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, 2000
                  ---------------------------------------------

                                       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.)


        5230 Carroll Canyon Road, Suite 310, San Diego, California 92121
        ----------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (858) 587-1060




Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports);  and (2) has been subject to such
filing requirements for the past 90 days.

Yes X      No
   --        ---

The number of shares  outstanding  of the  issuer's  only class of common  stock
($.01 par value) as of April 30, 2000 was 27,250,000 shares.


<PAGE>


                               SPORTS ARENAS, INC.
                                    FORM 10-Q
                          QUARTER ENDED MARCH 31, 2000

                                      INDEX

Part I - Financial Information:


Item 1.- Consolidated Condensed Financial Statements:

      Balance Sheets as of March 31, 2000 (unaudited)
         and June 30, 1999 ..........................................    1-2

      Unaudited Statements of Operations for the Three Months Ended
            March 31, 2000 and 1999 .................................     3

        Unaudited Statements of Operations for the Nine Months Ended
          March 31, 2000 and 1999 .....................................   4


      Unaudited Statements of Cash Flows for the Nine Months Ended
            March 31, 2000 and 1999 .................................     5

      Notes to Financial Statements .................................     6-10


Item 2.- Management's Discussion and Analysis of Financial Condition
            and Results of Operations ...............................    11-15

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

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


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



<PAGE>



                       SPORTS ARENAS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                      ASSETS

                                                       March 31,      June 30,
                                                         2000           1999
                                                     -----------     ----------
                                                     (Unaudited)

  Current assets:
     Cash and cash equivalents ...................   $   195,052    $   357,906
     Current portion of note receivable- affiliate        50,000         50,000
     Other receivables ...........................       197,291        116,404
     Inventories .................................       224,810        310,160
     Prepaid expenses ............................       295,401        199,668
                                                     -----------    -----------
        Total current assets .....................       962,554      1,034,138
                                                     -----------    -----------

  Receivables due after one year:
     Note receivable- affiliate, net .............        73,372        104,829
     Less current portion ........................       (50,000)       (50,000)
                                                     -----------    -----------
                                                          23,372         54,829
                                                     -----------    -----------
  Property and equipment, at cost:
     Land ........................................       678,000        678,000
     Buildings ...................................     2,461,327      2,461,327
     Equipment and leasehold and tenant
       improvements ..............................     2,251,869      2,137,993
                                                     -----------    -----------
                                                       5,391,196      5,277,320
        Less accumulated depreciation and
           amortization ..........................    (2,187,051)    (1,968,191)
                                                     -----------    -----------
         Net property and equipment ..............     3,204,145      3,309,129
                                                     -----------    -----------

  Other assets:
     Undeveloped land, at cost ...................     1,458,185      1,582,468
     Intangible assets, net ......................       258,198        294,423
     Investments .................................       604,172        618,853
     Other .......................................       139,300        104,980
                                                     -----------    -----------
                                                       2,459,855      2,600,724
                                                     -----------    -----------

                                                     $ 6,649,926    $ 6,998,820
                                                     ===========    ===========




                                       1
<PAGE>





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

                      LIABILITIES AND SHAREHOLDERS' DEFICIT


                                                       March 31,      June 30,
                                                         2000           1999
                                                     -----------     ----------
                                                     (Unaudited)

  Current liabilities:
     Assessment district obligation- in default ..   $ 2,761,130    $ 2,565,179
     Note payable, short-term ....................       200,000           --
     Current portion of long-term debt ...........     1,905,000        289,000
     Accounts payable ............................       674,547        453,203
     Accrued payroll and related expenses ........       240,917        164,877
     Accrued property taxes- in default ..........       659,343        582,859
     Accrued interest ............................        25,735         14,395
     Other liabilities ...........................       253,140        246,211
                                                     -----------    -----------
        Total current liabilities ................     6,719,812      4,315,724
                                                     -----------    -----------

  Long-term debt, excluding current portion ......     2,009,055      3,911,694
                                                     -----------    -----------

  Distributions received in excess of basis
     in investment ...............................    14,504,505     12,688,808
                                                     -----------    -----------

  Other liabilities ..............................       112,783         74,602
                                                     -----------    -----------

  Minority interest in consolidated subsidiary ...     1,712,677      1,712,677
                                                     -----------    -----------

  Commitments and contingencies (Note 5)

  Shareholders' deficit:
     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
     Accumulated deficit .........................   (18,119,963)   (15,415,742)
                                                     -----------    -----------
                                                     (16,117,414)   (13,413,193)
     Less note receivable from shareholder .......    (2,291,492)    (2,291,492)
                                                     -----------    -----------
       Total shareholders' deficit ...............   (18,408,906)   (15,704,685)
                                                     -----------    -----------

                                                     $ 6,649,926    $ 6,998,820
                                                     ===========    ===========






     See accompanying notes to consolidated condensed financial statements.



                                       2
<PAGE>




                     SPORTS ARENAS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                  THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                                  (Unaudited)

                                                         2000           1999
                                                     -----------    -----------
  Revenues:
     Bowling .....................................   $   793,718    $   784,665
     Rental ......................................       163,203        139,845
     Golf ........................................       318,987         86,468
     Other .......................................       119,256         30,520
     Other-related party .........................        43,085         53,354
                                                     -----------    -----------
                                                       1,438,249      1,094,852
                                                     -----------    -----------
  Costs and expenses:
     Bowling .....................................       521,409        480,788
     Rental ......................................        62,299         59,583
     Golf ........................................       422,101        299,298
     Development .................................        92,503         30,423
     Selling, general, and administrative ........       989,651        849,591
     Depreciation and amortization ...............        96,952         95,990
                                                     -----------    -----------
                                                       2,184,915      1,815,673
                                                     -----------    -----------

  Loss from operations ...........................      (746,666)      (720,821)
                                                     -----------    -----------

  Other income (charges):
     Investment income:
       Related party .............................         9,157          9,417
       Other .....................................         1,954            631
     Interest expense:
     Development activities ......................       (62,950)       (57,749)
       Other and amortization of finance costs ...       (84,083)       (89,229)
     Equity in income of investees ...............        45,569        107,537
                                                     -----------    -----------
                                                         (90,353)       (29,393)
                                                     -----------    -----------

  Net loss .......................................   $  (837,019)   $  (750,214)
                                                     ===========    ===========


  Basic and diluted net loss per common share
   (based on 27,250,000 weighted
    average common shares outstanding) ...........       ($0.03)      ($0.03)
                                                         =======      =======



     See accompanying notes to consolidated condensed financial statements.



                                       3
<PAGE>




                     SPORTS ARENAS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                   NINE MONTHS ENDED MARCH 31, 2000 AND 1999
                                  (Unaudited)

                                                         2000           1999
                                                     -----------    -----------
  Revenues:
     Bowling .....................................   $ 2,043,672    $ 2,111,999
     Rental ......................................       479,593        416,114
     Golf ........................................       600,518        232,242
     Other .......................................       180,003        110,392
     Other-related party .........................       128,419        159,478
                                                     -----------    -----------
                                                       3,432,205      3,030,225
                                                     -----------    -----------
  Costs and expenses:
     Bowling .....................................     1,557,673      1,485,310
     Rental ......................................       186,679        183,047
     Golf ........................................     1,026,914        793,930
     Development .................................       182,816        114,855
     Selling, general, and administrative ........     2,762,324      2,621,867
     Depreciation and amortization ...............       288,904        283,170
                                                     -----------    -----------
                                                       6,005,310      5,482,179
                                                     -----------    -----------

  Loss from operations ...........................    (2,573,105)    (2,451,954)
                                                     -----------    -----------

  Other income (charges):
     Investment income:
       Related party .............................        29,130        135,367
       Other .....................................        11,043         20,251
     Interest expense:
       Development activities ....................      (195,951)      (180,425)
       Other and amortization of finance costs ...      (263,568)      (256,453)
     Loss on sale of undeveloped land ............          (638)          --
     Equity in income of investees ...............       288,868        332,386
                                                     -----------    -----------
                                                        (131,116)        51,126
                                                     -----------    -----------

  Loss from operations before extraordinary loss .    (2,704,221)    (2,400,828)

  Extraordinary loss from early extinguishment of
     investee debt ...............................          --          (98,500)
                                                     -----------    -----------

  Net loss .......................................   $(2,704,221)   $(2,499,328)
                                                     ===========    ===========


  Basic and  diluted  net loss per  common  share
    (based on 27,250,000 weighted average
    common shares outstanding) from:
          Operations before extraordinary loss ...     ($ 0.10)       ($ 0.09)
          Extraordinary loss .....................         --             --
                                                       --------       --------
          Net loss ...............................     ($ 0.10)       ($ 0.09)
                                                       ========       ========



     See accompanying notes to consolidated condensed financial statements.


                                       4
<PAGE>




                     SPORTS ARENAS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                   NINE MONTHS ENDED MARCH 31, 2000 AND 1999
                                  (Unaudited)

                                                        2000            1999
                                                     -----------    -----------
  Cash flows from operating activities:
    Net loss .....................................   ($2,704,221)   ($2,499,328)
    Adjustments to reconcile net loss to the
      net cash used by operating activities:
        Amortization of deferred financing costs .         6,840         11,337
        Depreciation and amortization ............       288,904        283,170
        Equity in income of investees ............      (288,868)      (233,886)
        Deferred income ..........................        36,000           --
        Loss on sale of undeveloped land .........           638           --
        Interest income accrued on note
         receivable from shareholder .............          --         (104,286)
        Interest accrued on assessment
         district obligations ....................       195,951        180,425

      Changes in assets and liabilities:
        Decrease in receivables ..................       (80,887)        70,189
        (Increase) decrease in inventories .......        85,350        (35,877)
        (Increase) decrease in prepaid expenses ..       (95,733)        93,433
        Increase (decrease) in accounts payable ..       221,344        (82,307)
        Increase in accrued expenses .............       170,793        210,093
        Other ....................................       (15,840)        20,038
                                                     -----------    -----------
          Net cash used by operating activities ..    (2,179,729)    (2,086,999)
                                                     -----------    -----------

  Cash flows from investing activities:

     Decrease in notes receivable ................        31,457         41,609
     Capital expenditures ........................      (130,769)      (123,820)
     Increase in development costs on
       undeveloped land ..........................       (66,717)          --
     Proceeds from sale of undeveloped land ......       190,362           --
     Payments to holder of minority interest .....          --          (50,000)
     Contributions to investees ..................       (43,319)          --
     Distributions from investees ................     2,122,500      1,179,671
                                                     -----------    -----------
          Net cash provided by investing activities    2,103,514      1,047,460
                                                     -----------    -----------

  Cash flows from financing activities:

     Scheduled principal payments on long-term debt     (210,712)      (195,813)
     Extinguishment of long-term debt ............       (75,927)          --
     Proceeds from note payable ..................       750,000           --
     Payment of note payable .....................      (550,000)          --
     Other .......................................          --          (11,155)
                                                     -----------    -----------
         Net cash used by financing activities ...       (86,639)      (206,968)
                                                     -----------    -----------

  Net decrease in cash and cash equivalents ......      (162,854)    (1,246,507)
  Cash and cash equivalents, beginning of year ...       357,906      1,416,460
                                                     -----------    -----------
  Cash and cash equivalents, end of year .........   $   195,052    $   169,953
                                                     ===========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental  schedule of non-cash investing and financing  activities:  In July
   1999, the Company discarded fully depreciated equipment with a cost and
   accumulated depreciation of $16,893.

     See accompanying notes to consolidated condensed financial statements.


                                       5
<PAGE>

                           SPORTS ARENAS, INC. AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                       MARCH 31, 2000 AND 1999 (Unaudited)

1.    The  information  furnished  reflects  all  adjustments  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.

2.    Due  to  the  seasonal   fluctuations   of  the  bowling  and  golf  shaft
      manufacturing  operations,  the financial  results for the interim periods
      ended March 31, 2000 and 1999 are not necessarily indicative of operations
      for the entire year.

3. Investments:

   (a) Investments consist of the following:

                                                   March 31,     June 30,
                                                     2000          1999
                                                  -----------   -----------
         Vail Ranch Limited Partnership
          (equity method)                          $  566,246    $  580,927
         All Seasons Inns, La Paz (cost basis)         37,926        37,926
                                                  -----------   -----------
            Total                                  $  604,172    $  618,853
                                                  ===========   ===========

        Investment in UCV, L.P. classified as
          liability- Distributions received
          in excess of basis in investment        $14,504,505   $12,688,808
                                                  ===========   ===========

     The  following  is a  summary  of  the  equity  in  income  (loss)  of  the
     investments  accounted  for by the equity  method for the nine months ended
     March 31, 2000 and 1999, before the  extraordinary  loss of $98,500 related
     to UCV , L.P. in 1999:

                                               2000          1999
                                            ---------     ---------
        UCV, L.P.                           $ 346,868     $ 362,386
        Vail Ranch Limited Partnership        (58,000)      (30,000)
                                            ---------     ---------
                                            $ 288,868     $ 332,386
                                            =========     =========

     The following is a summary of distributions received from investees:

                                               2000         1999
                                           -----------   ----------
        UCV, L.P.                          $ 2,122,500   $  533,500
        Vail Ranch Limited Partnership             --       646,171
                                           -----------   ----------
                                           $ 2,122,500   $1,179,671
                                           ===========   ==========

   (b) Investment in UCV, L.P.

     The operating  results of this investment are included in the  accompanying
     consolidated   condensed   statements   of   operations   based   upon  the
     partnership's  fiscal  year (March 31).  Summarized  information  from UCV,
     L.P.'s (UCV)  unaudited  statements  of income for the  nine-month  periods
     ended December 31, 1999 and 1998 are as follows:

                                                1999         1998
                                             ----------   ----------
          Revenues .......................   $3,589,000   $3,460,000
          Operating and general and
            administrative costs .........    1,262,000    1,142,000
          Depreciation ...................       20,000       21,000
          Interest expense ...............    1,613,000    1,572,000
          Income before extraordinary item      694,000      725,000
          Extraordinary loss from early ..         --        197,000
          extinguishment of debt
          Net income .....................      694,000      528,000


                                       6
<PAGE>
     On October  14,  1999,  UCV  increased  the loan  amount and  modified  its
     existing  long-term  loan  agreement.  The loan amount was  increased  from
     $25,000,000 to $29,450,000 of which the lender is holding back $410,510 for
     capital  replacements.  The interest  rate on the  original  loan amount is
     unchanged.  The interest rate on the additional loan amount, which is based
     on the additional loan amount less the hold back for capital  replacements,
     is the greater of ten percent or a base rate plus 4.75 percent  (10-5/8% at
     March 31, 2000).  Monthly payments of interest only are due until May 2000,
     whereupon a monthly  payment of  principal  and  interest is due based on a
     25-year  amortization  period. In addition to the monthly payment, UCV will
     pay a  quarterly  principal  payment to be applied to the  additional  loan
     amount  equal to fifty  percent of UCV's cash flow after debt  service  and
     capital replacement expenditures.  The loan is due October 15, 2001 but may
     be extended to October 15, 2002 upon  payment of a 1/4 percent loan fee and
     meeting certain  financial  criteria.  The loan may not be prepaid prior to
     January 1, 2001.  On  maturity,  a fee of up to  $294,500  may be due under
     certain  circumstances.  The proceeds of the additional loan of $4,039,490,
     which is net of the capital  replacement  hold back,  were used to pay loan
     costs of approximately $125,000 and make distributions to partners of which
     the Company received $1,757,000.

4. Notes payable:

   On August 24, 1999 and  September  25,  1999 the Company  borrowed a total of
   $550,000 on an unsecured  note  payable from its partner in UCV.  Payments of
   interest  only were due monthly at a base rate plus 1 percent  (9-1/4%).  The
   loan was paid on October 14, 1999 from the Company's  distribution  from UCV.
   On March 31, 2000 the Company borrowed  $200,000 on an unsecured note payable
   from its partner in UCV. The Company borrowed an additional $200,000 in April
   2000 and $300,000 in May 2000  pursuant to this loan  agreement.  Payments of
   interest only are due monthly at a base rate plus 1 percent (10-1/2% at March
   31, 2000).

5. Contingencies:

   (a)  RCSA Holdings,  Inc.  (RCSA),  a wholly owned subsidiary of the Company,
        owns a 50 percent  managing  general  partnership  interest  in Old Vail
        Partners,  a  general  partnership  (OVPGP),  which  owns  33  acres  of
        undeveloped  land in Temecula,  California.  On September 23, 1999,  the
        other partner assigned his partnership  interest to Downtown Properties,
        Inc., a wholly owned  subsidiary of the Company.  Once the legal matters
        described below are resolved,  OVPGP is obligated to assign its interest
        in the 33 acres of land to Old Vail Partners, L.P. (OVP). RCSA and OVGP,
        Inc.,  wholly  owned  subsidiaries  of the  Company,  own a combined  50
        percent general and limited partnership interest in OVP. The 33 acres of
        land owned by OVPGP are located within a special assessment  district of
        the County of  Riverside,  California  (the County) which was created to
        fund and develop  roadways,  sewers,  and other required  infrastructure
        improvements  in the area  necessary  for the  owners to  develop  their
        properties. Property within the assessment district is collateral for an
        allocated  portion of the bonded debt that was issued by the  assessment
        district to fund the  improvements.  The annual  payments  (required  in
        semiannual   installments)   due   related  to  the   bonded   debt  are
        approximately  $144,000. The payments continue through the year 2014 and
        include  interest  at  approximately  7-3/4  percent.   OVPGP  has  been
        delinquent in the payment of property taxes and assessments for the last
        seven years. The property is currently  subject to default  judgments to
        the County of Riverside,  California totaling  approximately  $2,338,277
        regarding  delinquent  assessment  district  payments  ($1,678,934)  and
        property taxes ($659,343).

        The County had  scheduled the 33 acres for public sale for the defaulted
        property taxes on September 27, 1999. OVPGP had unsuccessfully attempted
        to  negotiate a payment plan with the County  subject to the  successful
        resolution of the zoning problems with the property  described below. On
        September 23, 1999 OVPGP filed a petition for relief under Chapter 11 of
        the federal  bankruptcy laws in the United States  Bankruptcy Court. The
        primary claim affected by this action is the County's  secured claim for
        delinquent taxes and assessment  district payments.  OVPGP's plan was to
        use the relief to continue its efforts to negotiate a settlement  of the
        zoning  issues and  restore  the  economic  value of the  property.  The
        bankruptcy  proceeding  was  dismissed  on February 15, 2000 based on an
        agreement  with OVPGP.  This allows the County of  Riverside  to proceed
        with a public sale of the property  within 45 days after giving  notice.
        On May 12,  2000,  OVPGP  received a notice that a public sale will take
        place on June 26, 2000 if delinquent  property taxes of $640,806 are not


                                       7
<PAGE>

        paid by June 23, 2000.  OVPGP is attempting  to raise private  equity or
        debt to satisfy the County's claims prior to the public sale. OVPGP will
        continue its efforts to restore the zoning.

        The delinquent  principal,  interest and penalties  ($1,678,934) and the
        remaining  principal  balance of the allocated portion of the assessment
        district  bonds  ($1,082,196)  are  classified as  "Assessment  district
        obligation- in default" in the  consolidated  balance sheet at March 31,
        2000.  In addition,  the  consolidated  balance  sheet at March 31, 2000
        includes $659,343 of delinquent  property taxes and late fees related to
        the 33-acre parcel.

        In November  1993,  the City of Temecula  adopted a general  development
        plan  that  designated  the  property  owned by OVPGP  as  suitable  for
        "professional   office"  use,   which  is  contrary  to  its  zoning  as
        "commercial"  use. As part of the  adoption  of its general  development
        plan, the City of Temecula adopted a provision that, until the zoning is
        changed on  properties  affected by the general  plan,  the general plan
        shall prevail when a use  designated by the general plan  conflicts with
        the  existing  zoning on the  property.  The  result is that the City of
        Temecula has effectively down-zoned OVPGP's property from a "commercial"
        to  "professional  office" use.  The  property is subject to  assessment
        district  obligations  that  were  allocated  in 1989  based on a higher
        "commercial"  use. Since the  assessment  district  obligations  are not
        subject to  reapportionment  as a result of re-zoning,  a  "professional
        office" use is not economically  feasible due to the  disproportionately
        high  allocation  of  assessment  district  costs.  OVPGP has filed suit
        against the City of Temecula  claiming that, if the effective  re-zoning
        is valid,  the  action is a taking  and  damaging  of  OVPGP's  property
        without  payment  of just  compensation.  OVPGP is  seeking  to have the
        effective  re-zoning  invalidated and an unspecified  amount of damages.
        OVPGP has previously  suffered  adverse outcomes in other suits filed in
        relation to this matter.  A stipulation  was entered that dismissed this
        suit  without  prejudice  and agreed to toll all  applicable  statute of
        limitations while OVPGP and the City of Temecula attempted to informally
        resolve this litigation. The outcome of this litigation is uncertain. If
        the City of  Temecula is  successful  in its  attempt to  down-zone  the
        property, the value of the property may be significantly impaired.

   (b)  The Company is involved in other various routine litigation and disputes
        incident to its business. In the management's opinion,  based in part on
        the advice of legal counsel,  none of these matters will have a material
        adverse effect on the Company's financial position.

6.   Commitments-  On  February  19,  2000,  Penley  Sports  signed  a ten  year
     operating  lease  agreement,  which  commenced  April 1, 2000, for a 38,025
     square  foot space to  relocate  its  manufacturing  operations.  The lease
     provides for fixed annual minimum  rentals in addition to taxes,  insurance
     and  maintenance  for each of the years  ending June 30 as  follows:  2000-
     $46,000, 2001- $221,000,  2002- $228,000,  2003- $234,000,  2004- $241,000,
     2005- $247,000, thereafter- $1,171,000.  Commencing April 1, 2005 the lease
     provides for adjustments to the rent based on increases in a consumer price
     index,  not to exceed six percent.  The lease also provides for two options
     that each extend the lease for an additional  five years.  The rent for the
     first year of the first  option  will be based on a five  percent  increase
     over the previous years rent.  Subsequent years rent will be adjusted based
     on increases in the consumer price index.

7.   Reclassifications-  Certain  reclassifications  have been made to the prior
     year financial statements to conform to the classifications used in 2000.

8. Business segment information:

   The Company operates principally in four business segments:  bowling centers,
   commercial  real  estate  rental,  real  estate  development,  and golf shaft
   manufacturing. The golf shaft manufacturing segment commenced in January 1997
   when the Company  acquired a small golf shaft  manufacturer.  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.


                                       8
<PAGE>

   The following is  summarized  information  about the Company's  operations by
   business segment.

<TABLE>
<CAPTION>
                                                  Real Estate   Real Estate                   Unallocated
                                      Bowling        Rental     Development        Golf        And Other       Totals
                                   ------------   ------------  ------------   ------------   ------------   ------------
NINE MONTHS ENDED MARCH 31, 2000:
--------------------------------
<S>                                <C>            <C>           <C>            <C>            <C>            <C>
Revenues .......................   $ 2,043,672    $   527,593   $      --      $   600,518    $   308,422    $ 3,480,205
Depreciation and amortization...        78,561        104,226          --           69,204         36,913        288,904
Interest expense ...............       107,181        125,020       196,972         10,979         19,367        459,519
Equity in income (loss) of
  investees ....................          --          346,868       (58,000)          --             --          288,868
Loss on sale ...................          --             --            (638)          --             --             (638)
Segment profit (loss) ..........      (350,208)       436,536      (455,426)    (2,078,018)      (297,278)    (2,744,394)
Investment income ..............                                                                                  40,173
Loss from operations
 before extraordinary loss .....                                                                              (2,704,221)

NINE MONTHS ENDED MARCH 31, 1999:
--------------------------------
Revenues .......................   $ 2,111,999    $   462,173    $     --      $   232,242    $   269,870    $ 3,076,284
Depreciation and .amortization..        80,177         99,674          --           64,037         39,282        283,170
Interest expense ...............       111,795         98,880       185,655         17,296         23,252        436,878
Equity in income (loss) of
 investees......................          --          362,386       (30,000)          --             --          332,386
Segment profit (loss) ..........      (203,627)       426,958      (330,510)    (2,122,464)      (326,803)    (2,556,446)
Investment income ..............                                                                                 155,618
Loss from operations
 before extraordinary loss .....                                                                              (2,400,828)
</TABLE>
                                      1999         1998
                                  -----------   -----------
Revenues per segment schedule ..  $3,480,205    $3,076,284
Intercompany rent eliminated ...     (48,000)      (46,059)
                                  -----------   -----------
Consolidated revenues             $3,432,205    $3,030,225
                                  ===========   ===========

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000:
--------------------------------
<S>                                <C>            <C>           <C>            <C>            <C>            <C>
Revenues .......................   $   793,718    $   179,403   $      --      $   318,987    $   162,341    $ 1,454,449
Depreciation and amortization...        25,928         35,126          --           23,634         12,264         96,952
Interest expense ...............        35,045         41,592        62,950          3,073          4,373        147,033
Equity in income (loss) of
 investees .....................          --           78,569       (33,000)          --             --           45,569
Segment profit (loss) ..........        (2,892)       111,955      (193,453)      (739,806)       (23,934)      (848,130)
Investment income ..............                                                                                  11,111
Loss from operations
 before extraordinary loss .....                                                                                (837,019)

THREE MONTHS ENDED MARCH 31, 1999:
--------------------------------
Revenues .......................   $   784,665    $   155,397   $      --      $    86 468    $    83,874    $ 1,110,404
Depreciation and amortization...        27,062         34,087          --           21,666         13,175         95,990
Interest expense ...............        42,171         32,862        59,529          5,181          7,235        146,978
Equity in income (loss) of
 investees .....................          --          117,537       (10,000)          --             --          107,537
Segment profit (loss) ..........        33,126        141,402       (99,952)      (735,055)       (99,783)      (760,262)
Investment income ..............                                                                                  10,048
Loss from operations
 before extraordinary loss .....                                                                                (750,214)
</TABLE>
                                        2000         1999
                                    -----------   -----------
Revenues per segment schedule ..    $1,454,449    $1,110,404
Intercompany rent eliminated ...       (16,200)      (15,552)
                                    -----------   -----------
Consolidated revenues ..........    $1,438,249    $1,094,852
                                    ===========   ===========


                                       9
<PAGE>



9. Liquidity

   The  accompanying  consolidated  condensed  financial  statements  have  been
   prepared  assuming the Company will continue as a going concern.  The Company
   has  suffered  recurring  losses  from  operations,  has  a  working  capital
   deficiency,  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 either  refinancing  or selling  certain real estate
   assets or increases in the sales volume and  profitability of its subsidiary,
   Penley Sports. The consolidated condensed 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.



                                       10
<PAGE>

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

                         Liquidity and Capital Resources
                         -------------------------------

Excluding  the  balance  of  the  assessment-district-obligation-in-default  and
property  taxes in default  related to the same  property  which are included in
current liabilities,  the Company has a working capital deficit of $2,336,785 at
March 31, 2000,  which is a $2,203,237  increase from the  similarly  calculated
working  capital  deficit of $133,548 at June 30, 1999.  The decrease in working
capital is  primarily  attributable  to an increase  in the  current  portion of
long-term debt related to a $1,725,999 note payable that matures in August 2000.
Cash used by operating  activities for the nine months ended March 31, 2000 also
reduced  working  capital,  however this was partially  offset by  distributions
received from investees. The following is a schedule of the cash provided (used)
before changes in assets and liabilities, segregated by business segments:

                                   2000          1999         Change
                                 ----------    ----------    ----------
     Bowling .................   $ (270,000)   $ (121,000)   $ (149,000)
     Rental ..................      199,000       169,000        30,000
     Golf ....................   (2,009,000)   (2,058,000)       49,000
     Development .............     (201,000)     (120,000)      (81,000)
     General corporate expense
       and other .............     (184,000)     (232,000)       48,000
                                 ----------    ----------    ----------
     Cash used by continuing
       operations ............   (2,465,000)   (2,362,000)     (103,000)
     Capital expenditures, net
       of financing .........      (131,000)     (124,000)       (7,000)
     Principal payments on
       long-term debt ........     (211,000)     (196,000)      (15,000)
                                 ----------    ----------    ----------
     Cash used ...............   (2,807,000)   (2,682,000)     (125,000)
                                 ==========    ==========    ==========

     Distributions received
      from investees .........    2,122,000     1,180,000       942,000
                                 ==========    ==========    ==========

The  Company has been unable to  generate  sufficient  cash flow from  operating
activities to meet  scheduled  principal  payments on long-term debt and capital
replacement  needs  during  the last  three  years.  It has  used  its  share of
distributions  from investees and proceeds from refinancings and sales of assets
to fund these deficits.

As described in Note 5 of the Notes to Consolidated Financial Statements,  OVPGP
is  delinquent in the payment of special  assessment  district  obligations  and
property  taxes on 33 acres of undeveloped  land. The annual  obligation for the
assessment district is approximately  $144,000. The County of Riverside obtained
judgments for the default in the delinquent  assessment  district payments.  The
amounts due to cure the judgment for the default under the  assessment  district
obligation on the 33 acre parcel at March 31, 2000 was approximately $1,679,000.
The principal  balance of the allocated  portion of the bonds  ($1,384,153 as of
March 31, 2000), and delinquent  interest and penalties  ($1,376,977 as of March
31, 2000) are classified as "Assessment  district obligation- in default" in the
consolidated  balance  sheet.  In  addition,   accrued  property  taxes  in  the
consolidated  balance sheet include  $659,343 of delinquent  property  taxes and
late fees as of March 31, 2000. The Company  estimates the value of this land is
approximately  $4,000,000 to $5,000,000 if the property was zoned  "commercial".
This  value is in  addition  to the  non-delinquent  portion  of the  assessment
district  obligation  ($1,082,196  at March 31, 2000) that a buyer would assume.
However,  the City of Temecula has adopted a general development plan as a means
of down-zoning the property to a lower use and, if successful, may significantly
impair the value of the  property.  The Company is contesting  this action.  The
County had  scheduled  the 33 acres for public sale for the  defaulted  property
taxes on September 27, 1999. OVPGP had  unsuccessfully  attempted to negotiate a
payment plan with the County subject to the successful  resolution of the zoning
problems  with the  property.  On September  23, 1999 OVPGP filed a petition for
relief  under  Chapter 11 of the federal  bankruptcy  laws in the United  States
Bankruptcy  Court.  The primary  claim  affected by this action is the  County's
secured claim for delinquent  taxes and assessment  district  payments.  OVPGP's
plan was to use the relief to continue its efforts to negotiate a settlement  of
the zoning issues and restore the economic value of the property. The bankruptcy
proceeding  was dismissed on February 15, 2000 based on an agreement with OVPGP.
This  allows  the  County of  Riverside  to  proceed  with a public  sale of the
property within 45 days after giving notice.  On May 12, 2000,  OVPGP received a
notice  that a public  sale  will  take  place on June  26,  2000 if  delinquent

                                       11
<PAGE>

property taxes of $640,806 are not paid by June 23, 2000. OVPGP is attempting to
raise private equity or debt to satisfy the County's  claims prior to the public
sale. OVPGP will continue its efforts to restore the zoning.  As a result of the
judgment  and  the  down-zoning  of  the  property,  the  recoverability  of the
remaining $1,458,185 carrying value of this property is uncertain.

As described in Note 3 of the Notes to  Consolidated  Financial  Statements,  on
October  14,  1999,  UCV  borrowed  additional  funds from its  existing  lender
pursuant to a modification  of its long-term  note payable.  The proceeds of the
additional  financing,  after  loan  costs,  were  used  to  make  approximately
$3,700,000  of  distributions  to the  partners  in UCV,  of which  the  Company
received  $1,757,000,   and  establish  working  capital  for  UCV's  additional
redevelopment  planning  costs.  Management  estimates  that  the  debt  service
(principal and interest) for UCV's  additional  borrowing will be  approximately
$800,000 annually.

A $1,725,999 note payable  collateralized by the real property underlying one of
the  bowling  centers  matures in August  2000 and the lender has  notified  the
Company that it will not extend the due date.  The Company is uncertain  whether
it will be  successful in obtaining  financing to refinance  the  property.  The
Company is currently evaluating alternatives, including selling the property for
the purpose of paying the note  payable.  The carrying  value of the property at
March 31, 2000 was approximately $1,566,000.

Excluding the amounts due for the delinquent  property  taxes  ($641,000) on the
undeveloped  land in  Temecula,  and the  estimated  costs to  construct  tenant
improvements  and  purchase  additional  equipment at the new factory for Penley
Sports  ($350,000  to  $450,000),  management  estimates  negative  cash flow of
$200,000 to $400,000 for the remaining  quarter of the year ending June 30, 2000
from operating  activities after adding the proceeds of additional advances from
short  term  borrowings  in  April  and May 2000 and  deducting  normal  capital
expenditures  and  principal  payments  on  notes  payable.  Management  expects
continuing  cash flow deficits  until Penley Sports  develops  sufficient  sales
volume to become  profitable.  However,  there can be no assurances  that Penley
Sports  will  ever  achieve  profitable  operations.   Management  is  currently
evaluating  other sources of working  capital from private equity or loans,  the
sale of  undeveloped  land in  Temecula,  the sale of its  office  building,  or
obtaining  additional investors in Penley Sports to provide sufficient funds for
the expected  future cash flow  deficits.  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.

               "SAFEHARBOR" 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
nine and three-month periods ended March 31, 2000 to the same period in 1999 and
a discussion of the significant changes:

Nine months ended March 31, 2000 versus 1999:
-----------------------------------------------
<TABLE>
<CAPTION>
                                                  Rental    Real Estate               Unallocated
                                      Bowling    Operation  Development     Golf       And Other     Totals
                                    ---------    ---------   ---------    ---------    ---------    ---------
<S>                                 <C>          <C>         <C>          <C>          <C>          <C>
 Revenues .......................   $ (68,327)   $  65,420   $    --      $ 368,276    $  38,552    $ 403,921
 Costs ..........................      72,363        3,632      67,961      232,984         --        376,940
 SG&A-direct ....................       3,269         --          --         76,996       62,133      142,398
 SG&A-allocated .................       8,852        6,000      17,000       15,000      (46,852)        --
 Depreciation and amortization ..      (1,616)       4,552        --          5,167       (2,369)       5,734
 Interest expense ...............      (4,614)      26,140      11,317       (6,317)      (3,885)      22,641
 Equity in investees ............        --        (15,518)    (28,000)        --           --        (43,518)
 Loss on sale ...................        --           --          (638)        --           --           (638)
 Segment profit (loss) ..........    (146,581)       9,578    (124,916)      44,446       29,525     (187,948)
 Investment income ..............                                                                    (115,445)
 Loss from operations before
    extraordinary loss ..........                                                                    (303,393)
</TABLE>

Three months ended March 31, 2000 versus 1999:
-----------------------------------------------
<TABLE>
<CAPTION>
                                                   Rental    Real Estate               Unallocated
                                      Bowling     Operation  Development     Golf       And Other     Totals
                                     ---------    ---------   ---------    ---------    ---------    ---------
<S>                                 <C>        <C>                        <C>          <C>          <C>
 Revenues .......................   $   9,053  $    24,006        --      $ 232,519    $  78,467    $ 344,045
 Costs ..........................      40,621        2,716      62,080      122,803         --        228,220
 SG&A-direct ....................      11,568         --          --        115,607       13,533      140,708
 SG&A-allocated .................       1,142        2,000       5,000       (1,000)      (7,142)        --
 Depreciation and amortization ..      (1,134)       1,039        --          1,968         (911)         962
 Interest expense ...............      (7,126)       8,730       3,421       (2,108)      (2,862)          55
 Equity in investees ............        --        (38,968)    (23,000)        --           --        (61,968)
 Segment profit (loss) ..........     (36,018)     (29,447)    (93,501)      (4,751)      75,849      (87,868)
 Investment income ..............                                                                       1,063
 Loss from operations before
    extraordinary loss ..........                                                                     (86,805)
</TABLE>

   Note:  The change in rental  revenues  and SG&A  expenses  do not include the
   effect of the net change in  elimination of  intercompany  rent of $1,941 and
   $648 for the nine and three month periods respectively.

BOWLING OPERATIONS:
-------------------
Bowling  revenues  decreased by 3% in the nine month period and  increased 1% in
the three month period.  The number of league games bowled continued to decrease
at each of the bowling  centers by  approximately  20% for each of the  periods.
This  decrease  is being  partially  offset by an increase  in  open-play  games
bowled. In the three month period ended March 31, 2000 the increase in open play
and food and beverage income at one of the bowling centers exceeded the decrease
of revenue from league play. This bowling center is located in a shopping center
that just  completed a major  renovation  and  "reopened"  with two major retail
stores. As a result,  the bowling center has experienced a significant  increase
in open play since the  "reopening".  Although  management  forecasts  continued
increases in open play at the bowling center, the amount of the increase and how
long it will continue is uncertain.

                                       13
<PAGE>
Bowl  costs  increased  by 5%  and 8% in  the  nine  and  three  month  periods,
respectively,  primarily  due to due to increases  in supplies  and  maintenance
expenses.  Most  of  the  increase  in  maintenance  expenses  related  to  lane
resurfacing or painting the exterior of a building,  which are not indicative of
a trend of increases in expenses to be annualized.  Direct selling,  general and
administrative  expense  increased by 8% in the three month period primarily due
to  increased  advertising  expense  related  to  one  of  the  bowling  centers
participating  in a joint cable  television  advertising  program.  There was no
significant change in this category of expense for the nine month period.

RENTAL OPERATIONS:
------------------
Rental revenues increased  approximately 15% and 17% in the nine and three month
periods,  respectively,  primarily  due to a 14% increase in the average  rental
rate at the  Company's  office  building.  Interest  expense  increased due to a
refinancing  in May 1999 which  increased  long-term  debt  associated  with the
rental segment by approximately $827,000.

The  equity in  income of UCV  decreased  in the  three and nine  month  periods
primarily due to an increase in UCV's interest  expense ($41,000 and $126,000 in
the nine and three month  periods,  respectively).  The increase  related to the
$4,039,490  additional advance UCV borrowed from its lender on October 14, 1999.
The increased interest expense from that date to December 31, 1999 was partially
offset by the decreased  interest expense from April 1, 1999 to October 14, 1999
because of a decrease in the interest  rate from a prior  financing in May 1998.
Otherwise,  UCV's  rents  increased  by 4% and 6% in the  nine and  three  month
periods,  respectively  and expenses  increased 10% and 4% in the nine and three
month  periods,  respectively.  The  increase in expenses  related  primarily to
increases in water and maintenance  expenses.  Management believes the increases
in revenues  and  expenses are  indicative  of a trend for the  remainder of the
fiscal year.

REAL ESTATE DEVELOPMENT OPERATIONS:
-----------------------------------
Development  costs and expenses  primarily  consists of legal costs  incurred to
contest the City of Temecula's  attempts to down-zone the undeveloped land owned
by OVPGP.  Interest expense related to development  activities primarily relates
to interest accrued on the past due and current assessment district  obligations
of OVPGP.

GOLF OPERATIONS:
----------------
Sales during the periods ended March 31, 2000 and 1999 were small because Penley
has  not yet  developed  significant  sales  with  golf  club  manufacturers  or
distributors.  The sales were  principally to custom golf shops during the first
two quarters of the year.  During the third quarter ended March 31, 2000, Penley
commenced sales to two of the largest golf component  distributors.  Most of the
increase in sales in the three month and nine month periods ended March 31, 2000
related to sales to these distributors.

Operating  expenses of the golf segment  consisted of the  following in 2000 and
1999:
                                    Three Months           Nine Months
                                 -------------------   -------------------
                                   2000       1999       2000       1999
                                 --------   --------   ---------   --------
    Costs of goods sold and
        manufacturing overhead   $367,000   $234,000   $ 841,000   $ 633,000
    Research & development ...     55,000     65,000     186,000     161,000
                                 --------   --------   ---------   ---------
         Total golf costs ....    422,000    299,000   1,027,000     794,000
                                 ========   ========   =========   =========

    Marketing & promotion ....    493,000    404,000   1,245,000   1,173,000
    Administrative-direct ....     53,000     26,000     115,000     110,000
                                 --------   --------   ---------   ---------
         Total SG&A-direct ...    546,000    430,000   1,360,000   1,283,000
                                 ========   ========   =========   =========

    Allocated corporate costs      64,000     65,000     211,000     196,000
                                 ========   ========   =========   =========

Total golf costs increased primarily due to an increase in the amount of cost of
goods sold  related to  increased  sales,  an increase in the cost of  prototype
shafts developed during the periods, and an increase in the payroll for research
and development. Marketing and promotion expenses increased during the three and
nine month  periods  ended  March 31, 2000  primarily  due  increases  in player
sponsorship costs and promotional goods.
                                       14
<PAGE>

UNALLOCATED AND OTHER:
----------------------
Other revenues decreased in the nine and three month periods primarily due to an
increase in leasing commission income. The increase in leasing commission income
is not indicative of a trend for the year.

Selling,  general and  administrative  expense  increased  in the nine and three
month periods  because of increased  payroll costs in 2000. This increase in the
corporate segment expenses resulted in an increase in the costs allocated to the
business segments.

Investment  income  decreased  in the nine month  period  ended  March 31,  2000
primarily  due to  discontinuing  the  accrual  of  interest  income on the note
receivable from shareholder effective December 31, 1998 (decrease of $104,000).

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------
The Company is exposed to market risk primarily due to  fluctuations in interest
rates.  The  Company  utilizes  both fixed  rate and  variable  rate  debt.  The
following  table  presents  principal  maturities and related  weighted  average
interest rates of the Company's fixed rate and variable rate debt for the fiscal
years ended June 30.

<TABLE>
<CAPTION>
                          2000          2001         2002      2003        2004      Thereafter        Total
                       ---------    -----------    --------   --------   --------    -----------    -----------
<S>                    <C>          <C>            <C>        <C>        <C>         <C>            <C>
  Fixed rate debt ..   $  54,000    $ 1,796,000    $ 39,000   $ 21,000   $ 22,000    $ 1,879,000    $ 3,811,000
  Weighted average
     interest rate .       8.2%           8.2%        8.2%       8.2%       8.2%           8.2%           8.2%

  Variable rate debt   $ 219,000    $    78,000    $  6,000       --          --             --      $  303,000
  Weighted average
     interest rate .      11.1%          11.8%       11.8%        --          --             --           11.8%
</TABLE>

The amounts for 2000 relate to the three months ending June 30, 2000.

The  Company's  unconsolidated  subsidiary,  UCV,  has  variable  rate  debt  of
approximately $29,040,000 after the additional advances under the loan agreement
on  October  14,  1999 for  which the  weighted  average  interest  rate was 7.2
percent. The principal maturities for each of UCV's fiscal years ending March 31
is: 2000- $230,000; 2001- $609,000; 2002- $28,201,000; and $29,040,000 in total.

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


                                       15
<PAGE>




                                     PART II

                                OTHER INFORMATION

ITEM 1. Legal Proceedings

        As of March 31, 2000,  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, 1999.

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

        On December 23, 1999 the Company held its annual shareholder  meeting in
         which the following item was voted upon:

                                          Tabulation of Votes
                                  --------------------------------
       Election of Directors:        For        Against    Abstain
       ----------------------     ----------    -------    -------
          Harold S. Elkan         24,118,926       0        13,849
          Steven R. Whitman       24,122,231       0        10,544
          Patrick D. Reiley       24,122,706       0        10,069
          James E. Crowley        24,122,756       0        10,019
          Robert A. MacNamara     24,122,781       0         9,994


ITEM 5. Other Information

          NONE

ITEM 6. Exhibits & Reports on Form 8-K

     (a) Exhibits: Financial Date Schedule

     (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:   May 19, 2000
            ---------------


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



     Date: May 19, 2000
           ------------
                                       17
<PAGE>