<PAGE>  1

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

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

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997


                        Commission file number: 0-19298


                              RIDDELL SPORTS INC.
             (Exact name of registrant as specified in its charter)
               
               
           DELAWARE                          22-2890400
 (State or other jurisdiction             (I.R.S. Employer
      of incorporation or                Identification No.)
         organization)


                  900 Third Avenue, New York, New York, 10022
              (Address of principal executive offices)  (Zip code)

                                 (212) 826-4300
              (Registrant's telephone number, including area code)


                                 Not Applicable
            (Former name, former address and former fiscal year, if 
                           changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes[ X ]      No [   ]


Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.

                9,059,779 Common Shares as of November 13, 1997


                                       1
<PAGE>  2



                              RIDDELL SPORTS INC.

                                     INDEX


                                                                          Page

     Form 10-Q  Cover Page  . . . . . . . . . . . . . . . . . . . . . . .   1
     Form 10-Q  Index . . . . . . . . . . . . . . . . . . . . . . . . . .   2
     Part I.  Financial Information:
       Item 1.   Financial Statements:
                Condensed Consolidated Balance Sheets . . . . . . . . . .   3
                Condensed Consolidated Statements of Operations . . . . .   4
                Condensed Consolidated Statements of Shareholders' Equity   5
                Condensed Consolidated Statements of Cash Flows . . . . .   6
                Notes to Condensed Consolidated Financial Statements  . .   7
       Item 2.  Management's Discussion and Analysis of 
               Financial Condition and Results of Operations  . . . . . .  14
     Part II.   Other Information:
       Item 1.  Legal Proceedings   . . . . . . . . . . . . . . . . . . .  19
       Item 2.  Changes in Securities   . . . . . . . . . . . . . . . . .  19
       Item 3.  Defaults upon Senior Securities   . . . . . . . . . . . .  19
       Item 4.  Submission of Matters to a Vote of Security Holders   . .  19
       Item 5.  Other Information:
                   Recent events  . . . . . . . . . . . . . . . . . . . .  19
       Item 6.  Exhibits and Reports on Form 8-K  . . . . . . . . . . . .  21
     Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21




     This Report contains certain statements which may be "forward looking"
statements under the federal securities laws that are based on the beliefs of
management as well as assumptions made by and information currently available
to management.  Forward looking statements contain risks and uncertainties as
are described in reports and other documents filed by the Company from time to
time.  Such uncertainties include, without limitation, (i) difficulties in the
marketing of the Company's products through new channels; (ii) actions by
competitors, including new product offerings, marketing and promotional
success, and a willingness to cut prices; (iii) changes in the patterns and
trends of sales and customer orders; (iv) difficulties in integrating the
business and operations of Varsity Spirit Corporation, the Company's newly
acquired subsidiary, including activities of the Varsity sales force to
implement cross-selling opportunities; (v) the effects of general economic
conditions and (vi) future litigation.


                                       2
<PAGE>  3
Part 1.    FINANCIAL INFORMATION; Item 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTIONS>

                                                 RIDDELL SPORTS INC. AND SUBSIDIARIES
                                                 CONDENSED CONSOLIDATED BALANCE SHEETS
                                                            (In thousands)
                                                                           September 30,     December 31,
                                                                                 1997             1996     
                                                                               ----------     ------------
<S>                                                                            <C>             <C>
                                                                ASSETS 
Current assets:
  Cash      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $1,724           $  357
  Accounts receivable, trade, less allowance for doubtful 
    accounts ($821 and $513 respectively) (Note 4)  . . . . . . . . . . .           43,929           15,145
  Inventories (Note 5)  . . . . . . . . . . . . . . . . . . . . . . . . .           21,074           16,406
  Prepaid expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . .            4,461            4,835
  Other receivables   . . . . . . . . . . . . . . . . . . . . . . . . . .            1,739              159
  Deferred taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . .            2,652            1,820
                                                                                 ----------     ------------
    Total current assets  . . . . . . . . . . . . . . . . . . . . . . . .           75,579           38,722

Property, plant and equipment, less accumulated 
  depreciation ($4,649 and $3,819 respectively)   . . . . . . . . . . . .            7,337            3,507
Intangibles and deferred charges, less accumulated
  amortization ($12,157 and $10,159 respectively)   . . . . . . . . . . .          113,353           34,067
Other assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              605               65
                                                                                 ----------     ------------
                                                                                 $ 196,874        $  76,361
                                                                                 ==========     ============

                                                 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt (Note 6)  . . . . . . . . . . . . . .     $         -        $    1,158
  Accounts payable  . . . . . . . . . . . . . . . . . . . . . . . . . . .           12,866            4,867
  Accrued liabilities   . . . . . . . . . . . . . . . . . . . . . . . . .           10,789            6,740
  Customer deposits   . . . . . . . . . . . . . . . . . . . . . . . . . .            2,712              -  
                                                                                 ----------     ------------
           Total current liabilities  . . . . . . . . . . . . . . . . . .           26,367           12,765
Long-term debt, less current portion (Note 6):
  Shareholders and related parties  . . . . . . . . . . . . . . . . . . .               -               439
  Other     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          129,100           29,545
                                                                                 ----------     ------------
                                                                                   129,100           29,984

Deferred taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            1,897            1,820
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .            3,120            4,047
Contingent liabilities (Note 7) . . . . . . . . . . . . . . . . . . . . .               -                - 
Shareholders' equity (Note 8):
  Preferred stock
  Common stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               91               81
  Additional paid in capital  . . . . . . . . . . . . . . . . . . . . . .           36,340           31,457
  Accumulated deficit   . . . . . . . . . . . . . . . . . . . . . . . . .              (41)          (3,793)
                                                                                 ----------     ------------
                                                                                    36,390           27,745
                                                                                 ----------     ------------
                                                                                 $ 196,874        $  76,361
                                                                                 ==========     ============

                                       See notes to condensed consolidated financial statements.
</TABLE>

                                         3
<PAGE>  4
<TABLE>
<CAPTIONS>
                                                 RIDDELL SPORTS INC. AND SUBSIDIARIES
                                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                               (In thousands, except per share amounts)


                                            Three Months Ended                     Nine Months Ended
                                               September 30,                         September 30,           
                                    ----------------------------------      --------------------------------
                                          1997               1996               1997               1996      
                                       -----------         ----------        ----------        ----------
<S>                                    <C>                 <C>               <C>               <C>
Net revenues:
       Net sales  . . . . . . . . .        $62,437            $17,782          $108,277            $57,663
       Royalty income   . . . . . .            537                555             1,948              2,130
                                       -----------         ----------        ----------         ----------
                                            62,974             18,337           110,225             59,793
Cost of sales . . . . . . . . . . .         38,278             10,100            64,123             31,316

                                       -----------         ----------        ----------         ----------
Gross profit  . . . . . . . . . . .         24,696              8,237            46,102             28,477
Selling, general and 
  administrative expenses . . . . .         14,426              5,783            31,789             19,985
Product liability . . . . . . . . .            625                664             1,875              1,992
                                       -----------         ----------        ----------         ----------

Income from operations  . . . . . .          9,645              1,790            12,438              6,500
Interest expense (Note 6) . . . . .          3,631                785             8,536              2,176
                                       -----------         ----------        ----------         ----------
Income before taxes . . . . . . . .          6,014              1,005             3,902              4,324
Income taxes  . . . . . . . . . . .            150                 40              150                 190
                                       -----------         ----------        ----------         ----------
Net income  . . . . . . . . . . . .         $5,864              $ 965            $3,752            $ 4,134
                                       ===========         ==========        ==========         ==========


Net earnings per share (Note 3) . .          $0.54            $  0.11           $  0.42             $ 0.48
                                       ===========         ==========        ==========         ==========
Weighted average number common
  and common equivalent
  shares outstanding  . . . . . . .         11,069              8,568             9,094              8,548
                                       ===========         ==========        ==========         ==========

                                       See notes to condensed consolidated financial statements.
</TABLE>

                                         4
<PAGE>  5

<TABLE>
<CAPTIONS>
                                                 RIDDELL SPORTS INC. AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                            (In thousands)

                                                                                 Retained
                                           Common Stock        Additional        earnings           Total
                                      --------------------       paid in       (Accumulated     Shareholders'
                                      Shares        Amount       capital          deficit)         equity     
                                      ---------     ------    --------------  --------------    --------------
<S>                                   <C>           <C>        <C>              <C>             <C>
For the Nine months ended September 30, 1996:

  Balance, January 1, 1996    . . .       8,068        $81           $31,457         ($6,636)          $24,902

    Net income for the period   . .                                                    4,134             4,134
                                      ---------     ------    --------------  --------------    --------------
  Balance, September 30, 1996   . .       8,068        $81           $31,457         $(2,502)         $ 29,036
                                      =========     ======    ==============  ==============    ==============

For the Nine months ended September 30, 1997 (Note 8):

  Balance, January 1, 1997  . . . .       8,068        $81           $31,457          (3,793)           27,745
    Options granted   . . . . . . .                                      559                               559
    Issuance of common stock upon
       exercise of stock options  .           6                           14                                14
    Sale of common stock,
       net of costs . . . . . . . .         986         10             4,310                             4,320
  Net income for the period   . . .                                                    3,752             3,752
                                      ---------     ------    --------------  --------------    --------------
  Balance, September 30, 1997   . .       9,060        $91           $36,340            ($41)          $36,390
                                      =========     ======    ==============  ==============    ==============






                                       See notes to condensed consolidated financial statements.
</TABLE>

                                         5
<PAGE>  6


<TABLE>
<CAPTIONS>
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                             Nine  Months Ended September  30, 
                                                            -----------------------------------
                                                                     1997                1996  
                                                                  -----------       -----------
<S>                                                               <C>                <C>
Cash flows from operating activities:
    Net income  . . . . . . . . . . . . . . . . . . . . . .           $3,752             $4,134
    Adjustments to reconcile net income to net 
     cash used in operating activities:
      Depreciation and amortization:
        Amortization of debt issue costs  . . . . . . . . .              292                 - 
        Other depreciation and amortization   . . . . . . .            2,536              1,648
      Stock options issued  . . . . . . . . . . . . . . . .              559                 - 
      Provision for losses on accounts receivable . . . . .              277                386
      Deferred taxes  . . . . . . . . . . . . . . . . . . .              150                190
      Changes in assets and liabilities (net 
        of effects from acquisitions):
        (Increase) decrease in:
          Accounts receivable, trade  . . . . . . . . . . .          (10,989)            (9,229)
          Inventories   . . . . . . . . . . . . . . . . . .            4,392               (841)
          Prepaid expenses  . . . . . . . . . . . . . . . .            4,643              2,793
          Other receivables   . . . . . . . . . . . . . . .              797                169
          Other assets  . . . . . . . . . . . . . . . . . .               38                 - 
        Increase (decrease) in:
          Accounts payable  . . . . . . . . . . . . . . . .              480               (983)
          Accrued liabilities   . . . . . . . . . . . . . .             (321)            (2,894)
          Customer deposits   . . . . . . . . . . . . . . .           (7,984)                - 
          Other liabilities   . . . . . . . . . . . . . . .             (927)              (457)
                                                                  -----------       -----------
              Net cash used in operating activities   . . .           (2,305)            (5,084)
                                                                  -----------       -----------
Cash flows from investing activities:
    Capital expenditures  . . . . . . . . . . . . . . . . .             (735)              (831)
    Acquisition of Varsity Spirit Corporation   . . . . . .          (91,245)                - 
                                                                  -----------       -----------
              Net cash used in investing activities   . . .          (91,980)              (831)
                                                                  -----------       -----------
Cash flows from financing activities:
    Net borrowings under line-of-credit agreement   . . . .          (11,290)             6,089
    Proceeds from issuance of long-term debt  . . . . . . .          115,000                 - 
    Debt issue costs  . . . . . . . . . . . . . . . . . . .           (6,640)                - 
    Principal payments on long-term debt:
      Shareholders  . . . . . . . . . . . . . . . . . . . .             (439)                - 
      Banks and other . . . . . . . . . . . . . . . . . . .           (5,313)              (142)
    Proceeds from issuance of common stock  . . . . . . . .            4,334                 - 
                                                                  -----------       -----------
              Net cash provided by financing activities   .           95,652              5,947
                                                                  -----------       -----------
Net increase in cash (Note 9) . . . . . . . . . . . . . . .            1,367                 32
Cash, beginning . . . . . . . . . . . . . . . . . . . . . .              357                615
                                                                  -----------       -----------
Cash, ending  . . . . . . . . . . . . . . . . . . . . . . .           $1,724               $647
                                                                  ===========       ===========

                                       See notes to condensed consolidated financial statements.
</TABLE>

                                         6
<PAGE>  7


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of presentation
     The condensed consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries.  All significant intercompany
accounts and transactions have been eliminated.  These statements are
unaudited, and in the opinion of management include all adjustments (consisting
only of normal recurring adjustments except as discussed below under Note 2 -
Acquisitions, Note 6 - Long Term Debt and Note 8 - Shareholders' equity)
necessary for fair presentation of the Company's consolidated financial
position and the consolidated results of its operations and cash flows at
September 30, 1997 and 1996 and for the periods then ended.  Certain
information and footnote disclosures made in the last Annual Report on Form 10-
K have been condensed or omitted for these interim statements.  Accordingly,
these condensed consolidated financial statements should be read in conjunction
with the December 31, 1996 Annual Report on Form 10-K.  Operating results for
the nine months ended September 30, 1997 are not necessarily indicative of the
results to be expected during the remainder of 1997.

     Tax expense for all periods presented herein was reduced by the benefit of
net operating loss carryforwards recognized during the periods.  The
recognition of these tax benefits had the effect of decreasing tax expense, and
increasing net income, for the three month periods ended September 30, 1997 and
1996 by approximately $2,250,000, or $0.20 per share, and $340,000, or $0.04
per share, respectively, and for the nine month periods ended September 30,
1997 and 1996 by approximately $1,450,000, or $0.16 per share, and $1,470,000,
or $0.17 per share, respectively.

2.   Acquisition

     On June 19, 1997 the Company acquired Varsity Spirit Corporation
("Varsity").  Varsity is the leading supplier of cheerleader and dance team
uniforms and accessories to the youth, junior high, high school and college
markets.  Varsity is also the leading operator of cheerleader and dance team
camps, clinics and special events.  The net purchase price of approximately
$91.2 million, including costs of the acquisition, was paid in cash, and the
acquisition has been accounted for under the purchase method.  The purchase
price was allocated based on estimated fair values at the date of acquisition. 
This resulted in an excess of the purchase price over the net assets acquired
of $74.6 million, which has been recorded as goodwill and is being amortized on
a straight-line basis over 40 years.  A summary of the allocation of the
purchase price to assets acquired, based on their estimated fair values
follows:

     (In thousands)
     Purchase price including costs and 
       liabilities paid at closing             $95,548
     Less, cash acquired                        (4,303)
                                              --------
     Net cash cost                              91,245
     Current liabilities assumed                22,959
     Less, acquired assets:
       Current assets, excluding cash          (35,055)
       Property and Equipment                   (3,926)
       Other assets                               (578)
                                              --------
     Excess cost over net
       assets acquired (goodwill)             $ 74,645
                                              ========


                                       7
<PAGE>  8
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


     The operating results of Varsity have been included in the consolidated
statements of operations from the date of acquisition.  The following pro forma
information presents the combined operations of the Company and Varsity as if
the acquisition, and relating financing transactions discussed in Note 6, had
occurred at the beginning of each of the periods presented:



                                                Nine Months Ended September 30,
                                                -------------------------------
 (In thousands)                                      1997             1996    
                                                 ------------     ------------
 Net revenues                                        $146,036         $135,304
 Cost of sales                                         86,524           77,333
                                                 ------------     ------------
 Gross profit                                          59,512           57,971
 Selling, general and administrative expenses          48,667           41,559
 Product liability expense                              1,875            1,992
                                                 ------------     ------------
 Income from operations                                 8.970           14,420
 Interest expense                                      11,317           10,683
                                                 ------------     ------------
 Income (loss) before taxes                            (2,347)           3,737
 Income taxes                                              -               160
                                                 ------------     ------------
 Net income (loss)                                    ($2,347)          $3,577
                                                 ============     ============
 Earnings (loss) per share                             ($0.26)           $0.38
                                                 ============     ============
 Depreciation and amortization                          4,035            3,849

    These pro forma results have been presented for comparative purposes only
and include certain pro forma adjustments including: (1) additional
amortization expense as a result of goodwill arising from the acquisition; (2)
salary increases relating to contracts entered into in conjunction with the
transactions; (3) elimination of costs incurred by Varsity in maintaining its
status as a separate public corporation; (4) adjustments of certain expenses
incurred by the Company or Varsity based on programs existing within the other
company; (5) elimination of one time charges arising from the transaction for
redeeming Varsity stock options, a change in control payment and bridge loan
commitment fees; (6) additional interest on acquisition debt and related debt
changes; and (7) the tax effect of the above.  The pro forma results are not
necessarily indicative of results that would have occurred had the combination
been effected at the dates indicated nor of future operating results of the
combined operations.


3.   Earnings per share

     Earnings per share are based on the weighted average number of common and
common equivalent shares outstanding.  Common equivalent shares outstanding are
based on the assumed exercise of dilutive common stock options and warrants
less the number of treasury shares assumed to be purchased from the proceeds of
the assumed exercise, and for the periods ending September 30, 1997, the
assumed conversion of the Convertible Subordinated Notes issued in November
1996.  The number of treasury shares assumed to be purchased from the proceeds
is based on the average market price of the Company's common stock for the
period in computing primary earnings per share, and is based on the end of
period market price of the Company's common stock, if higher than the average
market price, in computing fully diluted earnings per



                                       8
<PAGE>  9
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


 share.  Fully diluted earnings per share have not been presented as the
results are approximately the same as primary earnings per share after rounding
to the nearest cent.

     Earnings per share calculated for the nine month period ending September
30, 1997 does not equal the sum of earnings per share calculated for each of
the three quarterly periods falling within the year to date period.  The
computed earnings per share for the nine month period ended September 30, 1997
is $0.42 whereas the sum of the earnings per share for the first, second and
third quarters of 1997 is $0.28.  The Company reported losses for the first and
second quarters of 1997 while third quarter operations have resulted in a year
to date profit.  Common equivalent shares relating to options, warrants and the
Convertible Subordinated Notes were not included in the computation of earnings
per share during the first or second quarters of 1997 as these items are not
dilutive during net loss quarters.

     The Financial Accounting Standards Board  has recently issued Statement of
Financial  Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128"). This
statement simplifies the standards for computing earnings per share,  replacing
current  presentations with a dual  presentation of basic  and diluted earnings
per share. Basic earnings per share, as defined by the new standard,   excludes
dilution  while diluted  earnings  per share  is  computed similarly  to  fully
diluted  earnings per  share. SFAS  128 is  effective for  financial statements
issued for  periods ending after December  15, 1997. If the  provisions of SFAS
128 had  been applied  to the periods  presented  in  this report  earnings per
share would have been as follows:

                                Three Months Ended      Nine Months Ended
                                  September 30,           September 30,
                               -------------------    ----------------------
                                  1997      1996        1997         1996
                               --------   --------    -------      ---------
   Basic earnings per share      $0.65     $0.12        $0.45        $0.51
   Diluted earnings per share    $0.54     $0.11        $0.42        $0.48


4.  Receivables

    Accounts receivable include unbilled shipments of approximately $1,531,000
at September 30, 1997, principally relating to Varsity's business.  Unbilled
shipments at December 31, 1996, before the acquisition of Varsity, were not
material.  It is the Company's policy to record revenues when the related goods
have been shipped.  Unbilled shipments represent receivables for shipments that
have not yet been invoiced.  These amounts relate principally to partial
shipments to customers who are not invoiced until their order is shipped in its
entirety or customers with orders containing other terms that require a
deferral in the issuance of an invoice.  Management believes that substantially
all of these unbilled receivables will be invoiced within the current sales
season.


                                       9
<PAGE>  10
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)



5.  Inventories

      Inventories consist of the following:

         (In thousands)  September 30,  December 31,
                              1997           1996   
                          -----------     -----------
         Finished goods    $  11,513       $   6,712
         Work-in-process       1,964           4,345
         Raw materials         7,597           5,349
                          -----------     -----------
                             $21,074         $16,406
                          ===========     ===========

6.   Long Term Debt

     In connection with the acquisition of Varsity Spirit Corporation (see
Note 2) the Company issued $115,000,000 of its 10.5% Senior Notes due 2007 (the
"Senior Notes") and has entered into a new credit facility with NBD Bank and
NationsBank, N.A.

     The Senior Notes contain certain covenants that, among other things, 
restrict the level of other indebtedness the Company may incur, payment of
dividends and certain investments.  The Senior Notes also restrict payment of
junior indebtedness prior to the maturity of the junior indebtedness.  The
Senior Notes are guaranteed by each of the Company's subsidiaries.  The
separate financial statements of the guaranteeing subsidiaries are not
presented in this report because the guaranteeing subsidiaries are jointly and
severally liable and because the separate financial statements and other
disclosures concerning the guaranteeing subsidiaries are not deemed material to
investors by management.

     The new credit facility consists of a five-year revolving line of credit
in a principal amount not to exceed $35 million.  Draws under the line of
credit are limited under the terms of the related loan agreement to a
percentage of certain receivables and inventory.  The outstanding balance of
the line accrues interest at a rate of LIBOR plus a margin of 2.25% on draws so
designated by the Company, and on other draws at the higher of the Bank's prime
rate plus a margin of 0.75% or the Federal Funds rate plus 1.25%.  The credit
facility also calls for a commitment fee equal to an annual rate of 0.5%
applied to the unused portion of the line.  The margin of the interest rate
over the related rates, as well as the commitment fee rate, is subject to
quarterly adjustment after June 30, 1998 dependant on certain financial ratios. 
The interest rate margin can vary between 1.5% and 2.5% over LIBOR, 0% to 1%
over the prime rate,  0.5% and 1.5% over the Federal Funds rate and .04% to
0.5% on the commitment fee.  The credit facility agreement contains certain
covenants which, among other things, require the Company to meet certain ratio
and net worth tests, restrict the level of other indebtedness the Company may
incur and limit payments of dividends and certain investments.  The Company has
pledged essentially all of its tangible assets as collateral for the credit
facility.

     In connection with these financing transactions, all other long term debt
of the Company, except its $7.5 million of 4.10% Convertible Subordinated Notes
due 2004, was repaid.  Accordingly, at September


                                       10
<PAGE>  11
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


 30, 1997 long term debt of $129.1 million consisted of $115 million 10.5%
Senior Notes, $7.5 million 4.10% Convertible Subordinated Notes, and the
outstanding balance of $6.6 million under the line of credit. 

     In connection with obtaining consents needed for various aspects of the
Varsity acquisition, the Company amended its 4.10% Convertible Subordinated
Note to provide for a reduction from $6.00 to $5.3763 per share in the
conversion price.  The Company also incurred debt issue costs of approximately
$5.8 million in connection with the Senior Notes and approximately $0.8 million
of costs in connection with the new credit facility.  These costs will be
amortized to interest expense over the life of the related debt.  The Company
also incurred costs of $3.0 million in connection with a bridge loan commitment
needed to support the acquisition which was charged to interest expense in June
1997.


7.   Litigation matters and contingencies

     Recorded liabilities 

     In regards to the product liability and other litigation matters and
contingencies discussed below, the Company has recorded certain liabilities. 
While these amounts are discussed in the remaining sections of this note, a
summary of these amounts together with other items comprising the applicable
balance sheet line items follows:
<TABLE>
<CAPTIONS>
                                    Accrued              
   (In thousands)                                          liabilities    Other liabilities
                                                            (Current)       (Non-Current)
                                                          -------------   ---------------
<S>                                                       <C>             <C>
   September 30, 1997:
     Product liability matters:
       Future payments on settled cases                   $       1,750    $             -
       Reserves for pending and other contingencies                 600              3,000
                                                          -------------   ---------------
            Totals for product liability matters                  2,350              3,000
     Other (not related to litigation or contingencies)           8,439                120
                                                          -------------    ---------------
            Total of balance sheet category               $      10,789    $         3,120
                                                          =============    ===============

   December 31, 1996:
     Product liability matters:
       Future payments on settled cases                   $       1,750    $             -
       Reserves for pending and other contingencies                 500              3,500
                                                          -------------    ---------------
            Totals for product liability matters                  2,250              3,500
     Provision relating to fraudulent transfer litigation         1,400
     Other litigation contingency reserves                          400                 - 
     Other (not related to litigation or contingencies)           2,690                547
                                                          -------------    ---------------
            Total of balance sheet category               $       6,740    $         4,047
                                                          =============    ===============
</TABLE>

                                        11
<PAGE>  12
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


     Product liability:

     At September 30, 1997, a subsidiary of the Company was a defendant in 7
product liability suits relating to personal injuries allegedly arising from
the use of Riddell helmets or helmets reconditioned by All American.  The
ultimate outcome of these claims, or potential future claims, cannot presently
be determined.  The Company estimates that the uninsured portion of future
costs and expenses related to these claims, and incurred but not reported
claims, will amount to at least $3,600,000, and accordingly, a reserve in this
amount is included in the Condensed Consolidated Balance Sheet at September 30,
1997 as part of accrued liabilities and other liabilities.  These reserves are
based on estimates of losses and defense costs anticipated to result from such
claims, from within a range of potential outcomes, based on available
information, including an analysis of historical data such as the rate of
occurrence and the settlement amounts of past cases.  However, due to the
uncertainty involved with estimates, actual results have at times varied
substantially from earlier estimates and could do so in the future. 
Accordingly, there can be no assurance that the ultimate costs of such claims
will fall within the established reserves.

     The Condensed Consolidated Balance Sheets also include liabilities related
to unpaid portions of cases settled in prior periods at September 30, 1997 and
December 31, 1996.

     Other contingencies and litigation matters:

     On August 5, 1997 the Company settled an action commenced against it in
March, 1995 by the trustee for MacGregor Sporting Goods, Inc. ("Mac I"), which
filed for bankruptcy protection in March 1989, and the trustee for MGS
Acquisition, Inc. (collectively, the "Trustees").  The settlement agreement
(the "Settlement Agreement") was approved by order of the New Jersey Bankruptcy
Court (the "Mac Order"), which also dismissed the action with prejudice.  The
action had sought damages in connection with the Company's acquisitions in 1988
and 1989 of substantially all the assets and businesses of two former second-
tier subsidiaries of Mac I on the ground that the Company failed to pay
adequate consideration at a time when Mac I was insolvent.  The businesses
acquired included the Company's core football helmet business, the MacGregor
licensing business and the non-football uses of the Riddell trademark.

     Additionally, the Settlement Agreement settles, and the Mac Order
dismisses with prejudice, a state law debtor and creditor action initiated
against the Company by Innovative Promotions, Inc. and certain other purported
unsecured creditors of Mac I making similar allegations.

     The Settlement Agreement also settles claims against the Company brought
by the Company's former President.  Among other things, the former officer
alleged the Company breached its indemnification obligation to him as a former
officer and director of the Company.

     Generally, the Settlement Agreement required the Company to pay an
aggregate of $2.3 million, with respect to which the Company had, in prior
periods, previously expensed $2.1 million including  approximately $0.7 million
paid into an escrow fund.  These amounts were paid in August 1997. 
Additionally the Company agreed to assign royalties, to the extent paid, of up
to $3.0 million, on a present value basis, for up to ten years from its current
or any future "Riddell" footwear licensee.


                                       12
<PAGE>  13
                         RIDDELL SPORTS INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)



     In addition to the matters discussed in the preceding paragraphs, the
Company has certain other claims or potential claims against it that may arise
in the normal course of business, including without limitation claims relating
to employment related matters.  Management believes that the probable
resolution of such matters will not materially affect the financial position or
results of operations of the Company.

8.   Shareholders equity

     In June 1997, the Company sold 986,169 shares of its Common Stock to
certain key employees of Varsity at $4.50 per share for an aggregate, net of
related costs, of approximately $4.3 million pursuant to  Stock Purchase
Agreements dated May 15, 1997.  

     In connections with the terms of certain agreements entered into in
connection with the Varsity acquisition, the Company also has issued options
for the purchase of approximately 950,000 shares of its Common Stock to certain
Varsity employees.  Included in this amount are 450,000 options to certain key
employees of Varsity which vest immediately and which have an option price of
$3.80.  A value of $559,000 has been ascribed to these options and was charged
against operations in June, 1997, and credited to additional paid in capital. 
The remaining 500,000 options were issued to a broad group of Varsity employees
at market prices.


9.   Supplemental cash flow information

     In June 1997, in connection with the acquisition of Varsity Spirit
Corporation, the Company assumed liabilities of approximately $22,959,000.  In
June 1997, the Company credited additional paid in capital for  $559,000
relating to value ascribed to certain stock options (see Note 8).

     Cash paid for interest was $5,038,000 (including $3.0 million relating to
certain bridge financing commitment fees - see Note 6) and $2,135,000 for the
nine month periods ended September 30, 1997 and 1996, respectively.  Income tax
payments, or refunds, were not significant for the periods ended September 30,
1997 and 1996.


                                       13
<PAGE>  14


Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
     FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS:

The following table sets forth selected operating data as a percentage of net
revenues:

                               Three months ended        Nine months ended
                                   September 30,            September 30, 
                               ------------------        -------------------
                                 1997       1996            1997      1996
                               ---------  ---------      --------  ----------
    Net revenues:
         Net sales  . . . . .    99.1%      97.0%           98.2%     96.4%
         Royalty income . . .     0.9        3.0             1.8       3.6
                               ---------  ---------      --------  ----------
         Total net revenues .   100.0      100.0           100.0     100.0
    Gross profit  . . . . . .    39.2       44.9            41.8      47.6
    Selling, general and 
       administrative expenses   22.9       31.5            28.8      33.4
    Product liability expense     1.0        3.6             1.7       3.3
    Income from operations  .    15.3        9.8            11.3      10.9
    Interest expense  . . . .     5.8        4.3             7.7       3.7
    Income before taxes   . .     9.5        5.5             3.5       7.2

    Net income    . . . . . .     9.3        5.3             3.4       6.9


Overview:
     On June 19, 1997 the Company substantially completed its acquisition of
Varsity Spirit Corporation ("Varsity").  Varsity designs and markets
cheerleader and dance team uniforms for sale to the school spirit industry. 
Varsity also operates high school and college cheerleader and dance team camps. 
On a pro forma basis, revenue for the Company combined with Varsity for 1996
would have been $160.8 million, more that twice the Company's historical stand
alone revenues.   In transactions related to the acquisition, the Company
issued $115 million of 10.5% Senior Notes, sold approximately $4.4 million of
its Common Stock to certain former shareholders of Varsity, entered into a new
working capital credit facility and repaid certain other long term debt. These
transactions have had a significant impact on the Company's operating results. 
Earlier this year the Company also settled certain litigation matters
(unrelated to product liability) which had been ongoing for several years. 
Resolution of these litigation matters will result in a curtailment of the high
levels of legal expenses relating to these actions.


     Revenues

     Total revenues for the three months ended September 30, 1997 increased to
$63.0 million from $18.3 million for the three months ended September 30, 1996. 
For the nine month period ended September 30, 1997 total revenues increased to
$110.2 million from $59.8 million for the nine months ended September 30, 1996. 
These increases included revenues from the recently acquired Varsity operation
of $43.7 million for the third quarter and $50.2 million for the period from
the June acquisition date through September 30, 1997.   Revenues from the
Company's historical operations, excluding Varsity operations, increased 5% or


                                       14
<PAGE>  15


$0.9 million in the third quarter of 1997 and increased $0.2 million, or less
than 1%, for the nine month period of 1997 in relation to the comparable
periods of 1996.  On a pro forma basis, combined revenues of the Company and
Varsity's preacquisition operations for the nine month period ending September
30, 1997 were approximately $146.0 million, an increase of $10.7 million, or
8%,  over combined revenues for the comparable 1996 period.  

     Varsity's sales, including periods before and after the acquisition,
increased $4.3 million, or 11%, for the third quarter of 1997 to $43.7 million
from $39.4 million for the comparable 1996 quarter and for the nine month
period of 1997 increased $10.5 million, or 14%, to $86.0 million from $75.5
million in the 1996 period.  Varsity's sales for the nine month period
reflected an increase in sales of uniforms and accessories of $5.6 million, or
13%, in comparison to the 1996 nine month period, as well as growth in the
number of camp participants which contributed to an increase in camp and event
sales of $4.9 million, or 15%, over levels for the 1996 nine month period.

     Net sales of the Company's lines of sports products and services increased
by $0.9 million, or 5%,  for the third quarter of 1997 to $18.7 million from
$17.8 million for the quarter ended September 30, 1996.  For the nine month
period of 1997, net sales of these product lines increased $0.4 million, or
under 1%,  to $58.1 million from $57.7 million in the comparable period of
1996.

      Sales of athletic products and services sold to schools and other
institutions, which comprised 70% of revenues from the Company's historical
product lines for the nine month period of 1997, increased approximately $2.0
million, or 19%, for the third quarter and $4.4 million, or 12%, for the nine
month period.  The Company benefitted from initial sales of its newly
introduced line of athletic practice clothing and continued to experience
volume gains in most of its core football protective product lines and
reconditioning services.

     Offsetting the gain in institutional athletic products and service sales
was a decline in sales of collectible products sold to retailers of  $0.9
million, or 16%,  for the third quarter and $2.4 million, or 17%, for the nine
month period.  The Company believes that a principle reason for the decrease is
a decline in retail orders, reflecting an industry wide cautiousness in making
inventory commitments for licensed sports products. 

     The Company also experienced a decrease in sales of athletic youth
football products sold through recreational dealers and, to a lessor extent,
products sold internationally.  Sales of youth products, while relatively
stable in the third quarter with a decrease under $0.1 million, decreased $1.4
million, or 36%, for the nine month period ended September 30, 1997 in
comparison to the year ago period.  The Company has recently announced a new
strategy for sales of its youth products, and has begun to sell youth products
to recreational teams and organizations on a direct basis.  When the Company
changed its method of distribution for institutional products in 1994,
replacing independent dealers with its direct sales force, it left recreational
youth products exclusively with the dealer network and anticipated sales
declines in youth products as dealers de-emphasized the Company's products. 
While youth products will continue to be offered to recreational team dealers
and distributors, the Company believes it can increase overall sales by
primarily selling youth products on a direct basis.

     Royalty income from trademark licensing for the third quarter of 1997
decreased by 3% or under $0.1 million, and for the 1997 nine month period
decreased by 9% or $0.2 million.  This decrease was 


                                       15
<PAGE>  16


principally due to a decline in royalties from the licensing of the MacGregor
trademark related to certain licenses which expired at the end of 1996.


     Gross Profit

     Gross profit for the three months ended September 30, 1997 increased to
$24.7 million from $8.2 million for the three months ended September 30, 1996
and for the nine month period increased to $46.1 million from $28.5 million for
the nine month period of 1996.  These increases were due to the inclusion of
gross profits from the recently acquired Varsity operations of $17.2 million
for the third quarter of 1997, and $19.7 million for the period from the
acquisition date through September 30, 1997.

     On a pro forma basis, combined gross profits of the Company and Varsity's
preacquisition operations for the nine month period of 1997 were $59.5 million,
an increase over combined pro forma gross profits of $58.0 million for the
first nine months of 1996.  Varsity's gross profit, including periods before
and after the acquisition, increased $1.9 million, or 13%, for the third
quarter of 1997 to $17.2 million from $15.2 million for the comparable 1996
quarter and for the nine month period of 1997 increased $3.6 million, or 12%,
to $33.1 million from $29.5 million in the 1996 period.  Varsity's gross
profits were adversely impacted by $0.8 million of charges related to certain
changes in estimates resulting in adjustments of inventory reserves included in
Varsity's preacquisition results earlier in the year.

     Excluding the recently acquired Varsity operations, gross profit from
sales of the Company's sports products and services decreased by 9% or $0.7
million for the third quarter of 1997 to $7.0 million from $7.7 million for
quarter ended September 30, 1996.  For the nine month period ended September
30, 1997 these gross profits decreased by 7% or  $1.9 million to $24.4 million
from $26.3 million for the comparable period of 1996.   Related gross margin
rates decreased to 37.4% of sales for the third quarter from 43.2% of sales for
the third quarter of 1996.  For the nine month period gross profit margin rates
decreased to 42.1% of sales in 1997 compared to 45.7% of sales in the
comparable 1996 period.  The primary cause of the decline in gross profits was
from the decline in sales of retail sports collectibles which carry higher than
average margins.  The decrease in gross margin rates also contributed to lower
gross margins and was due to several factors.  Sales of practice wear, which
increased during the periods as discussed above, diluted gross margins as
expected.  Margins on practice wear normally carry a lower margin than the
Company's historical product lines and were lower than normal during the period
due to start up costs of related screen printing operations and introductory
pricing.  Also, while institutional reconditioning business volume increased,
margins for this product line were down due to higher costs associated with the
initial year of reconditioning work on equipment from  new customers gained
during the year and an increase in material cost relating to the overall
condition of equipment being reconditioned.


     Selling, General and Administrative Expenses

     Selling, general and administrative expense increases reflect expenses
from the recently acquired Varsity operations of $8.1 million for the third
quarter and $9.6 million for the period from the acquisition date through
September 30, 1997. 

     On a pro forma basis, combined selling, general and administrative
expenses of the Company and Varsity for the nine month period of 1997 were
approximately $48.7 million, an increase over pro forma 


                                       16
<PAGE>  17


combined expenses of $41.6 for the nine month period of 1996.  Varsity's
selling, general and administrative expenses, on a pro forma basis, increased
$4.9 million, or 23%, for the nine month period of 1997 to $26.5 million from
$21.6 million in the 1996 period.  Varsity expenses include several unusual
charges incurred earlier in the year, both before and after the acquisition,
including  a non-cash charge of $0.6 million in the second quarter relating to
in-the-money Riddell stock options contractually granted to certain Varsity
employees (as further discussed in Note 8 of Notes to Condensed Consolidated
Financial Statements) and approximately $0.4 million of adjustments of
receivable reserves in the second quarter arising from certain changes in
estimates.  Pro forma selling, general and administrative expenses for the nine
month period of 1997 also include a net increase in expenses of approximately
$1.1 million for incremental expenses arising from the acquisition (principally
amortization of goodwill)  that will impact the Company on an ongoing basis.

     Selling, general and administrative expenses from the Company's historical
operations, excluding Varsity, increased 10% or $0.6 million in the third
quarter of 1997 and increased 11% or $2.2 million for the nine month period of
1997 in relation to the comparable periods of 1996.  The year to date increase
in expenses is largely attributable to legal expenses related to various
litigation matters (exclusive of product liability litigation) that have
recently been resolved as discussed elsewhere in this report.  Total litigation
expense related to these litigation matters amounted to $2.8 million for the
first nine months of 1997.  As these litigation matters have recently been
resolved, high levels of legal expenditures relating to these actions will be
curtailed.


     Interest Expense

     Interest expense increased by $2.8 million for the third quarter, and $6.4
million for the nine month period, in relation to the comparable periods of
1996.  Interest expense for the periods has been impacted by additional debt
incurred to finance the Varsity acquisition.  Interest for the year to date
period also included a $3.0 million onetime charge relating to a commitment for
bridge financing that had been obtained as part of the transactions surrounding
the acquisition.  The increase in debt incurred to finance the acquisition, as
further discussed below, will have a continuing impact on interest expense in
future periods.


CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION:

     Seasonality

     The Company's businesses are highly seasonal.  The Company's historical
operations in recent years, before the acquisition of Varsity, have been most
profitable in the first through third quarters, with offsetting losses
occurring in the fourth quarter.  Varsity's operations have historically
generated operating income in the second and third quarters of each calendar
year with offsetting losses each first and fourth quarter.  Accordingly, the
second and third calendar quarters have become the most important to the
Company's profitability, and this seasonal pattern is expected to continue into
the future.

     The Company has historically sold a portion of its competitive football
products and reconditioning services on dated payment terms to its customers
(primarily high schools and colleges).   Accordingly, trade receivables
increase throughout the year as sales are made on these dated payment terms. 
The increase in trade receivables continues throughout an annual cycle until
reduced at the end of the cycle as the dated 


                                       17
<PAGE>  18


receivables become due, generally in the following July to October period.  In
order to finance the resulting receivable levels, the Company has maintained a
revolving line of credit.  The outstanding balance on the revolving line of
credit generally follows the seasonal receivable cycle described above,
increasing as the level of receivables increase until the midsummer of each
year when collections of the dated receivables are used to reduce the
outstanding balance on the line.  

     The recently acquired operations of Varsity follow a similar pattern. 
Varsity's slow season runs  from the fourth quarter through late in the first
quarter, a period in which Varsity generates lower levels of revenue while
incurring expenditures in preparation for its approaching business season. 
Working capital demand reaches a peak at the end of the first calendar quarter
and continues through the second quarter, a time period when Varsity has
historically incurred seasonal borrowings.  Varsity had historically repaid
these borrowings by early in the third quarter as its collections begin to pick
up in June with camp revenues and continue at a seasonally high level through
the fall of each year as many of its receivables are collected from the sale of
uniforms and related goods.

     The Company expects that its new debt structure will impact the
seasonality of its working capital demands as the semi-annual interest payments
on the $115 million of 10.5% Senior Notes come due each January and July.

     The Company has entered into a credit facility, maturing in 2002, which
provides for seasonal borrowings under a revolving line of up to $35 million,
dependant on certain levels of receivables and inventory.   Borrowings under
this credit facility amounting to $6.6 million were included in long term debt
at September 30, 1997.  The Company believes that funds available under this
line of credit together with anticipated operating cash flow will be sufficient
to meet the Company's capital needs over the next year.


     Changes in debt structure

     In order to finance the Varsity acquisition, the Company issued $115
million of 10.5% Senior Notes due 2007 and has entered into the new credit
facility for  a five year revolving line of credit.  See Note 6 of Notes to
Condensed Consolidated Financial Statements.

     Overall, the costs of the acquisition and the financing used approximately
$101 million of cash from the Company and Varsity, net of $4.4 million of gross
proceeds from newly issued stock sold to certain key employees of Varsity.  The
remaining $14 million proceeds from the issuance of the $115 million Senior
Notes, together with draws under the new revolving line of credit, were used to
refinance and reduce Riddell's and Varsity's existing lines of credit and
certain other indebtedness.  In conjunction with the entry into the new credit
facility the Company repaid all of its preexisting  long term debt, except for
its $7.5 million of 4.10% Convertible Subordinated Notes.  The preexisting debt
of the Company repaid included a $5 million term note with interest at prime
plus 0.5%, $439,000 of 8% subordinated notes due to certain shareholders and
approximately $150,000 of other notes payable which had been discounted at 6%.

     The Company incurred debt issue costs of approximately $5.8 million in
connection with the Senior Notes and approximately $0.8 million of costs in
connection with the new credit facility.  These costs will be amortized to
interest expense over the life of the related debt.  The Company also incurred
costs of $3.0 million in connection with a bridge loan commitment needed to
complete the acquisition which has been charged to interest expense in June,
1997, during the preceding quarter.


                                       18
<PAGE>  19


Part II.    OTHER INFORMATION

Item 1.   Legal Proceedings

     In August, 1997, the Company settled certain litigation matters as
previously reported in Form 10-Q for the Quarter Ended June 30, 1997.

     The Company is a defendant in certain product liability proceedings and
from time to time becomes involved in various claims and lawsuits incidental to
its business including, without limitation, employment related litigation.  See
Note 7 of "Notes to Condensed Consolidated Financial Statements".



Item 2.  Changes in Securities
     None

Item 3.  Defaults upon Senior Securities
     None


Item 4.  Submission of Matters to a Vote of Security Holders
     None


Item 5.  Other Information

RECENT DEVELOPMENTS

Acquisition of Varsity Spirit Corporation and Financing

     On July 25, 1997, the Company completed the acquisition of Varsity Spirit
Corporation, ("Varsity").  Varsity is a leading provider of products and
services to the school spirit industry.  Varsity designs and markets
cheerleader and  dance team uniforms and accessories and is one of the nation's
leading operators of youth, junior high, high school and college cheerleader
and dance team camps, clinics and competitions.  Pursuant to the acquisition,
on May 5, 1997, the Company, Cheer Acquisition Corp. (a wholly owned subsidiary
of  Riddell  and a Tennessee corporation ("Merger Sub" or "Cheer")), and
Varsity entered into a Merger Agreement pursuant to which Merger Sub offered to
purchase all outstanding shares of Common Stock, par value $0.01 per share, of
Varsity (the "Shares") at $18.90 per share, net to the seller in cash. 
Pursuant to a shareholders agreement (the "Shareholders Agreement"), dated as
of May 5, 1997, by and among Riddell, Merger Sub and certain shareholders of
Varsity, such shareholders tendered 1,738,530 Shares representing approximately
38% of the outstanding Shares of Varsity in accordance with the terms and
conditions of the Varsity tender offer.  On June 19, 1997 Merger Sub completed
the Varsity tender offer and purchased a total of 4,511,415 Varsity shares, or
approximately 98.5% of Varsity's then outstanding shares.  In addition, each
outstanding option to purchase Shares of Varsity Common Stock was surrendered
and canceled in exchange for a cash payment equal to the number of Shares
underlying such option, multiplied by $18.90, less the aggregate exercise price
of such option.


                                       19
<PAGE>  20


     Pursuant to stock purchase agreements (the "Stock Purchase Agreements"),
dated as of May 5, 1997, by and among Riddell, Merger Sub and certain
shareholders of Varsity (the "Shareholders") the Shareholders purchased
approximately 986,000 shares of Riddell common stock for approximately $4.4
million, representing approximately 10.9% of Riddell's shares then outstanding
after giving effect to such purchase.  Pursuant to the Merger Agreement on July
25, 1997, Merger Sub was merged with and into Varsity, and Varsity survived the
merger. Upon consummation of the merger, each remaining Share then outstanding
(other than Shares held in the treasury of Varsity, Shares held by the Company,
Merger Sub or any other wholly owned subsidiary of the Company) was converted
into the right to receive $18.90 in cash.

     In order to finance the Varsity acquisition, the Company issued $115
million of its 10.5% Senior Notes due 2007 and has entered into a new Credit
Facility with NBD Bank and NationsBank, N.A. consisting of a five year
revolving credit and working capital facility in a maximum principal amount not
to exceed$35 million.  See "Management's Discussion and Analysis--Liquidity and
Capital Resources."


Litigation Settlement

     On August 5, 1997 the Company settled an action commenced against it in
March, 1995 by the trustee for MacGregor Sporting Goods, Inc. ("Mac I"), which
filed for bankruptcy protection in March 1989, and the trustee for MGS
Acquisition, Inc. (collectively, the "Trustees').  The settlement agreement
(the "Settlement Agreement") was approved by order of the New Jersey Bankruptcy
Court (the "Mac Order"), which also dismissed the action with prejudice.  The
action sought monetary damages in an unspecified amount plus interest and/or
rescission in connection with Riddell's acquisitions in 1988 and 1989 of
substantially all the assets and businesses of two former second-tier
subsidiaries of Mac I on the ground that Riddell failed to pay adequate
consideration at a time when Mac I was insolvent.  The businesses acquired
included the core football helmet business, the MacGregor licensing business
and the non-football uses of the Riddell trademark.

     Additionally, the Settlement Agreement settles, and the Mac Order
dismisses with prejudice, a state law debtor and creditor action initiated
against Riddell by Innovative Promotions, Inc. and certain other purported
unsecured creditors of Mac I making similar allegations and seeking rescission
of, and/or monetary damages in excess of $22 million, exclusive of interest. 

     The Settlement Agreement also settles claims against Riddell, certain of
its subsidiaries and two of its officers and directors and Riddell's footwear
licensee brought by Riddell's former President, Frederic Brooks.  Among other
things, Mr. Brooks alleged Riddell breached its indemnification obligation to
him as a former officer and director of Riddell and sought damages in excess of
$3.9 million plus future attorneys fees and interest.  Mr. Brooks also sought
combined compensatory and punitive damages of at least $15 million.


                                       20
<PAGE>  21



Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibit index:
          10.1 Amendment No. 2 dated September 11, 1997, to Employment
               Agreement dated as of February 1, 1994 between Riddell, Inc. and
               Dan Cougill

          11   Computation of Earnings Per Share

          27   Financial Data Schedule (submitted in electronic
               form to SEC only)

    (b)   Reports on Form 8-K
          None





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                        RIDDELL SPORTS INC.


     Date:     November 13, 1997        By   /s/ DAVID MAUER
                                            -----------------------
                                             David Mauer
                                             President and 
                                             Chief Executive Officer




     Date:     November 13, 1997        By   /s/ DAVID GROELINGER
                                            -----------------------
                                             David Groelinger
                                             Executive Vice President and
                                             Chief Financial Officer


     Date:     November 13, 1997        By   /s/ LAWRENCE F. SIMON              
                                            -----------------------
                                             Lawrence F. Simon
                                             Senior Vice President 
                                             (Principal Accounting Officer)


                                       21