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 December 31, 2003

                                 OR

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

       For the transition period from __________________ to ______________


                          Commission File Number 0-2380

                               SPORTS ARENAS, INC.
                               -------------------
             (Exact name of registrant as specified in its charter)


                               Delaware 13-1944249
                               -------------------
               (State of Incorporation) (I.R.S. Employer I.D. No.)


             7415 Carroll Road, Suite C, San Diego, California 92121
             -------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (858) 408-0364




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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes      No X
                                      ---      ---

The number of shares  outstanding  of the  issuer's  only class of common  stock
($.01 par value) as of January 31, 2004 was 27,250,000 shares.

<PAGE>

                               SPORTS ARENAS, INC.

                                    FORM 10-Q

                         QUARTER ENDED DECEMBER 31, 2003

                                      INDEX






Part I - Financial Information:


Item 1.- Consolidated Condensed Financial Statements:

      Unaudited Balance Sheets as of December 31, 2003
           and June 30, 2003 ..........................................   1-2

      Unaudited Statements of Operations for the Three Months Ended
             December 31, 2003 and 2002 ...............................    3

      Unaudited Statements of Operations for the Six Months Ended
             December 31, 2003 and 2002 ...............................    4

      Unaudited Statements of Cash Flows for the Six Months Ended
             December 31, 2003 and 2002 ...............................    5

      Notes to Financial Statements...................................   6-9


Item 2.- Management's Discussion and Analysis of Financial Condition
                and Results of Operations.............................  10-15

Item 3.- Quantitative and Qualitative Disclosures about Market Risk...    15

Item 4.- Controls and Procedures .....................................    15

Part II - Other Information...........................................    16

Exhibits and reports on Form 8-K .....................................    16

Signatures............................................................    17


<PAGE>


                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                     ASSETS
                                  (Unaudited)

                                                     December 31,   June 30,
                                                         2003         2003
                                                     -----------  -----------


Current assets:
   Cash and cash equivalents ........................$    34,531  $   365,674
   Other receivable-affiliate .......................       --        350,000
   Receivables ......................................    188,885      402,875
   Inventories ......................................    843,212      641,127
   Prepaid expenses .................................     62,769       34,958
                                                     -----------  -----------
      Total current assets ..........................  1,129,397    1,794,634
                                                     -----------  -----------


Property and equipment, at cost:
   Equipment.........................................  1,997,600    1,889,395
      Less accumulated depreciation and amortization  (1,065,571)  (1,052,740)
                                                     -----------  -----------
       Net property and equipment ...................    932,029      836,655
                                                     -----------  -----------

Other assets:
   Investments ......................................  4,574,060    5,344,007
   Deferred tax assets ..............................  5,177,000    4,661,000
   Other ............................................     95,671       95,671
                                                     -----------  -----------
                                                       9,846,731   10,100,678
                                                     -----------  -----------

                                                     $11,908,157  $12,731,967
                                                     ===========  ===========







                                       1
<PAGE>


                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                  (Unaudited)


                                                     December 31,   June 30,
                                                         2003         2003
                                                     -----------  -----------

Current liabilities:
   Current portion of long-term debt ................$    19,669  $     5,771
   Accounts payable .................................    356,242      441,434
   Accrued payroll and related expenses .............    289,403      282,080
   Deferred income taxes ............................  1,026,000         --
   Other liabilities ................................      3,639        3,796
                                                     -----------  -----------
      Total current liabilities .....................  1,694,953      733,081
                                                     -----------  -----------

Long-term debt, excluding current portion ...........     76,376         --
                                                     -----------  -----------

Deferred income taxes ...............................  9,488,000   10,514,000
                                                     -----------  -----------

Minority interest in consolidated subsidiary ........    402,839      431,839
                                                     -----------  -----------


Shareholders' equity:
   Common stock, $.01 par value, 50,000,000
     shares authorized, 27,250,000 shares
     issued and outstanding .........................    272,500      272,500
   Additional paid-in capital .......................  1,730,049    1,730,049
   Retained earnings ................................    534,932    1,341,990
                                                     -----------  -----------
                                                       2,537,481    3,344,539
   Less note receivable from shareholder ............ (2,291,492)  (2,291,492)
                                                     -----------  -----------

     Total shareholders' equity......................    245,989    1,053,047
                                                     -----------  -----------

Commitments and contingencies (Note 6)

                                                     $11,908,157  $12,731,967
                                                     ===========  ===========









     See accompanying notes to consolidated condensed financial statements.


                                       2
<PAGE>

                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                 THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002
                                   (Unaudited)

                                                         2003         2002
                                                     -----------  -----------
Revenues:
   Golf .............................................$   372,000  $   496,677
   Rental ...........................................     23,156       22,311
   Other ............................................     12,698      114,224
   Other-related party ..............................     14,931       48,645
                                                     -----------  -----------
                                                         422,785      681,857
                                                     -----------  -----------
Costs and expenses:
   Golf .............................................    623,429      498,880
   Rental ...........................................     19,200       18,700
   Selling, general, and administrative .............    532,214      523,046
   Depreciation and amortization ....................     50,915       59,720
                                                     -----------  -----------
                                                       1,225,758    1,100,346
                                                     -----------  -----------

Loss from operations ................................   (802,973)    (418,489)
                                                     -----------  -----------

Other income (charges):
   Investment income- related party .................     11,529        7,214
   Interest expense and amortization of finance costs       (372)     (11,874)
   Gain on sale .....................................     78,533         --
   Equity in income of investees ....................     67,438       27,007
                                                     -----------  -----------
                                                         157,128       22,347
                                                     -----------  -----------

Loss from continuing operations before income taxes..   (645,845)    (396,142)

Income tax benefit ..................................    257,000         --
                                                     -----------  -----------

Loss from continuing operations .....................   (388,845)    (396,142)

Loss from discontinued operations ...................       --        (42,747)
                                                     -----------  -----------

Net loss ............................................$  (388,845) $  (438,889)
                                                     ===========  ===========

Per common share (based on weighted average shares
 outstanding) basic and diluted:
  Loss from continuing operations ...................   ($0.01)       ($0.01)
  Discontinued operations ...........................      --            --
                                                        ------        ------
   Net loss .........................................   ($0.01)       ($0.01)
                                                        ======        ======

     See accompanying notes to consolidated condensed financial statements.



                                       3
<PAGE>

                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                 SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002
                                   (Unaudited)

                                                         2003         2002
                                                     -----------  -----------
Revenues:
   Golf .............................................$   981,525  $ 1,131,751
   Rental ...........................................     42,491       40,287
   Other ............................................     21,329      156,052
   Other-related party ..............................     18,335       96,869
                                                     -----------  -----------
                                                       1,063,680    1,424,959
                                                     -----------  -----------
Costs and expenses:
   Golf .............................................  1,256,690    1,145,141
   Rental ...........................................     38,400       37,400
   Selling, general, and administrative .............  1,180,791    1,016,538
   Depreciation and amortization ....................     98,207      119,440
                                                     -----------  -----------
                                                       2,574,088    2,318,519
                                                     -----------  -----------

Loss from operations ................................ (1,510,408)    (893,560)
                                                     -----------  -----------

Other income (charges):
   Investment income:
     Related party ..................................     15,000       16,284
     Other ..........................................        297         --
   Interest expense and amortization of finance costs       (706)     (45,522)
   Gain on sale .....................................     78,533         --
   Equity in income of investees ....................     94,226       67,201
                                                     -----------  -----------
                                                         187,350       37,963
                                                     -----------  -----------

Loss from continuing operations before income taxes
  and change in accounting principle ................ (1,323,058)    (855,597)

Income tax benefit ..................................    516,000         --
                                                     -----------  -----------

Loss from continuing operations .....................   (807,058)    (855,597)

Loss from discontinued operations ...................       --       (108,269)
Cumulative effect of change in accounting principle .       --         37,675
                                                     -----------  -----------

Net loss ............................................$  (807,058) $  (926,191)
                                                     ===========  ===========

Per common share (based on weighted average shares
 outstanding) basic and diluted:
  Loss from continuing operations ...................   ($0.03)       ($0.03)
  Discontinued operations ...........................      --            --
  Cumulative effect of change in accounting principle      --            --
                                                        ------        ------
   Net loss .........................................   ($0.03)       ($0.03)
                                                        ======        ======

     See accompanying notes to consolidated condensed financial statements.



                                       4
<PAGE>
                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002
                                   (Unaudited)

                                                         2003         2002
                                                     -----------  -----------
Cash flows from operating activities:
  Net loss ..........................................$  (807,058) $  (926,191)
    Less loss from discontinued operations ..........       --        108,269
                                                     -----------  -----------
    Loss from continuing operations .................   (807,058)    (817,922)
  Adjustments to reconcile net loss to the net
   cash used by operating activities:
      Depreciation and amortization .................     98,207      119,440
      Equity in income of investees .................    (94,226)     (67,201)
      Gain on sales .................................    (78,533)        --
      Deferred income ...............................       --         24,000
      Provision for deferred income taxes ...........   (516,000)        --
      Change in accounting principle ................       --        (37,675)
    Changes in assets and liabilities:
      Decrease in receivables .......................    563,990      120,564
      (Increase) decrease in inventories ............   (202,085)      62,885
      (Increase) decrease in prepaid expenses .......    (27,811)      20,003
      Increase (decrease) in accounts payable .......    (85,192)     105,096
      Increase in accrued expenses ..................      7,166      100,130
      Other .........................................       --         18,642
                                                     -----------  -----------
  Net cash used by continuing operations ............ (1,141,542)    (352,038)
  Net cash used by discontinued operations ..........       --        (87,286)
                                                     -----------  -----------
  Net cash used by operating activities ............. (1,141,542)    (439,324)
                                                     -----------  -----------
Cash flows from investing activities:
   Capital expenditures .............................   (193,581)      (4,310)
   Distribution to holder of minority interest ......    (29,000)        --
   Proceeds from sale of assets .....................     78,533         --
   Distributions from investees .....................    864,173      417,100
                                                     -----------  -----------
 Net cash provided by investing activities ..........    720,125      412,790
                                                     -----------  -----------

Cash flows from financing activities:
   Scheduled principal payments on long-term debt ...     (6,204)      (4,179)
   Proceeds from long-term debt .....................     96,478         --
                                                     -----------  -----------
 Net cash provided (used) by financing activities ...     90,274       (4,179)
                                                     -----------  -----------

Net decrease in cash and cash equivalents ...........   (331,143)     (30,713)

Cash and cash equivalents, beginning of period ......    365,674       39,345
                                                     -----------  -----------

Cash and cash equivalents, end of period ............$    34,531  $     8,632
                                                     ===========  ===========

Supplemental Disclosure of Non-Cash Financing Activities:
  Reclassification of principal payments on
    short-term debt to accrued interest .............$      --    $   280,631
                                                     ===========  ===========
  Reclassification of non-current deferred tax
    liability to current portion ....................$ 1,026,000  $      --
                                                     ===========  ===========


     See accompanying notes to consolidated condensed financial statements.


                                       5
<PAGE>
                      SPORTS ARENAS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                     DECEMBER 31, 2003 AND 2002 (Unaudited)

1.   The information  furnished  reflects all adjustments of a recurring  nature
     which  management  believes  are  necessary  to a  fair  statement  of  the
     Company's financial position,  results of operations and cash flows for the
     interim periods. Certain information and note disclosures normally included
     in consolidated financial statements prepared in accordance with accounting
     principles  generally  accepted in the United  States of America  have been
     condensed  or  omitted  pursuant  to  the  rules  and  regulations  of  the
     Securities and Exchange Commission.

     The accompanying  unaudited  condensed  consolidated  financial  statements
     should be read in conjunction  with the consolidated  financial  statements
     and notes thereto  included in the  Company's  Annual Report filed on Form
     10-K on October 14, 2003 for the year ended June 30, 2003.

     Revenue   recognition-  the  Company  recognizes  revenue  when  persuasive
     evidence of an  arrangement  exists,  delivery has occurred,  the amount is
     fixed  or  determinable  and  collectibility  is  probable.  All  of  these
     conditions  are typically met at the time the Company ships products to its
     customers.

2.   Due to the  seasonal fluctuations  of the golf  club  shaft  manufacturing
     operations,  the financial  results for the interim periods ended December
     31, 2003 and 2002, are not  necessarily  indicative of operations  for the
     entire year.

3. Investments:
     Investments consist of the following:
                                                     December 31,   June 30,
                                                         2003        2003
                                                     -----------  -----------
     UCV, L.P. ......................................$ 4,565,233  $ 5,277,007
     Vail Ranch Limited Partnership .................      8,827       67,000
                                                     -----------  -----------
           Total ....................................$ 4,574,060  $ 5,344,007
                                                     ===========  ===========

     The  following  is a summary  of the  equity  in income of the  investments
     accounted for by the equity method:
                                Six Months         Three Months
                            ------------------   ------------------
                              2003      2002       2003      2002
                            --------  --------   --------  --------
        UCV, L.P. .......   $ 94,226  $ 67,201   $ 67,438  $ 27,007
                            ========  ========   ========  ========

      The following is a summary of distributions received from investees:
                                           2003        2002
                                         --------    --------
        UCV, L.P. ....................   $806,000    $417,100
        Vail Ranch Limited Partnership     58,173        --
                                         --------    --------
                                         $864,173    $417,100
                                         ========    ========

     As discussed in footnote 5(c) to the Company's  June 30, 2003 annual report
     on Form 10-K,  effective  April 1, 2003,  the Company  began  recording its
     equity in the income of UCV, L.P. (UCV) on a current basis rather than on a
     91 day  delayed  basis.  The  Company  has  treated  this  as a  change  in
     accounting  principle and  accordingly has classified its $37,675 of equity
     in earnings of UCV for the period of April 1, 2002 through June 30, 2002 as
     the  cumulative  effect  of a  change  in  accounting  principle  in  2003.
     Therefore,  the equity in income of UCV for the period July 1, 2003 through
     December 31, 2003 was $94,226 (see  footnote 15 to the  Company's  June 30,
     2003 annual report on Form 10-K).

                                       6
<PAGE>

     In November 2003 the Company received $60,532 related to amounts due on the
     the sale of the  Company's  investment in All Seasons Inns in a prior year.
     The Company had recorded a valuation allowance for the entire amount due at
     the time of sale. As a result,  the amount  received was classified as gain
     from sale.

4. Contingencies:

     A lawsuit was filed on January 10, 2003 in the United States District Court
     in the  Southern  District  of  California  by  Masterson  Marketing,  Inc.
     (Masterson)  against Penley Sports,  LLC.  Masterson's  lawsuit  originally
     asserted claims for copyright infringement,  breach of contract,  breach of
     fiduciary  duty,  and  sought  compensatory   damages,   punitive  damages,
     statutory damages, and attorney fees. The Company filed a motion to dismiss
     all claims. In response to that motion, Masterson dropped all claims except
     for the claims of copyright infringement and breach of contract.  Masterson
     also  dropped all prayers for  punitive  damages,  statutory  damages,  and
     attorney  fees.  It is not  possible at this time to predict the outcome of
     this litigation. We intend to vigorously defend against these claims.


5. Business segment information:
     The Company operates principally in two business segments:  commercial real
     estate rental and golf club shaft manufacturing.  Other revenues, which are
     not part of an  identified  segment,  consist of  property  management  and
     development  fees  (earned  from both a property  50  percent  owned by the
     Company  and a  property  in  which  the  Company  has  no  ownership)  and
     commercial brokerage.

                                       7
<PAGE>

     The following is summarized  information about the Company's  operations by
     business segment.
<TABLE>
<CAPTION>
                                         Real Estate                   Unallocated
                                          Operation         Golf        And Other         Totals
                                        ------------    -----------    -----------    ------------
SIX MONTHS ENDED DECEMBER 31, 2003
-------------------------------------
<S>                                     <C>             <C>            <C>            <C>
Revenues .............................  $     42,491    $   981,525    $    39,664    $  1,063,680
Depreciation and amortization ........          --           84,899         13,308          98,207
Interest expense .....................          --             --              706             706
Equity in income of investee .........        94,226           --             --            94,226
Gain on sale .........................          --             --           78,533          78,533
Segment profit (loss) ................        98,317     (1,236,991)      (199,681)     (1,338,355)
Investment income ....................                                                      15,297
Loss from continuing
  operations before taxes.............                                                  (1,323,058)
Significant non-cash items ...........       (94,226)          --             --           (94,226)

SIX MONTHS ENDED DECEMBER 31, 2002
-------------------------------------
Revenues .............................  $     40,287    $ 1,131,751    $   252,921    $  1,424,959
Depreciation and amortization ........        26,710         83,514          9,216         119,440
Interest expense .....................          --             --           45,522          45,522
Equity in income of investee .........        67,201           --             --            67,201
Segment profit (loss) ................        43,378       (797,913)      (117,346)       (871,881)
Investment income ....................                                                      16,284
Loss from continuing
  operations before taxes.............                                                    (855,597)
Significant non-cash items ...........       (67,201)          --             --           (67,201)
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, 2003
-------------------------------------
<S>                                     <C>             <C>            <C>            <C>
Revenues .............................  $     23,156    $   372,000    $    27,629    $    422,785
Depreciation and amortization ........          --           43,508          7,407          50,915
Interest expense .....................          --             --              372             372
Gain on sale .........................          --             --           78,533          78,533
Equity in income of investee .........        67,438           --             --            67,438
Segment profit (loss) ................        71,394       (706,860)       (21,908)       (657,374)
Investment income ....................                                                      11,529
Loss from continuing
  operations before taxes.............                                                    (645,845)
Significant non-cash items ...........       (67,438)           --             --          (67,438)

THREE MONTHS ENDED DECEMBER 31, 2002
-------------------------------------
Revenues .............................  $     22,311    $   496,677    $   162,869    $    681,857
Depreciation and amortization ........        13,355         41,757          4,608          59,720
Interest expense .....................          --             --           11,874          11,874
Equity in income of investee .........        27,007           --             --            27,007
Segment profit (loss) ................        17,263       (426,041)         5,422        (403,356)
Investment income ....................                                                       7,214
Loss from continuing
  operations before taxes.............                                                    (396,142)
Significant non-cash items ...........       (27,007)          --             --           (27,007)
</TABLE>

                                       8
<PAGE>
6. Liquidity

     The  accompanying  consolidated  financial  statements  have been  prepared
     assuming  the Company  will  continue as a going  concern.  The Company has
     suffered  recurring losses, has negative working capital and is forecasting
     negative  cash  flows  for  the  next  twelve  months.  These  items  raise
     substantial  doubt  about the  Company's  ability  to  continue  as a going
     concern.  The Company's ability to continue as a going concern is dependent
     on obtaining  additional  investors in its  subsidiary,  Penley Sports,  or
     increases in the sales volume of Penley Sports. The consolidated  financial
     statements  do  not  contain  adjustments,  if  any,  including  diminished
     recovery  of  asset  carrying   amounts,   that  could  arise  from  forced
     dispositions and other insolvency costs.

7. Discontinued Operations:

     During the year ended June 30, 2003, the Company  ceased  operations in two
     business  segments.  The  following  is a  summary  of the  loss  from  the
     discontinued business segments for the periods ended December 31:
                                   Three Months             Six Months
                              ----------------------   ----------------------
                                 2003        2002         2003        2002
                              ---------  -----------   ---------  -----------
     Bowling .................$    --    $   (33,747)  $    --    $  (108,269)
     Real estate development .     --         (9,000)       --           --
                              ---------  -----------   ---------  -----------
                              $    --    $   (42,747)  $    --    $  (108,269)
                              =========  ===========   =========  ===========

8. Note receivable from shareholder:

     In December 1990 the Company  loaned  $1,061,009 to the Company's  majority
     shareholder,  Andrew Bradley,  Inc. (ABI),  which is 88% owned by Harold S.
     Elkan, the Company's  President.  The loan provided funds to ABI to pay its
     obligation related to its purchase of the Company's stock in November 1983.
     The loan to ABI  provides for interest to accrue at an annual rate of prime
     plus 1-1/2 percentage  points (5.50 percent at December 31, 2003) and to be
     added to the principal balance annually. The loan was due November 7, 2003.
     The loan is  collateralized  by 21,808,267  shares of the  Company's  stock
     owned by ABI. The original loan amount plus accrued  interest of $1,230,483
     is presented  as a reduction of  shareholders'  equity  because  ABI's only
     asset is the stock of the Company.

     On November 7, 2003,  the  Company  presented  demand to ABI for payment of
     $3,351,724,  which represents the original  principal  balance plus accrued
     interest, of which $1,060,232 has not been accrued by the Company. The note
     provides for a 5 day grace period and negotiations are underway between the
     Company and ABI with respect to disposition of the note.


                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
            CONDITION AND RESULTS OF OPERATIONS:
            -----------------------------------
                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------
The independent  auditors'  report dated September 5, 2003 included in our June
30,  2003  Annual  Report  on Form  10-K  contained  the  following  explanatory
paragraph:

     The  accompanying  consolidated  financial  statements  have been  prepared
     assuming that the Company will continue as a going concern. As discussed in
     Note 13 to the consolidated financial statements,  the Company has suffered
     recurring  losses,  and is  forecasting  negative cash flows from operating
     activities for the next twelve months.  These items raise substantial doubt
     about the Company's  ability to continue as a going  concern.  Management's
     plans  in  regard  to these  matters  are also  described  in Note 13.  The
     consolidated financial statements do not include any adjustments that might
     result from the outcome of this uncertainty.

Management estimates positive cash flow of $100,000 to $200,000 in total for the
remaining  two  quarters  of the  year  ending  June  30,  2004  from  operating
activities after deducting capital  expenditures and principal payments on notes
payable  and  adding  estimated   distributions  from  UCV  and  VRLP.  However,
Management  estimates  that  it  will  have  a tax  liability  of  approximately
$1,026,000 due in September 2004 as a result of reporting the taxable portion of
the sale of the  apartment  project  owned by UCV, LP.  Management  is currently
uncertain  of  where  the  Company  will  obtain  the  funds  to pay  these  tax
liabilities.

The Company  estimates it will receive  approximately  $700,000 of distributions
from UCV in the third  quarter of which  $129,000  was  received  in January and
February 2004. The $700,000 of  distributions  from UCV represents the remainder
of funds to be  distributed  by UCV to the  Company  from the sales  proceeds of
UCV's apartment project.

In February 2003 Vail Ranch Limited Partners (VRLP) sold its membership interest
in  Temecula  Creek LLC to its other  partner in  Temecula  Creek LLC.  VRLP was
entitled to receive  one-half of the sales proceeds from the sale of a remaining
parcel of undeveloped land as well as the release of $100,000 that was held back
from the sales  proceeds  in  February  2003.  In  December  2003 VRLP  received
$121,955 as its share of the proceeds from the sale of the undeveloped  land. In
January 2004, VRLP received $99,959 as the balance of the hold back. The Company
received  distributions  from VRLP related to these  transactions  of $58,173 in
December 2003 and $59,975 in January  2004. As part of the Company's  obligation
to pay  approximately  one-half  of  these  proceeds  to its  minority  partner,
payments of $29,000 each were made to the minority  partner in December 2003 and
January 2004. The liability to the minority interest stated in the balance sheet
is  $402,839  but is  likley  to be  settled  for a lesser  amount  based on the
distributions received from VRLP.

In  December  1990 the  Company  loaned  $1,061,009  to the  Company's  majority
shareholder,  Andrew Bradley, Inc. (ABI), which is 88% owned by Harold S. Elkan,
the Company's  President.  The loan provided  funds to ABI to pay its obligation
related to its purchase of the Company's stock in November 1983. The loan to ABI
provides for interest to accrue at an annual rate of prime plus 1-1/2 percentage
points  (5.50  percent at December  31,  2003) and to be added to the  principal
balance annually.  The loan was due November 7, 2003. The loan is collateralized
by  21,808,267  shares of the  Company's  stock owned by ABI. The original  loan
amount plus  accrued  interest of  $1,230,483  is  presented  as a reduction  of
shareholders' equity because ABI's only asset is the stock of the Company.

On  November  7,  2003,  the  Company  presented  demand to ABI for  payment  of
$3,351,724,  which  represents  the  original  principal  balance  plus  accrued
interest,  of which  $1,060,232  has not been accrued by the  Company.  The note
provides for a 5 day grace  period and  negotiations  are  underway  between the
Company and ABI with respect to disposition of the note.

                                       10
<PAGE>

Management  expects  continuing  cash flow deficits until Penley Sports develops
sufficient  sales  volume  to  become  profitable.  Although,  there  can  be no
assurances  that  Penley  Sports  will  ever  achieve   profitable   operations,
management  estimates that a combination of continued  increases in the sales of
Penley Sports and reduction of its operating  costs will result in Penley Sports
and the Company achieving a breakeven level of operations at the end of the next
two quarters.

Management is currently  evaluating  other sources of working capital  including
the  sale  of  assets  or  obtaining  additional  investors  in  Penley  Sports.
Management  has not assessed the  likelihood of the Company  receiving any other
sources of long-term or short-term  liquidity.  If the Company is not successful
in obtaining other sources of working capital this could have a material adverse
effect  on the  Company's  ability  to  continue  as a going  concern.  However,
management  believes it will be able to meet its financial  obligations  for the
next twelve months.

The Company has working capital deficit of $565,556 at December 31, 2003,  which
is a $1,627,109  decrease  from the working  capital of  $1,061,553  at June 30,
2003.  The  decrease  in  working  capital  is  primarily  attributable  to  the
reclassification  of $1,026,000  from a non-current  deferred tax liability to a
current deferred tax liability and cash used by operating activities for the six
months  ended  December  31, 2003.  The cash used by  operating  activities  was
partially offset by  distributions  received from the Company's  investees.  The
following is a schedule of the cash provided (used) before changes in assets and
liabilities, segregated by business segments:

                                      2003          2002        Change
                                  ----------    ----------    ----------
    Rental ....................   $    4,000         3,000         1,000
    Golf ......................   (1,152,000)     (714,000)     (438,000)
    General corporate expense
      and other ...............     (250,000)      (68,000)     (182,000)
                                    ----------    ----------    ----------
    Cash used by continuing
      operations ..............   (1,398,000)     (779,000)     (619,000)
    Discontinued operations:
      Bowling .................         --         (96,000)       96,000
      Real estate development .         --            --            --
    Capital expenditures.......     (194,000)       (4,000)     (190,000)
    Principal payments on
      long-term debt ..........       (6,000)       (4,000)       (2,000)
                                  ----------    ----------    ----------
    Cash used .................   (1,598,000)     (883,000)     (715,000)
                                  ==========    ==========    ==========
    Distributions received from
      investees ...............      864,000       417,000       447,000
                                  ==========    ==========    ==========


                          CRITICAL ACCOUNTING POLICIES
                          ----------------------------
In  response to the SEC's  release No.  33-8040,  "Cautionary  Advice  Regarding
Disclosure About Critical Accounting  Policies",  the Company has identified its
most  critical  accounting  policy as that related to the carrying  value of its
long-lived  assets.  Any event or circumstance  that indicates to the Company an
impairment  of the fair  value of any asset is  recorded  in the period in which
such event or  circumstance  becomes known to the Company.  During the three and
six month periods ended December 31, 2003 no such event or circumstance occurred
that  would,  in the  opinion  of  management,  signify  the need for a material
reduction in the carrying value of any of the Company's assets.

                                       11
<PAGE>

                          NEW ACCOUNTING PRONOUNCEMENTS
                          -----------------------------
Statement of Financial Accounting Standards,  No. 149 Amendment of Statement 133
on Derivative  Instruments and Hedging  Activities,  or SFAS No. 149, amends and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No.  133. In  particular,  SFAS No. 149  clarifies  under what  circumstances  a
contract  within  an  initial  net  investment  meets  the  characteristic  of a
derivative  and when a derivative  contains a financing  component that warrants
special  reporting  in the  statement  of cash flows.  SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003, and is not
expected  to have a  material  impact on the  Company's  consolidated  financial
statements.

Statement of Financial  Accounting  Standards,  No. 150  Accounting  for Certain
Financial  Instruments with  Characteristics  of Both Liabilities and Equity, or
SFAS No. 150,  establishes  standards for how an issuer  classifies and measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  SFAS No. 150 requires  that an issuer  classify a financial  instrument
that is within  its scope as a  liability  (or an asset in some  circumstances).
Many of those instruments were previously  classified as equity. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after June 15, 2003. At the October 29, 2003 FASB Board meeting,  the
Board decided to  indefinitely  defer the effective date of SFAS No. 150 related
to the classification and measurement  requirements for mandatorily  redeemable
financial  instruments that become subject to SFAS No. 150 solely as a result of
consolidation,  such as the  minority  interest  in the  accompanying  financial
statements.

In December 2003, the FASB issued FASB  Interpretation  No. 46 (revised December
2003),  Consolidation  of Variable  Interest  Entities,  which  addresses  how a
business  enterprise  should  evaluate  whether it has a  controlling  financial
interest in an entity  through  means other than voting  rights and  accordingly
should  consolidate  the entity.  FIN 46R replaces FASB  Interpretation  No. 46,
Consolidation of Variable Interest  Entities,  which was issued in January 2003.
The Company  will be required  to apply FIN 46R to  variable  interests  in VIEs
created after December 31, 2003.  For variable  interests in VIEs created before
January 1, 2004,  the  Interpretation  will be applied  beginning  on January 1,
2005.  For any VIEs that must be  consolidated  under FIN 46R that were  created
before January 1, 2004, the assets,  liabilities and noncontrolling interests of
the VIE  initially  would  be  measured  at  their  carrying  amounts  with  any
difference  between the net amount added to the balance sheet and any previously
recognized  interest being recognized as the cumulative  effect of an accounting
change.  If determining the carrying amounts is not  practicable,  fair value at
the date FIN 46R first  applies may be used to measure  the assets,  liabilities
and noncontrolling  interest of the VIE. The Company currently does not have any
VIEs in which it has variable interests.

              "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
                          LITIGATION REFORM ACT OF 1995
              ----------------------------------------------------
With the  exception  of  historical  information  (information  relating  to the
Company's  financial  condition and results of operations at historical dates or
for historical periods),  the matters discussed in this Management's  Discussion
and  Analysis of  Financial  Condition  and Results of  Operations  are forward-
looking  statements that  necessarily  are based on certain  assumptions and are
subject to certain risks and uncertainties. These forward-looking statements are
based on management's  expectations as of the date hereof,  and the Company does
not  undertake  any  responsibility  to update  any of these  statements  in the
future.  Actual future  performance and results could differ from that contained
in or suggested by these  forward-looking  statements as a result of the factors
set forth in this  Management's  Discussion and Analysis of Financial  Condition
and Results of  Operations  and  elsewhere  in the  Company's  filings  with the
Securities and Exchange Commission.

                                       12
<PAGE>
                              RESULTS OF OPERATIONS
                              ---------------------
The  following is a summary of the changes in the results of  operations  of the
six and  three-month  periods ended December 31, 2003 to the same period in 2002
and a discussion of the significant changes:
<TABLE>
<CAPTION>
                                 SIX MONTHS ENDED DECEMBER 31, 2003 VERSUS 2002
                                 ----------------------------------------------
                               Real Estate               Unallocated
                                Operation       Golf      And Other     Total
                               -----------  -----------   ---------  ------------
<S>                           <C>           <C>           <C>        <C>
Revenues ..................... $     2,204  $  (150,226)  $(213,257) $   (361,279)
Costs ........................       1,000      111,549        --         112,549
SG&A-direct ..................        --         (1,082)    109,266       108,184
SG&A-allocated ...............        --        177,000    (120,931)       56,069
Depreciation and amortization      (26,710)       1,385       4,092       (21,233)
Interest expense .............        --           --       (44,816)      (44,816)
Gain from sale ...............        --           --        78,533        78,533
Equity in investees ..........      27,025         --          --          27,025
Segment profit (loss) ........      54,939     (439,078)    (82,335)     (466,474)
Investment income ............                                               (987)
Income tax benefit ...........                                            516,000
Income from continuing
  operations .................                                             48,539
Discontinued operations ......                                            108,269
Change in accounting principle                                            (37,675)
Net income (loss) ............                                            119,133
</TABLE>

<TABLE>
<CAPTION>
                                THREE MONTHS ENDED DECEMBER 31, 2003 VERSUS 2002
                                ------------------------------------------------
                               Real Estate               Unallocated
                                Operation       Golf      And Other     Total
                               -----------  -----------   ---------  ------------
<S>                           <C>           <C>           <C>        <C>
Revenues ..................... $       845  $  (124,677)  $(135,240) $   (259,072)
Costs ........................         500      124,549        --         125,049
SG&A-direct ..................        --        (62,158)     40,257       (21,901)
SG&A-allocated ...............        --         92,000     (60,931)       31,069
Depreciation and amortization      (13,355)       1,751       2,799        (8,805)
Interest expense .............        --           --       (11,502)      (11,502)
Gain from sale ...............        --           --        78,533        78,533
Equity in investees ..........      40,431         --          --          40,431
Segment profit (loss) ........      54,131     (280,819)    (27,330)     (254,018)
Investment income ............                                              4,315
Income tax benefit ...........                                            257,000
Income from continuing
  operations .................                                              7,297
Discontinued operations ......                                             42,747
Change in accounting principle                                               --
Net income (loss) ............                                             50,044
</TABLE>

REAL ESTATE OPERATIONS:
------------------
This segment includes the equity in income UCV, L.P. (UCV) and the sublease of a
portion of the Penley factory.  The operations of UCV consisted of the operation
of a 542 unit  apartment  project  until UCV sold the property on April 1, 2003.
UCV acquired  replacement  properties on August 28, 2003, September 25, 2003 and
September  26, 2003.  The  operations  of UCV for the three and six months ended
December  31, 2003  included  the  operations  of these  properties  since their
acquisition.

                                       13
<PAGE>

GOLF OPERATIONS:
----------------
Golf  revenues  declined  in the three and six month  periods  primarily  due to
declines in sales to golf club  manufacturers.  In one circumstance there was an
order shipped in July 2002 for which there was no comparable  sales  activity in
2003. There were also two manufacturers that were no longer in business in 2003.
The following is a breakdown of the percentage of sales by customer category:

                                    Six Months  Three Months
                                    ----------  ------------
                                    2003  2002   2003  2002
                                    ----  ----   ----  ----
     Golf equipment distributors .   53%   34%    54%   34%
     Small golf club manufacturers   17%   30%    19%   32%
     Golf shops ..................   26%   29%    22%   30%
     Other .......................    4%    7%     5%    4%

Operating expenses of the golf segment consisted of the following in 2003 and
2002:
                                      Six Months            Three Months
                                 ---------------------  --------------------
                                    2003        2002       2003       2002
                                 ----------  ----------  ---------  ---------
     Costs of goods sold and
        manufacturing overhead   $1,100,000  $1,048,000 $  519,000  $ 450,000
     Research & development         157,000      97,000    105,000     49,000
                                 ----------  ----------  ---------  ---------
         Total golf costs         1,257,000   1,145,000    624,000    499,000
                                 ==========  ==========  =========  =========
     Marketing & promotion          447,000     442,000    204,000    264,000
     Administrative-direct          129,000     135,000     54,000     56,000
                                 ----------  ----------  ---------  ---------
          Total SG&A-direct         576,000     577,000    258,000    320,000
                                 ==========  ==========  =========  =========
     Allocated corporate costs      301,000     124,000    154,000     62,000
                                 ==========  ==========  =========  =========

Total golf costs  increased in the three and six month  periods due to increases
in  costs  to  correct   manufacturing   problems   caused  by  changes  in  the
specifications  of  materials  purchased  from  one  of its  "prepreg"  vendors.
Marketing  and promotion  expenses  decreased in the three month period due to a
decrease in player  sponsorship costs. This decrease was offset in the six month
period by an increase in advertising costs in the first quarter.

OTHER
-----
Other  revenues-related  party  decreased  due to  UCV's  sale of its  apartment
project  on  April  1,  2003.  The  Company  had  received  management  fees and
development  fees from UCV totaling  $48,000 and $97,000  during the three month
and six month periods ended December 31, 2002, respectively. In the same periods
in 2003,  the  Company  only  recieved  management  fees  from  the  replacement
properties totalling $15,000 and $18,000 respectively.

Other revenues, which primarily consisted of management fees earned from a third
party,  decreased  $102,000  and  $113,000  in the three and six month  periods,
respectivley, due to the sale of the property being managed in October 2002.

Unallocated  selling,  general and administrative  expenses increased by $40,000
and $109,000 in the three and six month periods, respectively,  primarily due to
increases in audit fees and legal  expenses.

The  amount  of  corporate  expenses  allocated  to the Golf  segment  primarily
increased due to an increase in the  percentage  of expenses  allocable to golf.
This is the result of the  discontinuance of the bowling segment in May 2003 and
the  reduction  in property  management  services  performed  for UCV and others
during the three months ended September 30, 2003.

                                       14
<PAGE>

Interest expense decreased  primarily due to repayment of the short term debt in
April 2003.

The  increase  in gain on sale  primarily  relates to the  $60,532  received  in
November 2003 related to amounts due on the the sale of the Company's investment
in All  Seasons  Inns in a prior  year.  The  Company  had  recorded a valuation
allowance for the amount due at the time of sale.

Discontinued Operations:
------------------------

As  discussed  in  Footnote  7 of  Notes  to  Consolidated  Condensed  Financial
Statements,  the Company has  classified  its operations in the bowling and real
estate development segments as discontinued operations.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

The Company is exposed to market risk primarily due to  fluctuations in interest
rates.  However,  the Company does not consider  this  interest rate market risk
exposure to be material to its financial condition or results of operations.

The Company does not enter into  derivative  or interest rate  transactions  for
speculative or trading purposes.


ITEM 4. CONTROLS AND PROCEDURES
-------------------------------
An evaluation was carried out under the supervision  and with the  participation
of the Company's management, including its Chief Executive Officer and its Chief
Financial  Officer,   of  the  effectiveness  of  the  disclosure  controls  and
procedures (as defined in Rule  13a-14(c)  under the Securities and Exchange Act
of 1934 (the "Exchange Act") as of December 31, 2003.  Based on this evaluation,
the Chief Executive  Officer and the Chief Financial Officer have concluded that
the Company's  disclosure  controls and  procedures are effective to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.


                                       15
<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1. Legal Proceedings

         As of December  31, 2003,  there were no changes in legal  proceedings
         from  those  set  forth in Item 3 of the Form  10-K  filed for the year
         ended June 30, 2003, except the following:

          A lawsuit was filed on January 10, 2003 in the United States  District
          Court in the Southern  District of California by Masterson  Marketing,
          Inc.  (Masterson)  against Penley  Sports,  LLC.  Masterson's  lawsuit
          originally  asserted  claims  for  copyright  infringement,  breach of
          contract,  breach of fiduciary duty, and sought compensatory  damages,
          punitive damages,  statutory  damages,  and attorney fees. The Company
          filed a motion to dismiss  all claims.  In  response  to that  motion,
          Masterson  dropped  all  claims  except  for the  claims of  copyright
          infringement  and  breach of  contract.  Masterson  also  dropped  all
          prayers for punitive damages, statutory damages, and attorney fees. It
          is  not  possible  at  this  time  to  predict  the  outcome  of  this
          litigation. We intend to vigorously defend against these claims.



ITEM 2. Changes in Securities

            NONE


ITEM 3. Defaults upon Senior Securities

            N/A


ITEM 4. Submission of Matters to a Vote of Security Holder
        --------------------------------------------------

            NONE

ITEM 5. Other Information

            NONE


ITEM 6. Exhibits & Reports on Form 8-K
      (a) Exhibits:
           31.1   Certification of Chief Executive Officer
           31.2   Certification of Chief Financial Officer
           32.1   Certification of Chief Executive Officer pursuant to Sec. 906
           32.2   Certification of Chief Financial Officer pursuant to Sec. 906

      (b) Reports on Form 8-K:  NONE


                                       16
<PAGE>
                                   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.




      SPORTS ARENAS, INC.



      By:  /s/ Harold S. Elkan
         ----------------------
                  Harold S. Elkan, President and Director

      Date:   February 17, 2004
            --------------------



      By:/s/ Steven R. Whitman
         ---------------------
            Steven R. Whitman, Treasurer,
            Principal Accounting Officer and Director

      Date: February 17, 2004
           ------------------



                                       17