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                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549

                                     FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                        THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                           COMMISSION FILE NO. 0-27192

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

                       Delaware                      52-1930707
          (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)          Identification No.)

                                  One Tabor Center
                        1200 Seventeenth Street, Suite 2800
                              Denver, Colorado  80202
               (Address and Zip Code of principal executive offices)

          Registrant's telephone number, including area code:
                           (303) 626-7000

          Securities registered pursuant to Section 12(b) of the Act:

                                                Name of Each Exchange on Which
          Title of Each Class                             Registered
          -------------------                   ------------------------------
          Common Stock, par value $.01          NASDAQ National Market

          Securities registered pursuant to Section 12(g) of the Act:  None.

     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 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.  X  Yes        No
                                               ---        ---

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

     Aggregate market value of voting stock held by non-affiliates of the
Registrant was $320,275,000 based on a price of $10.78 per share, which was
the average of the bid and asked prices of such stock on March 3, 1998, as
reported on the NASDAQ National Market reporting system.

     29,755,600 shares of Common Stock were outstanding on March 3, 1998.

                        DOCUMENTS INCORPORATED BY REFERENCE

The registrant's definitive proxy statement with respect to its annual
meeting of stockholders is incorporated herein to Part III of this document
by reference.

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                                  TABLE OF CONTENTS
                                                                        PAGE
PART I
ITEM 1.  BUSINESS                                                         3
         GENERAL INFORMATION                                              3
         MULTIMEDIA DISTRIBUTION                                          4
           ON COMMAND CORPORATION                                         4
              GENERAL                                                     4
              OCC OPERATING AND GROWTH STRATEGY                           5
              SERVICES AND PRODUCTS                                       6
              TECHNOLOGY                                                  8
              SALES AND MARKETING                                         9
              INSTALLATION AND SERVICE OPERATIONS                        10
              HOTEL CONTRACTS                                            10
              SUPPLIERS                                                  10
              COMPETITION                                                11
              INTERNATIONAL MARKETS                                      13
              INVESTMENT IN OCC                                          13
           ASCENT NETWORK SERVICES                                       14
         ENTERTAINMENT                                                   15
           COLORADO AVALANCHE AND DENVER NUGGETS                         15
              GENERAL                                                    15
                SOURCES OF REVENUE                                       16
                  TICKET SALES                                           16
                  TELEVISION, CABLE AND RADIO
                   BROADCASTING                                          17
                  OTHER SOURCES                                          17
                NBA AND NHL GOVERNANCE                                   18
                COLLECTIVE BARGAINING                                    19
                COMPETITION                                              19
                BROADCAST OPERATIONS                                     20
           THE PEPSI CENTER                                              20
           BEACON COMMUNICATIONS                                         22
          OTHER BUSINESS INTERESTS                                       25
          REGULATION                                                     25
          PATENTS TRADEMARKS AND COPYRIGHTS                              25
          EMPLOYEES                                                      26
ITEM 2.   PROPERTIES                                                     26
ITEM 3.   LEGAL PROCEEDINGS                                              27
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            27
          EXECUTIVE OFFICERS OF THE REGISTRANT                           28

PART II
ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS                                            29
ITEM 6.   SELECTED FINANCIAL DATA                                        30
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                            33
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                    44


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ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE                            67
PART III
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT             67
ITEM 11.  EXECUTIVE COMPENSATION                                         67
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT                                                     67
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                 67
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K                                                       67




                                      2

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                                PART I

CERTAIN OF THE STATEMENTS THAT FOLLOW ARE FORWARD-LOOKING AND RELATE TO
ANTICIPATED FUTURE OPERATING RESULTS.  STATEMENTS WHICH LOOK FORWARD IN TIME
ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ASSUMPTIONS, WHICH MAY BE
AFFECTED BY SUBSEQUENT DEVELOPMENTS AND BUSINESS CONDITIONS, AND NECESSARILY
INVOLVE RISKS AND UNCERTAINTIES.  THEREFORE, THERE CAN BE NO ASSURANCE THAT
ACTUAL FUTURE RESULTS WILL NOT DIFFER MATERIALLY FROM ANTICIPATED RESULTS.
ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY SOME OF THE IMPORTANT FACTORS
THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED,
THOSE FACTORS SHOULD NOT BE VIEWED AS THE ONLY FACTORS WHICH MAY AFFECT
FUTURE OPERATING RESULTS.

ITEM 1.  BUSINESS

                         GENERAL INFORMATION

     Ascent Entertainment Group, Inc. ("Ascent" or the "Company") operates
diversified media and entertainment production and distribution businesses
characterized by well-known franchises. The Company conducts its business in
two segments, Multimedia Distribution and Entertainment. The Company's
approximately 57% owned publicly traded subsidiary, On Command Corporation
("On Command" or "OCC"), is the largest provider (by number of hotel rooms
served) of on-demand in-room video entertainment services to the domestic
lodging industry. The Company's Ascent Network Services ("ANS") division is
the primary provider of satellite distribution support services that link the
National Broadcasting Company ("NBC") television network with 170 of its
affiliated stations nationwide. The Company also owns two professional sports
franchises - the National Hockey League ("NHL") Colorado Avalanche and the
National Basketball Association ("NBA") Denver Nuggets. In order to enhance the
asset value of its sports franchises and to take advantage of the growing
popularity of the NHL and NBA, as well as to augment the revenues and
operating cash flows of its two sports franchises, the Company has commenced
construction of the Pepsi Center, a new state-of-the-art sports and
entertainment center in downtown Denver seating up to 20,000 to house the
Avalanche, the Nuggets and other live entertainment events. The Pepsi Center
is scheduled to be completed by the fall of 1999 and available for use in the
1999-2000 NHL and NBA seasons. Finally, the Company owns Beacon
Communications Corp. ("Beacon"), an independent motion picture and television
production company whose most recently produced films include AIR FORCE ONE,
A THOUSAND ACRES and PLAYING GOD.

     The Company is a Delaware corporation and was incorporated in 1995.  The
Company was formed by COMSAT Corporation ("COMSAT") to organize COMSAT's
multimedia distribution and entertainment assets under one management group.
An initial public offering (the "Offering") of Ascent's common stock was
completed in December 1995.  As a result of the Offering, COMSAT owned 80.67%
of the Company's common stock.

     COMSAT originally became involved in the entertainment industry through
its acquisition of the multimedia distribution businesses, ANS and On Command
Video Corporation ("OCV"), and its initial acquisition of an interest in the
Nuggets. COMSAT expanded the Company by acquiring complementary entertainment
businesses, including increasing its investment in OCV and the Nuggets and

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acquiring the Avalanche, Beacon, and other related interests. In 1996,
the Company formed OCC to combine OCV and the assets and certain liabilities
of Spectravision, Inc. ("SpectraVision"), at the time the second largest
provider of in-room on-demand video entertainment services to the domestic
lodging industry.

     In connection with the Offering, the Company and COMSAT entered into a
Services Agreement, pursuant to which COMSAT provided certain services to the
Company; a Corporate Agreement, which provided COMSAT with certain control
rights, including with respect to the Company's board of directors, equity
securities, and Certificate of Incorporation and Bylaws; and a Tax Sharing
Agreement related to the treatment of Ascent as part of COMSAT's consolidated
tax group (See Note 14 to the Company's Consolidated Financial Statements).

     On June 27, 1997, COMSAT consummated the distribution of all of its
ownership interest in Ascent to the COMSAT shareholders on a pro-rata basis
in a transaction that was tax-free for federal income tax purposes (the
"Distribution") pursuant to a Distribution Agreement dated June 3, 1997,
between Ascent and COMSAT.  The Distribution was intended, among other
things, to afford Ascent more flexibility in obtaining debt financing to meet
its growing needs. The Distribution Agreement terminated the Corporate
Agreement, the Tax Sharing Agreement and the Services Agreement.  In
addition, pursuant to the Distribution Agreement, certain restrictions were
put into place to protect the tax-free status of the Distribution.  Among the
restrictions, Ascent is not allowed to issue, sell, purchase or otherwise
acquire stock or instruments which afford a person the right to acquire the
stock of Ascent until July 1998.  Finally, as a result of the Distribution,
Ascent is no longer part of COMSAT's consolidated tax group and accordingly,
Ascent may be unable to recognize future tax benefits and will not receive
cash payments from COMSAT resulting from Ascent's anticipated operating
losses during 1998 and thereafter.  (See Note 14 to the Company's
Consolidated Financial Statements.)

                              MULTIMEDIA DISTRIBUTION

                               ON COMMAND CORPORATION

 GENERAL

     OCC is the largest provider (by number of hotel rooms served) of on-demand
in-room video entertainment and information to the domestic lodging industry,
according to a report published by Paul Kagan Associates, Inc., an industry
analyst. The Company believes that OCC's leading market position results from a
combination of its extensive installed room base, the quality of its proprietary
technology and its focus on customer service. OCC generally provides its in-room
video entertainment services pursuant to exclusive long-term contracts,
primarily with large national business and luxury hotel chains such as Marriott,
Hilton, Hyatt, Doubletree, Fairmont, Embassy Suites, The Four Seasons
and Holiday Inn. These hotels generally have higher occupancy rates than economy
and budget hotels, which is an important factor contributing to higher buy rates
for pay-per-view service. As of December 31, 1997, OCC had an installed room
base of approximately 893,000 rooms (of which 765,000 were served by on-demand
pay-per-view systems and 128,000 were only served by scheduled pay-per-view
systems) in approximately 3,062 hotels

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worldwide.

     In addition to installing OCV systems in hotels served by OCV, OCV sells
its systems to certain other providers of in-room entertainment, including
Hospitality Network, Inc., which is licensed to use OCV's system to provide
on-demand, in-room entertainment and information services to certain
gaming-based, hotel properties, and MagiNet Corporation (formerly Pacific Pay
Video Limited), which has been licensed to use OCV's system to provide
on-demand in-room entertainment in the Asia-Pacific region.

     In October 1996, OCC acquired the assets and certain liabilities of
SpectraVision (the "Acquisition"). Immediately prior to the Acquisition, OCV,
formerly an 84% (78.4% on a fully diluted basis) owned subsidiary of the
Company, was merged with a subsidiary of OCC, On Command Merger Corporation,
and OCV as the surviving corporation became a wholly owned subsidiary of OCC
(the "Merger" and with the Acquisition, the "OCC Transactions").  On Command
Development Corporation, a wholly owned subsidiary of OCC, develops
technologies to be used by OCV and SpectraVision to support and enhance OCV's
and SpectraVision's operations and to develop new applications to be marketed
by OCV and SpectraVision.

     The Acquisition enhanced OCC's position as the leading provider of
on-demand in-room video entertainment services to the domestic lodging
industry and approximately doubled the number of installed rooms served by
OCC. The conversion of SpectraVision rooms to OCC's on-demand system is
expected to result in higher average room revenues and lower operating costs.
The Acquisition also increased OCC's international base of rooms better
positioning it to expand further into international markets, which represent
a significant growth opportunity for OCC. As of December 31, 1997,
approximately 13.4% of OCC's hotel rooms served, or 120,000 rooms, are
located in international markets.

     OCC's primary on-demand system currently is the OCV system, a patented
video selection and distribution system that allows guests to select at any
time from 20 to up to 50 motion pictures on computer-controlled television
sets located in their rooms. By comparison, hotels still equipped with
SpectraVision technology generally offer fewer choices if served by
SpectraVision on-demand systems or only offer hotel guests eight movies per
day at scheduled times or some combination thereof. Management expects to
have a substantial majority of SpectraVision rooms converted to OCV's
on-demand system by 2000. OCC also provides in-room viewing of free-to-guest
programming of select cable channels (such as HBO, Showtime, ESPN, CNN, WTBS
and the Disney Channel) and other interactive services. The high speed, two-way
digital communications capability of the OCV system enables OCC to provide
advanced interactive features, such as video games, in addition to basic
interactive services such as video checkout and guest surveying. In addition
to the design innovation and quality of its products, OCC considers a focus
on customer satisfaction as central to the maintenance and growth of its
business.

 OCC OPERATING AND GROWTH STRATEGY

     The Company believes that the superior on-demand capability and range of
services offered as well as the system reliability and high quality service
of OCC's on-demand video technology, its long-term contracts primarily with

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national business and luxury hotel chains and high pay-per-view movie room
revenue, differentiate OCC from its competitors. OCC's strategy is to
increase revenues and operating cash flows through the following initiatives:
(i) increase its installed hotel customer base by obtaining new contracts
with business and luxury hotels and select mid-priced hotels without current
service, converting hotels currently served by other providers whose
contracts are expiring and servicing hotels which are acquired or constructed
by existing customers; (ii) increase revenues and decrease costs in certain
hotels acquired in the Acquisition by installing OCV technology offering
greater reliability, broader selection and more viewing flexibility; (iii)
create new revenue sources through an expanding range of interactive and
information services offered to the lodging industry; and (iv) expand its
room base in underserved foreign markets. The Company estimates that OCC may
incur capital expenditures of approximately $65 to $90 million in 1998, a
substantial portion of which will relate to the conversion of SpectraVision
rooms to OCV's on-demand system and the upgrading of the OCC technology.
These capital expenditures will be made by the Company in furtherance of its
goals of increasing revenues and operating cash flows, enhancing asset value
and achieving long-term growth.

 SERVICES AND PRODUCTS

     OCC provides on-demand and, in some cases, scheduled in-room television
viewing of major motion pictures (including new releases) and independent
non-rated motion pictures for mature audiences for which a hotel guest pays
on a per-view basis. Depending on the type of system installed and the size
of the hotel, guests can choose from 20 to up to 50 different movies with an
on-demand system. Those rooms still equipped with SpectraVision's tape-based
systems, which were acquired in the Acquisition, offer hotel guests either
eight movies a day at predetermined times or on-demand selection from a
library of videotapes the extent of which varies depending on the size of the
hotel and the date of the technology.

     OCC has substantially completed the integration of SpectraVision's
operating systems, financial reporting, sales, marketing and management
following the Acquisition. In addition, OCC has been actively pursuing the
renewal or extension of most of these contracts with hotel customers with
SpectraVision equipment by offering these customers the opportunity to obtain
OCC on-demand pay-per-view movie service and related services. As of December
31, 1997, OCC has converted approximately 67,000 rooms from SpectraVision's
scheduled system to OCC's on-demand system. A significant portion of the
installed base of rooms acquired in the Acquisition remains to be converted.
The conversion from SpectraVision to OCV technology, which is ongoing, offers
financial benefits to OCC as a result of lower field service costs, and
an increase in revenues due to on-demand capabilities and reduced system
down time.  There can be no assurance however, that the conversion process
will be completed on schedule or that the desired financial improvements will
be realized.  The inability to complete the conversion process on schedule
and realize such financial improvements could have a material adverse effect
on the financial condition or results of operations of OCC.

     OCC obtains non-exclusive rights to show motion pictures from major
motion picture studios generally pursuant to a master agreement with each
studio. The license period and fee for each motion picture are negotiated
individually with each studio, which typically receives a percentage of that
picture's gross revenues generated by the pay-per-view system. Typically, OCC

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obtains rights to exhibit major motion pictures during the "Hotel/Motel
Pay-Per-View Window," which is the time period after initial theatrical
release and before release for home video distribution or cable television
exhibition. OCC attempts to license pictures as close as possible to a motion
picture's theatrical release date to benefit from the studios' advertising
and promotional efforts. OCC also obtains independent motion pictures, most
of which are non-rated and are intended for mature audiences, for a one-time
flat fee that is nominal in relation to the licensing fees paid for major
motion pictures.

     OCC provides services under contracts with hotels that generally have a
term of five to seven years. Under these contracts, OCC installs its system
into the hotel at OCC's cost and OCC retains ownership of all equipment
utilized in providing the service. Traditionally, the hotel provides and owns
the televisions; however, based on certain economic evaluations, OCC may
provide televisions to certain hotels. OCC undertakes a significant
investment when it installs its system in a property, sometimes rewiring part
of the hotel. Depending on the size of the hotel property and the
configuration of the system installed, the installed cost of a new on-demand
system with interactive and video game services capabilities, including the
head-end equipment, averages from approximately $375 to $750 per room.  If
OCC does not provide televisions to the hotel property, the average costs are
$375 to $450 per room. OCC's contracts with hotels generally provide that OCC
will be the exclusive provider of in-room, pay-per-view television
entertainment services to the hotel and generally permit OCC to set the movie
price. The hotels collect movie viewing charges from their guests and retain
a commission equal to a percentage of the total pay-per-view revenue that
varies depending on the size and profitability of the system. Certain
contracts require OCC to upgrade systems to the extent that new technologies
and features are introduced during the term of the contract. At the scheduled
expiration of a contract, OCC generally seeks to extend the term of the
contract based on the competitive situation in the market. Marriott, Hilton
and Holiday Inn accounted for approximately 21%, 12% and 10%, respectively,
of OCC's revenues for the year ended December 31, 1997. The loss of any of
these customers, or the loss of a significant number of other hotel chain
customers, could have a material adverse effect on OCC's results of
operations or financial condition.

     The revenues generated from OCC's pay-per-view service are dependent
upon the occupancy rate at the property, the "buy rate" or percentage of
occupied rooms that buy movies or other services at the property and the
price of the movie or service. Occupancy rates vary by property based on the
property's location and competitive position within its marketplace and over
time based on seasonal factors and general economic conditions. Buy rates
generally reflect the hotel's guest mix profile, the popularity of the motion
pictures or services available at the hotel and the guests' other
entertainment alternatives. Buy rates also vary over time with general
economic conditions and the business of OCC is closely related to the
performance of the business and luxury hotel segments of the lodging
industry. Movie price levels are established by OCC and are set based on the
guest mix profile at each property and overall economic conditions.
Currently, OCV's movie prices typically range from $8.95 to $9.95 for the
first purchase by the hotel guest and, in certain hotels with OCV systems,
$4.95 for each subsequent buy by the same guest on the same day. The hotels
equipped with SpectraVision systems do not discount second buys. OCC has
experienced periods of, and may continue to experience periods of, slight
declines

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in its movie buy-rates. While OCC is taking measures to address such trends,
there can be no assurance that OCC's efforts to address such declines will be
effective. In addition, as OCC tests and begins marketing new programming
alternatives for guests, there can be no assurance that OCC's programming will
timely meet market requirements.

     The hardware installed in OCV's systems consists of a microprocessor
controlling the television in each room, a hand held remote control, and a
central "head-end" video rack and system computer located elsewhere in the
hotel. The in-room terminal unit may be integrated within, or located behind,
the television. OCC emphasizes sales and installations of full-scale OCV
video on-demand systems to business and luxury hotels. OCC markets lower cost
OCV VideoNOW systems to select mid-priced hotels. The VideoNOW system works
with the hotel's existing televisions and telephones, allowing guests to use
their touchtone telephones to access movies and other programming.  During
1997, OCV began to discontinue the marketing of VideoNOW systems due to OCC's
development of a lower-cost scalable, on-demand system based substantially
upon the OCV patented system.

     OCC also markets a free-to-guest service pursuant to which a hotel may
elect to receive one or more programming channels, such as HBO, Showtime,
CNN, ESPN, WTBS and other cable networks. OCC competes with local cable
television operators by customizing packages of programming to provide only
those channels desired by the hotel subscriber, which typically reduces the
overall cost of the services provided. OCC provides hotels free-to-guest
services through a variety of arrangements including having the hotel pay OCC
a fixed monthly fee for each service selected.  Among the guest services
provided are video check-out, room service ordering and guest satisfaction
survey.  Guest services are also currently made available in Spanish, French
and certain other foreign languages.  In most cases, the guest services are
made part of the contract for pay-per-view services which typically runs for
a term of five to seven years.

     OCC is testing and selectively deploying several new services to
complement its existing offerings and strengthen its growth strategy by
creating new potential revenue sources. New technology and services include a
digital server technology and internet offering which has been in a technical
and marketing test phase for several months. OCC is also testing shorter and
more targeted non-movie programming on a lower cost pay-per-view basis. The
initial categories of content will include business, lifestyle, and
kids-only. In addition, OCC is in the process of testing a new sports
category of programming which provides hotel guests with a selection of
out-of-market NBA games not already being televised nationally. Other
professional sports being evaluated for this category are football, baseball
and hockey. Finally, OCC plans to expand its video game offerings and plans
to include such interactive innovations as PC-based games.

 TECHNOLOGY

     Technology in the entertainment and communications industry is
continuously changing as new technologies and developments continue to be
introduced, including developments arising in the cable (including wireless
cable), telecommunications and direct-to-home and direct broadcast satellite
industries. OCC's product development philosophy is to design high quality
entertainment and information systems which incorporate features allowing OCC
to add system enhancements as they become commercially available and
economically viable. The high speed, two-way digital communications
capability of OCV's system enables OCC to provide advanced interactive
features, such as video games, in addition to basic interactive services such
as video checkout and guest surveying.  There can be no assurance however,
that future

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technological advances will not result in improved equipment or software
systems that could adversely affect OCC's competitive position.  In order to
remain competitive, OCC must maintain the programming enhancements,
engineering and technical capability and flexibility to respond to customer
demands for new or improved versions of its systems and new technological
developments, and there can be no assurance that OCC will have the financial
or technological resources to be successful in doing so.

     OCC's systems incorporate proprietary communications system designs with
commercially manufactured components and hardware such as video cassette
players, amplifiers and computers. Because systems generally use industry
standard interfaces, OCC can integrate new technologies as they become
economically viable.

     Since 1991, SpectraVision's tape based system has provided hotel guests
with on-demand viewing from a library of videotapes, which varies by hotel.
During 1994, however, SpectraVision introduced a new satellite-based
scheduled pay-per-view system and a new digital video on-demand service,
Digital Guest Choice, that provides on-demand viewing of digitally stored
movies. The digitized movies are stored at the hotel site and then decoded
and forwarded to the guest instantaneously and on-demand. Digital Guest
Choice allows multiple users to access the same digitally stored movie image
at the same time. On January 11, 1997, OCC experienced an interruption in its
satellite delivered service caused by the loss of communication with a
satellite used to deliver pay-per-view programming to 950 of OCC's then
approximately 3,100 hotels. Of the hotels affected, approximately 410 hotels
continued to provide limited pay-per-view services through alternate disk or
tape-based systems. OCC then entered into a six month agreement with Hughes
Network Systems for transponder capacity on a GE Americom Communications,
Inc. satellite to resume the satellite service through July 1997.
Thereafter, OCC transferred its remaining approximately 26,500 satellite
served rooms, along with certain other rooms that did not meet OCC's target
customer profile, to Skylink Cinema Corporation ("Skylink").

 SALES AND MARKETING

     Substantially all of OCV's growth was derived from obtaining
contracts with hotels in the United States not under contract with existing
vendors or served by other vendors as the contracts covering such hotels
expired.  OCC believes that, as a result of the Acquisition, opportunities
for additional growth in the United States will be more limited than in the
past.  Therefore, OCC intends to focus its strategy for obtaining new hotel
customers in international markets.  OCC believes that, relative to the
United States, many international markets are underserved by the in-room
entertainment industry.

     OCC's marketing efforts are primarily focused on business and luxury
hotels with approximately 150 rooms or more, as OCC management believes that
such hotels consistently generate the highest revenues per room in the
lodging industry and have the highest potential for new service revenue
growth. OCC also targets smaller deluxe, luxury and upscale hotels and select
mid-priced hotels serving business travelers that meet its profitability
criteria.  In connection with such smaller hotel segments, OCC has recently
begun to employ additional engineering development and marketing efforts to
target hotels with under 150 guest rooms.  OCC intends to continue targeting
established hotel chains and certain business and luxury hotel management
companies, and selected independent hotels.

     OCC markets its services to hotel guests by means of on-screen advertising
that highlights the services and motion picture selections of the month. OCC
believes it has been successful at renewing its hotel contracts due to its large
capital investment in wiring infrastructure of the hotel and its high quality
service record.

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 INSTALLATION AND SERVICE OPERATIONS

     At December 31, 1997, OCC's installation and service organization
consisted of approximately 355 installation and service personnel in the
United States and Canada. OCC installation and service personnel are
responsible for all of the hotel rooms served by OCC. Installation and
service personnel are responsible for system maintenance and distribution of
video cassettes. OCC's installation personnel prepare site surveys to
determine the type of equipment to be installed at each hotel, install
systems, train the hotel staff to operate the systems, and perform quality
control tests. OCC also uses local installation subcontractors supervised by
full-time OCC personnel to install its systems.

     OCC maintains a toll-free technical support hot line that is monitored
24 hours a day by trained support technicians. The on-line diagnostic
capability of the OCV and SpectraVision systems enables the technician to
identify and resolve a majority of the reported system malfunctions from
OCC's service control center without visiting the hotel property. When a
service visit is required, the modular design of the OCV and SpectraVision
systems generally permits installation and service personnel to replace
defective components at the hotel site.

 HOTEL CONTRACTS

     OCC typically enters into a separate contract with each hotel for the
services provided. Contracts with the corporate-managed hotels in any one
chain generally are negotiated by that chain's corporate management, and the
hotels subscribe at the direction of the corporate management. In the case of
franchised or independently owned hotels, the contracts are generally
negotiated separately with each hotel. Existing contracts generally have a
term of five or seven years from the date the system becomes operational. At
expiration, OCC typically seeks to extend the term of the contract on terms
competitive in the market. At December 31, 1997, approximately 4.5% of the
pay-per-view hotels served by OCC have contracts that have expired and are on
a month-to-month basis. Approximately 7.4% of the pay-per-view hotels served
by OCC have contracts expiring in 1998.  However, some of the SpectraVision
hotel contracts, which OCC classified internally as expiring, have two year
automatic renewal provisions and may continue to be in effect.  As a result,
the expiration rates set forth above may overstate the actual number of hotel
contracts that are expiring.

 SUPPLIERS

     OCC contracts directly with various electronics firms for the
manufacture and assembly of its systems hardware, the design of which is
controlled by OCC. Historically, these suppliers have been dependable and
able to meet delivery schedules on time. OCC believes that, in the event of a
termination of any of its sources, alternate suppliers could be located
without incurring significant costs or delays. However, certain electronic
component parts used with OCC's products are available from a limited number
of suppliers and can be subject to temporary shortages because of general
economic conditions and the demand and supply for such component parts. In
addition, some of the SpectraVision systems currently installed in hotels
require a high level of service and repair. As

                                      10
<PAGE>


these systems become older, servicing replacement parts will become more
difficult. If OCC were to experience a shortage of any given electronic part,
OCC believes that alternative parts could be obtained or system design
changes implemented. In such event, OCC could experience a temporary
reduction in the rate of new room installations and/or an increase in the
cost of such installations.

     The head-end electronics are assembled at OCC's facilities for testing
prior to shipping. Following assembly and testing of equipment designed
specifically for a particular hotel, the system is shipped to each location,
where it is installed by OCC-employed and trained technicians, typically
assisted by independent contractors.

     For those hotels for which OCC supplies televisions, OCC purchases such
televisions from a small number of television vendors.  In the event of a
significant price increase for televisions by such vendors, OCC could face
additional, unexpected capital expenditure costs.

     OCC also maintains direct contractual relations with various suppliers
of pay-per-view and free-to-guest programming, including the motion picture
studios and programming networks. OCC obtains its free-to-guest programming
pursuant to multi-year license agreements and pays its programming suppliers
a monthly fee for each room offering the service. OCC believes its
relationships with all suppliers are good, except for Showtime Networks, Inc.
("Showtime") which is disputing OCC's performance of the contract with
Showtime in connection with OCV's termination of scheduled satellite delivered
pay-per-view service. Showtime is currently installed in approximately 3.4%
of OCC's room base.

     In addition, OCC receives satellite signal transmission services for much
of its domestic cable television programming from DirecTV, Inc.  While OCC
believes that its relationship with DirecTV is good, an interruption in
DirecTV's' satellite service could interfere with OCC's ability to serve many
of its hotel customers' free-to-guest cable programming requirements.

 COMPETITION

     There are several providers of in-room video entertainment to the
domestic lodging industry, at least three of which provide on-demand
pay-per-view and free-to-guest programming and other interactive services
over the hotel television. Internationally, there are more companies
competing in the pay-per-view lodging industry than in the United States.

     Pay-per-view, the most profitable component of the services offered,
competes for a guest's time and entertainment resources with broadcast
television, free-to-guest programming and cable television services. In
addition, there are a number of potential competitors that could utilize
their existing infrastructure to provide in-room entertainment to the lodging
industry, including major hotel chains themselves, cable companies (including
wireless cable), telecommunications companies, and direct-to-home and direct
broadcast satellite companies. Some of these potential competitors are
already providing free-to-guest services to hotels and testing
video-on-demand.

     OCC is the leading provider (by number of hotel rooms served) of in-room

                                      11
<PAGE>

video entertainment services to the United States lodging industry. OCC is
also the leading provider (by number of hotels rooms served) of in-room
on-demand video entertainment services to the United States lodging industry.
OCC competes on a national scale primarily with LodgeNet Entertainment
Corporation ("LodgeNet") and on a regional basis with certain other smaller
entities. Based on publicly filed information, OCC estimates that, at
December 31, 1997, LodgeNet served approximately 512,000 pay-per-view
rooms.  At December 31, 1997, OCC served approximately 893,000 rooms, of which
approximately 765,000 are on-demand rooms.

     Competition with respect to new pay-per-view contracts centers on a
variety of factors, depending upon the circumstances important to a
particular hotel. Among the more important factors are (i) the features and
benefits of the entertainment and information systems, (ii) the quality of
the vendor's technical support and maintenance services and (iii) the
financial terms and conditions of the proposed contract. With respect to
hotel properties already receiving in-room entertainment services, the
current provider may have certain informational and installation cost
advantages as compared to outside competitors.

     The Company believes that OCC's competitive advantages include (i)
technological leadership represented by its superior on-demand capability and
range of services offered, and (ii) system reliability and high quality
service. OCC believes that its growth (including OCV's growth over the
previous three years) reflects the strong competitive position of OCC's
products and services. The OCC system offers an expansive library of
on-demand movies and will allow OCC to upgrade and add new features to the
OCC system during the terms of the pay-per-view contracts.

     OCC anticipates substantial competition in obtaining new contracts with
major hotel chains. The Company believes that hotels view the provision of
in-room on-demand entertainment both as a revenue source and as a source of
competitive advantage in that sophisticated hotel guests are increasingly
demanding a greater range of quality entertainment and informational
alternatives. At the same time, OCC believes that certain major hotel chains
have awarded contracts based primarily on the level and nature of financial
and other incentives offered by the pay-per-view service provider. While the
Company believes its competitive advantages will enable OCC to continue to
offer financial arrangements that are attractive to hotels, its competitors
may attempt to gain or maintain market share at the expense of profitability.
OCC may not always be willing to match the incentives provided by its
competitors.

     In addition, while the Company is addressing the likelihood of increased
demand for internet services in the hotel guest room, OCC may face additional
competition for guest time and resources from traditional as well as new
competitors.  Some of these competitors may be better funded from both
public capital or private venture capital markets and have access to
additional capital resources which OCC does not have.

     The communications industry is subject to rapid technological change.
New technological developments could adversely affect OCC's operations unless
it is able to provide equivalent services at competitive prices.

                                      12
<PAGE>


 INTERNATIONAL MARKETS

     In addition to its operations in the fifty United States, OCC offers its
services in Canada, Mexico, Puerto Rico, the U.S. Virgin Islands, Hong Kong,
Singapore, Thailand, Australia, the Bahamas, Europe, and elsewhere in the
Asia-Pacific region.

     OCC generally experiences higher international revenues and operating
cash flow per room than in the United States because of higher prices,
higher buy rates, and the general lack of programming alternatives.  However,
OCC generally incurs greater capital expenditures and operating costs outside
of the United States.  At December 31, 1997, OCC serviced 420 hotels with a
total of 120,000 rooms located outside the United States.

     The competition to provide pay-per-view services to international hotels
is even more dispersed than in the United States.  Expansion of OCC's
operations into foreign markets involves certain risks that are not
associated with further expansion in the United States including availability
or programming, government regulation, currency fluctuations, language
barriers, differences in signal transmission formats, local economic and
political conditions, and restriction on foreign ownership and investment.
Consequently, these risks may hinder OCC's efforts to grow its base of hotel
rooms in foreign markets.

 INVESTMENT IN OCC

     The Company made its initial investment in OCV in 1991 and owned
approximately 84% of OCV (78.4% on a fully diluted basis) prior to the
Acquisition.  In connection with the OCC Transactions, each stockholder of
OCV received (i) 2.84 shares of OCC common stock for each share of OCV common
stock previously held and (ii) Series A Warrants to purchase, on a cashless
basis, 18.607% of a share of OCC common stock for each share of OCV common
stock previously held.  Of the 21,750,000 shares of OCC common stock and
Series A Warrants to purchase 1,425,000 shares of OCC common stock
distributed to the OCV stockholders, Ascent received 17,149,766 shares of OCC
common stock and Series A Warrants to purchase 1,123,823 shares of OCC common
stock.  Hilton Hotels Corporation, a former minority stockholder of OCV that is
unaffiliated with the Company but is a significant customer of OCC, received
approximately 2,331,986 shares of OCC common stock and Series A Warrants to
purchase approximately 152,786 shares.

     The Company currently has no agreements or understandings with respect
to the minority stockholders of the Company or OCC, other than a letter
agreement dated April 19, 1996 with Gary Wilson Partners that provides that
(i) Gary Wilson Partners will, so long as (a) it owns any shares of OCC
common stock received upon exercise of the Series C Warrant that it received
for advisory and other services that it provided in connection with the OCC
Transactions and (b) the Company continues to own 20% of the outstanding
shares of OCC common stock, vote its shares of OCC common stock in accordance
with the instructions of the Company and (ii) so long as the Company owns 20%
of the outstanding OCC common stock, Gary Wilson Partners will not, without
the prior written consent of the Company, sell any interest in the Series C
Warrants or the shares of OCC common stock purchasable for cash in connection
with the Series C Warrant, until October 8, 1998.

                                       13
<PAGE>

                           ASCENT NETWORK SERVICES

     ANS merged with and into the Company on May 30, 1997.  Prior thereto ANS
was a wholly-owned subsidiary of Ascent.  ANS, as a division of the Company,
principally operates a nationwide network (excluding satellite transponders)
for satellite distribution of NBC's national television programming to the
majority of NBC's affiliate stations nationwide, as well as an installation,
field service and maintenance support business relating to such network. ANS
also provides satellite distribution field service and maintenance support
for networks operated by other customers. ANS has operated its satellite
distribution network for NBC since 1984 under the NBC Agreement, a 10-year
agreement that was extended in 1994 for an additional five years. Management
believes the NBC Agreement, which is scheduled to expire in 1999, will be
renewed and extended and that, in connection with such renewal, NBC would
engage ANS to complete a full upgrade of the NBC distribution network to
digital technology, although no assurance can be provided that such contract
will be renewed or that any such renewal will be on terms as favorable to the
Company. Expenditures by ANS which would be associated with the digital
upgrade in the event of such renewal are estimated at approximately $30 to
$35 million, substantially all of which are currently anticipated to be
financed through operating leases. The renewal of the NBC Agreement and
digital upgrade of the NBC distribution system would be expected to increase
the asset value of ANS and further solidify the relationship between ANS and
NBC.

     ANS has historically been a stable source of revenues and operating cash
flows for the Company, generating approximately $20 million of revenues and
$10 million of EBITDA since 1995. Ascent's strategy for maintaining and
expanding this source of cash flow is to renew and extend the NBC Agreement
to 2006 or beyond, and to be engaged for and complete successfully the full
digital upgrade of the NBC satellite distribution network.

     The NBC Agreement was initially entered into in 1984, in connection with
ANS's construction, service and support of NBC's master earth station and
receiver earth stations at NBC affiliates. Pursuant to such contract, ANS
designed, built and continues to operate a Ku-band satellite distribution
network, for which the network control center is located in Florida. The
Company owns and operates the network (excluding the satellite transponders,
which are leased by NBC) and receives yearly payments from NBC in connection
with such operations. The network consists of the network control center, two
master earth stations, eight transmit/receive stations, 170 receive earth
stations at NBC affiliates, 54 portable uplink antennas, and six
transportable transmit/receive trucks.

     NBC, with ANS's technical assistance, issued a request for information
to certain of its hardware vendors in July 1995 with respect to procuring
equipment necessary to upgrade the NBC distribution network to digital
technology. In August 1996, ANS and NBC executed a letter of intent
pursuant to which ANS has procured and installed certain of such digital
equipment to provide MSNBC, LLC, a partnership between NBC and Microsoft
Corporation ("MSNBC") with network service, maintenance and support. The
partial digital upgrade service is being provided for a 10 year term and is
currently governed by the underlying NBC Agreement. The Company anticipates
finalizing a service agreement with MSNBC separate from the underlying NBC
Agreement in the first half of 1998 for the partial digital upgrade service.
The network service,

                                      14
<PAGE>

maintenance and support provided to MSNBC are related to and dependent upon
the original NBC distribution network. As previously discussed, the Company
expects that ANS will assist NBC in a full network upgrade of all satellite
distribution locations to digital technology in late 1998 or early 1999,
although no assurance can be provided in this regard.

                                 ENTERTAINMENT

                    COLORADO AVALANCHE AND DENVER NUGGETS

GENERAL

     The Company owns and operates franchises in two major professional
sports leagues, the Colorado Avalanche-Registered Trademark- in the NHL and
the Denver Nuggets in the NBA. Both of these franchises are located in
Denver, Colorado where residents have historically supported successful local
sports franchises. With the success of the NHL and NBA over the past two
decades as shown in higher ticket sales, increased average attendance,
increased merchandising sales and licensing fees, more profitable national
and local broadcast packages and increased expansion fees, NHL and NBA sports
franchises have increased in value and revenue generation over that period.

     The Company believes that the NHL in general will continue to grow in
popularity as evidenced by a record number of aggregate league-wide ticket
sales of approximately 16.2 million and record revenues from ticket sales of
approximately $595 million during the 1996-1997 season (a 4% increase in
number of tickets sold and a 14.8% increase in revenues from the prior
season) and an increase in revenues from retail sales of NHL licensed
merchandise in the United States from approximately $800 million in 1992-1993
to approximately $1.2 billion in 1996-1997. This popularity is further
evidenced by the increase in the expansion fee paid for an NHL expansion team
from $6 million paid in 1979 to $80 million to be paid in 1998, 1999 and 2000
by each of the new NHL expansion teams to be located in Nashville, Tennessee,
Atlanta, Georgia, Columbus, Ohio and Minneapolis-St. Paul, Minnesota, as
approved by the NHL Board of Governors in June 1997. The increased popularity
of the NHL resulted in 1994 in a new five-year national over-the-air
television rights contract with the Fox television network with aggregate
license fees of $155 million, subject thereafter to a two-year renewal term
at Fox's option for aggregate incremental license fees of $120 million. In
addition, in 1994, the NHL extended its existing contracts with ESPN and its
Canadian broadcaster through the 1998-1999 season for aggregate license fees
of approximately $235 million.

     The NBA is a professional sports enterprise that has experienced a
significant rise in popularity over the past decade. The popularity of the
NBA is evidenced by the doubling of NBA ticket sales over the past decade to
approximately 16.8 million and the increase in average game attendance by
over 50% to approximately 14,159 or 86% of capacity for the 1996-1997 season.
In addition, revenues from the sale of NBA retail merchandise in the United
States have increased from approximately $2.1 billion in 1992-1993 to
approximately $2.6 billion in 1995-1996. The NBA's popularity is further
evidenced by the increase in the expansion fee paid for an NBA expansion team
in the last two decades from $12 million paid in 1980 to $125 million paid in
1995. The current four-year national television contracts between the NBA and
each of NBC and Turner Sports provide $1.1 billion in aggregate fixed
revenues for NBA member

                                      15
<PAGE>

teams over the term of the contracts, and provide for revenue sharing over
specified amounts of sponsorship revenues. Such contracts will expire after
the 1997-1998 season. New contracts with both NBC and Turner Sports,
commencing with the 1998-1999 season, were announced in November, 1997, under
which $2.6 billion in aggregate fixed revenues will be provided to NBA member
teams over the four-year term of such contracts and such contracts also
provide for revenue sharing.

     In August 1997, the Company capitalized on the growing demand for
popular branded regional sports programming by entering into a license
agreement with Fox Sports Rocky Mountain ("Fox Sports"), a partnership
between Liberty Media Corporation ("Liberty") and Fox News Corporation (the
"Fox Sports Agreement") for the local television rights (over-the-air and
cable) for the Nuggets and the Avalanche. The Fox Sports Agreement has a term
of seven years, commencing with the 1997-1998 playing season, provides for
license fees that may exceed $100 million if paid over the life of the
agreement and significantly increases revenues to the Company from these
rights as compared to prior years. As a result of the Fox Sports Agreement,
Avalanche and Nuggets games will continue to be distributed to over 2.7
million viewers in the seven states served by Fox Sports.

     The Company believes that it can achieve growth in revenues and
operating cash flow from the Avalanche and the Nuggets. The three key
elements of the Company's strategy to realize such growth are to: (i)
complete the financing and construction of the Pepsi Center in the 1999-2000
season; (ii) continue the strong performance of the Avalanche and take steps
to improve the Nuggets' on-court performance; and (iii) build on the existing
base of the Company's sports franchise assets and the recent Fox Sports
Agreement through complementary entertainment and distribution opportunities
in the Rocky Mountain region.

SOURCES OF REVENUES

     The Avalanche and the Nuggets derive a significant amount of their
revenues from the sale of tickets to home games, the licensing of local
market television, cable network and radio rights and from distributions
under revenue-sharing arrangements with the NBA and NHL, as well as other
ancillary sources.

TICKET SALES.   Each of the Avalanche and the Nuggets play an equal number of
home games and away games during the 82-game NBA and 82-game NHL regular
seasons. In addition, the teams play approximately eight exhibition games
prior to the commencement of the regular season. The Avalanche and the
Nuggets receive all revenues from the sale of tickets to regular season home
games (subject, in the case of the Nuggets, to an NBA gate assessment) and no
revenues from the sale of tickets to regular season away games. Generally,
the Avalanche and the Nuggets retain all revenues from the sale of tickets to
home exhibition games played in Denver and the Rocky Mountain region (less
appearance fees paid to the visiting team), and receive appearance fees for
exhibition games played elsewhere. If the Avalanche or the Nuggets compete
successfully during the regular season and make the playoffs in their
respective league, the team receives revenues from the sale of tickets to
home playoff games, although a portion of such ticket revenue is shared with
the respective league. From the 1995-1996 season to the present, average
ticket

                                      16
<PAGE>

prices to the Avalanche games have increased by 62.2%, and, from the
1991-1992 season to the present, average ticket prices to the Nugget games
have increased by 87.3%. In the 1997-1998 season, average ticket prices for
the Avalanche and Nuggets represented 114% and 81.2% of the average NHL and
NBA ticket prices.

     The seating capacity of Denver's McNichols Arena is approximately 17,000
for Nuggets basketball games and approximately 16,000 for the Avalanche
hockey games, including 18 executive suites containing a total of 180
seats. The policy of the Avalanche and the Nuggets is to limit the number of
season tickets so that approximately 25% of the tickets are available on a
per game basis. For the 1997-1998 season, the Avalanche have sold 12,500
season tickets and the Nuggets have sold approximately 6,800 season tickets.
The Avalanche currently enjoys the longest consecutive record of sell-out
games in the NHL (over 120 games as of the date of this Annual Report on Form
10-K).

TELEVISION, CABLE AND RADIO BROADCASTING.   The NHL and NBA, as agents for
their respective members, license the national television rights for
Avalanche and Nuggets games, respectively. In 1994, the NHL entered into a
new five-year national over-the-air television contract with the Fox
television network with aggregate license fees of $155 million, subject
thereafter to a two-year renewal term at Fox's option for aggregate
incremental license fees of $120 million. In addition, in 1994, the NHL
extended its existing contracts with ESPN and its Canadian broadcaster
through the 1998-1999 season for aggregate license fees of approximately $235
million. In 1994, the NBA licensed the national broadcast of NBA games under
agreements with NBC and Turner Sports. The current four-year national
television contracts between the NBA and each of NBC and Turner Sports
provide $1.1 billion in aggregate fixed revenues for NBA member teams over
the term of the contracts, and provide for revenue sharing over specified
amounts of sponsorship revenues. Such contracts will expire after the
1997-1998 season. New contracts with both NBC and Turner Sports, commencing
with the 1998-1999 playing season, were announced in November 1997, under
which $2.6 billion in aggregate fixed revenues will be provided to NBA member
teams over the four-year term of such contracts and such contracts also
provide for revenue sharing. Each NHL or NBA member team shares equally in
the license fees from their respective national television contracts, except
that pursuant to an agreement entered into when the Nuggets and the other
former American Basketball Association ("ABA") teams joined the NBA, a
portion of the NBA national television revenues otherwise payable to each of
the former ABA teams is paid to a group that owned an ABA franchise that was
not admitted to the NBA.

     In August 1997, the Company capitalized on the growing demand for
popular branded regional sports programming by entering into the Fox Sports
Agreement. The Fox Sports Agreement has a term of seven years, commencing
with the 1997-1998 playing season, provides for license fees that may exceed
$100 million if paid over the life of the agreement and significantly
increases revenues to the Company from these rights as compared to prior
years. In addition, both the Nuggets and the Avalanche license the local rights
to broadcast all games on radio under agreements with KKFN, 950 AM.

OTHER SOURCES.   Other sources of revenues for each of the Nuggets and the
Avalanche include their pro rata share of franchise fees to be paid by
expansion teams upon entry to the NBA or NHL and promotional and novelty
revenues, including royalties from marketing and merchandising conducted by

                                      17
<PAGE>

each of the NBA and NHL. In 1995, the Nuggets recorded $9.2 million in
revenues in connection with the admission of two new franchises into the NBA.
In connection with obtaining the NHL's consent to the Company's acquisition
of the Avalanche franchise and relocation of the Avalanche to Denver, the
Company agreed that up to $2 million of the Avalanche's share of expansion
fees from each of the next four expansion teams will be retained by the NHL.

     The Avalanche and the Nuggets also derive additional revenues through
the sale of signage, promotions and program advertising space to corporate
sponsors, arena concessions and parking and sales generated by team stores
that sell NHL, Avalanche, NBA and Nuggets branded goods.

     Each member of the NBA and NHL assigns to its respective league the
exclusive rights to the merchandising of its team name, insignia and other
similar properties, subject to certain restrictions and limitations. Each of
the leagues then pay royalties to each of their respective teams in
consideration of the receipt of such rights. This assignment is subject to
the Nuggets' and the Avalanche's right to use their insignia and symbols in
connection with the promotion of the team in their home territory and retail
sales in their home arena and team owned stores. Each of the NBA and NHL
licenses other companies to manufacture and sell official NBA and NHL items
such as warm-up jackets and sweatshirts, as well as certain non-sports items.

NBA AND NHL GOVERNANCE

     The NBA and the NHL are generally responsible for regulating the conduct
of their member teams. The NBA and the NHL establish the regular season and
playoff schedules for the teams. They also negotiate, on behalf of their
members, the leagues' national over-the-air and cable television contracts
and collective bargaining agreements with the NBA and NHL Players'
Associations. Because the NBA and NHL are joint ventures, each of their
members generally has joint and several liability for the league's
liabilities and obligations and shares in its profits. Any failure of other
members of the NBA or the NHL to pay their pro rata share of any such
obligations could adversely affect the Nuggets or the Avalanche, as the case
may be. The success of the NBA and NHL and their member teams depends in part
on the competitiveness of the other teams in their respective leagues and
their ability to maintain fiscally sound franchises. Certain NBA and NHL
teams have at times encountered financial difficulties, and there can be no
assurance that the NBA or the NHL and their respective members will continue
to be able to operate on a fiscally stable and effective basis. Under the
terms of the constitution and by-laws of the NBA and the NHL, league approval
is required under certain circumstances, including in connection with the
sale or relocation of a member team.

     Each of the NBA and the NHL is governed by a Board of Governors, which
consists of one representative from each member team. The Board of Governors
of each league selects the league Commissioner who administers the daily
affairs of the league, including dealings with the Players' Association,
interpretations of playing rules and arbitration of conflicts among members.
The Commissioner also has the power to impose sanctions, including fines and
suspensions, for violations of league rules.

     The Commissioner of each of the NBA and NHL has the exclusive power to
interpret the constitution, by-laws, rules and regulations of their
respective

                                      18
<PAGE>

league, and their interpretations are final and binding on the Company, the
Nuggets, the Avalanche and their personnel. In addition, member clubs of the
NBA and NHL may not resort to the courts to enforce or maintain rights or
claims against other member clubs, or to seek resolution of any dispute or
controversy between member clubs, but instead all such matters must be
submitted for final and binding determination to the respective Commissioner
of such league without any right of appeal to the courts or otherwise.
Finally, each of the NHL and the NBA prohibits the acquisition of 5% or more
of the direct or indirect ownership interests in a member club owned by a
publicly traded company without the respective league's prior consent.
Neither the NBA nor the NHL, nor any of their respective member clubs, nor
any officer or employee of either league or its member clubs, other than the
Company, has reviewed in advance the information being provided in this
report, or assumes any responsibility for the accuracy of any representations
made by the Company to any potential investors.

COLLECTIVE BARGAINING

     The NHL and the NHL Players' Association entered into a seven-year
NHL Collective Bargaining Agreement on August 11, 1995 that took retroactive
effect as of September 6, 1993. Though the NHL Collective Bargaining
Agreement does not expire until September 15, 2000, both the NHL and NHL
Players' Association had the right to reopen negotiations at the end of the
1997-1998 season. However, both parties have agreed to waive the right to
reopen negotiations in connection with an agreement that allows NHL players
to participate in the 1998 Winter Olympics. In 1997, the NHL Collective
Bargaining Agreement was extended through the 2002-2003 season. The Company
believes that the NHL Collective Bargaining Agreement renders unlikely any
player labor disruptions in the near future.

     On September 13, 1995, the NBA Players' Association approved a six-year
NBA Collective Bargaining Agreement, which was subsequently ratified by the
NBA owners on September 18, 1995, and signed on July 11, 1996, retroactive to
September 18, 1995. The NBA Collective Bargaining Agreement provides for,
among other things, maximum and minimum total team salaries to be paid to
players and runs for a term from September 18, 1995 through June 30, 2001.
The NBA Collective Bargaining Agreement provides various exceptions to the
salary limitations, including exceptions relating to a team's resigning its
own veteran free agent players, replacing injured players, and signing
players at the minimum individual player salary. Due to the fact that player
salaries are increasing at a faster rate than league revenues, in March 1998
the NBA Board of Governors voted to exercise the NBA's right under the terms
of the NBA Collective Bargaining Agreement to terminate the agreement as of
June 30, 1998 and immediately commence negotiations on a new collective
bargaining agreement. Management is unable to predict what the timing and
outcome of these negotiations will be and whether any work stoppage will
ensue.

COMPETITION

     The Nuggets and the Avalanche compete for sports fans' entertainment
dollars not only with each other and other major league sports, but also with
minor league sports, college athletics, other sports entertainment and

                                      19
<PAGE>

non-sports entertainment such as the Colorado Symphony, the Colorado Opera
and the Colorado Ballet, movies, local theater and recreational activities
such as skiing. During portions of their respective seasons, the Nuggets and
the Avalanche will experience competition from each other, professional
football (the Denver Broncos), professional baseball (the Colorado Rockies)
and women's professional basketball (the Colorado Xplosion). In addition, the
colleges and universities in the Rocky Mountain region, as well as public and
private schools, offer a full schedule of athletic events throughout the
year. The Nuggets and the Avalanche compete with other United States and
foreign teams, professional and otherwise, for available players and the
upcoming NHL expansion will increase the competition for talented players
among NHL teams.  In this regard, there can be no assurance that the
Avalanche will be able to retain all of its key players in the event of an
expansion draft or that the rules regarding the expansion draft will not
change to the detriment of the Company. Ultimately, the success of each of
the Nuggets and Avalanche will depend upon each team's continued ability to
retain and attract talented, healthy players.

BROADCAST OPERATIONS

     In addition to its Denver sports franchises, the Company also owns a
one-third interest in Colorado Studios, a Denver television production
company that owns and operates mobile television production facilities. On
behalf of Fox Sports, Colorado Studios produces and transmits to the Rocky
Mountain region Nuggets and Avalanche games. Colorado Studios is equally
owned by the Company, Fox Sports and Norac, Inc., a Denver-based television
production company.

                               THE PEPSI CENTER

     The Nuggets and the Avalanche currently play in McNichols Arena, one of
the oldest arenas in use in either the NBA or the NHL, with seating capacity
and configuration and other revenue generating attributes significantly less
advantageous than those of more modern facilities. The Company has entered
into the 1997 Denver Arena Agreement (the "Arena Agreement") with the City
and County of Denver ("City") setting forth the terms on which the Company,
through Ascent Arena Company, LLC (the "Arena Company"), will construct, own
and manage the new Pepsi Center in downtown Denver. Management believes that
moving to the Pepsi Center in the 1999-2000 NHL and NBA seasons will increase
the revenues, operating cash flows and asset value of the Company's two
sports franchises. The Pepsi Center will also create incremental revenue
sources and cash flows from other entertainment events and retail
merchandising. Under current plans, the Pepsi Center will increase seating
capacity for the Avalanche and the Nuggets from 16,000 and 17,000 seats,
respectively, at McNichols Arena to 18,100 and 19,300 seats, respectively.
For other events, seating capacity will be as high as 20,000, depending on
the configuration. The Pepsi Center will have 93 luxury suites available for
lease (compared to 18 suites at McNichols Arena), all of which already have
lease commitments with terms of five to ten years (at lease amounts from
$90,000 to $180,000 per year), and will have over 1,600 club seats and
enhanced concessions, retail and restaurant facilities, including a 236-seat
club level restaurant (which McNichols Arena does not have). The Company
anticipates that the added luxury suites, club seats and increased seating
capacity, combined with naming rights, founding sponsor arrangements and
enhanced facilities, will result in significantly increased revenues to the
Company.  However, the construction of the Pepsi Center does

                                      20
<PAGE>

entail significant risks including regulatory and licensing requirements,
shortages of materials or skilled labor, unforeseen engineering,
environmental or geological problems, work stoppages, weather interference,
unanticipated cost increases and challenges from local residents.  No
assurance can be given as to whether or when the proposed Pepsi Center will
be completed or, if completed, that the budgeted costs of the Pepsi Center
will not be exceeded.

     The Arena Company was formed for the purpose of developing plans for the
Pepsi Center as a privately financed arena in Denver for the Avalanche, the
Nuggets and other entertainment events, including among other things,
concerts, college sporting events, ice and dance performances, comedy shows
and circuses. On March 28, 1996, Ascent purchased from The Anschutz
Corporation ("TAC") all of TAC's interests in the proposed arena development
project, including, among other things, all of TAC's interest in the Arena
Company, for $6.6 million in cash and, contingent on the construction and
occupancy of the new arena, an additional payment of $5 million on a
non-interest bearing basis plus a paid-up suite license.  The Company paid
TAC $2.5 million in connection with groundbreaking, and only $2.5 million
remains to be paid.

     On November 13, 1997, Ascent entered into the Arena Agreement with the
City. The Arena Agreement sets forth the terms whereby Ascent, through the
Arena Company, will construct, own and manage the Pepsi Center. These terms
include: (i) the Nuggets and the Avalanche would be released from their
existing leases at McNichols Arena upon the completion of the Pepsi Center;
(ii) in consideration for such release and other consideration from the City,
upon completion of the Pepsi Center, the land associated with the Pepsi
Center will be transferred to the City and the City will lease the land back
to the Arena Company for a period of 23 years (with a possible extension for
two years), after which the City will contribute the land back to the Arena
Company; (iii) the Arena Company will be entitled to rebates on property
taxes for a 23-year term (with a possible extension for two years), and
rebates on sales and use taxes during the construction of the Pepsi Center;
and (iv) the City will be entitled to annual payments out of sales taxes
generated at the Pepsi Center and other Company revenues in the aggregate
amount of $1 million per year during the first five years of operation, and
subsequently increasing at a rate depending on attendance.

     Pursuant to a Land Purchase Agreement with Southern Pacific
Transportation Company ("SPT"), on November 14, 1997, the Arena Company
purchased approximately 50 acres of undeveloped land in downtown Denver, a
portion of which will serve as the site for the proposed Pepsi Center and
related parking. The land not used for the Pepsi Center and related parking
will be developed by Ascent into restaurant, retail and office facilities.
The Land Purchase Agreement provides for the Arena Company and SPT to effect
a State-approved voluntary environmental remediation plan on the site with
SPT responsible for substantially all of the costs thereof, and for SPT to
provide continuing indemnification with regard to certain other environmental
liabilities through 2022 on a declining percentage basis.  However, there can
be no assurance that SPT will meet its obligation to fund the construction
period work under the voluntary cleanup plan or  provide indemnification for
other environmental liabilities or that, after implementation of the
voluntary remediation plan, governmental authorities will not order the Arena
Company to perform additional remediation.

     Development and construction of the Pepsi Center will cost approximately

                                      21
<PAGE>

$160 million. The Company expects to finance the Pepsi Center from the sale
by the Arena Company of approximately $100 to $130 million of indebtedness
(the "Arena Notes"), secured by some or all of the assets of the Arena
Company, including the Pepsi Center, and by the revenues of the Pepsi Center,
including corporate sponsorships. In addition, the Arena Company is expected
to require $30 to $60 million in equity investments, $15 million of which has
been invested by a subsidiary of Liberty, $15 million of which has already
been invested by the Company and the remainder of which, as required, is
expected to be invested by the Company. In connection with Liberty's
investment, Liberty's subsidiary will receive an ownership interest in the
Arena Company that includes an interest in the capital of the Arena Company
and a profits interest of approximately 6.5% representing the right to
receive distributions from the Arena Company measured by reference to each of
the Nuggets and the Avalanche.  Liberty will not have any management or
operating rights with respect to the Arena Company, the Nuggets or the
Avalanche.  In addition, Liberty was granted put rights beginning in July
2005 to require the Company to purchase from Liberty its then current
ownership interest at its fair market value.  Likewise, the Company has a
call right beginning in July 2005 to purchase Liberty's interest at its then
fair market value.  The Board of Governors for both the NBA and NHL have
approved the Liberty investment and the Company expects to finalize the
written documentation evidencing such approvals during the second quarter of
1998.

     It is anticipated that the Arena Notes will be sold in the second
quarter of 1998. While management believes that the projected revenues from
the Pepsi Center will be sufficient to enable the Arena Company to sell the
Arena Notes on favorable terms, there can be no assurances that market
conditions will not change or other circumstances will not arise which would
prevent the Arena Company from selling the Arena Notes on favorable terms or
at all. If the sale of the Arena Notes is not consummated, the Company would
have to seek other sources of financing to complete the construction of the
Pepsi Center.  Further, although the Company anticipates that the Pepsi Center
will be completed for the 1999-2000 season, there can be no assurance that the
Pepsi Center will be completed by, or be completed within, the contemplated
time frame, if at all.  In addition, no assurance can be given that, once the
Pepsi Center is completed, attendance for the Pepsi Center events or revenues
generated by the Pepsi Center will achieve projected levels.

     The Arena Company, the Avalanche and the Nuggets have concluded
negotiations with the Pepsi-Cola Company regarding the principal terms of
naming rights, pouring rights and sponsorship of the teams for a 20-year
period, pursuant to which the Pepsi Center will be known as the "Pepsi
Center," and anticipate signing a definitive agreement in the first half of
1998. The Arena Company is also currently negotiating sponsorship
arrangements with other companies who would be designated "founding sponsors"
in consideration for long term sponsorship of the Pepsi Center and the teams.
The Arena Company anticipates that the naming rights, pouring rights and
founding sponsor arrangements will result in significant revenues both to
fund costs of the construction of the Pepsi Center and on an annual basis
thereafter.

                            BEACON COMMUNICATIONS

     Acquired in 1994, Beacon produces feature-length motion pictures for
theatrical distribution and television programming. Since its inception in
1990, Beacon has produced nine motion pictures, including AIR FORCE ONE, A
THOUSAND ACRES, PLAYING GOD and THE COMMITMENTS. While Beacon generally
produces motion pictures with total budgeted production costs (before any
third party contributions) ranging from $20 million to $60 million, it also
considers certain higher budget projects such as AIR FORCE ONE starring
Harrison Ford with a production budget of approximately $95 million (of which
more than seventy five percent was funded by contributions from third
parties). As

                                      22
<PAGE>

of December 31, 1997, AIR FORCE ONE has grossed in excess of $170 million
in the domestic market and $135 million in foreign markets since its release
in July 1997. Historically, Beacon has limited its net investment to between
$4 million and $17 million in the development and production of each of the
motion pictures it has produced.

     In order to maintain the Company's strategy for limited investment in
new motion picture production, in 1996 Beacon entered into the Universal
Agreement, a five-year domestic distribution agreement with Universal
Pictures ("Universal") for up to 20 pictures produced by Beacon (although
Universal is not obligated to accept more than four films per year from
Beacon). Pursuant to the Universal Agreement, Universal contributes a
significant percentage of the production cost per motion picture which it
recoups out of domestic revenues, and receives a distribution fee to
distribute the motion pictures in the United States and Canada, and Beacon
receives net revenues after Universal's fees and expenses. Universal
generally controls all rights to distribute such motion pictures domestically
for two full television syndication cycles, not to exceed 21 years from the
theatrical release of the picture and Beacon retains all international
distribution rights, the films' copyrights and certain other rights related
to such films such as music publishing, merchandising and hotel television
rights. In the event that Universal declines to distribute a film produced by
Beacon, Beacon may seek another domestic distributor for the film.       The
principal revenue sources for the distribution of motion pictures are
domestic and foreign theatrical rentals, domestic and foreign home video,
domestic and foreign pay and basic cable television, broadcast network
television, domestic and foreign syndicated television and other sources,
such as music rights, airline and other non-theatrical exhibition and various
merchandising rights. In addition, motion pictures often produce licensing
opportunities to manufacture and distribute commercial articles derived from
characters or other elements of a motion picture, such as clothing, games,
dolls and similar products. Rights may also be licensed for novelization of
the screenplay and other related book publications. The principal cost
elements of motion picture production and distribution include, among others,
costs of direct and indirect labor, talent, rights, producer fees, print
costs, publicity and advertising.

     Beacon has developed a strategy for production that the Company believes
will allow Beacon to maximize its production capacity while at the same time
reducing its investment and diversifying risks. A major component of that
formula involves Beacon's strategic relationships with significant domestic
and international motion picture distributors, such as Universal and The Walt
Disney Company ("Disney"), whose Buena Vista International division
distributed AIR FORCE ONE internationally. The Universal Agreement is a key
part of Beacon's strategy as it allows Beacon to retain all international
distribution rights and, in its discretion, pre-sell a portion of such rights
to help fund motion picture production costs and reduce its exposure.

     In April 1993, Beacon entered into a five-year agreement (the "Sony
Agreement") with Sony Pictures Entertainment, Inc. ("Sony"), pursuant to
which Sony agreed to co-finance and distribute in the United States and
Canada, through Sony's affiliates, up to 15 motion pictures produced by
Beacon. Three motion pictures were distributed pursuant to the Sony
Agreement, including AIR FORCE ONE. Sony generally controls all rights to
distribute the motion pictures

                                      23
<PAGE>

domestically for the later of 14 years or the end of the second television
syndication cycle for such motion picture (but in no event later than 23
years), although Beacon retains the copyrights. In July 1996, the Sony
Agreement was amended to terminate Sony's exclusive acquisition term and to
provide that Sony has retained certain rights to jointly develop, produce and
distribute certain additional motion pictures with Beacon.

     As described above, Beacon entered into the Universal Agreement in July
1996. To date, no motion pictures have been produced and distributed pursuant
to the Universal Agreement. Pursuant to the terms of the Universal Agreement,
Universal has the right to terminate the Universal Agreement if for any
reason Armyan Bernstein, Beacon's Chairman and Chief Executive Officer, is no
longer rendering exclusive producing services in connection with Beacon
productions. The Universal Agreement allows Beacon to continue to offset
production risks by pre-selling foreign distribution rights to its motion
pictures and provides Beacon a proven domestic distribution network for its
productions.

     Beacon's goal is to create a motion picture and television production
company built upon its relationships with high quality talent, the
availability of a strategic distribution alliance and control of the
copyrights to its motion pictures. Beacon does not intend to generally engage
in broad, costly motion picture development and production programs or employ
a large development staff. Instead, Beacon's strategy is to develop superior
quality projects as a means of attracting film-makers and actors of
demonstrated talent to produce motion pictures with budgets generally below
the industry average.

     Beacon anticipates Universal or some other domestic distributor will
release most of its motion pictures on a broad basis, with advertising and
distribution budgets generally comparable to those of the major motion
picture companies. This type of release pattern requires substantial
marketing expenditures to create a campaign and purchase advertising on
television, newspapers, radio and other media. Beacon expects that the
Universal Agreement will help offset such costs and provide more cost
effective use of Beacon's resources than if Beacon distributed its motion
pictures alone.

     The production and release of motion pictures are subject to numerous
uncertainties, however, and there can be no assurance that Beacon's strategy
will be successful, that its release schedule will be met, that Beacon will
be successful in obtaining the necessary financing for its operations or that
it will achieve its goals. In addition, the costs of producing and
distributing motion pictures have generally increased in recent years and may
continue to increase in the future.  While Beacon attempts to reduce the
financial risk of an individual project, actual production costs may exceed
production budgets and the occurrence of material cost overruns, to the
extent not covered by greater revenues attributable to such films, could have
a material adverse effect on Beacon's results of operations.  Beacon intends
to maintain flexibility in order to adjust its strategies, including the
criteria for investing in motion pictures, in response to changes in the
motion picture industry and in respect of Beacon.

     Beacon competes with many other motion picture producers and
distributors, including the major motion picture studios. Although the motion

                                      24
<PAGE>

picture industry is extremely competitive, Beacon believes it can attract
well known and highly respected talent at below-market rates as a result of
its focus on high quality scripts. In addition, the Company has consistently
produced its motion pictures at or below budget. Beacon believes that its
high quality and production efficiency will allow it to compete effectively.

                           OTHER BUSINESS INTERESTS

     The Company owned a 26% limited partnership interest in New Elitch
Gardens, Ltd. ("Elitch Gardens"), which it purchased at a cost of
approximately $7.9 million.  Elitch Gardens operated an amusement park in
Denver, Colorado.  In October 1996, Elitch Gardens' amusement park was sold
to Premier Parks Inc.  In connection with the sale, the Company has recorded
a loss on its investment of $2.3 million in 1996 and $129,000 in 1997.
The Company has received distributions in 1996 and 1997 in an aggregate
amount of $3.6 million in connection with the sale of Elitch Gardens, and
expects an additional distribution in the first half of 1998.  See Note 2 to
the Company's Consolidated Financial Statements.

     The Company also owns a small equity interest in Maginet Corporation,
which purchases and uses OCC's on-demand systems in the Asia-Pacific region,
and Metromedia International Group, a diversified company pursuing
telecommunications ventures in eastern Europe and producing motion pictures,
among other things.  See Note 2 to the Company's Consolidated Financial
Statements.

                                  REGULATION

     The Federal Communications Commission (the "FCC") has broad jurisdiction
over electronic communications. The FCC does not directly regulate On Command
Corporation's pay-per-view or free-to-guest services. However, the FCC's
jurisdiction does encompass certain aspects of ANS's satellite delivery
operations.

     The Code and Ratings Administration of the Motion Picture Association of
America, an industry trade association, assigns ratings for age-group
suitability for viewing of motion pictures. Beacon will follow the practice
of submitting its motion pictures for such ratings. In addition, United
States television stations and networks as well as foreign governments impose
restrictions on the content of motion pictures which may restrict in whole or
in part exhibition on television or in a particular territory.

                      PATENTS, TRADEMARKS AND COPYRIGHTS

     The Company uses a number of trademarks for its products and services,
including "Ascent," "On Command," "OCV," "SpectraVision," "Denver Nuggets,"
"Colorado Avalanche," "Beacon" and others. Many of these trademarks are
registered by the Company, and those trademarks that are not registered are
protected by common law and state unfair competition laws. Because the
Company believes that these trademarks are significant to the Company's
business, the Company has taken affirmative legal steps to protect its
trademarks in the past and intends to actively protect these trademarks in
the future. The Company believes that its trademark position is adequately
protected. The Company also believes that its trademarks are generally well
recognized by consumers of its

                                      25
<PAGE>

products and are associated with a high-level of quality and value.

     OCV and SpectraVision own a number of patents and patent licenses
covering various aspects of OCC's pay-per-view and interactive systems.
Although OCV and SpectraVision maintain and protect these valuable assets,
OCC believes that the design, innovation and quality of OCV's and
SpectraVision's products and their relations with their customers are at
least as important, if not more so, to the maintenance and growth of OCC.

     Distribution rights to motion pictures are granted legal protection
under the copyright laws of the United States and most foreign countries,
which provide substantial civil and criminal sanctions for unauthorized
duplication and exhibition of motion pictures. Beacon plans to take all
appropriate and reasonable measures to secure, protect and maintain or obtain
agreements from licensees to secure, protect and maintain copyright
protection for all of the motion pictures distributed by Beacon under the
laws of all applicable jurisdictions.

                                  EMPLOYEES

     The Company had approximately 1,021 employees at March 3, 1998. In
addition to the NBA Collective Bargaining Agreement and the NHL Collective
Bargaining Agreement, relating to the players for the Nuggets and the
Avalanche, respectively, Beacon is a signatory to collective bargaining
agreements with the Screen Actors Guild, the Directors' Guild of America and
the Writers' Guild of America. These agreements generally require Beacon to
employ union actors, directors and writers and comply with certain other
provisions relating to compensation, benefits and work rules. The Company
considers its relations with its employees to be good.


ITEM 2.  PROPERTIES

     The Company currently leases its principal offices in Denver, Colorado
under a lease which expires in August 1998. The Company also leases
facilities for ANS from COMSAT in Maryland, for Beacon in Los Angeles,
California, and for ANS in Palm Bay, Florida. In December 1996 OCC entered
into a lease for facilities in San Jose, California and relocated its
headquarters and OCV's manufacturing facilities to that location. In
connection with the Acquisition, OCC acquired SpectraVision's headquarters
building in Plano, Texas and directed SpectraVision to assume certain leases
for office space throughout the United States, Canada, Mexico, Puerto Rico,
Hong Kong and Australia for its customer support operations. On October 31,
1997, OCC sold the SpectraVision headquarters building for $4.5 million in
cash.


     The Avalanche and the Nuggets currently play their home games in
Denver's McNichols Arena, an indoor sports arena located in downtown Denver.
McNichols Arena is owned by the City and is made available to the Nuggets
under a lease agreement which extends until the conclusion of the 2005-2006
season. McNichols Arena is made available to the Avalanche under a lease
agreement which extends until the conclusion of the 1997-1998 season, subject
to renewals for a one-year term. Pursuant to an amendment to the Nuggets
lease agreement, the term of the Nuggets' lease decreased by one year for
each of the first two years that the Avalanche played in McNichols Arena
(from the 2007-2008 season

                                      26
<PAGE>

to the 2005-2006 season).

     The Nuggets and the Avalanche have an agreement with the City for use of
McNichols Arena as well as offices and training rooms.  The lease, as
modified by the Arena Agreement (see Note 5 of Notes to the Consolidated
Financial Statements), extends through the completion of the new arena and
requires annual maximum rental payments of $350,000 and $400,000 per year for
the Nuggets and Avalanche, respectively.  The City is generally responsible
for maintaining McNichols Arena and providing administrative personnel such
as ushers, electricians, janitors, technicians and engineers. The Avalanche
and the Nuggets are responsible for providing police and fire safety
personnel, announcers, timers, scorers and statisticians. The Avalanche and
the Nuggets also share in revenue from food and beverage concessions and
parking rights at McNichols Arena.

     Through the Arena Company, the Company plans to construct, own and
operate a new state-of-the-art sports and entertainment center to be located
in downtown Denver. Under the terms of the Arena Agreement with the City,
upon completion of construction of the Pepsi Center, the Avalanche and the
Nuggets will be released from their existing leases at McNichols Arena, and
the Nuggets and the Avalanche will be obligated to play in the Pepsi Center
for a term of 23 years (with a possible extension of two years). See
"Business-Entertainment-The Pepsi Center."


ITEM 3.  LEGAL PROCEEDINGS

     The Company is a party to certain legal proceedings in the ordinary
course of its business. However, the Company does not believe that any such
legal proceedings will have a material adverse effect on the Company's
financial position or results of operations. In addition, through its
ownership of the Avalanche and the Nuggets, the Company is a defendant along
with other NHL and NBA owners in various lawsuits incidental to the
operations of the two professional sports leagues. The Company will generally
be liable, jointly and severally, with all other owners of the NHL or NBA, as
the case may be, for the costs of defending such lawsuits and any liabilities
of the NHL or NBA which might result from such lawsuits. The Company does not
believe that any such lawsuits, singly or in the aggregate, will have a
material adverse effect on the Company's financial condition or results of
operations. The Nuggets, along with three other teams, have also agreed to
indemnify the NBA, its member teams and other related parties against certain
ABA-related obligations and litigation, including costs to defend such
actions. The Company believes that the ultimate disposition and the costs of
defending these or any other incidental NHL or NBA legal matters or of
reimbursing related costs, if any, will not have a material adverse effect on
the Company's financial condition or results of operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.


                                     27

<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

     In accordance with General Instruction G to the Annual Report on Form
10-K, included herein is the following table, which sets forth the names,
ages at March 3, 1998 and titles of the executive officers of the Company,
and biographical information with respect to such officers.

<TABLE>
<S>                      <C>  <C>
     Name                Age  Office
     ----                ---  ------
 Charles Lyons           43   Chairman of the Board, President and Chief
                              Executive Officer
 James A. Cronin, III    43   Executive Vice President, Chief Operating Officer,
                              Chief Financial Officer and Director
 Robert M. Kavner        54   President and Chief Executive Officer, On Command
                              Corporation
 Arthur M. Aaron         40   Vice President, Business and Legal Affairs and
                              Secretary
 David A. Holden         38   Vice President, Finance and Controller
 Ellen Robinson          35   President, Ascent Sports, Inc.
</TABLE>


      There is no family relationship between an officer and any other
officer or director and no arrangement  or understanding between an officer
and any other person pursuant to which he or she was selected as an officer.

     MR. LYONS has been President, Chief Executive Officer and a director of
the Company and its predecessors since February 1992 and Chairman since June
1997. Mr. Lyons is Chairman of the Board of OCC.

     MR. CRONIN has been Executive Vice President, Chief Operating Officer,
Chief Financial Officer and a director of the Company since June 1997. Prior
thereto he was Executive Vice President, Finance and Chief Operating Officer
of the Company since June 1996. From July to October 1996 Mr. Cronin was
Executive Vice President-Finance, acting Chief Financial Officer and acting
Chief Operating Officer of OCC. Mr. Cronin served as a financial and
management consultant from 1992 through June 1996. Mr. Cronin is a director
of OCC and Landair Services, Inc.

     MR. KAVNER has been President and Chief Executive Officer of OCC since
September, 1996. Prior thereto Mr. Kavner was a principal in Kavner &
Associates, a consulting firm for media and communications companies. From
June 1994 through September 1995 Mr. Kavner was an Executive Vice President
of Creative Artists Agency, Inc. ("CAA"). Prior to joining CAA, Mr. Kavner
was Executive Vice President of AT&T Corp. ("AT&T") from 1984 to 1994, where
he held the positions of Chief Executive Officer of AT&T's Multimedia
Products and Services Group and Chief Financial Officer of AT&T. Mr. Kavner
is a director of Fleet Financial Corp. and Earthlink Networks, Inc.

     MR. AARON has been Vice President, Business and Legal Affairs of the
Company since April 1995. Prior thereto, he was a General Attorney in the
Office of the General Counsel of COMSAT since July 1993. From October 1987 to

                                      28
<PAGE>

July 1993, Mr. Aaron was an attorney at the law firm of Skadden, Arps, Slate,
Meagher & Flom in Boston, Massachusetts.

     MR. HOLDEN has been Vice President, Finance since June 1997 and
Controller of the Company since April 1996. Prior thereto, Mr. Holden was
Senior Manager at Deloitte & Touche LLP ("Deloitte") from 1987 through 1996.

     MS. ROBINSON has been President of Ascent Sports, Inc. since June 1996.
Prior thereto, Ms. Robinson served as General Manager of Pepsi Cola Bottling
Company ("Pepsi") in Denver from 1995 to 1996, Vice President of Customer
Development of Pepsi from 1992 through 1995 and Area Marketing Manager of
Pepsi from 1988 through 1992.  Ms. Robinson is a member of the Board of
Directors of Koala Corporation.


                                   PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

     As of March 3, 1998, there were approximately 33,463 record holders of
shares of Common Stock, $.01 par value, of the Company ("Common Stock").
Ascent's Common Stock trades on the Nasdaq Stock Market-SM-, under the symbol
"GOAL."  The Company's Transfer Agent and Registrar is The Bank of New York,
101 Barclay Street, New York, New York.  The Company has not declared or paid
any dividends on the Common Stock and does not intend to do so in the
foreseeable future.  For a description of certain restrictions on the
Company's payment of dividends, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 6 to the Company's
Consolidated Financial Statements.

     The high and low closing prices for the Company's Common Stock for the
two fiscal years ended December 31, 1997 are as follows:

<TABLE>
     Quarter Ended                 High      Low
     -------------                 ----      ---
<S>                              <C>       <C>
     December 31, 1997           $10.375   $ 9.938

     September 30, 1997          $11.625   $11.313

     June 30, 1997               $ 9.375   $ 8.250

     March 31, 1997              $    11   $    10

     December 31, 1996           $23.125   $11.500

     September 30, 1996          $24.875   $15.750

     June 30, 1996               $25.250   $14.500

     March 31, 1996              $15.750   $11.250
</TABLE>

                                      29


<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction
with the Company's consolidated financial statements and schedules and
accompanying notes and with "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" presented elsewhere in this document.

                         FIVE YEAR FINANCIAL SUMMARY
         (Dollar amounts in thousands, except per share information)

<TABLE>
                                                    Years ended December 31,
                                      -----------------------------------------------------
                                      1997       1996        1995         1994         1993
                                      ----       ----        ----         ----         ----
<S>                                <C>         <C>         <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:

Multimedia Distribution Revenue    $ 242,043   $167,976(1) $135,782     $125,823     $ 97,855
Entertainment Revenue                186,471     90,144      66,036(2)    39,653       27,826
                                   ---------   --------    --------     --------     --------
   Total Revenue                     428,514    258,120     201,818      165,476      125,681
                                   ---------   --------    --------     --------     --------

Operating Expenses                   470,873    302,439     218,353      155,475      121,192
Provision for restructuring               --         --      10,866(3)        --           --
                                   ---------   --------    --------     --------     --------
   Total expenses                    470,873    302,439     229,219      155,475      121,192
                                   ---------   --------    --------     --------     --------

Income (loss) from operations        (42,359)   (44,319)    (27,401)      10,001        4,489
Interest expense                     (20,971)   (10,715)       (759)        (326)        (567)
Other income (expense),
   [including income taxes,
   minority interest
   and extraordinary items]           21,816     19,000       7,137       (4,075)      (1,252)
                                   ---------   --------    --------     --------     --------
Net income (loss)                  $ (41,514)  $(36,034)   $(21,023)    $  5,600     $  2,670
                                   ---------   --------    --------     --------     --------
                                   ---------   --------    --------     --------     --------
Basic and diluted net income
 (loss) per common share (4)(5)    $   (1.40)  $  (1.21)   $  (0.87)    $   0.23     $   0.11
                                   ---------   --------    --------     --------     --------
                                   ---------   --------    --------     --------     --------
Weighted average number of
 common shares outstanding (4)        29,755     29,753      24,217       24,000       24,000
                                   ---------   --------    --------     --------     --------
                                   ---------   --------    --------     --------     --------

OTHER FINANCIAL DATA:

Operating Income (loss):
   Multimedia Distribution         $ (21,745)  $ (9,775)   $  2,885     $ 18,140     $ 15,327

   Entertainment                     (12,078)   (24,812)     (9,418)       1,064       (2,871)
   Ascent Corporate                   (8,536)    (9,732)    (10,002)      (9,203)      (7,967)
   Restructuring reserve                  --         --     (10,866)          --           --
                                   ---------   --------    --------     --------     --------
     Total                          $(42,359)  $(44,319)   $(27,401)    $ 10,001     $  4,489
                                   ---------   --------    --------     --------     --------
                                   ---------   --------    --------     --------     --------

Capital Expenditures:
   Multimedia Distribution          $ 93,914   $ 78,793    $ 82,903     $ 89,073     $ 63,708
   Entertainment                      25,156     10,066       2,208          980        1,232
                                   ---------   --------    --------     --------     --------
     Total                          $119,070   $ 88,859    $ 85,111     $ 90,053     $ 64,940
                                   ---------   --------    --------     --------     --------
                                   ---------   --------    --------     --------     --------
</TABLE>

                                  30
<PAGE>

<TABLE>
<S>                         <C>         <C>         <C>         <C>         <C>
CASH FLOW DATA:
   Net cash provided by
     operating activities   $  74,870   $  23,090   $  63,289   $  38,560   $  27,713
   Net cash used in
     investing activities   $(130,831)  $(113,127)  $(180,041)  $(119,975)  $ (76,086)
   Net cash provided by
     financing activities   $  77,248   $  82,988   $ 124,406   $  81,554   $  51,217


EBITDA: (6)
   Multimedia Distribution  $  66,859   $  52,457   $  48,277   $  53,031   $  39,071
   Entertainment                  768     (12,286)     (1,135)      4,993         612
   Ascent Corporate            (8,404)     (9,678)    (10,002)     (9,203)     (7,967)
                            ---------   ---------   ---------   ---------   ---------
      Total                 $  59,223   $  30,493   $  37,140   $  48,821   $  31,716
                            ---------   ---------   ---------   ---------   ---------
                            ---------   ---------   ---------   ---------   ---------

OTHER:
Cash dividends per share    $     --   $      --    $     --    $      --   $      --
                            ---------   ---------   ---------   ---------   ---------
                            ---------   ---------   ---------   ---------   ---------

BALANCE SHEET DATA
(AT END OF PERIOD):

Total assets                $738,984    $ 742,642     504,416   $ 372,580   $ 270,473
Total long-term debt         259,958       50,000      70,000         207       1,024
Stockholder's equity         227,698      269,585     301,269     268,197     181,181

ROOM DATA:
Total Number of Guest-pay
 rooms (at end of period):
   On-Demand                 765,000      710,000     361,000     248,000     124,000
   Scheduled only (7)        128,000      208,000      51,000     194,000     264,000
                            ---------   ---------   ---------   ---------   ---------
      Total rooms            893,000      918,000     412,000     442,000     388,000
                            ---------   ---------   ---------   ---------   ---------
                            ---------   ---------   ---------   ---------   ---------
</TABLE>

(1)  Includes $21.4 million in revenues from SpectraVision.  The results of
     operations for the fourth quarter of 1996 include the results from
     SpectraVision assets which were acquired on October 8, 1996.  See Note 2 of
     Notes to the Consolidated Financial Statements.

(2)  Includes $9.2 million of NBA expansion fee revenue recorded in the second
     quarter of 1995.  In addition, the results of operations for the second and
     third quarter of 1995 include the results of the Avalanche which was
     acquired on July 1, 1995.

(3)  Includes a $10.9 million restructuring charge resulting from the
     discontinuation of Satellite Cinema's lower margin, scheduled, satellite
     delivered pay-per-view service.  See Note 12 of Notes to Consolidated
     Financial Statements.

(4)  Gives effect to the 24,000-for-1 stock split of the outstanding Common
     Stock effected upon consummation of the Offering.

(5)  The Company adopted SFAS No. 128, "Earnings Per Share" during 1997 and
     accordingly, has restated the prior years presentation.

(6)  EBITDA represents earnings before interest expense, income taxes,
     depreciation and amortization and other income (expense).  The most
     significant difference between EBITDA and cash provided from operating
     activities is changes in working capital.  EBITDA is presented

                                   31
<PAGE>

     because it is a widely accepted financial indicator used by certain
     investors and analysts to analyze and compare companies on the basis of
     operating performance.  In addition, management believes EBITDA provides an
     important additional perspective on the Company's operating results and the
     Company's ability to service its long-term debt and fund the Company's
     continuing growth. EBITDA is not intended to represent cash flows for
     the period, or to depict funds available for dividends, reinvestment or
     other discretionary uses.  EBITDA has not been presented as an alternative
     to operating income or as an indicator of operating performance and should
     not be considered in isolation or as a substitute for measures of
     performance prepared in accordance with generally accepted accounting
     principles, which are presented and discussed in Item 7 under Liquidity
     and Capital Resources. See the Consolidated Financial Statements and
     the Notes thereto appearing elsewhere in this document.  EBITDA for the
     year ended December 31, 1995 excludes the provision for restructuring
     during such period.

(7)  Historically, the Company through its Satellite Cinema division, provided
     satellite delivered (scheduled only) pay-per-view movies to the lodging
     industry prior to its ownership of OCV.  During the third quarter of 1995,
     management of the Company decided to discontinue Satellite Cinema's
     scheduled movie operations and focus solely on the business and luxury
     hotels served by OCV's on-demand technology.  Effective October 8, 1996 the
     Company, through OCC, acquired the assets and certain liabilities of
     SpectraVision, which assets included a certain number of scheduled only
     pay-per-view rooms.  In the third quarter of 1997, OCC assigned to Skylink
     operating rights and sold assets associated with approximately 26,500 rooms
     in the United States and Canada.

                                     32
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the Consolidated
Financial Statements and Unaudited Condensed Consolidated Financial
Statements and Notes thereto and other financial information included
elsewhere in this Annual Report.

CERTAIN OF THE STATEMENTS THAT FOLLOW ARE FORWARD-LOOKING AND RELATE TO
ANTICIPATED FUTURE OPERATING RESULTS.  STATEMENTS WHICH LOOK FORWARD IN TIME ARE
BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ASSUMPTIONS, WHICH MAY BE
AFFECTED BY SUBSEQUENT DEVELOPMENTS AND BUSINESS CONDITIONS, AND NECESSARILY
INVOLVE RISKS AND UNCERTAINTIES.  THEREFORE, THERE CAN BE NO ASSURANCE THAT
ACTUAL FUTURE RESULTS WILL NOT DIFFER MATERIALLY FROM ANTICIPATED RESULTS.
ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY SOME OF THE IMPORTANT FACTORS
THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED, THOSE
FACTORS SHOULD NOT BE VIEWED AS THE ONLY FACTORS WHICH MAY AFFECT FUTURE
OPERATING RESULTS.

OVERVIEW

The Company operates in two segments: Multimedia Distribution, which consists of
OCC and ANS, and Entertainment, which consists of the Denver Nuggets, the
Colorado Avalanche, the Arena Company, and Beacon.

MULTIMEDIA DISTRIBUTION

The Company made its initial investment in OCC in 1991 and owned
approximately 79% of OCV prior to the Acquisition. As a result of
consummating the Acquisition, the Company owned approximately 57%
(approximately 46% on a fully diluted basis) of the outstanding common stock
of OCC.

Prior to the Acquisition, OCV had experienced rapid growth in the prior three
and one half years, increasing its base of installed rooms from approximately
37,000 rooms in approximately 90 hotels at the end of 1992 to approximately
441,000 rooms in approximately 1,585 hotels at October 1996. Conversely,
SpectraVision, as a result of financial constraints and its bankruptcy filing
in June 1995, had experienced deterioration in its room base over the same
period. SpectraVision's room base, including both pay-per-view and
free-to-guest, had decreased from approximately 1,059,000 installed rooms in
approximately 2,543 hotels at the end of 1992 to approximately 484,000 rooms,
including both pay-per-view and free-to-guest, in approximately 1,632 hotels
at October 1996. During the third quarter of 1995, management of the Company
decided to discontinue Satellite Cinema's scheduled movie operations and
focus primarily on the business and luxury hotels served by OCV's on-demand
technology. In December 1995, certain assets and contracts relating to
Satellite Cinema customers were sold by OCV to Skylink Communications
("Skylink"). See Note 2 of Notes to the Consolidated Financial Statements.
Effective October 8, 1996, the Company, through OCC, acquired the assets and
certain liabilities of SpectraVision, which assets included a certain number
of scheduled only rooms. During the third quarter of 1997, OCC assigned to
Skylink operating rights and sold assets associated with approximately 26,500
SpectraVision rooms located in the U.S. and Canada.

The following table sets forth information with regard to pay-per-view rooms
installed as of December 31:

<TABLE>

                        1997                1996                1995
                        ----                ----                ----
                   Rooms     Percent   Rooms     Percent   Rooms     Percent
                   -----     -------   -----     -------   -----     -------
<S>               <C>        <C>      <C>        <C>      <C>        <C>

 On-Demand        765,000     85.7%   710,000     77.3%   361,000     87.6%
                  -------     ----    -------    -----    -------    -----
 Scheduled        128,000     14.3%   208,000     22.7%    51,000     12.4%
                  -------     ----    -------    -----    -------    -----
                  893,000    100.0%   918,000    100.0%   412,000    100.0%
                  -------    -----    -------    -----    -------    -----
                  -------    -----    -------    -----    -------    -----

</TABLE>
                                   33
<PAGE>

It is expected that the Company will continue to derive a majority of its
consolidated revenues from OCC. Revenue and income growth are anticipated
from the continued installation of on-demand systems for new hotel customers
and systems serving existing SpectraVision customers. The primary sources of
revenues of OCC (which are more fully discussed below) are movie rentals,
video games, free-to-guest services and video system sales. The Company
projects that the conversion of hotel rooms acquired in the Acquisition to
OCC's on-demand technology, as well as the continued upgrading and expansion
of the products and services offered by OCC, may require capital expenditures
of approximately $60 to $90 million during 1998.

Through ANS, the Company provides satellite distribution support services,
principally to the NBC television network for which it is the primary
provider. In 1984, ANS entered into the ten-year NBC Agreement to design,
build, operate and support its satellite distribution network. In 1994, ANS
and NBC extended the term of the NBC Agreement to 1999. In addition, in
August 1996, the Company and NBC executed a letter of intent pursuant to
which the Company has procured and installed certain digital technology
equipment and has agreed to provide MSNBC, LLC, a joint venture between NBC
and Microsoft Corporation ("MSNBC"), with network service, maintenance and
support. This partial digital upgrade service, governed by the underlying NBC
Agreement, is being provided for a 10-year term. ANS and MSNBC currently
anticipate finalizing a service agreement separate from the underlying NBC
Agreement in the first half of 1998 for the MSNBC partial digital upgrade
service. The network service, maintenance and support provided to MSNBC are
related to and dependent upon the original NBC distribution network. The
Company anticipates that ANS will assist NBC in completing the upgrade of the
NBC distribution network to digital technology, although no assurance can be
provided in this regard. Expenditures by ANS which would be associated with
such digital upgrade in the event of such renewal are estimated at
approximately $30-$35 million, substantially all of which are currently
expected to be financed through operating leases, and would be accompanied by
an extension of the NBC Agreement. No assurance can be provided that such
agreement will be extended and, if extended, on what terms. The Company
anticipates that the contract to complete the digital upgrade for NBC will be
awarded in the fourth quarter of 1998 and accordingly, the timing of the
expenditures may vary.

ENTERTAINMENT

The Company made its initial investment in the Nuggets, one of 29 franchises
in the NBA, in 1989 with the acquisition of a 62.5% interest in a limited
partnership that acquired the Nuggets. In 1991 and 1992, the Company acquired
the remaining interests in the partnership. In July of 1995, the Company
acquired the Avalanche, one of 26 franchises in the NHL, at a cost of
approximately $75.8 million. The Company moved the franchise to Denver to
share Denver's McNichols Arena with the Nuggets, where the team commenced
play under the Colorado Avalanche name in the 1995-1996 season. Based on the
timing of the Avalanche acquisition, the Company's results of operations for
the year ended December 31, 1995 include the results of the Avalanche only
for the last six months.

The financial performance of the Nuggets and the Avalanche are, to a large
extent, dependent on their performance in their respective leagues. In
addition, due to the limitation of the facilities available at McNichols
Arena, the Company expects the Avalanche and the Nuggets to continue to
experience operating losses as long as both teams play in McNichols Arena. On
November 13, 1997, the Arena Company entered into the Arena Agreement with
the City, pursuant to which Ascent will construct, own and operate the Pepsi
Center in which the Nuggets and Avalanche would play beginning in the
1999-2000 NHL and NBA playing seasons. As a result of the Nuggets and the
Avalanche playing in the Pepsi Center and Ascent operating the Pepsi Center
for live events, completion of the Pepsi Center is expected to result in
increased revenues and improved operating results for the Company's
Entertainment segment.

In December of 1994, Ascent acquired the assets of Beacon, a film and
television production company based in Los Angeles.  The cost of this
acquisition was $29,133,000 which consisted of $16,180,000 in cash and
liabilities assumed of $12,953,000.  Since the acquisition of

                               34
<PAGE>

Beacon, Beacon has produced four motion pictures including AIR FORCE ONE, A
THOUSAND ACRES, AND PLAYING GOD which were released in 1997.

SEASONALITY, VARIABILITY AND OTHER

The Company's businesses are subject to the effects of both seasonality and
variability.

The Multimedia Distribution segment revenues, and primarily those of OCC, are
influenced principally by hotel occupancy rates and the "buy rate" or
percentage of occupied rooms at hotels that buy movies or other services at
the property. Higher revenues are generally realized during the summer months
and lower revenues realized during the winter months due to business and
vacation travel patterns which impact the lodging industry's occupancy rates.
Buy rates generally reflect the hotel's guest mix profile, the popularity of
the motion picture or services available at the hotel and the guests' other
entertainment alternatives.

The Entertainment segment revenues are influenced by various factors.
Revenues for the Nuggets and the Avalanche correspond to the NBA and NHL
playing seasons, which extend from the fall to late spring depending on the
extent of each team's post-season playoff participation. Accordingly, the
Company realizes the vast majority of its revenues from the Nuggets and the
Avalanche during such period. Beacon's revenues fluctuate based upon the
delivery and/or availability of the films it produces, the timing of
theatrical and home video releases and seasonal consumer purchasing behavior.
Release and delivery dates for theatrical products are determined by several
factors, including the distributor's schedule, the timing of vacation and
holiday periods and competition in the market. Specifically, Beacon delivered
and released three motion pictures during the year ended December 31, 1997;
AIR FORCE ONE was delivered and released in July 1997, A THOUSAND ACRES was
delivered and released in September 1997, and PLAYING GOD was released
domestically in October 1997 and was delivered to certain of its foreign
distributors during the year ended December 31, 1997. Accordingly, Beacon's
revenues have significantly increased during the year ended December 31, 1997
as compared to prior years.

Furthermore, Beacon's operating results are significantly affected by
accounting policies required for the film and entertainment industry and
management's estimates of the ultimate realizable value of its films.
Production advances received prior to delivery or completion of a film are
treated and recorded as deferred income and are generally recognized as
revenues on the date the film is delivered or made available for delivery.

The Company generally capitalizes all costs incurred to produce a film. Such
costs include the acquisition of story rights, the development of stories,
the direct costs of production, print and advertising costs, production
overhead and interest expense relating to financing the project. Capitalized
exploitation or distribution costs include those costs that clearly benefit
future periods such as film prints and prerelease and early release
advertising that is expected to benefit the film in future periods. These
costs, as well as participation and talent residuals, are amortized each
period under the individual film forecast method, which uses the ratio that
the current period's gross revenues from all sources for the film bear to
management's estimate of anticipated total gross revenues for such film from
all sources. In the event management reduces its estimates of the future
gross revenues associated with a particular item or product, which had been
expected to yield greater future proceeds, a write-down and a corresponding
decrease in the Company's earnings for the quarter and fiscal year end in
which such write-down is taken could result and could be material.

As a result of the operating losses expected to be incurred by OCC, the
Avalanche and the Nuggets, the Company expects to incur operating losses on a
consolidated basis during 1998. However, the Company expects to record
positive earnings before income taxes, depreciation and amortization and
positive operating cash flows during this period.

                                35
<PAGE>

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

The following table sets forth certain data as a percentage of revenues for
the period indicated:

<TABLE>

                                          1997                    1996
                                          ----                    ----
                                    Amount    Percent       Amount     Percent
                                   --------   -------       ------     -------
                                              (Dollars in thousands)
 <S>                                <C>        <C>         <C>          <C>
 INCOME STATEMENT DATA
 Revenues:
      Multimedia Distribution      $242,043      56.5 %    $167,976       65.1%
      Entertainment                 186,471      43.5        90,144       34.9
                                   --------     -----      --------      -----
         Total                      428,514     100.0       258,120      100.0

 Cost of services                   360,886      84.2       217,949       84.4
 Depreciation and amortiza          101,583      23.7        74,812       29.0
 General and administrative           8,404       2.0         9,678        3.8
                                   --------     -----      --------      -----
 Operating loss                     (42,359)     (9.9)      (44,319)     (17.2)
 Other income (expense), net           (319)       --           565        0.2
 Interest expense                   (20,971)     (4.9)      (10,715)      (4.1)
 Income tax benefit                   7,816       1.8        11,957        4.6
 Minority interest                   14,319       3.3         6,812        2.6
 Extraordinary loss, net                 --        --          (334)      (0.1)
                                   --------     -----      --------      -----
 Net loss                          $(41,514)     (9.7)%    $(36,034      (14.0)%
                                   --------     -----      --------      -----
                                   --------     -----      --------      -----
</TABLE>


REVENUES

Revenues increased by $170.4 million, or 66.0%, to $428.5 million for the
year ended December 31, 1997 from $258.1 million for the year ended December
31, 1996. Multimedia Distribution revenues increased by $74.0 million, or
44.0%, to $242.0 million for the year ended December 31, 1996.  This increase
in the Multimedia Distribution revenues is attributable to a $74.6 million
increase in revenues at OCC.  The increase in revenues at OCC was due to a
larger number of hotel rooms served, resulting primarily from the Acquisition
in October 1996. OCC's revenues in 1997 were also affected by a satellite
outage in January affecting certain SpectraVision properties and the
termination and sale of approximately 40,000 rooms during the second-half of
1997 that were receiving pay-per-view programming delivered exclusively by
satellite.  Management of OCC believes these two events reduced Multimedia
Distribution revenues in 1997 by approximately $3.0 million to $4.0 million.
Entertainment revenues increased by $96.4 million in 1997 primarily as a
result of an increase in revenues at Beacon of $87.1 million.  The increase
in revenues at Beacon is due to the recognition of $91.0 million in revenues
from the release and delivery of three motion pictures to their distributors
during 1997. Specifically, Beacon recognized revenues of $72.9 million from
the release of AIR FORCE ONE (which includes Beacon's share of the net box
office results through December 31, 1997 and $50.0 million which is
attributable to the recognition of previously deferred revenues upon delivery
of the film to its foreign distributor), $6.8 million from the delivery and
domestic release of A THOUSAND ACRES and revenues of $11.3 million from the
delivery and release of the motion picture PLAYING GOD. In contrast, during
the year ended December 31, 1996, Beacon recognized revenues of $4.6 million
from the home video release of the motion picture, THE BABYSITTER'S CLUB. In
addition, during the year ended December 31, 1997, the Avalanche realized
increased revenues of $10.0 million from regular season ticket sales,
sponsorship sales, local broadcast revenues, and increased playoff and
preseason revenues in spite of playing fewer home games as compared to 1996.
However, the increases in revenues from the Avalanche were partially offset
by declining revenues from the Nuggets as compared to 1996.

                                  36
<PAGE>

COST OF SERVICES

Cost of services increased by $143.0 million, or 65.6%, to $360.9 million for
the year ended December 31, 1997 from $217.9 million for the year ended
December 31, 1996. The overall increase in cost of services is attributable
to an increase in film amortization costs at Beacon of $70.9 million,
primarily from AIR FORCE ONE, and increased costs at OCC due to the overall
increase in number of rooms served. Cost of Services for Multimedia
Distribution was $175.2 million, or 72.4% of Multimedia Distribution revenues
for the year ended December 31, 1997 compared to $115.5 million, or 68.8% of
Multimedia Distribution revenues for the year ended December 31, 1996. The
decline in Multimedia Distribution margin is primarily attributable to an
increase in cost of services at OCC and a lower recovery of free-to-guest
programming costs provided to hotels. The increase in cost of services at OCC
is primarily due to higher royalties on feature movies, higher hotel
commission expenses on SpectraVision rooms, and an increase in field service
costs in order to support the acquired SpectraVision equipment and expenses
associated with the satellite outage, as discussed previously.  In addition,
OCC has incurred additional costs in 1997 in the development of its new
digital technologies, for activities to integrate SpectraVision and OCC's
operational systems and the expansion of its international presence.
Partially offsetting the declining margin at OCC was an increase in margin at
ANS, which is attributable to ancillary sales of higher margin services in
1997 and labor cost savings. Cost of Services for Entertainment was $185.7
million, or 99.6% of Entertainment revenues for the year ended December 31,
1997 compared to $102.4 million, or 113.7% of Entertainment revenues for the
year ended December 31, 1996. The improved margin at Entertainment is
primarily attributable to results from AIR FORCE ONE, and to a lesser degree,
improved operating results at the Avalanche from higher revenues.  Lower
revenues and higher costs with respect to the Nuggets, resulting primarily
from increased team costs related to contract terminations, partially offset
Entertainment's improved margin.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization increased by $26.8 million, or 35.8%, to $101.6
million for the year ended December 31, 1997 from $74.8 million for the year
ended December 31, 1996.  Depreciation and amortization for Multimedia
Distribution was $88.7 million, or 36.7% of Multimedia Distribution revenues
for the year ended December 31, 1997, compared to $62.2 million, or 37.0% of
Multimedia Distribution revenues for the year ended December 31, 1996. The
increase is primarily attributable to a higher installed room base and the
resulting increase in depreciation at OCC, combined with the incremental
depreciation and amortization of the intangible assets acquired in connection
with the Acquisition in October 1996.  Depreciation and amortization for
Entertainment was $12.8 million, or 6.9% of Entertainment revenues for the
year ended December 31, 1997, compared to $12.6 million, or 14.0% of
Entertainment revenues for the year ended December 31, 1996.

GENERAL AND ADMINISTRATIVE

General and administrative expenses, which include only those costs incurred
by the parent company, Ascent Entertainment Group, Inc., decreased by $1.3
million, or 13.4%, to $8.4 million for the year ended December 31, 1997
compared to general and administrative expenses of $9.7 million for the year
ended December 31, 1996.  This decrease primarily reflects the reduction of
approximately $1.8 million in certain general and administrative service
charges from COMSAT and the non-recurrence of moving, relocation and other
travel costs incurred in 1996 offset by increased professional services costs
associated with the Distribution, the recognition of expense during 1997 for
the Company's stock appreciation rights, and an increase in employment
related costs necessary to support the Company's continued growth.  From
January through June 1997, COMSAT provided only limited administrative and
support services to the Company and, since July 1997 has provided none.

OTHER INCOME (EXPENSE)

Other income (expense) decreased by approximately $900,000 during the year
ended December 31, 1997 as compared to the year ended December 31, 1996. The
increase in other expenses during 1997 is attributable to OCC's recognition
of a $917,000 loss on its investment in

                                     37
<PAGE>

MagiNet during the fourth quarter of 1997.  While the Company recognized $2.3
million in losses on its limited partnership investment in Elitch Gardens
during 1996, these losses were substantially offset by a gain of $1.9 million
from the sale of investment securities and other interest income recognized
during 1996.  Elitch Gardens, a Denver amusement park, was sold in October
1996.

INTEREST EXPENSE

Interest expense increased by $10.3 million to $21.0 million for the year
ended December 31, 1997 from $10.7 million during the year ended December 31,
1996. This increase is attributable to the additional borrowings incurred
during the fourth quarter of 1996 (primarily the assumption of debt in the
Acquisition) and throughout 1997 for capital expenditures, investment
requirements and the funding of operating requirements of the Company and its
subsidiaries; and to a lesser degree, an increase in financing costs as a
result of the amendment to the former Ascent Credit Facility in March 1997
and debt issuance costs associated with the Company's Senior Secured Discount
Notes (the Notes) issued in December 1997.

INCOME TAXES

The Company recorded an income tax benefit of $7.8 million during the year
ended December 31, 1997 as compared to an income tax benefit of $12.0 million
for the year ended December 31, 1996. Up to and until the Distribution from
COMSAT on June 27, 1997, the Company was able to recognize tax benefits from
its operating losses as part of its inclusion as a member of the consolidated
tax group of COMSAT.  Accordingly, the Company recognized a tax benefit of
$8.6 million from its operating losses during the first half of 1997.
However, this benefit was partially offset by the Company's recognition of
tax expense of $800,000 to reflect OCC's tax on its income from foreign
jurisdictions during 1997. Furthermore, OCC, which files a separate return,
recognized no tax benefit from its operating losses due to uncertainties
regarding its ability to realize a portion of the benefits associated with
future deductible temporary differences (deferred tax assets) and net
operating loss carry forwards, prior to their expiration. (See Note 8 of
Notes to Consolidated Financial Statements.)

MINORITY INTEREST

Minority interest reflects the losses attributable to the minority interest
in the Company's 57% owned subsidiary, OCC.

NET LOSS

As a result of the foregoing, net loss for the year ended December 31, 1997
was $41.5 million as compared to a net loss of $36.0 million for the year
ended December 31, 1996.

                                  38
<PAGE>

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

The following table sets forth certain data as a percentage of revenues for the
period indicated:

<TABLE>
                                          1996                1995
                                          ----                ----
                                    Amount    Percent    Amount   Percent
                                    ------    -------    ------   -------
                                           (Dollars in thousands)
<S>                                 <C>      <C>        <C>      <C>
INCOME STATEMENT DATA
Revenues:
  Multimedia Distribution          $167,976    65.1%    $135,782    67.3%
  Entertainment                      90,144    34.9       66,036    32.7
                                   --------   -----     --------   -----
    Total                           258,120   100.0      201,818   100.0
Cost of services                    217,949    84.4      154,676    76.6
Depreciation and amortization        74,812    29.0       53,675    26.6
General and administrative            9,678     3.8       10,002     5.0
Provision for restructuring              --      --       10,866     5.4
                                   --------   -----     --------   -----
Operating loss                      (44,319)  (17.2)     (27,401)  (13.6)
Other income (expense), net             565     0.2       (2,070)   (1.0)
Interest expense                    (10,715)   (4.1)        (759)   (0.4)
Income tax benefit                   11,957     4.6        9,835     4.9
Minority interest                     6,812     2.6         (628)   (0.3)
Extraordinary loss, net                (334)   (0.1)          --    (334)
                                   --------   -----     --------   -----
Net loss                           $(36,034   (14.0)%   $(21,023)  (10.4)%
                                   --------   -----     --------   -----
                                   --------   -----     --------   -----
</TABLE>

REVENUES

Revenues increased by $56.3 million, or 27.9%, to $258.1 million for the year
ended December 31, 1996 from $201.8 million for the year ended December 31,
1995. Multimedia Distribution revenues increased by $32.2 million, or 23.7%, to
$168.0 million for the twelve months ended December 31, 1996 from $135.8 million
for the twelve months ended December 31, 1995. While revenues for the year ended
December 31, 1996 includes $21.4 million from the SpectraVision assets acquired
by OCC in October, 1996, 1995 revenues includes $24.7 million of revenues from
the Company's Satellite Cinema business, which ceased operations on December 31,
1995. Excluding the 1995 Satellite Cinema revenues and the 1996 SpectraVision
revenues, Multimedia Distribution revenues increased $35.5 million or 32.0% over
1995 revenues. This increase is primarily attributable to the 29.0% growth in
1996 of OCV installed on-demand rooms (from 361,000 rooms at December 31, 1995
to 466,000 rooms at December 31, 1996). In addition, revenues increased at ANS
due to revenues earned for services provided under the NBC agreement for the
MSNBC partial digital upgrade. Entertainment revenues increased by $24.1
million, or 36.5%, to $90.1 million for the year ended December 31, 1996 from
$66.0 million for the year ended December 31, 1995 primarily as a result of the
inclusion of a full year of revenues from the Avalanche. The Avalanche, acquired
in July 1995, reflected no revenues in the first half of 1995 as compared to
$26.4 million for the first six months of 1996. The increased Avalanche revenues
were partially offset by lower revenues at the Nuggets, primarily attributable
to the absence of $9.2 million in NBA expansion fees recognized in 1995, and at
Beacon, since Beacon had no movie releases in 1996 as compared to one in 1995.

COST OF SERVICES

Cost of services increased by $63.2 million, or 40.9%, to $217.9 million for the
year ended December 31, 1996 from $154.7 million for the year ended December 31,
1995. Costs of services for Multimedia Distribution was $115.5 million, or 68.8%
of Multimedia Distribution revenue for the year ended December 31, 1996 compared
to $87.5 million, or 64.4% of Multimedia Distribution revenue for the year ended
December 31, 1995.  The decline in Multimedia Distribution margin is primarily
attributable to one-time charges of $8.7 million at OCC for costs associated
with the integration of SpectraVision, the alignment of OCC's operating
practices and the establishment of OCC as a new public company.  In

                                  39
<PAGE>

addition, OCC's margin also decreased due to an increase in free-to-guest
costs and movie royalty expenses in 1996 as compared to 1995.  Costs of
services for Entertainment was $102.4 million, or 113.7% of Entertainment
revenue for the year ended December 31, 1996, compared to $67.2 million, or
101.8% of Entertainment revenue for the year ended December 31, 1995.  The
decline of Entertainment margin is attributable to increased operating losses
at the Nuggets which is primarily attributable to lower ticket revenues due
to reduced attendance and the absence of NBA expansion fees of $9.2 million
recognized in 1995.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization increased by $21.1 million, or 39.3%, to
$74.8 million for the year ended December 31, 1996 from $53.7 million for the
year ended December 31, 1995. Depreciation and amortization for Multimedia
Distribution was $62.2 million, or 37.0% of Multimedia Distribution revenues for
the year ended December 31, 1996, compared to $45.4 million, or 33.4% of
Multimedia Distribution revenues for the year ended December 31, 1995. This
increase in depreciation and amortization is primarily attributable to the
capital investment associated with installing on-demand service systems in
hotels and to a lesser extent, the depreciation and amortization associated with
assets acquired from the SpectraVision acquisition. Depreciation and
amortization for Entertainment was $12.6 million, or 14.0% of Entertainment
revenues, for the year ended December 31, 1996, compared to $8.3 million, or
12.6% of Entertainment revenues, for the year ended December 31, 1995. This
increase in depreciation and amortization is attributable to the inclusion of a
full year of amortization of the intangible assets acquired in the 1995
acquisition of the Avalanche.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses, which include only those costs incurred
by the parent Company, Ascent Entertainment Group, Inc., decreased by $300,000,
or 3%, to $9.7 million for the year ended December 31, 1996, compared to
general and administrative expenses of $10.0 million for the year ended
December 31, 1995.  This decrease primarily reflects the reduction of
approximately $2.4 million in certain general and administrative service
charges from COMSAT offset by an increase in costs associated with being a
publicly traded corporation in 1996.

OTHER INCOME (EXPENSE)

Other income for the year ended December 31, 1996 was $600,000, an increase of
$2.7 million from the year ended December 31, 1995 which reflected $2.1 million
in other expense. Other income in 1996 includes a gain of $1.9 million from the
sale of investment securities in 1996 offset by $2.3 million in losses on the
Company's limited partnership investment in Elitch Gardens. The improvement over
1995 is primarily due to the settlement of a lawsuit in 1995 with a former
employee of OCV of $1.5 million and a charge of $900,000 for expenses in 1995
associated with the Company's portion of certain site-specific plans for a Pepsi
Center in Denver.

INTEREST EXPENSE AND EXTRAORDINARY LOSS

Interest expense increased by $9.9 million to $10.7 million for the year ended
December 31, 1996 from $759,000 for the year ended December 31, 1995. This
increase is attributable to borrowings incurred in conjunction with Ascent's
initial public offering in December 1995 to pay off indebtedness owed to COMSAT
and the additional borrowings incurred during 1996 to fund the Company's
continuing expansion of its businesses, primarily for capital expenditures at
OCC and the assumption of debt in connection with the Acquisition. In
conjunction with the Acquisition, the Company and OCC each obtained new credit
agreements with a bank. The Company recorded an extraordinary loss of $334,000,
net of taxes, in the fourth quarter of 1996 in connection with the
extinguishment of its previous credit facility with its former lender.

                                 40
<PAGE>

INCOME TAX BENEFIT

The Company recorded an income tax benefit of $12.0 million for the year ended
December 31, 1996 as compared to an income tax benefit of $9.8 million for the
year ended December 31, 1995. This decline in the Company's effective tax
benefit is primarily attributable to the losses incurred by OCC during the
fourth quarter of 1996, in which no tax benefit was recognized due to
uncertainties regarding OCC's ability to realize a portion of the benefits
associated with future deductible temporary differences (deferred tax assets)
and net operating loss carry forwards prior to their expiration. See Note 8 of
Notes to Consolidated Financial Statements.

NET LOSS

As a result of the foregoing, net loss for the year ended December 31, 1996 was
$36.0 million, compared to net loss of $21.0 million for the year ended
December 31, 1995.

LIQUIDITY AND CAPITAL RESOURCES

The primary sources of cash during the year ended December 31, 1997 were as
follows: cash from operating activities of $74.9 million, net borrowings under
the Ascent and OCC credit facilities of an aggregate of $60.0 million, a $15.0
million equity investment in the Arena Company by Liberty, the collection of
$3.0 million on notes and other long-term receivables and aggregate proceeds of
$2.7 million from the sale of investments and distributions from partnerships
and joint ventures.  Cash was expended primarily for property and equipment
as the Company continued to make investments to support business growth.
Specifically, capital expenditures of $91.8 million were made by OCC for the
continuing installation of on-demand systems in new hotel properties and the
conversion of SpectraVision rooms to OCC's on-demand technology, and $24.8
million was expended by the Arena Company to acquire land and commence
construction on the Pepsi Center.  In addition, $21.8 million of cash was
invested by Beacon on films under production and development and to acquire
rights for film properties and $17.7 million in cash was used by the sports
teams to make payments associated with long-term player contracts.

The Company's working capital position improved by $212.8 million, from a
working capital deficit of $205.0 million at December 31, 1996 to positive
working capital of $7.8 million at December 31, 1997. This improvement is
primarily attributable to the refinancing of both the Ascent and OCC credit
facilities and the issuance of the Notes (see Note 6 of Notes to the
Consolidated Financial Statements), whereby short-term debt of $143.0 million at
December 31, 1996 was refinanced on a long-term basis. The working capital
improvement is also attributable to an increase in cash of $21.3 million, the
classification of $8.6 million of film inventory as a current asset and a
reduction in deferred revenue of $32.6 million, primarily at Beacon, due to the
recognition of certain previously deferred revenues upon delivery of films to
their respective distributors.

Total indebtedness of the Company at December 31, 1997 consists primarily of the
Notes totaling $127.0 million and $133.0 million outstanding under OCC's Credit
Facility. Based on borrowings at December 31, 1997, the Company had access to
$50.0 million of long-term financing under the Ascent Credit Facility and OCC
had access to $67.0 million of long-term financing under the OCC Credit
Facility, subject to certain covenant restrictions (see Note 6 of Notes to the
Consolidated Financial Statements.)

The Company is proposing to offer approximately $100.0 to $130.0 million of
Arena Notes during the second quarter of 1998 for purposes of financing the
development and construction of the Pepsi Center. The Arena Notes are expected
to be secured by some or all of the assets of the Arena Company, including the
Pepsi Center and by the revenues of the Pepsi Center, including certain
corporate sponsorships.

The Company's cash requirements during 1998 are expected to include (i) the
continuing conversion and installation by OCC of on-demand in room video
entertainment systems, (ii) construction of the Pepsi Center, (iii) funding the
development, production and/or

                                  41
<PAGE>

acquisition of rights for motion pictures at Beacon, (iv) funding the
operating requirements of Ascent and its subsidiaries, and (v) the payment of
interest under the Ascent Credit Facility and OCC Credit Facility. The
Company anticipates that capital expenditures in connection with the
continuing installation and conversion by OCC of on-demand in room video
entertainment systems may be approximately $65.0 to $90.0 million in 1998.
The Company anticipates that OCC's funding for its operating requirements and
capital expenditures for the continuing installation by OCC of on-demand
in-room video entertainment systems will be funded primarily through cash
flows from OCC's operating activities and financed under the OCC Credit
Facility. The expenditures for construction of the Pepsi Center will be
funded through the anticipated proceeds of the Arena Notes. However, as a
result of the timing of the closing of the Arena Notes, the Company has, and
will continue to advance during the first half of 1998, funds to the Arena
Company to support the ongoing construction activity. Beacon's cash
requirements with respect to the funding of its anticipated movie productions
are expected to consist of expenditures totaling approximately $12.0 to $20.0
million during 1998. Such cash requirements will be dependent upon the
number, nature and timing of the projects that the Company determines to
pursue during 1998. To fund Beacon's productions, the Company expects to
utilize Beacon's domestic distribution agreement with Universal Pictures when
appropriate, and/or pre-sell a portion of the international distribution
rights to help fund motion picture costs. The Company's other long-term
capital requirements may include ANS' participation in an upgrade of the NBC
affiliate network. ANS' cash requirements, should it be awarded the NBC
Agreement, may consist of expenditures of $30.0 to $35.0 million, commencing
in late 1998 or 1999, substantially all of which are currently anticipated to
be financed through operating leases.

Management of the Company believes that available cash, cash flows from
operating activities and funds available under the Ascent Credit Facility and
OCC Credit Facility (see Note 6 of Notes to Consolidated Financial Statements),
together with the anticipated proceeds from the Arena Notes will be sufficient
for the Company and its subsidiaries to satisfy their growth and finance working
capital requirements during 1998. However, it is the Company's expectation that
cash flows from operations will be insufficient to cover planned capital
expenditures during 1998 and 1999 and, accordingly, no cash interest is payable
on the Notes until June 2003.  Thereafter, the Company's ability to pay interest
on the Notes and to satisfy its other debt obligations will depend upon the
future performance of the Company and, in particular, on the successful
implementation of the Company's strategy, including conversion of the hotel
rooms acquired in the SpectraVision Acquisition to OCC's on-demand technology,
the upgrade and expansion of OCC's technology and service offerings and
construction of the Pepsi Center in Denver, and the ability to attain
significant and sustained growth in the Company's cash flow.  There can be no
assurance that the Company will successfully implement its strategy or that the
Company will be able to generate sufficient cash flow from operating activities
to meet its long-term debt service obligations and working capital requirements.
Based on the Company's current expectation with respect to its existing
businesses, the Company does not expect to have cash flows after capital
expenditures sufficient to repay all of the Senior Secured Discount Notes at
maturity and, accordingly, may have to refinance the Notes at or before their
maturity.  There can be no assurance that any such financing could be obtained
on terms that are acceptable to the Company, or at all.  In the absence of such
financing, the Company could be forced to sell assets.

As previously discussed, on June 27, 1997, COMSAT completed the Distribution of
the Ascent common stock held by COMSAT as a tax-free dividend to COMSAT's
shareholders. The Distribution was intended, among other things, to afford
Ascent more flexibility in obtaining debt financing to meet its growing needs.
The Distribution Agreement between Ascent and COMSAT (see Note 14 of Notes to
the Consolidated Financial Statements) terminated an agreement between Ascent
and COMSAT which imposed restrictions on Ascent to ensure compliance with
certain capital structure and debt financing restrictions imposed on COMSAT by
the Federal Communications Commission. As a result, Ascent's financial leverage
has increased and may increase in the future for numerous reasons, including the
sale of the Arena Notes.  In addition, pursuant to the Distribution Agreement,
certain restrictions have been put in place to protect the tax-free status of
the Distribution. Among the

                                   42
<PAGE>

restrictions, Ascent will not be allowed to issue, sell, purchase or otherwise
acquire stock or instruments which afford a person the right to acquire the
stock of Ascent until July 1998. Finally, as a result of the Distribution,
Ascent is no longer part of COMSAT's consolidated tax group and accordingly,
Ascent may be unable to recognize tax benefits and will not receive cash
payments from COMSAT resulting from Ascent's anticipated operating losses
during 1998 and thereafter.

Also, in connection with the Acquisition, Ascent and OCC entered into an
agreement (the "OCC Corporate Agreement"), pursuant to which OCC agreed, among
other things, not to incur any indebtedness, other than under the OCC Credit
Facility (and refinancings thereof) and indebtedness incurred in the ordinary
course of business which together shall not exceed $100.0 million in the
aggregate, without Ascent's prior written consent. In connection with OCC's 1998
budget process, Ascent consented to OCC incurring up to $157.0 million through
December 1998, provided that such indebtedness be incurred in compliance with
the financial covenants of OCC's Credit Facility.

INFLATION

Inflation has not significantly impacted the Company's financial position or
operations.

INFORMATION SYSTEMS AND THE YEAR 2000

As is the case for most other companies using computers in their operations, the
Company and its subsidiaries are in the process of addressing the Year 2000
problem.  The Company is currently engaged in a comprehensive project to upgrade
its information, technology, and manufacturing computer software to programs
that will consistently and properly recognize the Year 2000.  Many of the
Company's systems include new hardware and packaged software recently purchased
from vendors who have represented that these systems are already Year 2000
compliant.  The Company is in the process of obtaining assurances from vendors
that timely updates will be made available to make all remaining purchased
software Year 2000 compliant.

The Company will utilize both internal and external resources to reprogram or
replace and test all of its software for Year 2000 compliance, and the Company
expects to complete the project by late 1998.  The financial impact of making
the required systems changes is not expected to be material to the Company's
consolidated financial position, results of operations, or cash flows.

                                  43
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of
Ascent Entertainment Group, Inc.:

     We have audited the accompanying consolidated balance sheets of Ascent
Entertainment Group, Inc. and its subsidiaries (the "Company") as of December
31, 1997 and 1996, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1997. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and the
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
the financial statement schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Ascent
Entertainment Group, Inc. and its subsidiaries as of December 31, 1997 and 1996,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.  Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects, the
information set forth therein.


/s/ Deloitte & Touche LLP

Deloitte & Touche LLP


Denver, Colorado
February 26, 1998




                                       44

<PAGE>

                           ASCENT ENTERTAINMENT GROUP, INC.
                             CONSOLIDATED BALANCE SHEETS
                             DECEMBER 31, 1997 AND 1996
                                   (IN THOUSANDS)

<TABLE>
                                                           1997        1996
                                                           ----        ----
                                  ASSETS
<S>                                                      <C>         <C>
CURRENT ASSETS:
  Cash and cash equivalents                              $ 25,250    $  3,963
  Receivables, net (Note 3)                                62,572      54,695
  Current portion of film inventory (Note 4)                8,628          --
  Prepaid expenses                                         15,876      11,247
  Deferred income taxes (Note 8)                            2,577       3,580
  Income taxes receivable (Note 8)                          8,212      12,623
  Other current assets                                      1,462       2,759
                                                         --------    --------
      Total current assets                                124,577      88,867
                                                         --------    --------
  Property and equipment, net (Note 5)                    336,859     301,498
  Goodwill, net                                           122,341     132,805
  Franchise rights, net                                    97,373     102,189
  Film inventory, net (Note 4)                             17,442      76,234
  Investments (Note 2)                                      5,979       9,150
  Other assets, net                                        34,413      31,899
                                                         --------    --------
TOTAL ASSETS                                             $738,984    $742,642
                                                         --------    --------
                                                         --------    --------

               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term borrowings (Note 6)                         $     --    $143,000
  Accounts payable                                         24,202      19,992
  Deferred income (Note 4)                                 48,004      80,609
  Other taxes payable                                      10,657      10,447
  Accrued compensation                                     13,480      10,539
  Other accrued liabilities                                18,239      17,643
  Income taxes payable (Note 8)                             2,213       6,970
  Payable to COMSAT (Note 14)                                  --       4,662
                                                         --------    --------
      Total current liabilities                           116,795     293,862
                                                         --------    --------

  Long-term debt (Note 6)                                 259,958      50,000
  Other long-term liabilities (Notes 5 and 7)              37,448      15,978
  Deferred income taxes (Note 8)                            1,917       5,742
                                                         --------    --------
  TOTAL LIABILITIES                                       416,118     365,582
                                                         --------    --------
  Minority interest (Note 2)                               95,168     107,475
  Commitments and contingencies (Notes 2, 5, 6, and 9)         --         --

STOCKHOLDERS' EQUITY (Note 10):
  Preferred stock, par value $.01 per share, 5,000
    shares authorized, one outstanding                         --          --
  Common stock, par value $.01 per share, 60,000
    shares authorized, 29,756 and 29,754 shares issued
    and outstanding                                           297         297
  Additional paid-in capital                              307,248     307,569
  Accumulated deficit                                     (81,147)    (39,633)
  Unrealized gain on available for sale securities,
    net of taxes                                            1,300       1,352
                                                         --------    --------
      TOTAL STOCKHOLDERS' EQUITY                          227,698     269,585
                                                         --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $738,984    $742,642
                                                         --------    --------
                                                         --------    --------
</TABLE>

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

                                       45
<PAGE>

                          ASCENT ENTERTAINMENT GROUP, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
                                               1997       1996       1995
                                               ----       ----       ----
<S>                                          <C>        <C>        <C>
REVENUES (Note 3 and Note 14 for related
 party revenues)                             $428,514   $258,120   $201,818
                                             --------   --------   --------
OPERATING EXPENSES:
Cost of services                              360,886    217,949    154,676
Depreciation and amortization                 101,583     74,812     53,675
General and administrative                      8,404      9,678     10,002
Provision for restructuring (Note 12)              --         --     10,866
                                             --------   --------   --------
      Total operating expense                 470,873    302,439    229,219
                                             --------   --------   --------

Loss from operations                          (42,359)   (44,319)   (27,401)
Other income (expense), net                      (319)       565     (2,070)
Interest expense (Notes 6 and 14)             (20,971)   (10,715)      (759)
                                             --------   --------   --------
Loss before taxes, minority interest
 and extraordinary loss                       (63,649)   (54,469)   (30,230)
Income Tax Benefit (Note 8)                     7,816     11,957      9,835
                                             --------   --------   --------
Loss before minority interest and
 extraordinary loss                           (55,833)   (42,512)   (20,395)
Minority interest                              14,319      6,812       (628)
                                             --------   --------   --------

Loss before extraordinary loss                (41,514)   (35,700)   (21,023)
Extraordinary loss on early extinguishment
 of debt, net of taxes (Note 6)                  --         (334)        --
                                             --------   --------   --------
NET LOSS                                     $(41,514)  $(36,034)  $(21,023)
                                             --------   --------   --------
                                             --------   --------   --------

Basic and diluted net loss per common share:
Before extraordinary loss                    $  (1.40)  $  (1.20)  $   (.87)
Extraordinary loss on early extinguishment
 of debt, net of taxes                            --        (.01)        --
                                             --------   --------   --------
BASIC AND DILUTED NET LOSS PER SHARE         $  (1.40)  $  (1.21)  $   (.87)
                                             --------   --------   --------
                                             --------   --------   --------

Weighted average number of common shares
 outstanding                                   29,755     29,753     24,217
                                             --------   --------   --------
                                             --------   --------   --------
</TABLE>

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

                                    46
<PAGE>

                       ASCENT ENTERTAINMENT GROUP, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                              (IN THOUSANDS)
<TABLE>
                                                                               UNREALIZED
                                                                                GAIN ON
                                                      ADDITIONAL               AVAILABLE      TOTAL
                                 BUSINESS     COMMON   PAID-IN    ACCUMULATED   FOR-SALE   STOCKHOLDERS'
                                  EQUITY      STOCK    CAPITAL      DEFICIT    SECURITIES     EQUITY
                                  ------      -----    -------      -------    ----------    --------
<S>                             <C>           <C>     <C>         <C>          <C>         <C>
Balance at January 1, 1995      $ 268,197
   Net Loss                       (17,424)
   Net Transfers from
    COMSAT and Subsidiaries       115,110
                                ---------     -----   ---------      --------     -------     ---------

Balance at December 17, 1995      365,883
   Net loss                                                          $ (3,599)                $  (3,599)
   Repayment of COMSAT loan      (140,000)
   Incorporation of Ascent
    Entertainment Group, Inc.    (225,883)    $ 240   $ 225,643                                 225,883
   Net proceeds from initial
    public offering on
    Dec 18, 1995                                 57      78,928                                  78,985
                                ---------     -----   ---------      --------     -------     ---------

Balance at December 31, 1995                    297     304,571        (3,599)                  301,269
   Net loss                                                           (36,034)                  (36,034)
   Investment in OCC adjustment
    (Note 2)                                              1,178                                   1,178
   Capital contribution from
    COMSAT (Note 10)                                      1,820                                   1,820
   Unrealized gain on available
     for-sale securities, net
     of taxes                                                                       1,352         1,352
                                ---------     -----   ---------      --------     -------     ---------

Balance at December 31, 1996                    297     307,569       (39,633)      1,352       269,585
   Net loss                                                           (41,514)                  (41,514)
   Net change in unrealized
    gain on available for-sale-
    securities, net of taxes                                                          (52)          (52)
   Other                                                   (321)                                   (321)
                                ---------     -----   ---------      --------     -------     ---------

Balance at December 31, 1997    $      --     $ 297   $ 307,248      $(81,147)    $ 1,300     $ 227,698
                                ---------     -----   ---------      --------     -------     ---------
                                ---------     -----   ---------      --------     -------     ---------
</TABLE>
                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                        47
<PAGE>

                       ASCENT ENTERTAINMENT GROUP, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                (IN THOUSANDS)

<TABLE>
                                                                  1997           1996           1995
                                                                ---------      ---------      ---------
<S>                                                             <C>            <C>            <C>
OPERATING ACTIVITIES:
  Net loss                                                      $ (41,514)     $ (36,034)     $ (21,023)
  Adjustments to reconcile net loss to net cash provided
   by operating activities:
   Depreciation and amortization                                  101,583         74,812         53,675
   Amortization of film inventory                                  79,780          8,442          4,904
   Minority interest in earnings (losses) of
    subsidiaries                                                  (14,319)        (6,812)           628
   Equity in (earnings) of unconsolidated partnerships
    or joint ventures                                                (612)          (346)          (112)
   Interest accretion on Senior Secured Notes                         294             --             --
   Provision for loss on investments                                1,125          2,310             --
   (Gain)/Loss on disposals of property and equipment              (1,016)            11            173
   Provision for restructuring                                         --             --         10,866
   Extraordinary loss on extinguishment of debt, net                   --            334             --
  Changes in operating assets and liabilities:
   Current assets                                                  (5,794)        (9,693)       (10,034)
   Current liabilities                                            (43,967)       (13,727)        27,749
   Noncurrent assets                                               (9,389)        (4,744)        (2,415)
   Noncurrent liabilities                                           8,701          7,965         (1,908)
   Other                                                               (2)           572            786
                                                                ---------      ---------      ---------
   Net cash provided by operating activities                       74,870         23,090         63,289
                                                                ---------      ---------      ---------
INVESTING ACTIVITIES:
   Proceeds from notes and other long-term receivable               2,951          6,684            787
   Proceeds from sale of investments                                1,920          3,608             --
   Net expenditures for film production costs                     (21,829)       (21,050)       (12,549)
   Purchase of property and equipment                            (119,070)       (88,859)       (89,487)
   Proceeds from sale of property and equipment                     4,459            187            482
   Investment in unconsolidated businesses                             --         (4,125)        (3,625)
   Distributions from partnerships and joint ventures                 738             --             --
   Acquisitions of businesses                                          --         (9,572)       (76,249)
   Other                                                               --            --             600
                                                                ---------      ---------      ---------
   Net cash used in investing activities                         (130,831)      (113,127)      (180,041)
                                                                ---------      ---------      ---------
FINANCING ACTIVITIES:
   Net proceeds from issuance of Senior Secured Discount
    Notes                                                         122,231             --             --
   Proceeds from borrowings under former credit facilities         59,000         75,000         70,000
   Repayment of borrowings under former credit facilities        (252,000)      (145,000)          (817)
   Proceeds from borrowings under credit facilities               133,000        205,537
   Payments under revolving credit loans and other notes payable       --        (15,207)            --
   Payment of assumed debt from SpectraVision Acquisition              --        (40,000)            --
   Capital Contribution from COMSAT                                    --          1,820             --
   Proceeds from issuance of subsidiary's equity instruments       15,000          2,587            209
   Repayment of COMSAT note                                            --             --       (140,000)
   Net transfers from COMSAT and its subsidiaries                      --             --        115,110
   Common stock issued                                                 17             --         78,985
   Other                                                               --         (1,749)           919
                                                                ---------      ---------      ---------
   Net cash provided by financing activities                       77,248         82,988        124,406
                                                                ---------      ---------      ---------
   Net increase (decrease) in cash and cash equivalents            21,287         (7,049)         7,654
  Cash and cash equivalents, beginning of year                      3,963         11,012          3,358
                                                                ---------      ---------      ---------
  Cash and cash equivalents, end of year                        $  25,250      $   3,963      $  11,012
                                                                ---------      ---------      ---------
                                                                ---------      ---------      ---------
SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid, net of interest capitalized                   $  16,712      $   8,851      $     166
                                                                ---------      ---------      ---------
                                                                ---------      ---------      ---------
   Income taxes paid                                            $   2,447      $      --      $   1,482
                                                                ---------      ---------      ---------
                                                                ---------      ---------      ---------
NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Reversal of accrual made in OCC purchase price
    allocation                                                  $   3,000      $      --      $      --
                                                                ---------      ---------      ---------
                                                                ---------      ---------      ---------
</TABLE>


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

                                        48
<PAGE>

                      ASCENT ENTERTAINMENT GROUP, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     The accounting and reporting practices of Ascent Entertainment Group, Inc.
(the "Company" or "Ascent") and its majority owned subsidiaries conform to
generally accepted accounting principles and prevailing industry practices. The
following is a summary of the Company's significant accounting and reporting
policies.

 BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION.  The accompanying
consolidated financial statements include the accounts of Ascent and its
majority-owned subsidiaries which include On Command Corporation ("OCC"), the
Denver Nuggets Limited Partnership (the "Nuggets"), the Colorado Avalanche, LLC
(the "Avalanche"), Beacon Communications Corp. ("Beacon") and Ascent Arena
Company, LLC (the "Arena Company"). Ascent Network Services, Inc. ("ANS"),
formerly a wholly owned subsidiary of Ascent, was merged into Ascent and became
an operating division of Ascent on May 30, 1997. All significant intercompany
transactions have been eliminated.

     OCC provides video distribution and pay-per-view video entertainment
services to the lodging industry and has operating subsidiaries or branches in
the United States, Canada, Mexico, the United Kingdom, Australia, and Asia.
ANS provides video distribution services to the National Broadcasting
Company ("NBC") television network and other private networks. The Nuggets own a
franchise in the National Basketball Association ("NBA"). The Avalanche own a
franchise in the National Hockey League ("NHL"). Beacon is a producer of motion
pictures and television programming.  The Arena Company owns and is managing the
construction of a new arena in downtown Denver.

     Ascent executed an initial public offering (the "Offering") of its common
stock on December 18, 1995. Prior to the Offering, Ascent was a wholly owned
subsidiary of COMSAT Corporation ("COMSAT").  In addition, Ascent's relationship
with COMSAT was governed by three agreements entered into in connection with the
Offering: an Intercompany Services Agreement, a Corporate Agreement and a Tax
Sharing Agreement.  Until June 27, 1997 COMSAT continued to own a majority
(80.67%) of Ascent's common stock and control Ascent.

     On June 27, 1997, COMSAT consummated the distribution of its 80.67%
ownership interest in Ascent to the COMSAT shareholders on a pro-rata basis in a
transaction that was tax-free for federal income tax purposes (the
"Distribution"). Ascent and COMSAT entered into a Distribution Agreement and a
Tax Disaffiliation Agreement, both dated as of June 3, 1997 (see Notes 8 and 14)
in connection with the Distribution. Ascent and COMSAT also terminated the
Intercompany Services Agreement and Corporate Agreement entered into in
connection with the Offering resulting in, among other things, the termination
of the restriction on Ascent's incurring indebtedness without the consent of
COMSAT. As a result of the Distribution, Ascent became an independent publicly
held corporation. All costs incurred by Ascent during 1997 which were directly
associated with the Distribution have been charged to expense.

 CASH AND CASH EQUIVALENTS.  Ascent considers highly liquid investments with a
maturity of three months or less at the time of purchase to be cash equivalents.

PROPERTY AND EQUIPMENT.  Property and equipment is stated at cost, less
accumulated depreciation and amortization. Installed video systems consist of
video system equipment and related costs of installation at hotel locations.
Distribution systems to networks consist of equipment at network affiliates and
the related costs of installation.  Construction in progress consists of
construction expenditures on the Denver Arena Project (see Note 5) and purchased
and manufactured parts of partially constructed video systems at OCC.

     The Company capitalizes interest incurred on funds used to construct the
Denver arena project (see Note 5).  The capitalized interest is recorded as part
of the asset to which it relates and will be amortized over the asset's
estimated useful life, once the arena is operational.  In 1997, $221,600 of
interest cost was capitalized.  No interest was capitalized in 1996 and 1995.

                                   49
<PAGE>

     Depreciation and amortization are calculated using the straight-line method
over the estimated service life of each asset. The service lives for property
and equipment are: installed video systems, 3 to 7 years; distribution systems,
10 to 15 years; furniture, fixtures and equipment, 3 to 10 years; and buildings
and leasehold improvements, 3 to 20 years.

 GOODWILL.  The consolidated balance sheets include goodwill related to the
acquisitions of On Command Video Corporation, the Nuggets and Beacon by Ascent,
and SpectraVision by OCC (see Note 2). Goodwill is amortized over 10 to 25
years. Accumulated goodwill amortization was $22,440,000 and $13,801,000 at
December 31, 1997 and 1996, respectively.

 FRANCHISE RIGHTS.  Franchise rights were recorded in connection with the
purchases of the Nuggets beginning in 1989 and the Avalanche beginning in 1995.
Such rights are being amortized over 25 years. The amounts shown on the
consolidated balance sheets are net of accumulated amortization of $22,988,000
and $18,172,000 at December 31, 1997 and 1996, respectively.

 EVALUATION OF LONG-LIVED ASSETS.  The Company evaluates the potential
impairment of long-lived assets and long-lived assets to be disposed of in
accordance with Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of."  As of January 1, 1996, the date of adoption, and as of
December 31, 1997 and 1996, management believes that there was not any
impairment of the Company's long-lived assets or any other such identifiable
intangibles.

 DEBT ISSUANCE COSTS.  Costs associated with the issuance of the Company's
Senior Secured Discount notes and current credit facilities are capitalized and
amortized over the term of the related borrowing or facility. Amortization of
debt issuance costs is charged to operations and is included in interest
expense.

 DEFERRED COMPENSATION COSTS.  Certain current and former players of the Nuggets
and the Avalanche have contracts that provide for deferred compensation and
bonuses. Ascent records a charge to operations equal to the present value of the
future guaranteed payments in the period in which the compensation is earned. In
addition, certain players' contracts provide for guaranteed compensation
payments. (See Note 7).

FILM PRODUCTION ADVANCES.  Film production advances received from distributors
prior to delivery or completion of a film are treated and recorded as deferred
income and are generally recognized as revenues on the date the film is
delivered or made available for delivery to the distributors.

 REVENUE AND COST RECOGNITION.  OCC installs pay-per-view video systems in
hotels, generally under five to seven-year agreements, whereby revenues are
recognized at the time of viewing. Revenue from the sale of video systems is
recognized when the equipment is shipped, except for systems requiring
installation by OCC, which is recognized upon completion of the installation.
Revenues from video management services and royalties are recognized when
earned.

     The Nuggets and Avalanche game admission and broadcasting revenues are
recognized as earned per home game during the teams' pre-season, regular season,
and potential post-season, which is generally from September to May of the
following calendar year. Certain team and game costs, principally gate
assessments, arena rentals and user fees, are recorded and expensed on the same
basis. Player salaries, related fringe benefits and insurance, are recognized on
a per-day basis during the teams' regular playing seasons. Advance ticket sales
and advance payments on television, radio, concessionaire and marketing
contracts, and payments for team and game expenses not earned or incurred, are
recorded as deferred revenues and deferred game expenses, respectively, and
amortized ratably as regular season games are played. Sponsor and concessionaire
contracts exceeding one year in length are deferred and amortized over the life
of the contract.  Sponsor contracts one year in length are recognized as the
services are performed during the playing season.

     Revenues from feature film and television program distribution licensing
agreements are recognized on the date the completed film or program is delivered
or becomes available for delivery, is available for exploitation in the relevant
media window purchased by that customer or licensee and certain other conditions
of sale have been met pursuant to criteria specified by SFAS No. 53, "Financial
Reporting by Producers and Distributors of Motion Picture Films."

                                     50
<PAGE>

     The Company generally capitalizes all costs incurred to produce a film.
Such costs include the acquisition of story rights, the development of stories,
the direct costs of production, print and advertising costs, production overhead
and interest expense related to financing the project.  Capitalized exploitation
or distribution costs include those costs that clearly benefit future periods
such as film prints and prerelease and early release advertising that is
expected to benefit the film in future periods.  These costs, as well as
participation and talent residuals, are amortized each period under the
individual film forecast method, which uses the ratio that the current period's
gross revenues from all sources for the film bear to management's estimate of
anticipated total gross revenues for such film from all sources.  Estimates of
total gross revenues can change significantly due to the level of market
acceptance of film and television products. Accordingly, revenue estimates are
reviewed periodically and amortization is adjusted.  Such adjustments could have
a material effect on results of operations in future periods.

     Revenue from other services is recorded as services are provided.

GENERAL AND ADMINISTRATIVE EXPENSE.  General and administrative expenses include
those costs incurred by the parent company, Ascent Entertainment Group, Inc.
Similar costs incurred by the Company's majority-owned subsidiaries are included
in the cost of services in the accompanying statements of operations.  For the
years ended December 31, 1997, 1996, and 1995, the Company's subsidiaries
incurred related costs of $35,348,000, $22,359,000, and $11,265,000,
respectively.

RESEARCH AND DEVELOPMENT COSTS.  Research and development costs are charged to
operations as incurred. These costs are included in cost of services in the
consolidated statements of operations. The amounts charged were $6,912,000,
$4,628,000 and $2,734,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.

INCOME TAXES.  A current or deferred income tax liability or asset is recognized
for temporary differences which exist due to the recognition of certain income
and expense items for financial reporting purposes in periods different than for
tax reporting purposes. The provision for income taxes is based on the amount of
current and deferred income taxes payable or refundable at the date of the
financial statement as measured by the provisions of current tax laws.

 NET LOSS PER SHARE.  The Company computes and presents its net loss per share
in accordance with SFAS No. 128 "Earnings Per Share," which was issued in
February 1997. Accordingly, the Company has restated the prior periods
presentation.  Net loss per share is calculated using the income available to
common stockholders divided by the weighted average number of common shares
outstanding in the respective years. Common equivalent shares were 29,755,000,
30,012,200, and 24,218,600, for the years ended December 31, 1997, 1996, and
1995, respectively.

USE OF ESTIMATES, SIGNIFICANT RISKS AND UNCERTAINTIES.  The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Such management estimates
include the allowance for doubtful accounts receivable, the estimated useful
lives of video systems and property and equipment, intangible assets, including
goodwill and franchise rights, the amortization of film costs based on future
film revenues, the reduction in construction in progress and film inventory to
their net realizable value and the amounts of certain accrued liabilities.

     The Company participates in the highly competitive multimedia distribution
and entertainment industries and believes that changes in any of the following
areas could have a material adverse effect on the Company's future financial
position or results of operations: declines in hotel occupancy as a result of
general business, economic, seasonal or other factors; loss of one or more of
its major hotel chain customers; a decline in ticket sales and other revenues by
the sports franchises; the timing and success of film releases; ability to
obtain additional capital to finance capital expenditures and film production
costs; ability to retain senior management and key employees, including players;
risks associated with being a party to collective bargaining agreements
between the NBA and NHL and their respective players' associations; ability to
convert operational software to be Year 2000 compliant; and risks of
technological obsolescence.

 RECENTLY ISSUED ACCOUNTING STANDARDS. In June 1997, the FASB adopted SFAS
No. 130 "Reporting Comprehensive Income", which requires that an enterprise
report, by major

                                         51
<PAGE>

components and as a single total, the change in its net assets during the
period from non-owner sources; and SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information", which redefines how operating
segments are determined and requires disclosures of certain financial and
descriptive information about a Company's operating segments. Adoption of
these statements will not impact the Company's consolidated financial
position, results of operations or cash flows. While the Company has not
completed its analysis of which operating segments it will report under SFAS
No. 131 in the future, it is required to and will adopt both SFAS 130 and 131
in fiscal 1998.

 RECLASSIFICATIONS.  Certain reclassifications have been made to the 1996 and
1995 financial statements to conform with the current year's presentation.

NOTE 2 -- ACQUISITION AND INVESTMENTS:

     The Company completed one acquisition in 1996 and one in 1995. These
acquisitions have been accounted for under the purchase method and, accordingly,
the results of operations of the acquired businesses are included in the
consolidated financial statements from the dates of acquisition. These
acquisitions are summarized as follows:

 SPECTRAVISION, INC.  Effective October 8, 1996, Ascent through its newly formed
subsidiary, OCC, acquired the assets, properties and certain liabilities of
SpectraVision, Inc. (the "Acquisition") a leading provider of in-room video
entertainment services to the lodging industry.  Prior to the acquisition of
SpectraVision, On Command Video Corporation ("OCV"), formerly an 84% owned
subsidiary of Ascent, was merged with a subsidiary of OCC and became a wholly
owned subsidiary of OCC pursuant to an Agreement and Plan of Merger.  At the
Closing Date, Ascent and the minority stockholders of OCV received 21,750,000
shares of OCC common stock (Ascent received 17,149,766 of these shares.)  In
consideration of the acquisition of the assets and properties of SpectraVision
by OCC, 8,041,618 shares of OCC common stock were issued to the SpectraVision
bankruptcy estate for distribution to SpectraVision's creditors. An additional
208,382 shares, which were held in reserve pursuant to the Acquisition
Agreement, were subsequently distributed primarily to the SpectraVision
bankruptcy estate for the benefit of SpectraVision's creditors.  Ascent owns
approximately 57% of the common stock of OCC as of December 31, 1997.

     In connection with the Acquisition, OCC also issued warrants representing
the right to purchase a total of 7,500,000 shares of OCC common stock (20% of
the outstanding common stock of OCC, after exercise of the warrants). The
warrants have a term of 7 years and an exercise price of $15.27 per share.
Series A Warrants to purchase on a cashless basis up to 1,425,000 shares of OCC
common stock were issued to former OCV shareholders, of which Ascent received
warrants to purchase 1,123,823 shares; Series B warrants to purchase for cash an
aggregate of 2,625,000 shares of OCC common stock were issued to the
SpectraVision bankruptcy estate for distribution to creditors; and Series C
warrants were issued to OCC's investment advisors to purchase for cash an
aggregate of 3,450,000 shares of OCC common stock in consideration for certain
banking and advisory services provided in connection with the transactions.

     The aggregate purchase consideration was allocated to the acquired assets
and assumed liabilities of SpectraVision, based on their respective fair market
values. The fair value of tangible assets acquired and liabilities assumed was
approximately $66,000,000 and $64,000,000, respectively. In addition, $2,000,000
of the purchase price was allocated to purchased technology. The balance of the
purchase price, $87,636,000, was recorded as goodwill and is being amortized
over twenty years on a straight-line basis. The assets acquired and liabilities
assumed are as follows (in thousands):
<TABLE>
     <S>                                                   <C>
     Estimated fair value of assets acquired
       (including intangibles of $92,636)                  $155,916
     Liabilities assumed                                    (64,282)
                                                           --------
     Net assets acquired at estimated fair value             91,634
     Cash paid (net of cash received of $257)                (9,572)
                                                           --------
     Common stock and warrants issued                      $ 82,062
                                                           --------
                                                           --------
</TABLE>

     The following unaudited pro forma consolidated results of operations for
the years ended December 31, 1996 and 1995 are presented as if the SpectraVision
acquisition had been made at the beginning of each period presented. The
unaudited pro forma information is not necessarily indicative of either the
results of operations that would have occurred had the purchase been made during
the periods presented or the future results of the combined operations.

                                    52
<PAGE>
<TABLE>
                                                  YEAR ENDED DECEMBER 31,
                                                     1996        1995
                                                     ----        ----
                                                 (IN THOUSANDS, EXCEPT
                                                  PER SHARE INFORMATION)
     <S>                                           <C>         <C>
     Revenues                                      $343,420    $325,804
     Net loss                                      $(42,982)   $(34,749)
     Basic and diluted loss per common share       $  (1.45)   $  (1.44)
</TABLE>

     In connection with this transaction, the Company recorded an increase in
additional paid-in capital of $1,178,000 as a result of the exchange of its
investment in OCV for its investment in OCC.

 COLORADO AVALANCHE LLC.  In July 1995, Ascent acquired a NHL franchise and
related player contracts, management contracts and certain other assets from Le
Club de Hockey Les Nordiques located in Quebec, Canada. The franchise was
relocated to Denver, Colorado for the 1995-1996 NHL season, renamed the Colorado
Avalanche, and its results since July 1, 1995 have been included in the
accompanying consolidated financial statements.  The cost of the acquisition was
$75,840,000 which was allocated principally to franchise rights and player
contracts.

 OTHER INVESTMENTS.  Other Investments consist of the following at December 31,
1997 and 1996:
<TABLE>
                                                             1997     1996
                                                             ----     ----
                                                             (IN THOUSANDS)
          <S>                                               <C>       <C>
          Marketable equity securities                      $2,001    $2,080
          Investment in MagiNet Corporation                    348     1,265
          Investments in partnerships and joint ventures:
            Elitch Gardens                                     330     2,379
            NBA partnerships                                 2,438     2,657
            Colorado Studios                                   862       769
                                                            ------    ------
               Total other investments                      $5,979    $9,150
                                                            ------    ------
                                                            ------    ------
</TABLE>

     At December 31, 1997 and 1996, the Company's investment in marketable
equity securities consists of its investment in MetroMedia International Group.
This investment is considered to be available-for-sale and accordingly, the net
unrealized holding gain or loss, net of deferred income taxes, is reported as a
separate component of stockholders' equity. In 1996, the gross realized gain
from the sale of a portion of these available-for-sale securities was $1,892,000
and is included in other income (expense) in the accompanying financial
statements. The Company's investment in MagiNet Corporation (MagiNet), a private
company, is accounted for at cost (see Note 14). In the fourth quarter of 1997,
OCC recorded a loss of $917,000 on its investment in MagiNet due to a dilution
of its ownership interest in MagiNet.  The Company's investments in partnerships
and joint ventures are accounted for using the equity method.

     The Company's investment in the limited partnership owning Elitch Gardens,
an amusement park in Denver, Colorado, was increased from 13% to 26% in March
1996, when Ascent purchased all of The Anschutz Corporation's (TAC) interest in
the limited partnership for $4,125,000 in cash. Subsequently, in September,
1996, the Company recorded a $1,800,000 loss on its limited partnership
investment in Elitch Gardens, based on the announced sale of the amusement park
to Premier Parks, Inc. The Company's share of proceeds from the sale, which
closed on October 30, 1996, are subject to certain future adjustments. In
December 1996 and June 1997, the Company recorded additional losses of $510,000
and $129,000, respectively, on its investment due to concerns over the
liquidation of the partnership. The Company has received distributions of
$1,716,000 in 1996 and $1,900,000 in 1997 in connection with the sale of Elitch
Gardens. Management of the Company believes its remaining investment in Elitch
Gardens is likely to be recovered through additional partnership distributions
to be received in 1998.

                                  53
<PAGE>

NOTE 3 -- RECEIVABLES AND CONCENTRATION OF CREDIT RISK:

     Receivables consist of the following at December 31, 1997 and 1996:

<TABLE>
                                                                 1997      1996
                                                                 ----      ----
                                                                 (IN THOUSANDS)
          <S>                                                  <C>       <C>
          Trade receivables                                    $59,866   $52,426
          Current portion of notes and long-term receivables     4,468     4,405
          Less allowance for doubtful accounts                   1,762     2,136
                                                               -------   -------
            Receivables, net                                   $62,572   $54,695
                                                               -------   -------
                                                               -------   -------
</TABLE>

     Ascent generates a substantial portion of its revenues from OCC and from
hotel guest's usage of OCC pay-per-view video systems located in various hotels
primarily throughout the United States, Canada, Mexico, the United Kingdom,
Australia, and Asia. OCC performs periodic credit evaluations of its installed
hotel locations and generally requires no collateral. While the Company does
maintain allowances for potential credit losses, actual bad debt losses have
not been significant. The Company invests its cash in high-credit quality
instruments. These instruments are short-term in nature and, therefore, bear
minimal risk.

     OCC has one customer, including its affiliates, which accounted for 11%,
14%, and 16% of consolidated revenues in 1997, 1996 and 1995, respectively.
Beacon has one customer which accounted for 15% of consolidated revenues in
1997.  No other customer accounted for more than 10% of consolidated revenues
during 1997, 1996 and 1995.

     Included in other long-term assets is a long-term receivable of $2,704,000
and $5,655,000 at December 31, 1997 and 1996, respectively.

NOTE 4 -- FILM INVENTORY:

     Film inventory consists of the following at December 31, 1997 and 1996:

<TABLE>
                                                      1997      1996
                                                      ----      ----
                                                       (IN THOUSANDS)
     <S>                                             <C>       <C>
     Films released, less amortization               $20,359   $ 3,382
     Films in process and development                     --    69,732
     Development                                       5,711     3,120
                                                     -------   -------
          Total film inventory                       $26,070   $76,234
                                                     -------   -------
                                                     -------   -------
</TABLE>

     The Company estimates that approximately 100% of unamortized released film
cost will be amortized over the next three fiscal years. At December 31, 1996,
the Company increased film inventory and deferred revenues by approximately
$49,852,000 in connection with the receipt of film production advances relating
to certain films in progress and under development at December 31, 1996.  At
December 31, 1997, the Company had no film production advances included in film
inventory.

NOTE 5 -- PROPERTY AND EQUIPMENT:

     Property and equipment consists of the following at December 31, 1997 and
1996:

<TABLE>
                                                       1997       1996
                                                       ----       ----
                                                       (IN THOUSANDS)
     <S>                                             <C>        <C>
     Land                                            $ 20,533   $  2,000
     Buildings and leasehold improvements               1,922      2,997
     Installed video systems                          406,574    343,475
     Distribution systems to networks                  98,341     95,334
     Furniture, fixtures and equipment                 18,506     16,836
                                                     --------   --------
          Total                                       545,876    460,642

     Less accumulated depreciation and amortization   275,744    200,452
                                                     --------   --------
     Net property and equipment in service            270,132    260,190
     Construction-in-progress                          66,727     41,308
                                                     --------   --------
          Property and equipment, net                $336,859   $301,498
                                                     --------   --------
                                                     --------   --------
</TABLE>

 DENVER ARENA PROJECT.  On May 7, 1997, the Arena Company entered into a Land
Purchase Agreement (the "Agreement") with Southern Pacific Transportation
Company ("SPT") pursuant

                                     54
<PAGE>

to which on November 14, 1997 the Arena Company purchased approximately 49
acres in Denver as the site for the construction of an arena for a total
purchase price of $20,533,000.  The Land Purchase Agreement provides for the
Arena Company and SPT to effect a State-approved voluntary environmental
remediation plan on the site with SPT responsible for substantially all of
the costs thereof, and for SPT to provide continuing indemnification with
regard to certain other environmental liabilities through 2022 on a declining
percentage basis.

     On November 13, 1997, Ascent and the Arena Company entered into a
definitive agreement (the "Arena Agreement") with the City and County of Denver
(the "City"). The Arena Agreement provides for Ascent to construct, own and
manage a new arena in the City through its subsidiary, the Arena Company. The
Arena Agreement also provides for the release of the Nuggets and Avalanche from
their existing leases at the City's current arena, McNichols Arena, upon the
completion of the new arena. In addition, upon completion of the new arena,
Ascent is to transfer to the City the land associated with the arena and the
City will lease the land back to Ascent for a 25 year term. At the end of such
term the City will contribute the land back to Ascent.

     On November 14, 1997, Liberty Denver Arena, LLC ("LDA") a subsidiary of
Liberty Media Corporation, invested $15,000,000 in the Arena Company.  Pursuant
to the Operating Agreement between Ascent and LDA, LDA received an ownership
interest in the Arena Company that includes an interest in the capital of the
Arena Company and a profits interest of approximately 6.5% representing the
right to receive distributions from the Arena Company measured by the amount of
distributions received by the Company, as defined, from each of the Nuggets and
Avalanche.  LDA will not have any management or operating rights with respect to
the Arena Company, the Nuggets or the Avalanche.  In addition, LDA was granted
put rights beginning in July 2005 to require the Company to purchase from LDA
its then current ownership interest at its fair market value. Likewise, the
Company has a call right beginning in July 2005 to purchase the LDA ownership
interest at its then fair market value.  In connection with this transaction,
the Company recorded an increase in other long-term liabilities of $13,000,000
reflecting LDA's right to receive future distributions, if any, from the Nuggets
and Avalanche.

OTHER.  On October 31, 1997, OCC sold the land and the building which housed the
SpectraVision spare part depot in Richardson, Texas for $4,500,000 in cash.

NOTE 6 -- LONG-TERM DEBT:

     Long-term debt consists of the following at December 31, 1997 and 1996:
<TABLE>
                                                                  1997       1996
                                                                  ----       ----
                                                                   (IN THOUSANDS)
          <S>                                                   <C>        <C>
          Senior Secured Discount Notes, net of unamortized
            discount of $98,042,000 in 1997                     $126,958   $     --
          OCC Credit Facility                                    133,000         --
          Former OCC credit facility, paid November 1997              --     98,000
          Former Ascent credit facility, paid December 1997           --     95,000
                                                                --------   --------
                Total                                            259,958    193,000
          Less: Short-term borrowings                                 --    143,000
                                                                --------   --------
                Total long-term debt                            $259,958   $ 50,000
                                                                --------   --------
                                                                --------   --------
</TABLE>

 SENIOR SECURED DISCOUNT NOTES.  On December 22, 1997, Ascent completed the sale
of $225,000,000 principal amount at maturity of Senior Secured Discount Notes
due 2004 (the "Senior Notes").  The Senior Notes, which mature on December 15,
2004, were sold at a discount for an aggregate price of $126,663,750,
representing a yield to maturity of 11.875% computed on a semi-annual bond
equivalent basis from the date of issuance.  Cash interest will not accrue on
the Senior Notes prior to December 15, 2002.  Commencing December 15, 2002, cash
interest on the Senior Notes will accrue and thereafter will be payable on June
15 and December 15 of each year (commencing June 15, 2003) at a rate of 11.875%
per annum.  The Senior Notes are redeemable, at the option of Ascent, in whole
or in part, on or after December 15, 2001, at specified redemption prices plus
accrued and unpaid interest.  In addition, at any time prior to December 15,
2000, Ascent may redeem up to 35% of the originally issued principal amount at
maturity of the Senior Notes with the net cash proceeds of one or more sales of
its capital stock at a redemption price equal to 111.875% of the accreted value
thereof to the redemption date.  The Senior Notes are senior

                                 55
<PAGE>

secured indebtedness of Ascent, secured by a pledge of all of the capital
stock of OCC, now owned or hereafter acquired by Ascent.  The Senior Notes
rank senior to all existing and future subordinated indebtedness of Ascent
and pari passu in right of payment to all unsubordinated indebtedness of
Ascent.  The Senior Notes contain restrictions on among other things, the
Company's ability to pay dividends, incur additional indebtedness and the
making of loans, investments and other defined payments.  The net proceeds
from the offering and sale of the Senior Notes of approximately $121.0
million, after deducting debt issuance costs, were used to repay outstanding
indebtedness under Ascent's former credit facility.

 ASCENT CREDIT FACILITY.  Concurrently with the sale of the Senior Notes, the
Company and a bank entered into a second amended and restated loan and security
agreement (the "Ascent Credit Facility") to decrease the maximum amount of
borrowings under the Company's existing credit facility from $140.0 million to
$50.0 million and restate other terms and conditions of the previous agreement.
Available borrowings under the Ascent Credit Facility will be permanently
reduced commencing in March 2000 and on a quarterly basis thereafter in varying
amounts through December 2002 when the facility will terminate.  The Ascent
Credit facility requires the Company to repay and permanently reduce the
available borrowings thereunder with 100% of the net cash proceeds from the
issuance and sale of additional shares of the Company's capital stock and with
the net cash proceeds from sales of assets of the Company or its subsidiaries
(other than OCC), unless there exists no event of default and such proceeds are
reinvested in similar assets within 120 days.  In addition, the Ascent Credit
Facility includes restrictions on among other things, the Company's ability
to pay dividends, incur additional indebtedness and the making of loans and
investments.  At December 31, 1997, there was $50.0 million of available
borrowings under the Ascent Credit Facility.

     The Ascent Credit facility is secured by first priority pledges of, and
liens on, the capital stock and or partnership or membership interests in all of
the Company's subsidiaries other than OCC (collectively, the "Credit Facility
Guarantors"), and a negative pledge on all of the assets of the Credit Facility
Guarantors, with limited exceptions.  The obligations of the Company under the
Ascent Credit Facility are guaranteed by the Credit Facility Guarantors.

     At the Company's option, interest rates under the Ascent Credit Facility
will be a fluctuating rate of interest equal to either (i) an adjusted London
Interbank Offering Rate (LIBOR) plus an applicable borrowing margin or (ii) the
greater of the Federal Funds Effective Rate plus .5% plus an applicable
borrowing margin or, the bank's prime rate plus an applicable borrowing margin.
The applicable borrowing margin will be 2.75% (for LIBOR borrowing) and 1.50%
(for Base Rate borrowings) until December 31, 2000.  Thereafter, the applicable
borrowing margin will range from 2.00% to 2.75% for LIBOR borrowings or 0.75% to
1.50% for Base Rate borrowings, based upon certain financial ratios of the
Company.  In addition, a fee of .50% per annum is charged on the unused portion
of the Ascent Credit Facility.  The Ascent Credit Facility also contains
customary events of default requiring Ascent to maintain certain financial
covenants and events of default specifically related to Ascent's Sports Teams
and the construction of the arena.

     In October 1996, upon the closing of the Company's previous credit facility
with the bank, Ascent extinguished borrowings of $145.0 million outstanding
under its then existing $175.0 million credit facility with a different bank.
The Company utilized funds received from OCC of $39.3 million and borrowed
$110.0 million under its new credit facility to extinguish its outstanding bank
obligations, including accrued interest, and other Ascent obligations.  The
Company recorded an extraordinary loss of approximately $334,000, net of tax, of
$157,000 during the fourth quarter of 1996 in connection with the extinguishment
of its previous credit facility.

 OCC CREDIT FACILITY.  On November 18, 1997, OCC refinanced its former credit
facility and entered into an amended and restated agreement with its lender (the
"OCC Credit Facility"). Under the amended OCC Credit Facility, the amount
available to OCC was increased from $150.0 million to $200.0 million, and
certain other terms were amended; most notably, the inclusion of restrictions on
OCC's ability to pay dividends or make other distributions until the later of
January 1, 1999 or until certain operating ratios are attained.  The OCC Credit
Facility will mature in November 2002 and, subject to certain conditions, can be
renewed for two additional years.  At December 31, 1997, there was $67.0 million
of available borrowings under the OCC Credit Facility, subject to certain
covenant restrictions.

                                       56
<PAGE>

     Revolving loans extended under the OCC Credit Facility generally will
bear interest at LIBOR plus a spread that may range from 0.375% to 0.75%
depending on certain operating ratios of OCC. At December 31, 1997, the
weighted average interest rate on the OCC Credit Facility was 6.5%. In
addition, a fee ranging from .1875% to .25% per annum is charged on the
unused portion of the OCC Credit Facility, depending on certain OCC operating
ratios. The OCC Credit Facility contains customary covenants, including,
among other things, compliance by OCC with certain financial covenants.

 Total minimum payments on long-term debt for the years subsequent to
December 31, 1997, assuming the Senior Notes are not redeemed prior to
maturity, are as follows (in thousands):

<TABLE>
<S>                                               <C>
        1998                                      $     --
        1999                                            --
        2000                                            --
        2001                                            --
        2002                                       133,000
        Thereafter                                 225,000
                                                  --------
           Total                                  $358,000
                                                  --------
                                                  --------
</TABLE>

NOTE 7  -- DEFERRED COMPENSATION

     Deferred compensation, which is included in other long-term liabilities
on the accompanying balance sheet, consists of the following at December 31,
1997 and 1996:

<TABLE>
                                                                  1997    1996
                                                                  ----    ----
                                                                 (IN THOUSANDS)
<S>                                                              <C>     <C>
 Deferred compensation contracts payable, at varying
  interest rates, through 2021                                   $8,183  $3,914
 Less: Imputed interest                                             571     720
       Current maturities                                         2,492     439
                                                                 ------  ------
       Total                                                     $5,120  $2,755
                                                                 ------  ------
                                                                 ------  ------
</TABLE>

          Total annual payments on long-term deferred compensation for the
years subsequent to December 31, 1997 are as follows (in thousands):

<TABLE>
<S>                                                          <C>
     1998                                                    $2,492
     1999                                                     1,718
     2000                                                     1,127
     2001                                                       973
     2002                                                       629
     Thereafter                                               1,244
                                                             ------
           Total                                             $8,183
                                                             ------
                                                             ------
</TABLE>

NOTE 8  --  INCOME TAXES

     Through June 27, 1997, the date of the Distribution, Ascent was a member
of COMSAT's consolidated tax group for federal income tax purposes.
Accordingly, Ascent prepared its tax provision based on Ascent's inclusion in
COMSAT's consolidated tax return pursuant to the tax sharing agreement
entered into in connection with the Offering (see Note 1). Such tax
provision, up to the Distribution, was calculated as if prepared on a
separate return basis. Pursuant to the tax sharing agreement and the tax
disaffiliation agreement, taxes payable or receivable with respect to periods
that Ascent was included in COMSAT's consolidated tax group are settled with
COMSAT annually.  At December 31, 1997 and 1996, Ascent's federal income tax
receivable from COMSAT was $7,945,000 and $12,623,000, respectively.  As a
result of the Distribution (see Notes 1 and 14), the Company ceased being a
member of COMSAT's consolidated tax group.).  Additionally, in conjunction
with the SpectraVision acquisition, Ascent's ownership in OCC decreased to
approximately 57% and OCC began filing a separate return commencing on
October 9, 1996.

     In connection with the acquisition of SpectraVision, OCC had until July
15, 1997 to determine whether it would elect under Internal Revenue Code
Section 338(h)(10) to treat the transaction as a purchase of assets for tax
purposes. Subsequently, after performing

                                  57
<PAGE>

further analysis, OCC elected not to make the 338(h)(10) election.  As a
result, the consolidated amounts presented in the tables below reflect the
required reporting reclassifications made at OCC to eliminate the 1996
computation of deferred taxes previously presented on the assumption that OCC
would make the 338(h)(10) election and to reinstate the SpectraVision tax
attributes based on the treatment of the Acquisition as a taxable stock
purchase whereby OCC assumed carryover basis in SpectraVision's assets,
including net operating losses.

     The components of income tax benefit for the years ended December 31,
1997, 1996 and 1995 are as follows:

<TABLE>
                                         1997       1996       1995
                                         ----       ----       ----
<S>                                    <C>        <C>        <C>
                                               (IN THOUSANDS)
 Federal:
      Current                          $(6,137)   $(15,695)  $(1,589)
      Deferred                          (2,675)      3,130    (8,125)
 State and local                           408         110      (121)
 Foreign                                   588         498        --
                                       -------    --------   -------
           Total                       $(7,816)   $(11,957)  $(9,835)
                                       -------    --------   -------
                                       -------    --------   -------
</TABLE>

     The difference between the Company's income tax benefit computed at the
statutory federal tax rate and Ascent's effective tax rate for the years ended
December 31, 1997, 1996 and 1995 is as follows:

<TABLE>
                                                     1997       1996       1995
                                                     ----       ----       ----
<S>                                                <C>        <C>        <C>
                                                          (IN THOUSANDS)
 Federal income tax benefit computed at the
  statutory rate                                   $(22,277)  $(19,063)  $(10,580)
 State income tax benefit, net of federal income
  tax benefit                                        (1,110)      (573)       (72)
 Goodwill                                             2,464        860        831
 Foreign                                                588        498          -
 Valuation allowance                                 10,620      5,333          -
 Other                                                1,899        988        (14)
                                                   --------   --------   --------
      Income tax benefit                           $ (7,816)  $(11,957)  $ (9,835)
                                                   --------   --------   --------
                                                   --------   --------   --------
</TABLE>

     The net current and net non-current components of deferred tax assets
and liabilities as shown on the balance sheets at December 31, 1997 and 1996
are:

<TABLE>
                                                              1997      1996
                                                              ----      ----
                                                               (IN THOUSANDS)
<S>                                                         <C>        <C>
 Current deferred tax asset                                 $ 2,577    $ 3,580
 Non-current deferred tax liability                          (1,917)    (5,742)
                                                            -------    -------
    Net deferred tax asset (liability)                      $   660    $(2,162)
                                                            -------    -------
                                                            -------    -------
</TABLE>

     The deferred tax assets and liabilities at December 31, 1997 and 1996
are:

<TABLE>
                                                            1997        1996
                                                            ----        ----
                                                             (IN THOUSANDS)
<S>                                                       <C>          <C>
   Assets:
      Net operating loss carryforwards                    $ 25,734     $15,150
      Alternative minimum tax credit                        11,463      10,699
      Other accrued liabilities                              9,464       8,552
      Amortization of intangibles                            6,479       4,261
      Contract revenue                                       1,954         510
      Other                                                  1,407         453
      Valuation allowance                                  (26,294)    (15,674)
                                                          --------    --------
      Total deferred tax assets                             30,207      23,951
                                                          --------    --------
   Liabilities:
      Property and equipment                               (14,138)    (13,242)
      Franchise rights                                     (12,255)    (11,620)
      Other                                                 (3,154)     (1,251)
                                                          --------    --------
      Total deferred tax liabilities                       (29,547)    (26,113)
                                                          --------    --------
      Net deferred asset (liability)                      $    660    $ (2,162)
                                                          --------    --------
                                                          --------    --------
</TABLE>

                                      58
<PAGE>

     OCC has federal net operating loss carryforwards of approximately
$68,000,000, which expire beginning in 2010. However, because of the
acquisition of SpectraVision by OCC, the pre-ownership change net operating
loss carryforwards (approximately $43,000,000) are subject under Section 382
of the Internal Revenue Code to an annual limitation estimated to be
approximately $6,000,000. In addition, OCC has state net operating loss
carryforwards of approximately $40,600,000 which expire beginning in 2000.
Certain of the state net operating loss carryforwards are also subject to
annual limitation under Section 382.

     The Company also has alternative minimum tax credit carryforwards of
approximately $11,463,000 and $251,000 are available to offset future regular
federal and state tax liabilities, respectively.

NOTE 9 -- COMMITMENTS AND CONTINGENCIES

 EMPLOYMENT AND CONSULTING AGREEMENTS.  Ascent has employment and consulting
agreements with certain officers and entertainment talent. Virtually all of
the player agreements provide for guaranteed payments. Other contracts
provide for payments upon the fulfillment of their contractual terms and
conditions, which generally relate only to normal performance of employment
duties.

     Amounts required to be paid under such agreements (including
approximately $122,798,000 relating to player agreements) are as follows at
December 31, 1997 (in thousands):

<TABLE>
<S>                                                               <C>
       1998                                                       $ 59,690
       1999                                                         42,743
       2000                                                         25,347
       2001                                                         14,463
       2002                                                         17,721
       Thereafter                                                   12,703
                                                                  --------
           Total                                                  $162,667
                                                                  --------
                                                                  --------
</TABLE>


 FACILITY AND EQUIPMENT LEASES.  Ascent leased its Corporate headquarters
from COMSAT through June 1996 and continues to lease other facilities used by
ANS under a three year lease. In connection with Ascent's relocation to
Denver in June 1996, the Company entered into an operating lease for its
corporate headquarters which expires in August 1998.  Total rental payments
to COMSAT were approximately $62,000, $373,000 and $1,097,000 for the years
ended December 31, 1997, 1996 and 1995, respectively.

     OCC leases its principal facilities from one of its minority
stockholders under a non-cancelable operating lease which expires in December
2003. In addition to lease payments, OCC is responsible for taxes, insurance
and maintenance of the leased premises. OCC also leases certain other office
space from unrelated parties.  Rental payments to the OCC minority
stockholders were $1,430,000, $538,000 and $538,000 for years ended December
31, 1997, 1996, and 1995, respectively.

     The Nuggets and the Avalanche have an agreement with the City and County
of Denver (the "City") for use of the City's playing facility, McNichols
Arena, as well as offices and training rooms. The lease, as modified by the
Arena Agreement (see Note 5), extends through the completion of the new arena
and requires annual maximum rental payments of $350,000 and $400,000 per year
for the Nuggets and Avalanche, respectively.  The total payment for McNichols
Arena was $750,000, $700,000 and $667,000 for the years ended December 31,
1997, 1996, and 1995, respectively.

     The Company and its subsidiaries also lease equipment under
non-cancelable operating leases, which extend through 2004.  Rental expense
under all non-cancelable leases was approximately $7,659,000, $5,774,000, and
$3,125,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.

     The future minimum rental commitments under the Company's facility and
equipment leases at December 31, 1997 are as follows (in thousands):

<TABLE>
<S>                                                               <C>
       1998                                                       $ 7,736
       1999                                                         5,744
       2000                                                         2,565
       2001                                                         1,930
       2002                                                         1,620
       Thereafter                                                   2,305
                                                                  -------
           Total                                                  $21,900
                                                                  -------
                                                                  -------
</TABLE>

                                 59
<PAGE>

CONCESSION AGREEMENT.  In conjunction with the purchase of the Nuggets, Ascent
assumed the rights and obligations of a concessions agreement (the "Concessions
Agreement") with Ogden Allied Leisure Services, Inc. ("Ogden") and the City. The
Concessions Agreement expires in 2001 and provides for the Nuggets and the City
to share in concession revenues according to formulas contained in the
Agreement.  At December 31, 1997, under the terms of the Concessions Agreement,
the Nuggets were contingently liable for approximately $2,098,000, plus other
reasonable damages, if the Nuggets terminate the agreement.

OFF BALANCE SHEET RISKS.  At December 31, 1997, Ascent was contingently liable
to banks for $389,000 for outstanding letters of credit securing performance of
certain contracts. These guarantees expire in 1998. The estimated fair value of
these instruments is not significant.

 LITIGATION.  The Company is a party to certain legal proceedings in the
ordinary course of its business. However, the Company does not believe that any
such legal proceedings will have a material adverse effect on the Company's
financial position or results of operations. In addition, through its ownership
of the Nuggets and the Avalanche, the Company is a defendant along with other
NBA and NHL owners in various lawsuits incidental to the operations of the two
professional sports leagues. The Company will generally be liable, jointly and
severally, with all other owners of the NBA or NHL, as the case may be, for the
costs of defending such lawsuits and any liabilities of the NBA or NHL which
might result from such lawsuits. The Company does not believe that any such
lawsuits, individually or in the aggregate, will have a material adverse effect
on the Company's financial position or results of operations. The Nuggets, along
with three other teams, have also agreed to indemnify the NBA, its member teams
and other related parties against certain American Basketball Association
("ABA") related obligations and litigation, including costs to defend such
actions. Management of Ascent believes that the ultimate disposition and the
costs of defending these or any other incidental NBA or NHL legal matters or of
reimbursing related costs, if any, will not have a material adverse effect on
the financial statements of the Company.

     In 1995, OCV filed suit against a competitor alleging patent infringement
and seeking unspecified damages. In 1996, the competitor filed a counter suit
against OCV alleging patent infringement and seeking unspecified damages. OCV
intends to contest the counter suit vigorously and believes the claim is without
merit and will not result in a material adverse effect to OCV's financial
position, results of operations or cash flows.

     In 1990, a lawsuit was filed against OCC by a former employee alleging
wrongful termination and breach of contract. In March 1995, a verdict in a jury
trial was entered against OCC. In consideration for not appealing the verdict,
OCC entered into a settlement agreement with the plaintiff and recorded the
$856,000 after-tax cost of the settlement in the first quarter of 1995.

NOTE 10 -- STOCKHOLDERS' EQUITY

     STOCKHOLDERS' RIGHTS' PLAN. On June 27, 1997, the Company adopted a Rights'
Plan (the "Plan") and, in accordance with the Plan, declared a dividend of one
preferred share purchase right for each outstanding share of common stock,
payable July 10, 1997 to stockholders of record on that date. The Plan is
intended to enable all Ascent stockholders to realize the long term value of
their investment in the Company. The Plan will not prevent a takeover, but
should encourage anyone seeking to acquire the Company to negotiate with the
Board of Directors prior to attempting a takeover.

     The rights become exercisable after a person or group acquires 15% or more
of the Company's common stock or announces an offer, the consummation of which
would result in the ownership of 15% or more of the Company's common stock. Once
exercisable, each right will entitle the holder other than the person or group
that has acquired 15% of the Company's shares to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par value $.01, at a
price of $40.00, subject to adjustment. If a person or group acquires 15% or
more of Ascent's outstanding common stock, each right will entitle its holder to
purchase a number of shares of the Company's common stock having a market value
of two times the exercise price of the right. In the event a merger or other
business combination transaction is effected after a person or group has
acquired 15% or more of the Company's common stock, each right will allow its
holder to purchase a number of the resulting company's common shares having a
market value of two times the exercise price of the right.  Following the
acquisition by a person or group of 15% or more of the Company's common stock
but prior to the acquisition of a 50% ownership interest, the Company may
exchange the rights at an exchange ratio of one share of common stock per
right.  The

                                    60
<PAGE>

Company may also redeem the rights at $.01 per right at any time prior to a
15% acquisition. The rights, which do not have voting power and are not
entitled to dividends until such time as they become exercisable, expire on
July 2007.

     STOCK OPTION PLANS. Ascent adopted the 1995 Key Employee Stock Plan (the
"Employee Plan") and the 1995 Non-Employee Directors Stock Plan (the "Director
Option Plan") contemporaneously with the Offering. The Employee Plan provides
for the issuance of stock options, restricted stock awards, stock appreciation
rights and other stock based awards and the Director's Option Plan provides for
the issuance of stock options and common stock. Options granted under the
Employee or Director Option Plans generally expire 10 years from the date of
grant. For each of the Plans, options are generally granted at prices not less
than the fair market value of the Company's common stock at the date of grant.
In order for the Distribution to be tax-free (see Notes 1 and 14), the
Distribution Agreement required Ascent to cancel substantially all of the
outstanding options, and not to have any plans or agreements to issue stock.
Therefore, in connection with the Distribution, the Director Option Plan was
terminated as it only provided for the issuance of common stock and stock
options. In addition, substantially all of the stock options previously granted
under the Employee Plan (1,283,750 options) were canceled and, in exchange,
option holders were issued stock appreciation rights ("SARs"), payable only in
cash, with an exercise price equal to $9.53 per share, based on the average
trading price of the Ascent common stock for five days commencing with the date
of the Distribution.  In addition, under the Employee Plan, 120,000 SARs were
granted to certain officers and key employees of the Company in June 1997 and
22,000 SARs were granted to other employees in October 1997. The SARs permit the
optionee to surrender the SAR, in whole or in part, on any date that the fair
market value of the Company's common stock exceeds the exercise price for the
SAR and receive payment in cash. Payment would be equal to the excess of the
fair market value of the shares reflected by the surrendered SAR over the
exercise price for such shares. The SARs will vest over either a three year or
five year period from the date of grant of the option for which they were
exchanged. In June 1997, the Company also adopted the 1997 Non-employee
Directors Stock Appreciation Rights Plan (subject to stockholder approval)
pursuant to which each non-employee director was granted a SAR with respect to
100,000 shares of Ascent common stock with a three year vesting period. The
exercise price for the non-employee directors SARs is $8.27 per share, the
market price on the date of the Distribution. The change in value of SARs will
be reflected in the Company's statement of operations based upon the market
value of the common stock. During the year ended December 31, 1997 the Company
recorded $449,000 in expense relating to the SARs.

     The weighted average remaining contractual life of the Director Option Plan
outstanding options at December 31, 1997 is approximately 8 years. The following
is a summary of changes in shares under the Company's Stock Option Plans:

<TABLE>
                                                                OPTIONS OUTSTANDING
                                                               --------------------
                                                   OPTIONS                   WEIGHTED
                                                  AVAILABLE                  AVERAGE
                                                     FOR       NUMBER OF     EXERCISE
                                                    GRANT        SHARES       PRICE
                                                    -----        ------       -----
<S>                                               <C>          <C>            <C>
Balances, December 18, 1995                       1,610,000            --         --
  Granted (weighted average fair value of $9.01)   (948,750)      948,750     $15.00
                                                  ---------    ----------     ------
Balances, December 31, 1995                         661,250       948,750      15.00
  Granted (weighted average fair value of $8.63)   (397,500)      397,500      18.14
  Canceled/expired                                    3,000        (3,000)     15.00
                                                  ---------    ----------     ------
Balances, December 31, 1996                         266,750     1,343,250      15.93
  Conversion of options to SAR's                         --    (1,283,750)     15.92
  Canceled/Expired                                       --       (14,500)     15.00
  Options granted                                    (8,000)        8,000      10.50
                                                  ---------    ----------     ------
Balances, December 31, 1997                         258,750        53,000     $15.31
                                                  ---------    ----------     ------
                                                  ---------    ----------     ------
</TABLE>

     In 1996, the Company adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost was recognized for the options
granted under the Ascent Stock Option Plans in 1996 and 1997.  Had compensation
cost for the Director's Option Plan in 1997 and both the Director's and
Employee's Plans in 1996 been determined based on the fair value at the grant
date for awards made in those years consistent with the provisions of SFAS No.
123, the Company's net loss and loss per common share would have been reduced to
the proforma amounts as indicated below (in thousands, except per share
information):

                                    61
<PAGE>

<TABLE>
                                                        1997          1996
     <S>                                             <C>           <C>
     Net loss as reported                            $(41,514)     $(36,034)
     Net loss pro forma                              $(41,571)     $(37,668)
     Basic and diluted loss per share as reported    $  (1.40)     $  (1.21)
     Basic and diluted loss per share pro forma      $  (1.40)     $  (1.27)
</TABLE>

     The proforma amounts for 1995 would not differ significantly from the
reported amounts in 1995 as the awards granted in 1995 were granted on
December 18, 1995.

     Under SFAS 123, the fair value of stock-based awards to employees is
calculated through the use of option pricing models, even though such models
were developed to estimate the fair value of freely tradable, fully transferable
options without vesting restrictions, which significantly differ from the
Company's stock option awards. These models also require subjective assumptions,
including future stock price volatility and expected time to exercise, which
greatly affect the calculated values and in which the Company has no significant
history or established trends. The Company's calculations were made using the
Black-Scholes option pricing model with the following weighted average
assumptions for 1997 and 1996, respectively: expected life, 12-24 months
following the last vesting date of the award; stock volatility, 47.2% and 57.6%;
risk free interest rates, 5.3% and 5.9%; and no dividends during expected
term. The Company's calculations are based on an option valuation approach and
forfeitures are recognized as they occur.

OCC STOCK OPTION PLANS.  OCC has also adopted a stock incentive plan (the
"OCC Plan"), expiring in 2006, under which employees of OCC may be granted
stock options, restricted stock awards, stock appreciation rights and other
stock based awards. Under the OCC plan options generally are granted at fair
market value on the date of grant. At December 31, 1997, the OCC plan has
3,000,000 shares reserved for issuance and options to purchase 2,373,809
shares outstanding under the plan. OCC has also adopted the disclosure only
provisions of SFAS 123. The Company's share of OCC's pro forma compensation
cost for 1997 and 1996 would be approximately $21,379,000 and $9,152,000 or an
additional loss of $.72 and $.31 per share to the respective proforma amounts
above.

 COMSAT STOCK INCENTIVE PLANS.  COMSAT has stock incentive plans which provide
for the issuance of stock options, restricted stock awards, stock appreciation
rights and restricted stock units. Qualifying employees of the Company have been
participants of these plans. The amount of expense charged to the Company for
participation in these plans in 1997, 1996 and 1995 was $1,163,000, $1,471,000,
and $865,000, respectively.

NOTE 11 -- EMPLOYEE BENEFIT PLANS

 SAVINGS PLANS.  OCC, ANS, the Nuggets, the Avalanche and Beacon each
participate in various 401(k) plans for qualifying employees. A portion of
employee contributions is matched by the respective entity. Matching
contributions for the years ended December 31, 1997, 1996 and 1995 were
$1,006,000, $1,266,000, and $600,000 respectively.

 COMSAT PLANS.  On January 1, 1996, Ascent elected to terminate its
participation in the COMSAT defined benefit pension plan, COMSAT's
postretirement benefit plan and the COMSAT supplemental pension plan for
executives discussed below.

     COMSAT sponsored a noncontributory defined benefit pension plan for
qualifying employees at ANS and Beacon. Pension benefits were based on years of
service and compensation prior to retirement. Ascent's policy was to fund the
minimum actuarially computed contributions required by law as determined by
COMSAT's actuaries. Ascent contributions to the plan charged to expense were
$126,000 in 1995.

     COMSAT also sponsored an unfunded supplemental pension plan for executives.
Ascent's expense for this plan was $56,000 in 1995.

     COMSAT provided health and life insurance benefits to qualifying retirees.
The expected cost of these benefits was recognized during the years in which
employees rendered service. COMSAT charged Ascent $314,000 in 1995, for Ascent's
share of postretirement benefit expense.

 NUGGETS.  The Nuggets contribute annually to the NBA's General Manager, Coaches
and Trainers Pension Plan as well as the NBA Players Association Players'
Pension Plan

                                  62
<PAGE>

(collectively, the "NBA Plans"). These multi-employer plans are administered
by the NBA and require the Nuggets to make annual contributions to the NBA
Plans equal to an amount stated pursuant to the actuarial valuation.
Contributions to the General Manager, Coaches and Trainers Plan charged to
expense were $185,000, $134,000, and $94,000 for the periods ended December
31, 1997, 1996 and 1995, respectively. Contributions to the Players' Plan
charged to expense were $309,000, $159,000, and $132,000 for the periods
ended December 1997, 1996 and 1995, respectively. The Nuggets policy is to
fund pension costs determined by the NBA actuaries.

     The NBA, in conjunction with the NBA Players Association, has established a
Pre-Pension Benefit Plan which is designed to pay benefits to players
subsequent to their retirement from the NBA but prior to the age of
qualification for the normal players' pension plan. There were no contributions
charged to expense under this plan for the years ended December 31, 1997, 1996
and 1995.

 AVALANCHE.  The Avalanche contributes monthly to the National Hockey League
Pension Society ("NHL Plan") for the benefit of its players. This multi-employer
plan is administered by the NHL and requires the Avalanche to make contributions
to the NHL Plan for the applicable playing season equal to an amount stated
pursuant to an actuarial valuation. Contributions to the NHL Plan charged to
expense were $142,000, $210,000 and $130,000 for the years ended December 31,
1997, 1996 and 1995, respectively.

     The Avalanche is also required by the NHL to provide a pension or
equivalent benefit for its general manager and head coach. This benefit
corresponds to an established annual amount for each year of service beginning
the season following age 60. The Avalanche has chosen to fund this benefit
separately from the NHL plan for its various participants. For the year ended
December 31, 1997, the amount of contributions to the General Manager and
Coaches Plan charged to expense was $36,000.  The Avalanche is also required by
the NHL to provide a pension benefit to other participants, however, the
Avalanche makes available an employer matching contribution in conjunction with
its 401(k) plan which satisfies this funding requirement. No contributions were
made to the General Manager and Coaches plan for the periods ended December 31,
1996 and 1995, as the 401(k) employer matching contribution satisfied the
funding requirements of the plan in those years.

NOTE 12 -- PROVISION FOR RESTRUCTURING

     During the third quarter of 1995, management of the Company decided to
discontinue the Satellite Cinema scheduled movie operations. As a result of this
decision, a restructuring charge of $10,866,000 was recorded in the third
quarter of 1995. The components of this restructuring charge included a write-
down of property and equipment of $5,140,000 to their estimated salvage value,
an accrual for severance costs of $1,010,000 and a charge of $4,716,000 for
costs related to contractual commitments that would not be fulfilled.  In the
fourth quarter of 1996, the Company evaluated its remaining restructuring
accruals, which are primarily for severance and contractual obligations to be
paid through September 1997, and reduced such accruals by $300,000.  Through
December 31, 1997, the Company has made all remaining cash payments for
severance costs and contractual commitment costs and has written-off other
assets relating to contractual commitments. As of December 31, 1997, the Company
has no further reserves relating to the discontinued operations of Satellite
Cinema's operations. During the year ended December 31, 1995, Satellite Cinema
operations reflected revenues of $24,682,000 and an operating loss, before
allocation of general and administrative expenses, of $16,156,000.

NOTE 13 -- BUSINESS SEGMENT INFORMATION

     Ascent reports operating results and financial data in two business
segments: multimedia distribution and entertainment. The multimedia distribution
segment includes video distribution and on-demand video entertainment services
to the lodging industry, and video distribution services to the NBC television
network and other private networks. The results of ANS and OCC are reported in
the multimedia distribution segment. The entertainment segment includes the
Denver Nuggets and the Colorado Avalanche franchises in the NBA and NHL,
respectively, the Arena Company, the owner and construction manager of the Pepsi
Center, and Beacon, a producer of theatrical films and television programming.

                                       63
<PAGE>

<TABLE>
                                                 YEARS ENDED DECEMBER 31,
                                           -------------------------------------
                                             1997          1996           1995
                                           --------      --------       --------
                                                        (IN THOUSANDS)
<S>                                        <C>           <C>            <C>
Revenue:
  Multimedia Distribution                  $242,043      $167,976 (2)   $135,782
  Entertainment                             186,471 (1)    90,144 (3)      6,036 (3)
                                           --------      --------       --------
  Total                                    $428,514      $258,120       $201,818
                                           --------      --------       --------
                                           --------      --------       --------
Operating income (loss):
  Multimedia Distribution                  $(21,745)     $ (9,775)(2)   $  2,885
  Entertainment                             (12,078)      (24,812)        (9,418)
  Corporate                                  (8,536)       (9,732)       (10,002)
  Restructuring Charges                          --            --        (10,866)(4)
                                           --------      --------       --------
  Total                                    $(42,359)     $(44,319)      $(27,401)
                                           --------      --------       --------
                                           --------      --------       --------
Capital expenditures:
  Multimedia Distribution                  $ 93,914      $ 78,793       $ 82,903
  Entertainment                              25,156        10,066          2,208
                                           --------      --------       --------
  Total                                    $119,070      $ 88,859       $ 85,111
                                           --------      --------       --------
                                           --------      --------       --------
Depreciation and amortization:
  Multimedia Distribution                  $ 88,737      $ 62,232       $ 45,392
  Entertainment                              12,846        12,580          8,283
                                           --------      --------       --------
  Total                                    $101,583      $ 74,812       $ 53,675
                                           --------      --------       --------
                                           --------      --------       --------
Identifiable assets (at end of period):
  Multimedia Distribution                  $451,079      $457,746       $279,591
  Entertainment                             252,944       266,216        207,172
  Corporate                                  34,961        18,680         17,653
                                           --------      --------       --------
  Total                                    $738,984      $742,642       $504,416
                                           --------      --------       --------
                                           --------      --------       --------
</TABLE>

(1)  Entertainment revenues in 1997 include $91.0 million in revenues at Beacon
     from the release and delivery of three films, AIR FORCE ONE, PLAYING GOD
     and A THOUSAND ACRES.

(2)  The Multimedia distribution segment for 1996 reflects the acquisition of
     SpectraVision by OCC in October 1996 (see Note 2).

(3)  Entertainment revenues in 1995 include $9,200,000 of NBA expansion fees
     and, commencing in 1996, include a full year of operations for the
     Avalanche.

(4)  Applies to Multimedia Distribution segment.

NOTE 14 -- RELATED PARTY TRANSACTIONS AND AGREEMENTS WITH COMSAT

     In connection with the Distribution, Ascent and COMSAT executed the
Distribution Agreement, dated June 3, 1997. The Distribution Agreement provided,
among other things, that COMSAT would distribute all of its holdings of Ascent
common stock to COMSAT shareholders on a pro-rata basis. COMSAT consummated the
Distribution on June 27, 1997 (see Note 1).  In addition, while COMSAT has
received a ruling from the IRS that the Distribution will not be taxable to
COMSAT or its shareholders, such a ruling is based on the representations made
by COMSAT in the IRS ruling documents. Accordingly, in order to maintain the
tax-free status of the Distribution, Ascent will be subject to the following
restrictions under the Distribution Agreement: (i) Ascent shall not take any
action, nor fail or omit to take any action, that would cause the Distribution
to be taxable or cause any representation made in the ruling documents to be
untrue in a manner which would have an adverse effect on the tax-free status of
the Distribution; (ii) until the second anniversary of the Distribution, Ascent
will continue the active conduct of its ANS satellite distribution, service and
maintenance business; (iii) until the first anniversary of the Distribution,
Ascent will not sell or otherwise issue to any person, or redeem or otherwise
acquire from any person, any Ascent stock or securities exercisable or
convertible into Ascent stock or any instruments that afford any person the
right to acquire stock of Ascent; (iv) for six months after the Distribution,
Ascent will not solicit any person to make a tender offer for stock of Ascent,
participate in or support any unsolicited tender offer for stock of Ascent, or
approve any proposed business combination or any transaction which would result
in any person owning 20% or more of the

                                   64
<PAGE>

stock of Ascent; (v) until the second anniversary of the Distribution, Ascent
will not sell, transfer or otherwise dispose of assets that, in the aggregate,
constitute more than 60% of its gross assets as of the Distribution, other
than in the ordinary course of business; (vi) until the second anniversary of
the Distribution, Ascent will not voluntarily dissolve or liquidate or engage
in any merger, consolidation or other reorganization; and (vii) until the
second anniversary of the Distribution, Ascent will not unwind the merger of
ANS with and into Ascent in any way.

     The restrictions noted in items (ii) through (vii) above will be waived
with respect to any particular transaction if either COMSAT or Ascent have
obtained a ruling from the IRS in form and substance reasonably satisfactory to
COMSAT that such transaction will not adversely affect the tax-free status of
the Distribution, or COMSAT has determined in its sole discretion, exercised in
good faith solely to preserve the tax-free status of the Distribution that such
transaction could not reasonably be expected to have a material adverse effect
on the tax-free status of Distribution, or, with respect to a transaction
occurring at least one year after the Distribution, Ascent obtains an
unqualified tax opinion in form and substance reasonably acceptable to COMSAT
that such transaction will not disqualify the Distribution's tax-free status.

     Pursuant to the Distribution Agreement, Ascent will indemnify COMSAT
against any tax related losses incurred by COMSAT to the extent such losses are
caused by any breach by Ascent of its representations, warranties or covenants
made in the Distribution Agreement. In turn, COMSAT will indemnify Ascent
against any tax related losses incurred by Ascent to the extent such losses are
caused by any COMSAT action causing the Distribution to be taxable. To the
extent that tax related losses are attributable to subsequent tax legislation or
regulation, such losses will be borne equally by COMSAT and Ascent.

     Prior to the Distribution, Ascent was charged by COMSAT for certain general
and administrative services.  In 1995, the cost of administering these services
was allocated to Ascent using a formula that considered Ascent's proportionate
share of sales, payroll and properties. The amounts charged to Ascent under this
method for services were $4,540,000 for the year ended December 31, 1995.  In
1996, charges for these services from COMSAT were determined pursuant to an
Intercompany Services Agreement ("Services Agreement"). The Services Agreement,
which was amended in December 1996 to reflect a reduced level of services to be
provided effective January 1, 1997, was terminated on June 27, 1997 in
connection with the Distribution. Total charges incurred under the Services
Agreement were approximately $173,000 and $2,000,000 for the years ended
December 31, 1997 and 1996, respectively.

     During the year ended December 31, 1997 Ascent paid COMSAT $245,000 in
interest relating to intercompany obligations between the two entities.  No
interest was paid during the years ended December 31, 1996 and 1995,
respectively.

     From April through July 1995, Ascent loaned $2,000,000 to one of its
directors. The loan, plus interest thereon at the prime rate plus one percent,
was repaid in full in November 1995.

     During the third quarter of 1995, the Company entered into a Contribution
Agreement with OCV, whereby the Company contributed various assets and
liabilities (primarily installed video systems and related construction in
progress, accounts receivable, deferred income taxes and other assets) to OCV
with a net book value of approximately $56,539,000 in exchange for approximately
5,337,000 shares of common stock of OCV. This transfer of net assets and shares
between companies under common control has been accounted for at historical
cost. During the second quarter of 1996, the Company contributed some additional
assets and liabilities (installed video systems and related deferred income
taxes and other assets) to OCV in connection with the aforementioned
contribution agreement. These assets and liabilities had a net book value of
approximately $1,385,000. In August 1996, the Company, OCV and Hilton entered
into a letter of agreement providing for the cancellation of 1,336,470 shares of
common stock of OCV issued to Ascent pursuant to the Contribution Agreement.

     In conjunction with the SpectraVision Acquisition (see Note 2), Ascent and
OCC entered into a Corporate Agreement (the "OCC Corporate Agreement"), pursuant
to which, among other things, OCC has agreed not to incur any indebtedness
without Ascent's prior consent, other than indebtedness under OCC's Credit
Facility (see Note 6), and indebtedness incurred in the ordinary course of
operations which together shall not exceed $140,000,000 through December 31,
1997; provided, however, that such indebtedness may only be incurred in
compliance with the financial covenants contained in OCC's credit facility, with
any

                                       65
<PAGE>

amendments to such covenants subject to the written consent of Ascent.

     OCC earned revenues of approximately $22,000,000, $18,900,000 and
$15,000,000 for the years ended December 31, 1997, 1996, and 1995, respectively,
from Hilton and its affiliates.  Accounts receivable from Hilton and its
affiliates at December 31, 1997 and 1996 was approximately $753,000 and
$1,700,000, respectively. Hilton is a minority stockholder of OCC.

     OCC earned revenues of $901,000, $4,944,000 and $3,362,000 for the years
ended December 31, 1997, 1996 and 1995, respectively, from MagiNet Corporation,
which is a related party by virtue of OCC's investment in its preferred stock
(see Note 2). Accounts receivable from MagiNet at December 31, 1997 and 1996
were approximately $150,000 and $1,000,000, respectively.

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The fair value of cash and cash equivalents, receivables, other current
assets, accounts payable and other accrued liabilities approximate their
carrying value due to the short-term nature of these financial instruments. The
fair value of certain short-term and long-term investments approximates their
carrying value. The fair value of the Company's bank borrowings and other
long-term liabilities approximates their carrying value due to the variable
nature of the interest associated with those obligations.  The fair value of
the Company's Senior Discount Notes approximates their carrying value at
December 31, 1997 as such notes were issued on December 22, 1997.

NOTE 16 -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):

     The following is a summary of unaudited quarterly results of operations for
the years ended December 31, 1997 and 1996:

<TABLE>
                                      DEC. 31        SEPT. 30     JUNE 30     MARCH 31
                                      --------       --------     -------     --------
                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                   <C>          <C>            <C>         <C>
1997
Revenues                              $110,027     $141,034(2)    $ 87,604    $ 89,849
Operating Expenses                      97,132      113,014         71,174      87,970
Depreciation and Amortization           25,894       25,141         25,183      25,365
Operating income (loss)                (12,999)       2,879         (8,753)    (23,486)
Net Loss                               (12,758)      (1,361)        (9,747)    (17,648)
Basic and diluted loss per share          (.44)        (.04)          (.33)       (.59)

1996 (1)
Revenues                              $ 88,619     $ 40,248       $ 56,314    $ 72,939
Operating Expenses                      88,845       30,440         47,190      61,152
Depreciation and Amortization           26,175       16,939         15,966      15,732
Operating loss                         (26,401)      (7,131)        (6,842)     (3,945)
Loss before extraordinary item         (19,134)      (6,035)        (6,256)     (4,275)
Net loss                               (19,468)      (6,035)        (6,256)     (4,275)
Basic and diluted loss per share          (.65)        (.20)          (.21)       (.14)
</TABLE>

(1)  Results for the fourth quarter of 1996 include $8.7 million of
     non-recurring charges incurred by OCC and operating losses incurred by
     SpectraVision since the date of acquisition. These non-recurring charges
     include costs relating to asset write-downs, reserve and expense accruals
     associated with the integration of SpectraVision, the alignment of the
     OCC's operating practices for OCV and SpectraVision and the establishment
     of OCC as a new public company.

(2)  Results for the third quarter of 1997, include $74.8 million in revenues at
     Beacon from the release and delivery of two films during the quarter, AIR
     FORCE ONE AND A THOUSAND ACRES.

                                          66
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.

     None.

                                   PART III

     Except for the portion of Item 10 relating to Executive Officers which
is included in Part I of this Report, the information called for by Items 10
through 13 is incorporated by reference from the Ascent Entertainment Group,
Inc. 1998 Annual Meeting of Stockholders - Notice and Proxy Statement - (to
be filed pursuant to Regulation 14A not later than 120 days after the close
of the fiscal year) which meeting involves the election of directors, in
accordance with General Instruction G to the Annual Report on Form 10-K.

ITEM 10.  DIRECTORS AND OFFICERS OF THE REGISTRANT.
ITEM 11.  EXECUTIVE COMPENSATION.
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


                                   PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)  Documents filed as part of this Report.                            Page
                                                                        ----

1.   Consolidated Financial Statements and Supplementary Data of
     Registrant

     Independent Auditors' Report                                        44

     Consolidated Balance Sheets as of December 31, 1997 and 1996        45

     Consolidated Statements of Operations for the years ended
     December 31, 1997, 1996 and 1995                                    46

     Consolidated Statements of Stockholders' Equity for the years
     ended December 31, 1997, 1996 and 1995                              47

     Consolidated Statements of Cash Flows for the years ended
     December 31, 1997, 1996 and 1995                                    48

     Notes to Consolidated Financial Statements                          49

     Financial Statement Schedules

     Schedule II - Valuation and Qualifying Accounts for the
     years ended December 31, 1997, 1996 and 1995                        73

     Information required by the other schedules has been presented in the
     Notes to the Consolidated Financial Statements, or such schedule is not
     applicable and, therefore, has been omitted.

(b)  REPORTS ON FORM 8-K.

     (1) Current Report on Form 8-K filed on December 23, 1997 including the
Registrant's press release regarding the consummation of the issuance of
$225 million in principal amount at maturity of 11-7/8% Senior

                                   67
<PAGE>

Secured Discount Notes due 2004.

     (2) Current Report on Form 8-K filed on November 3, 1997 including (i)
Registrant's press release indicating (a) that Registrant had reached
final agreements with the City and County of Denver regarding the Company's
construction and operation of a downtown Denver sports and entertainment
arena and (b) the extension by the Company's lender of the date by which the
Company would have to commence construction on the sports arena and (ii)
Registrant's press release reporting its third  quarter 1997 financial
results.

     (3) Current Report on Form 8-K filed on July 29, 1997 including (i) a
discussion regarding the revenues estimated to be received by Registrant
under its domestic and foreign distribution agreements for the film AIR FORCE
ONE and (ii) Registrant's press release reporting its second quarter 1997
financial results.

     (4) Current Report on Form 8-K filed on July 8, 1997 (as amended by Form
8-K/A filed on July 11, 1997) including a discussion regarding (i) the
following actions taken in connection with COMSAT Corporation's tax-free
spin-off of its 80.67% interest in the Company to the COMSAT shareholders
(a) the resignations of Allen Flower, Alan Korobov, Robert Schwartz and Edwin
Colodny as directors of the Company and the action by  the remaining members
board of directors of the Company to set the Board at six members and elect
Peter Barton, Paul Gould and James A. Cronin, III as members of the Board,
(b) the adoption of a shareholders rights plan and (c) the adoption of
certain amendments to the Company's by-laws and (ii) the amendment of
employment agreements between the Company and Messrs. Lyons and Cronin and
the execution of employment agreements between the Company and Messrs. Aaron
and Holden.

     (5) Current Report on Form 8-K filed on June 19, 1997 including (i) the
Registrant's press release reporting COMSAT Corporation's announcement that
it would complete the distribution of its 80.67% ownership interest in the
Company on June 27, 1997 in the form of a special tax-free  dividend to its
shareholders and (ii) copies of a Distribution Agreement and Tax
Disaffiliation Agreement by and between the Company and COMSAT related to
such distribution.

     (6) Current Report on Form 8-K filed on February 21, 1997 including
Registrant's press release reporting its fourth quarter and full year 1996
financial results.

                                      68
<PAGE>

(c)  EXHIBITS:  The following exhibits are listed according
                to the number assigned in the table in Item
                601 of Regulation S-K.


3.1(a)   Amended and Restated Certificate of Incorporation of Ascent
         Entertainment Group, Inc. (as amended through December 12, 1995)
         (Incorporated by reference to Exhibit 3.1 to Registrant's Amendment
         No. 4 to Registration Statement on Form S-1, Commission File No.
         33-98502).

3.1(b)   Amended and Restated Bylaws of Ascent Entertainment Group, Inc. (as
         amended through June 27, 1997). (Incorporated by reference to
         Exhibit 3.1 to the Company's current report on Form 8-K filed on
         July 8, 1997 as amended by a Form 8-K/A filed on July 11, 1997).

4.1      Rights Agreement, dated as of June 27, 1997, between Ascent
         Entertainment Group, Inc. and The Bank of New York. (Incorporated
         by reference to Exhibit 4.1 to the Company's current report on Form
         8-K filed on July 8, 1997 as amended by a Form 8-K/A filed on July
         11, 1997).

4.2      Indenture between the Registrant and The Bank of New York, as
         Trustee, dated December 22, 1997. (Incorporated by reference from
         the exhibit of the same number to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-4 (No. 333-44461)
         filed on January 28, 1998.)

10(a)    Distribution Agreement between Ascent and COMSAT dated June 3,
         1997. (Incorporated by reference to Exhibit 10(a) to the Company's
         current report on Form 8-K filed on June 19, 1997).

10(b)    Tax Disaffiliation Agreement between Ascent and COMSAT dated June
         3, 1997. (Incorporated by reference to Exhibit 10(b) to the
         Company's current report on Form 8-K filed on June 19, 1997).

10.1     Amended and Restated Employment Agreement by and between Ascent
         Entertainment Group, Inc. and Charles Lyons. (Incorporated by
         reference to Exhibit 10.1 to the Company's current report on Form
         8-K filed on July 8, 1997 as amended by a Form 8-K/A filed on July
         11, 1997). *

10.2     Amended and Restated Employment Agreement by and between Ascent
         Entertainment Group, Inc. and James A. Cronin, III. (Incorporated
         by reference to Exhibit 10.2 to the Company's current report on
         Form 8-K filed on July 8, 1997 as amended by a Form 8-K/A filed on
         July 11, 1997). *

10.3     Employment agreement by and between Ascent Entertainment Group,
         Inc. and Arthur M. Aaron. (Incorporated by reference to Exhibit
         10.3 to the Company's current report on Form 8-K filed on July 8,
         1997 as amended by a Form 8-K/A filed on July 11, 1997). *

10.4     Employment Agreement by and between Ascent Entertainment Group,
         Inc. and David A. Holden. (Incorporated by reference to Exhibit
         10.4 to the Company's current report on Form 8-K filed on July 8,
         1997 as amended by a Form 8-K/A filed on July 11, 1997). *

10.5     Second Amended and Restated $50,000,000 Credit Agreement dated as
         of December 22, 1997 among the Registrant, the lenders named
         therein and NationsBank of Texas, N.A., as administrative agent.
         (Incorporated by reference to Exhibit 10.5 to Amendment No. 1 to
         the Registrant's Registration Statement on Form S-4 (No. 333-44461)
         filed on January 28, 1998.)

10.6     $200,000,000 Credit Agreement dated as of November 24, 1997 among
         On Command Corporation, the lenders named therein and NationsBank
         of Texas, N.A., as administrative agent. (Incorporated by reference
         to the exhibit of the same number to Amendment No. 1 to the
         Registrant's

                                       69
<PAGE>

         Registration Statement on Form S-4 (No. 333-44461) filed on
         January 28, 1998.)

10.7     Purchase and Sale Agreement dated May 7, 1997, between Denver Arena
         Company, LLC and Southern Pacific Transportation Company relating
         to the purchase of land for the construction of the arena.
         (Incorporated by reference to Exhibit 10.7 to the Registrant's
         Quarterly Report on Form 10-Q for the quarter ended June 30, 1997,
         Commission File No. 0-27192).

10.8     Ascent Entertainment Group, Inc. 1997 Directors and Executives
         Deferred Compensation Plan. (Incorporated by reference to Exhibit
         10.8 to the Registrant's Quarterly Report on Form 10-Q for the
         quarter ended June 30, 1997, Commission File No. 0-27192).

10.9     Second Amendment to Development, Production and Distribution
         Agreement between Beacon Communications Corp. and Sony Pictures
         Entertainment, Inc. dated as of July 22, 1996. (Incorporated by
         reference to Exhibit 10.6 to Amendment No. 2 to the Registration
         Statement on Form S-4 of On Command Corporation (No. 333-10407)
         filed on September 26, 1996). (Confidential treatment granted).

10.10    Buena Vista International, Inc. - Beacon Communications Corp.
         Letter Agreement dated as of April 1, 1996. (Incorporated by
         reference to Exhibit 10.1 to the Registrant's Quarterly Report on
         Form 10-Q for the quarter ended September 30, 1997, Commission File
         No. 0-27192). (Confidential Treatment Granted)

10.11    Term Sheet for Local Television License Agreement for the Denver
         Nuggets and the Colorado Avalanche between the Registrant and Fox
         Sports Rocky Mountain. (Incorporated by reference to Exhibit 10.2
         to the Registrant's Quarterly Report on Form 10-Q for the quarter
         ended September 30, 1997, Commission File No. 0-27192).
         (Confidential treatment granted).

10.12    Form of Employment Agreement between Robert Kavner and On Command
         Corporation.  (Incorporated by reference to Exhibit 10.6 to
         Amendment No. 2 to the Registration Statement on Form S-4 of On
         Command Corporation (No. 333-10407) filed on September 26, 1996.)

10.13    1997 Denver Arena Agreement by and among Ascent Arena Company, LLC,
         The Denver Nuggets Limited Partnership, The Colorado Avalanche, LLC
         and the City and County of Denver dated December 12, 1997.
         (Incorporated by reference to the exhibit of the same number to
         Amendment No. 1 to the Registrant's Registration Statement on Form
         S-4 (No. 333-44461) filed on January 28, 1998.)

10.14    Employment Agreement between the Registrant and Ellen Robinson.
         (Incorporated by reference to Exhibit 10.20 to the Registrant's
         Annual Report on Form 10-K for fiscal year ended December 31, 1996,
         Commission File No. 0-27192).*

10.15    Corporate Agreement dated as of October 8, 1997, between the
         Registrant and On Command Corporation. (Incorporated by reference
         to Exhibit 10.22 to the Registrant's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1996.)

10.16    Master Services Agreement, dated as of August 3, 1993 by and
         between Marriott International, Inc., Marriott Hotel Services, Inc.
         and On Command Video.  (Incorporated by reference to Exhibit 10.6
         to Amendment No. 2 to Registrant's Registration Statement on Form
         S-1 (No. 33-98502) filed on November 13, 1995.)  (Confidential
         treatment granted).

10.17    Ascent Entertainment Group, Inc. 1995 Key Employee Stock Plan.
         (Incorporated by reference to Exhibit 10.16 to Registrant's Annual
         Report on Form 10-K (No. 0-27192) filed March 29, 1996.)*

10.18    Agreement between Beacon Communications Corp. and Universal Pictures,
         a division of Universal City Studios, Inc. dated as of July 10, 1996.
         (Incorporated by reference to Exhibit 10.5 to the Registrant's
         Quarterly Report on Form 10-Q filed November 13, 1996, as amended by
         Registrant's Quarterly Report on Form 10-Q/A filed on January 6,
         1997.)

21       Subsidiaries of Ascent Entertainment Group, Inc.

                                         70
<PAGE>


23.1     Consent of Deloitte & Touche LLP

   *     Compensatory plan or arrangement.










                                         71
<PAGE>

                               SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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, in the City and County
of Denver, State of Colorado on March 25, 1998.

                                    ASCENT ENTERTAINMENT GROUP, INC.

                                    By:   /s/ Charles Lyons
                                        --------------------------------------
                                          Charles Lyons
                                          President & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities indicated
on March 25, 1998.

                                    /s/ Charles Lyons
                                    ------------------------------------------
                                    Charles Lyons
                                    President, Chief Executive Officer and
                                    Chairman of the Board (Principal Executive
                                    Officer)


                                    /s/ James A. Cronin, III
                                    ------------------------------------------
                                    James A. Cronin, III
                                    Executive Vice President, Chief Financial
                                    Officer, Chief Operating Officer and
                                    Director (Principal Financial Officer)


                                    /s/ David A. Holden
                                    ------------------------------------------
                                    David A. Holden
                                    Vice President, Finance and Controller
                                    (Principal Accounting Officer)


                                    /s/ Charles M. Lillis
                                    ------------------------------------------
                                    Charles M. Lillis (Director)


                                   /s/ Charles M. Neinas
                                   -------------------------------------------
                                   Charles M. Neinas (Director)


                                   /s/ Peter Barton
                                   -------------------------------------------
                                   Peter Barton (Director)


                                   /s/ Paul A. Gould
                                   -------------------------------------------
                                   Paul A. Gould (Director)

                                           72
<PAGE>

                         ASCENT ENTERTAINMENT GROUP, INC.
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1997
                                 (IN THOUSANDS)

<TABLE>
                                  Balance at   Charged      Charged                  Balance
                                  beginning      to         to other    Deductions   at end
                                   of year     expenses    accounts(a)     (b)       of year
                                   -------     --------    -----------  ---------    -------
<S>                                <C>         <C>         <C>          <C>          <C>

 1995:  Allowance for loss on
    accounts receivable             $3,893       $  711     $   (94)    $(1,270)     $3,240
                                    ------       ------     -------     -------      ------
                                    ------       ------     -------     -------      ------
 1996:  Allowance for loss on
     accounts receivable            $3,240       $  758     $(1,775)    $   (87)     $2,136
                                    ------       ------     -------     -------      ------
                                    ------       ------     -------     -------      ------
 1997:  Allowance for loss on
     accounts receivable            $2,136       $1,255    $ (1,245)    $  (384)     $1,762
                                    ------       ------     -------     -------      ------
                                    ------       ------     -------     -------      ------
</TABLE>

     (a)  Recoveries of amounts previously reserved and other adjustments.
     (b)  Uncollectible amounts written off.

                                         73