================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                   FORM 10-QSB

      (Mark One)
         [ X]    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


                           Commission File No. 0-12193

                          AFFINITY ENTERTAINMENT, INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                       22-2473403
    (State or other jurisdiction of                      (I.R.S. Employer)
     incorporation or organization)                      Identification No.)


    15310 Amberly Drive, Suite 370, Tampa, Florida             33647
       (Address of principal executive offices)             (Zip Code)


                                 (813) 975-8180
              (Registrant's telephone number, including area code)


      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     .
                                               ---      --- 

      Registrant  has  12,104,217  shares  of  outstanding   Common Stock  as of
April 30, 1997
================================================================================


<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

<TABLE>
<CAPTION>
                             AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
--------------------------------------------------------------------------------------------------
                                  (In thousands, except per share data)

                                                   Three Months Ended         Six Months Ended
                                                 March  31,    March 31,    March 31,    Sept. 30,
                                                     1997        1996         1997         1996
--------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>
REVENUE .....................................     $   314      $   338      $   505      $ 1,803
COSTS AND EXPENSES
   Cost of revenue, exclusive of amortization          78          623          144        1,460
   General and administrative ...............       1,002          320        2,015          863
   Depreciation and amortization ............         288           41          424           76
  Acquisition costs .........................          --          175           --          175
                                                  -------      -------      -------      -------
           Total costs and expenses .........       1,368        1,159        2,583        2,574
                                                  -------      -------      -------      -------
   Operating loss ...........................      (1,054)        (821)      (2,078)        (771)

OTHER INCOME, net ...........................          19           99           73          185
                                                  -------      -------      -------      -------
Income (loss) before minority interest ......      (1,035)        (722)      (2,005)        (586)

Minority interest in net loss of subsidiary .          48           --           95           --
                                                  -------      -------      -------      -------

Net loss ....................................     $  (987)     $  (722)     $(1,910)     $  (586)
                                                  =======      =======      =======      =======

Loss per common share .......................     $  (.12)     $  (.10)     $  (.23)     $  (.09)
                                                  =======      =======      =======      =======

Weighted average shares outstanding .........       8,380        7,089        8,380        6,546
                                                  =======      =======      =======      =======

</TABLE>



















      The accompanying notes are an integral part of these financial statements.

                                        2


<PAGE>

<TABLE>
<CAPTION>
                  AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
--------------------------------------------------------------------------------
                                 (In thousands)

                                                        March  31,     Sept. 30,
                                                          1997            1996
--------------------------------------------------------------------------------
<S>                                                       <C>             <C>   

                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents ......................         $   --         $1,366
   Accounts receivable, net ......................            259            133
  Programming costs ..............................          2,939            990
  Other current assets, net ......................            436            188
                                                           ------         ------
      Total current assets .......................         $3,634         $2,677

PROPERTY, PLANT AND EQUIPMENT, at cost
  Edit equipment .................................         $1,237         $1,237
  Other equipment ................................            468            314
                                                           ------         ------
                                                            1,705          1,551
  Less accumulated depreciation ..................          1,154          1,072
                                                           ------         ------
                                                              551            479
  Construction in progress .......................             --             64
                                                           ------         ------
      Total property and equipment ...............            551            543

OTHER ASSETS
  Loans receivable, net ..........................             --            539
  Goodwill .......................................          1,355             --
  Investment in joint venture, net ...............            250            250
  Other assets ...................................             30            315
                                                           ------         ------
  Total other assets .............................          1,635          1,104
                                                           ------         ------
  Total assets ...................................         $5,820         $4,324
                                                           ======         ======

</TABLE>


















   The accompanying notes are an integral part of these financial statements.

                                        3


<PAGE>

<TABLE>
<CAPTION>

                  AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - (Continued)
-----------------------------------------------------------------------------------
                                 (In thousands)

                                                             March  31,   Sept. 30,
                                                                1997         1996
-----------------------------------------------------------------------------------
<S>                                                          <C>           <C> 

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable .....................................     $  1,304      $     --
  Notes payable ........................................          697            12
  Notes payable - related party ........................           25            --
  Accrued liabilities ..................................          565           139
  Deferred revenue .....................................           38            --
                                                             --------      --------
        Total current liabilities ......................     $  2,629      $    151
                                                             --------      --------


MINORITY INTEREST ......................................     $    508      $     --

STOCKHOLDERS' EQUITY
  Convertible preferred stock - $1 par value; $10 stated
      value,  500,000 shares authorized, 48,734 shares
      issued and outstanding ...........................     $    487      $    487
  Convertible preferred stock - $.0001 par value,
      $50 stated value, 100,000 shares authorized, no
      shares issued and outstanding ....................           --            --
  Common stock - $.01 and $.10 par value;
      25,000,000 shares authorized, 8,398,883
      and 8,284,217 shares issued and outstanding,
      respectively .....................................           84           829
  Additional paid-in capital ...........................       15,320        14,686
  Additional paid-in capital - stock options ...........          279           394
  Deficit ..............................................       (7,804)       (5,894)
                                                             --------      --------
                                                                8,366        10,502
Less:
  Stock subscriptions receivable .......................        5,266         5,829
  Unearned compensation ................................          378           432
  Due from officers and directors ......................           39            68
                                                             --------      --------
      Total stockholders' equity .......................        2,683         4,173
                                                             --------      --------
   Total liabilities and stockholders' equity ..........     $  5,820      $  4,324
                                                             ========      ========

</TABLE>










   The accompanying notes are an integral part of these financial statements.

                                        4


<PAGE>

<TABLE>
<CAPTION>


                                                 AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
                                   CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
                                                               (In thousands)

                               Convertible Convertible                   Additional
                                Preferred  Preferred  Common              Paid-In
                                  Stock     Stock     Stock   Additional  Capital            Stock
                               $10 Stated $10 Stated $.10 Par  Paid In     Stock          Subscription   Unearned   Due From
                                  Value     Value      Value   Capital    Options Deficit  Receivable  Compensation Officers  Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                 <C>      <C>     <C>      <C>         <C>    <C>        <C>          <C>        <C>     <C>    
Balance on October 1, 1996 ......   $--      $487    $ 829    $ 14,686    $ 394  $(5,894)   $(5,829)     $(432)     $(68)   $ 4,173
Cash received on subscription
     receivable .................    --        --       --          --       --       --        165         --        --        165
Amortization of unearned
    compensation ................    --        --       --          --       --       --         --         54        --         54
Changes in par value of
     common stock ...............    --        --     (746)        746       --       --         --         --        --         --
Exercise of stock options .......    --        --        1         286     (115)      --         --         --        --        172
Repayment of loan ...............    --        --       --          --       --       --         --         --        29         29
Adjustment to stock price .......    --        --       --        (398)      --       --        398         --        --         --
Net loss for the six months ended
      March 31, 1996 ............    --        --       --          --       --   (1,910)        --         --        --     (1,910)
                                    ----     ----    -----    --------    -----  -------    -------      -----      ----    -------
Balance on March 31, 1997 .......   $--      $487    $  84    $ 15,320    $ 279  $(7,804)   $(5,266)     $(378)     $(39)   $ 2,683
                                    ====     ====    =====    ========    =====  =======    =======      =====      ====    =======


</TABLE>

















































      The accompanying notes are an integral part of these financial statements.

                                          5


<PAGE>

                  AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
--------------------------------------------------------------------------------
                                   (In thousands)
                                                                Quarter Ended
                                                            March 31,  March 31,
                                                              1997        1996
--------------------------------------------------------------------------------

Cash Flows - Operating Activities:
Net loss .................................................   $(1,910)   $  (586)
Adjustments to reconcile net loss to net cash used in
 operating activities:
   Depreciation and amortization .........................       424         75
   Minority interest in subsidiary .......................       508         --
   Amortization of unearned compensation related to grant
       of stock options to executives ....................        54         --
Changes in current assets and liabilities:
   (Increase) decrease in accounts receivable ............       316       (498)
   (Increase) decrease in programming costs ..............      (926)       149
   (Increase) decrease in current assets .................      (247)       (88)
   Increase (decrease) in accounts payable
      and accrued liabilities ............................      (472)       (77)
   Increase (decrease) in deferred revenue ...............        --       (164)
  Increase (decrease) in television broadcast air time ...        --         78
  Increase (decrease) in loan receivable .................       568       (600)
  Increase (decrease) in other assets ....................       285         --
                                                             -------    -------
     Net cash used in operating activities ...............   $(1,400)   $(1,711)
                                                             -------    -------
Cash Flows - Investing Activities:
   Capital expenditures ..................................       (60)       (73)
   Investment in joint venture ...........................        --         -- 
  Purchase of goodwill ...................................      (600)        --
                                                             -------    -------
        Net cash used in investing activities ............      (660)       (73)
                                                             -------    -------
Cash Flows - Financing Activities:
   Proceeds from sale of common stock ....................       337      6,617
   Proceeds from notes payable ...........................       357        145
   Principal payments on notes payable ...................        --       (834)
                                                             -------    -------
     Net cash provided by financing activities ...........       694      5,928
                                                             -------    -------
(Decrease)Increase in cash and cash equivalents ..........    (1,366)     4,144
   Cash and cash equivalents at beginning of period ......     1,366        147
                                                             -------    -------
   Cash and cash equivalents at end of period ............   $    --    $ 4,291
                                                             =======    =======

Supplemental Schedule of Non-cash Investing and Financing Activities:

   During the quarter  ended  December  31,  1996,  the Company  reclassified  a
   $600,000 loan  receivable to an  investment as a part of the  acquisition  of
   Century Technologies, Inc.

   The accompanying notes are an integral part of these financial statements.

                                        6

<PAGE>





                  AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE A - HISTORY AND ORGANIZATION

      Affinity   Entertainment,   Inc.  (the   "Company"),   formerly   Affinity
Teleproductions,  Inc.,  a Delaware  corporation  is engaged  in  producing  and
selling feature films, television programs,  commercials,  and documentaries for
the home and industrial  markets in the United States and  internationally.  The
Company  entered into this  business  following a February 1994 merger with CBNI
Development,  Inc.  ("CBNI").  CBNI  has  been  engaged  in a  shopping  service
business.

      On August 31, 1994, the Company acquired Broadcast Edit, Inc.  ("Broadcast
Edit"),  a  California  corporation  for  50,000  shares  of  common  stock in a
transaction  accounted  for a pooling of  interests.  Broadcast  Edit is a video
production   and   post-production   company.   It  provides  a  full  range  of
communication  services to corporations  and advertising  agencies,  and it also
produces, directs and edits television programs and videos for the entertainment
industry.

      The  Company is engaged in the  production  of feature  films,  television
programs,  commercials,  documentaries  and videos for all media  worldwide.  In
addition,  the Company,  through its  wholly-owned  subsidiary,  Broadcast Edit,
Inc.,  produces and performs  post-production  editing  services for programming
produced internally by the Company and externally by outside parties.

      The  Company   has  formed  a  new   wholly-owned   subsidiary,   Affinity
Entertainment  Group,  Inc.,  April 4, 1995,  to  intensify  its  efforts on the
feature film portion of its business.

      On October  31,  1996,  the Company  purchased  a 73%  interest in Century
Technologies, Inc., a publicly-held Colorado corporation that is in the business
of distributing film and television products to worldwide markets.

      On December 9, 1996,  the Company  formed a new  wholly-owned  subsidiary,
Tradewinds Television,  Inc., for the purpose of operating a domestic television
syndication  company.  On  December  9, 1996,  the name was  changed to Affinity
Television, Inc.

NOTE B - BASIS OF PRESENTATION

      The  accompanying   Condensed  Consolidated  Balance  Sheet  includes  the
accounts of the Company,  its wholly-owned  subsidiaries and its 73% interest in
Century Technologies, Inc. ("Century"). The statement of Operations includes the
accounts of the Company and one of its wholly-owned subsidiaries for the quarter
ended March 31, 1997 and the activity from the date of acquisition through March
31, 1997 for  Century and its other  wholly-owned  subsidiary.  All  significant
intercompany accounts, transactions and profits have been eliminated.

      The Condensed  Consolidated  Financial Statements are unaudited and should
be read in conjunction with the audited  Consolidated  Financial  Statements and
notes thereto for the fiscal year ended September 30, 1996.

                                        7

<PAGE>





      In  the  opinion  of  management,  all  adjustments  necessary  for a fair
presentation  of such  Condensed  Consolidated  Financial  Statements  have been
included.  Such  adjustments  consist only of normal  recurring  items.  Interim
results are not necessarily indicative of results for a full year. The Condensed
Consolidated Financial Statements and notes hereto are presented as permitted by
the  Securities  Exchange  Commission  and do not  contain  certain  information
included in the Company's  annual  Consolidated  Financial  Statements and notes
hereto as discussed above.

NOTE C - SIGNIFICANT EVENTS

MOVIE PROJECTS

      The Company's first film, Men Seeking Women, premiered on March 8, 1997 at
the Santa Barbara Film Festival  (California).  The Company will receive half of
the gross  revenues from this motion  picture after  recouping the costs already
expended.

      On February 13,  1997,  the Company  entered  into an agreement  with Azur
Entertainment,  Ltd. to develop a made-for-television  movie that will be filmed
and set in the principality of Monaco.  The Executive Producer of the movie will
be Jorge Zamacona and the script will be written by Vivian and Valerie Mayhew.

TELEVISION PROJECTS

      The Company's reality based series,  Bounty Hunters, has cleared more than
75% of the country for the series  renewal,  with ten of the top ten  television
markets  being  sold.  An  additional  twenty-six  episodes  of this series that
follows fearless crime fighting agents as they apprehend  fugitives from justice
will be produced.  This series is sold on a barter advertising sales basis. This
show is produced by Forever Blue Entertainment and Affinity Television, Inc.

      In January the Company  co-launched  sales of Looking Beyond,  a show that
explores the paranormal world, taking highly emotional stories from the point of
view of the victims of such phenomena and examines the greatest mysteries of our
age.  Currently,  the Company has 70% of the country sold,  including ten of the
top ten markets.  Looking  Beyond is being  produced in  association  with First
Television and will have twenty-six hour-long episodes available.

AGREEMENT WITH TRIBUNE ENTERTAINMENT

      The Company entered into an agreement with Tribune  Entertainment  Company
on March 26,  1997,  to sell the  commercial  time for both  Bounty  Hunters and
Looking  Beyond  for  the  1997/1998   television   broadcast  season.   Tribune
Entertainment  Company, a subsidiary of Tribune Broadcasting  Company, is one of
the fastest-growing  suppliers of diverse product to the television marketplace.
Tribune Company is a leading information and entertainment company that owns and
operates  sixteen  television  stations (the second largest  television  station
group in the U. S.),  five radio  stations,  publishes  four  daily  newspapers,
provides  educational products and services and has ownership interest in the WB
Television Network.


                                        8

<PAGE>


AUTHORIZATION OF PREFERRED STOCK

      On October 31, 1996, the Company  authorized the creation of two shares of
Series  D  Preferred  Stock  with  a par  value  of $1 in  connection  with  the
acquisition of Century Technologies, Inc.

ACQUISITION OF CENTURY TECHNOLOGIES, INC.

      On October  31,  1996,  the Company  purchased  a 73%  interest in Century
Technologies,  Inc. ("Century"), a publicly-held Colorado corporation that is in
the business of distributing film and television  products to worldwide markets.
Under the terms of the Stock Acquisition  Agreement between parties, the Company
purchased 37,500,000 Units of Century for $0.08 per unit.

      Each Unit consists of one (1) share of Century  Common Stock at $.0001 par
value  ("Century  Common  Stock") and one (1) Common Stock  purchase  warrant to
purchase  one (1)  share  of  Century  Common  Stock  at $2.00  per  share  (the
"Warrants").  The Units are immediately separable into their component parts. In
consideration  for the  transfer of the Units,  the Company  paid Three  Million
Dollars  ($3,000,000)  to Century  consisting of (i) the conversion to equity of
Four Hundred Thousand Dollars ($400,000) cash previously advanced by the Company
to Century,  (ii) Two Hundred  Thousand  Dollars  ($200,000)  cash,  and (iii) a
negotiable  one-year  promissory  note  payable by the Company to Century in the
amount  of  Two  Million  Four  Hundred  Thousand  Dollars   ($2,400,000)   (the
"Promissory Note") which is secured by the Company's Series D Preferred Stock.

      The  Promissory  Note Bears  interest at a rate of eight  percent (8%) per
annum  and is  secured  by two (2)  shares of  Series D  Preferred  Stock of the
Company, par value $1.00 (the "Series D Preferred Stock").  Each share of Series
D Preferred  Stock shall be  convertible  into 750,000  shares of the  Company's
Common Stock only in the event of default by the Company on the Promissory Note.
The Series D Preferred  Stock is not entitled to any voting for dividend  rights
of any kind.  Notwithstanding the foregoing, the Company shall have the right to
provide such substitute collateral as the Company and Century may mutually agree
upon in  writing.  The  Series  D  Preferred  Stock  will be held in  escrow  by
Century's counsel (the "Escrow Agent") until such time as the Promissory Note is
paid in full or substitute  collateral  is provided by the Company.  The Company
believes  that the  acquisition  of Century will enable the Company to implement
its  business  plan  of  becoming   heavily  vested  in  the  U.S.  and  foreign
distribution of both feature films and television programming.

ACQUISITION OF THE ASSETS OF TRADEWINDS TELEVISION, LLC

      On  September  13, 1996,  the Company and  Tradewinds  Television,  LLC, a
California  Limited  Liability Company  ("Tradewinds"),  entered into an Interim
Financing and Security  Agreement (the "Security  Agreement")  pursuant to which
Tradewinds  granted the Company,  as security for the repayment by Tradewinds of
certain loans to be made by the Company,  a first priority lien on substantially
all  of  Tradewinds'   assets  (the  "Assets").   The  Assets  include  accounts
receivable,  the  name and  mark  "Tradewinds  Television,"  the  rights  to the
syndicated television series "Bounty Hunters" and distribution rights to certain
other  television  products.  As  of  November  19,  1996,  the  Company  loaned
Tradewinds an aggregate of approximately  $823,000 (the "Loans") pursuant to the
Security Agreement.


                                      9

<PAGE>


      Concurrently,  with the execution of the Security  Agreement,  the Company
and  Tradewinds  engaged in  negotiations  pursuant to which the  Company  would
purchase  substantially  all of the Assets.  The parties  entered  into an Asset
Purchase  Agreement,  dated  October 3, 1996,  as  amended,  to provide for such
acquisition.  The sale of the assets was contingent upon the resolution to which
satisfaction  of the  Company  of various  bankruptcy  issues  concerning  other
companies affiliated with Royeric Pack, the owner of Tradewinds.

      On  November  14,  1996,  the  Company  filed a  complaint  in Los Angeles
Superior Court  asserting that  Tradewinds had defaulted under the Loans and the
Security Agreement,  and seeking judicial foreclosure on the Assets, among other
claims. On December 6, 1996,  Tradewinds in lieu of foreclosure on the Assets by
the Company, agreed to transfer and assign to the Company the Assets, subject to
certain payables  associated  therewith,  in consideration of Affinity forgiving
the indebtedness  evidenced by the Loans. Such indebtedness,  including interest
and related costs and expenses, was approximately  $1,000,000.  Also on December
6, 1996, the Company entered into an Executive Producer Agreement with Mr. Pack,
providing  executive  producing  services in connection  with the Bounty Hunters
series.  Pursuant  to such  agreement,  Mr. Pack  received a $75,000  payment on
December 6, 1996 for the first production  season, and is entitled in the second
production  season to a fee of $3,000 per  episode,  payable upon airing of each
such episode.

      On December 17, 1996,  the Company agreed with the Trustee of Action Media
Group,  Inc.,  a company  affiliated  with Mr.  Pack and which is the subject of
bankruptcy court proceeding  ("AMG"), to pay $275,000 to the Trustee of AMG, and
to secure in exchange a release of certain claims by the Trustee and AMG against
Tradewinds  and the Company with regard to  indebtedness  owed by the Company in
lieu of foreclosure, as described above.

      On  December  18,  1996,  the  Court  having  jurisdiction  over  the  AMG
bankruptcy  proceeding  approved  the  $275,000  payment and release  among AMG,
Tradewinds and the Company. An order to this effect (the "Settlement Order") was
entered on January 14, 1997.  The Company  Trustee  subsequently  filed a motion
seeking to amend the unspecified liabilities owed by Tradewinds to third parties
including AMG. The Company is contesting this motion.

      Upon  receipt of the Assets by the Company,  the Assets were  deposited in
the Company's wholly owned subsidiary, Affinity Television, Inc.

NOTE D - INCOME TAXES

      The Company  provides for the tax effects of transactions  reported in the
Condensed Consolidated Financial Statements.  The provision, if any, consists of
taxes currently due plus deferred taxes related primarily to differences between
the basis of assets and liabilities for financial and income tax reporting.  The
deferred tax assets and  liabilities,  if any,  represent  the future tax return
consequences  of those  differences,  which will either be taxable or deductible
when the assets and liabilities are recovered or settled.  As of March 31, 1997,
the Company  had no  material  current  tax  liability,  deferred  tax assets or
liabilities.





                                       10

<PAGE>



NOTE E - LOSS PER COMMON SHARE

      The loss per share of common stock is  calculated  by dividing net loss by
the  weighted  average  shares of  common  stock and  common  stock  equivalents
outstanding during the period.  Common stock equivalents include shares issuable
upon conversion of the Company's convertible preferred stock and exercise of the
Company's  outstanding  warrants and stock options.  For the quarter ended March
31, 1997, common stock  equivalents were  anti-dilutive and were not included in
the calculation of weighted average common shares outstanding.

NOTE F - RECLASSIFICATIONS

      Reclassifications  to  the  March  31,  1996  consolidated  statements  of
operations and cash flows were made to conform to March 31, 1997 presentation.

NOTE G - ISSUANCE OF STOCK

      The Company had previously granted options to purchase the Common Stock of
the Company exercisable at $5.00 per share to several foreign investors pursuant
to the July 1995 Option  Agreements  between the  Company and such  holders.  On
February 12, 1997, the exercise  price was reduced to $2.00 per share.  On March
31,  1997,  the Company  reduced the price of these  options to $1.25 per share.
Subsequently,  the Company issued 1,575,000 shares of restricted Common Stock at
$1.25 per share.

      The  Company  re-negotiated  the  receivable  due for  stock  subscription
agreements by reducing the option exercise price of the original options granted
to foreign investors to $1.00 per share for 295,000 shares.

NOTE H - SUBSEQUENT EVENTS

      The  Company  entered  into a two year  agreement  dated April 4, 1997 for
referral of  full-length  feature  motion  picture  projects to the Company.  In
consideration,   the  Company  will  issue  100,000   shares  of  the  Company's
unrestricted common shares, and beginning May 1, 1997, pay $10,000 per month for
the remaining tenure of the agreement.

      On April 4, 1997, the Company  entered into an agreement to sell 2,500,000
shares of the  Company's  shares of  restricted  common stock at $1.25 per share
payable over several months.

      Effective April 1,1997,  the Company  entered into a separation  agreement
with an employee to terminate the employee under his  employment  contract dated
July 14, 1994. As compensation for the employee's  termination,  he will be paid
all accrued and unpaid salary, a severance payment of $75,000,  continued use of
the leased  automobile  through the term of the lease,  and  issuance of 400,000
shares of the Company's unrestricted common stock.



                                       11


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

      The Company  produces  feature films,  television  programs,  commercials,
documentaries and videos for all media worldwide.


A.  RESULTS OF OPERATIONS

      The following table  summarizes the changes in selected  items,  including
absolute dollar changes,  percentage  changes and percent of net revenue for the
quarter ended March 31, 1997, compared to the quarter ended March 31, 1996.


                                          Quarter Ended
                                     March 31       March 31     $ Change
                                       1997           1996      Fav/(Unfav)
                                       ----           ----      -----------
                                                              (In Thousands,
                                                                 except %)

Net Revenue .................        $   314         $ 338         $ (24)
 Cost of Revenue ............             78           623           545
 General and administrative .          1,002           320          (682)
  Depreciation and
    amortization ............            288            41          (247)
Acquisition costs ...........             --           175           175
Operating loss ..............         (1,054)         (821)         (233)
Other income, net ...........             19            99           (80)
Income (loss) before
  minority interest .........         (1,035)         (722)         (313)
Minority interest in net loss
 of subsidiary ..............             48            --            48
Net income (loss) ...........           (987)         (722)         (265)



NET REVENUE

      For the  quarter  ended  March 31,  1997,  the  decrease  in  revenues  is
primarily  due to the  Company  ceasing  the airing of its  television  project,
EDENQUEST,  and all of its ancillary sources of income, and its THE CONTEMPORARY
COLLECTIBLES  SHOW series.  For the quarter  ended March 31,  1996,  the Company
produced three original  episodes,  and a compilation ("best of") of its popular
EDENQUEST television series. As of March 31, 1997, the third and fourth episodes
have not been telecast on free  television or basic cable,  as the Company plans
to syndicate these episodes through its subsidiary,  Affinity Television,  Inc.,
for airing in the summer of 1997.  The decrease in revenue  described  above was
offset in part by the revenues  generated by Affinity  Television,  Inc. derived
mainly from the syndicated television series BOUNTY HUNTERS and GHOSTWRITER.




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<PAGE>



COST OF REVENUE

      For the quarter ended March 31, 1997, the significant  decrease in cost of
revenue can be  attributed to several  factors.  For the quarter ended March 31,
1996,  television  distributors  commissions  were paid by the Company  based on
total cumulative  sales of EDENQUEST.  As sales in EDENQUEST  increased,  so did
commission  percentages.  In  addition,  the Company  canceled the launch of the
second  season  of THE  CONTEMPORARY  COLLECTIBLES  SHOW,  due to a  variety  of
factors,  including the uncertainty  regarding the availability of its satellite
air time.  As a result,  the  Company  took a one time  charge of  approximately
$125,000 to operations  for expenses  incurred in  connection  with the Lifetime
Channel.

GENERAL AND ADMINISTRATIVE

      For the  quarter  ended  March 31,  1997,  the  increase  in  general  and
administrative  expenses is primarily due to higher professional expenses as the
Company seeks to position itself to make  acquisitions and expand its operations
into feature films and distribution. Further, the Company hired additional staff
to  better  implement  its  business  plan and  increased  salaries  of some key
personnel to levels  commensurate to their job descriptions.  Additionally,  the
general and administrative expenses also increased due to the acquisition of its
two new  subsidiaries.  The  Company  is in the  process  of  consolidating  its
California operations to reduce costs.

DEPRECIATION AND AMORTIZATION

      For the  quarter  ended  March  31,  1997,  the  significant  increase  in
depreciation  and  amortization  expense  is  primarily  due to the  accelerated
amortization of EDENQUEST and ADVENTURE QUEST.


B.    FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

      The  Company  expects to meet its cash  requirements  for fiscal year 1997
with funds  generated from  operations,  the exercise of employee stock options,
sales of restricted  common stock via private  placements and loans. The Company
believes  that these  sources  will be adequate to meet the  Company's  expected
needs for fiscal year 1997, although there can be no assurance that this will be
the case.

      The  Company  has not  formalized  its  plan  for  paying  the  $2,400,000
Promissory Note payable to Century  Technologies,  Inc. on October 31, 1997. The
Company expects that this  Promissory Note will be repaid with some  combination
of the assets and receivables of Tradewinds Television, Inc.

      For the quarter ended March 31, 1997, the predominate sources of operating
funds were editing services and exercise of stock options.

      Other than discussed  above,  the Company is not aware of any known trends
or uncertainties that have or are reasonably likely to have a material effect on
the Company's  financial  position,  liquidity or capital  resources.  Any other
projects  not  contemplated  herein  will be funded by joint  ventures  or other
outside capital.
                                       13

<PAGE>


PART II - OTHER INFORMATION

 Item 6.  Exhibits and Reports on Form 8-K.

      (a) Exhibits
          
          27 - Financial Data Schedule (Electronic filing only)

      (b) Reports on Form 8-K

            1.    Amended Form 10-KSB, Annual Report of Affinity  Entertainment,
                  Inc. and  Subsidiaries  for the year ended September  30,1996,
                  filed March 13,1997,  relating to the  consolidated  financial
                  statements of Affinity Entertainment, Inc. and Subsidiaries.

            2.    Current  Report of Form 8-K,  dated March 13, 1997,  regarding
                  the  acquisition of all assets of Tradewinds  Television,  LLC
                  and pro forma financial statements thereto.






































                                       14

<PAGE>


                                  SIGNATURES


      In  accordance  with  Section  13 or 15  (d)  of  the  Exchange  Act,  the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized on May 14, 1997.


                                        AFFINITY ENTERTAINMENT, INC.



                                         /s/ William J. Bosso
                                        ----------------------------------------
                                        William J. Bosso
                                        Chairman, President, Secretary, Director



































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