectively.
Although financial forecasts both with respect to Parent and the Company were
not made available to us, Parent and the Company confirmed the reasonableness of
the financial forecasts prepared by us in connection with rendering our opinion.
We have also considered such other information, financial studies, analyses,
investigations and financial, economic and market criteria that we deemed
relevant.

In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of the information reviewed by us
for the purpose of this opinion and we have not assumed any responsibility for
independent verification of such information. We have not made or obtained or
assumed any responsibility for making or obtaining any independent evaluation or
appraisal of any of the assets (including properties and facilities) or
liabilities of Parent or the Company. We were not asked to, and did not, solicit
other proposals to acquire the Company.

We understand that approximately 47.5% of Company Common Stock is owned,
directly or indirectly, by Parent.

Our opinion is necessarily based upon conditions as they exist and can be
evaluated on the date hereof. Our opinion as expressed below does not imply any
conclusion as to the likely trading range for Parent Common Stock following the
consummation of the Merger, which may vary depending upon, among other factors,
changes in interest rates, dividend rates, market conditions, general economic
conditions and other factors that generally influence the price of securities.
Our opinion does not address the Company's underlying business decision to
effect the Merger, and we express no view on the effect on the Company of the
Merger and related transactions. Our opinion is directed only to the fairness,
from a financial point of view, of the Exchange Ratio to holders of Company
Common Stock (other than Parent or any subsidiary of Parent) and does not
constitute a recommendation concerning how such holders of Company Common Stock
should vote with respect to the Merger Agreement or the Merger.

As you are aware, Salomon Brothers Inc doing business as Salomon Smith
Barney (collectively with all other entities doing business as Salomon Smith
Barney, "Salomon Smith Barney") is acting as financial

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advisor to the Special Committee of the Board of Directors of the Company in
connection with the Merger and will receive a fee for its services. In the
ordinary course of business, Salomon Smith Barney may actively trade the
securities of Parent and the Company for its own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities. In addition, Salomon Smith Barney and its affiliates have
previously rendered certain investment banking and financial advisory services
to the Company for which Salomon Smith Barney has received customary
compensation. Salomon Smith Barney and its affiliates (including Travelers Group
Inc.) may have other business relationships with Parent, the Company and their
affiliates.

Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio is fair to the holders of Company Common Stock
(other than Parent or any subsidiary of Parent) from a financial point of view.

Very truly yours,

SALOMON SMITH BARNEY

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APPENDIX C

ILLINOIS BUSINESS CORPORATION ACT

PROVISIONS RELATING TO DISSENTERS' RIGHTS

5/11.65. Right to dissent

(a) A shareholder of a corporation is entitled to dissent from, and obtain
payment for his or her shares in the event of any of the following corporate
actions:

(1) consummation of a plan of merger or consolidation or a plan of
share exchange to which the corporation is a party if (i) shareholder
authorization is required for the merger or consolidation or the share
exchange by Section 11.20 or the articles of incorporation or (ii) the
corporation is a subsidiary that is merged with its parent or another
subsidiary under Section 11.30;

(2) consummation of a sale, lease or exchange of all, or substantially
all, of the property and assets of the corporation other than in the usual
and regular course of business;

(3) an amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:

(i) alters or abolishes a preferential right of such shares;

(ii) alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of such shares;

(iii) in the case of a corporation incorporated prior to January 1,
1982, limits or eliminates cumulative voting rights with respect to such
shares; or

(4) any other corporate action taken pursuant to a shareholder vote if
the articles of incorporation, by-laws, or a resolution of the board of
directors provide that shareholders are entitled to dissent and obtain
payment for their shares in accordance with the procedures set forth in
Section 11.70 or as may be otherwise provided in the articles, by-laws or
resolution.

(b) A shareholder entitled to dissent and obtain payment for his or her
shares under this Section may not challenge the corporate action creating his or
her entitlement unless the action is fraudulent with respect to the shareholder
or the corporation or constitutes a breach of a fiduciary duty owed to the
shareholder.

(c) A record owner of shares may assert dissenters' rights as to fewer than
all the shares recorded in such person's name only if such person dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the record owner asserts dissenters' rights. The rights of a partial dissenter
are determined as if the shares as to which dissent is made and the other shares
were recorded in the names of different shareholders. A beneficial owner of
shares who is not the record owner may assert dissenters' rights as to shares
held on such person's behalf only if the beneficial owner submits to the
corporation the record owner's written consent to the dissent before or at the
same time the beneficial owner asserts dissenters' rights.

5/11.70. Procedure to dissent

(a) If the corporate action giving rise to the right to dissent is to be
approved at a meeting of shareholders, the notice of meeting shall inform the
shareholders of their right to dissent and the procedure to dissent. If, prior
to the meeting, the corporation furnishes to the shareholders material
information with respect to the transaction that will objectively enable a
shareholder to vote on the transaction and to determine whether or not to
exercise dissenters' rights, a shareholder may assert dissenters' rights only if
the shareholder delivers to the corporation before the vote is taken a written
demand for payment for his or her shares if the proposed action is consummated,
and the shareholder does not vote in favor of the proposed action.

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(b) If the corporate action giving rise to the right to dissent is not to
be approved at a meeting of shareholders, the notice to shareholders describing
the action taken under Section 11.30 or Section 7.10 shall inform the
shareholders of their right to dissent and the procedure to dissent. If, prior
to or concurrently with the notice, the corporation furnishes to the
shareholders material information with respect to the transaction that will
objectively enable a shareholder to determine whether or not to exercise
dissenters' rights, a shareholder may assert dissenter's rights only if he or
she delivers to the corporation within 30 days from the date of mailing the
notice a written demand for payment for his or her shares.

(c) Within 10 days after the date on which the corporate action giving rise
to the right to dissent is effective or 30 days after the shareholder delivers
to the corporation the written demand for payment, whichever is later, the
corporation shall send each shareholder who has delivered a written demand for
payment a statement setting forth the opinion of the corporation as to the
estimated fair value of the shares, the corporation's latest balance sheet as of
the end of a fiscal year ending not earlier than 16 months before the delivery
of the statement, together with the statement of income for that year and the
latest available interim financial statements, and either a commitment to pay
for the shares of the dissenting shareholder at the estimated fair value thereof
upon transmittal to the corporation of the certificate or certificates, or other
evidence of ownership, with respect to the shares, or instructions to the
dissenting shareholder to sell his or her shares within 10 days after delivery
of the corporation's statement to the shareholder. The corporation may instruct
the shareholder to sell only if there is a public market for the shares at which
the shares may be readily sold. If the shareholder does not sell within that 10
day period after being so instructed by the corporation, for purposes of this
Section the shareholder shall be deemed to have sold his or her shares at the
average closing price of the shares, if listed on a national exchange, or the
average of the bid and asked price with respect to the shares quoted by a
principal market maker, if not listed on a national exchange, during that 10 day
period.

(d) A shareholder who makes written demand for payment under this Section
retains all other rights of a shareholder until those rights are cancelled or
modified by the consummation of the proposed corporate action. Upon consummation
of that action, the corporation shall pay to each dissenter who transmits to the
corporation the certificate or other evidence of ownership of the shares the
amount the corporation estimates to be the fair value of the shares, plus
accrued interest, accompanied by a written explanation of how the interest was
calculated.

(e) If the shareholder does not agree with the opinion of the corporation
as to the estimated fair value of the shares or the amount of interest due, the
shareholder, within 30 days from the delivery of the corporation's statement of
value, shall notify the corporation in writing of the shareholder's estimated
fair value and amount of interest due and demand payment for the difference
between the shareholder's estimate of fair value and interest due and the amount
of the payment by the corporation or the proceeds of sale by the shareholder,
whichever is applicable because of the procedure for which the corporation opted
pursuant to subsection (c).

(f) If, within 60 days from delivery to the corporation of the shareholder
notification of estimate of fair value of the shares and interest due, the
corporation and the dissenting shareholder have not agreed in writing upon the
fair value of the shares and interest due, the corporation shall either pay the
difference in value demanded by the shareholder, with interest, or file a
petition in the circuit court of the county in which either the registered
office or the principal office of the corporation is located, requesting the
court to determine the fair value of the shares and interest due. The
corporation shall make all dissenters, whether or not residents of this State,
whose demands remain unsettled parties to the proceeding as an action against
their shares and all parties shall be served with a copy of the petition.
Nonresidents may be served by registered or certified mail or by publication as
provided by law. Failure of the corporation to commence an action pursuant to
this Section shall not limit or affect the right of the dissenting shareholders
to otherwise commence an action as permitted by law.

(g) The jurisdiction of the court in which the proceeding is commenced
under subsection (f) by a corporation is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the power described
in the order appointing them, or in any amendment to it.

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(h) Each dissenter made a party to the proceeding is entitled to judgment
for the amount, if any, by which the court finds that the fair value of his or
her shares, plus interest, exceeds the amount paid by the corporation or the
proceeds of sale by the shareholder, whichever amount is applicable.

(i) The court, in a proceeding commenced under subsection (f), shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of the appraisers, if any, appointed by the court under subsection (g),
but shall exclude the fees and expenses of counsel and experts for the
respective parties. If the fair value of the shares as determined by the court
materially exceeds the amount which the corporation estimated to be the fair
value of the shares or if no estimate was made in accordance with subsection
(c), then all or any part of the costs may be assessed against the corporation.
If the amount which any dissenter estimated to be the fair value of the shares
materially exceeds the fair value of the shares as determined by the court, then
all or any part of the costs may be assessed against that dissenter. The court
may also assess the fees and expenses of counsel and experts for the respective
parties, in amounts the court finds equitable, as follows:

(1) Against the corporation and in favor of any or all dissenters if
the court finds that the corporation did not substantially comply with the
requirements of subsections (a), (b), (c), (d), or (f).

(2) Against either the corporation or a dissenter and in favor of any
other party if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this Section.

If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated and that the fees for
those services should not be assessed against the corporation, the court may
award to that counsel reasonable fees to be paid out of the amounts awarded to
the dissenters who are benefited. Except as otherwise provided in this Section,
the practice, procedure, judgment and costs shall be governed by the Code of
Civil Procedure.

(j) As used in this Section:

(1) "Fair value", with respect to a dissenter's shares, means the
value of the shares immediately before the consummation of the corporate
action to which the dissenter objects excluding any appreciation or
depreciation in anticipation of the corporate action, unless exclusion
would be inequitable.

(2) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair
and equitable under all the circumstances.

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PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant's Restated Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of directors
for monetary damages for breach of their fiduciary duties as a director. The
Registrant's By-Laws provide that the directors, officers and certain other
persons will be indemnified with respect to third-party actions or suits,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant. The
Registrant's By-Laws further provide that directors, officers and certain other
persons will be indemnified with respect to actions or suits by or in the right
of the Registrant, provided that such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the Registrant; except that no indemnification shall be made in the event that
such person shall be adjudged to be liable to the Registrant, unless a court
determines that indemnification is fair and reasonable in view of all the
circumstances. The Registrant's By-Laws allow the registrant to pay all expenses
incurred by a director, officer, employee or agent in defending any proceeding
with the scope of the indemnification provisions as such expenses are incurred
in advance of its final disposition, upon an undertaking by such party to repay
such expenses, if it is ultimately determined that such party was not entitled
to indemnity by the Registrant. The Registrant believes that these arrangements
are necessary to attract and retain qualified persons as directors and officers.

Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party to
an action by reason of the fact that he was a director, officer or agent of the
corporation or was serving at the request of the corporation against expenses
actually and reasonably incurred by him in connection with such action if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action, had no reasonable cause to believe his conduct was unlawful.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the registrant pursuant to the foregoing
provisions, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy or expressed in the Securities Act and is, therefore, unenforceable.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits. See Exhibit Index.

(b) Financial Statement Schedules. Not Applicable.

ITEM 22. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

1. To file during any period in which offers and sales are being made,
a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and

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(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

2. That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.

3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement 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.

5. That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form.

6. That every prospectus: (i) that is filed pursuant to paragraph 5
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the Registration Statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offering
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

7. To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in the documents filed subsequent to
the effective date of the Registration Statement through the date of
responding to the request.

8. To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.

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, 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 the 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 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.

II-2
<PAGE> 116

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 New York, State of New
York, on May 21, 1998.

USA NETWORKS, INC.

By: /s/ BARRY DILLER*

----------------------------------
Barry Diller
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 21, 1998.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ BARRY DILLER* Chairman of the Board, Chief Executive Officer
- ----------------------------------------------------- and Director
Barry Diller

/s/ VICTOR A. KAUFMAN* Office of the Chairman, Chief Financial
- ----------------------------------------------------- Officer and Director (Principal Financial
Victor A. Kaufman Officer)

/s/ MICHAEL DURNEY* Controller (Chief Accounting Officer)
- -----------------------------------------------------
Michael Durney

Director
- -----------------------------------------------------
Paul G. Allen

/s/ FRANK J. BIONDI, JR.* Director
- -----------------------------------------------------
Frank J. Biondi, Jr.

/s/ EDGAR BRONFMAN, JR.* Director
- -----------------------------------------------------
Edgar Bronfman, Jr.
</TABLE>

II-3
<PAGE> 117

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ JAMES G. HELD* Director
- -----------------------------------------------------
James G. Held

/s/ ROBERT W. MATSCHULLAT* Director
- -----------------------------------------------------
Robert W. Matschullat

/s/ SAMUEL MINZBERG* Director
- -----------------------------------------------------
Samuel Minzberg

/s/ WILLIAM D. SAVOY* Director
- -----------------------------------------------------
William D. Savoy

/s/ H. NORMAN SCHWARZKOPF* Director
- -----------------------------------------------------
H. Norman Schwarzkopf

/s/ RICHARD E. SNYDER* Director
- -----------------------------------------------------
Richard E. Snyder

*By: /s/ THOMAS J. KUHN
------------------------------------------------
Thomas J. Kuhn
Attorney-in-fact
</TABLE>

II-4
<PAGE> 118

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>

2.1 Agreement and Plan of Merger by and among the Registrant,
Brick Acquisition Corp. and Ticketmaster Group, Inc.,
dated as of March 20, 1998 (attached as Appendix A to the
Proxy Statement/Prospectus contained in the Registration
Statement). .............................................
2.2 Investment Agreement among Universal Studios, Inc., the
Registrant, Home Shopping Network, Inc. and Liberty Media
Corporation, dated as of October 19, 1997, as amended and
restated as of December 18, 1997, filed as Appendix A to
the Registrant's Definitive Proxy Statement, January 12,
1998, is incorporated herein by reference................
3.1 Restated Certificate of Incorporation of the Registrant,
filed as Exhibit 3.1 to the Registrant's Form 8-K,
February 23, 1998, is incorporated herein by reference...
3.2 Amended and Restated By-Laws of the Registrant, filed as
Exhibit 3.1 to the Registrant's Form 8-K, January 9,
1998, is incorporated herein by reference................
4.1 Form of Specimen Certificate for the Registrant's Common
Stock, filed as Exhibit 4.6 to the Registrant's Form
10-K, December 31, 1997, is incorporated herein by
reference................................................
*5.1 Opinion of Wachtell, Lipton, Rosen & Katz, regarding the
legality of the securities being issued..................
*8.1 Opinion of Wachtell, Lipton, Rosen & Katz, regarding certain
tax matters..............................................
*8.2 Opinion of Shearman & Sterling, regarding certain tax
matters. ................................................
10.1 Form of Governance Agreement among the Registrant, Universal
Studios, Inc., Liberty Media Corporation and Barry
Diller, dated as of October 19, 1997, filed as Appendix B
to the Registrant's Definitive Proxy Statement, January
12, 1998, is incorporated herein by reference............
10.2 Form of Stockholders Agreement among Universal Studios,
Inc., Liberty Media Corporation, Barry Diller, the
Registrant and The Seagram Company Ltd., dated as of
October 19, 1997, filed as Appendix C to the Registrant's
Definitive Proxy Statement, January 12, 1998, is
incorporated herein by reference. .......................
10.3 Amended and Restated Limited Liability Company Agreement of
USANi LLC, dated as of February 12, 1998, filed as
Exhibit 10.59 to the Registrant's Form 10-K, December 31,
1997, is incorporated herein by reference................
10.4 Exchange Agreement dated as of October 19, 1997 by and among
the Registrant, Universal Studios, Inc. (and certain of
its subsidiaries) and Liberty Media Corporation (and
certain of its subsidiaries), filed as Exhibit 10.60 to
the Registrant's Form 10-K, December 31, 1997, is
incorporated herein by reference. .......................
10.5 Cooperation, Non-Competition and Confidentiality Agreement
by and between the Registrant and Fredric D. Rosen, dated
March 9, 1998, filed as Exhibit 6 to Amendment No. 4 to
the Registrant's report on Schedule 13D for Ticketmaster
Group, Inc., March 23, 1998, is incorporated herein by
reference................................................
</TABLE>

<PAGE> 119

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
23.1 Consent of Wachtell, Lipton, Rosen & Katz (included in
Exhibit 5.1 and Exhibit 8.1).............................
23.2 Consent of Shearman & Sterling (included in Exhibit 8.2)....
*23.3 Consent of Deloitte & Touche LLP............................
*23.4 Consent of Ernst & Young LLP................................
*23.5 Consent of Ernst & Young LLP................................
*23.6 Consent of KPMG Peat Marwick LLP............................
*23.7 Consent of KPMG Peat Marwick LLP............................
*23.8 Consent of Price Waterhouse LLP.............................
*23.9 Consent of Price Waterhouse LLP.............................
*23.10 Consent of Salomon Smith Barney.............................
*24.1 Power of Attorney...........................................
99.1 Form of Proxy Card..........................................
</TABLE>

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

* Previously filed.

<PAGE> 1

Exhibit 99.1

FORM OF PROXY CARD

TICKETMASTER GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TICKETMASTER GROUP, INC.

The undersigned, having received the Notice of Annual Meeting and Proxy
Statement/Prospectus, hereby appoints Fredric D. Rosen, Ned S. Goldstein and
Peter B. Knepper, and each of them, proxies with full power of substitution, for
and in the name of the undersigned, to vote all shares of Common Stock of
Ticketmaster Group, Inc. owned of record by the undersigned at the 1998 Annual
Meeting of Shareholders to be held at the Park Hyatt Hotel located at 2151
Avenue of the Stars, Century City, California 90067, on Tuesday, June 23, 1998
at 10:00 a.m., local time, and any adjournments or postponements thereof, in
accordance with the directions marked on the reverse side hereof. This proxy
revokes all prior proxies given by the undersigned.

ELECTION OF DIRECTORS -- NOMINEES

Paul G. Allen, Peter R. Barton, Barry Diller, Jonathan L. Dolgen,
James G. Held, John A. Pritzker, Fredric D. Rosen, William D. Savoy,
Terence M. Strom

(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name above.)

You are encouraged to specify your choices by marking the appropriate boxes (see
reverse side), but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The proxies cannot vote your
shares unless you sign and return this card.

(SEE REVERSE SIDE)

/X/ Please Mark Your Votes As in this Example.

This Proxy when properly executed will be voted in the manner directed herein on
the matters set forth below and in the discretion of the proxies upon all
matters incident to the conduct of the Annual Meeting and upon such other
matters as may properly be brought before the meeting. If no direction is made,
this Proxy will be voted FOR approval of the Agreement and Plan of Merger
pursuant to which Ticketmaster would become a wholly-owned subsidiary of USA
Networks, Inc., FOR all of the Board of Directors nominees, and FOR ratification
of the appointment of Ernst & Young LLP as Ticketmaster's independent auditors
for the fiscal year ending January 31, 1999.

<TABLE>
<S> <C>
1. Approval of the Agreement and Plan of Merger................................. FOR / / AGAINST / / ABSTAIN / /

2. Election of Directors (see reverse)
/ / FOR ALL NOMINEES (except as indicated on reverse) / / WITHHOLD AUTHORITY to vote for all nominees.
3. Ratification of Appointment of Ernst & Young LLP ........................... FOR / / AGAINST / / ABSTAIN / /
The Board of Directors recommends a vote FOR these proposals.
</TABLE>

Do you plan to attend the Annual Meeting / / YES / / NO
Dated: , 1998
-------------------------------------------

- --------------------------------------------------------------------------------
(Signature)

Please sign exactly as name appears on stock certificate(s). Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.

(SEE REVERSE SIDE)