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

                               FORM 10-Q/A No. 1


(Mark One)
[X]    JOINT QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the quarterly period ended March 31, 1997

                                       OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934 
       [NO FEE REQUIRED]

       For the transition period from ______________________ to _______________

<TABLE>
<S>                                          <C>              <C>                                               <C>
       Commission File Number 1-9319                                       Commission File Number 1-9320

           CALIFORNIA JOCKEY CLUB                                          BAY MEADOWS OPERATING COMPANY
---------------------------------------------------------------  --------------------------------------------------------------
(Exact name of registrant as specified in its charter)           (Exact name of registrant as specified in its charter)

                  Delaware                     94-0358820                        Delaware                      94-2878485
----------------------------------------------------------------  -------------------------------------------------------------
       (State or other jurisdiction of      (I.R.S. Employer          (State or other jurisdiction of       (I.R.S. Employer
      incorporation or organization)        Identification No.)        incorporation or organization)       Identification No.)

                94-0358820                                                                94-2878485
----------------------------------------------------------------  -------------------------------------------------------------
    (I.R.S. Employer Identification No.)                                      (I.R.S. Employer Identification No.)

2600 S. Delaware Street, San Mateo, California    94403           2600 S. Delaware Street, San Mateo, California        94402
----------------------------------------------------------------  -------------------------------------------------------------
 (Address of principal executive offices)       (Zip Code)           (Address of principal executive offices)        (Zip Code)

                (415) 573-4514                                                         (415) 574-7223
----------------------------------------------------------------  -------------------------------------------------------------
(Registrant's telephone number, including area code)                (Registrant's telephone number, including area code)

               Not Applicable                                                         Not Applicable
----------------------------------------------------------------  -------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed     (Former name, former address and former fiscal year, if
                                                                           changed since last report) since last report)
</TABLE>


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 each registrant's classes of common stock,
par value $.01 per share, as of the close of business on May 2, 1997, was as
follows:

<TABLE>
<CAPTION>
             Registrant                                Number of Shares
             ----------                                ----------------
      <S>                                              <C>      
       California Jockey Club                             5,763,257
      Bay Meadows Operating Company                       5,763,257

</TABLE>


                                      -1-




<PAGE>   2
                         PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

SEPARATE AND COMBINED STATEMENTS OF INCOME 
THREE MONTHS ENDED MARCH 31, 1997 
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
--------------------------------------------------------------------------------
                                                                                
<TABLE>
<CAPTION>
                                                                         BAY MEADOWS
                                                          CALIFORNIA      OPERATING
                                                            JOCKEY       COMPANY AND
                                                             CLUB         SUBSIDIARY      ELIMINATIONS      COMBINED

<S>                                                       <C>             <C>             <C>             <C>
REVENUES:
  Pari-mutuel revenue                                                     $   17,099                     $    17,099
  Producer fees                                                                  321                             321
  Admissions, programs, parking and other racing income                        1,626                           1,626
  Concession sales                                                             1,063                           1,063
  Rental of racing facility                               $    1,660             160      $    (1,660)           160
  Interest and dividend income                                   112              49              (24)           137
  Other income                                                     2             183                             185
                                                          ----------     -----------      ------------     ---------

          Total                                                1,774          20,501           (1,684)        20,591
                                                          ----------     -----------      ------------     ---------

COSTS AND EXPENSES:
  Purses and incentive awards                                                  7,240                           7,240
  Commissions paid to guest tracks                                             1,089                           1,089
  Direct operating costs                                                       6,608                           6,608
  Cost of concession sales                                                       329                             329
  Depreciation and amortization                                  239             181                             420
  Racing facility rental                                                       1,666           (1,660)             6
  Marketing                                                                      465                             465
  General and administrative expense                             155             728              (24)           859
  Legal expenses                                                  62             201                             263
  Merger related costs                                           299             131                             430
                                                          ----------     -----------      ------------     ---------

          Total                                                  755          18,638           (1,684)        17,709
                                                          ----------     -----------      ------------     ---------

INCOME BEFORE INCOME TAX PROVISION                             1,019           1,863                           2,882

INCOME TAX PROVISION                                                             748                             748

NET INCOME                                                $    1,019     $     1,115      $         -      $   2,134
                                                          ==========     ===========      ============     =========

NET INCOME PER SHARE                                      $      .18     $       .19                       $     .37
                                                          ==========     ===========                       =========

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING                                       5,763,257       5,763,257                       5,763,257
                                                           =========       =========                       =========
</TABLE>



See Notes to Financial Statements.








                                      -2-
<PAGE>   3
CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

SEPARATE AND COMBINED STATEMENTS OF OPERATIONS 
THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                         BAY MEADOWS
                                                          CALIFORNIA      OPERATING
                                                            JOCKEY       COMPANY AND
                                                             CLUB         SUBSIDIARY      ELIMINATIONS      COMBINED

<S>                                                       <C>             <C>             <C>               <C>
REVENUES:
  Pari-mutuel revenue                                                     $   22,833                        $    22,833
  Producer fees                                                                  398                                398
  Admissions, programs, parking and other racing income                        1,935                              1,935
  Concession sales                                                               855                                855
  Rental of racing facility                              $    2,212              140           $(2,212)             140
  Interest and dividend income                                  123               86                (4)             205
  Other income                                                    3              445                                448
                                                         ----------       ----------       ------------         -------

          Total                                               2,338           26,692            (2,216)          26,814
                                                         ----------       ----------       ------------         -------

COSTS AND EXPENSES:
  Purses and incentive awards                                                  9,634                              9,634
  Commissions paid to guest tracks                                             1,599                              1,599
  Direct operating costs                                                       8,071                              8,071
  Cost of concession sales                                                       233                                233
  Depreciation and amortization                                 230              166                                396
  Racing facility rental                                                       2,218            (2,212)               6
  Marketing                                                                      611                                611
  General and administrative expense                            130              889                (4)           1,015
  Legal expenses                                                 47              136                                183
                                                         ----------       ----------       ------------         -------

          Total                                                 407           23,557            (2,216)          21,748
                                                         ----------       ----------       ------------         -------

INCOME BEFORE INCOME TAX PROVISION                            1,931            3,135                              5,066

INCOME TAX PROVISION                                                           1,258                              1,258
                                                         ----------       ----------       ------------         -------

NET INCOME                                               $    1,931       $    1,877       $         -          $ 3,808
                                                         ==========       ==========       ============         =======

NET INCOME PER SHARE                                     $      .34       $      .33                            $   .66
                                                         ==========       ==========                            =======

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING                                      5,763,257        5,763,257                          5,763,257
                                                         ==========       ==========                            =======
</TABLE>


See Notes to Financial Statements.





                                      -3-

<PAGE>   4
CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                       MARCH 31,      DECEMBER 31,
                                                                         1997             1996
ASSETS
<S>                                                                    <C>             <C>     
CURRENT ASSETS:
  Cash and cash equivalents                                            $  7,708        $  2,027
  Securities available for sale (at fair value)                           5,609           2,612
  Securities held to maturity (at cost)                                                   4,463
  Amounts held on deposit for Thoroughbred horse owners                     471
  Accounts receivable (net of allowance for doubtful accounts of
     $77 in 1997 and 1996)                                                1,269             527
  Prepaid expenses                                                          160             525
                                                                       --------        --------
          Total current assets                                           15,217          10,154
                                                                       --------        --------

PROPERTY, PLANT AND EQUIPMENT:
  Land                                                                    1,851             691
  Land held for sale                                                      3,604           3,083
  Racing plant                                                           24,301          24,177
  Tennis facility held for sale                                             308             308
  Equipment and leasehold improvements                                   11,248          11,032
                                                                       --------        --------

          Total                                                          41,312          39,291

  Accumulated depreciation and amortization                             (22,512)        (22,092)
                                                                       --------        --------

          Property, plant and equipment - net                            18,800          17,199
                                                                       --------        --------

OTHER ASSETS (net of accumulated amortization of
  $1,374 in 1997 and 1996)                                                  102              96
                                                                       --------        --------

DEFERRED INCOME TAXES                                                       227             227
                                                                       --------        --------

TOTAL ASSETS                                                           $ 34,346        $ 27,676
                                                                       ========        ========


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                     $  3,424        $  1,328
  Accrued liabilities                                                     2,959           1,983
  Note payable                                                            2,900           2,900
  Accrued purses                                                            884
  Due to Thoroughbred horse owners                                          471
                                                                       --------        --------

          Total current liabilities                                      10,638           6,211
                                                                       --------        --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common Stock, $.01 par value, authorized 10,000,000 shares;
    issued and outstanding 5,763,257 shares                                 116             116
  Additional paid in capital                                             18,385          18,385
  Retained earnings                                                       3,884           1,750
  Unrealized gain on securities available for sale                        1,323           1,214
                                                                       --------        --------

          Total stockholders' equity                                     23,708          21,465
                                                                       --------        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 34,346        $ 27,676
                                                                       ========        ========
</TABLE>



                                      -4-
<PAGE>   5
CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

SEPARATE AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                 BAY MEADOWS
                                  CALIFORNIA      OPERATING
                                   JOCKEY        COMPANY AND
                                    CLUB         SUBSIDIARY    ELIMINATIONS     COMBINED

<S>                                <C>           <C>           <C>              <C>     
Balance at January 1, 1997          $19,781       $ 1,684                       $ 21,465

Net income                            1,019         1,115                          2,134
Unrealized gain on securities
  available for sale                    109                                          109
                                    -------       -------                        -------

Balance at March 31, 1997           $20,909       $ 2,799                        $23,708
                                    =======       =======                        =======
</TABLE>



See Notes to Financial Statements.


                                      -5-
<PAGE>   6
CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

SEPARATE AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                 BAY MEADOWS
                                   CALIFORNIA     OPERATING
                                    JOCKEY       COMPANY AND
                                     CLUB        SUBSIDIARY    ELIMINATIONS     COMBINED

<S>                                 <C>          <C>           <C>              <C>     
Balance at January 1, 1996          $21,878       $ 1,229                       $ 23,107

Net income                            1,931         1,877                          3,808
Unrealized gain on securities
  available for sale                    338                                          338
                                    -------       -------                        -------

Balance at March 31, 1996           $24,147       $ 3,106                        $27,253
                                    =======       =======                        =======
</TABLE>


See Notes to Financial Statements.


                                      -6-
<PAGE>   7
CALIFORNIA JOCKEY CLUB AND
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

COMBINED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      1997          1996
<S>                                                                 <C>            <C>    
OPERATING ACTIVITIES:
  Net income                                                        $ 2,134        $ 3,808
  Adjustments to reconcile net income to net cash provided by
    operating activities:
    Depreciation and amortization                                       420            396
    Changes in operating assets and liabilities:
      Accounts receivable                                              (742)           960
      Amounts held on deposit for Thoroughbred horse owners            (471)         3,054
      Income taxes receivable and payable                               520          1,165
      Prepaid expenses and other current assets                         359           (153)
      Accounts payable                                                2,096         (1,832)
      Accrued liabilities                                               456            340
      Accrued purses                                                    884           (465)
      Due to Thoroughbred horse owners                                  471         (3,054)
      Uncashed pari-mutuel tickets and vouchers                           0         (4,381)
                                                                    -------        -------

          Net cash provided by (used in) operating activities         6,127           (162)
                                                                    =======        =======

INVESTING ACTIVITIES:
  Purchase of securities held to maturity                            (2,000)        (3,638)
  Maturities of securities held to maturity                           3,575          3,375
  Purchase of property, plant and equipment                          (2,021)          (753)
                                                                    -------        -------

          Net cash used in investing activities                        (446)        (1,016)
                                                                    -------        -------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      5,681         (1,178)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      2,027          7,307
                                                                    -------        -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $ 7,708        $ 6,129
                                                                    =======        =======
</TABLE>





See Notes to Financial Statements.


                                      -7-
<PAGE>   8
CALIFORNIA JOCKEY CLUB

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                    MARCH 31,      DECEMBER 31,
                                                                      1997            1996
<S>                                                                 <C>             <C>     
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                         $  3,323        $  1,138
  Securities available for sale (at fair value)                        5,609           2,612
  Securities held to maturity (at cost)                                    0           4,463
  Accounts receivable                                                      8              36
  Receivable from Bay Meadows Operating Company                        1,458           2,332
  Prepaid expenses                                                         0               3
                                                                    --------        --------
   
          Total current assets                                        10,398          10,584
                                                                    --------        --------

PROPERTY, PLANT AND EQUIPMENT:
  Land                                                                 1,851             691
  Land held for sale                                                   3,604           3,083
  Racing plant                                                        24,301          24,177
  Tennis facility held for sale                                          308             308
  Equipment                                                              460             460
                                                                    --------        --------

          Total                                                       30,524          28,719

  Accumulated depreciation                                           (16,168)        (15,929)
                                                                    --------        --------

          Property, plant and equipment - net                         14,356          12,790
                                                                    --------        --------

TOTAL ASSETS                                                        $ 24,754        $ 23,374
                                                                    ========        ========


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                  $    150        $    184
  Accrued liabilities                                                    795             509
  Note payable                                                         2,900           2,900
                                                                    --------        --------

          Total current liabilities                                    3,845           3,593
                                                                    --------        --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common Stock, $.01 par value, authorized 10,000,000 shares;
    issued and outstanding 5,763,257 shares                               58              58
  Additional paid in capital                                          17,597          17,597
  Retained earnings                                                    1,931             912
  Unrealized gain on securities available for sale                     1,323           1,214
                                                                    --------        --------

          Total stockholders' equity                                  20,909          19,781
                                                                    --------        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 24,754        $ 23,374
                                                                    ========        ========
</TABLE>


See Notes to Financial Statements.


                                      -8-
<PAGE>   9
CALIFORNIA JOCKEY CLUB

STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      1997          1996

<S>                                                                 <C>            <C>    
OPERATING ACTIVITIES:
  Net income                                                        $ 1,019        $ 1,931
  Adjustments to reconcile net income to net cash provided by
    operating activities:
    Depreciation                                                        239            230
    Changes in operating assets and liabilities:
      Accounts receivable                                                28             (1)
      Receivable from Bay Meadows Operating Company                     874         (1,439)
      Prepaid expenses and other assets                                   3              0
      Accounts payable                                                  (34)            43
      Accrued liabilities                                               286            (27)
                                                                    -------        -------

          Net cash provided by operating activities                   2,415            737
                                                                    -------        -------

INVESTING ACTIVITIES:
  Purchase of securities held to maturity                            (2,000)        (3,638)
  Maturities of securities held to maturity                           3,575          3,375
  Purchase of property, plant and equipment                          (1,805)          (116)
                                                                    -------        -------

          Net cash used in investing activities                        (230)          (379)
                                                                    -------        -------


INCREASE IN CASH AND CASH EQUIVALENTS                                 2,185            358

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      1,138            989
                                                                    -------        -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $ 3,323        $ 1,347
                                                                    =======        =======
</TABLE>





See Notes to Financial Statements.


                                      -9-
<PAGE>   10
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                            MARCH 31,       DECEMBER 31,
                                                                                               1997            1996
<S>                                                                                          <C>             <C>     
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                                                  $  4,385        $    889
  Amounts held on deposit for Thoroughbred horse owners                                           471               0
  Accounts receivable (net of allowance for doubtful accounts of $77 in 1997 and 1996)          1,261             491
  Prepaid expenses and other current assets                                                       160             522
                                                                                             --------        --------

          Total current assets                                                                  6,277           1,902
                                                                                             --------        --------

PROPERTY, PLANT AND EQUIPMENT:
  Equipment and leasehold improvements                                                         10,788          10,572
  Accumulated depreciation and amortization                                                    (6,344)         (6,163)
                                                                                             --------        --------

          Property, plant and equipment - net                                                   4,444           4,409
                                                                                             --------        --------

OTHER ASSETS (net of accumulated amortization of $1,374 in 1997 and 1996)                         102              96
                                                                                             --------        --------

DEFERRED INCOME TAXES                                                                             227             227
                                                                                             --------        --------

TOTAL ASSETS                                                                                 $ 11,050        $  6,634
                                                                                             ========        ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                                           $  3,274        $  1,144
  Accrued liabilities                                                                           2,164           1,474
  Accrued purses                                                                                  884               0
  Due to Thoroughbred horse owners                                                                471               0
  Payable to California Jockey Club                                                             1,458           2,332
                                                                                             --------        --------

          Total current liabilities                                                             8,251           4,950
                                                                                             --------        --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common Stock .01 par value authorized 10,000,000 shares; issued and outstanding:
  5,763,257 shares                                                                                 58              58
  Additional paid in capital                                                                      788             788
  Retained earnings                                                                             1,953             838
                                                                                             --------        --------

          Total stockholders' equity                                                            2,799           1,684
                                                                                             --------        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                   $ 11,050        $  6,634
                                                                                             ========        ========
</TABLE>



See Notes to Financial Statements.


                                      -10-
<PAGE>   11
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      1997           1996
<S>                                                                 <C>            <C>    
OPERATING ACTIVITIES:
  Net income                                                        $ 1,115        $ 1,877
  Adjustments to reconcile net income to net cash provided by
   (used in) operating activities:
    Depreciation and amortization                                       181            166
    Changes in operating assets and liabilities:
      Accounts receivable                                              (770)           961
      Amounts held on deposit for Thoroughbred horse owners            (471)         3,054
      Income taxes receivable and payable                               520          1,165
      Prepaid expenses and other assets                                 356           (153)
      Accounts payable                                                2,130         (1,875)
      Accrued liabilities                                               170            367
      Accrued purses                                                    884           (465)
      Due to Thoroughbred horse owners                                  471         (3,054)
      Payable to California Jockey Club                                (874)         1,439
      Uncashed pari-mutuel tickets and vouchers                           0         (4,381)
                                                                    -------        -------

          Net cash provided by (used in) operating activities         3,712           (899)
                                                                    -------        -------

INVESTING ACTIVITIES -  Purchase of
  property, plant and equipment                                        (216)          (637)
                                                                    -------        -------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      3,496         (1,536)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        889          6,318
                                                                    -------        -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $ 4,385        $ 4,782
                                                                    =======        =======
</TABLE>



See Notes to Financial Statements.

                                      -11-
<PAGE>   12
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accompanying unaudited financial statements include condensed
      unaudited financial statements of California Jockey Club ("Cal Jockey")
      and Bay Meadows Operating Company ("Bay Meadows") on a combined basis and
      for each company individually. All significant affiliate and intercompany
      balances and transactions have been eliminated on the combined financial
      statements. The accompanying condensed unaudited financial statements
      should be read in conjunction with the companies' 1996 Annual Report. Net
      income per share is computed as net income divided by weighted average
      shares outstanding. Certain prior year amounts have been reclassified to
      conform to the 1997 presentation.

      In the opinion of management, all adjustments (consisting of only
      recurring adjustments) considered necessary for a fair presentation of the
      financial condition and results of operations for Cal Jockey and Bay
      Meadows individually, have been included in the financial statements. The
      results of operations for the three months ended March 31, 1997, are not
      indicative of the results that may be expected for the year ending
      December 31, 1997, because of the seasonal nature of the operations.

2.    NEW ACCOUNTING STANDARD

      In February 1997, the Financial Accounting Standards Board issued
      Statement of Financial Accounting Standards No. 128 ("SFAS 128"), Earnings
      per Share. SFAS 128 requires dual presentation of basic EPS and diluted
      EPS on the face of all income statements issued after December 15, 1997
      for all entities with complex capital structures. Basis EPS is computed as
      net income divided by the weighted average number of common shares
      outstanding for the period. Diluted EPS reflects the potential dilution
      that could occur from common shares issuable through stock options,
      restricted stock, warrants and other convertible securities. The Companies
      do not anticipate the effect of the adoption of SFAS 128 on earnings per
      share to be material.

3.    PROPOSED MERGER AGREEMENT

      On October 31, 1996, Cal Jockey and Bay Meadows entered into a merger
      agreement with Patriot American Hospitality, Inc. ("Patriot"). The
      acquisition agreement was approved unanimously by the Boards of Patriot,
      Cal Jockey, and Bay Meadows and is subject to approval by the shareholders
      of each of Patriot, Cal Jockey and Bay Meadows. The parties, together with
      Patriot American Hospitality Partnership, L.P., a limited partnership (the
      "Patriot Partnership"), thereafter entered into an Agreement and Plan of
      Merger, dated as of February 24, 1997 (the "Merger Agreement"), which by
      its terms supersedes the October 31, 1996 Agreement and more fully details
      the transactions to be consummated by the parties.

      Pursuant to the Merger Agreement, Patriot will merge with and into Cal
      Jockey, with Cal Jockey being the surviving company. In connection with
      the Merger, Cal Jockey's name will be changed to "Patriot American
      Hospitality, Inc." ("New Patriot REIT") and Bay Meadows' name will be
      changed to "Patriot American Hospitality Operating Company" ("New Patriot
      Operating Company"). The shareholders of Cal Jockey and Bay Meadows will
      have the option either to tender each of their paired 




                                      -12-

<PAGE>   13
   
      shares for $33.00 in cash prior to consumation of the Merger or to retain
      their paired shares, which will then remain outstanding after the Merger 
      and will represent the same number of paired shares of New Patriot REIT 
      Common Stock and New Patriot Operating Company Common Stock.
    

ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The information set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" below includes "forward-looking statements"
within the meaning of Section 21E of the Securities and Exchange act of 1934, as
amended, and is subject to the safe harbor created by that section. Readers are
cautioned not to place undue reliance on these forward-looking statements and to
note that they speak only as of the date hereof. Factors that realistically
could cause actual results to differ materially from those in the
forward-looking statements are set forth below and include the following:
nonconsummation of the Merger Agreement, Agreement of Purchase and Sale dated
May 31, 1995 between Property Resources, Inc. and Cal Jockey, as amended (the
"Franklin Agreement") or Agreement of Purchase and Sale, dated December 1995,
with Iacocca & Associates, Inc., as amended (the "Iacocca Agreement"), failure
to secure the necessary governmental approvals to construct new stalls at the
Racecourse, as well as the risk factors set forth in this Item 2.
        
THE PATRIOT TRANSACTION

On October 31, 1996, Cal Jockey and Bay Meadows entered into a merger agreement
(the "October 31, 1996 Agreement") with Patriot American Hospitality, Inc. 
("Patriot"). The parties, together with Patriot American Hospitality
Partnership, L.P., a limited partnership (the "Patriot Partnership"), thereafter
entered into an Agreement and Plan of Merger, dated as of February 24, 1997 (the
"Merger Agreement"), which by its terms supersedes the October 31, 1996
Agreement and more fully details the transactions to be consummated by the
parties. The Merger Agreement was approved unanimously by the Boards of Patriot,
Cal Jockey and Bay Meadows and is subject to approval by the shareholders of
each of Patriot, Cal Jockey and Bay Meadows.


Pursuant to the Merger Agreement, Patriot will merge with and into Cal Jockey
(the "Merger"), with Cal Jockey being the surviving company. In connection with
the Merger, Cal Jockey's name will be changed to "Patriot American Hospitality,
Inc." ("New Patriot REIT") and Bay Meadows' name will be changed to "Patriot
American Hospitality Operating Company" ("New Patriot Operating Company").
Patriot stockholders will be entitled to receive for each share of common stock,
no par value per share, of Patriot ("Patriot Common Stock") held by them at the
effective time of the Merger, as adjusted as a result of the two-for-one split
of Patriot stock announced in February 1997, 0.519 shares of common stock, par
value $.01 per share, of New Patriot REIT ("New Patriot REIT Common Stock") and
0.519 shares of common stock, par value $.01 per share, of New Patriot Operating
Company ("New Patriot Operating Company Common Stock") (subject to certain REIT
qualification requirements), which shares will be paired and transferable only
as a single unit. In addition, each outstanding Paired Share which is not
tendered pursuant to the joint self tender offer of Cal Jockey and Bay Meadows
(as described below), will remain outstanding after the Merger and will, without
any action on the part of the stockholders of Cal Jockey and Bay Meadows,
represent the same number of paired shares of New Patriot REIT Common Stock and
New Patriot Operating Company Common Stock. 

In connection with the Merger, Bay Meadows will form an operating partnership
(the "New Patriot Operating Partnership") into which Bay Meadows will contribute
its assets in exchange for limited partnership units of the New Patriot
Operating Partnership, and Cal Jockey will contribute certain of its assets to
the Patriot Partnership in exchange for limited partnership units of the Patriot
Partnership. Upon completion of the Merger and the transactions contemplated by
the Merger Agreement (the "Related Transactions"), substantially all of the
operations of New Patriot REIT and New Patriot Operating Company will be
conducted through their respective operating partnerships. The Board of
Directors of each of Patriot, Cal Jockey and Bay Meadows has approved the
October 31, 1996 Agreement, the Merger Agreement and the Related



                                      -13-
<PAGE>   14
Transactions, including, without limitation, the Merger, the Subscription (as
hereinafter defined), the issuance of up to approximately 30,500,000 shares of
Cal Jockey Common Stock and 30,500,000 shares of Bay Meadows Common Stock, the
contribution of the assets of Bay Meadows to the New Patriot Operating
Partnership and the contribution of certain of the assets of Cal Jockey to the
Patriot Partnership.

THE SUBSCRIPTION. By operation of the Merger, each issued and outstanding share
of Patriot Common Stock will be converted into the right to receive 0.519
shares of New Patriot REIT Common Stock subject to certain REIT qualification
requirements described below. The Patriot Partnership will, in connection with
the Merger, subscribe (the "Subscription") for shares of Bay Meadows Common
Stock (which in connection with the Merger will become New Patriot Operating
Company Common Stock) (the "Subscribed Shares") in an amount equal to the number
of shares of New Patriot REIT Common Stock that will be issued to Patriot
stockholders in the Merger. Immediately prior to the Merger, the Patriot
Partnership will fund the Subscription and Patriot and the Patriot Partnership
will designate the Patriot stockholders as the recipients of the Subscribed
Shares, in compliance with the Pairing Agreement, on the basis of 0.519
Subscribed Shares for each share of Patriot Common Stock outstanding at the
Effective Time, subject to certain REIT qualification requirements described
below. The result of the Merger and the Subscription will be that Patriot
stockholders will have the right to receive 0.519 shares of New Patriot REIT
Common Stock and 0.519 shares of New Patriot Operating Company Common Stock,
subject to certain REIT qualification requirements described below, for each
share of Patriot Common Stock held by them at the Effective Time, which shares
of New Patriot REIT Common Stock and New Patriot Operating Company Common Stock
will be paired and transferable only as a single unit.

So that New Patriot REIT will continue to qualify and maintain REIT status, the
Amended and Restated Certificates of Incorporation of New Patriot REIT and New
Patriot Operating Company (the "Restated Charters") will provide that no person
or entity may own, or be deemed to own by virtue of certain attribution rules of
the Code, in excess of 9.8% (the "Ownership Limit") of the total outstanding
shares of any class or series of New Patriot REIT Common Stock and New Patriot
Operating Company Common Stock or preferred stock of New Patriot REIT or New
Patriot Operating Company. If any holder of Patriot Common Stock would receive
in the Merger and the Subscription a number of paired shares of New Patriot REIT
Common Stock and New Patriot Operating Company Common Stock which would cause
such holder or any other person or entity to own, or be deemed to own, paired
shares of New Patriot REIT Common Stock and New Patriot Operating Company Common
Stock in excess of the Ownership Limit, then such holder shall acquire no right
or interest in such number of paired shares of New Patriot REIT Common Stock and
New Patriot Operating Company Common Stock that would cause such holder or any
other person or entity to exceed the Ownership Limit, but such holder shall, in
lieu of receiving those paired shares which would cause the Ownership Limit to
be exceeded (the "Excess Paired Shares"), have the right to be paid by New
Patriot REIT an amount in cash for such Excess Paired Shares equal to the
product of the fair market value per Excess Paired Share multiplied by the
number of such Excess Paired Shares.

   
THE SELF TENDER OFFER. In connection with the Merger, Cal Jockey and Bay Meadows
will commence a joint self tender offer (the "Offer") to purchase for cash at a
combined price of $33.00 per Paired Share up to that percentage of the issued
and outstanding Paired Shares of Cal Jockey Common Stock and Bay Meadows Common
Stock (subject to certain REIT qualification requirements) such that upon
consummation of the Merger the stockholders of Cal Jockey and Bay Meadows prior
to the Merger will own at least 1.0% of the paired shares of New Patriot REIT
Common Stock and New Patriot Operating Company Common Stock. The obligation of
Cal Jockey and Bay Meadows to accept for payment and pay for their respective
portion of the Paired Shares validly tendered and not withdrawn pursuant to the
Offer will be subject to the satisfaction or waiver of the conditions to the
Merger Agreement. The purpose of the Offer is to permit the holders of Paired 
Shares of Cal Jockey Common Stock and Bay Meadows Common Stock to receive cash 
in the amount of $33.00 per Paired Share if such holders do not wish to become 
holders of the paired shares of New Patriot REIT Common Stock and New Patriot 
Operating Company Common Stock after the Merger. On the fifth business day 
following the date Cal Jockey and Bay Meadows publicly announce that all
    
                                    -14-
<PAGE>   15
   
of the conditions to the Merger Agreement have been satisfied or waived, the
Offer will expire and all validly tendered Paired Shares will be accepted for
payment. The number of validly tendered Paired Shares which Cal Jockey and Bay
Meadows may accept for payment, however, is subject to reduction if as a result
of the Offer any person or entity would own, or would be deemed to own by
virtue of certain attribution provisions of the Code, outstanding Paired Shares
in excess of the Ownership Limit upon consummation of the Offer. In such event,
the number of Paired Shares tendered in the Offer which may be accepted for
payment by Cal Jockey and Bay Meadows shall be reduced pro rata (based on the
number of Paired Shares tendered by each tendering stockholder) to the extent
necessary to avoid any person or entity owning, or being deemed to own, Paired
Shares in excess of the Ownership Limit. In the event the Merger Agreement is 
terminated in accordance with its terms, the Offer will simultaneously 
terminate. On May 1, 1997, the closing price of the Paired Shares on the AMEX 
was $41.00.
    

FINANCING THE OFFER. Patriot will provide Cal Jockey and Bay Meadows with the
funds necessary to satisfy their payment obligations under the Offer by
borrowing the necessary amounts under its financing sources.

CONDITIONS TO THE MERGER AND THE OFFER. Consummation of the Merger and the
Offer is subject to various conditions (which must be satisfied or waived),
including: (i) approval of a proposal to adopt the Merger Agreement and the
Related Transactions, by the holders of two-thirds of the outstanding shares of
Patriot Common Stock, by the holders of a majority of the outstanding shares of
Cal Jockey Common Stock and by the holders of a majority of the outstanding
shares of Bay Meadows Common Stock; (ii) approval of a proposal to amend and
restate the Certificate of Incorporation of Cal Jockey and the Bylaws of Cal
Jockey by the holders of a majority of the outstanding shares of Cal Jockey
Common Stock; and (iii) approval of a proposal to amend and restate the
Certificate of Incorporation of Bay Meadows and the Bylaws of Bay Meadows by
the holders of a majority of the outstanding shares of Bay Meadows Common
Stock. These proposals are currently expected to be voted on at special
meetings to be held by the parties in June 1997. Although each of the
aforementioned proposals will be voted on separately, because each of the
proposals is a condition to closing, if any of the proposals is not adopted,
the parties will not be required to consummate the Offer, the Merger or any of
the Related Transactions. Prior to consummation of the Merger, Cal Jockey will
distribute to its stockholders a dividend in the amount of $0.10 per Paired
Share plus the amount per Paired Share equal to the proceeds generated from the
sale of Cal Jockey's 100,000 shares of Santa Anita Realty Enterprises, Inc.
stock, less the original purchase price for this stock, divided by the number of
Paired Shares outstanding. There can be no assurances that the proposal
conditions or other conditions to consummation of the Merger will be satisfied
or waived.

SALE TO PAINEWEBBER. Patriot and PaineWebber Incorporated ("PaineWebber") have
entered into an agreement that following the close of the Merger, an affiliate
of PaineWebber will purchase substantially all of the land of Cal Jockey,
including the land subject to the Franklin Agreement and Iacocca Agreement, for
a purchase price of $78.05 million. New Patriot REIT would retain ownership of
the improvements located on the land. Simultaneously with the consummation of
such purchase, the PaineWebber affiliate and New Patriot REIT would enter into a
ground lease covering that portion of land on which the Racecourse is situated
for a term of seven years. New Patriot REIT would then sublease the Racecourse
land and related improvements to New Patriot Operating Company.
        
GENERAL

Bay Meadows Operating Company ("Bay Meadows") has been allocated 104 racing days
for the year ending December 31, 1997 versus 115 racing days for 1996. Of these
racing days, Bay Meadows conducted 44 days of racing in the three months ended
March 31, 1997 versus 63 days in the same period in 1996. Historically, Bay
Meadows and California Jockey Club have derived a major portion of their
revenues from the racing meet.

CALIFORNIA JOCKEY CLUB

Results of Operations: Quarter Ended March 31, 1997
Compared with Quarter Ended March 31, 1996

Total revenues for California Jockey Club ("Cal Jockey") decreased $564,000
(24%) for the three months ended March 31, 1997, compared to the same period in
the prior year. Rental income derived from the leasing of its racing facility is
based on Bay Meadows' racing revenues and decreased $552,000 as a result of 19
less racing days in the first three months of 1997 than in the same period in
1996.

Total costs and expenses for the three months ended March 31, 1997, increased
$348,000 (86%), primarily as a result of merger related costs including legal
expenses, the proxy filing fee and the interest expense on the note payable to
Patriot.

Liquidity and Capital Resources

During the first three months of 1997, Cal Jockey's primary sources of capital
were from proceeds of maturing securities and operating activities. Net cash
provided by operating activities was $2,415,000, consisting primarily of net
income excluding depreciation of $1,019,000, and a decrease in receivables from
Bay Meadows. Receivables from Bay Meadows decreased primarily due to amounts
related to the rental of the racing facility. Net cash used in investing
activities was $230,000, consisting of net proceeds of $1,575,000 on securities
held to maturity, offset by purchases of $1,805,000 in property, plant and
equipment.

                                    -15-
<PAGE>   16
Cash and cash equivalents increased to $3,323,000 at March 31, 1997 from
$1,138,000 at December 31, 1996. This increase was the result of rental payments
received from Bay Meadows. Cal Jockey's financial condition and results of
operations are affected by Bay Meadows' lease payments which are in turn
affected by Bay Meadows' racing operations. During the first quarter of 1997,
there were 19 less racing days than in the first quarter of 1996. In 1997, Bay
Meadows has been allocated 11 less racing days than in 1996. This is expected to
negatively impact revenues and profitability for 1997.

During the first quarter of 1997, Cal Jockey sold certain securities classified
as Held to Maturity in order to meet its obligations. Accordingly, all remaining
securities classified as Held to Maturity were reclassified as Available for
Sale.

Cal Jockey has guaranteed a $2,500,000 bank line of credit for Bay Meadows that
expires on February 1, 1998. As of March 31, 1997, there were no borrowings
outstanding on this line of credit.

Cal Jockey anticipates that funds generated internally and its cash reserves
will be sufficient to meet its liquidity requirements for the foreseeable
future.

BAY MEADOWS OPERATING COMPANY AND SUBSIDIARIES

Results of Operations:  Quarter Ended March 31, 1997
Compared with Quarter Ended March 31, 1996

Total revenues decreased $6,191,000 (23%) for the three months ended March 31,
1997, compared with the same period in 1996. This was due to a decrease in
pari-mutuel revenues of $5,734,000. Pari-mutuel revenues decreased primarily due
to 19 fewer racing days in the first three months of 1997 than in the same
period in 1996. Admissions, program, parking and other racing income decreased
$309,000 due to the same factors affecting pari-mutuel revenues. Concession
sales increased $208,000 as a result of Bay Meadows operating Turf Club
concessions previously outsourced to a third party. Interest income decreased 
due to lower investment balances.

Total costs and expenses decreased $4,919,000 (21%) for the three months ended
March 31, 1997, compared with the same period in the prior year. This was
primarily due to decreases in expenses associated with lower operating revenues,
including (i) purses and incentive awards ($2,394,000), (ii) commissions paid to
guest locations ($510,000), (iii) direct operating costs ($1,463,000), (iv)
racing facility rental ($552,000) and (v) marketing ($146,000).

Liquidity and Capital Resources

Cash and cash equivalents increased to $4,385,000 at March 31, 1997 from
$889,000 at December 31, 1996. Net cash provided by operating activities was
$3,712,000, consisting primarily of net income excluding depreciation of
$1,115,000, $2,130,000 increase in accounts payable, $884,000 increase in
accrued purses, $471,000 increase in amounts due to Thoroughbred horse owners
offset by a decrease in accounts receivable of $770,000, decrease in amounts due
to Cal Jockey of $874,000 and decrease of $471,000 in amounts held on deposit
for Thoroughbred horse owners. Net cashed used in investing was $216,000 for the
purchase of property, plant and equipment.



                                      -16-
<PAGE>   17
As of March 31, 1997, Bay Meadows' current liabilities exceeded its current
assets by $1,974,000. The current ratio (current assets to current liabilities)
was .76 to 1 at March 31, 1997, compared to .38 to 1 at December 31, 1996.

Bay Meadows is dependent on Cal Jockey's assistance in securing a bank line of
credit for its working capital needs throughout the year. Bay Meadows received a
signed commitment from Cal Jockey to guarantee a $2,500,000 bank line of credit.
Bay Meadows obtained this bank line of credit on March 10, 1997, and it is
available through February 1, 1998. As of March 31, 1997, there were no
borrowings outstanding on this line of credit. Bay Meadows anticipates that it
may be required to borrow or seek an alternative sources of funds to ensure
liquidity after that date if the transaction with Patriot is not consummated.

RISK FACTORS

REAL ESTATE INVESTMENT RISKS

GENERAL RISKS

Cal Jockey's investments will be subject to varying degrees of risk generally
incident to the ownership of real property. The underlying value of Cal Jockey's
real estate investments and Cal Jockey's income and ability to make
distributions to its stockholders will be dependent upon the ability of Cal
Jockey to manage its real property in a manner sufficient to maintain or
increase revenues and to generate sufficient income in excess of operating
expenses. Income from investments may be adversely affected by changes in
national economic conditions, changes in local market conditions due to changes
in general or local economic conditions and neighborhood characteristics,
changes in interest rates, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for capital
improvements, changes in real estate tax rates and other operating expenses,
adverse changes in governmental rules and fiscal policies, adverse changes in
zoning laws, civil unrest, acts of God, including earthquakes and other natural
disasters (which may result in uninsured losses), acts of war and other factors
which are beyond the control of Cal Jockey.

VALUE AND ILLIQUIDITY OF REAL ESTATE

Real estate investments are relatively illiquid. The ability of Cal Jockey to
vary its portfolio in response to changes in economic and other conditions will
therefore be limited. If Cal Jockey must sell an investment, there can be no
assurance that Cal Jockey will be able to dispose of it in the time period it
desires or that the sales price of any investment will recoup or exceed the
amount of Cal Jockey's investment.

PROPERTY TAXES

Cal Jockey's and Bay Meadows' racing facilities are subject to real property
taxes. The real property taxes on the racing facilities in which Cal Jockey
invests may increase or decrease as property tax rates change and as the value
of the properties are assessed or reassessed by taxing authorities. If property
taxes increase as a result of such reappraisals or reassessments, Cal Jockey's
ability to make expected distributions to its stockholders could be adversely
affected.


                                      -17-
<PAGE>   18
POTENTIAL RISKS RELATED TO ENTITLEMENTS FOR FRANKLIN AGREEMENT AND IACOCCA
AGREEMENT

Pursuant to the Franklin Agreement and the Iacocca Agreement, Cal Jockey has
agreed to sell approximately 33 acres of the stable area and the entire
approximately 40 acre training track area for purchase prices of approximately
$21 million and $31 million, respectively.  In addition Cal Jockey and the
buyers are responsible for a portion of various off-site improvements.  As a
condition to consummation of the land sale transactions contemplated by the
Franklin Agreement and the Iacocca Agreement, Cal Jockey is required to secure
certain planning, land use, and zoning entitlements from the City of San Mateo
in connection with the development of the subject properties (the
"Entitlements").  Cal Jockey also is required to obtain final certification of
an Environmental Impact Report analyzing the environmental effects (such as
impacts on traffic flow, air quality, and growth inducement) of the
contemplated developments (the "EIR").  On April 22, 1997, the City of San
Mateo City Council approved the Entitlements and certified the EIR.  Such
approval and certification are subject to possible appeal by citizens and
neighborhood or other groups.  If such appeal is commenced, significant delays
in the development process could occur.  Any such delay could affect the
obligations of the buyers to consummate the purchase of the stable area and the
training track area.  In addition, both the Franklin Agreement and the Iacocca
Agreement require as a condition to the buyers' obligations to consummate the
sale transactions, that Cal Jockey secure a development agreement vesting the
rights of the buyers to develop the property subject to the conditions of
approval.  While a draft of such agreement has been submitted to the City of
San Mateo, city officials have not yet indicated whether the City of San Mateo
will agree to execute such a development agreement.  A failure of the City of
San Mateo to agree to such a development agreement could give rise to rights of
termination of the Franklin Agreement and the Iacocca Agreement by the
respective buyers.

REIT TAX RISKS

Dependence on Qualification as a REIT Cal Jockey operates in a manner designed
to permit it to qualify as a REIT for federal income tax purposes, but no
assurance can be given that Cal Jockey will be able to continue to operate in a
manner so as to qualify or remain so qualified. Qualification as a REIT involves
the application of highly technical and complex Code provisions for which there
are only limited judicial or administrative interpretations. Qualification as a
REIT also involves the determination of various factual matters and
circumstances not entirely within Cal Jockey's control. In addition, no
assurance can be given that new legislation, new regulations, administrative
interpretations or court decisions will not change the tax laws with respect to
qualification as a REIT or the federal income tax consequences of such
qualification. Cal Jockey, however, is not aware of any currently pending tax
legislation that would adversely affect the ability of Cal Jockey to continue to
qualify as a REIT.

If Cal Jockey were to fail to qualify as a REIT, Cal Jockey would be subject to
federal income tax (including any applicable alternative minimum tax) on its
taxable income at corporate rates. In addition, unless entitled to relief under
certain statutory provisions, Cal Jockey also would be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification is lost. This treatment would reduce the net earnings of Cal
Jockey available for distribution to stockholders because of the additional tax
liability to Cal Jockey for the year or years involved. In addition,
distributions would no longer be required to be made.

                                      -18-
<PAGE>   19
HORSE RACING INDUSTRY RISKS

REGULATION OF GAMING OPERATIONS

Bay Meadows' pari-mutuel wagering operations are contingent upon the continued
governmental acceptance of such operations as forms of legalized gambling. As a
form of gambling, pari-mutuel wagering is subject to extensive licensing and
regulatory control by the CHRB and other California authorities. These
regulatory authorities have broad powers with respect to the licensing of
gaming operations, and may revoke, suspend, condition or limit the gaming
operations of Bay Meadows. Any such change in regulations may have a material
adverse effect on Bay Meadows' financial condition and results of operations.

STABLE AREA

Bay Meadows' operations are conducted at the Racecourse, a single facility in
San Mateo, California.  Cal Jockey has agreed to sell the stable area of the
Racecourse pursuant to the Franklin Agreement.  The purchaser of the Stable
Area has indicated its intention to tear down the existing stables.  Bay
Meadows has publicly proposed a plan for the construction of 900 on-site stalls
replacing the stalls to be torn down and Patriot has indicated its support for
this plan.  The cost for the construction of such stalls together with various
other improvements is estimated to be between approximately $11 million and $13
million.  There can be no assurances that Bay Meadows or Cal Jockey will obtain
in a timely fashion the necessary final governmental approvals to construct
such stalls.  Patriot has indicated that following consumation of the Merger it
will pay the costs associated with the construction of these stalls.

Further, any prolonged suspension of operations at the facility
due to destruction of or material damage to the facility or for other reasons
could have a material adverse effect on Bay Meadows' financial condition and
results of operations. Bay Meadows intends to maintain property and business
interruptions insurance to protect against such types of disruption, but there
can be no assurance that the proceeds of such insurance would be adequate to
repair or rebuild its facilities in such event or to compensate Bay Meadows for
losses incurred during the period of any such disruption.

DEPENDENCE ON RELATIONSHIP WITH OWNERS AND TRAINERS ASSOCIATIONS

Bay Meadows' Thoroughbred horse racing operations requires it to maintain good
working relationships with the Thoroughbred Owners of California (the "Owners
Association"), the organization recognized by the CHRB as representing owners of
Thoroughbred participating in horse racing meets at the Racecourse, and the
California Horsemen's Benevolent and Protective Association (the "Trainers
Association"), the organization recognized by the CHRB as representing trainers.
If Bay Meadows is unable to continue its present relationships with the Owners
Association or the Trainers Association or finds itself unable to attract a
sufficient number of horses to its live horse race meets, such events could have
a material adverse effect on Bay Meadows' financial condition and results of
operations.

COMPETITION

Thoroughbred horse racing, and gaming generally, are competitive industries. Bay
Meadows competes in regional markets with other horse race courses, off-track
betting, state-run lotteries and Indian reservation gaming. Many of these
competitors have resources that exceed those of Bay Meadows. Bay Meadows also
competes locally with other sporting and entertainment businesses. Approval of
legislation legalizing casinos and other forms of gaming or expansion of gaming
at Indian reservations could increase competition for Bay Meadows in the future
and could have a material adverse effect on Bay Meadows' financial condition and
results of operations. Also, Bay Meadows may face increasing competition from
businesses accepting wagers by telephone and via the Internet.

DECLINES IN ON-TRACK ATTENDANCE

Many race tracks across the nation are experiencing declines in on-track
attendance. There can be no assurance that Bay Meadows will not experience
further declines in on-track attendance, which declines could have a material
adverse effect on its results of operations.


                                      -19-
<PAGE>   20
                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrants have duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized.

DATED:  May 15, 1997





                              CALIFORNIA JOCKEY CLUB



                              /s/  James M. Harris
                              ------------------------------------------
                              James M. Harris
                              President, Treasurer and Secretary
                              (Principal Executive and Financial Officer)



                              BAY MEADOWS OPERATING COMPANY



                              /s/  F. Jack Liebau
                              ------------------------------------------
                              F. Jack Liebau
                              President and Chief Executive Officer
                              (Principal Executive Officer)






                                      -20-