<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                       OR

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

                        FOR THE TRANSITION PERIOD FROM __________ TO __________.

                             COMMISSION FILE NUMBER
                                     0-22582

                          TBA ENTERTAINMENT CORPORATION
                 (Name of Small Business Issuer in its Charter)


                  DELAWARE                                      62-1535897
       (State or other jurisdiction of                       (I.R.S. employer
       incorporation or organization)                      identification no.)

           16501 VENTURA BOULEVARD
             ENCINO, CALIFORNIA                                   91436
  (Address of principal executive offices)                      (Zip Code)

                                 (818) 728-2600
                (Issuer's telephone number, including area code)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     COMMON STOCK, PAR VALUE $.001 PER SHARE

    Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES [X] NO [ ].

    Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

    Issuer's revenues for its most recent fiscal year:  $27,272,700.

    The aggregate market value of the voting stock held by non-affiliates of the
registrant (based on the closing sale price of such stock as reported on
March 26, 1999 on the Nasdaq National Market of the National Association of
Securities Dealers, Inc.) was approximately $27,240,900.

    As of March 26, 1999, 8,522,880 shares of the registrant's Common Stock were
outstanding.

           Transitional Small Business Disclosure Format (Check One):
                                 Yes [ ] No [X]

<PAGE>   2

                      DOCUMENTS INCORPORATED BY REFERENCE:

    Portions of the registrant's definitive Proxy Statement, to be filed
pursuant to Section 14(a) of the Securities Exchange Act of 1934 in connection
with the registrant's 1999 annual meeting of stockholders, have been
incorporated by reference in Part III of this report.

                                     PART I

ITEM 1.          DESCRIPTION OF BUSINESS.


GENERAL

    TBA Entertainment Corporation ("TBA" or the "Company") is a diversified
communications and entertainment services company. The Company provides a broad
range of services through four integrated business divisions:

    -   Corporate Communications & Entertainment - Provides a broad range of
        business communications, meeting production, entertainment and event
        production services to corporate clients worldwide.

    -   Entertainment Marketing & Special Events - Creates and executes
        innovative entertainment marketing and special event initiatives
        including music tours, festivals, television broadcasts and syndicated
        radio specials.

    -   Artist Management - Manages the negotiation of recording, touring,
        merchandising and performance contracts, and the development of
        long-term career strategies for music industry artists.

    -   Event Merchandising - Creates and executes high-impact merchandising
        programs for entertainment and sporting events, institutional
        organizations and celebrity clients.

    The integration of TBA's four business divisions creates competitive
advantages for the Company. TBA believes that while a variety of competitors
exist with each of the Company's divisions, none offer the complete scope of
entertainment services provided by TBA. This inner-company synergy provides
TBA's clients with an expanded range of comprehensive services while creating
additional sources of revenues and profits for the Company. For example, in
providing corporate meetings and entertainment events and entertainment
marketing programs, the Company creates opportunities to showcase artist
management clients and to provide unique merchandising programs. Providing
entertainment marketing programs and merchandising programs for corporate
clients provides opportunities to cross-sell client decision makers on other
corporate communication and entertainment events.

    The Company's current operating structure is the result of strategic
acquisitions within each of the four business divisions. A brief description of
each of the acquisitions completed since January 1, 1998 is included below in
the detailed description of each of the four business divisions.

    The Company was incorporated in Tennessee in June 1993 and reincorporated in
Delaware in September 1997. The Company's executive offices are located at 16501
Ventura Boulevard, Encino, California 91436, and its telephone number is (818)
728-2600.

CORPORATE COMMUNICATIONS & ENTERTAINMENT

    The Corporate Communications & Entertainment division is an industry leader
in the production of innovative corporate meetings and events. This division
helps businesses effectively communicate their message via a broad range of
business communications, meeting production, entertainment and event productions
services. TBA utilizes award-winning creative capabilities and state-of-the-art
technology to help corporate clients worldwide deliver targeted messages that
educate, inspire and motivate. The Corporate Communications & Entertainment
division targets clients with recurring needs for business communications and
entertainment services. The Company's client list encompasses a number of
industry sectors including airline, automotive, information technology, food
service, insurance and financial services. Representative clients include
American Airlines, Pontiac, Motorola, Microsoft, McDonald's Corporation,
Frito-Lay Corp., State Farm Insurance and Merrill Lynch.

    The Corporate Communications & Entertainment division specializes in the
creative development, design, production and staging of a wide variety of
extraordinary events including: sales conferences, corporate meetings and
events, conventions and trade shows, product launches, awards shows, shareholder
meetings, live network broadcasts, television commercials, videoconferencing and
corporate anniversaries. TBA believes that it has benefited from the decision by
an increasing number of major corporations to outsource their business
communications and entertainment needs. TBA, and the companies acquired by TBA
in 1998, collectively produced over 800 events in 1998. The recurring nature of
this large number of events serves as a source of more predictable revenues as
they occur on a more regular basis. The large number of events also provides
opportunities for the Company's other divisions, including corporate event
opportunities for TBA's artist management clients and merchandising activities.

    The Corporate Communications & Entertainment division serves it clients from
a growing roster of offices nationwide, including Atlanta, Chicago, Dallas,
Nashville, Phoenix, Salt Lake City and San Diego. These offices were assembled
via strategic acquisitions over the past two years. The following is a brief
description of these acquisitions:

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    In April 1997, the Company acquired its first corporate communications and
entertainment company with the acquisition of all of the outstanding capital
stock of TBA Entertainment Group Nashville, Inc., formerly Avalon Entertainment
Group, Inc. ("AEG"). AEG, with offices in Nashville and San Diego, enjoys a
strong reputation for developing and producing live entertainment for
conventions, corporate meetings and special events. AEG provides turn-key
services for entertainment events including event planning, talent arrangements
and event staging.

    In August 1998, the Company acquired all of the outstanding capital stock of
TBA Entertainment Group Chicago, Inc., formerly Corporate Productions, Inc.
("CPI"), a Chicago-based company. CPI adds strong business communications
expertise through its award-winning creative capabilities to produce innovative
business communication solutions for corporate meetings.

    In September 1998, the Company acquired all of the outstanding capital stock
of TBA Entertainment Group Phoenix, Inc., formerly Image Entertainment
Productions, Inc. ("Image"), a Phoenix-based company. Image specializes in
corporate entertainment and Phoenix-area festivals including the entertainment
activities surrounding the Fiesta Bowl.

    In October 1998, the Company acquired all of the outstanding capital stock
of TBA Entertainment Group Dallas, Inc., formerly Magnum Communications, Inc.
("Magnum"). Magnum, with offices in Dallas and Salt Lake City, adds strong
audiovisual presentation and design capabilities to the Corporate Communications
& Entertainment division.

    With the completion of the acquisitions described above, TBA delivers a full
range of corporate communications and entertainment services to its clients. The
Corporate Communications & Entertainment division emphasizes the coordination
of services between the division's offices and, as necessary, allocates
resources from one office in order to support another. In addition, this
division supplements its full-time staff with independent contractors where
needed. TBA has long-standing relationships with freelance contractors in
various production, technical and creative disciplines.

    The Company believes, based on its experience, that the corporate
communications and entertainment industry is highly fragmented. Further, the
Company believes that its competitors consist of a number of small, primarily
regional companies that provide only a limited range of services. However, the
Company believes that there are other competitors whose business, like the
Company's, is full service in scope. The Company also competes with in-house
corporate communications staff of existing and potential clients and with staffs
of hotel and convention centers.

    Because of the highly-fragmented nature of the corporate communications and
entertainment industry, the Company believes that there are a number of
acquisition opportunities available to the Company. The Company believes, based
on its experience with past acquisitions, that some portion of the small,
regional, limited-services companies would welcome the opportunity to provide a
full range of corporate communications and entertainment services that would
result from an association with the Company. However, there can be no assurance
that the Company will be successful in acquiring any more businesses in the
corporate communications and entertainment industry.

ENTERTAINMENT MARKETING & SPECIAL EVENTS

         The Entertainment Marketing & Special Events division is an industry
leader in the creation, development and execution of highly integrated and
innovative entertainment marketing and special event programs. This division
continually forges new ways for clients to reach their audiences and realize
their business objectives. The Entertainment Marketing & Special Events division
specializes in the creative development, design, production and execution of a
broad range of marketing initiatives that may include: national music tours,
festivals, lifestyle events, nationally syndicated radio programs, satellite
media tours, network television broadcast specials, point of purchase campaigns,
premium/incentive programs, brand imaging campaigns, sponsorship fullfillment,
webcasts, experiential branding initiatives and consumer/trade promotions.

     The Company operates the Entertainment Marketing & Special Events division
both for its own account and through joint venture arrangements. The flagship
joint venture arrangement is Warner/TBA, a strategic joint venture between Time
Warner's Warner Custom Music Group and TBA. The Company's 50% interest in
Warner/TBA was acquired as part of the acquisition of AEG in April 1997. This
partnership combines the vast network of resources of the world's most
diversified, vertically integrated music company with TBA's creative and
production expertise to create an entertainment marketing company with strong
competitive advantages. In July 1997, TBA entered into a joint venture
arrangement (TBA/Frank) with Frank Productions, Inc., which specializes in
concert production and national touring. In December 1998, the Company acquired
all of the outstanding capital stock of TKS Marketing, Inc., which specializes
in sponsorship fullfillment.



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<PAGE>   4

     The Company works with its clients to custom craft an entertainment
marketing and special event to the exact specifications of that particular
client. Over time, TBA believes existing clients will expand their programs,
including increasing the scope of existing components of programs and by adding
new components to programs. The Company's Entertainment Marketing & Special
Events division is currently characterized by a relatively small number of
accounts with high revenues per account. As a result, the loss or addition of
any one account could have a material affect on the Company's revenues. Because
contracts for the Company's marketing programs are typically signed six months
to one year before the program takes place, management believes that, to a
reasonable degree, it can forecast and take appropriate action for changes in
its client portfolio. When possible, the Company also seeks to enter into
multi-year contracts with its clients. For example, in 1999 TBA entered into a
three-year agreement to produce Rockfest with Hard Rock Cafe as the corporate
sponsor. In addition, the Company believes that certain of its programs have
applications beyond one single client. For example, in 1998 the Company
developed the "For the Record" concept and marketing program for the country
music group Alabama. This program was developed to highlight the outstanding
career of Alabama and included a guest appearance on a nationally televised CBS
special, a double-CD release of all 41 of their number one hits, a worldwide pay
per view television special, a 13-city Christmas tour and a soon to be released
video of the pay per view event. TBA believes that there are other music
industry artists that would benefit from the For the Record marketing program.

    TBA provides companies with the power to reach and engage their customers in
a fresh, contemporary manner utilizing relevant programming and experiential
branding techniques to integrate their company or brand into the lifestyle of
their consumers. The Entertainment Marketing & Special Events division seeks to
develop music marketing programs that appeal to highly-focused demographic
segments. Management believes that national consumer product companies are
well-suited to use entertainment marketing as a tool and seeks to target these
industry participants as potential customers. The Company has produced
entertainment marketing programs for clients that include Fruit of the Loom,
Blockbuster Entertainment, Crown Royal, Turner Sports and Red Lobster
restaurants. In 1999, Warner/TBA will produce the proprietary event Rockfest
with Hard Rock Cafe as the corporate sponsor. In 1997, Rockfest was sponsored by
Blockbuster Entertainment and was the largest one day ticketed event in music
history.

    The Entertainment Marketing & Special Events division also provides unique
opportunities for the Company to showcase artist management clients and to
develop high-impact merchandising programs to complement the overall marketing
program. In addition, relationships with corporate clients also create
opportunities to sell corporate communications and entertainment services to an
expanded client base.

    ARTIST MANAGEMENT

    The Artist Management division develops and implements career strategies for
music industry artists. The Company, as a leader in the production of corporate
communications and entertainment programs, entertainment marketing initiatives,
special events sponsorship procurement and merchandising of entertainment and
sporting events, is uniquely positioned to create incomparable opportunities for
artists. Management believes that the Company's familiarity with all facets of
the entertainment industry enables it to help artists create and capitalize on
opportunities. With its expertise in concert production and corporate
entertainment events and its relationships with venue managers, outside concert
promoters, broadcasting executives and other industry professionals, management
believes that the Company is uniquely positioned to offer services which can
significantly enhance the careers of its clients. The Company develops long term
career strategies and represents music industry artists in the negotiation of
recording, touring, merchandising and performance contracts. Using these
integrated resources, the Artist Management team is unified around the strategy
of creating long-term, sustained success for our management clients.

     The Company has made two strategic acquisitions over the past two years in
assembling the Artist Management Division. The following is a brief description
of these acquisitions:

     In April 1997, the Company acquired its first Artist Management company
with the acquisition of AEG. AEG manages well-known artists such as Neal McCoy,
Gary Chapman, Jay Johnson and new duo Kincaid.

     In June 1998, the Company acquired all of the equity interest in Titley
Spalding & Associates LLC, which currently manages Brooks & Dunn, Kathy Mattea
and Chely Wright.

     The Company believes that the artist management industry is
highly-fragmented and its competitors consist primarily of small independent
artist managers with a limited roster of artist management clients, although
there are several participants in the industry that have capabilities and
resources comparable to and in certain respects greater than those of the
Company. The Company currently has artist management clients that are primarily
in the country music genre. Because of the highly-fragmented nature of the
artist management industry, the Company believes that there are a number of
acquisition opportunities available to the Company, a number of which have been
identified by the Company, both within the country music genre as well as in
other music genres including pop and rock. However, there can be no assurances
that the Company will be successful in acquiring any more companies in the
artist management industry.



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<PAGE>   5

EVENT MERCHANDISING

    The Event Merchandising division develops and executes merchandising
programs for entertainment and sporting events, institutional organizations and
celebrity clients. This division creates, designs, and executes merchandising
programs as well as promotional and for-sale items. As a leader and innovator in
the industry, TBA has custom-crafted and executed exclusive merchandising
programs for a broad range of events. These events include the Olympic games,
the world's premier sporting event, the Association of Volleyball Professionals,
the world's premier men's beach volleyball tour, U.S. Women's Figure Skating
Championship, and the Lipton Tennis Tournament, a world-class tennis
championship.

    In addition, through the Event Merchandising division, TBA can deliver the
added benefit of a merchandising program to any artist management client,
integrated entertainment marketing initiative, special event, corporate
communications program or business imaging campaign. This integrated strategy
serves TBA's clients by building positive public awareness while generating
additional profitability for the Company.

    The Company has made three strategic acquisitions over the past three years
in assembling its Event Merchandising division. The following is a brief
description of these acquisitions:

    In July 1997, the Company acquired 51% of Eric Chandler Merchandising, Inc.
("ECM"). ECM, a Los Angeles-based company, specializes in executing
merchandising for large-scale entertainment and sporting events, such as the
1996 Summer Olympic Games in Atlanta, Georgia. The remaining 49% of ECM was
acquired by TBA in May 1998.

    In August 1998, the Company acquired all of the outstanding stock of
Corporate Incentives, Inc. ("CII"), in connection with its acquisition of CPI.
CII implements corporate merchandising programs.

    In March 1999, the Company acquired all of the outstanding stock of Karin
Glass & Associates, Inc. and affiliated companies ("KGA"). KGA, an
Indianapolis-based company, is a full-service merchandising company specializing
in merchandise design, production and fullfillment.


DISCONTINUED OPERATIONS

    In 1998, the Company continued to focus its growth in certain segments of
the entertainment sector and, in accordance with this strategy, divested itself
of businesses that were not a part of the future growth plans of the Company.
Such divestitures are described below:

    Concert Promotion and Amphitheater Operations. On May 13, 1998, the Company
    sold its 51% interest in Avalon West Coast ("AWC"), a group of affiliated
    entities engaged primarily in concert promotion and amphitheater operations
    on the West coast, to New York-based SFX Entertainment, Inc. The Company
    received proceeds from the sale of its interest in AWC in the amount of
    approximately $10 million, without giving effect to applicable transaction
    costs.

    The Village at Breckenridge Resort. On August 12, 1998, the Company sold all
    of its interest in The Village at Breckenridge Acquisition Corp., Inc. and
    Property Management Acquisition Corp., Inc., the wholly-owned subsidiaries
    of the Company that own the Village at Breckenridge Resort located in
    Breckenridge, Colorado, and the associated property management business
    operating in Breckenridge (the "Breckenridge Resort"), to Vail Summit
    Resorts, Inc., an affiliate of Vail Resorts, Inc ("Vail"), for an aggregate
    purchase price of approximately $34 million in cash. After repayment of debt
    associated with the Breckenridge Resort, the Company realized approximately
    $11 million, without giving effect to applicable transaction costs. An
    additional $3 million of the $34 million sales proceeds were placed into an
    escrow account. TBA will receive the $3 million from the escrow account in
    1999 upon the closing of the sale of a portion of the assets comprising the
    Breckenridge Resort to an unaffiliated third party.

    Nashville Country Club. The Nashville Country Club restaurant opened in
    November 1994 and was closed in November 1997. The sale of the restaurant
    property was completed in December 1998. The Company realized approximately
    $1.4 million in net proceeds from the sale.

    The Company utilized a portion of the proceeds from the sale of these assets
    to fund its growth strategy in 1998. The remaining proceeds will be utilized
    for operations and to fund the continued expansion of the Company's core
    entertainment operations pursuant to its business strategy.

COMPETITION

    In addition to the competitive factors outlined above for each of the
Company's four business divisions, the success of the Company's entertainment
operations are dependent upon numerous factors beyond the Company's control,
including economic conditions, amounts of available leisure time, transportation
costs, lifestyle trends and weather conditions.



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<PAGE>   6

SEASONALITY

    The Company experiences quarterly fluctuations in revenue, operating income
and net income as a result of many factors, including the timing of clients'
meetings and events, timing of artists' tours and recording releases, weather
related issues, delays in or cancellation of clients' entertainment marketing
programs, as well as changes in the Company's mix among the various services
offered.

TRADEMARKS

    The Company has filed Intent-To-Use Trademark Applications for the TBA
Entertainment Corporation mark for the various classes of goods and services in
which the Company's mark will be utilized. In addition, the Company has filed or
intends to file Intent-To-Use Trademark Applications for other proprietary
programs developed by the Company. There can be no assurance, however, that
these trademarks will proceed to registration, and if so registered, that the
trademarks, in any one or more classes, will not violate the proprietary rights
of others, that any registration of the trademarks or the Company's use thereof
will be upheld if challenged, or that the Company will not be prevented from
using the trademarks.

REGULATION AND LICENSES

    The Company is subject to federal, state and local laws affecting its
business, including various health, sanitation and safety standards. The
Company's entertainment operations are subject to state and local government
regulation, including regulations relating to live music performances. Each live
concert performance must comply with regulations adopted by federal agencies and
with licensing and other regulations enforced by state and local health,
sanitation, safety, fire and other departments. Difficulties or failures in
obtaining the required licenses or approvals can delay and sometimes prevent the
promotion of live concerts. The failure to receive or retain, or delay in
obtaining, a license to serve alcohol and beer in a particular location could
adversely affect the Company's operations in that location and impair the
Company's ability to obtain licenses elsewhere. The failure or inability of the
Company to maintain insurance coverage could materially and adversely affect the
Company.

EMPLOYEES

    As of December 31, 1998, the Company had approximately 120 full-time and
part-time employees. It is the Company's intention to manage its growth
consistent with its ability to attract and retain qualified employees to manage
its operations. Over the course of any given event or program, the Company
evaluates the production personnel requirements and determines the extent to
which it must supplement its available employee base with the use of freelance
contractors or part-time employees. The Company believes that its relationship
with its employees and freelance contractors is good.

     The Company has no full-time employees whose employment is covered by
collective bargaining or similar agreements with unions; however, the Company
does from time to time independently contract with or hire part-time union
personnel, especially during the production of a particular entertainment
marketing program and, accordingly, the Company is a party to certain agreements
with unions governing the hiring and terms of employment of such personnel.


ITEM 2.   DESCRIPTION OF PROPERTY.

    The Company has offices located in Hickory Valley, Tennessee in a building
owned by a limited partnership, the general partner of which is a corporation
owned by Thomas J. Weaver III and Frank A. McKinnie Weaver, Sr., each an officer
and director of the Company, and of which they also are limited partners. The
limited partnership does not charge the Company rent for its Hickory Valley, 
Tennessee offices.

    The Company and/or its subsidiaries maintain leased office space in
Nashville, Tennessee, San Diego, California, Los Angeles, California, New York,
New York, Salt Lake City, Utah, Chicago, Illinois and Phoenix, Arizona. These
leases expire at various dates through January 2005. The Company anticipates
that as it expands, it will require additional office space to support such
growth and believes that suitable space will be available as needed.

    The Company's wholly-owned subsidiary, TBA Entertainment Group Dallas, Inc.
owns the building in which its offices and production facilities are located, as
well as certain vacant land adjacent to such building. The building is located
at 1333 Maryland Drive in Irving, Texas. The building is encumbered with an
approximately $300,000 first lien mortgage indebtedness.



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<PAGE>   7

ITEM 3.   LEGAL PROCEEDINGS.

    On July 31, 1997, the Company acquired a 51% partnership interest in the
Irvine Meadows Amphitheater Partnership, a California general partnership which
owned and managed the Irvine Meadows Amphitheater in Irvine, California. The
Company acquired such 51% partnership interest from a corporate affiliate of
Robert Geddes, who was at the time a member of the Board of Directors of the
Company. In order to effectuate such sale, the Geddes affiliate acquired an
aggregate 49% partnership interest in the Irvine Meadows Amphitheater
Partnership from two of its existing partners. On October 23, 1998, the two
partners that sold their partnership interests to Mr. Geddes, along with their
controlling shareholders (collectively, the "Plaintiffs"), filed a complaint in
the Los Angeles Superior Court against the Company and Mr. Geddes. Certain other
defendants were also named in the complaint. In such complaint, the Plaintiffs
allege that, in connection with their sale, Mr. Geddes breached certain
contractual obligations, breached his fiduciary duty to them as partners, and
fraudulently induced them to sell their respective partnership interests. The
Plaintiffs further allege that the Company aided and abetted the alleged breach
of fiduciary duty and the fraud in the inducement. The Company denies all of the
allegations and is vigorously defending this action. Management does not believe
that the outcome of this litigation will have a material adverse effect on the
financial condition and operations of the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    There were no matters submitted to a vote of the Company's shareholders
during the fourth quarter of the fiscal year ended December 31, 1998.


                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    (a) The Common Stock is quoted on the Nasdaq National Market under the
symbol TBAE. On March 26, 1998, the last reported sale price of the Common Stock
was $4.00 per share. The following table sets forth the range of high and low
sales prices of the Common Stock during each quarterly period within the two
most recent years, as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
                                    HIGH              LOW
                                   -------          -------
<S>                                <C>              <C>
          1998 

            First Quarter          $4 1/16          $ 3 1/4

            Second Quarter          5                 3 5/8

            Third Quarter           5 9/32            3 5/8

            Fourth Quarter          4 7/8             3 7/16

          1997 

            First Quarter           6                 3 3/8

            Second Quarter          5 7/8             4 1/8

            Third Quarter           5 7/8             3 3/8

            Fourth Quarter          4 3/4             3 1/8
</TABLE>


    (b) The approximate number of holders of record of Common Stock on March 26,
1998 was 134.

    (c) The Company has not paid or declared cash distributions or dividends and
does not intend to pay cash dividends on the Common Stock in the foreseeable
future. The Company currently intends to retain all earnings to finance the
development and expansion of its operations. The declaration of cash dividends
in the future will be determined by the Board of Directors based upon the
Company's earnings, financial condition, capital requirements and other relevant
factors.



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ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The purpose of the following discussion and analysis is to explain the major
factors and variances between periods of the Company's results of operations.
The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the historical consolidated
financial statements and notes thereto included in Item 7.

Introduction

The Company is a diversified communications and entertainment services company
that produces a broad range of business communications, meeting production and
entertainment services for corporate meetings, develops and produces integrated
music marketing programs and special events, manages music artists and develops
and executes merchandising programs for large-scale entertainment and sporting
events.

Prior to April 21, 1997, the Company operated a restaurant in Nashville,
Tennessee and the Village at Breckenridge Resort ("Breckenridge Resort") in
Breckenridge, Colorado. In April 1997, the Company acquired its first corporate
communications and entertainment company, TBA Entertainment Group Nashville,
Inc., formerly Avalon Entertainment Group, Inc. ("AEG"), including a 50%
interest in the Warner/TBA (formerly Warner/Avalon) joint venture. In 1998, the
Company grew its operations through the acquisition of several additional
corporate communications and entertainment services businesses, including Titley
Spalding & Associates, LLC ("TSA"), TBA Entertainment Group Chicago, Inc.,
formerly Corporate Productions, Inc. ("CPI"), Corporate Incentives, Inc.
("CII"), TBA Entertainment Group Phoenix, Inc., formerly Image Entertainment
Productions, Inc. ("Image"), TBA Entertainment Group Dallas, Inc., formerly
Magnum Communications, Inc. ("Magnum"), and TKS Marketing, Inc. ("TKS"),
(collectively, the "1998 Acquisitions").

General

The Company currently derives a majority of its revenues (86% and 98% for the
years ended December 31, 1998 and 1997, respectively) from the production of
business communications and entertainment events for corporate clients. The
Company works with its clients to develop creative programming to deliver
messages to the client's targeted audiences. The Company receives a fee for
providing these services, which may include developing creative content,
designing audio/visual presentations and arranging for live entertainment and
related production services, including lights and sound. Revenue is recognized
when the services are completed for each event. Costs of producing the events
are also deferred until the event occurs.

The remainder of the Company's revenues are generated from artist management (6%
and 2% of total revenues for the years ended December 31, 1998 and 1997,
respectively), event merchandising (5% and 0% of total revenues for the years
ended December 31, 1998 and 1997, respectively) and entertainment marketing (3%
and 0% of total revenues for the years ended December 31, 1998 and 1997,
respectively). Artist management revenue, which generally consists of
commissions received from artists' earnings, is recognized in the period in
which the artist earns the revenue. There are generally only minimal direct
costs associated with generating artists management revenue. Event merchandising
revenue is recognized when the merchandise is shipped or sold to the customer.
Cost of sales includes the direct cost of acquiring or producing the
merchandise. Entertainment marketing revenues and cost of revenues are
recognized when the services are completed for each program or, for those
programs with multiple events, apportioned to each event and recognized as each
event occurs.




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The Company also develops and produces entertainment marketing programs and
special events through a 50% interest in Warner/TBA, a joint venture with an
affiliate of Time Warner. The Company accounts for these activities using the
equity method of accounting.

Results of Operations ended December 31, 1998 and 1997

The 1997 period includes the results of operations for AEG from the April 21,
1997 acquisition date, to December 31, 1997, whereas the 1998 period includes
the results of operations for AEG from January 1, 1998 to December 31, 1998.
Results of operations of each of the 1998 Acquisitions are included from the
corresponding acquisition dates in 1998.

Revenues increased $20,835,600, or 324%, to $27,272,700 for 1998 from $6,437,100
for 1997. $17,198,700 of the increase resulted from the production of 298
additional corporate entertainment and meeting production events, to 406 events
in 1998 compared to 108 events produced in 1997. The increase in the number of
shows is primarily attributable to an increase in the Company's sales force, the
addition of corporate meeting event services in 1998 and the acquisitions of
CPI, Image and Magnum, in the third and fourth quarters of 1998. In 1997, the
Company produced primarily corporate entertainment events through the operations
of AEG. The average revenue per event remained relatively constant at
approximately $58,000 between years. The Company is aggressively pursuing larger
corporate entertainment and meeting events with Fortune 1000 companies. In 1998,
the Company produced 20 events with revenues in excess of $250,000, versus two
such events in 1997. However, the impact of the substantial increase in the
number of larger events was offset by the acquisition of Image in September
1998. Historically, Image has produced a large number of relatively low revenue
events. From the September acquisition date, shows produced by Image had average
revenue of $9,600 per event. The Company anticipates that Image will produce
fewer low revenue events in the future as the Company seeks to expand Image's
corporate communications and entertainment services.

Revenue from the artist management division increased $1,565,900 for the 1998
period from the 1997 period. The Company contracted with one well-known new
artist in 1997, which began producing significant revenue in 1998. Additionally,
in June 1998, the Company acquired TSA, an artist management company with three
artists currently under management. Revenue from the event merchandising
division increased $1,233,500 for the 1998 period from the 1997 period, due to
the addition of merchandising activities through the acquisition of Eric
Chandler Merchandising, Inc. and CII. The Company is aggressively pursuing
additional merchandising opportunities. The remaining revenue increase of
$837,500 results from revenue recognized from a comprehensive pay per view
entertainment marketing program that was executed by the Company in the fourth
quarter of 1998. In the 1997 period, all entertainment marketing programs were
executed through the Warner/TBA joint venture, which is accounted for using the
equity method of accounting.

Cost of revenues increased $13,763,100, or 292%, to $18,468,700 for 1998 from
$4,705,600 for 1997. The increase resulted primarily from the production of
additional corporate entertainment and meeting planning events and the addition
of merchandising activities discussed above. Cost of revenues as a percentage of
revenues decreased to 68% for 1998 from 73% for 1997. A portion of the decrease
(3%) was due to improved profit margins related to corporate entertainment and
meeting planning events for 1998 as compared to 1997. The remaining decrease
results from increased revenues for artist management which typically have
minimal direct costs as a percentage of revenue. The decrease in cost of
revenues is offset by the increase in revenues in the event merchandising
division, which had a cost of revenues of 81% of event merchandising revenues
for 1998.

General and administrative expenses increased $5,080,400, or 269%, to $6,969,000
for 1998 from



                                       9
<PAGE>   10

$1,888,600 for 1997. The increase results primarily from increased personnel
and related operating expenses associated with the increased number of corporate
entertainment and meeting planning events, as well as general and administrative
expenses associated with the 1998 Acquisitions. The increase is further
explained by increased personnel and related expenses incurred to develop an
administrative and accounting infrastructure to manage the Company's growth
during the past year.

Depreciation and amortization expense increased $530,500, or 356%, to $679,400
for 1998 from $148,900 for 1997. The increase results primarily from the
amortization of goodwill associated with the 1998 Acquisitions.

Equity income from AEG's 50% joint venture interest in Warner/TBA increased
$264,800, or 336%, to $343,700 for 1998 from $78,900 for 1997. Revenues for
Warner/Avalon decreased $1,979,200, or 18%, to $8,852,500 for 1998 from
$10,831,700 for 1997. Operating costs of Warner/TBA decreased $2,445,900, or
23%, to $8,165,000 for 1998 from $10,610,900 for 1997. The overall decrease in
revenues and operating expenses results primarily from a reduction in the size
of entertainment marketing programs produced in 1998 as compared to 1997.
Operating costs as a percentage of revenues decreased to 92% of revenues in 1998
as compared to 98% in 1997. The decrease results primarily from the elimination
of a music tour program that occurred in 1998 in which the Company incurred
operating losses of $666,000.

For 1998, net interest income was $144,500 versus net interest expense of
$153,000 for 1997. The change is attributable primarily to interest earned on
increased cash balances resulting from proceeds from the sale of certain
businesses, offset by increased outstanding debt associated with the 1998
Acquisitions.

Discontinued operations

Prior to 1998, the Company acquired and operated certain businesses that were
sold in 1998. These businesses included the Nashville Country Club restaurant
(opened in November 1994 and sold in December 1998), the Breckenridge Resort
(acquired in April 1996 and sold in August 1998) and a 51% controlling interest
in another group of entertainment companies (collectively referred to as "AWC")
involved in concert promotion and amphitheater operations (acquired in July 1997
and sold in May 1998).

The sale of these businesses has resulted in the reclassification of the
operating results of these businesses to discontinued operations for all periods
presented, in accordance with generally accepted accounting principles.
Operating results of these businesses and other information for discontinued
operations appear in the notes to consolidated financial statements captioned
"Dispositions" (Note 5).

The Company recognized a net gain on the disposition of AWC and the Nashville
Country Club restaurant in 1998 of $1,196,500. No gain has been recognized on
the sale of the Breckenridge Resort in 1998, as a portion of the proceeds from
the sale of the Breckenridge Resort are held in escrow pending the consummation
of certain other transactions. Upon receipt of the funds held in escrow, which
is expected to occur in 1999, the Company expects to recognize a one-time gain
from the sale of the Breckenridge Resort.

The provision for income taxes, as a percentage of income taxes from continuing
operations before income taxes, was 11% for 1998, which reflects statutory tax
rates adjusted for utilization of net operating loss carryforwards and book/tax
differences. There was no provision for income taxes for 1997 as the Company had
net operating loss carryforwards available to offset taxable income.

Net income (loss) from continuing operations increased $1,870,200, to net income
of $1,490,100 for 1998 from a net loss of $380,100 for 1997 due to the reasons
described above.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1998, the Company had cash and cash equivalents of
$15,583,800 and working capital of $14,933,900 including $759,600 of current
portion of long-term debt. Cash provided by



                                       10
<PAGE>   11
continuing operations was $1,476,900 for the year ended December 31, 1998
compared to cash used in continuing operations of $620,400 for the year ended
December 31, 1997. For 1998, net income from continuing operations plus
depreciation and amortization and less undistributed joint venture earnings and
deferred taxes provided $1,278,500 of operating cash flow, versus using $310,100
of operating cash flow in 1997. For 1998, the net change in working capital
provided $198,400 of operating cash flow, with increases in trade accounts
receivables and decreases in deferred revenue offset by increases in accounts
payable and other accrued liabilities and decreases in deferred charges and
other current assets. For 1997, the net change in working capital used $310,300
of operating cash flow, with increases in trade accounts receivable and
decreases in deferred revenue offset by decreases in deferred charges and other
current assets.

Cash provided by investing activities for the year ended December 31, 1998 was
$15,283,100 resulting primarily from the proceeds received from the sale of AWC,
the Breckenridge Resort and the Nashville Country Club restaurant, offset by
cash used for the 1998 Acquisitions and expenditures for property and equipment.
Cash provided by investing activities for the year ended December 31, 1997 was
$76,400 and resulted primarily from cash acquired in the acquisition of AEG.

Cash used in financing activities for the year ended December 31, 1998 was
$2,154,800, resulting from the repayment of borrowings and the purchase of
treasury shares pursuant to the Company's stock repurchase program, which was
approved in August 1998. Cash provided by financing activities for the year
ended December 31, 1997 was $8,874,800, resulting from an offering of 2,600,000
shares of common stock of the Company for $9,100,000, less offering costs of
$971,000. The proceeds of this offering were used to acquire AWC and for working
capital purposes.

The Company has pursued an aggressive growth strategy since its formation in
1993. From the Company's inception through December 31, 1997, the Company
acquired and operated certain businesses that were sold in 1998. These
businesses included the Nashville Country Club restaurant (opened in November
1994 and sold in December 1998), the Breckenridge Resort (acquired in April 1996
and sold in August 1998) and AWC (acquired in July 1997 and sold in May 1998).
The Company relied on external sources of funds, including public offerings of
its common stock and bank borrowings to finance the acquisition of these
businesses and to fund the general operations of the Company. In 1998, the
Company realized net proceeds of $19,393,800 from the sale of these businesses,
after repayment of borrowings associated with these businesses and applicable
transaction costs. In 1999, the Company expects to receive an additional
$3,000,000 of net proceeds from the sale of the Breckenridge Resort that are
currently held in escrow pending the consummation of certain transactions
involving the Breckenridge Resort.

In April 1997, the Company acquired its first corporate communications and
entertainment services business (AEG) for aggregate consideration of $3,211,000,
including transaction related costs. The primary sources of funds for the AEG
acquisition were operating cash flows and the issuance of $2,480,000 of notes
payable to the sellers of AEG ("AEG Notes"). In November 1997, the Company
borrowed $2,600,000 from a bank, the proceeds of which were used to repay
$1,980,000 of the AEG Notes in 1997. In 1998, the Company repaid the remaining
$500,000 of AEG Notes and $520,000 of the notes payable to the bank.

In 1998, the Company acquired five additional entertainment related businesses
for total consideration paid at closing of $12,406,700, including applicable
transaction costs. The total purchase price paid at closing included cash
payments of $5,427,000, including transaction costs, 956,000 shares of common
stock of the Company valued at $4,071,700 and the issuance of $2,908,000 of
aggregate value of notes payable ("Acquisition Notes"). The Company utilized a
portion of the net proceeds from the sale of certain businesses described above
to fund the cash portion of the purchase price for the 1998 Acquisitions.



                                       11
<PAGE>   12
The Acquisition Notes are payable in various installments of principal plus
accrued interest at 8% through August 2004. Acquisition Notes totaling $458,000
are subject to reduction based on the earnings of Image for the years 1999 and
2000. During 1998 and continuing through a portion of 2003 (the "Earn-out
Period"), the sellers of TSA and TKS will be paid additional sales price
consideration based on the earnings of TSA and TKS during each of the years in
the Earn-out Period, up to a maximum of $6,380,000 additional purchase price.
The additional purchase price for 1998 related to TSA, totaling $546,500 will be
paid entirely in cash. Subsequent to 1998, the additional purchase price for TSA
and TKS will be paid 60% in cash and 40% in notes payable which are payable in
semi-annual installments with 8% interest over a five-year period.

The Company expects to continue its aggressive growth strategy in certain
sectors of the entertainment industry. In March 1999, the Company acquired Karin
Glass & Associates, Inc. and affiliated companies (collectively, "KGA") for a
maximum purchase price of $3,200,000. The purchase price paid at closing
included a cash payment of $2,300,000 and the issuance of 221,500 shares of
common stock of the Company valued at $900,000. The purchase price is subject to
reduction based on the earnings of KGA during each of the years 1999 and 2000.
The Company anticipates that future business acquisitions made by the Company
will also be completed through a combination of cash, notes payable issued to
the sellers and the issuance of common stock of the Company to the sellers.

In 1998, the Company's board of directors authorized the repurchase of up to
1,000,000 shares of the Company's common stock until August 1999. As of December
31, 1998, the Company had repurchased 196,700 shares of common stock for total
consideration of $724,500. In 1999, the Company repurchased an additional
398,600 shares of common stock for total consideration of $1,850,700. The
Company utilized proceeds from the sale of businesses and cash flow from
operations to fund the repurchases of common stock.

Management believes that cash flow from operations and remaining proceeds from
the sale of AWC, the Breckenridge Resort and the Nashville Country Club
restaurant, will be adequate to fund the operations and the expansion plans of
the Company in 1999. In addition, to provide any additional funds necessary for
the continued pursuit of the Company's growth strategies, the Company may issue
additional equity and debt securities and may incur, from time to time,
additional short- and long-term bank indebtedness. The availability and
attractiveness of any outside sources of financing will depend on a number of
factors, some of which relate to the financial condition and performance of the
Company, and some of which will be beyond the Company's control, such as
prevailing interest rates and general economic conditions. There can be no
assurance that such additional financing will be available or, if available,
will be on terms acceptable to the Company. To the extent that the Company is
able to finance its growth through internal and external sources of capital, the
Company intends to continue to grow its operations through additional
acquisitions. There can be no assurance that the Company will be able to acquire
any additional businesses, that any businesses that are acquired will be or will
become profitable or the Company will be able to effectively integrate any such
businesses into its existing operations.

Other Consolidated Items

As of the end of 1998, the Company had fully utilized substantially all net
operating loss carryforwards for income tax purposes. Pursuant to Statement of
Financial Accounting Standards No. 109, the Company has recognized a current
deferred tax asset for the effect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and amounts
used for income tax purposes.





                                       12
<PAGE>   13

Year 2000

Many currently installed computer systems, hardware and software products
("Computer Applications") are coded to accept only two digit entries rather than
four digits to define the applicable year. Consequently, these Computer
Applications may not be able to properly recognize dates beginning with the year
2000 which could result in miscalculations or system failures. As a result, many
companies' Computer Applications may need to be upgraded or replaced in order to
comply with "Year 2000" requirements.

The Company's Computer Applications consist of both internal systems and systems
provided by third parties. The Company believes that its Computer Applications
are Year 2000 compliant because the Company purchased such Computer Applications
during 1998 from suppliers that represented them to be Year 2000 compliant.

A comprehensive program is in place to remediate potential Year 2000 issues in 
purchased software and hardware, as well as non-information technology (IT) 
systems. The program is divided into four phases:

     1. complete inventory of IT and non-IT systems that may be sensitive to 
        the Year 2000 issue 

     2. assessment of systems to determine Year 2000 compliance

     3. remediate non-compliant systems by repair or replacement

     4. testing of remediated systems

The inventory and assessment phases were completed by the end of 1998. The 
Company anticipates completing the remediation and testing phases by the end of 
the third quarter of 1999. While the Company's Year 2000 conversion is expected 
to be completed prior to any potential disruption to the Company's business, 
the Company acknowledges the uncertainties involved in preparing its system for 
the Year 2000. As such, the Company is developing a comprehensive Year 2000 
specific contingency plan.

However, there can be no assurance that the Company will identify all
susceptible systems or that systems provided by third parties will be Year 2000
compliant or that any resulting Year 2000 issues would not have an adverse
effect on the operations of the Company.

The Company has not incurred any significant costs to date that are specifically
attributable to resolving the Year 2000 issue and does not estimate the future
costs related to the resolution of this matter to be material.

Forward Looking Statements

The foregoing discussion may contain certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such statements are intended to be covered by
the safe harbors created by such provisions. These statements include the plans
and objectives of management for future growth of the Company, including plans
and objectives related to the acquisition of certain businesses and the
consummation of future private and public issuances of the Company's equity and
debt securities. The forward-looking statements included herein are based on
current expectations that involve numerous risks and uncertainties. Assumptions
relating to the foregoing involve judgements with respect to, among other
things, future economic, competitive and market conditions and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond the control of the Company. Although the Company
believes that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could be inaccurate and, therefore, there can
be no assurance that the forward-looking statements included in this Form 10-KSB
will prove to be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives of the Company will be achieved.




                                       13
<PAGE>   14
ITEM 7.  FINANCIAL STATEMENTS.

    The following financial statements required by this item are filed herewith:


<TABLE>
<CAPTION>
                                                                           PAGE
<S>                                                                        <C> 
      Report of Independent Public Accountants                             15

      Consolidated Balance Sheet as of December 31, 1998                   16

      Consolidated Statements of Operations for the years
        ended December 31, 1998 and 1997                                   17

      Consolidated Statements of Stockholders' Equity for the years
        ended December 31, 1998 and 1997                                   18

      Consolidated Statements of Cash Flows for the years
        ended December 31, 1998 and 1997                                   19

      Notes to Consolidated Financial Statements                           20
</TABLE>




                                       14

<PAGE>   15

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To TBA Entertainment Corporation:

We have audited the accompanying consolidated balance sheet of TBA Entertainment
Corporation (a Delaware corporation)(formerly Nashville Country Club, Inc.) and
subsidiaries as of December 31, 1998, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 1998 and 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of TBA Entertainment
Corporation and subsidiaries as of December 31, 1998, and the consolidated
results of their operations and their cash flows for the years ended December
31, 1998 and 1997, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Los Angeles, California
March 25, 1999


                                       15

<PAGE>   16
                 TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                             AS OF DECEMBER 31, 1998

<TABLE>
<S>                                                                                <C>
Current assets:
  Cash and cash equivalents                                                        $ 15,583,800
  Accounts receivable, net of allowance
    for doubtful accounts of $55,800                                                  2,355,100
  Deferred charges and other current assets                                           1,616,800
  Net short-term assets from sale of
    discontinued operations                                                           2,552,000
                                                                                   ------------
      Total current assets                                                           22,107,700

Property and equipment, net                                                           1,853,600

Other assets, net:
  Goodwill                                                                           16,008,600
  Investment in Joint Venture                                                           410,600
  Other                                                                                  64,700
                                                                                   ------------
      Total assets                                                                 $ 40,445,200
                                                                                   ============
Current liabilities:
   Accounts payable and accrued liabilities                                        $  4,299,400
   Deferred revenue                                                                   2,114,800
   Current portion of long term-debt                                                    759,600
                                                                                   ------------
      Total current liabilities                                                       7,173,800

Long-term debt, net of current portion                                                4,755,700
                                                                                   ------------
      Total liabilities                                                              11,929,500
                                                                                   ------------
Stockholders' equity:
  Preferred stock, $.001 par value; authorized 1,000,000 shares,          
    68,800 of Series A convertible preferred stock issued                             
    and outstanding, liquidation preference $2,100                                        2,100    
  Common stock, $.001 par value; authorized 20,000,000
     shares, 8,831,500 shares issued and outstanding                                      8,800
  Additional paid in capital                                                         30,723,100
  Accumulated deficit                                                                (1,493,800)
  Less treasury stock, at cost, 196,700 shares                                         (724,500)
                                                                                   ------------
       Total stockholders' equity                                                    28,515,700
                                                                                   ------------
       Total liabilities and stockholders' equity                                  $ 40,445,200
                                                                                   ============
</TABLE>


       The accompanying notes are an integral part of this balance sheet.


                                       16
<PAGE>   17
                 TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                        1998               1997 
                                                    ------------       ------------
<S>                                                 <C>                <C>         
Revenues                                            $ 27,272,700       $  6,437,100
Costs related to revenues                             18,468,700          4,705,600
                                                    ------------       ------------
        Gross profit margin                            8,804,000          1,731,500

General and administrative expenses                    6,969,000          1,888,600
Depreciation and amortization expense                    679,400            148,900
Equity in income of Joint Venture                       (343,700)           (78,900)
Minority interest                                        (36,000)                --
Interest (income) expense, net                          (144,500)           153,000
                                                    ------------       ------------
Income (loss) from continuing operations
  before income taxes                                  1,679,800           (380,100)
Provision for income taxes                              (189,700)                --
                                                    ------------       ------------
Income (loss) from continuing operations               1,490,100           (380,100)
                                                    ------------       ------------

Discontinued operations (Notes 2 and 5):
 (Loss) income from operations, including
 income tax benefit of ($189,900) and
 income tax expense of $351,800 for the
 years ended December 31, 1998 and 1997,
 respectively                                            (15,600)           782,400
Gain on disposition of discontinued
  operations                                           1,196,500                 --
                                                    ------------       ------------
Income from discontinued operations                    1,180,900            782,400
                                                    ------------       ------------
Net income                                          $  2,671,000       $    402,300
                                                    ============       ============

Earnings per common share - basic:
  Income (loss) from continuing operations          $        .19       $       (.07)
  Income from discontinued operations                        .15                .14
                                                    ------------       ------------
Net income                                          $        .34       $        .07
                                                    ------------       ------------

Earnings per common share - diluted:
  Income (loss) from continuing operations          $        .18       $       (.06)
  Income from discontinued operations                        .14                .12
                                                    ------------       ------------
Net income                                          $        .32       $        .06
                                                    ============       ============
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       17

<PAGE>   18
                 TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


<TABLE>
<CAPTION>
                                         PREFERRED STOCK                   COMMON STOCK
                                     -----------------------       -----------------------------       ADDITIONAL
                                      SHARES         AMOUNT          SHARES            AMOUNT        PAID-IN CAPITAL
                                     --------       --------       ----------       ------------     ---------------
<S>                                  <C>            <C>            <C>              <C>              <C>
BALANCES, December 31, 1996           334,300       $ 10,000        4,590,400       $ 16,770,400       $         --

  Issuance of shares of common
    stock and warrants,
    net of offering costs                  --             --        2,600,000          8,129,000                 --
  Conversion to $.001 par
    value stock upon
    reincorporation                        --             --               --        (24,892,200)        24,892,200
  Repurchase of common stock               --             --               --                 --                 --
  Net Income                               --             --               --                 --                 --
                                     --------       --------       ----------       ------------       ------------
BALANCES, December 31, 1997           334,300         10,000        7,190,400              7,200         24,892,200

  Issuance of common stock warrants        --             --               --                 --            112,800
  Issuance of common stock upon
    acquisitions                           --             --        1,423,300              1,400          5,948,900
  Repurchase of common stock               --             --               --                 --                 --
  Common stock cancelled                   --             --          (47,700)              (100)          (238,400)
  Conversion of preferred
    stock into common stock          (265,500)        (7,900)         265,500                300              7,600
  Net income                               --             --               --                 --                 --
                                     --------       --------       ----------       ------------       ------------
BALANCES, December 31, 1998            68,800       $  2,100        8,831,500       $      8,800       $ 30,723,100
                                     ========       ========       ==========       ============       ============
</TABLE>


<TABLE>
<CAPTION>
                                                                  TREASURY STOCK                TOTAL
                                          ACCUMULATED       --------------------------       STOCKHOLDERS'
                                            DEFICIT           SHARES           AMOUNT           EQUITY
                                          -----------       ----------       ---------       ------------
<S>                                       <C>               <C>              <C>             <C>
BALANCES, December 31, 1996               $(4,567,100)              --              --       $ 12,213,300

  Issuance of shares of common
    stock and warrants,
    net of offering costs                          --               --              --          8,129,000
  Conversion to $.001 par
    value stock upon
    reincorporation                                --               --              --
  Repurchase of common stock                       --            4,800         (24,200)           (24,200)
  Net Income                                  402,300               --              --            402,300
                                          -----------       ----------       ---------       ------------
BALANCES, December 31, 1997                (4,164,800)           4,800         (24,200)        20,720,400

  Issuance of common stock warrants                --               --              --            112,800
  Issuance of common stock upon
    acquisitions                                   --               --              --          5,950,300
  Repurchase of common stock                       --          239,600        (938,800)          (938,800)
  Common stock cancelled                           --          (47,700)        238,500                 --
  Conversion of preferred           
    stock into common stock                        --               --              --                 --
  Net income                                2,671,000                                           2,671,000
                                          -----------       ----------       ---------       ------------
BALANCES, December 31, 1998               $(1,493,800)         196,700       $(724,500)      $ 28,515,700
                                          ===========       ==========       =========       ============
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       18

<PAGE>   19
                 TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                                1998               1997
                                                                            ------------       ------------
<S>                                                                         <C>                <C>
Cash flows from operating activities:
  Net income                                                                $  2,671,000       $    402,300
  Adjustments to reconcile net income to net cash
    provided by (used in) continuing operations:
        Depreciation and amortization                                            679,400            148,900
        Income from discontinued operations                                   (1,180,900)          (782,400)
        Undistributed earnings of Joint Venture                                 (343,700)           (78,900)
        Deferred tax provision                                                  (547,300)                --
        Changes in assets and liabilities:
            Increase in accounts receivable                                     (853,600)          (165,100)
            Decrease in deferred charges and other current assets                348,300            186,800
            Decrease (increase) in other assets                                    9,900            (33,800)
            Increase in accounts payable and accrued liabilities               1,376,900              3,000
            Decrease in deferred revenue                                        (683,100)          (301,200)
                                                                            ------------       ------------
        Net cash provided by (used in) continuing operations                   1,476,900           (620,400)
                                                                            ------------       ------------

Cash flows from investing activities:
  Acquisitions of businesses, net of cash acquired                            (3,242,900)           124,800
  Net proceeds from dispositions of businesses                                19,393,800                 --
  Expenditures for property and equipment                                       (599,800)           (48,400)
  Increase in other current assets                                              (268,000)                --
                                                                            ------------       ------------
        Net cash provided by investing activities                             15,283,100             76,400
                                                                            ------------       ------------
Cash flows from financing activities:
    Proceeds from sale of common stock, net of offering costs                         --          8,129,000
    Proceeds from borrowings                                                          --          2,750,000
    Repayments of borrowings                                                  (1,215,900)        (1,980,000)
    Repurchase of common stock                                                  (938,900)           (24,200)
                                                                            ------------       ------------
        Net cash  (used in) provided by financing activities                  (2,154,800)         8,874,800
                                                                            ------------       ------------

Net cash used in discontinued operations                                              --         (7,534,400)
                                                                            ------------       ------------

Net increase in cash and cash equivalents                                     14,605,200            796,400

Cash and cash equivalents - beginning of year                                    978,600            182,200
                                                                            ------------       ------------

Cash and cash equivalents - end of year                                     $ 15,583,800       $    978,600
                                                                            ============       ============
Cash paid during the year for interest                                      $    347,300       $     24,900
                                                                            ============       ============
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       19
<PAGE>   20
                 TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

1.       The Company

         TBA Entertainment Corporation and subsidiaries (the "Company")
         (formerly Nashville Country Club, Inc.) is a diversified communications
         and entertainment company that produces a broad range of business
         communications, meeting productions and entertainment services for
         corporate meetings, develops and produces integrated music marketing
         programs, manages music industry artists and develops and executes
         merchandising programs for entertainment and sporting events. The
         Company was incorporated in Tennessee in June 1993 and reincorporated
         in Delaware in September 1997.

2.       Basis of Financial Presentation

         Principles of Consolidation

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

         Discontinued Operations

         Prior to 1998, the Company acquired and operated certain businesses
         that were sold in 1998 (Note 5). These businesses included the
         Nashville Country Club Restaurant (opened in November 1994 and sold in
         December 1998), the Village at Breckenridge Resort ("Breckenridge
         Resort") (acquired in April 1996 and sold in August 1998) and a 51%
         controlling interest in a group of entities (collectively referred to
         as "AWC") (acquired in July 1997 and sold in May 1998). The sale of
         these businesses has resulted in the reclassification of the operating
         results of these businesses to discontinued operations for all periods
         presented, in accordance with generally accepted accounting principles.

         Unaudited Pro Forma Financial Information

         During 1997 and 1998 the Company made several acquisitions which are
         described in greater detail in Note 4 (the "Acquisitions"). Operating
         results of each of the Acquisitions is included in the accompanying
         consolidated statements of operations from their respective acquisition
         dates. The following unaudited pro forma financial information
         represents the consolidated results for the years ended December 31,
         1998 and 1997, as if the Acquisitions had occurred as of the beginning
         of such year. The pro forma


                                       20

<PAGE>   21

         results reflect certain adjustments, including amortization of the
         excess purchase price over fair value of net assets acquired, interest
         expense on the acquisition debt and adjustments to salaries and
         ownership distributions to former owners.

         No pro forma adjustments have been made for the results of
         operations of AWC before the July 31, 1997 acquisition date because the
         operations of AWC are reflected as discontinued operations. The pro
         forma results are not necessarily indicative of what actually would
         have occurred if the Acquisitions had been completed as of the
         beginning of each of the periods presented, nor are they necessarily
         indicative of future consolidated results.

<TABLE>
<CAPTION>
                                                        UNAUDITED PRO FORMA
                                                  FOR THE YEARS ENDED DECEMBER 31,
                                               --------------------------------------
                                                   1998                      1997
                                               ------------              ------------
<S>                                            <C>                       <C>         
         Total revenues ..................     $ 41,590,300              $ 33,678,200
         Income from continuing
           operations ....................     $  1,901,700              $  1,348,600
         Earnings per common share:
           Basic .........................             $.22                      $.19
           Diluted .......................             $.21                      $.18
</TABLE>

         The above calculations of pro forma basic and diluted earnings per
         common share assumes that the following number of weighted average
         shares were outstanding:

<TABLE>
<CAPTION>
                                           1998           1997
                                        ---------      ---------
                                              (Unaudited)
<S>                                     <C>            <C>      
         Basic ...................      8,633,900      7,088,600
         Diluted .................      8,861,900      7,422,900
</TABLE>

3.       Summary of Significant Accounting Policies

         Revenue Recognition

         The Company recognizes revenue when services are completed for an
         event. For those projects that provide for multiple events, the
         contract revenue and costs are apportioned and revenue and profit are
         recognized as each event occurs. Deferred income represents customer
         deposits and advance billings on future events. Deferred charges
         represent Company expenditures related to future events. For
         merchandise operations, revenue is recognized when the merchandise is
         shipped or sold to a customer.

         Costs Related to Revenue

         Costs related to revenue is comprised of all direct costs associated
         with the production of an event, including talent fees, contracted
         services, equipment rentals and costs associated with the production of
         audio-visual effects. Such costs are


                                       21
<PAGE>   22

         deferred until the event occurs. Cost of merchandise revenue is
         comprised of the direct costs of the merchandise sold.

         Cash and Cash Equivalents

         Cash and cash equivalents consist primarily of cash in banks and highly
         liquid investments purchased with an original maturity of three months
         or less. Cash and cash equivalents carry amounts approximate fair
         value. The Company holds its investments in highly qualified financial
         institutions. 

         Property and Equipment

         Property and equipment consists of the following as of December 31,
         1998:

<TABLE>
<S>                                                              <C>
         Land                                                    $   388,000
         Buildings and improvements                                  236,800
         Furniture, fixtures and equipment                         1,424,300
                                                                 -----------
                                                                   2,049,100
         Less - accumulated depreciation and amortization           (195,500)
                                                                 -----------
         Property and equipment, net                             $ 1,853,600
                                                                 ===========
</TABLE>

         Property and equipment are recorded at cost and are depreciated or
         amortized using the straight-line method, over the following estimated
         useful lives:

<TABLE>
<S>                                                             <C>
         Building and improvements ........................      3-25 years
         Furniture, fixtures and equipment ................       3-5 years
</TABLE>

         The Company follows the policy of capitalizing expenditures that
         materially increase asset lives and charges ordinary maintenance and
         repairs to operations as incurred.

         Accounts Payable and Accrued Liabilities

         Accounts payable and accrued liabilities consists of the following at
         December 31, 1998:

<TABLE>
<S>                                                                  <C>
         Accounts payable .......................................    $1,131,200
         Accrued payroll and related taxes ......................     1,128,000
         Due to sellers of acquired businesses ..................       546,500
         Income taxes payable ...................................       590,500
         Other accrued expenses .................................       903,200
                                                                     ----------
                                                                     $4,299,400
                                                                     ==========
</TABLE>

         Income Taxes

         The Company accounts for income taxes under the liability method
         required by Statement of Financial Accounting Standards No. 109
         "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires


                                       22

<PAGE>   23
         recognition of deferred income tax assets and liabilities based on
         enacted tax laws for any temporary differences between financial
         reporting and tax bases of assets, liabilities and carryforwards. SFAS
         109 also requires that deferred tax assets be reduced by a valuation
         allowance if it is more likely than not that some or all of the
         deferred tax asset will be realized.

         Earnings (Loss) per Common Share

         The Company computes net income (loss) per common share pursuant to the
         provisions of Statement of Financial Accounting Standards No. 128,
         "Earnings per Share".

         The following table sets forth the computation of basic and diluted
         earnings per common share:

<TABLE>
<CAPTION>
                                                              1998             1997
                                                           ----------      -----------
<S>                                                        <C>             <C>
         Basic Earnings Per Common Share:

         Net income (loss) from continuing operations      $1,490,100      $  (380,100)
         Weighted average common stock outstanding          7,851,600        5,680,300
                                                           ----------      -----------
         Basic earnings per common share                   $      .19      $      (.07)
                                                           ==========      ===========
         Diluted Earnings Per Common Share:

         Net income (loss) from continuing operations      $1,490,100      $  (380,100)
                                                           ----------      -----------
         Weighted average common stock outstanding          7,851,600        5,680,300

         Additional common stock resulting from
           dilutive securities:
           Preferred Stock                                    224,200          334,300
           Weighted average common stock issued in
             AEG transaction                                  163,500          310,000
           Stock options                                        4,200               --
                                                           ----------      -----------
         Weighted average common stock and dilutive
           securities outstanding                           8,243,500        6,324,600
                                                           ----------      -----------
         Diluted earnings per common share                 $      .18      $      (.06)
                                                           ==========      ===========
</TABLE>

         Options and warrants to purchase 2,519,000 and 2,264,000 shares of
         common stock in 1998 and 1997, respectively, were not considered in
         calculating diluted earnings per share as their inclusion would have
         been anti-dilutive.

         Use of Estimates in Preparation of Financial Statements

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


                                       23

<PAGE>   24
         Adoption of new Accounting Pronouncements

         Comprehensive Income -- In June 1997, the Financial Accounting
         Standards Board issued Statement of Financial Accounting Standards No.
         130 "Reporting Comprehensive Income". This Statement, which is
         effective for all reporting periods beginning in 1998, requires the
         prominent disclosure of all components of Comprehensive Income, as
         defined. The Company currently does not have any operations that would
         give rise to any elements of comprehensive income.

         Employers' Disclosures About Pensions -- In February 1998, the
         Financial Accounting Standards Board issued Statement of Financial
         Accounting Standard No. 132, "Employers' Disclosures about Pensions and
         Other Postretirement Benefits". This statement, which is effective for
         financial periods ending after December 15, 1998, requires full
         disclosure of all pension plans and other postretirement benefit plans.
         The Company does not currently have any pensions or other
         postretirement benefit plans.

         Reclassifications

         Certain reclassifications have been made to the 1997 consolidated
         financial statements to conform with classifications used in 1998.

4.       Acquisitions

         During 1997 and 1998, the Company made several acquisitions of
         businesses. The following is a description of each of the businesses
         acquired.


                                       24

<PAGE>   25
         1997 Acquisition

         Avalon Entertainment Group, Inc.

         Effective April 21, 1997, the Company acquired 100% of the common stock
         of TBA Entertainment Group Nashville, Inc., formerly Avalon
         Entertainment Group, Inc.("AEG"). The purchase price included a cash
         payment of $400,000 and the issuance of $2,480,000 of promissory notes
         ("AEG Notes") as of April 21, 1997, and a future contingent payment, to
         be paid in shares of common stock of the Company, based on the 1997
         earnings of AEG. The aggregate purchase price for AEG was not to exceed
         $7,200,000. In contemplation of the payment of the future contingent
         amount, the Company placed 809,800 shares of the Company's common stock
         into escrow on April 21, 1997. In May 1998, the Company and the sellers
         agreed upon the amount of the future contingent payment on a basis
         different than that set forth in the original purchase agreement. On
         May 13, 1998, 445,400 shares were released from escrow to the sellers
         with the balance of the common stock returned to the Company. The
         release of the 445,400 shares to the sellers resulted in the
         recognition of additional purchase price for the acquisition of AEG of
         $1,781,600.

         1998 Acquisitions

         Titley Spalding & Associates, LLC

         On June 18, 1998 the Company acquired 100% of the membership interest
         of Titley Spalding & Associates, LLC ("TSA") for cash, stock and future
         contingent consideration. The maximum purchase price is approximately
         $7,500,000. At closing the Company paid $1,000,000 cash and issued
         175,000 shares of the Company's stock valued at $754,700.

         During the remainder of 1998 and continuing through a portion of 2003
         (the "Earnout Period"), the sellers of TSA will be paid additional
         sales price consideration based on the earnings of TSA during each of
         the years in the Earnout Period, up to a maximum of $5,755,000
         additional purchase price. The additional purchase price for 1998
         totaling $546,500 will be paid entirely in cash. Subsequent to 1998,
         the additional purchase price will be paid 60% in cash and 40% in notes
         payable which are payable in semi-annual installments with 8% interest
         over a 5-year period. Additional consideration paid during the Earnout
         Period will be recorded as goodwill and amortized over the remaining
         period of the original 10-year amortization period which commenced on
         the acquisition date.


                                       25

<PAGE>   26
         Corporate Productions, Inc.

         On August 11, 1998 the Company acquired 100% of the common stock of TBA
         Entertainment Group Chicago, Inc., formerly Corporate Productions, Inc.
         ("CPI"), for a maximum aggregate purchase price of approximately
         $5,000,000. The purchase price paid at closing included a cash payment
         of $1,450,000, the issuance of 414,000 shares of common stock of the
         Company valued at $2,000,000 and the issuance of $1,550,000 in
         aggregate amount of promissory notes ("CPI Notes").

         The CPI Notes accrue interest at 8% per annum and are payable in three
         equal annual installments of principal plus accrued interest,
         commencing August 2001. The CPI Notes are secured by a pledge of the
         CPI common stock owned by the Company.

         Image Entertainment Productions, Inc.

         On September 15, 1998, the Company acquired 100% of the common stock of
         TBA Entertainment Group Phoenix, Inc., formerly Image Entertainment
         Productions, Inc. ("Image"), for a maximum aggregate purchase price of
         approximately $1,375,000. The purchase price paid at closing included a
         cash payment of $687,000, the issuance of 60,000 shares of common stock
         of the Company valued at $230,000 and the issuance of a $458,000
         promissory note ("Image Note").

         The principal amount of the Image Note is subject to reduction based on
         the earnings of Image during each of the years 1999 through 2000. The
         Image Note, as adjusted, accrues interest at 8% per annum and is
         payable in two installments of principal plus accrued interest equal to
         65% of the Image Note on March 31, 2000 and the remainder on March 31,
         2001.

         Magnum Communications, Inc.

         On October 15, 1998, the Company acquired 100% of the common stock of
         TBA Entertainment Group Dallas, Inc., formerly Magnum Communications,
         Inc. ("Magnum"), for $3,260,000. The purchase price paid at closing
         included a cash payment of $1,273,000, the issuance of 307,000 shares
         of common stock of the Company valued at $1,087,000 and the issuance of
         $900,000 in aggregate amount of promissory notes ("Magnum Notes"). The
         Magnum Notes accrue interest at 8% per annum and are payable in
         quarterly installments of interest only commencing December 31, 1998,
         and in quarterly installments of principal and interest commencing
         December 31, 1999.


                                       26

<PAGE>   27
         TKS Marketing, Inc.

         On December 8, 1998, the Company acquired 100% of the common stock of
         TKS Marketing, Inc. ("TKS"), for $625,000 cash plus future
         consideration. The maximum aggregate purchase price is approximately
         $1,250,000. TKS was previously affiliated with TSA. Through 2003, the
         sellers of TKS will be paid additional sales price consideration based
         on the earnings of TKS during each of the years during the earn-out
         period, up to a maximum of $625,000 additional purchase price.

         The accounting for the above-mentioned acquisitions is in accordance
         with the purchase method of accounting. The operations of the acquired
         businesses are included in the accompanying consolidated statements of
         operations from their respective acquisition dates. The purchase price
         for each acquisition has been allocated to the assets acquired and
         liabilities assumed based on their estimated fair values on the
         respective acquisition dates. The excess of the purchase price over the
         fair value of net assets acquired has been allocated to goodwill and is
         being amortized over periods ranging from five to twenty years.
         Amortization expense related to goodwill was $504,400 and $128,800 for
         the years ended December 31, 1998 and 1997. Accumulated amortization
         related to goodwill totaled $629,200 at December 31, 1998.

5.       DISPOSITIONS

         AWC

         Effective July 31, 1997, the Company acquired a 51% controlling
         interest in AWC, a group of entities affiliated with AEG. The remaining
         49% of AWC was owned by a group of individuals who became officers and
         stockholders of the Company. The purchase price included a $7 million
         cash payment with proceeds from the Company's 1997 stock offering.
         Including acquisition costs, the total purchase price for AWC was
         $7,862,900. The acquisition was accounted for using the purchase method
         of accounting and, accordingly, the purchase price was allocated to the
         assets acquired and the liabilities assumed based on their estimated
         fair values on the date of acquisition.

         On May 13, 1998 the Company sold its 51% controlling interest in
         certain of the AWC businesses to an unaffiliated third party (the
         "buyer") for $9,915,000 in cash before applicable transaction expenses.
         The individuals that owned the remaining 49% of AWC also sold their
         interest in these businesses to the buyer. The Company recognized a
         one-time pre-tax gain of $1,445,000 as a result of the sale of its
         interest in these businesses.

         Net operations attributable to those business of AWC included in the
         sale to the buyer from the July 31, 1997 acquisition date


                                       27

<PAGE>   28

         through the May 13, 1998 sale date, are included in discontinued
         operations in the accompanying consolidated statements of operations.
         The following is a summary of the revenue and expenses related to these
         businesses for the years ended December 31, 1998 and 1997:


<TABLE>
<CAPTION>
                                                           1998              1997
                                                        -----------       -----------
<S>                                                     <C>               <C>        
         Revenues ...................................   $ 2,462,800       $13,204,000

         Operating expenses .........................     3,579,000        10,830,700
         Depreciation and amortization ..............       261,600           300,300
         Interest expense, net ......................        36,600            40,200
         Income tax (benefit) expense................      (189,800)          351,800
         Minority interest in net 
         (loss) income of AWC .......................      (552,100)        1,319,400
                                                        -----------       -----------
         Net (loss) income from discontinued
           operations attributable to the Company ...   $  (672,500)      $   361,600
                                                        ===========       ===========
</TABLE>

         Breckenridge Resort

         In July 1998, Village at Breckenridge Acquisition Corp. ("VABAC"), a
         wholly owned subsidiary of the Company and owner and operator of the
         Breckenridge Resort, entered into an agreement with an unaffiliated
         third party developer (the "Development Agreement"). Pursuant to the
         Development Agreement, VABAC agreed to sell a portion of the assets
         comprising the Breckenridge Resort to the Developer for $10,000,000.
         The sale is contingent upon the developer receiving approval of the
         development plan. The sale of these assets is expected to close in
         1999.

         In a simultaneous transaction, the Company entered into an agreement to
         sell 100% of the common stock of VABAC to Vail Summit Resorts, Inc.
         ("Vail") for $34,000,000. Vail, by virtue of its acquisition of VABAC,
         also acquired the rights and obligations of the Development Agreement.
         The sale of the common stock of VABAC was consummated on August 12,
         1998. The proceeds from the sale were distributed as follows:
         $19,762,300 to repay indebtedness at the Breckenridge Resort,
         $3,000,000 to an escrow account, $11,013,170 to the Company and the
         remainder to pay closing costs. The Company will be entitled to the
         $3,000,000 held in escrow upon the sale of the assets pursuant to the
         Development Agreement. As of December 31, 1998, the Company recorded a
         receivable for a portion of the escrow amount, totaling $2,121,200
         which amount represented the Company's remaining investment in VABAC
         after receipt of the August 12, 1998 sale proceeds. This amount is
         reflected in "net short-term assets from the sale of discontinued
         operations" in the accompanying consolidated balance sheet. Upon
         receipt of the entire $3,000,000 held in escrow in 1999, the Company


                                       28

<PAGE>   29
         expects to recognize a one-time pre-tax gain as a result of the sale of
         VABAC.

         Nashville Restaurant

         In December 1998, the Company sold substantially all of the assets of
         the Nashville restaurant to an unaffiliated third party for $3,450,000.
         The assets included the Company's leasehold interest in land on which
         the Nashville restaurant is located, the building and equipment and an
         adjacent parking structure. The Company recognized a loss on the sale
         of the Nashville Restaurant of $248,500 in 1998.

         As a result of the sale of the Breckenridge Resort and the Nashville
         restaurant, together which previously comprised the Company's Resort
         Division, the operations of the Resort Division have been reclassified
         to discontinued operations for all periods presented. The following is
         a summary of the revenues and expenses related to the Resort Division
         for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                         1998             1997
                                                     -----------      -----------
<S>                                                  <C>              <C>        
         Revenues .............................      $16,350,400      $23,791,800

         Operating expenses ...................       13,925,100       20,731,100
         Depreciation and amortization ........          710,200          947,100
         Interest expense, net ................        1,058,200        1,692,800
                                                     -----------      -----------
         Net income from discontinued
           Operations .........................      $   656,900      $   420,800
                                                     ===========      ===========
</TABLE>

6.       Investment in Warner/TBA Joint Venture

         AEG owns a 50% interest in a joint venture with Warner Custom Music
         Corp. ("Warner") The joint venture, Warner/TBA (formerly
         Warner/Avalon), develops and coordinates live, sponsored music
         entertainment marketing tours and programs and related projects and
         generates revenues primarily from third party corporate sponsorships.
         Warner/TBA recognizes revenue by amortizing the contract sponsorship
         funds over the life of the related programs, which may range from
         single day events to tours lasting several months.

         AEG accounts for the investment using the equity method of accounting.
         Summary statements of operations data of Warner/TBA


                                       29

<PAGE>   30

         for the years ended December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                1998             1997
                                             ----------      -----------
<S>                                          <C>             <C>        
         Revenues .....................      $8,852,500      $10,831,700
         Net Income ...................      $  687,500      $   220,800
</TABLE>

         Summary balance sheet data of Warner/TBA consists of the following as
         of December 31, 1998:

<TABLE>
<S>                                                <C>
                  Current assets ................. $981,800
                  Non-current assets .............  304,500
                  Current liabilities ............  568,000
                  Partners' capital ..............  718,300
</TABLE>

         As of December 31, 1998, the Company had undistributed earnings from
         Warner/TBA of $359,200 and a receivable from Warner/TBA of $51,400.

         During 1998, affiliates of Warner accounted for 60% of the gross
         revenues of Warner/TBA. The next two largest customers accounted for
         21% and 16% of gross revenues of Warner/TBA. In 1997, the two largest
         customers accounted for 68% and 29% of gross revenues of Warner/TBA.

         In 1997, Warner/TBA entered into various agreements to develop a live,
         sponsored, music tour for each of the years 1997, 1998 and 1999. During
         1997 the tour incurred operating losses of $666,000 which reduced
         Warner/TBA's net income for 1997. As of March 1998, a line-up of
         artists satisfactory to the tour sponsor was not available.
         Accordingly, the tour sponsor terminated its agreement with Warner/TBA,
         resulting in the cancellation of the tour program for 1998 and 1999.

7.       Long-Term Debt

         Long-term debt of the Company consists of the following as of 
         December 31,1998:

<TABLE>
<S>                                                                                       <C>
         Acquisition notes payable (Note 4), interest at 8%, unsecured ..............     $ 2,908,000

         Note payable to a bank, interest at the bank's prime rate plus
         0.25%(8.0% at December 31, 1998), due in monthly installments with a
         balloon payment in December 2000, secured
         by a pledge of the common stock of AEG .....................................       2,080,000

         Mortgage note payable to a bank, interest at 8.25%,
         due in monthly installments through December 2011, secured by
         land and building ..........................................................         324,900

         Equipment notes payable, interest ranging from 7.57% to 10.25%, due in
         monthly installments with various maturity dates
         through February 2001, secured by equipment ................................         202,400
                                                                                          -----------
                                                                                            5,515,300

         Less-current portion .......................................................        (759,600)
                                                                                          -----------
                                                                                          $ 4,755,700
                                                                                          ===========
</TABLE>


                                       30

<PAGE>   31
         The Company obtained a $250,000 line of credit in September 1997. The
         Company borrowed $150,000 on this line of credit in September 1997,
         which amount was repaid in June 1998.

         The Company recognized interest expense of $307,700 and $166,400
         related to long-term debt for the year ended December 31, 1998 and
         1997, respectively.

         Future annual maturities of long-term debt consists of the following as
         of December 31, 1998:

<TABLE>
<CAPTION>
                           YEAR ENDING
                           DECEMBER 31,
                           ------------
<S>                        <C>                                <C>
                           1999.........................      $759,600
                           2000.........................     2,218,000
                           2001.........................     1,001,100
                           2002.........................       760,400
                           2003.........................       537,000
                           Thereafter...................       239,200
                                                            ----------
                                                            $5,515,300
                                                            ==========
</TABLE>

8.       Stockholders' Equity

         Preferred Stock

         The Company is authorized to issue 1,000,000 shares of $.001 par value
         preferred stock. The Company has designated 557,100 shares of the
         authorized preferred stock as Series A Convertible Preferred Stock
         ("Series A Preferred Stock"), of which 334,300 shares were previously
         issued and were non-voting. In 1998, 265,500 shares of Series A
         Preferred Stock were converted into 265,500 shares of common stock.
         Subsequent to December 31, 1998, an additional 65,400 shares of Series
         A Preferred Stock were converted into 65,400 shares of common stock.

         Common Stock and Common Stock Warrants

         In April 1996, the Company completed an offering of 1,351,455 units,
         each consisting of two shares of common stock and one redeemable common
         stock purchase warrant. The redeemable warrants are detachable and
         separately transferable. Each redeemable warrant entitles the holder to
         purchase one share of common stock at a price of $6.25 per share until
         April 2001, and is redeemable by the Company at $0.50 per warrant under
         certain conditions. In connection with this offering, the underwriter
         was also granted a warrant to acquire up to 120,000 units at $15.50 per
         unit. The warrants issued in 1996 were outstanding at December 31,
         1998.

         In July 1997, the Company issued 2,600,000 shares of its common stock.
         In connection with this offering, the underwriter was granted a warrant
         to acquire up to 130,000 shares of common stock


                                       31
<PAGE>   32
         at $4.20 per share until July 2002. These warrants were outstanding as
         of December 31, 1998.

         At December 31, 1998, the Company also had other outstanding warrants
         to purchase 147,500 shares of common stock at exercise prices ranging
         from $4.38-$6.00 per share, expiring 1999 through 2002.

         In August 1998, the board of directors authorized the repurchase, at
         management's discretion, of up to 1,000,000 shares of the Company's
         common stock until August 1999. The Company's repurchases of shares of
         common stock are recorded as treasury stock and result in a reduction
         of stockholders' equity. As of December 31, 1998, the Company had
         repurchased 196,700 shares of common stock for total consideration of
         $724,500, pursuant to the stock repurchase program (Note 12).

         Stock Options

         In 1995 and 1996, the Company granted 80,000 non-qualified options to
         key employees and directors of which 28,000 have been cancelled as of
         December 31, 1998. In 1997 and 1998, the Company established two stock
         option plans that provide for the granting of either incentive stock
         options or non-qualified stock options to key employees, officers and
         directors of the Company. Under the two plans, the Company may grant a
         total of 750,000 stock options at prices not less than the fair market
         value on the date of grant, with expiration dates not exceeding ten
         years. As of December 31, 1998, the Company has granted 520,000
         incentive stock options pursuant to these plans.

         Information relating to stock options during 1997 and 1998 is as
         follows:

<TABLE>
<CAPTION>
                                                        Shares Under         Options Price         Weighted-Average
                                                          Options           Range Per Share         Exercise Price
                                                        ------------        ---------------        ---------------
<S>                                                     <C>                 <C>                    <C>
         Options outstanding at December 31, 1996           80,000            $5.00-5.50                  $5.31
           Cancelled                                       (30,000)                 5.00                   5.00
           Granted                                         300,000             4.50-5.40                   5.28
                                                          --------
         Options outstanding at December 31, 1997          350,000             4.50-5.50                   5.31
           Cancelled                                      (298,000)            5.00-5.50                   5.38
           Granted                                         520,000             3.78-4.20                   4.12
                                                          --------
         Options outstanding at December 31, 1998          572,000             3.78-5.50                   4.23
                                                          ========
         Options exercisable at December 31, 1998          496,500                                         4.26
                                                          ========
</TABLE>

         The weighted average remaining life of the outstanding stock options at
         December 31, 1998 was six years.

         The Company applies APB Opinion No. 25 ("Accounting for Stock Issued to
         Employees") and related interpretations in accounting


                                       32

<PAGE>   33
         for stock options; accordingly, no compensation cost has been
         recognized in the accompanying consolidated statements of operations
         for options issued. Had compensation cost been determined based on the
         fair value of the stock options at grant date consistent with the
         method of Statement of Financial Accounting Standards No. 123 ("SFAS
         123"), the Company's net income (loss) from continuing operations and
         net income (loss) per share would have been the unaudited pro forma
         amounts indicated below:

<TABLE>
<CAPTION>
                                                                      1998          1997
                                                                   ----------    ----------
                                                                          (Unaudited)
<S>                                                                <C>           <C>
         Net income (loss) from continuing operations:
             As reported ......................................    $1,490,100    $ (380,100)
             Pro forma ........................................     1,250,600      (813,200)
         Basic earnings per common share:
             As reported ......................................           .19          (.07)
             Pro forma ........................................           .16          (.14)
         Diluted earnings per common share:
             As reported ......................................           .18          (.06)
             Pro forma ........................................           .15          (.13)
</TABLE>

         As required by SFAS 123, the Company provides the following disclosure
         of hypothetical values for these awards. The weighted-average
         grant-date fair value of options granted during 1998 and 1997 was
         estimated to be $1.70 and $1.51, respectively.

         The fair value of each option grant was estimated on the date of grant
         using a Black-Scholes option-pricing model with the following weighted
         average assumptions for 1998 and 1997, respectively; risk free interest
         rates of 5.67 and 6.70 percent; expected lives of 3 years; volatility
         of 64 percent  and 40 percent and no assumed dividends. Additional
         adjustments are made for assumed cancellations and expectations that
         shares acquired through the exercise of options are held during
         employment.

         Change in Par Value

         In September 1997, Company stockholders approved a reincorporation of
         the Company in the State of Delaware and a change from no par value to
         $.001 par value common and preferred stock. The change in par value has
         been recorded as an adjustment to additional paid-in capital and common
         stock.



                                       33

<PAGE>   34

9.       Income Taxes

         The provision for income taxes consists of the following for the year
         ended December 31, 1998:

<TABLE>
<CAPTION>
                                                                            1998
                                                                            ----
<S>                                                                       <C>
                      Current
                        Federal ......................................    $373,200
                        State ........................................     363,700
                      Deferred 
                        Federal ......................................    (465,200)
                        State ........................................     (82,100)
                                                                          --------
                      Total ..........................................    $189,600
                                                                          ========
</TABLE>

         There is no current or deferred tax expense from continuing operations
         for 1997 as the Company utilized net operating loss carryforwards. The
         benefits of net operating loss carryforwards and other temporary
         differences had not previously been recognized as of December 31, 1997.

         A reconciliation of the difference between the statutory federal tax
         rate and the Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
                                                              Year Ended
                                                             December 31,
                                                             ------------
                                                                1998
                                                               -------
<S>                                                            <C>
                 Income taxes at statutory federal rate ...   $ 1,085,400
                 State income tax, net of federal tax
                   benefit ................................       191,500
                 Non-deductible goodwill amortization .....       189,400
                 Change in valuation allowance ............    (1,415,100)
                 Other ....................................       138,400
                                                               ----------
                 Income tax provision .....................   $   189,600
                                                              ===========
</TABLE>

         Deferred income taxes reflect the net tax effects of temporary
         differences between the carrying amounts of assets and


                                       34

<PAGE>   35
         liabilities for financial reporting purposes and the amounts used for
         income tax purposes. Realization of the future tax benefits related to
         the deferred tax assets is dependent on many factors, including the
         Company's ability to generate taxable income within the net operating
         loss carryforward period. Management has considered these factors in
         reaching its conclusion as to the valuation allowance for financial
         reporting purposes. The income tax effect of temporary differences
         comprising the deferred tax assets and liabilities as of December 31,
         1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                         1998            1997
                                                                         ----         -----------
<S>                                                                      <C>          <C>
         Deferred tax assets:
                  Net operating loss carryforwards ..................    $  60,000     $ 1,710,000
                  Deferred gain on sale of discontinued operations...      406,100              --
                  Accrued payroll related costs......................      242,400           5,000
                  Deferred costs ....................................       19,400          40,000
                  Other .............................................       91,800          15,000
                                                                         ---------     -----------
                                                                           819,700     $ 1,770,000
         Deferred tax liabilities:                                         
                  Accelerated depreciation for tax ..................      (57,500)       (140,000)
                                                                         ---------     -----------
         Net deferred tax asset .....................................      762,200       1,630,000
         Valuation allowance ........................................     (214,900)     (1,630,000)
                                                                         ---------     -----------
                                                                         $ 547,300     $        --
                                                                         =========     ===========
</TABLE>

         During 1998, the valuation allowance for net deferred tax assets was
         reduced by $1,415,100 due to the use of net operating loss
         carryforwards in 1998.

10.      Commitments and Contingencies

         Operating Leases
 
         The Company leases office space under non-cancelable operating lease 
         agreements expiring in various years through 2005.

         Commitments for operating leases:

<TABLE>
              <S>                           <C>
               1999......................... $  484,400
               2000.........................    493,400
               2001.........................    468,800
               2002.........................    392,500
               2003.........................    198,200
               Thereafter...................    260,900
                                             ----------
                                             $2,298,200
                                             ==========   
</TABLE>

         The Company incurred rent expense of approximately $285,300 and 
         $95,800 for the years ended December 31, 1998 and 1997, 
         respectively.

         Contingencies

         The Company is a party to legal proceedings incidental to its 
         business. Certain claims, suits or complaints arising out of the 
         normal course of business have been filed or were pending against the 
         Company. Although it is not possible to predict the outcome of such 
         litigation, based on the facts known to the Company and after 
         consultation with legal counsel, management believes that such 
         litigation will not have a material adverse effect on its financial 
         position or results of operations.

11.      Business Segment Information

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 131 "Disclosures about Segments
         of an Enterprise and Related Information." The statement requires
         presentation of segment information based on the way management makes
         decisions and assesses performance. The Company believes that all of
         its material operations are part of the entertainment services
         industry, and it currently reports as a single industry segment. The
         Company conducts substantially all of its entertainment operations in
         the United States. Within the single entertainment services industry
         segment, the Company has four operating divisions: corporate
         communications & entertainment, entertainment marketing & special
         events, artist management and event merchandising. The revenue and
         gross profit of each of these divisions is reported in the following
         table. Inter-division revenue is insignificant. 

<TABLE>
<CAPTION>
                             Corporate       Entertainment    
                            Communications     Marketing &        Artist           Event
                           & Entertainment   Special Events     Management     Merchandising
                           ----------------  --------------     ----------     -------------
<S>                          <C>               <C>              <C>            <C>
1998
  Revenues ..............    $23,461,500       $837,500         $1,721,300     $1,252,400
  Gross profit margin....      6,623,200        227,400          1,721,300        232,100

1997 
  Revenues ..............      6,262,700             --            155,400         19,000
  Gross profit margin ...      1,580,400             --            142,100          9,000
</TABLE>   

12.      Subsequent Events

         Repurchase of Common Stock

         Subsequent to December 31, 1998, the Company repurchased 398,600
         shares of its common stock for total consideration of $1,850,700,
         pursuant to the stock repurchase program (Note 8).

         1999 Acquisition

         On March 17, 1999, the Company acquired 100% of the common stock of
         Karin Glass Associates, Inc. and affiliated companies (collectively,
         "KGA"), for a maximum purchase price of approximately $3,200,000. The
         purchase price paid at closing included a cash payment of $2,300,000
         and the issuance of 221,500 shares of common stock of the Company 
         valued at $900,000. The purchase price paid at closing is subject to
         reduction based on the earnings of KGA during each of the years 1999
         and 2000. The sellers have pledged their shares of common stock of
         the Company as collateral during the earn-out period.


                                       35

<PAGE>   36

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

         The information required by this Item regarding the directors and
executive officers of the Company will be included in the Company's definitive
Proxy Statement to be filed pursuant to Regulation 14A in connection with the
Company's 1999 annual meeting of stockholders and is incorporated herein by
reference thereto.

ITEM 10. EXECUTIVE COMPENSATION.

         The information required by this Item regarding the directors and
executive officers of the Company will be included in the Company's definitive
Proxy Statement to be filed pursuant to Regulation 14A in connection with the
Company's 1999 annual meeting of stockholders and is incorporated herein by
reference thereto.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information required by this Item will be included in the Company's
definitive Proxy Statement to be filed pursuant to Regulation 14A in connection
with the Company's 1999 annual meeting of stockholders and is incorporated
herein by reference thereto.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information required by this Item will be included in the Company's
definitive Proxy Statement to be filed pursuant to Regulation 14A in connection
with the Company's 1999 annual meeting of stockholders and is incorporated
herein by reference thereto.




                                       36

<PAGE>   37
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

         (a)   Exhibits.

<TABLE>
<CAPTION>
         EXHIBIT
          NUMBER                               DESCRIPTION OF DOCUMENT
        ---------                  ---------------------------------------------
<S>                                <C>
          2.1(1)         --        Merger Agreement between TBA Entertainment
                                   Corporation and Avalon Acquisition Corp.,
                                   Inc. and Avalon Entertainment Group, Inc.

          2.2(2)         --        Purchase Agreement between TBA Entertainment
                                   Corporation, Titley Spalding & Associates,
                                   LLC, Clarence Spalding and Robert R. Titley
                                   dated June 18, 1998.

          2.3(3)         --        Purchase Agreement between TBA Entertainment
                                   Corporation and SFX Entertainment, Inc. and
                                   AWC Acquisition Corp. dated May 13, 1998.

          2.4(4)         --        Stock Purchase Agreement between TBA
                                   Entertainment Corporation, Magnum
                                   Communications, Inc, William R. Cox, Gary A.
                                   Larr, Charles A. Barry and Lon M. Hudman
                                   dated October 15, 1998.

          2.5*           --        Merger Agreement among TBA Entertainment
                                   Corporation, CPI Acquisition Corp., Inc.,
                                   Richard S. Smith, Richard W. Perry, Pamela J.
                                   Furmanek and Corporate Productions, Inc.
                                   dated August 11, 1998.

          2.6*           --        Stock Purchase Agreement among TBA
                                   Entertainment Corporation, Kenneth C. Koziol
                                   and Image Entertainment Productions dated
                                   September 15, 1998.

          2.7*                     Stock Purchase Agreement among TBA
                                   Entertainment Corporation, Karin Glass and
                                   Associates, Inc., Ink Up, Inc., KGA, Inc.,
                                   Karin Glass and Kenneth Glass dated March 18,
                                   1999.

          3.1(5)         --        Certificate of Incorporation of the Company.

          3.2(6)         --        Bylaws of the Company.

          4.1(7)         --        Specimen Common Stock Certificate.

          4.2(5)         --        Article IX of the Certificate of
                                   Incorporation of the Company (included in
                                   Exhibit 3.1).

          4.3(8)         --        Certificate of Designation of Series A
                                   Convertible Preferred Stock of the Company.

          4.4(9)         --        Specimen Warrant Certificate.

          10.1(10)       --        Purchase and Sale Agreement between TBA
                                   Entertainment Corporation and Vail Summit
                                   Resorts, Inc. dated July 10, 1998.

          10.2(11)       --        Employment Agreement dated as of January 1,
                                   1994 between the Company and Thomas Jackson
                                   Weaver III.
</TABLE>


                                       37

<PAGE>   38

<TABLE>
<CAPTION>
         EXHIBIT
          NUMBER                               DESCRIPTION OF DOCUMENT
        ---------                  ---------------------------------------------
<S>                                <C>
          10.3(12)       --        Employment Agreement dated as of January 1,
                                   1994 between the Company and Prab Nallamilli.

          10.4(13)       --        Stock Purchase Warrant dated February 24,
                                   1994 between the Company and Yee, Desmond,
                                   Schroeder & Allen, Inc.

          10.5(14)       --        Form of Indemnification Agreement between the
                                   Company and each of the directors and
                                   executive officers.

          10.6(15)       --        TBA Entertainment Corporation 1995 Stock
                                   Option Plan.

          10.7(16)       --        Form of Stock Option Agreement for options
                                   granted under the 1995 Stock Option Plan.

          10.8(17)       --        TBA Entertainment Corporation 1997 Stock
                                   Option Plan.

          10.9(18)       --        Form of Stock Option Agreement for options
                                   granted under the 1997 Stock Option Plan.

          10.10(19)      --        Representative's Warrant Agreement dated
                                   April 23, 1996 between the Company and H.J.
                                   Meyers & Co., Inc.

          10.11(20)      --        Warrant Agreement dated April 23, 1996 among
                                   the Company, H.J. Meyers & Co., Inc. and
                                   American Stock Transfer & Trust Company.

          10.12(21)      --        Registration Rights Agreement between the
                                   Company, Robert E. Geddes, Greg M. Janese,
                                   Thomas Miserendino, Brian K. Murphy and Marc
                                   W. Oswald.

          10.13(22)      --        Consulting Agreement between Avalon
                                   Entertainment Group, Inc. and Robert E.
                                   Geddes.

          10.14(23)      --        Consulting Agreement between Avalon
                                   Entertainment Group Inc. and Thomas
                                   Miserendino.

          10.15(24)      --        Employment Agreement between Avalon
                                   Entertainment Group, Inc. and Marc W. Oswald.

          10.16(25)      --        Employment Agreement between Avalon
                                   Entertainment Group, Inc. and Greg M. Janese.

          10.17(26)      --        Placement Agent Warrant Agreement between the
                                   Company and Rauscher Pierce Refsnes, Inc.

          21*            --        Subsidiaries of the Company.

          27*            --        Financial Data Schedule
</TABLE>


----------

*     Filed herewith.

(1)   Incorporated herein by reference to Exhibit 2.1 to the Company's Current
      Report on Form 8-K dated on April 21, 1997.

(2)   Incorporated herein by reference to Exhibit 2.1 to the Company's Current
      Report on Form 8-K dated on June 18, 1998.

(3)   Incorporated herein by reference to Exhibit 2.1 to the Company's Current
      Report on Form 8-K dated May 13, 1998.

(4)   Incorporated herein by reference to the Exhibit 2.1 to the Company's
      Current Report on Form 8-K dated October 18, 1998.



                                       38

<PAGE>   39

(5)   Incorporated herein by reference to Exhibit 3.1 to the Company's Current
      Report on Form 8-K dated April 21, 1997.

(6)   Incorporated herein by reference to Exhibit 3.2 to the Company's Current
      Report on Form 8-K dated April 21, 1997.

(7)   Incorporated herein by reference to Exhibit 4.1 to the Company's Current
      Report on Form 8-K dated April 21, 1997.

(8)   Incorporated herein by reference to Exhibit 4.3 to the Company's Current
      Report on Form 8-K dated April 21, 1997.

(9)   Incorporated herein by reference to Exhibit 4.3 to the Company's
      Registration Statement on Form SB-2 (Registration No. 33-97890) dated
      March 15, 1996.

(10)  Incorporated herein by reference to Exhibit 10.1 to the Company's
      Quarterly Report on Form 10-QSB for the quarter ended (June 30, 1998).

(11)  Incorporated herein by reference to Exhibit 10.2 to the Company's
      Registration Statement on Form SB-2 (Registration No. 33-69944) dated
      December 8, 1993.

(12)  Incorporated herein by reference to Exhibit 10.3 to the Company's
      Registration Statement on Form SB-2 (Registration No. 33-69944) dated
      December 8, 1993.

(13)  Incorporated herein by reference to Exhibit 10.5 to the Company's
      Registration Statement on Form SB-2 (Registration No. 33-69944) dated
      December 8, 1993.

(14)  Incorporated herein by reference to Exhibit 10.6 to the Company's
      Registration Statement on Form SB-2 (Registration No. 33-69944) dated
      December 8, 1993.

(15)  Incorporated herein by reference to Exhibit 10.9 to the Company's Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 1995.

(16)  Incorporated herein by reference to Exhibit 10.10 to the Company's Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 1995.

(17)  Incorporated herein by reference to Exhibit 10.11 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(18)  Incorporated herein by reference to Exhibit 10.12 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(19)  Incorporated herein by reference to Exhibit 10.13 to the Company's Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 1995.

(20)  Incorporated herein by reference to Exhibit 10.14 to the Company's Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 1995.

(21)  Incorporated herein by reference to Exhibit 10.15 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(22)  Incorporated herein by reference to Exhibit 10.16 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(23)  Incorporated herein by reference to Exhibit 10.17 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(24)  Incorporated herein by reference to Exhibit 10.18 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.



                                       39

<PAGE>   40

(25)  Incorporated herein by reference to Exhibit 10.19 to the Company's Annual
      Report on Form 10-KSB, as amended, for the fiscal year ended December 29,
      1996.

(26)  Incorporated herein by reference to Exhibit 10.20 to the Company's Current
      Report on Form 8-K dated June 20, 1997.

      No reports on Form 8-K were filed during the quarterly period ended
December 31, 1998.

                                   SIGNATURES

    In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Hickory Valley, Tennessee, on the 31st day of
March, 1999.


                                             TBA ENTERTAINMENT CORPORATION


                                             By: /s/ Thomas Jackson Weaver III
                                                ------------------------------
                                             Thomas Jackson Weaver III
                                             Chairman of the Board and
                                             Chief Executive Officer


    In accordance with the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates stated.

<TABLE>
<CAPTION>
            SIGNATURE                            TITLE                              DATE
            ---------                            -----                              ----
<S>                                <C>                                          <C>
/s/ Thomas Jackson Weaver III      Chairman of the Board, Chief Executive       March 31, 1999
--------------------------------   Officer and President (Principal
 Thomas Jackson Weaver III         Executive and Financial Officer)

/s/ Joseph C. Galante
--------------------------------   Director                                     March 31, 1999
 Joseph C. Galante

/s/ Frank Bumstead
--------------------------------   Director                                     March 31, 1999
 Frank Bumstead

/s/ Charles Flood
--------------------------------   Director                                     March 31, 1999
 Charles Flood

/s/ Prab Nallamilli
--------------------------------   Director                                     March 31, 1999
 Prab Nallamilli

/s/ Louis J. Risi, Jr.
--------------------------------   Director                                     March 31, 1999
 Louis J. Risi, Jr.

/s/ Steven L. Risi
--------------------------------   Director                                     March 31, 1999
 Steven L. Risi

/s/ Frank A. McKinnie Weaver, Sr.
--------------------------------   Director                                     March 31, 1999
 Frank A. McKinnie Weaver, Sr.

/s/ Kyle Young
--------------------------------   Director                                     March 31, 1999
 Kyle Young

/s/ Bryan J. Cusworth
--------------------------------  Chief Financial Officer (Principal            March 31, 1999
 Bryan J. Cusworth                Accounting Officer)
</TABLE>



                                       40

<PAGE>   41

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
       EXHIBIT NO.                           DESCRIPTION
       ----------        -------------------------------------------------------
<S>                      <C>
          2.5            Merger Agreement among TBA Entertainment Corporation,
                         CPI Acquisition Corp., Inc., Richard S. Smith, Richard
                         W. Perry, Pamela J. Furmanek and Corporate Productions,
                         Inc., dated August 11, 1998

          2.6            Stock Purchase Agreement among TBA Entertainment
                         Corporation, Kenneth C. Koziol and Image Entertainment
                         Productions dated September 15, 1998

          2.7            Stock Purchase Agreement among TBA Entertainment 
                         Corporation, Karin Glass and Associates, Inc., Ink Up, 
                         Inc., Karin Glass and Kenneth Glass dated March 18, 
                         1999 

          21             Subsidiaries of the Company

          27             Financial Data Schedule
</TABLE>