<PAGE>   1
 
================================================================================
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
(MARK ONE)
 
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 1997
 
[ ]   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: 0-21631

                            ------------------------
 
                            TICKETMASTER GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                           <C>
                   ILLINOIS                                     36-3597489
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)
 
    8800 SUNSET BOULEVARD, WEST HOLLYWOOD,
                   CALIFORNIA                                     90069
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)
</TABLE>
 
                                 (310) 360-6000
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                                (NOT APPLICABLE)
   (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                    REPORT)
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 [ ]
 
     The number of shares outstanding of the registrant's Common Stock as of
July 31, 1997 was 24,739,715.
 
================================================================================
<PAGE>   2
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                     PAGE NO.
                                                                                     --------
<S>                                                                                  <C>
PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
     Independent Accountants' Review Report........................................         2
     Condensed Consolidated Balance Sheets -- January 31, 1997 and July 31, 1997...         3
     Condensed Consolidated Statements of Operations -- Three months and six months
      ended July 31, 1996 and 1997.................................................         4
     Condensed Consolidated Statements of Cash Flows -- Six months ended July 31,
      1996 and 1997................................................................         5
     Notes to Condensed Consolidated Financial Statements..........................         6
  Item 2. Management's Discussion and Analysis of Financial Condition and Results
     of Operations.................................................................         9
PART II. OTHER INFORMATION
  Item 1. Legal Proceedings........................................................        18
  Item 4. Submission of Matters to a Vote of Security Holders......................        19
  Item 6. Exhibits and Reports on Form 8-K.........................................        19
     Signatures....................................................................        20
</TABLE>
 
                                        1
<PAGE>   3
 
                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT
 
The Board of Directors
Ticketmaster Group, Inc.:
 
     We have reviewed the accompanying condensed consolidated balance sheet of
Ticketmaster Group, Inc. and subsidiaries as of July 31, 1997, and the related
condensed consolidated statements of operations for the three-month period then
ended and cash flows for the three-month period then ended (not included
separately herein). These financial statements are the responsibility of the
Company's management. The condensed consolidated balance sheet of Ticketmaster
Group, Inc. and subsidiaries as of April 30, 1997 and the related condensed
consolidated statements of operations and cash flows for the three-month period
then ended were reviewed by other accountants whose report (dated June 6, 1997)
stated that they were not aware of any material modifications that should be
made to these statements for them to be in conformity with generally accepted
accounting principles.
 
     We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
 
     Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
at July 31, 1997, and for the three-month period then ended for them to be in
conformity with generally accepted accounting principles.
 
     The balance sheet of Ticketmaster Group, Inc. and subsidiaries as of
January 31, 1997 was derived from consolidated financial statements audited by
other auditors (whose unqualified report is dated March 12, 1997, except for
notes 13 and 14, which are as of April 17, 1997), and we do not express an
opinion on that data.
 
                                          ERNST & YOUNG LLP
Los Angeles, California
September 3, 1997
 
                                        2
<PAGE>   4
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
<TABLE>
<CAPTION>
                                                                      JANUARY 31,      JULY 31,
                                                                         1997            1997
                                                                      -----------     -----------
                                                                                      (UNAUDITED)
<S>                                                                   <C>             <C>
                                             ASSETS
Current assets:
  Cash and cash equivalents.......................................     $   60,880      $  83,250
  Accounts receivable, ticket sales...............................         12,014         31,244
  Accounts receivable, other......................................          8,884         11,688
  Inventory.......................................................          4,093          4,007
  Prepaid expenses................................................          8,079          9,708
                                                                        ---------      ---------
          Total current assets....................................         93,950        139,897
Property, equipment and leasehold improvements, net...............         32,923         40,965
Investments in and advances to affiliates.........................          7,308          5,994
Cost in excess of net assets acquired, net........................         65,074         97,240
Intangible and other assets, net..................................         26,031         32,707
Deferred income taxes, net........................................          3,948          3,469
                                                                        ---------      ---------
                                                                       $  229,234      $ 320,272
                                                                        =========      =========
 
                              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt...............................     $      190      $     490
  Accounts payable, trade.........................................         10,767          8,904
  Accounts payable, clients.......................................         35,842         85,390
  Accrued expenses................................................         16,863         22,588
  Deferred revenue................................................          9,233         12,153
                                                                        ---------      ---------
          Total current liabilities...............................         72,895        129,525
Long-term debt, net of current portion............................        127,514        146,730
Deferred rent and other...........................................          7,400          2,693
Minority interests................................................             80             --
Shareholders' equity:
  Preferred stock.................................................             --             --
  Common stock, no par value, authorized 80,000,000 shares, issued
     and outstanding 24,739,715 shares at January 31, and July 31,
     1997, respectively...........................................             --             --
  Exchangeable, Class B common stock, non-voting,
     non-participating, no par value, issued and outstanding
     1,115,531 shares at July 31, 1997............................             --         16,175
  Additional paid-in capital......................................        127,466        127,466
  Cumulative currency translation adjustment......................            (53)          (109)
  Accumulated deficit.............................................       (106,068)      (102,208)
                                                                        ---------      ---------
          Total shareholders' equity..............................         21,345         41,324
                                                                        ---------      ---------
                                                                       $  229,234      $ 320,272
                                                                        =========      =========
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                        3
<PAGE>   5
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED             SIX MONTHS ENDED
                                                    JULY 31,                      JULY 31,
                                            -------------------------     -------------------------
                                               1996          1997            1996          1997
                                            -----------   -----------     -----------   -----------
<S>                                         <C>           <C>             <C>           <C>
Revenue:
  Ticketing operations....................  $    50,039   $    69,473     $    94,052   $   136,865
  Concession control systems..............           --         8,484              --        14,734
  Publications............................        2,522         3,010           4,512         5,977
  Merchandising...........................          657           728           1,395         1,122
                                            -----------   -----------     -----------   -----------
                                                 53,218        81,695          99,959       158,698
                                            -----------   -----------     -----------   -----------
Operating costs, expenses and other items:
  Ticketing operations....................       30,905        39,503          58,655        78,608
  Ticketing selling, general and
     administrative.......................        8,453        12,415          16,278        23,015
  Concession control systems operations...           --         4,814              --         8,515
  Concession control systems selling,
     general and administrative...........           --         2,766              --         5,053
  Publications............................        4,594         4,134           9,115         8,857
  Merchandising...........................          575           709           1,226         1,059
  Corporate general and administrative....        4,170         5,218           8,396        10,339
  Depreciation............................        1,410         2,552           2,760         4,785
  Amortization of goodwill................          464         1,260             912         2,288
  Amortization of other...................          702         1,783           1,257         3,450
  Equity in net income of unconsolidated
     affiliates...........................       (1,124)         (381)         (2,136)       (1,037)
                                            -----------   -----------     -----------   -----------
     Operating income.....................        3,069         6,922           3,496        13,766
Other expenses:
  Interest expense, net...................        3,005         2,186           5,917         4,286
  Minority interests......................          (18)           27             126            70
                                            -----------   -----------     -----------   -----------
     Income (loss) before income taxes....           82         4,709          (2,547)        9,410
Income tax provision (benefit)............          521         2,730            (129)        5,550
                                            -----------   -----------     -----------   -----------
  Net income (loss).......................  $      (439)  $     1,979     $    (2,418)  $     3,860
                                            ===========   ===========     ===========   ===========
Net income (loss) per share...............  $     (0.03)  $      0.08     $     (0.16)  $      0.15
                                            ===========   ===========     ===========   ===========
Weighted average number of common shares
  outstanding.............................   15,310,405    25,947,986      15,310,405    25,669,440
                                            ===========   ===========     ===========   ===========
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                        4
<PAGE>   6
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                      SIX MONTHS ENDED
                                                                                          JULY 31,
                                                                                    --------------------
                                                                                     1996         1997
                                                                                    -------     --------
<S>                                                                                 <C>         <C>
Cash flows from operating activities:
  Net income (loss)...............................................................  $(2,418)    $  3,860
  Adjustments to reconcile net income (loss) to net cash provided by operating
    activities:
    Depreciation and amortization.................................................    4,929       10,523
    Income attributable to minority interests.....................................      126           70
    Equity in income of unconsolidated affiliates.................................   (2,136)      (1,037)
    Deferred income taxes.........................................................     (270)         479
    Changes in operating assets and liabilities net of effects from purchase of
     Joint Venturers' interests:
      Accounts receivable, ticket sales...........................................     (680)     (16,747)
      Accounts receivable, other..................................................      484         (610)
      Inventory...................................................................       63           86
      Prepaid expenses............................................................      457         (660)
      Accounts payable, trade.....................................................     (782)      (3,378)
      Accounts payable, clients...................................................    2,013       30,346
      Accrued expenses............................................................    1,337        3,000
      Deferred income.............................................................    1,998        2,501
      Deferred revenue and other..................................................    2,336       (4,707)
                                                                                    -------     --------
         Net cash provided by operating activities................................    7,457       23,726
Cash flows from investing activities:
  Purchase of equipment and leasehold improvements................................   (3,260)      (9,158)
  Investments in affiliates.......................................................   (1,809)        (123)
  Return of investments in affiliates.............................................    2,940        1,809
  Intangible and other assets.....................................................      193          249
  Minority interest purchased.....................................................       --       (9,707)
  Payment for acquisitions, net of cash acquired..................................   (2,722)      (3,078)
                                                                                    -------     --------
         Net cash used in investing activities....................................   (4,658)     (20,008)
Cash flows from financing activities:
  Proceeds from long-term debt....................................................   10,773       29,135
  Reduction of long-term debt.....................................................     (273)     (10,337)
  Distributions to minority shareholders..........................................     (153)         (90)
                                                                                    -------     --------
         Net cash provided by financing activities................................   10,347       18,708
  Effect of exchange rate on cash and cash equivalents............................      (57)         (56)
                                                                                    -------     --------
         Net increase in cash and cash equivalents................................   13,089       22,370
Cash and cash equivalents, beginning of period....................................   34,004       60,880
                                                                                    -------     --------
Cash and cash equivalents, end of period..........................................  $47,093     $ 83,250
                                                                                    =======     ========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest......................................................................  $ 6,108     $  4,807
    Income taxes..................................................................      564        4,504
                                                                                    =======     ========
</TABLE>
 
Supplemental schedule of noncash investing and financing activities:
   During the six months ended July 31, 1997, the Company acquired its
   licensees' equity interest in the Canadian operations and the 50% interest of
   its partner in Ticketmaster-Northwest. In conjunction with the acquisitions,
   liabilities were assumed as follows:
 
<TABLE>
        <S>                                                                            <C>
        Fair value of assets acquired................................................  $66,518
        Cash paid for interests acquired.............................................   28,725
        Exchangeable Common Stock (defined in Note 2) issued for interests
          acquired...................................................................   16,175
                                                                                       -------
                 Liabilities assumed.................................................  $21,618
                                                                                       =======
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                        5
<PAGE>   7
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
(1) BASIS OF PRESENTATION
 
     The accompanying unaudited condensed consolidated financial statements
include the accounts of Ticketmaster Group, Inc. and subsidiaries (the
"Company") for the three and six months ended July 31, 1996 and 1997, and have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the rules and regulations of the Securities
and Exchange Commission. The consolidated balance sheet presented herein for
January 31, 1997 was derived from the Company's audited consolidated financial
statements for the fiscal year then ended. The condensed consolidated financial
statements presented herein for the three and six months ended July 31, 1996 and
1997 include all material adjustments (consisting of normal and recurring
matters) which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows for
such periods. However, these results are not necessarily indicative of results
for any other interim period or for the results that may be expected for the
full year.
 
     Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. Management believes that the disclosures included in the
accompanying interim financial statements and footnotes are adequate to make the
information not misleading, but that they should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1997 (File No.
0-21631).
 
(2) ACQUISITIONS
 
     Pursuant to an Agreement of Purchase and Sale of Stock, dated as of May 13,
1997 (with effect from March 1, 1997), the Company acquired all of the issued
and outstanding shares of capital stock of its Canadian licensees for a purchase
price of Canadian $44,650,000 (approximately US $32,350,000) consisting of
approximately Canadian $22,325,000 in cash and 1,115,531 non-voting,
non-participating Class B Shares of the Company's new Canadian subsidiary
(Exchangeable Common Stock). This acquisition has been recorded as a purchase
transaction; accordingly, the purchase price was allocated to the net assets
acquired based on their estimated fair market values. Approximately $6.4 million
was allocated to purchased user agreements; the excess of the estimated fair
value of net assets acquired amounted to approximately $20.9 million, which has
been accounted for as goodwill and is being amortized over 30 years using the
straight line method. The accompanying consolidated statements of operations
include the results of operations since the effective date of the acquisition.
Upon the occurrence or satisfaction, as applicable, of certain specified events
and conditions relating to operations in Canada, the purchase price will be
increased by approximately 12.3%, payable on May 1, 1998, 50% in cash and 50% in
additional Class B Shares of the Canadian subsidiary. If increased, the purchase
price will be allocated between purchased user agreements and goodwill. Holders
of the Class B Shares have the right, at any time, to exchange such Class B
Shares for shares of the Company's Common Stock on a one-for-one basis, subject
to adjustment. In addition, the Company has the right to require such exchange
to occur at any time on or after January 1, 2001, or earlier if certain
specified events occur.
 
     On June 30, 1997, the Company acquired the 50% interest held by its Joint
Venture partner in Ticketmaster-Northwest for $12.6 million in cash. This
acquisition has been recorded as a purchase transaction; accordingly, the
purchase price was allocated to the net assets acquired based on their estimated
fair market values. Approximately $1.5 million was allocated to purchased user
agreements; the excess of the estimated fair value of net assets acquired
amounted to approximately $10.4 million, which has been accounted for as
goodwill and is being amortized over 30 years using the straight line method.
The accompanying consolidated statements of operations include the results of
operations since the effective date of the acquisition.
 
                                        6
<PAGE>   8
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
     On July 31, 1997 the Company acquired 50% of the capital stock of The
Ticket Shop Limited for a purchase price of approximately Irish L1,517,000
(approximately US $2,200,000). This acquisition (Ireland acquisition) has been
recorded as a purchase transaction; accordingly, the purchase price was
allocated to the net assets acquired based on their estimated fair market
values. Approximately $0.8 million was allocated to purchased user agreements;
the excess of the estimated fair value of net assets acquired amounted to
approximately $1.4 million, which has been accounted for as goodwill and is
being amortized over 30 years using the straight line method
 
     Also, on July 31, 1997, the Company acquired the 20% minority interest held
by its Joint Venture partner in Ticketmaster-Tennessee for $1.1 million in cash.
This acquisition has been recorded as a purchase transaction; accordingly, the
purchase price was allocated to the net assets acquired based on their estimated
fair market values. Approximately $0.3 million was allocated to purchased user
agreements; the excess of the estimated fair value of net assets acquired
amounted to approximately $0.8 million, which has been accounted for as goodwill
and is being amortized over 30 years using the straight line method.
 
     The following pro forma information presents a summary of consolidated
results of the Company, the European, Ticketmaster-Indiana,
Ticketmaster-Northwest and Pacer/CATS/CCS Joint Ventures, the Delaware Valley
(Philadelphia), Canadian and Mexico licensees and the Texas and Florida
operating subsidiaries for the three and six months ended July 31, 1996 and
1997, assuming the acquisitions had been made as of February 1, 1996, with pro
forma adjustments to give affect to amortization of goodwill and purchased user
agreements, interest on the related acquisitions and the related income tax
effect utilizing a statutory rate for Federal taxes equal to 34%, and for state
and foreign taxes equal to the rate applicable in each jurisdiction. The pro
forma financial information is not necessarily indicative of the results of
operations as they would have been had the transactions been effective on
February 1, 1996.
 
<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED        SIX MONTHS ENDED
                                                     JULY 31,                 JULY 31,
                                                -------------------     ---------------------
                                                 1996        1997         1996         1997
                                                -------     -------     --------     --------
                                                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
    <S>                                         <C>         <C>         <C>          <C>
    Total revenue.............................  $79,142     $83,666     $152,008     $165,437
    Net income (loss).........................      561       2,164         (127)       4,224
    Income per share..........................     0.02        0.08         0.00         0.16
</TABLE>
 
     Pro forma results of operations have not been presented for the Ireland and
TM-Tennessee acquisitions because the pro forma effect of these acquisitions are
not significant.
 
(3) EARNINGS PER SHARE
 
     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("FAS 128")
which will become effective in the fourth quarter of 1998. FAS 128 replaces the
presentation of earnings per share reflected on the Statement of Operations with
a dual presentation of Basic Earnings per Share ("Basic EPS") and Diluted
Earnings per Share ("Diluted EPS"). Basic EPS excludes dilution and is computed
by dividing net income by the weighted average number of common shares
outstanding during the period. Diluted EPS reflects the potential dilution that
could occur if stock options and other commitments to issue common stock were
exercised resulting in the issuance of common stock that then shared in the
earnings of the Company. FAS 128 does not permit early application; however, it
requires, when implemented in the fourth quarter, the restatement of previously
reported earnings per share for each income statement presented. Pro forma
disclosure of earnings per share information as if
 
                                        7
<PAGE>   9
 
                   TICKETMASTER GROUP, INC. AND SUBSIDIARIES
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
the Company implemented FAS 128 during the three and six months ended July 31,
1997 and 1996, respectively, are as follows:
 
     Pro Forma Earnings Per Share:
 
<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED JULY 31,  SIX MONTHS ENDED JULY 31,
                                             --------------------------   -------------------------
                                                 1996          1997          1996          1997
                                              -----------   -----------   -----------   -----------
                                                    (IN THOUSANDS, EXCEPT SHARE AND PER SHARE
                                                                  INFORMATION)
<S>                                           <C>           <C>           <C>           <C>
Net income (loss)...........................  $      (439)  $     1,979   $    (2,418)  $     3,860
                                              ===========   ===========   ===========   ===========
Weighted average shares.....................   15,310,405    25,855,246    15,310,405    25,669,324
                                              ===========   ===========   ===========   ===========
Basic earnings (loss) per share.............  $     (0.03)  $      0.08   $     (0.16)  $      0.15
                                              ===========   ===========   ===========   ===========
Weighted average shares including the
  dilutive effect of stock options (92,740
  and 116 for the three and six months ended
  July 31, 1997)............................  $15,310,405   $25,947,986   $15,310,405   $25,669,440
                                              ===========   ===========   ===========   ===========
Diluted earnings (loss) per share...........  $     (0.03)  $      0.08   $     (0.16)  $      0.15
                                              ===========   ===========   ===========   ===========
</TABLE>
 
                                        8
<PAGE>   10
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
 
     The following contains forward-looking statements. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from those anticipated by these
forward-looking statements as a result of various factors. The risks and
uncertainties that may affect the operations, performance and development of the
Company's business include, but are not limited to, the following: business and
general economic conditions and competitive factors. In light of these risks and
uncertainties, there can be no assurance that events anticipated by the
forward-looking statements contained below will in fact transpire.
 
GENERAL
 
     The Company's Managed Businesses are comprised of the Consolidated
Businesses (i.e. its wholly and majority owned subsidiaries) together with the
Unconsolidated Joint Ventures (i.e. those Joint Ventures in which it acts as
managing partner). The Company seeks to optimize the performance of each of the
Managed Businesses regardless of its percentage ownership. The Company provides
the same scope of ticket inventory control and management, distribution and
dedicated marketing and support services to its Joint Ventures as it does to its
wholly owned operating subsidiaries. Consequently, certain aspects of the
performance of the Managed Businesses are better understood by measuring their
performance as a whole without regard to the Company's ownership interest. Where
relevant, certain aspects of the performance of the Managed Businesses are also
discussed with regard to the Consolidated Businesses and Unconsolidated Joint
Ventures separately.
 
     All discussion included herein calculates the percentage changes using
actual dollar amounts, versus rounded dollar amounts.
 
                                        9
<PAGE>   11
 
RESULTS OF OPERATIONS
 
  FOR THE QUARTER ENDED JULY 31, 1997 COMPARED WITH THE QUARTER ENDED JULY 31,
1996
 
     The following table sets forth unaudited operating results for the
Consolidated Businesses and the Unconsolidated Joint Ventures, collectively, the
Managed Businesses. The amounts shown for the Unconsolidated Joint Ventures
represent the full balance for each line item and do not give effect to the
Joint Venture ownership interests held by entities other than the Company.
 
<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED JULY 31, 1996                THREE MONTHS ENDED JULY 31, 1997
                             ---------------------------------------------   ---------------------------------------------
                             TICKETMASTER    UNCONSOLIDATED       TOTAL      TICKETMASTER    UNCONSOLIDATED       TOTAL
                             CONSOLIDATED         JOINT          MANAGED     CONSOLIDATED         JOINT          MANAGED
                             BUSINESS(1)       VENTURES(2)      BUSINESSES   BUSINESS(1)       VENTURES(2)      BUSINESSES
                             ------------   -----------------   ----------   ------------   -----------------   ----------
                                                                    (IN THOUSANDS)
<S>                          <C>            <C>                 <C>          <C>            <C>                 <C>
Revenues:
  Ticketing operations.....    $ 50,039         $  15,310        $ 65,349      $ 69,473          $ 8,074         $ 77,547
  Concession control
    systems................          --             6,723           6,723         8,484               --            8,484
  Publications.............       2,522               176           2,698         3,010               --            3,010
  Merchandising............         657                --             657           728               --              728
                               --------          --------        --------      --------         --------         --------
         Total revenues....      53,218            22,209          75,427        81,695            8,074           89,769
Operating costs, expenses
  and other items:
  Ticketing operations.....      30,905             8,576          39,481        39,503            5,028           44,531
  Ticketing selling,
    general and
    administrative.........       8,453             2,816          11,269        12,415            1,867           14,282
  Concession control
    systems operations.....          --             4,228           4,228         4,814               --            4,814
  Concession control
    systems selling,
    general and
    administrative.........          --             2,354           2,354         2,766               --            2,766
  Publications.............       4,594               128           4,722         4,134               --            4,134
  Merchandising............         575                --             575           709               --              709
  Corporate general and
    administrative.........       4,170                --           4,170         5,218               --            5,218
  Depreciation.............       1,410               633           2,043         2,552              244            2,796
  Amortization of
    goodwill...............         464               143             607         1,260               --            1,260
  Amortization of other....         702               441           1,143         1,783              459            2,242
                               --------          --------        --------      --------         --------         --------
         Total operating
           costs...........      51,273            19,319          70,592        75,154            7,598           82,752
                               --------          --------        --------      --------         --------         --------
                                  1,945         $   2,890        $  4,835         6,541          $   476            7,017
                                                 ========        ========                       ========         ========
Equity in net income of
  unconsolidated
  affiliates...............      (1,124)                                           (381)
                               --------                                        --------
Operating income...........       3,069                                           6,922
Interest expense and
  other....................       2,987                                           2,213
Income tax provision.......         521                                           2,730
                               --------                                        --------
         Net (loss)
           income..........    $   (439)                                       $  1,979
                               ========                                        ========
Supplemental information:
  EBITDA(3)................    $  4,521         $   4,107        $  8,628      $ 12,136          $ 1,179         $ 13,315
                               ========          ========        ========      ========         ========         ========
  Attributable
    EBITDA(4)..............                                      $  6,464                                        $ 13,195
                                                                 ========                                        ========
  Net cash provided by
    (used in) operating
    activities.............    $  9,532         $   5,627        $ 15,159      $(11,910)          (1,272)         (13,182)
  Net used in investing
    activities.............      (3,310)           (1,742)         (5,052)      (13,834)          (2,402)         (16,236)
  Net cash provided by
    (used in) financing
    activities.............       6,903            (1,214)          5,689         8,788             (335)           8,453
  Number of tickets sold...      11,114             4,021          15,135        14,165            2,116           16,281
  Gross dollar value of
    tickets sold...........    $327,606         $ 117,006        $444,612      $471,727          $61,024         $532,751
</TABLE>
 
Notes following
 
                                       10
<PAGE>   12
 
---------------
 
(1) Defined as results of operations from businesses included in the Company's
    Consolidated Financial Statements included elsewhere in this Form 10-Q,
    which include the accounts of the Company, its wholly owned subsidiaries and
    majority (80% or greater) owned companies and Joint Ventures. Investments in
    companies and Joint Ventures, in which ownership ranges from 33 1/3% - 50%
    and in which the Company exercises significant influence over operating and
    financial policies, are accounted for using the equity method.
 
(2) Defined as the combined results of operations from unconsolidated Joint
    Ventures. Ticketmaster's ownership interest in these businesses range from
    33 1/3% - 50% and are in companies and Joint Ventures in which Ticketmaster
    exercises significant influence over operating and financial policies, and
    are accounted for under the equity method included in the Consolidated
    Businesses.
 
(3) Defined as revenue less operating costs before interest, taxes, depreciation
    and amortization. Managed Business EBITDA does not represent cash flows from
    operations, as defined by generally accepted accounting principles, and
    should not be considered to be an alternative to net income as an indicator
    of operations performance or to cash flows from operations as a measure of
    liquidity. Management believes that an EBITDA presentation is an important
    factor in evaluating the amount of cash available for repayment of debt,
    future investment, dividends and in determining cash available for future
    distributions.
 
(4) Defined as Ticketmaster's pro rata share in the results of its Consolidated
    Businesses and Unconsolidated Joint Ventures' revenue less operating costs
    before interest, taxes, depreciation and amortization. EBITDA does not
    represent cash flows from operations, as defined by generally accepted
    accounting principles, and should not be considered to be an alternative to
    net income as an indicator of operating performance or to cash flows from
    operations as a measure of liquidity. Management believes that an EBITDA
    presentation is an important factor in evaluating the amount of cash
    available for repayment of debt, future investments, dividends and in
    determining cash available for future distributions.
 
  Consolidated Businesses
 
     Ticketing operations revenue increased by $19.4 million, or 39%, to $69.5
million versus $50.0 million for the same quarter of the prior year. This
increase is attributed to an increase of 27% in ticket sales (from 11.1 million
to 14.2 million tickets), and a 9% increase in average per ticket operations
revenue (from $4.50 to $4.90) which is attributed to an overall increase in
convenience charges and an increase in sponsorship and promotions revenue.
Increased ticket sales were largely attributed to the acquisitions of its Joint
Venture partners' interests in (and subsequent consolidation of) the
Ticketmaster-Europe operations in June 1996, Ticketmaster-Indiana operations in
November 1996 and in the Ticketmaster-Northwest operations in June 1997 and the
acquisitions of the Company's Delaware Valley (Philadelphia) licensee in October
1996 and Canadian licensees in March 1997. Increased sponsorship and promotions
revenue is primarily attributed to an increase in activity with strategic
marketing partners resulting from the Company's efforts to create integrated
marketing opportunities around live events, its call centers, ticket stock and
envelopes and event promotional material and in additional media outlets such as
Ticketmaster Online.
 
     Revenue generated by concession and control systems for the three months
ended July 31, 1997 are included in Consolidated Businesses while the revenue
generated for the three months ended July 31, 1996 are included in
Unconsolidated Joint Ventures due to the acquisition of the Joint Venture
partners' interests on July 29, 1996. Accordingly, the discussion and analysis
included herein is based upon a comparison of Consolidated Businesses to
Unconsolidated Joint Ventures. Concession and control systems revenue increased
by $1.8 million, or 26%, to $8.5 million versus $6.7 million for the same
quarter of the prior year. The Company attributes its strong revenue growth to
increased sales resulting from the acceptance of new products by major theatre
chains in the United States, Europe and South America.
 
     Publications revenue increased by $0.5 million, or 19%, to $3.0 million
versus $2.5 million for the same quarter of the prior year. In January 1996, the
Company distributed its first issue of Live! magazine, a monthly consumer
oriented entertainment magazine. This increase is attributed to higher annual
subscription revenue,
 
                                       11
<PAGE>   13
 
due to an increase in the subscription price, and an increase in the advertising
revenue per page in the magazine.
 
     Ticketing operations costs increased by $8.6 million, or 28%, to $39.5
million versus $30.9 million for the same quarter of the prior year, which is
consistent with an increase in ticketing operations revenue of 39%. This
increase is attributed to the increase in ticketing operations revenue as these
costs are primarily variable in nature. Ticketing operations costs decreased as
a percentage of ticketing operations revenue to 57% from 62%. Much of this
decrease is attributed to operating efficiencies and increased revenue generated
from sponsorship and promotion activity which yields higher margins.
 
     Ticketing selling, general & administrative costs increased by $4.0
million, or 47%, to $12.4 million versus $8.5 million for the same quarter of
the prior year. This increase was largely attributed to the increase in
territories serviced by the Consolidated Businesses resulting from the
acquisitions of a Joint Venture partners' interests in (and subsequent
consolidation of) the Ticketmaster-Europe operations in June 1996,
Ticketmaster-Indiana operations in November 1996 and in the
Ticketmaster-Northwest operations in June 1997 and the acquisitions of the
Company's Delaware Valley (Philadelphia) licensee in October 1996 and Canadian
licensees in March 1997.
 
     The operating costs of concession and control systems increased by $0.6
million, or 14%, to $4.8 million included in the Consolidated Businesses from
$4.2 million included in the Unconsolidated Joint Ventures for the same quarter
of the prior year. As a percentage of revenue, these expenses decreased from 63%
to 56%, this decrease is primarily attributed to a combination of product mix
and improvements in the quotation, assembly and delivery processes. The selling,
general and administrative costs of concession and control systems increased by
$0.4 million, or 18%, to $2.8 million, which is consistent with the increased
level of sales which is reflected by an increase in revenues of 26%.
 
     Corporate general and administrative costs increased by $1.0 million, or
25%, to $5.2 million versus $4.2 million for the same quarter of the prior year.
Much of the increase resulted from increased expenses associated with growth in
administrative functions necessary to support the development of the Company's
principal business inclusive of recent acquisitions, and more recent development
efforts in Ticketmaster-Publications and Ticketmaster Online.
 
     Depreciation increased by $1.1 million, or 81% ,to $2.6 million versus $1.4
million for the same quarter of the prior year. Amortization of goodwill
increased by $0.8 million, or 172%, to $1.3 million versus $0.5 for the same
quarter of the prior year. Other amortization increased by $1.1 million, or
154%, to $1.8 million versus $0.7 for the same quarter of the prior year. These
increases are attributed to the acquisitions (and subsequent consolidation) of
interests previously owned by third parties in Pacer/CATS/CCS and Ticketmaster's
operations in Europe, Indiana, Florida, Texas, Northwest and licensees in
Delaware Valley (Philadelphia) and Canada.
 
     Consolidated interest and other expense decreased by $0.8 million, or 26%,
to $2.2 million for the quarter, resulting from reduced borrowing levels and
lower cost of capital.
 
     Income tax expense, increased from $0.5 million in the second quarter of
the prior year, to $2.7 million or 58% of pre-tax income in the second quarter
of the current year. The high effective tax rate occurred primarily because of
non-deductible amortization resulting from acquisitions and the effective
international tax rates.
 
     As a result of the foregoing, the Company had net income of $2.0 million in
the current quarter compared to net losses of $0.4 million for the same quarter
of the prior year.
 
  Unconsolidated Joint Ventures
 
     Ticketing operations revenue decreased by $7.2 million, or 47%, to $8.1
million versus $15.3 million for the same quarter of the prior year. This
decrease is attributed to the acquisitions by the Company of its partners' Joint
Venture interests (and thus inclusion of operating results in Consolidated
Businesses rather than Unconsolidated Joint Ventures) in the Ticketmaster-Europe
and Indiana operations in June and November 1996, respectively, and in the
Ticketmaster-Northwest operations in June 1997.
 
                                       12
<PAGE>   14
 
     Concession and Control Systems became a wholly-owned subsidiary of the
Company on July 29, 1996, the results of which have been discussed in
Consolidated Businesses.
 
     Ticketing operations costs decreased by $3.5 million, or 41%, to $5.0
million versus $8.6 million for the same quarter of the prior year, which is
consistent with the decrease in ticket operations revenue of 47%, as these costs
are primarily variable in nature.
 
     Ticketing selling, general and administrative costs decreased by $0.9
million, or 34%, to $1.9 million versus $2.8 million for the same quarter of the
prior year. The decrease is attributed to the acquisitions by the Company of its
partners' Joint Venture interests (and thus inclusion of operating results in
Consolidated Businesses rather than Unconsolidated Joint Ventures) in the
Ticketmaster-Europe and Indiana operations in June and November 1996,
respectively, and in the Ticketmaster-Northwest operations in June 1997.
 
     Depreciation decreased by $0.4 million or 39% to $0.2 million in the
current year versus $0.6 million for the same quarter of the prior year. The
decrease is attributed to the acquisitions by the Company of its partners' Joint
Venture interests (and thus inclusion of operating results in Consolidated
Businesses rather than Unconsolidated Joint Ventures) in Pacer/CATS/CCS and in
the Ticketmaster-Europe and Indiana operations in June and November 1996 and
June 1997, respectively, and in the Ticketmaster-Northwest operations in June
1997.
 
     As a result of the foregoing, net income from Unconsolidated Joint Ventures
decreased by $2.4 million, or 84%, to $0.5 million versus $2.9 million for the
same quarter of the prior year.
 
  Managed Businesses
 
     Aggregate revenues for the Managed Businesses increased by $14.3 million,
or 19%, to $89.8 million versus $75.4 million for the same quarter of the prior
year. The increase is primarily attributed to an increase of $12.2 million, or
19%, to $77.5 million in ticketing operations revenue.
 
     As a result of the foregoing, EBITDA for the Managed Businesses increased
by $4.7 million, or 54%, to $13.3 million versus $8.6 million for the same
quarter of the prior year.
 
                                       13
<PAGE>   15
 
RESULTS OF OPERATION
 
  FOR THE SIX MONTHS ENDED JULY 31, 1997 COMPARED WITH THE SIX MONTHS ENDED JULY
31, 1996
 
     The following table sets forth unaudited operating results for the
Consolidated Businesses and the Unconsolidated Joint Ventures, collectively, the
Managed Businesses. The amounts shown for the Unconsolidated Joint Ventures
represent the full balance for each line item and do not give effect to the
Joint Venture ownership interests held by entities other than the Company.
 
<TABLE>
<CAPTION>
                                   SIX MONTHS ENDED JULY 31, 1996                  SIX MONTHS ENDED JULY 31, 1997
                            ---------------------------------------------   ---------------------------------------------
                            TICKETMASTER    UNCONSOLIDATED       TOTAL      TICKETMASTER    UNCONSOLIDATED       TOTAL
                            CONSOLIDATED         JOINT          MANAGED     CONSOLIDATED         JOINT          MANAGED
                            BUSINESS(1)       VENTURES(2)      BUSINESSES   BUSINESS(1)       VENTURES(2)      BUSINESSES
                            ------------   -----------------   ----------   ------------   -----------------   ----------
                                                                   (IN THOUSANDS)
<S>                         <C>            <C>                 <C>          <C>            <C>                 <C>
Revenues:
  Ticketing operations....    $ 94,052         $  33,095        $127,147      $136,865          $17,058        $  153,923
  Concession control
    systems...............          --            12,964          12,964        14,734                             14,734
  Publications............       4,512               176           4,688         5,977                              5,977
  Merchandising...........       1,395                --           1,395         1,122                              1,122
                              --------          --------        --------      --------         --------        ----------
         Total revenues...      99,959            46,235         146,194       158,698           17,058           175,756
Operating costs, expenses
  and other items:
  Ticketing operations....      58,655            18,344          76,999        78,608            9,876            88,484
  Ticketing selling,
    general and
    administrative........      16,278             6,058          22,336        23,015            3,595            26,610
  Concession control
    systems operations....          --             8,462           8,462         8,515                              8,515
  Concession control
    systems selling,
    general and
    administrative........          --             4,687           4,687         5,053                              5,053
  Publications............       9,115               128           9,243         8,857                              8,857
  Merchandising...........       1,226                --           1,226         1,059                              1,059
  Corporate general and
    administrative........       8,396                --           8,396        10,339                             10,339
  Depreciation............       2,760             1,330           4,090         4,785              497             5,282
  Amortization of
    goodwill..............         912               173           1,085         2,288                              2,288
  Amortization of other...       1,257             1,084           2,341         3,450              916             4,366
                              --------          --------        --------      --------         --------        ----------
         Total operating
           costs..........      98,599            40,266         138,865       145,969           14,884           160,853
                              --------          --------        --------      --------         --------        ----------
                                 1,360         $   5,969        $  7,329        12,729          $ 2,174        $   14,903
                                                ========        ========                       ========        ==========
  Equity in net income of
    unconsolidated
    affiliates............      (2,136)                                         (1,037)
                              --------                                        --------
  Operating income........       3,496                                          13,766
  Interest expense and
    other.................       6,043                                           4,356
  Income tax provision
    (benefit).............        (129)                                          5,550
                              --------                                        --------
         Net (loss)
           income.........    $ (2,418)                                       $  3,860
                              ========                                        ========
  Supplemental
    information:
    EBITDA(3).............    $  6,289         $   8,556        $ 14,845      $ 23,252          $ 3,587        $   26,839
                              ========          ========        ========      ========         ========        ==========
    Attributable
      EBITDA(4)...........                                      $ 10,068                                       $   25,396
                                                                ========                                       ==========
    Net cash provided by
      operating
      activities..........    $  7,457         $   6,721        $ 14,178      $ 23,726          $ 3,704        $   27,430
    Net cash used in
      investing
      activities..........      (4,658)           (6,851)        (11,509)      (20,008)          (3,278)          (23,286)
    Net cash provided by
      (used in) financing
      activities..........      10,347            (3,943)          6,404        18,708           (1,913)           16,795
    Number of tickets
      sold................      21,580             8,823          30,403        28,973            4,541            33,514
    Gross dollar value of
      tickets sold........    $619,806         $ 250,188        $869,994      $936,596          $128,915       $1,065,511
</TABLE>
 
Notes following
 
                                       14
<PAGE>   16
 
  Consolidated Businesses
 
     Ticketing operations revenue increased by $42.8 million, or 46%, to $136.9
million versus $95.1 million for the same period of the prior year. The increase
is attributed to an increase of 34% in ticket sales (from 21.6 million to 29.0
million tickets), an 8% increase in average per ticket operations revenue (from
$4.36 to $4.72) which is attributed to an overall increase in convenience
charges and an increase in sponsorship and promotions revenue. Increased ticket
sales were largely attributed to the acquisitions of its Joint Venture partners'
interests in (and subsequent consolidation of) the Ticketmaster-Europe
operations in June 1996 and Ticketmaster-Indiana operations in November 1996 and
in the Ticketmaster-Northwest operations in June 1997 and the acquisitions of
the Company's Delaware Valley (Philadelphia) licensee in October 1996 and
Canadian licensees in March 1997. Increased sponsorship and promotions revenue
is primarily attributed to an increase in activity with strategic marketing
partners resulting from the Company's efforts to create integrated marketing
opportunities around live events, its call centers, ticket stock and envelopes
and event promotional material and in additional media outlets such as
Ticketmaster Online.
 
     Revenues generated by concession and control systems for the six months
ended July 31, 1997 are included in Consolidated Businesses while the revenues
generated for the six months ended July 31, 1996 are included in Unconsolidated
Joint Ventures due to the acquisition of the Joint Venture partners' interests
on July 29, 1996. Accordingly, the discussion and analysis included herein is
based upon a comparison of Consolidated Businesses to Unconsolidated Joint
Ventures. Concession and control systems revenue increased by $1.8 million, or
14%, to $14.7 million versus $13.0 million for the same quarter of the prior
year.
 
     Publications revenue increased by $1.5 million, or 32%, to $6.0 million
versus $4.5 million for the same period of the prior year. In January 1996, the
Company distributed its first issue of Live! magazine, a monthly consumer
oriented entertainment magazine. The increase is attributed to higher annual
subscription revenue, due to an increase in the subscription price, and an
increase in the advertising revenue per page in the magazine.
 
     Ticketing operations costs increased by $20.0 million, or 34%, to $78.6
million versus $58.7 million for the same period of the prior year, which is
consistent with increased ticket operations revenue of 46%. This increase is
attributed to the increase in ticketing operations revenue as these costs are
primarily variable in nature. Ticketing operations costs decreased as a
percentage of ticket operations revenue to 57% from 62%. Much of this decrease
is attributed to operating efficiencies and increased revenue generated from
sponsorship and promotion activity which yields higher margins.
 
     Ticketing selling, general and administrative costs increased by $6.7
million, or 41%, to $23.0 million versus $16.3 million for the same period of
the prior year. The increase was largely attributed to the increase in
territories serviced by the Consolidated Businesses resulting from the
acquisitions of its Joint Venture partners' interests in (and subsequent
consolidation of) the Ticketmaster-Europe operations in June 1996,
Ticketmaster-Indiana operations in November 1996 and in the
Ticketmaster-Northwest operations in June 1997 and the acquisitions of the
Company's Delaware Valley (Philadelphia) licensee in October 1996 and Canadian
licensees in March 1997.
 
     The operating costs of concession and control systems remained consistent
at $8.5 million in each period included in Consolidated Businesses and
Unconsolidated Joint Ventures for the same quarter of the prior year. As a
percentage of revenue, these expenses decreased from 65% to 58%, this decrease
is primarily attributed to a combination of product mix and improvements in the
quotation, assembly and delivery processes. The selling, general and
administrative costs of concession and control systems increased $0.4 million,
or 8%, to 5.1 million versus $4.7 million for the same period of the prior year,
which is consistent with the increased level of sales which is reflected by an
increase in revenues of 14%.
 
     Corporate general and administrative costs increased by $1.9 million, or
23%, to $10.3 million versus $8.4 million for the same period of the prior year.
Much of the increase resulted from increased expenses associated with growth in
administrative functions necessary to support the development of the Company's
 
                                       15
<PAGE>   17
 
principal business inclusive of recent acquisitions, and more recent development
efforts in Ticketmaster-Publications and Ticketmaster Online.
 
     Depreciation increased by $2.0 million, or 73%, to $4.8 million versus $2.8
million for the same period of the prior year. Amortization of goodwill
increased by $1.4 million, or 151%, to $2.3 million versus $0.9 for the same
period of the prior year. Other amortization increased by $2.2 million, or 174%,
to $3.5 million versus $1.3 for the same period of the prior year. These
increases are attributed to acquisitions (and subsequent consolidation) of
interests previously owned by third parties in Pacer/CATS/CCS and in
Ticketmaster's operations in Europe, Indiana, Florida, Texas, Northwest and the
Delaware Valley (Philadelphia) and Canadian licensees.
 
     Consolidated interest and other expense decreased by $1.6 million, or 28%,
to $4.3 million for the quarter, reflecting lower borrowing levels and lower
cost of capital.
 
     Income tax expense, measured as a percentage of pre-tax income, increased
from a benefit of 5% resulting from pre-tax losses in the first six months of
the prior year to 59% of pre-tax income in the first six months of the current
year. The high effective tax rate occurred because of increased non-deductible
amortization resulting from acquisitions and effective international tax rates.
 
     As a result of the foregoing, the Company had net income of $3.9 million in
the current period compared to net losses of $2.4 million for the same period of
the prior year.
 
  Unconsolidated Joint Ventures
 
     Ticketing operations revenue decreased by $16.0 million, or 48%, to $17.1
million versus $33.1 million for the same period of the prior year. The decrease
is attributed to a decrease of 40% in ticket sales (from 8.8 million to 4.5
million tickets). The decrease is attributed to the acquisition by the Company
of its partners' Joint Venture interests (and thus inclusion of operating
results in Consolidated Businesses rather than Unconsolidated Joint Ventures) in
the Ticketmaster Europe and Indiana operations in June and November 1996,
respectively, and in the Northwest operations in June 1997.
 
     The discussion and analysis with respect to results of operations from
concession and control systems is included in Consolidated Businesses.
 
     Ticketing operations costs decreased by $8.5 million, or 46%, to $9.9
million versus $18.3 million for the same period of the prior year, which is
consistent with decreased ticketing operations revenue of 48%, as these costs
are primarily variable in nature.
 
     Ticketing selling, general and administrative costs decreased by $2.5
million, or 41%, to $9.9 million versus $6.1 million for the same period of the
prior year. This decrease is attributed to the acquisition by the Company of its
partners' Joint Venture interests (and thus inclusion of operating results in
Consolidated Businesses rather than Unconsolidated Joint Ventures) in the
Ticketmaster-Europe and Indiana operations in June and November 1996,
respectively, and in the Northwest operations in June 1997.
 
     Depreciation decreased by $0.8 million or 63% to $0.5 million in the
current year versus $1.3 million for the same period of the prior year. This
decrease is attributed to the acquisition by the Company of its partners' Joint
Venture interests (and thus inclusion of operating results in Consolidated
Businesses rather than Unconsolidated Joint Ventures) in Pacer/CATS/CCS and in
the Ticketmaster-Europe and Indiana operations in June and November 1996,
respectively, and in the Northwest operations in June 1997.
 
     As a result of the foregoing, net income from Unconsolidated Joint Ventures
decreased by $3.1 million, or 58%, to $2.2 million versus $5.4 million for the
same period of the prior year.
 
  Managed Businesses
 
     Aggregate revenues for the Managed Businesses increased by $29.6 million,
or 20%, to $175.8 million versus $146.2 million for the same period of the prior
year. The increase is primarily attributed to an increase of $26.8 million, or
18.3%, to $154.0 million in ticketing operations revenue.
 
                                       16
<PAGE>   18
 
     As a result of the foregoing, EBITDA for the Managed Businesses increased
by $12.0 million, or 28%, to $26.8 million versus $14.8 million for the same
period of the prior year.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company's primary sources of liquidity are cash flows from operations
and available credit under its revolving bank credit facilities.
 
     Net cash provided by operating activities was $23.7 million in the period
ended July 31, 1997 compared with $7.5 million in the period ended July 31,
1996. This change primarily reflects an increase in income before depreciation
and amortization.
 
     As of July 31, 1997, the Company had cash and cash equivalents of $29.1
million for its own account, separate from funds held in accounts on behalf of
venues and promoters and working capital of $10.4 million.
 
     Net cash used in investing activities was $20.0 million in the period ended
July 31, 1997 compared with $4.7 million in the period ended July 31, 1996. This
increase primarily related to acquisitions of minority interests, licensees, new
ventures, payments for upgrades to call centers and improvements made to the
Company's recently acquired corporate headquarters building.
 
     Excluding the acquisitions and formations of new venture investments
activities, the Company's anticipated annual capital expenditures for the
remainder of fiscal 1998 are expected to include $2.5 million of replacements or
upgrades of computer equipment, $1.5 million in expanded call center capacity
and additional amounts which management determines are necessary in order to
maintain the Company's competitive position or to otherwise achieve its business
strategies.
 
     Net cash provided by financing activities was $18.7 million in the period
ended July 31, 1997 compared to $10.3 million in the period ended July 31, 1996.
The current period activity is primarily attributed to borrowings for the
Northwest and Canadian acquisitions, while the activity for the same quarter of
the prior year was primarily attributed to borrowings for the
Ticketmaster-European Joint Venture acquisition and for general business
purposes.
 
     Amounts available under the Credit Agreement are limited to the lower of
the commitment amount or a borrowing base calculated as a multiple of cash flows
as defined in the Credit Agreement. As of July 31, 1997, the Company had $130
million in outstanding bank borrowings under its $175 million revolving bank
credit line. Amounts available under the credit line decreased to $165 million
as of December 31, 1997 and will reduce further to $150 million as of December
31, 1998. As of July 31, 1997, the borrowing base calculation did not restrict
the Company's availability under the Credit Agreement. The Company's Credit
Agreement contains other covenants and restrictions, as to which the Company was
in compliance at July 31, 1997.
 
     On April 23, 1997, the Company entered into a $9.0 million non-recourse
Promissory Note secured by a Deed of Trust on the Company's new headquarters
building, the proceeds of which were used to pay-down existing commitments
outstanding under the Company's Credit Agreement.
 
     Also as of July 31, 1997, Pacer/CATS/CCS had indebtedness of $7.5 million
outstanding under a bank term loan. The term loan provides, among other things,
monthly interest payments only through June 1997, from July 1997 through June
1999 the Company is required to make principal and interest payments to the
extent Pacer/CATS/CCS's cashflows exceed certain amounts. The loan agreement is
secured by all of Pacer/CATS/CCS's assets and contains certain restrictions and
covenants, with which Pacer/CATS/CCS is in full compliance or has obtained the
necessary waivers from its bank.
 
     The Company anticipates that funds from operations and available credit
from its bank lending facilities will be sufficient to meet its working capital,
capital expenditure and debt service requirements through the end of fiscal
1998. However, to the extent that such funds are insufficient, the Company may
need to incur additional indebtedness and/or refinance existing indebtedness.
The Company's ability to do so may be restricted by borrowing base calculations
and other financial covenants described in the Credit Agreement.
 
                                       17
<PAGE>   19
 
                          PART II.  OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
     The following summarizes certain recent events that have taken place with
respect to the matters described under "Legal Proceedings" in the Company's
Annual Report filed on Form 10-K for the year ended January 31, 1997: (i) with
regard to Ticketmaster Corporation of Washington's (TCW) action against HBI
Financial, Inc. (HBI), on June 30, 1997, the Parties settled the matter in full
and TCW purchased HBI's interest in Ticketmaster-Northwest for $12.6 million in
cash; (ii) with regard to the Company's action against Microsoft, no substantive
activities have taken place since those reported in the Company's Form 10-Q for
the period ending April 30, 1997; and (iii) with regard to the action filed
against the Company by Ticketmaster Group Limited Partnership, the Company's
licensee in Maryland, Washington, D.C. and parts of Virginia, no substantive
activities have taken place since those reported in the Company's Form 10-Q for
the period ending April 30, 1997.
 
     On July 23, 1997, a three-member tribunal of the American Arbitration
Association issued an Award in favor of the claimant MovieFone, Inc., Promofone,
Inc. and the Teleticketing Co. LP (the "MovieFone Entities") and against the
respondent Pacer Cats Corporation, a wholly owned subsidiary of Wembley plc and
now known as "PCC Management, Inc." The Award provides, among other things, (i)
that the respondent shall pay to the claimant damages aggregating $22,751,250
and (ii) for injunctive relief relating to certain conduct of the respondent and
its successors and assigns with respect to the MovieFone Entities' business for
a specified period of time. The foregoing only summarizes certain provisions of
the Award, and reference is made to the full text thereof filed as Exhibit 99.3.
 
     No entity owned by the Company, including, but not limited to,
Pacer/CATS/CCS, was a party to the arbitration proceeding. Nonetheless, counsel
for Wembley plc, WIL, Incorporated, PCC Management, Inc. and Wembley, Inc.
(collectively the "Wembley Entities"), by letter dated 8/4/97, advised
Pacer/CATS/CCS, Ticketmaster Corporation, Ticketmaster Cinema Group, Ltd. and
Cinema Acquisition Corporation (collectively, the "Ticketmaster Entities"), that
the Wembley Entities intend to look to the Ticketmaster Entities to be made
whole with respect to the costs of the arbitration, including attorneys' fees
incurred in connection therewith, and all or part of any monetary damages
assessed against the respondent.
 
     The Ticketmaster Entities in turn have advised counsel for the Wembley
Entities that they believe that there is no validity to any claim by the Wembley
Entities against any of the Ticketmaster Entities. In this regard, by agreement
dated July 2, 1996, ("Agreement"), the Wembley Entities released and covenanted
not to sue the Ticketmaster Entities in connection with any claims arising out
of the arbitration proceeding; however, the Wembley Entities retained certain
limited indemnification rights under the Agreement, solely with respect to
Pacer/CATS/CCS and its operations from and after April 15, 1994. In the event
any of the alleged claims are pursued by the Wembley Entities, the Ticketmaster
Entities intend to vigorously oppose them.
 
     No determination, adverse or otherwise, can presently be made as to the
effect, if any, this matter may have on the Company.
 
                                       18
<PAGE>   20
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     On June 10, 1997, Registrant held its annual meeting of stockholders. The
following matters were submitted to the stockholders for action and the votes
cast are indicated below:
 
<TABLE>
<CAPTION>
                                           FOR             WITHHELD
                                        ----------         --------
    <S>                                 <C>                <C>
    1. Election of Directors:
       Paul G. Allen                    21,194,520          2,440
       Fredric D. Rosen                 21,194,520          2,440
       Charles Evans Gerber*            21,194,520          2,440
       David E. Liddle*                 21,194,520          2,440
       John A. Pritzker                 21,194,520          2,440
       William D. Savoy                 21,194,520          2,440
       Terence M. Strom*                21,194,520          2,440
</TABLE>
 
---------------
 
     * The indicated persons resigned from the Board on July 17, 1997. See
       Registrant's Form 8-K filed on July 30, 1997.
 
     2. Approval of Amendment to Stock Option Plan inclusive of an increase in
the number of shares available for issuance from 3,250,000 to 3,750,000:
 
<TABLE>
<CAPTION>
   FOR          AGAINST      ABSTAIN
----------     ---------     -------
<S>            <C>           <C>
17,666,879     3,515,282     2,849
</TABLE>
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
<TABLE>
 <C>   <S>
  (a)  Exhibits:
       11.1 Computation of Earnings Per Share
       99.3 Award
  (b)  Reports on Form 8-K:
       A Form 8-K was filed on May 28, 1997 in regards to the acquisition of Ticketmaster
       Canada Holdings Ltd.
       A Form 8-K/A was filed on June 12, 1997 in regards to the acquisition of Ticketmaster
       Canada Holdings Ltd.
       A Form 8-K was filed on July 14, 1997 in regards to the acquisition of the interest of
       the Company's partner in Ticketmaster-Northwest.
       A Form 8-K was filed on July 30, 1997 in regards to a change in control of the
       Company.
       A Form 8-K was filed on August 11, 1997 in regards to a change in the Company's
       certifying accountant.
       A Form 8-K/A was filed on August 19, 1997 in regards to a change in the Company's
       certifying accountant.
</TABLE>
 
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<PAGE>   21
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                          TICKETMASTER GROUP, INC.
 
Date: September 11, 1997                  By:     /s/ PETER B. KNEPPER
                                            ------------------------------------
                                                      Peter B. Knepper
                                                 Senior Vice President and
                                                  Chief Financial Officer
                                            (Principal Financial and Accounting
                                                           Officer)
 
                                          By:     /s/ NED S. GOLDSTEIN
                                            ------------------------------------
                                                      Ned S. Goldstein
                                                 Senior Vice President and
                                                      General Counsel
                                                 (Duly Authorized Officer)
 
                                       20