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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.
20549





FORM 10-Q





(Mark One)

|x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2009 or



| ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period fromto.

Commission file number 000-51636





Triple Crown Media, Inc.

(Exact name of registrant as
specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 20-3012824                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|725A Old Norcross Rd, Lawrenceville, GA                        |  | 30045                                  
|(Address of principal executive offices)                       |  | (Zip code)                             

(770) 338-7351

(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
periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ̈    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ̈        Accelerated filer   ̈

Non-accelerated filer   ̈        Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practical date.

Common Stock, $.001 par value

5,591,626 shares
outstanding as of April 21, 2009









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##### Table of Contents

|         |  |                                                                                                                       |  |     
|-------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                                       |  | PAGE
|PART 1.  |  | FINANCIAL INFORMATION                                                                                                 |  |     
|         |  |                                                                                                                      
|Item 1.  |  | Financial Statements                                                                                                  |  |     
|         |  |                                                                                                                      
|         |  | Condensed and consolidated balance sheets  June 30, 2008 and March 31, 2009 (Unaudited)                              |  | 3   
|         |  |                                                                                                                      
|         |  | Condensed and consolidated statements of operations (Unaudited)  Three and nine months ended March 31, 2008 and 2009 |  | 4   
|         |  |                                                                                                                      
|         |  | Condensed and consolidated statements of cash flows (Unaudited)  Nine months ended March 31, 2008 and 2009           |  | 5   
|         |  |                                                                                                                      
|         |  | Notes to condensed and consolidated financial statements (Unaudited)                                                  |  | 6   
|         |  |                                                                                                                      
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 16  
|         |  |                                                                                                                      
|Item 3.  |  | Quantitative and Qualitative Disclosure About Market Risk                                                             |  | 27  
|         |  |                                                                                                                      
|Item 4.  |  | Controls and Procedures                                                                                               |  | 27  
|         |  |                                                                                                                      
|PART II. |  | OTHER INFORMATION                                                                                                     |  | 28  
|         |  |                                                                                                                      
|Item 1A. |  | Risk Factors                                                                                                          |  | 28  
|         |  |                                                                                                                      
|Item 2.  |  | Exhibits                                                                                                              |  | 28  



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PART I. FINANCIAL INFORMATION

TRIPLE CROWN MEDIA, INC.

CONDENSED AND CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)



|                                                                                                                                                              |  |              |         |   |               |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ------------- | - | ------- | -
|                                                                                                                                                              |  | June 30,2008 |         |   | March 31,2009 |  
|                                                                                                                                                              |  |              |         |   | (Unaudited)   |  
|ASSETS                                                                                                                                                        |  |              |         |   |               |   |         |  
|Current Assets:                                                                                                                                               |  |              |         |   |               |   |         |  
|Cash and cash equivalents                                                                                                                                     |  | $            | 1,095   |   |               | $ | 1,038   |  
|Accounts receivable, net                                                                                                                                      |  |              | 4,307   |   |               |   | 3,649   |  
|Inventories                                                                                                                                                   |  |              | 435     |   |               |   | 532     |  
|Other receivables                                                                                                                                             |  |              | 5,100   |   |               |   | 3,823   |  
|Other current assets                                                                                                                                          |  |              | 820     |   |               |   | 779     |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Total current assets                                                                                                                                          |  |              | 11,757  |   |               |   | 9,821   |  
|Property and equipment                                                                                                                                        |  |              | 22,557  |   |               |   | 22,432  |  
|Less: accumulated depreciation                                                                                                                                |  |              | (15,545 | ) |               |   | (16,112 | )
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Property and equipment, net                                                                                                                                   |  |              | 7,012   |   |               |   | 6,320   |  
|Goodwill                                                                                                                                                      |  |              | 12,625  |   |               |   | 12,625  |  
|Other intangible assets, net                                                                                                                                  |  |              | 6,343   |   |               |   | 5,847   |  
|Other assets                                                                                                                                                  |  |              | 2,888   |   |               |   | 1,818   |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Total assets                                                                                                                                                  |  | $            | 40,625  |   |               | $ | 36,431  |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|                                                                                                                                                              |  |             
|LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS DEFICIT                                                                                                        |  |              |         |   |               |   |         |  
|Current liabilities:                                                                                                                                          |  |              |         |   |               |   |         |  
|Current portion of long-term debt                                                                                                                             |  | $            | 20,193  |   |               | $ | 218     |  
|Accounts payable                                                                                                                                              |  |              | 1,163   |   |               |   | 346     |  
|Accrued expenses                                                                                                                                              |  |              | 3,732   |   |               |   | 1,379   |  
|Federal and state income taxes payable                                                                                                                        |  |              | 2,624   |   |               |   | 1,969   |  
|Deferred revenues                                                                                                                                             |  |              | 949     |   |               |   | 889     |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Total current liabilities                                                                                                                                     |  |              | 28,661  |   |               |   | 4,801   |  
|Long-term debt                                                                                                                                                |  |              | 50,609  |   |               |   | 73,834  |  
|Other liabilities                                                                                                                                             |  |              | 4,321   |   |               |   | 4,984   |  
|Series B redeemable preferred stock, $.001 par value (authorized 20,000 shares; issuedand outstanding 6,050 shares; $6,050 liquidation
value)                 |  |              | 4,607   |   |               |   | 4,677   |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Total liabilities                                                                                                                                             |  |              | 88,198  |   |               |   | 88,296  |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Series A redeemable, convertible preferred stock, $.001 par value (authorized 50,000 shares; issued and outstanding 20,890 shares; $20,890 liquidation
value) |  |              | 17,389  |   |               |   | 17,581  |  
|                                                                                                                                                              |  |             
|Stockholders deficit:                                                                                                                                        |  |              |         |   |               |   |         |  
|Common stock, par value $.001 (authorized 25,000 shares issued and outstanding 5,592 shares)                                                                  |  |              | 6       |   |               |   | 6       |  
|Additional paid-in capital                                                                                                                                    |  |              | 7,170   |   |               |   | 7,272   |  
|Accumulated deficit                                                                                                                                           |  |              | (71,174 | ) |               |   | (76,724 | )
|Other comprehensive loss                                                                                                                                      |  |              | (964    | ) |               |   |        |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|Total Stockholders deficit                                                                                                                                   |  |              | (64,962 | ) |               |   | (69,446 | )
|                                                                                                                                                              |  |              |         |   |               |   |         |  
|                                                                                                                                                              |  | $            | 40,625  |   |               | $ | 36,431  |  
|                                                                                                                                                              |  |              |         |   |               |   |         |  

See notes to condensed consolidated financial statements.



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TRIPLE CROWN MEDIA, INC.

CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)



|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|------------------------------------------------------- |  | --------------------------- | ------ | - | -------------------------- | - | ------ | ----------- |  | - | ----------- | - |  | - | ------ | -
|                                                        |  | Three months endedMarch 31, |        |   | Nine months endedMarch 31, |  
|                                                        |  | 2008                        |        |   | 2009                       |   |        | 2008        |  |   | 2009        |  
|                                                        |  | (Unaudited)                 |        |   | (Unaudited)                |   |        | (Unaudited) |  |   | (Unaudited) |  
|Operating revenues                                      |  | $                           | 10,892 |   |                            | $ | 9,309  |             |  | $ | 35,333      |   |  | $ | 30,518 |  
|Expenses:                                               |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Operating expenses before depreciation and amortization |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Publishing                                              |  |                             | 8,376  |   |                            |   | 7,219  |             |  |   | 25,358      |   |  |   | 22,950 |  
|Corporate and administrative                            |  |                             | 637    |   |                            |   | 746    |             |  |   | 3,082       |   |  |   | 1,962  |  
|Depreciation                                            |  |                             | 279    |   |                            |   | 294    |             |  |   | 741         |   |  |   | 866    |  
|Amortization                                            |  |                             | 207    |   |                            |   | 181    |             |  |   | 623         |   |  |   | 598    |  
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|                                                        |  |                             | 9,499  |   |                            |   | 8,440  |             |  |   | 29,804      |   |  |   | 26,376 |  
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Operating income                                        |  |                             | 1,393  |   |                            |   | 869    |             |  |   | 5,529       |   |  |   | 4,142  |  
|                                                        |  |                             |        |  
|Other expenses:                                         |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Interest expense related to Series B preferred stock    |  |                             | (113   | ) |                            |   | (114   | )           |  |   | (340        | ) |  |   | (342   | )
|Interest expense, other                                 |  |                             | (2,349 | ) |                            |   | (2,189 | )           |  |   | (8,872      | ) |  |   | (7,262 | )
|Debt issue cost amortization                            |  |                             | (360   | ) |                            |   | (410   | )           |  |   | (1,009      | ) |  |   | (1,219 | )
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Loss from continuing operations before income taxes     |  |                             | (1,429 | ) |                            |   | (1,844 | )           |  |   | (4,692      | ) |  |   | (4,681 | )
|Income tax expense                                      |  |                             | 768    |   |                            |   |       |             |  |   | 3,363       |   |  |   | 50     |  
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Loss from continuing operations                         |  |                             | (2,197 | ) |                            |   | (1,844 | )           |  |   | (8,055      | ) |  |   | (4,731 | )
|Discontinued operations:                                |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Loss on sale of discontinued operations,net             |  |                             | 185    |   |                            |   |       |             |  |   | (4,061      | ) |  |   |       |  
|Loss from discontinued operations, net                  |  |                             | 787    |   |                            |   |       |             |  |   | (40,065     | ) |  |   |       |  
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Net loss                                                |  |                             | (1,225 | ) |                            |   | (1,844 | )           |  |   | (52,181     | ) |  |   | (4,731 | )
|Series A preferred stock dividends accrued              |  |                             | (272   | ) |                            |   | (273   | )           |  |   | (816        | ) |  |   | (820   | )
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Net loss available to common stockholders               |  | $                           | (1,497 | ) |                            | $ | (2,117 | )           |  | $ | (52,997     | ) |  | $ | (5,551 | )
|                                                        |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Basic and diluted per share information:                |  |                             |        |   |                            |   |        |             |  |   |             |   |  |   |        |  
|Loss from continuing operations                         |  | $                           | (0.41  | ) |                            | $ | (0.33  | )           |  | $ | (1.50       | ) |  | $ | (0.85  | )
|Loss from discontinued operations, net of tax           |  | $                           | (0.18  | ) |                            | $ |       |             |  | $ | (8.23       | ) |  | $ |       |  
|Net loss                                                |  | $                           | (0.23  | ) |                            | $ | (0.33  | )           |  | $ | (9.74       | ) |  | $ | (0.85  | )
|Net loss available to common shareholders               |  | $                           | (0.28  | ) |                            | $ | (0.38  | )           |  | $ | (9.89       | ) |  | $ | (0.99  | )
|Weighted-average shares outstanding                     |  |                             | 5,352  |   |                            |   | 5,591  |             |  |   | 5,360       |   |  |   | 5,591  |  

See notes to condensed consolidated financial statements.



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TRIPLE CROWN MEDIA, INC.

CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)



|                                                                            |  |                                 |         |   |                                 |   |        |  
|--------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------- | - | ------ | -
|                                                                            |  | Nine Months EndedMarch 31, 2008 |         |   | Nine Months EndedMarch 31, 2009 |  
|                                                                            |  | (Unaudited)                     |         |   | (Unaudited)                     |  
|Operating activities:                                                       |  |                                 |         |   |                                 |   |        |  
|Net loss                                                                    |  | $                               | (52,181 | ) |                                 | $ | (4,731 | )
|Loss from discontinued operations                                           |  |                                 | (44,126 | ) |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Loss from continuing operations                                             |  | $                               | (8,055  | ) |                                 | $ | (4,731 | )
|Adjustments to reconcile net loss to net cash used by operating activities: |  |                                 |         |   |                                 |   |        |  
|Depreciation                                                                |  |                                 | 741     |   |                                 |   | 866    |  
|Amortization and impairment charges                                         |  |                                 | 1,632   |   |                                 |   | 496    |  
|Accretion of preferred stock                                                |  |                                 | 340     |   |                                 |   | 262    |  
|Loss on disposal of assets, net                                             |  |                                 | 213     |   |                                 |   |       |  
|Stock compensation expense                                                  |  |                                 | 432     |   |                                 |   | 102    |  
|Issuance of common stock to 401(k) plan                                     |  |                                 | 234     |   |                                 |   |       |  
|Deferred income taxes                                                       |  |                                 | 6,012   |   |                                 |   |       |  
|Changes in operating assets and liabilities:                                |  |                                 |         |   |                                 |   |        |  
|Accounts receivable                                                         |  |                                 | 1,738   |   |                                 |   | 5,658  |  
|Inventories                                                                 |  |                                 | (176    | ) |                                 |   | (97    | )
|Other current assets                                                        |  |                                 | (5,445  | ) |                                 |   | 41     |  
|Accounts payable and accrued expenses                                       |  |                                 | (3      | ) |                                 |   | (2,206 | )
|Accrued Income taxes                                                        |  |                                 | 2,507   |   |                                 |   | (655   | )
|Deferred revenue                                                            |  |                                 | (76     | ) |                                 |   | (60    | )
|Other assets and liabilities                                                |  |                                 | (453    | ) |                                 |   | (2,809 | )
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash provided by (used in) continuing operations                        |  |                                 | (359    | ) |                                 |   | (3,133 | )
|Net cash used in discontinued operations                                    |  |                                 | (9,875  | ) |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash used in operating activities                                       |  |                                 | (10,234 | ) |                                 |   | (3,133 | )
|                                                                            |  |                                
|Investing activities:                                                       |  |                                 |         |   |                                 |   |        |  
|                                                                            |  |                                
|Purchases of property and equipment                                         |  |                                 | (361    | ) |                                 |   | (174   | )
|Proceeds for asset sales                                                    |  |                                 | 35      |   |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash used in continuing operations                                      |  |                                 | (326    | ) |                                 |   | (174   | )
|Net cash provided by discontinued operations                                |  |                                 | 67,152  |   |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash provided by (used in) investing activities                         |  |                                 | 66,826  |   |                                 |   | (174   | )
|                                                                            |  |                                
|Financing activities:                                                       |  |                                 |         |   |                                 |   |        |  
|                                                                            |  |                                
|Proceeds from borrowings                                                    |  |                                 | 11,221  |   |                                 |   | 3,305  |  
|Dividends paid to stockholders                                              |  |                                 | 64      |   |                                 |   |       |  
|Net repayments of borrowing on debt                                         |  |                                 | (65,877 | ) |                                 |   | (55    | )
|Debt Issue costs                                                            |  |                                 | (560    | ) |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash (used in) provided by continuing operations                        |  |                                 | (55,152 | ) |                                 |   | 3,250  |  
|Net cash used in discontinued operations                                    |  |                                 |        |   |                                 |   |       |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Net cash (used in) provided by financing activities                         |  |                                 | (55,152 | ) |                                 |   | 3,250  |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Increase in cash and cash equivalents                                       |  |                                 | 1,440   |   |                                 |   | (57    | )
|                                                                            |  |                                
|Cash and cash equivalents, beginning of period                              |  |                                 | 166     |   |                                 |   | 1,095  |  
|                                                                            |  |                                 |         |   |                                 |   |        |  
|Cash and cash equivalents, end of period                                    |  | $                               | 1,606   |   |                                 | $ | 1,038  |  
|                                                                            |  |                                 |         |   |                                 |   |        |  

See notes to condensed consolidated financial statements.



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TRIPLE CROWN MEDIA, INC.

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1  BASIS OF PRESENTATION

The accompanying unaudited condensed and consolidated financial statements of Triple Crown Media, Inc., or the Company, have been prepared in
accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for
the three- and nine-month periods ended March 31, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2009, or fiscal 2009. For further information, refer to the consolidated
financial statements and footnotes thereto included in our Annual Report on Form 10-K for the twelve months ended June 30, 2008, or fiscal 2008.

Organization and Business Description  Until December 30, 2005, the Company was comprised of the newspaper publishing and wireless businesses owned and operated by Gray Television, Inc., or Gray, operating as wholly
owned subsidiaries or divisions of Gray.

On December 30, 2005, Gray distributed to each common stockholder of Grays common stock one
share of our common stock for every ten shares of Gray common stock held by each Gray common stockholder and one share of our common stock for every ten shares of Gray Class A common stock held by each Gray Class A common stockholder. As a
result, the Company became a separate, stand-alone entity, independent of Gray. We refer to this transaction as the Spin-off.

Immediately following
the Spin-off, and also on December 30, 2005, Bull Run Corporation was merged into a wholly owned subsidiary of the Company, in a transaction referred to as the Merger. Under the terms of the Merger, each Bull Run common stockholder received
..0289 shares of our common stock in exchange for each share of Bull Run common stock owned by each Bull Run common stockholder; holders of Bull Runs series D preferred stock and a certain holder of Bull Runs series E preferred stock
received shares of our series A redeemable, convertible preferred stock for their shares of Bull Run preferred stock and accrued dividends thereon; certain other holders of Bull Runs series E preferred stock had their shares redeemed in cash
at the liquidation value of those shares; the holder of Bull Run series F preferred stock received shares of our common stock for such holders shares of Bull Run preferred stock and accrued dividends thereon; and a significant stockholder of
Bull Run who had advanced cash to Bull Run prior to the Merger received shares of our series B redeemable preferred stock in exchange for settlement of Bull Runs liabilities payable to such holder.

Following the consummation of the Merger on December 30, 2005, the Company was comprised of the Newspaper Publishing and Wireless segments formerly owned and
operated by Gray, as well as the Collegiate Marketing and Production Services segment and Association Management Services segment acquired in the Merger, both of which were operated by a wholly owned subsidiary, Host Communications, Inc., or Host.

The Company sold its Wireless business, operated as GrayLink, LLC, or GrayLink, on June 22, 2007. In addition, the Company sold Host and
Pinnacle Sports Productions, LLC, (acquired on September 19, 2006) or Pinnacle, comprising its Collegiate Marketing and Production Services and Association Management Services businesses on November 15, 2007. Accordingly, the Company has
reclassified the results of operations and financial position of these segments to discontinued operations. Subsequent to November 15, 2007, the Companys sole remaining operating segment is comprised of its newspaper publishing
businesses.

Hereinafter, all references to Triple Crown Media, Inc., the Company, TCM, we, us or
our in these footnotes refer to the combined and consolidated businesses.



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Stock-Based Compensation  Effective January 1, 2006, we account for stock-based
compensation using Statement of Financial Accounting Standards (SFAS) No. 123(R), Accounting for Stock-Based Compensation (SFAS 123(R)), as amended, which results in the recognition of compensation expense
for stock-based compensation. We adopted SFAS 123(R) using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the
service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes valuation model. The recognized expense is net of expected forfeitures and restatement of prior periods is not required. The fair value
of restricted stock is determined based on the number of shares granted and the quoted market price of our common stock.

Valuation and
Impairment Testing of Intangible Assets  In accordance with SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142), we do not amortize goodwill and certain intangible assets with indefinite useful
lives. Instead, SFAS 142 requires that we review goodwill and intangible assets deemed to have indefinite useful lives for impairment on at least an annual basis. We perform the annual impairment review during the fourth quarter of each fiscal year
or whenever events or changes in circumstances indicate that such assets might be impaired.

Intangible assets are comprised of goodwill that is
required to be considered an indefinite-lived asset. Other separately identified definite-lived intangible assets include customer relationships, trademarks and trade names. These assets are being amortized over their estimated useful lives.
Customer relationships are amortized using the straight-line method over a period of 5 to 15 years, based on the estimated future economic benefit. Trademarks and trade names are being amortized over 6 and 15 years, respectively, using a
straight-line method, which approximates the estimated future economic benefit. For the three- and nine-month period ended March 31, 2009, we recorded amortization expense of $0.2 million and $0.6 million, respectively, in connection with our
definite-lived intangible assets.

We recorded a goodwill impairment charge of $23.7 million to reduce the carrying value of the Host and Pinnacle
businesses to fair value less cost to sell during the first quarter of fiscal 2008. Management performed an interim goodwill impairment valuation as of December 31, 2008 utilizing its revised November 2008 operating budgets and forecasts noting
no additional impairment at any of the reporting units. No further impairment indicators were noted in the quarter ended March 31, 2009.

Accounting for Derivatives  We adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, (SFAS 133), as amended, effective December 31, 2005. SFAS 133 requires
a company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a fair value hedge, changes in the fair value of the hedged assets,
liabilities or firm commitments are recognized through earnings. If the derivative is a cash flow hedge, the effective portion of changes in the fair value of the derivative are recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivatives change in fair value is immediately recognized in earnings.

Previously we
used interest rate swap agreements to hedge exposure to interest rate fluctuations on our variable rate debt, designating these swaps as cash flow hedges of anticipated interest payments. These hedging activities may be transacted with one or more
highly rated institutions, reducing the exposure to credit risk in the event of nonperformance by the counterparty to the swap agreement.

In
February 2006, we entered into an interest rate swap agreement effective in June 2006 which terminated in March 2009. Under the agreement, we converted a notional amount of $60 million of floating rate debt (currently bearing interest at LIBOR plus
the currently applicable margin of 3.25%) to fixed rate debt, bearing interest at 5.05% plus the applicable margin.

Loss Per Share Basic loss per share excludes any dilutive effects of stock options, convertible preferred stock and accrued preferred stock dividends potentially paid in common stock. In periods where they are anti-dilutive, such amounts are
excluded from the calculation of dilutive earnings (loss) per share.



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The number of shares used to calculate basic earnings per share in the condensed consolidated statement of
operations for the three and nine months ended March 31, 2009 of 5,591,626 was based on the weighted-average number of shares outstanding for such period, whereas such amount for the three and nine months ended March 31, 2008 was based on
the weighted-average number of shares outstanding for such period of 5,352,230, and 5,359,648, respectively.

Due to the net loss for the three and
nine months ended March 31, 2009 and 2008, potentially dilutive stock options, unvested restricted stock and convertible preferred stock would have been anti-dilutive; therefore, diluted earnings per share is equal to basic earnings per share.

Reclassifications Certain amounts included in the consolidated financial statements for prior years have been reclassified from
their original presentation to conform with the current year presentation.

NOTE 2  GOING CONCERN

Our financial statements for the year ended June 30, 2008 (Item 8, Note 18) explain the factors that raised substantial uncertainty regarding our ability to
continue as a going concern for a period of one year from the date of those financial statements. Since that report date, we have continued to generate operating losses and have operated with limited borrowing capacity under our line of credit.

As of March 31, 2009, changes to our revolving line of credit facility have resulted in our inability to borrow on this facility in the future.
At March 31, 2009 however, we have working capital of approximately $5 million due to our outstanding debt obligations being reclassified from short to long term. This was a result of our entering into Amendment No. 5 to our First Lien
Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement on March 31, 2009. Pursuant to Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement, Lenders
waived certain Events of Default under the Credit Agreement, extended the maturity dates of the Revolving Credit Notes and the Term Notes, ceased future Revolving Credit Advances, permitted payment on outstanding Revolving Credit Advances and
amended certain financial covenants and other provisions in the Credit Agreement, as further discussed in Note 4. However, all of our First Lien outstanding debt matures on December 30, 2010 and the Second Lien outstanding debt matures on
December 30, 2011. In order to meet these obligations, we will be required to restructure our current credit facilities, refinance with another lender, or attempt to derive capital from some other sources.

Additionally, the sale of Host and Pinnacle in fiscal 2008 resulted in $2.6 million of tax liabilities which began to come due on September 15, 2008. In
order to meet these tax obligations we have been negotiating with the appropriate authorities to arrange payment plans to spread these payments over an extended period of time.

If we are not successful in some or all of the following, we may not have sufficient liquidity to operate: 1) generate positive operating cash flow to meet our
current operating obligations as they become due; 2) restructure our credit facilities to provide for additional working capital sources should we not be able to generate the operating cash flow needed to meet our daily operating obligations; and 3)
in the case of our tax obligations, successfully renegotiating our payment plans with the taxing authorities. We cannot predict the outcome of any of these matters at this time.

These factors raise substantial doubt as to our ability to continue as a going concern. The accompanying financial statements have been prepared on a going concern
basis which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3  TRANSACTIONS WITH AFFILIATED COMPANIES

Insurance
Contract with Georgia Casualty & Surety Co.  Effective December 30, 2005, we obtained certain workers compensation insurance coverage under an insurance contract with Georgia Casualty & Surety Co., or
Georgia Casualty, which was a wholly owned subsidiary of Atlantic American Corporation, a



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publicly traded company in which J. Mack Robinson (a significant shareholder) and certain of his affiliates have a substantial ownership interest, and a company of
which Hilton H. Howell, a member of our board of directors and Mr. Robinsons son-in-law, is an executive officer (as of March 31, 2008, Georgia Casualty was no longer a subsidiary of Atlantic American and thus no longer an affiliated
company). For the three and nine months ended March 31, 2008, our workers compensation insurance expense attributable to our insurance contract with Georgia Casualty was approximately $0.04 and $0.07 million, respectively.

NOTE 4  LONG-TERM DEBT AND LIQUIDITY

Long-term debt outstanding as
of June 30, 2008 and March 31, 2009 consists of the following (amounts in thousands):



|                                     |  |              |         |   |               |   |        |  
|------------------------------------ |  | ------------ | ------- | - | ------------- | - | ------ | -
|                                     |  | June 30,2008 |         |   | March 31,2009 |  
|First lien senior term loan          |  | $            | 21,280  |   |               | $ | 21,469 |  
|Second lien senior term loan         |  |              | 30,229  |   |               |   | 32,826 |  
|First lien revolving credit facility |  |              | 19,293  |   |               |   | 19,757 |  
|                                     |  |              |         |   |               |   |        |  
|                                     |  |              | 70,802  |   |               |   | 74,052 |  
|Current Portion of Long-Term Debt    |  | $            | (20,193 | ) |               | $ | (218   | )
|                                     |  |              |         |   |               |   |        |  
|Long Term Debt                       |  | $            | 50,609  |   |               | $ | 73,834 |  
|                                     |  |              |         |   |               |   |        |  

On December 30, 2005, we entered into a (i) First Lien Secured Credit Agreement and
(ii) Second Lien Senior Secured Credit Agreement with Wachovia Bank, National Association, among others. The First Lien Secured Credit Agreement provides for a senior secured revolving credit facility in the aggregate principal amount of $20
million, which matures on December 30, 2009 (which we refer to as the First Lien Revolving Credit Facility) and a senior secured term loan facility in an aggregate principal amount of $90 million, which matures on June 30, 2010
(which we refer to as the First Lien Term Loan Facility and, together with the First Lien Revolving Credit Facility, the First Lien Credit Facility). The Second Lien Credit Agreement provides for a senior secured term loan
facility in the aggregate principal amount of up to $30 million, which matures on December 30, 2010 (which we refer to as the Second Lien Credit Facility and, together with the First Lien Credit Facility, the Credit
Facilities). Substantially all of our assets are pledged as collateral in conjunction with the Credit Facilities. Proceeds of the Credit Facilities were used to fund a $40 million cash distribution to Gray in connection with the Spin-off,
refinance all of Bull Runs long-term debt in connection with the Merger, pay the cash portion of the Merger consideration and pay transaction costs.

On September 18, 2006, we amended the Credit Facilities in conjunction with our acquisition of Pinnacle (now presented as part of discontinued operations). Pursuant to the amendments, amounts under the First Lien Revolving Credit
Facility may be borrowed, repaid and reborrowed by us from time to time until maturity. Interest for borrowings under the First Lien Revolving Credit Facility was based, at our option, on either (a) 2.25% per annum plus the higher of
(1) the prime rate of interest announced or established by Wachovia from time to time and (2) the Federal funds rate plus 0.50% per annum (the Base Rate) or (b) 3.25% per annum plus the applicable London
Interbank Offered Rate (LIBOR) rate for Eurocurrency borrowings. If we met certain leverage ratio criteria as set forth in the First Lien Senior Secured Credit Agreement, our interest rate would have declined at .25% increments to
(a) 1.50% per annum above the Base Rate or (b) 2.50% per annum above the applicable LIBOR rate for Eurocurrency borrowings. We did not qualify for a reduction in our Base Rate of LIBOR applicable margins of 2.25% and 3.25%.
Interest for borrowings under the First Lien Term Credit Facility was based, at our option, on either (a) 2.50% per annum plus the higher of (1) the prime rate of interest announced or established by Wachovia from time to time, and
(2) the Base Rate or (b) 3.50% per annum plus the applicable LIBOR rate for Eurocurrency borrowings, subject to adjustment based on our credit ratings assigned to the Second Lien Credit Facility by Standard & Poors and
Moodys. Interest under the Second Lien Credit Facility was based upon (a) 8.50% per annum above the Base Rate or (b) 9.50% per annum above the applicable LIBOR rate for Eurocurrency borrowings, subject to adjustment based
on our credit ratings assigned by Standard & Poors and Moodys.



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At March 31, 2009, the First Lien Term Loan Facility and the Second Lien Credit Facility were fully drawn.
Amounts drawn on the First Lien Revolving Credit Facility as of June 30, 2008 and March 31, 2009 were $19.3 million and $19.7 million, respectively. As of March 31, 2009 we had no availability under our revolving credit facility due
to our entering into the Fifth Amendment to our Credit Facilities, more fully discussed below.

Our Credit Facilities contain affirmative and
negative covenants and financial ratios customary for financings of this type, including, among other things, limits on the incurrence of debt or liens, a limit on the making of dividends or distributions, provision for mandatory prepayments under
certain conditions, limitations on transactions with affiliates and investments, a limit on the ratio of debt to earnings before interest, income taxes, depreciation and amortization, as adjusted for certain non-cash and nonrecurring items (which we
refer to as EBITDA), a limit on the ratio of EBITDA to fixed charges, and a limit to the ratio of EBITDA to all cash interest expense on all debt. The Credit Facilities contain events of default customary for facilities of this type
(with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default, the interest rate on all outstanding obligations will be increased and payment of all outstanding loans may be accelerated and/or the
lenders commitments may be terminated. In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts payable under the Credit Agreements shall automatically become immediately due and payable, and
the lenders commitments will automatically terminate.

On November 9, 2007, we entered into the third amendment to each of our Credit
Facilities due, in part, to our failure to meet our financial covenants. Pursuant to these amendments, our lenders agreed to temporarily suspend, on a retroactive basis, the requirement for us to comply with all financial covenants contained therein
for the period September 30, 2007 through November 15, 2007. Subsequent to the consummation of the Host and Pinnacle transactions, we were required to remain in compliance with our leverage covenants. We were in compliance with our
covenants as of December 31, 2007; however, our forecasts indicated that we would not be in compliance with future covenants and, accordingly, we sought to further amend our covenants.

On February 15, 2008 we executed our fourth amendment to the First Lien Term Loan Facility. Pursuant to the amendment, borrowings associated with Base Rate
and Eurodollar advances were charged interest at rates of 4.50% and 5.50% per annum, respectively, provided that the Base Rate and Eurodollar Rate (as defined) cannot fall below 4.00% and 3.00%, respectively. The amendment also provided for a
reduction in the First Lien Leverage Coverage, Fixed Charge Coverage and Interest Coverage Ratios for each quarter ending through September 30, 2009. Capital expenditures cannot exceed $500,000 for any four consecutive quarters. We were in
compliance with our loan covenants as of June 30, 2008; however, we failed to meet certain financial loan covenants for the quarter ended September 30, 2008. As a result of not meeting certain of these loan covenants, our lenders had the
option to call our debt at any time. Accordingly, we classified all of our First Lien Term Loan Facility debt as a current liability as of December 31, 2008.

On February 15, 2008 we executed our fourth amendment to the Second Lien Credit Facility. Pursuant to the amendment, borrowings associated with Base Rate and Eurodollar advances were charged interest at rates of 11.00% and
12.00% per annum, respectively, provided that the Base Rate and Eurodollar Rate cannot fall below 4.00% and 3.00%, respectively. The amendment also provided for a reduction in the Leverage Ratio for each quarter ending through
September 30, 2009. Capital expenditures cannot exceed $500,000 for any four consecutive quarters. We were in compliance with our loan covenants as of June 30, 2008; however, we failed to meet certain financial loan covenants for the
quarter ended September 30, 2008. As a result of not meeting certain of these loan covenants, our lenders had the option to call our debt at any time. Accordingly, we classified all of our Second Lien Credit Facility debt as a current liability
as of December 31, 2008.

On March 31, 2009 we executed our fifth amendment to the First Lien Credit Facility. Pursuant to this amendment,
our lenders waived covenant defaults for the quarters ended September 30, 2008 and December 31, 2008. The unused portion of the Revolving Line of Credit was terminated resulting in the Company having no availability on our line of credit.
The interest rates remained unchanged from those provided in the Fourth Amendment. The maturity under the First Lien Credit Facility was extended to



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December 30, 2010. A portion of the $5 million escrow proceeds, related to the sale of Host, will be used to pay all First Lien Credit Facility interest and
scheduled amortization through September 30, 2009. Financial covenants were reset and now include only a minimum EBITDA requirement and a minimum Fixed Charge ratio. We also agreed to hire a financial advisor acceptable to the lenders as well
as an appraiser in order to determine the value of the company and develop an exit plan. Beginning March 31, 2009 capital expenditures cannot exceed $200,000 for any four consecutive quarters.

On March 31, 2009 we executed our fifth amendment to the Second Lien Credit Facility. Pursuant to this amendment, our lenders waived covenant defaults for the
quarters ended September 30, 2008 and December 31, 2008 and the payment default due January 2, 2009. The quarterly interest payment that was due January 2, 2009 was rolled into the total debt obligation under the Second Lien
Credit Facility. The cash interest rate was changed to 0% and the PIK interest rate will be charged at 15%. The maturity of the Second Lien Credit Facility was extended to December 30, 2011. The financial covenants were reset and now include
only a minimum EBITDA requirement and a minimum Fixed Charge ratio. There will be no loan amortization payments until the First Lien Credit Facility is paid in full. The Second Lien holders may receive penny warrants for 80% of our common stock;
provided, however, such common shares will not include voting powers until payments are made on the First Lien Credit Facility based on a sliding scale. The warrants have not been issued yet and are subject to shareholder ratification. Our covenants
require us to issue these warrants by July 31, 2009 although the period for issuance may be extended at the sole discretion of the Second Lien holders. Failure to issue these warrants will result in an even of default. The amendment also
requires the Company, no later than 120 days after the Fifth Amendment effective date, to have consummated all transactions, activities or steps necessary to result in the Company no longer being required to file periodic reports with the SEC under
the Securities and Exchange Act of 1934 as long as the expenses associated with these transactions, activities or steps do not exceed $140,000 in the aggregate.

We incurred $0.6 million of bank fees to execute the fourth amendment to the First Lien Term Facility and the Second Lien Credit Facility which were executed in fiscal 2008. These costs were capitalized and will be amortized
over the remaining life of the credit facilities with the previously capitalized debt costs. We incurred no bank fees to execute the Fifth Amendment to the First Lien Term Facility and the Second Lien Credit Facility which were executed in fiscal
2009.

NOTE 5  INCOME TAXES

The differences between
the federal statutory tax rate of 34% and the effective tax rate of 69% and 16% for the three and nine months ended March 31, 2008 is primarily due to a non-deductable goodwill impairment charge associated with the sale of Host, change in our
valuation allowance and state income taxes as well as other non-deductable expenses such as interest expense related to our Series B preferred stock and other permanent differences. The difference between the federal statutory rate of 34% and the
effective tax rate of 0 % and (1.1) % for the three and nine months ended March 31, 2009 is due to the fact that we have no projected taxable income resulting in no current tax provision as well as our deferred tax items being fully
reserved resulting in no deferred tax provision offset with accruing interest on our past due income tax obligations. We currently believe our effective income tax rate for fiscal 2009 will be approximately (1.1) %, excluding potential effects
of changes in judgments as to the potential realization of deferred tax assets and state income tax adjustments. Changes in the amount of interest accrued on our tax obligations relative to our taxable income could change causing our expected tax
rate to vary.

We adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation 48, Accounting for
Uncertainty in Income Taxes (FIN 48), on July 1, 2007. Previously, we had accounted for tax contingencies in accordance with SFAS 5, Accounting for Contingencies. As required by FIN 48, which clarifies
Statement 109, Accounting for Income Taxes, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.
For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax
authority. We would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses for all periods presented.



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At the adoption date, we applied FIN 48 to all tax positions for which the statute of limitations remained
open and determined there were no unrecognized tax benefits for which a liability would be required as of July 1, 2007. There have been no material changes in unrecognized tax benefits since July 1, 2007.

NOTE 6  DISCONTINUED OPERATIONS

Host; Pinnacle

On September 28, 2007, we committed to a plan to sell Host and Pinnacle comprising our Collegiate Marketing and Association Management
businesses and ultimately completed this sale on November 15, 2007. The gross sales price was $74.3 million with $67.9 received at closing and $1.4 million held in escrow subject to working capital settlement provisions and $5.0 million held in
escrow subject to indemnity settlement provisions. On March 31, 2009 the $5.0 million related to the indemnity provision was released and disbursed in accordance with the provisions of our fifth loan amendment to each of our Credit Facilities.
During the first quarter ended September 30, 2007, we recorded a goodwill impairment charge of $23.7 million to reduce the carrying value of these businesses to fair value less cost to sell. We have classified our operating results for these
businesses as discontinued operations.

Summary operating results for Host and Pinnacle were as follows (amounts in thousands):



|                             |  |                                 |  
|---------------------------- |  | ------------------------------- | -
|                             |  | Nine Months EndedMarch 31, 2008 |  
|Operating revenue            |  | 39,147                          |  
|Loss before taxes            |  | (25,699                         | )
|Income tax (benefit) expense |  | (18,427                         | )
|Loss, net of tax             |  | (44,126                         | )

NOTE 7  PREFERRED STOCK

As of March 31, 2009, 20,890 shares of our series A redeemable, convertible preferred stock (which we refer to as Series A Preferred Stock) were outstanding, having an aggregate face value of $20.9 million and a carrying
value of $17.6 million at March 31, 2009, all of which are convertible into shares of our common stock (a) at the holders option, at any time after December 30, 2006 or (b) at our option, upon a change of control or
liquidation event at a conversion price equal to $16.54 per share. Each holder of the Series A Preferred Stock is entitled to receive dividends at an annual rate of $40 per share in cash or in additional shares of Series A Preferred Stock, at our
option. We currently do not anticipate that cash dividends will be paid for the foreseeable future. The liquidation and redemption price of the Series A Preferred Stock is $1,000 per share and dividends are cumulative. We have the option to redeem
the Series A Preferred Stock at any time after December 30, 2010 at the liquidation value, which includes accrued dividends, but in any case we are required to redeem all outstanding shares of Series A Preferred Stock by August 2, 2020. As
of March 31, 2009, all outstanding shares of Series A Preferred Stock were held by J. Mack Robinson, who also beneficially owns approximately 9% of our outstanding common stock, and affiliated companies.

As of March 31, 2009, 6,050 shares of our series B convertible preferred stock (which we refer to as Series B Preferred Stock) were outstanding, having an
aggregate face value of $6.1 million and a carrying value of $4.7 million at March 31, 2009, all of which are convertible into shares of our common stock at our option, upon a change of control or liquidation event at a conversion price equal
to $16.54 per share. The holder of the Series B Preferred Stock is entitled to receive dividends at an annual rate of $60 per share in cash or in additional shares of Series B Preferred Stock, at our option. We currently do not anticipate that cash
dividends will be paid for the foreseeable future. The liquidation and redemption price of the Series B Preferred Stock is $1,000 per share and dividends are cumulative. We have the option to redeem the Series B Preferred Stock at any time after
December 31, 2010 at the liquidation value, which includes accrued dividends, but in any case we are required to redeem all outstanding shares of Series B Preferred



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Stock by August 2, 2021. As of March 31, 2009, all shares of Series B Preferred Stock were held by Mr. Robinson and affiliated companies.

All shares of preferred stock rank, as to payment of dividends and as to distribution of assets upon our liquidation or dissolution, on a parity with all other
currently issued preferred stock and any preferred stock issued by us in the future, and senior to our currently issued common stock and any common stock issued in the future. The difference between the carrying value and face value of each series
of preferred stock will be accreted using the interest method through the applicable mandatory redemption date of the series of preferred stock. Accordingly, for the three and nine months ended March 31, 2009, accretion in the amount of
approximately $0.06 million and $0.19 million, respectively, was recognized as a component of Series A Preferred Stock dividends accrued and $0.02 million and $0.07 million was recognized as interest expense related to Series B Preferred Stock,
respectively.

NOTE 8  OTHER COMPREHENSIVE LOSS

A
reconciliation of net loss to comprehensive loss follows (amounts in thousands):



|                                                                                                          |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |        |  
|--------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | -------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                                                          |  | Three Months EndedMarch 31, |        |   | Nine Months EndedMarch 31, |  
|                                                                                                          |  | 2008                        |        |   | 2009                       |   |        | 2008 |  |   | 2009    |  
|Net loss                                                                                                  |  | $                           | (1,225 | ) |                            | $ | (1,844 | )    |  | $ | (52,181 | ) |  | $ | (4,731 | )
|Other comprehensive (loss) income, change in the valuation of an interest rate swap agreement, net of tax |  |                             | (878   | ) |                            |   |       |      |  |   | (1,721  | ) |  |   |       |  
|                                                                                                          |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |        |  
|Comprehensive loss                                                                                        |  | $                           | (2,103 | ) |                            | $ | (1,844 | )    |  | $ | (53,902 | ) |  | $ | (4,731 | )
|                                                                                                          |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |        |  

We entered into an interest rate swap agreement in February 2006, effective June 6, 2006, to manage our
debt profile. This swap agreement expired March 31, 2009. Changes in the value of this interest rate swap agreement, as determined by the interest rates as of the beginning and end of each reporting period, resulted in comprehensive income or
loss during the life of the swap agreement.

NOTE 9  EMPLOYEE BENEFIT PLANS

Stock Options and Other Equity Compensation Plans  In November 2005, we adopted our 2005 Long-Term Incentive Plan, referred to as the 2005
Incentive Plan. We have reserved 1.0 million shares of our common stock under the 2005 Incentive Plan for the issuance of stock options, restricted stock awards, stock appreciation rights and performance awards, pursuant to which certain awards
are granted. The terms and conditions of such awards are determined at the sole discretion of our board of directors or a committee designated by the Board to administer the plan. We provide previously unissued shares of our common stock to a
participant upon a participants exercise of vested options. Of the 1.0 million shares authorized, approximately 0.3 million shares are available for future grants as of March 31, 2009.

Effective January 1, 2006, we account for share-based compensation under SFAS No. 123(R), a revision of SFAS No. 123, Accounting for
Stock-Based Compensation, and superseding APB Opinion No. 25, Accounting for Stock Issued to Employees, which requires us to expense the fair value of grants made under the stock option program over the vesting period of each
individual option agreement. Awards that are granted after the effective date of SFAS No. 123(R) are valued and non-cash share-based compensation expense is recognized in the consolidated statements of operations in accordance with SFAS
123(R). No non-vested awards were granted before the effective date of SFAS 123(R). We recognize non-cash share-based compensation expense ratably over the requisite service period which generally equals the vesting period of options,
adjusted for expected forfeitures.



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In accordance with SFAS 123(R), we recognized non-cash share-based compensation expenses as follows (amounts in
thousands):



|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|------------------------------------------------------- |  | ------------------------------ | ----- | - | ------------------------------ | - | ----- | ----------------------------- |  | - | ----------------------------- | - |  | - | ----- | -
|                                                        |  | Three MonthsEndedMarch 31,2008 |       |   | Three MonthsEndedMarch 31,2009 |   |       | Nine MonthsEndedMarch 31,2008 |  |   | Nine MonthsEndedMarch 31,2009 |  
|Non-Cash Share-Based Compensation Expense               |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|Stock Options                                           |  | $                              | 28    |   |                                | $ | 30    |                               |  | $ | 208                           |   |  | $ | 72    |  
|Restricted Stock                                        |  |                                | 13    |   |                                |   | 2     |                               |  |   | 224                           |   |  |   | 30    |  
|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|Non-Cash Stock Compensation Expense                     |  |                                | 41    |   |                                |   | 32    |                               |  |   | 432                           |   |  |   | 102   |  
|Less: Related Income Tax Expenset                       |  |                                | 22    |   |                                |   |      |                               |  |   | 310                           |   |  |   |      |  
|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|Non-Cash Share-Based Compensation Expense, net of taxes |  | $                              | 63    |   |                                | $ | 32    |                               |  | $ | 742                           |   |  | $ | 102   |  
|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|Earnings Per Share                                      |  | $                              | (0.01 | ) |                                | $ | (0.01 | )                             |  | $ | (0.14                         | ) |  | $ | (0.02 | )
|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  
|Income Tax Benefit Per Share                            |  | $                              | (0.00 | ) |                                | $ |      |                               |  | $ | (0.06                         | ) |  | $ |      |  
|                                                        |  |                                |       |   |                                |   |       |                               |  |   |                               |   |  |   |       |  

The non-cash share-based compensation expenses were based on the fair values of stock options and restricted
stock. For the three and nine months ended March 31, 2008 and 2009, the expense was included in the unaudited consolidated statements of operations as corporate and administrative expenses.

We value stock options using the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of traded options that are fully
transferable and have no vesting restrictions. In determining the expected term, we separate groups of employees that have historically exhibited similar behavior with regard to option exercises and post-vesting cancellations. The
option-pricing model requires the input of highly subjective assumptions, such as those listed below. The volatility rates are based on historical stock prices. The expected life of options granted are based on historical data, which, as of
March 31, 2009, is a partial option life cycle, adjusted for the remaining option life cycle by assuming ratable exercise of any unexercised vested options over the remaining term. The risk-free interest rate is based on the U.S. Treasury yield
curve in effect at the time of grant. The total expense to be recorded in future periods will depend on several variables, including the number of share-based awards.

We periodically review the assumptions used to value our stock options. The fair values of options granted were estimated on the date of grant using the following
assumptions:



|           |  |                                   |   |  |                     |  |                       |   |  |                       |  
|---------- |  | --------------------------------- | - |  | ------------------- |  | --------------------- | - |  | --------------------- | -
|Grant Date |  | WeightedAverageExpectedVolatility |   |  | ExpectedLife(Years) |  | ExpectedDividendYield |   |  | Risk-FreeInterestRate |  
|4/27/2006  |  | 33.6                              | % |  | 5.75                |  | 0                     | % |  | 4.79                  | %
|11/29/2006 |  | 33.6                              | % |  | 5.75                |  | 0                     | % |  | 4.51                  | %

The strike price of options granted April 27, 2006 and November 29, 2006 were $5.43 and $6.90,
respectively. The weighted-average grant date fair value of options granted April 27, 2006 and November 29, 2006 were $2.25 and $2.79 per share, respectively. Shares granted April 27, 2006 vest 33% annually as of each June 30
from June 30, 2007 through 2009. Shares granted November 29, 2006 vest 33% annually as of each November 29 from November 29, 2007 through 2009. As of March 31, 2009, there was approximately $0.01 million in non-cash
share-based compensation cost related to non-vested awards not yet recognized in our consolidated statements of operations. This cost is expected to be recognized over a weighted-average period of 0.8 years. No shares were forefeited, no shares
vested and no shares were exercised during the three and nine months ended March 31, 2009.

As a result of the Merger and the resulting exchange
of options to purchase Bull Run common stock for options to purchase shares of our common stock, certain of our employees hold options to acquire shares of our common stock at exercise prices ranging from $40.14 to $1,362.46 per share. All of these
options



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##### Table of Contents

were fully vested as of the date of the Merger. As of March 31, 2009, options for 3,702 shares were outstanding, having a weighted-average exercise price of
$434.99 per share and a weighted-average remaining life of 2.2 years. During the three and nine months ended March 31, 2009, 223 options were forfeited, no shares vested and no shares were exercised.

In connection with the grant of restricted stock, the fair market value of our common stock on the date the awards were granted, net of expected forfeitures,
represents unrecognized deferred share-based compensation, which is being amortized on a straight-line basis over the probable vesting periods of the underlying awards. In February 2006, each of the seven members of our board of directors, at that
time, received an award of 5,000 shares of our common stock, subject to a vesting schedule whereby 1,000 shares vest annually as of each December 31 from December 31, 2006 through 2010. On February 21, 2007, pursuant to an employment
agreement with our then current Chief Executive Officer, 120,000 shares of restricted stock were granted to Thomas J. Stultz subject to a vesting schedule whereby 30,000 shares vest annually as of each February 21 from February 21, 2008
through 2011 and 55,000 shares of restricted stock were granted on July 1, 2007 which will vest on February 21, 2012. On November 15, 2007, we and Tom Stultz entered into a severance and consulting agreement as a result of our sale of
Host. Accordingly, we recorded a $1.3 million charge to discontinued operations to account for the accelerated vesting of the restricted stock previously granted. This agreement also contained other provisions in which we recognized an expense in
the statement of operations, namely cash compensation in the amount of $0.6 million. The amount was paid on a biweekly basis through September 2008. As of March 31, 2009, $0.06 million of share-based compensation expense related to restricted
stock remains to be amortized. This remaining cost is expected to be recognized over a weighted-average period of 1.2 years

Employee Benefit
PlansEffective January 1, 2006, we began providing retirement benefits to substantially all of our employees with one or more years of service, in the form of a plan referred to as the TCM 401(k) Plan, intended to meet the requirements
of section 401(k) of the Internal Revenue Code of 1986, as amended. Under the TCM 401(k) Plan, our employees may contribute up to the maximum allowable under federal law and, prior to April 22, 2008, we would match up to 50% of the first 6%
contributed by the employee, in the form of contributions of our common stock. On April 22, 2008, the Board of Directors voted to discontinue the employer matching contribution.

NOTE 10  COMMITMENTS AND CONTINGENCIES

Legal Matters  We are subject to legal proceedings and
claims that arise in the normal course of business. In our opinion, the amount of ultimate liability, if any, with respect to these actions will not materially affect our financial position or results of operations.

Indemnification  Pursuant to various agreements facilitating the Spin-off, we agreed to indemnify Gray in certain circumstances for potential
tax liabilities imposed upon Gray due to any action or inaction by us that causes the Spin-off to not qualify as a tax-free transaction to Gray and/or to Grays shareholders. In our opinion, the amount of ultimate liability, if any, with
respect to this indemnification will not materially affect our financial position or results of operations.



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Overview

All references to
we, us, or our refer to the consolidated businesses. For information related to the Spin-Off and Merger, refer to Note 1 to the condensed consolidated financial statements contained in Item 1 of this
quarterly report on Form 10-Q.

Following the consummation of the Merger on December 30, 2005, we were comprised of the Newspaper Publishing and
Wireless segments formerly owned and operated by Gray Television, Inc., plus the Collegiate Marketing and Production Services segment and Association Management Services segment acquired in the Merger, both of which were operated by a wholly owned
subsidiary, Host.

We sold our Wireless business, operated as GrayLink, LLC, on June 22, 2007. In addition, on September 28, 2007, we
committed to a plan to sell Host Communications, Inc., or Host, and Pinnacle Sports Productions, LLC, or Pinnacle, comprising our Collegiate Marketing and Association Management businesses, and ultimately completed this sale on November 15,
2007. Accordingly, we have reclassified the results of operations and financial position of these segments to discontinued operations in this Form 10-Q.

We derive revenue from our Newspaper Publishing operations primarily from three sources: retail advertising, circulation and classified advertising.

Our Newspaper Publishing operations advertising contracts are generally entered into annually and provide for a commitment as to the volume of advertising to be purchased by an advertiser during the year. Our newspaper publishing
operations advertising revenues are primarily generated from local advertising and are generally highest in the second and fourth calendar quarters of each year due to the Easter, Thanksgiving and Christmas holidays.

Industrywide, newspaper subscriber circulation levels have been slowly declining. From March 31, 2008 to March 31, 2009, our aggregate daily circulation
has declined approximately 3.3%. Revenue for the nine-month period July 1, 2008 to March 31, 2009 decreased throughout all our revenue categories except legal advertising which increased $1.6 million or 36% when compared to the comparable
time periods last year. The increase was due in large part to record foreclosures in Gwinnett, Rockdale, Clayton and Henry counties. Advertising decreases in general can be attributed to economic trends over the past year, which we believe has
resulted in companies decreasing their advertising budgets.

Our Newspaper Publishing operations primary operating expenses are employee
compensation, related benefits and newsprint costs. Our Newspaper Publishing operations have experienced significant variability in its newsprint costs in recent years. Historically, for the newspaper publishing industry, the price of newsprint has
been cyclical and volatile. The industry average price for the three months ended March 31, 2009 and 2008 was $732 and $620 per metric ton, respectively. Prices fluctuate based on factors that include both foreign and domestic production
capacity and consumption. Price fluctuations can have a significant effect on our results of operations. We seek to manage the effects of increases in prices of newsprint through a combination of technology improvements, page width and page count
reductions, inventory management and advertising and circulation price increases. In addition, newspaper production costs are variable based on circulation and advertising volumes.

Going Concern

Our financial statements for the
year ended June 30, 2008 (Item 8, Note 18) explain the factors that raised substantial uncertainty regarding our ability to continue as a going concern for a period of one year from the date of those financial statements. Since that report
date, we have continued to generate operating losses and have operated with limited borrowing capacity under our line of credit.



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As of March 31, 2009, changes to our revolving line of credit facility have resulted in our inability to
borrow on this facility in the future. At March 31, 2009 however, we have working capital of approximately $5 million due to our outstanding debt obligations being reclassified from short to long term. This was a result of our entering into
Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement on March 31, 2009. Pursuant to Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior
Secured Credit Agreement, Lenders waived certain Events of Default under the Credit Agreement, extended the maturity dates of the Revolving Credit Notes and the Term Notes, ceased future Revolving Credit Advances, permitted payment on outstanding
Revolving Credit Advances and amended certain financial covenants and other provisions in the Credit Agreement, as further discussed in Note 4. However, all of our First Lien outstanding debt matures on December 30, 2010 and the Second Lien
outstanding debt matures on December 30, 2011. In order to meet these obligations, we will be required to restructure our current credit facilities, refinance with another lender, or attempt to derive capital from some other sources.

Additionally, the sale of Host and Pinnacle in fiscal 2008 resulted in $2.6 million of tax liabilities which began to come due on September 15,
2008. In order to meet these tax obligations we have been negotiating with the appropriate authorities to arrange payment plans to spread these payments over an extended period of time.

If we are not successful in some or all of the following, we may not have sufficient liquidity to operate: 1) generate positive operating cash flow to meet our
current operating obligations as they become due; 2) restructure our credit facilities to provide for additional working capital sources should we not be able to generate the operating cash flow needed to meet our daily operating obligations; and 3)
in the case of our tax obligations, successfully renegotiating our payment plans with the taxing authorities. We cannot predict the outcome of any of these matters at this time.

These factors raise substantial doubt as to our ability to continue as a going concern. The accompanying financial statements have been prepared on a going concern
basis which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Revenues

Set forth below are the principal types of revenues
derived by our continuing operations for the three and nine months ended March 31, 2008 and 2009 and the percentage contribution of each to our total revenues (dollars in thousands):



|                   |  |                              |        |   |                             |   |        |      |       |  |       |        |  |   |        |  |        |   |   |   |        |  |       |  
|------------------ |  | ---------------------------- | ------ | - | --------------------------- | - | ------ | ---- | ----- |  | ----- | ------ |  | - | ------ |  | ------ | - | - | - | ------ |  | ----- | -
|                   |  | Three Months Ended March 31, |        |   | Nine Months Ended March 31, |  
|                   |  | 2008                         |        |   | 2009                        |   |        | 2008 |       |  | 2009  |       
|                   |  | Amount                       |        | % |                             |   | Amount |      | %     |  |       | Amount |  | % |        |  | Amount |   | % |  
|Publishing:        |  |                              |        |   |                             |   |        |      |       |  |       |        |  |   |        |  |        |   |   |   |        |  |       |  
|Retail Advertising |  | $                            | 5,670  |   | 52.1                        | % |        | $    | 4,481 |  | 48.1  | %      |  | $ | 19,081 |  | 54.0   | % |   | $ | 16,176 |  | 53.0  | %
|Classifieds        |  |                              | 3,655  |   | 33.6                        | % |        |      | 3,459 |  | 37.2  | %      |  |   | 11,497 |  | 32.5   | % |   |   | 10,056 |  | 33.0  | %
|Circulation        |  |                              | 1,193  |   | 11.0                        | % |        |      | 1,118 |  | 12.0  | %      |  |   | 3,608  |  | 10.2   | % |   |   | 3,399  |  | 11.1  | %
|Other              |  |                              | 374    |   | 3.4                         | % |        |      | 251   |  | 2.7   | %      |  |   | 1,147  |  | 3.2    | % |   |   | 887    |  | 2.9   | %
|                   |  |                              |        |   |                             |   |        |      |       |  |       |        |  |   |        |  |        |   |   |   |        |  |       |  
|Total Revenues     |  | $                            | 10,892 |   | 100.0                       | % |        | $    | 9,309 |  | 100.0 | %      |  | $ | 35,333 |  | 100.0  | % |   | $ | 30,518 |  | 100.0 | %
|                   |  |                              |        |   |                             |   |        |      |       |  |       |        |  |   |        |  |        |   |   |   |        |  |       |  

Results of Operations

Three and Nine Months Ended March 31, 2009 compared to Three and Nine Months Ended March 31, 2008



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The following analysis of our financial condition and results of operations should be read in conjunction with our
financial statements for the three and nine months ended March 31, 2008 and 2009, which are contained herein.

Revenues. Total revenues
for the three months ended March 31, 2009 decreased to approximately $9.3 million compared to approximately $10.9 million for the three months ended March 31, 2008. For the nine months ended March 31, 2009, total revenues decreased to
$30.5 million from $35.3 million for the nine months ended March 31, 2008. Revenue for both the three- and nine-month periods decreased throughout all our revenue categories except legal advertising which increased $.71 million or 43% for the
quarter and $1.6 million or 36% for the nine-month period when compared to the comparable time periods last year. The increase was due in large part to record foreclosures in Gwinnett, Rockdale, Clayton and Henry counties. Advertising decreases in
general can be attributed to economic trends over the past year, which we believe has resulted in companies decreasing their advertising budgets.

Operating Expenses.Operating expenses, before depreciation and amortization, for the three months ended March 31, 2009 decreased 13.8% to approximately $7.2 million compared to approximately $8.4 million for the three months
ended March 31, 2008. For the nine months ended March 31, 2009, operating expenses decreased to approximately $23.0 million from $25.4 million for the nine months ended March 31, 2008. The decrease is primarily due to a reduction
in payroll and related expenses.Payroll and related expense decreased 20.9% to approximately $3.3 million for the three months ended March 31, 2009 compared to approximately $4.0 million for the three months ended March 31, 2008.
Payroll and related expense decreased 19.3% to approximately $10.3 million for the nine months ended March 31, 2009 compared to approximately $12.8 million for the nine months ended March 31, 2008. A contributing factor to the decrease is
a reduction of headcount from 383 as of September 30, 2007 to 329 as of September 30, 2008. Headcount was further reduced by an additional 20 people in the quarter ended March 31, 2009. Another contributing factor is lower amounts
being paid in commissions and bonuses over the course of the year which is directly tied to lower revenue amounts.

Corporate and administrative
expenses for the three months ended March 31, 2009 were approximately $0.7 million compared to $0.6 million for the three months ended March 31, 2008. Corporate and administrative expenses for the nine months ended March 31, 2009 were
approximately $2.0 million compared to $3.1 million for the nine months ended March 31, 2008. The decrease was due to the elimination of headcount and restructuring of corporate duties after the sale of Host.

Depreciation of property and equipment totaled approximately $0.3 million for each of the three months ended March 31, 2009 and 2008 and approximately $0.9
million for the nine months ended March 31, 2009 compared to approximately $0.7 million for the nine months ended March 31, 2008.

Amortization expense in connection with definite-lived intangible assets acquired in the acquisition of the Jonesboro Group was approximately $0.2 million for each of the three months ended March 31, 2009 and 2008 and approximately
$0.6 million for each of the nine months ended March 31, 2009 and 2008.

Interest expense. Interest expense incurred in connection with
our Credit Facilities was approximately $2.2 million and $2.4 million for the three months ended March 31, 2009 and 2008, respectively. Interest expense incurred in connection with our Credit Facilities was approximately $7.3 million and $8.9
million for the nine months ended March 31, 2009 and 2008, respectively. The reduction in interest expense was mainly due to a principal payment on the First Lien Term Loan Facility of $65.5 million after the sale of Host, which occurred midway
through fiscal 2008.

Debt issue cost amortization.Amortization of costs incurred in connection with our Credit Facilities were approximately
$0.4 million and $1.2 million for the three and nine months ended March 31, 2009, respectively compared to $0.4 million and $1.0 million for the three and nine months ended March 31, 2008, respectively.

Income tax benefit. Income tax expense was approximately $0 million and $0.05 million for the three and nine months ended March 31, 2009, respectively.
The differences between the federal statutory tax rate of 34% and the effective tax rate of (53.7) % and (71.7) % for the three and nine months



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ended March 31, 2008 is primarily due to a non-deductable goodwill impairment charge associated with the sale of Host, change in the companys valuation
allowance and state income taxes as well as other non-deductable expenses such as interest expense related to our Series B preferred stock and other permanent differences. The difference between the federal statutory rate of 34% and the effective
tax rate of 0 % and (1.1) % for the three and nine months ended March 31, 2009 is due the fact that we have no projected taxable income resulting in no current tax provision as well as our deferred tax items being fully reserved resulting
in no deferred tax provision offset with accruing interest on our past due income tax obligations. We currently believe our effective income tax rate for fiscal 2009 will be approximately (1.1) %, excluding potential effects of changes in
judgments as to the potential realization of deferred tax assets and state income tax adjustments. Changes in the amount of interest accrued on our tax obligations relative to our taxable income could change causing our expected tax rate to vary.

Discontinued Operations.Gain from discontinued operations was approximately $0.8 million for the three months ended March 31, 2008.
Loss from discontinued operations was approximately $40.1 million for the nine months ended March 31, 2008. The $40.1 million loss for the nine months ended March 31, 2008 included a $23.7 million impairment charge.

Net loss available to common shareholders.Our net loss available to common shareholders is approximately $2.1 million and $1.5 million for the three months
ended March 31, 2009 and 2008, respectively. Our net loss available to common shareholders is approximately $5.5 million and $52.3 million for the nine months ended March 31, 2009 and 2008, respectively. The results for the three months
ended March 31, 2008 included a gain of approximately $.79 million and for the nine months ended March 31, 2008 a loss of approximately $40.1 million associated with the discontinued operations of Host and Pinnacle.

General

The following tables present data that we
believe is helpful in evaluating our liquidity and capital resources (amounts in thousands):



|                                                     |  |                            |         |   |               |   |        |  
|---------------------------------------------------- |  | -------------------------- | ------- | - | ------------- | - | ------ | -
|                                                     |  | Nine Months EndedMarch 31, |        
|                                                     |  | 2008                       |         |   | 2009          |  
|Net cash provided by (used in) continuing operations |  | $                          | (359    | ) |               | $ | (3,133 | )
|Net cash used in discontinued operations             |  |                            | (9,875  | ) |               |   |       |  
|                                                     |  |                            |         |   |               |   |        |  
|Net cash used in operating activities                |  |                            | (10,234 | ) |               |   | (3,133 | )
|Net cash used in continuing operations               |  |                            | (326    | ) |               |   | (174   | )
|Net cash provided by discontinued operations         |  |                            | 67,152  |   |               |   |       |  
|                                                     |  |                            |         |   |               |   |        |  
|Net cash provided by (used in) investing activities  |  |                            | 66,826  |   |               |   | (174   | )
|Net cash (used in) provided by continuing operations |  |                            | (55,152 | ) |               |   | 3,250  |  
|Net cash used in discontinued operations             |  |                            |        |   |               |   |       |  
|                                                     |  |                            |         |   |               |   |        |  
|Net cash (used in) provided by financing activities  |  |                            | (55,152 | ) |               |   | 3,250  |  
|Net increase (decrease) in cash and cash equivalents |  | $                          | 1,440   |   |               | $ | (57    | )
|                                                     |  |                            |         |   |               |   |        |  
|                                                     |  |                           
|                                                     |  | June 30,2008               |         |   | March 31,2009 |  
|Cash and cash equivalents                            |  | $                          | 1,095   |   |               | $ | 1,038  |  
|Long-term debt, including current portion            |  |                            | 70,802  |   |               |   | 74,052 |  



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Nine Months Ended March 31, 2009 compared to Nine Months Ended March 31, 2008

Net cash used in operating activities decreased approximately $7.1 million for the nine months ended March 31, 2009 compared to the corresponding period of
the previous year. The change is primarily attributable to: the absence of the effect of discontinued operations, less cash generated from continuing operations due to reduced cash brought on by the slowdown in the economy offset by reduced
publishing expenses, corporate overhead and lower interest expense.

Net cash used in investing activities decreased approximately $67.0 million for
the nine months ended March 31, 2009 primarily due to the absence of the effect of discontinued operations.

Net cash used in financing
activities decreased approximately $58.4 million for the nine months ended March 31, 2009 primarily due to the absence of the repayment of debt associated with the sale of Host Communications.

Off-Balance Sheet Arrangements

We have various
operating lease commitments for equipment and real estate used for office space and production facilities. The minimum annual rental commitments under these and other operating leases, net of subleases, with an original lease term exceeding one year
are approximately $0.2 million, $0.6 million, $0.5 million, $0.4 million and $0.3 million for the years ending June 30, 2009 through 2013, respectively, and $0.2 million thereafter.

We used interest rate swap agreements to hedge exposure to interest rate fluctuations on our variable rate debt, designating these swaps as cash flow hedges of
anticipated interest payments. These hedging activities may have been transacted with one or more highly rated institutions, reducing the exposure to credit risk in the event of nonperformance by the counterparty to the swap agreement.

The fair value of the swap agreement was recognized on the balance sheet as an asset or liability, with the offset recorded in accumulated other comprehensive
income net of income taxes. Any changes in the market value of the swaps were adjusted to the asset or liability account and recorded net of the related income taxes in other comprehensive income, except to the extent that the swap is considered
ineffective. To the extent that the swap was considered ineffective, changes in market value of the swap were recognized as a component of interest expense in the period of the change.

In February 2006, we entered into an interest rate swap agreement effective in June 2006 which terminated in March 2009. Under the agreement, we converted a
notional amount of $60 million of floating rate debt (currently bearing interest at LIBOR plus the currently applicable margin of 3.25%) to fixed rate debt, bearing interest at 5.05% plus the applicable margin.

Contractual Obligations as of March 31, 2009



|                                |  |                       |        |       |   |          |  |          |        |                  |   |     |  |   |    
|------------------------------- |  | --------------------- | ------ | ----- | - | -------- |  | -------- | ------ | ---------------- | - | --- |  | - | ---
|(Dollars in thousands)          |  | Payment Due by Period
|Contractual Obligations         |  | Total                 |        | Year1 |   | Years2-3 |  | Years4-5 |        | More than5 Years
|Debt obligations                |  | $                     | 74,052 |       | $ | 218      |  | $        | 73,834 |                  | $ |    |  | $ |   
|Interest Obligations (1)        |  | $                     | 18,230 |       |   | 7,604    |  |          | 10,627 |                  |   |     |  |   |   
|Operating lease obligations (2) |  | $                     | 2,064  |       |   | 155      |  |          | 1,088  |                  |   | 644 |  |   | 177
|                                |  |                       |        |       |   |          |  |          |        |                  |   |     |  |   |    
|                                |  | $                     | 94,346 |       | $ | 7,977    |  | $        | 85,549 |                  | $ | 644 |  | $ | 177
|                                |  |                       |        |       |   |          |  |          |        |                  |   |     |  |   |    



|(1) | Interest obligations assume the current base rate in effect at the date of this Form 10-Q. Interest obligations are presented through the maturity dates of each component of the credit
facilities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | Operating lease obligations represent payment obligations under non-cancelable lease agreements classified as operating leases and disclosed pursuant to SFAS No. 13, Accounting for
Leases, as may be modified or supplemented. These amounts are not recorded as liabilities as of the current balance sheet date. Operating lease obligations are presented net of future receipts on contracted sublease arrangements totaling
approximately $2.1 million as of March 31, 2009.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dividends on Series A preferred stock and Series B preferred stock are payable
annually at an annual rate of $40 and $60 per share, respectively, in cash or with the issuance of the respective preferred stock, at our option. If we were to fund dividends accruing during the nine months ended March 31, 2009 in cash, the
total obligation would be approximately $3.9 million based on the number of shares of Series A and Series B preferred stock outstanding as of March 31, 2009.

We currently anticipate that the cash requirements for capital expenditures, operating lease commitments and working capital with respect to the Newspaper Publishing business over the next few years will be generally
consistent, in the aggregate, with historical levels and would likely be funded from cash provided by operating activities. In the aggregate, total capital expenditures are not expected to exceed $0.2 million for the twelve months ending
March 31, 2010.

On December 30, 2005, we entered into (i) First Lien Secured Credit Agreement and (ii) Second Lien Senior
Secured Credit Agreement with Wachovia Bank, National Association, among others. The First Lien Secured Credit Agreement provides for a senior secured revolving credit facility in the aggregate principal amount of $20 million, which matures on
December 30, 2009 (which we refer to as the First Lien Revolving Credit Facility) and a senior secured term loan facility in an aggregate principal amount of $90 million, which matures on June 30, 2010 (which we refer to as the
First Lien Term Loan Facility and, together with the First Lien Revolving Credit Facility, the First Lien Credit Facility). The Second Lien Credit Agreement provides for a senior secured term loan facility in the aggregate
principal amount of up to $30 million, which matures on December 30, 2010 (which we refer to as the Second Lien Credit Facility and, together with the First Lien Credit Facility, the Credit Facilities). Substantially all
of our assets are pledged as collateral in conjunction with the Credit Facilities. Proceeds of the Credit Facilities were used to fund a $40 million cash distribution to Gray in connection with the Spin-off, refinance all of Bull Runs
long-term debt in connection with the Merger, pay the cash portion of the Merger consideration and pay transaction costs.

On September 18,
2006, we amended the Credit Facilities in conjunction with our acquisition of Pinnacle (now presented as part of discontinued operations). Pursuant to the amendments, amounts under the First Lien Revolving Credit Facility may be borrowed, repaid and
reborrowed by us from time to time until maturity. Interest for borrowings under the First Lien Revolving Credit Facility was based, at our option, on either (a) 2.25% per annum plus the higher of (1) the prime rate of interest
announced or established by Wachovia from time to time and (2) the Federal funds rate plus 0.50% per annum (the Base Rate) or (b) 3.25% per annum plus the applicable London Interbank Offered Rate (LIBOR)
rate for Eurocurrency borrowings. If we had met certain leverage ratio criteria as set forth in the First Lien Senior Secured Credit Agreement, our interest rate would have declined at .25% increments to (a) 1.50% per annum above the Base
Rate or (b) 2.50% per annum above the applicable LIBOR rate for Eurocurrency borrowings. We did not qualify for a reduction in our Base Rate of LIBOR applicable margins of 2.25% and 3.25%. Interest for borrowings under the First Lien Term
Credit Facility was based, at our option, on either (a) 2.50% per annum plus the higher of (1) the prime rate of interest announced or established by Wachovia from time to time, and (2) the Base Rate or (b) 3.50% per
annum plus the applicable LIBOR rate for Eurocurrency borrowings, subject to adjustment based on our credit ratings assigned to the Second Lien Credit Facility by Standard & Poors and Moodys. Interest under the Second Lien Credit
Facility is based upon (a) 8.50% per annum above the Base Rate or (b) 9.50% per annum above the applicable LIBOR rate for Eurocurrency borrowings, subject to adjustment based on our credit ratings assigned by Standard &
Poors and Moodys.

At March 31, 2009, the First Lien Term Loan Facility and the Second Lien Credit Facility were fully drawn. Amounts
drawn on the First Lien Revolving Credit Facility as of June 30, 2008 and March 31, 2009 were $19.3 million and $19.7 million, respectively. As of March 31, 2009 we had no availability under our revolving credit facility due to our
entering into the Fifth Amendment to our Credit Facilities, more fully discussed below.



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Our Credit Facilities contain affirmative and negative covenants and financial ratios customary for financings of
this type, including, among other things, limits on the incurrence of debt or liens, a limit on the making of dividends or distributions, provision for mandatory prepayments under certain conditions, limitations on transactions with affiliates and
investments, a limit on the ratio of debt to earnings before interest, income taxes, depreciation and amortization, as adjusted for certain non-cash and nonrecurring items (which we refer to as EBITDA), a limit on the ratio of EBITDA to
fixed charges, and a limit to the ratio of EBITDA to all cash interest expense on all debt. The Credit Facilities contain events of default customary for facilities of this type (with customary grace periods, as applicable) and provide that, upon
the occurrence of an event of default, the interest rate on all outstanding obligations will be increased and payment of all outstanding loans may be accelerated and/or the lenders commitments may be terminated. In addition, upon the
occurrence of certain insolvency or bankruptcy related events of default, all amounts payable under the Credit Agreements shall automatically become immediately due and payable, and the lenders commitments will automatically terminate.

On November 9, 2007, we entered into the third amendment to each of our Credit Facilities due, in part, to our failure to meet our financial
covenants. Pursuant to these amendments, our lenders agreed to temporarily suspend, on a retroactive basis, the requirement for us to comply with all financial covenants contained therein for the period September 30, 2007 through
November 15, 2007. Subsequent to the consummation of the Host and Pinnacle transactions, we were required to remain in compliance with our leverage covenants. We were in compliance with our covenants as of December 31, 2007; however, our
forecasts indicated that we would not be in compliance with future covenants and, accordingly, we sought to further amend our covenants.

On
February 15, 2008 we executed our fourth amendment to the First Lien Term Loan Facility. Pursuant to the amendment, borrowings associated with Base Rate and Eurodollar advances were charged interest at rates of 4.50% and 5.50% per annum,
respectively, provided that the Base Rate and Eurodollar Rate (as defined) cannot fall below 4.00% and 3.00%, respectively. The amendment also provided for a reduction in the First Lien Leverage Coverage, Fixed Charge Coverage and Interest Coverage
Ratios for each quarter ending through September 30, 2009. Capital expenditures cannot exceed $500,000 for any four consecutive quarters. We were in compliance with our loan covenants as of June 30, 2008; however, we failed to meet certain
financial loan covenants for the quarter ended September 30, 2008. As a result of not meeting certain of these loan covenants, our lenders had the option to call our debt at any time. Accordingly, we classified all of our First Lien Term Loan
Facility debt as a current liability as of December 31, 2008.

On February 15, 2008 we executed our fourth amendment to the Second Lien
Credit Facility. Pursuant to the amendment, borrowings associated with Base Rate and Eurodollar advances were charged interest at rates of 11.00% and 12.00% per annum, respectively, provided that the Base Rate and Eurodollar Rate cannot fall
below 4.00% and 3.00%, respectively. The amendment also provided for a reduction in the Leverage Ratio for each quarter ending through September 30, 2009. Capital expenditures cannot exceed $500,000 for any four consecutive quarters. We were in
compliance with our loan covenants as of June 30, 2008; however, we failed to meet certain financial loan covenants for the quarter ended September 30, 2008. As a result of not meeting certain of these loan covenants, our lenders had the
option to call our debt at any time. Accordingly, we classified all of our Second Lien Credit Facility debt as a current liability as of December 31, 2008.

On March 31, 2009 we executed our fifth amendment to the First Lien Credit Facility. Pursuant to this amendment, our lenders waived covenant defaults for the quarters ended September 30, 2008 and December 31,
2008. The unused portion of the Revolving Line of Credit was terminated resulting in the Company having no availability on our line of credit. The interest rates remained unchanged from those provided in the Fourth Amendment. The maturity under the
First Lien Credit Facility was extended to December 30, 2010. A portion of the $5 million escrow proceeds, related to the sale of Host Communications, will be used to pay all First Lien Credit Facility interest and scheduled amortization
through September 30, 2009. Financial covenants were reset and now include only a minimum EBITDA requirement and a minimum Fixed Charge ratio. We also agreed to hire a financial advisor acceptable to the lenders as well as an appraiser in order
to determine the value of the company and develop an exit



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plan. Beginning March 31, 2009 capital expenditures cannot exceed $200,000 for any four consecutive quarters.

On March 31, 2009 we executed our fifth amendment to the Second Lien Credit Facility. Pursuant to this amendment, our lenders waived covenant defaults for the
quarters ended September 30, 2008 and December 31, 2008 and the payment default due January 2, 2009. The quarterly interest payment that was due January 2, 2009 was rolled into the total debt obligation under the Second Lien
Credit Facility. The cash interest rate was changed to 0% and the PIK interest rate will be charged at 15%. The maturity of the Second Lien Credit Facility was extended to December 30, 2011. The financial covenants were reset and now include
only a minimum EBITDA requirement and a minimum Fixed Charge ratio. There will be no loan amortization payments until the First Lien Credit Facility is paid in full. The Second Lien holders may receive penny warrants for 80% of our common stock;
provided, however, such common shares will not include voting powers until payments are made on the First Lien Credit Facility based on a sliding scale. The warrants have not been issued yet and are subject to shareholder ratification. Our covenants
require us to issue these warrants by July 31, 2009 although the period for issuance may be extended at the sole discretion of the Second Lien holders. Failure to issue these warrants will result in an even of default. The amendment also
requires the Company, no later than 120 days after the Fifth Amendment effective date, to have consummated all transactions, activities or steps necessary to result in the Company no longer being required to file periodic reports with the SEC under
the Securities and Exchange Act of 1934 as long as the expenses associated with these transactions, activities or steps do not exceed $140,000 in the aggregate.

We incurred $0.6 million of bank fees to execute the fourth amendment to the First Lien Term Facility and the Second Lien Credit Facility which were executed in fiscal 2008. These costs were capitalized and will be amortized
over the remaining life of the credit facilities with the previously capitalized debt costs. We incurred no bank fees to execute the Fifth Amendment to the First Lien Term Facility and the Second Lien Credit Facility which were executed in fiscal
2009.

Working Capital

Our
financial statements for the year ended June 30, 2008 (Item 8, Note 18) explain the factors that raised substantial uncertainty regarding our ability to continue as a going concern for a period of one year from the date of those financial
statements. Since that report date, we have continued to generate operating losses and have operated with limited borrowing capacity under our line of credit.

As of March 31, 2009, changes to our revolving line of credit facility have resulted in our inability to borrow on this facility in the future. At March 31, 2009 however, we have working capital of approximately $5
million due to our outstanding debt obligations being reclassified from short to long term. This was a result of our entering into Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement
on March 31, 2009. Pursuant to Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement, Lenders waived certain Events of Default under the Credit Agreement, extended the maturity
dates of the Revolving Credit Notes and the Term Notes, ceased future Revolving Credit Advances, permitted payment on outstanding Revolving Credit Advances and amended certain financial covenants and other provisions in the Credit Agreement, as
further discussed in Note 4. However, all of our First Lien outstanding debt matures on December 30, 2010 and the Second Lien outstanding debt matures on December 30, 2011. In order to meet these obligations, we will be required to
restructure our current credit facilities, refinance with another lender, or attempt to derive capital from some other sources.

Additionally, the
sale of Host and Pinnacle in fiscal 2008 resulted in $2.6 million of tax liabilities which began to come due on September 15, 2008. In order to meet these tax obligations we have been negotiating with the appropriate authorities to arrange
payment plans to spread these payments over an extended period of time.

If we are not successful in some or all of the following, we may not have
sufficient liquidity to operate: 1) generate positive operating cash flow to meet our current operating obligations as they become due; 2) restructure our credit facilities to provide for additional working capital sources should we not be able to



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generate the operating cash flow needed to meet our daily operating obligations; and 3) in the case of our tax obligations, successfully renegotiating our payment
plans with the taxing authorities. We cannot predict the outcome of any of these matters at this time.

These factors raise substantial doubt as
to our ability to continue as a going concern. The accompanying financial statements have been prepared on a going concern basis which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Certain Relationships

Effective December 30, 2005 following the time of the Spin-off, we obtained certain workers compensation insurance coverage under an insurance contract with
Georgia Casualty & Surety Co., which at that time was a wholly owned subsidiary of Atlantic American Corporation, a publicly traded company in which J. Mack Robinson (a significant shareholder of ours) and certain of his affiliates have a
substantial ownership interest, and a company of which Hilton H. Howell, a member of our board of directors and Mr. Robinsons son-in-law, is an executive officer (as of March 31, 2008, Georgia Casualty was no longer a subsidiary of
Atlantic American and thus no longer an affiliated company). For the three and nine months ended March 31, 2008, our workers compensation insurance expense attributable to our insurance contract with Georgia Casualty was approximately
$0.04 million and $0.07 million respectively.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments and estimations that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from those estimates. We consider the following accounting policies to be critical policies that require judgments or estimations in their application where variances in those
judgments or estimations could make a significant difference to future reported results.

Revenue Recognition

Revenue is generated primarily from circulation and advertising revenue. Advertising revenue is billed to the customer and recognized when the advertisement is
published. We bill our customers in advance for newspaper subscriptions and the related revenues are recognized over the period the service is provided on a straight-line basis.

The allowance for doubtful accounts represents our best estimate of the accounts receivable that will be ultimately collected, based on, among other things,
historical collection experience, a review of the current aging status of customer receivables and a review of specific information for those customers that are deemed to be higher risk. We evaluate the adequacy of the allowance for doubtful
accounts on at least a quarterly basis. Unfavorable changes in economic conditions might impact the amounts ultimately collected from advertisers and corporate sponsors and therefore may result in an inadequate allowance.

Valuation and Impairment Testing of Intangible Assets

In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, (SFAS 142), we do not amortize goodwill and certain intangible assets with indefinite useful lives. Instead, SFAS 142 requires that we
review goodwill and intangible assets deemed to have indefinite useful lives for impairment on at least an annual basis. We perform our annual impairment review during the fourth quarter of each year or whenever events or changes in circumstances
indicate that such assets might be impaired.

Intangible assets are comprised of goodwill that is required to be considered an indefinite-lived
asset. Other separately identified definite-lived intangible assets include customer relationships, trademarks and tradenames. These assets are being amortized over their estimated useful lives. Customer relationships are amortized using the
straight-line method over a period of 5 to 15 years, based on the estimated future economic benefit. Trademarks and tradenames are being amortized over 6 and 15 years, respectively, using a straight-line method, which approximates the estimated
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months ended March 31, 2009, we recorded amortization expense of $0.5 million in connection with our definite-lived intangible assets.

For purposes of testing goodwill impairment, each of the Gwinnett Daily Post, Rockdale/Newton Citizen and the Jonesboro Group are each considered separate
reporting units. There is no recorded goodwill associated with the Albany Herald.

The impairment analysis is based on our estimates of the net
present value of future cash flows derived from each reporting unit in order to determine the estimated market value. The determination of estimated market value requires significant management judgment including estimating operating cash flow to be
derived in each reporting unit beyond the next three years, changes in working capital, capital expenditures and the selection of an appropriate discount rate. Factors potentially leading to a reduction of the estimated net present value of future
cash flows could include (i) the loss of significant customers or contracts, (ii) significantly less favorable terms of new contracts and contract renewals and (iii) prolonged economic downturns affecting advertising spending.

We review each reporting unit for possible goodwill impairment by comparing the estimated market value of each respective reporting unit to the
carrying value of that reporting units net assets. If the estimated market values exceed the net assets, no goodwill impairment is deemed to exist. If the fair value of the reporting unit does not exceed the carrying value of that reporting
units net assets, goodwill impairment is deemed to exist. We then perform, on a notional basis, a purchase price allocation applying the guidance of SFAS No. 141, Business Combinations, (SFAS 141), by allocating
the reporting units fair value to the fair value of all tangible and identifiable intangible assets residual fair value representing the implied fair value of goodwill of that reporting unit. The carrying value of goodwill for the reporting
unit is written down to this implied value.

Goodwill and intangibles, net of accumulated amortization, was approximately $18.5 million as of
March 31, 2009, of which goodwill was approximately $12.6 million. The carrying value of goodwill and acquired intangibles, net of accumulated amortization, represented approximately 50.7% of our total assets as of March 31, 2009.
Management performed an interim goodwill impairment valuation as of December 31, 2008 utilizing its revised November 2008 operating budgets and forecasts noting no impairment at any of the reporting units. No further impairment indicators were
noted in the quarter ended March 31, 2009.

Deferred Income Taxes

Deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or
recovered. A valuation allowance is recognized on certain deferred tax assets if it is more likely than not that some or all of these deferred tax assets will not be realized. We do not anticipate that all of our available net operating loss
carryforwards will ultimately be realized, due to their expiration or other limitations on utilization. As a result, as of March 31, 2009, we continue to recognized a full valuation allowance on our net operating loss as well as all of our
other net deferred tax assets. If and when we revise our estimate of the benefit expected to be derived from the net operating loss and other net deferred tax assets, the valuation allowance may be modified. Increases in the valuation allowance
could increase the tax provision or decrease the tax benefit recognized in the period of the change in estimate. The net operating loss carryforwards for federal tax purposes begin to expire in 2018.

Transactions with Related Parties

Since the
Spin-off and Merger, the terms of all material transactions involving related persons or entities have been on terms similar to those of our transactions with independent parties, or in cases where we have not entered into similar transactions with
unrelated parties, on terms that were believed to be representative of those that would likely be negotiated with independent parties. All material transactions with related parties will be, reviewed and approved by our independent directors.



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Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157. On February 14, 2008, FSB, FAS 157-2, was issued. This FSP defers application of SFAS No. 157 for non-financial assets and liabilities to years beginning after
November 15, 2008 (beginning with our fiscal year ending June 30, 2010). SFAS No. 157 is required to be applied whenever another financial accounting standard requires or permits an asset or liability to be measured at fair
value. The statement does not expand the use of fair value to any new circumstances. As of July 1, 2008, we adopted the required provisions of SFAS No. 157, as amended by FSP No. 157-2. Those provisions relate to our financial
assets and liabilities carried at fair value and our fair value disclosures related to financial assets and liabilities. This statement provides a definition of fair value, establishes a hierarchy of valuation techniques based on the nature of the
inputs used to develop the fair value measures and requires certain disclosures about fair values used in financial statements. There are three levels of inputs to fair value measurements: Level 1, meaning the use of quoted prices for identical
instruments in active markets; Level 2, meaning observable inputs other than Level 1, including quoted prices for similar assets or liabilities, quoted prices in less active markets or other observable inputs that can be corroborated by observable
market data, as well as derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data; and Level 3, meaning the use of unobservable
inputs. Observable market data should be used when available.

We apply fair value accounting to our derivative financial instrument in accordance
with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (FASB No. 133). The adoption of SFAS No. 157 did not have a significant impact on our consolidated financial
statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities,
including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 permits companies to choose to measure certain financial instruments and other items at fair value, with unrealized gains and losses on
items for which the fair value option has been elected reported in earnings at each subsequent reporting date. The adoption of SFAS 159 did not have a significant impact on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations, (SFAS No. 141R). Under SFAS No. 141R,
an acquiring entity will be required to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value, with limited exceptions. Under SFAS No. 141R, certain items, including acquisition costs, will be
generally expensed as incurred; non-controlling interests will be valued at fair value at the acquisition date and subsequently measured at the higher of such amount or the amount determined under existing guidance for non-acquired contingencies;
in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition
date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS No. 141R also includes new disclosure requirements. SFAS No. 141R applies
prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We have not determined the effect that adoption of SFAS
No. 141R will have on our financial statements, since such effect is not reasonably estimable at this time.

In March 2008, the FASB issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging ActivitiesAn Amendment of FASB Statement No. 133, (SFAS 161). This statement revises the requirements for the disclosure of derivative instruments
and hedging activities that include the reasons a company uses derivative instruments, how derivative instruments and related hedged items are accounted under SFAS 133 and how derivative instruments and related hedged items affect a companys
financial position, financial performance and cash flows. SFAS 161 will be effective July 1, 2009. We are currently evaluating the impact of adopting SFAS 161 and do not anticipate a material effect.

In May 2008, the FASB issued FASB Staff Position APB 14-1 (FSP APB 14-1), Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement), which applies to all convertible debt instruments that have a net settlement feature, which means that such convertible debt instruments, by their terms, may be settled either
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cash upon conversion. FSP APB 14-1 requires issuers of convertible debt instruments that may be settled wholly or partially in cash upon conversion to separately
account for the liability and equity components in a manner reflective of the issuers nonconvertible debt borrowing rate. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and
interim periods within those fiscal years. Early adoption is not permitted and retroactive application to all periods presented is required. We are currently evaluating the impact of the application of FSP APB 14-1 on our financial statements, and
do not anticipate a material effect.

Interest Rate and Market Rate Risk

We are exposed to changes in interest rates due to our financing of our acquisitions, investments and operations. Interest rate risk is present with our floating rate debt. Based on our debt profile as of March 31, 2009, a
100 basis point increase in market interest rates would increase interest expense and decrease pretax income (or increase pretax loss) by approximately $0.7 million annually. This amount was determined based on our floating rate debt. This amount
does not include the effects of certain potential results of increased interest rates, such as reduced level of overall economic activity or other actions management may take to mitigate the risk. Furthermore, this sensitivity analysis does not
assume changes in our financial structure that could occur if interest rates were higher.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When
used in this report, the words believes, expects, anticipates, estimates and similar words and expressions are generally intended to identify forward-looking statements. Statements that describe our
future strategic plans, goals or objectives are also forward-looking statements. Readers of this report are cautioned that any forward-looking statements, including those regarding the intent, belief or current expectations of our management, are
not guarantees of future performance, results or events, and involve risks and uncertainties. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to update such forward-looking
statements to reflect subsequent events or circumstances. Actual results and events may differ materially from those in the forward-looking statements as a result of various factors, including the factors disclosed in Part II, Item 1A of this
Quarterly Report on Form 10-Q and in Item 1A of our Annual Report on Form 10-K for the twelve months ended June 30, 2008.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

See Interest Rate and Market
Rate Risk in Item 2 of this Form 10-Q.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

We maintain
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, referenced herein as the Exchange Act. These disclosure controls and procedures are designed to ensure that
information required to be disclosed by us in the reports that we file or furnish under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information
is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, an
evaluation of the effectiveness of our disclosure controls and procedures performed pursuant to Rule 13a-15 under the Exchange Act. Based on their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of
December 31, 2008, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or furnish under the Exchange Act is recorded, processed,



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summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our
management to allow timely decisions regarding disclosure.

(b) Changes in Internal Control over Financial Reporting

There has not been any changes in our internal control over financial reporting during the fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

You
should carefully consider the risk factors disclosed below and in our Annual Report on Form 10-K for the year ended June 30, 2008 in Part I, Item 1A, Risk Factors. Any of those risks could have a material adverse effect on our financial
condition and results of operations. There has not been any subsequent material changes to such risk factors.

Our flexibility is limited due
to our debt.

As of March 31, 2009, changes to our revolving line of credit facility have resulted in our inability to borrow on this
facility in the future. At March 31, 2009 however, we have working capital of approximately $5 million due to our outstanding debt obligations being reclassified from short to long term. This was a result of our entering into Amendment
No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured Credit Agreement on March 31, 2009. Pursuant to Amendment No. 5 to our First Lien Senior Secured Credit Agreement and Second Lien Senior Secured
Credit Agreement, Lenders waived certain Events of Default under the Credit Agreement, extended the maturity dates of the Revolving Credit Notes and the Term Notes, ceased future Revolving Credit Advances, permitted payment on outstanding Revolving
Credit Advances and amended certain financial covenants and other provisions in the Credit Agreement, as further discussed in Note 4. However, all of our First Lien outstanding debt matures on December 30, 2010 and the Second Lien outstanding
debt matures on December 30, 2011. In order to meet these obligations, we will be required to restructure our current credit facilities, refinance with another lender, or attempt to derive capital from some other sources.

If we are not successful in some or all of the following, we may not have sufficient liquidity to operate: 1) generate positive operating cash flow to meet our
current operating obligations as they become due and restructure our credit facilities to provide for additional working capital sources should we not be able to generate the operating cash flow needed to meet our daily operating obligations.

These factors raise substantial doubt as to our ability to continue as a going concern. The accompanying financial statements have been prepared on
a going concern basis which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.

Item 2. Exhibits



|             |  |                                                        
|------------ |  | -------------------------------------------------------
|Exhibit 31.1 |  | Rule 13a  14(a) Certificate of Chief Executive Officer
|             | 
|Exhibit 31.2 |  | Rule 13a  14(a) Certificate of Chief Financial Officer
|             | 
|Exhibit 32.1 |  | Section 1350 Certificate of Chief Executive Officer    
|             | 
|Exhibit 32.2 |  | Section 1350 Certificate of Chief Financial Officer    



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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.



|                   |  |  |  |                          |  |                                                    
|------------------ |  |  |  | ------------------------ |  | ---------------------------------------------------
|                   |  |  |  | TRIPLE CROWN MEDIA, INC.
|                   |  |  | 
|Date: May 14, 2009 |  |  |  | by:                      |  | /s/ MARK G. MEIKLE                                 
|                   |  |  |  |                          |  | Mark G. Meikle                                     
|                   |  |  |  |                          |  | Executive Vice President and ChiefFinancial Officer



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